Floor Statements

Mr. President, I am proud to join Senator Mikulski as cosponsor of the ``National Great Black Americans Commemoration Act of 2003.'' This legislation will help offer a more complete portrayal of our Nation's proud history--one that includes an increased awareness of the contributions made by many great black Americans of various fields and accomplishments.

This legislation seeks to recognize the contributions of African Americans who have served in Congress or other government capacities, in the military, or in other important roles as educators, authors, scientists, inventors, athletes, clergy and civil rights leaders. Clearly, there are few, if any, areas of American culture and history that have not been touched and improved upon by the impact of black individuals. As we recognize this, it is important that we also recognize those whose goal is to make available the history of these outstanding people.

One such institution is The Great Blacks in Wax Museum, a nonprofit organization in Baltimore, MD, whose mission is to present the history of black Americans and to highlight their contributions to our nation. I believe that this institution's work thus far and its goals for the future make it worthy of our support. This legislation not only commends the efforts made by this museum to date, but authorizes the appropriation of funds that will help the museum to improve and expand. Appropriate Federal assistance, coupled with other funding raised by the museum, will allow the current institution to become the National Great Blacks in Wax Museum and Justice Learning Center, which will be better equipped to serve its purposes. This improved museum will be a bright example for projects with similar goals and will provide an excellent source of historical education for all who visit.

I am a strong believer that our history should be presented in a complete and accurate manner. Where we have understated in the past, we should make amends. The development of the National Great Blacks in Wax Museum and Justice Learning Center will be a valuable statement recognizing the contributions of so many great African Americans. I hope that my colleagues will see the merit in this endeavor and will lend their support to the National Great Black Americans Commemoration Act.

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 President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. President, I rise today in support of the nomination of Michael Chertoff to the U.S. Court of Appeals for the Third Circuit. I happen to be admitted to the bar of the Third Circuit. I can't imagine a better person we can put on that circuit than Michael Chertoff.

This is not the first time this body has had the opportunity to consider Mr. Chertoff's qualifications. In May 2001, my colleagues and I voted to confirm his nomination to the post of Assistant Attorney General for the Criminal Division of the United States Department of Justice. He has worked tirelessly in that position on behalf of our country prosecuting those whose specific goal is to harm America, and we are grateful for his service.

The same credentials and experience that paved the way for Mr. Chertoff's confirmation as Assistant Attorney General demonstrate that he will make an exceptional Federal appellate judge. He graduated magna cum laude from Harvard College in 1975 and magna cum laude from Harvard Law School in 1978. After his graduation, he served as a law clerk to United States Supreme Court Justice William J. Brennan, Jr.

Following his clerkship, he embarked on a long and distinguished professional career dedicated to fighting crime and corruption that began in the United States Attorney's Office for the Southern District of New York in 1983, where he served as a line prosecutor. In 1987, he was promoted to First Assistant U.S. Attorney for the District of New Jersey. In 1990, former President Bush appointed him to be the United States Attorney for the District of New Jersey.

During his time as a Federal prosecutor, Mr. Chertoff gained extensive experience in all phases of criminal investigations and prosecutions. He handled major organized crime, fraud, and corruption prosecutions. Here are a few examples:

Mr. Chertoff successfully prosecuted a RICO murder case involving the third ranking member of the Genovese La Cosa Nostra family and others. The principal defendants were convicted of conspiring to murder John Gotti and murdering a mob associate. They each received 75-to-80 year prison terms.

Mr. Chertoff successfully prosecuted the Mafia commission case, which charged the bosses of all five New York La Cosa Nostra families with operating a national commission through a pattern of racketeering acts such as extortion, loan sharking, and the murders of a mafia boss and two associates.

Mr. Chertoff successfully prosecuted the mail fraud, bank fraud, and tax evasion trial of the mayor of Jersey City, NJ. The case arose out of an investment fraud perpetrated by the mayor while he was in office. The defendant was convicted of 14 felonies, sentenced to jail, and removed from office.

Mr. Chertoff also successfully prosecuted Arthur and Irene Seale for the 1992 kidnapping and murder of Exxon executive Sidney Reso, a tragic case which garnered substantial media attention.

This record alone demonstrates that Michael Chertoff has the experience and qualifications to serve as a judge on the Third Circuit. However, his public service is not limited to holding high level government positions. For example:

Mr. Chertoff served as special counsel to the New Jersey Senate Judiciary Committee in its investigation of racial profiling. Under his counsel, the Committee held nine hearings examining racial profiling allegations, concluding that the former attorney general had misled the Committee and had attempted to cover up the extent of racial profiling in New Jersey from the U.S. Department of Justice.

After a convicted rapist was mistakenly released from prison, Mr. Chertoff again served as Special Counsel for the New Jersey Senate Judiciary Committee during its hearings into the application of Megan's Law, which requires State correction officials to notify prosecutors 90 days prior to the release of a sex offender, and the reasons why it was not being systematically employed by the State.

Mr. Chertoff also represented three indigent defendants on death row in Arkansas through a program operated by the NAACP legal defense fund. The death sentences of all three defendants were overturned on the appeal that he handled.

Mr. Chertoff has received numerous awards and honors, including an honorary law degree from Seton Hall University in 2002; the Anti- Defamation League Distinguished Public Service Award in 1992; and in 1987 the U.S. Department of Justice John Marshall Award for Outstanding Achievement in Trial.

These are but a few examples of public service that reinforce the true nature of Michael Chertoff's character. Recognizing this level of excellence, the American Bar Association has given Mr. Chertoff a unanimous well-qualified rating, the highest possible designation.

Plenty of others share the ABA's view of Mr. Chertoff. In a joint press release, New Jersey's two Democratic Senators, Jon Corzine and Frank Lautenberg, expressed their strong support for Mr. Chertoff, stating, ``We are pleased that the President has selected a distinguished New Jerseyan for this important seat on the U.S. Court of Appeals for the Third Circuit. Michael Chertoff is a highly intelligent and competent lawyer with a long and impressive record of public service.''

In a March 11, 2003 editorial, the Bergen Record endorsed Mr. Chertoff's nomination, calling it ``a refreshing change.'' The newspaper continued, ``Mr. Chertoff is exactly the type of nominee the nation needs for federal judgeships,'' and concluded, ``Mr. Chertoff is the type of smart, non-ideological high achiever whom Presidents of both parties should consider for the bench.''

Mr. President, I have touched on only some of the attributes and accomplishments that demonstrate Michael Chertoff's overwhelming qualifications for the Third Circuit. He will be an outstanding Federal appellate judge, and I urge my colleagues to vote in favor of his nomination.

Mr. President, I notice the distinguished Senator from Pennsylvania is here. Both he and I are admitted to the bar of the Third Circuit Court of Appeals. I am also admitted to the bar of the Tenth Circuit Court of Appeals.

I yield the floor so the distinguished Senator from Pennsylvania can make his statement.

Mr. President, all I will say, in yielding back the remainder of my seconds, is that I have been around here 17 years. I don't know that I have ever seen a better nominee for any circuit court in the country. This is one very great lawyer, great human being, good family man, person with a record that all of us should emulate if we could. I hope all of our colleagues will vote for Michael Chertoff. He deserves our vote.

No raw number of confirmations means anything, in and of itself, while there are not one but two filibusters of exemplary nominees going on now, potentially more to come, and emergency vacancies continue to exist. Are we supposed to be grateful that only a few of President Bush's nominees are being filibustered? Is there an acceptable filibuster percentage that the Democratic leadership has in mind? The mere fact that we have to ask these questions makes it crystal clear that we have a broken process. Even one filibuster of a judicial nominee is one too many.

As for the allegation that two nominees have been defeated, well, I for one would not be as quick as some of my Democratic colleagues to declare that the nominations of Miguel Estrada and Priscilla Owen have been defeated. We will continue to fight for the confirmation of these nominees and continue to file for cloture on their nominations. They are exemplary nominees who deserve to be confirmed.

And as for the implication that it is somehow acceptable to filibuster two judicial nominees in light of the others that have been confirmed, I must ask my Democratic colleagues who are leading these filibusters: Would you ever argue that it is permissible to break two criminal laws just as long as all the rest are being followed? Of course not. Nobody would make that argument any more than they would argue that it is permissible to disregard two of the constitutional amendments that comprise our Bill of Rights simply because there are eight others. The confirmation of other Bush judicial nominees in no way excuses or justifies the shabby treatment inflicted on Miguel Estrada and Priscilla Owen.

Mr. President, I am pleased to support this amendment, which provides a more expeditious naturalization process for the brave noncitizens who serve in our Nation's military. It is a recognition of and an expression of appreciation for their dedication and sacrifice during this time of conflict. Moreover, this amendment reflects our Nation's compassion and gratitude to those who gave their lives in defense of our freedom, as it grants, for the first time, derivative benefits to the immediate family members of these fallen men and women who only became citizens posthumously.

Senator Kennedy's amendment allows members of the military to apply for naturalization after 2 years of service instead of 3 years. It also provides for naturalization proceedings overseas so that the servicemen who serve abroad may become citizens without having to travel back to the United

States at their own expense. In addition, the amendment benefits the immediate family members of servicemen who died in combat and are granted posthumous citizenship. Now, these family members will have at least an opportunity to derive immigration benefits based on the posthumous grant of citizenship. Indeed, this amendment allows these family members to stay in the country for which their loved ones gave their lives.

I thank Senator Kennedy for his effort in reaching out for bipartisan support on this amendment, and for his willingness to accept the input and suggestions from Democrats and Republicans alike. In particular, I am grateful that Senator Kennedy accepted my proposal to close some loopholes so that alien smugglers and other worthy individuals do not inadvertently reap a benefit from this amendment. I am confident that this amendment now appropriately reflects the values and virtues that are inviolable to all of us as Americans.

Mr. President, I rise today, with my colleague Senator Kohl, to introduce S. 1177, the Prevent All Cigarette Trafficking, PACT Act of 2003. I do so because of my concern that contraband cigarettes contribute heavily to the profits of organized crime syndicates, specifically global terrorist organizations. Furthermore, illegal cigarette trafficking has had a damaging impact on the economies of numerous States.

Organized crime syndicates typically purchase cigarettes in States with low taxes and transport the product into states wit high taxes to illegally sell to small retailers below market costs. The Internet has exacerbated this problem. Frequently, these syndicates produce counterfeit State and city tax stamps in order to make it less risky for these small retailers to sell them to consumers. For example, Virginia has a per pack tax of 2.5 cents, while New York City has a per pack tax of $3. Organized crime syndicates, such as those affiliated with the Lebanon-based terrorist organization, Hezbollah, have been known to purchase and transport cigarettes in tractor-trailers up Interstate 95 from Virginia to New York for resale. As one can easily see, a State such as New York is losing millions of dollars in revenue each year because of unpaid taxes on these contraband cigarettes, while terrorist organizations are making millions in profits.

Recent articles in the Washington Post and New York Post revealed that a cigarette-smuggling ring, which allegedly purchased over 70,000 cartons from undercover Federal agents in a sting operation last fall, does in fact have ties to Hezbollah. If this group had been successful in its racketeering scheme, it would have amounted to a loss of nearly $2.4 million in tax revenue for New York and millions in profits for Hezbollah, allowing this organization to finance their terrorist activities.

Members of an organized crime syndicate arrested in Charlotte, NC last year for smuggling contraband cigarettes from North Carolina to Michigan were also using their illegal profits to aid Hezbollah, according to the Charlotte Observer. The Buffalo News reported that one of the members of the Charlotte syndicate, Mohamad Hammoud, allegedly has ties to a recently arrested Detroit-area syndicate, which includes two women from the Seneca Nation of Indians' Cattaraugus reservation. Because the syndicate transported the cigarettes from North Carolina to Michigan for resale, Michigan lost $12.50 per carton in sales and excise taxes. These examples illustrate that cigarette smuggling is not only a lucrative business for organized crime but also detrimental to the budgets of many states.

The PACT Act attacks the problem of illegal cigarette trafficking by these organized crime syndicates through its strengthening of the Jenkins Act of 1949, 15 U.S.C. Sec. Sec. 375-378, 2003. In its current form, the Jenkins Act requires tobacco vendors to register with each State tax administrator in which they sell cigarettes, as well as file a monthly report that provides shipment information within each State. Failure to do so is a misdemeanor. Compliance with this statute enables States to collect cigarette excise, sales and use taxes from consumers. This legislation, which the distinguished Senator from Wisconsin and I are introducing, strengthens the Act by increasing the reporting requirements first established under Jenkins, expressly including cigarette orders placed through the Internet, lowering the threshold for cigarettes to be treated as contraband from 60,000 to 10,000, increasing the criminal penalty for violating the Act to a felony and creating a substantial civil penalty.

The PACT Act will also provide State attorneys general with the option to bring actions in federal court, which is a tool desired by many states. According to a GAO report from last year on Internet cigarette sales, online cigarette sellers simply do not comply with the Jenkins Act requirements--in fact most of them defiantly state that they do not comply with the Jenkins Act. Many State attorneys general realize that this practice is unfair not only to their individual States, but also to the brick and mortar retailers located in their state, placing these businesses at an unfair commercial disadvantage. Providing these state attorneys general with the ability to bring actions against these out-of-state Internet vendors for lost revenue is crucial in leveling the playing field and collecting the rightful revenue for states like Washington, California, New York, Wisconsin, Michigan and Rhode Island.

I ask my colleagues to join Senator Kohl and me in our efforts to help stop the funding of global terrorist organizations and ensure that States are able

to recover lost revenue by co-sponsoring and supporting the PACT Act of 2003.

Mr. President, I rise today, with my colleague Senator Kohl, to introduce S. 1177, the Prevent All Cigarette Trafficking, PACT Act of 2003. I do so because of my concern that contraband cigarettes contribute heavily to the profits of organized crime syndicates, specifically global terrorist organizations. Furthermore, illegal cigarette trafficking has had a damaging impact on the economies of numerous States.

Organized crime syndicates typically purchase cigarettes in States with low taxes and transport the product into states wit high taxes to illegally sell to small retailers below market costs. The Internet has exacerbated this problem. Frequently, these syndicates produce counterfeit State and city tax stamps in order to make it less risky for these small retailers to sell them to consumers. For example, Virginia has a per pack tax of 2.5 cents, while New York City has a per pack tax of $3. Organized crime syndicates, such as those affiliated with the Lebanon-based terrorist organization, Hezbollah, have been known to purchase and transport cigarettes in tractor-trailers up Interstate 95 from Virginia to New York for resale. As one can easily see, a State such as New York is losing millions of dollars in revenue each year because of unpaid taxes on these contraband cigarettes, while terrorist organizations are making millions in profits.

Recent articles in the Washington Post and New York Post revealed that a cigarette-smuggling ring, which allegedly purchased over 70,000 cartons from undercover Federal agents in a sting operation last fall, does in fact have ties to Hezbollah. If this group had been successful in its racketeering scheme, it would have amounted to a loss of nearly $2.4 million in tax revenue for New York and millions in profits for Hezbollah, allowing this organization to finance their terrorist activities.

Members of an organized crime syndicate arrested in Charlotte, NC last year for smuggling contraband cigarettes from North Carolina to Michigan were also using their illegal profits to aid Hezbollah, according to the Charlotte Observer. The Buffalo News reported that one of the members of the Charlotte syndicate, Mohamad Hammoud, allegedly has ties to a recently arrested Detroit-area syndicate, which includes two women from the Seneca Nation of Indians' Cattaraugus reservation. Because the syndicate transported the cigarettes from North Carolina to Michigan for resale, Michigan lost $12.50 per carton in sales and excise taxes. These examples illustrate that cigarette smuggling is not only a lucrative business for organized crime but also detrimental to the budgets of many states.

The PACT Act attacks the problem of illegal cigarette trafficking by these organized crime syndicates through its strengthening of the Jenkins Act of 1949, 15 U.S.C. Sec. Sec. 375-378, 2003. In its current form, the Jenkins Act requires tobacco vendors to register with each State tax administrator in which they sell cigarettes, as well as file a monthly report that provides shipment information within each State. Failure to do so is a misdemeanor. Compliance with this statute enables States to collect cigarette excise, sales and use taxes from consumers. This legislation, which the distinguished Senator from Wisconsin and I are introducing, strengthens the Act by increasing the reporting requirements first established under Jenkins, expressly including cigarette orders placed through the Internet, lowering the threshold for cigarettes to be treated as contraband from 60,000 to 10,000, increasing the criminal penalty for violating the Act to a felony and creating a substantial civil penalty.

The PACT Act will also provide State attorneys general with the option to bring actions in federal court, which is a tool desired by many states. According to a GAO report from last year on Internet cigarette sales, online cigarette sellers simply do not comply with the Jenkins Act requirements--in fact most of them defiantly state that they do not comply with the Jenkins Act. Many State attorneys general realize that this practice is unfair not only to their individual States, but also to the brick and mortar retailers located in their state, placing these businesses at an unfair commercial disadvantage. Providing these state attorneys general with the ability to bring actions against these out-of-state Internet vendors for lost revenue is crucial in leveling the playing field and collecting the rightful revenue for states like Washington, California, New York, Wisconsin, Michigan and Rhode Island.

I ask my colleagues to join Senator Kohl and me in our efforts to help stop the funding of global terrorist organizations and ensure that States are able

to recover lost revenue by co-sponsoring and supporting the PACT Act of 2003.

Mr. President, I rise to speak in support of the growth and jobs tax bill conference report before the Senate today. I first wish to congratulate and thank the chairman of the Finance Committee and the majority leader for their tireless efforts in working out a very difficult compromise. Their hard work made it possible for us to vote on this major tax cut legislation today--legislation that will make a big difference in the lives of Utahans and Americans across the Nation.

The conference report before us is a major accomplishment, for the U.S. economy, for the American people, and for President Bush and Vice President Cheney. It is the culmination of months of very hard work that began with the President's release of his jobs and growth plan late last year. This was a bold and brilliant plan designed to help our economy over the next year while also removing long-standing barriers to long-term growth.

At the heart of the plan was one overriding objective--to kick our sputtering economic engine into high gear so we could finally shake off the listlessness that has lingered since the double whammy when recession hit in 2000 and terrorists struck our homeland in September 2001. Although we have emerged from recession, the recovery has been very slow and new job creation has not kept up pace with jobs that have been lost.

I am seeing this in Utah, where our State's economy has been hit harder than many by the downturn. My State has a highly educated workforce, and we have more high-tech jobs, more commercial construction jobs, and more tourism jobs than many other States. Those sectors have suffered. Utah's unemployment rate was 5.3 percent last month. Compared to the 3 percent unemployment rate we had just a couple of years ago, this is unacceptable. Along with the President and many of our colleagues, I have been calling for a strong prescription to help get our economy, in Utah and across the country, back to its full potential.

To accomplish this, the Bush plan focused on three actions-- accelerating the already enacted but yet to be phased in tax cuts from 2001, increasing incentives for businesses to invest in productive equipment and grow, and addressing the debilitating and unfair effects of taxing the profits of corporations twice. I am happy to report that all three of these elements are present in the conference report.

The conference report speeds up the tax rate cuts that Congress, on a bipartisan basis, passed just 2 years ago. The small amount of rate reduction from the 2001 Tax Act that has already taken effect has served to lessen the blow of the recession. These across-the-board rate reductions were the right remedy, but their phase-in has been too slow. By accelerating the remainder of these cuts, effective this year, we can put the full dosage of medicine to work on what remains a sick economy.

This tax bill will cut taxes for practically every American who pays income tax. This will provide great assistance to our economy in two ways. First, it will put cash into the pockets of American workers immediately. Almost as soon as this bill is signed into law by the President, the Internal Revenue Service will release new tax withholding tables that will reflect the

lower tax rates. This means an immediate raise in pay for almost every U.S. worker.

Second, lower tax rates will encourage Americans to work harder, to save more, and invest a higher amount of their income. This serves us will both in the short run and over the longer term.

We cannot forget the huge effect these tax rate reductions will have on the small businesses of America. It seems that many of our colleagues on the other side of the aisle refuse to recognize the fact that about 80 percent of small businesses pay taxes at the individual tax rates. Rather than being the giveaway to the so-called ``wealthy'' that opponents of this tax cut accuse it of being, this is a first- class jobs creation bill.

Moreover, the bill before us includes significant tax relief for married couples suffering from chronic marriage tax penalties. While we still cannot say these unconscionable tax effects are totally eliminated from the Internal Revenue Code after the effective date of this measure, we are making major strides in this endeavor.

The acceleration of the child tax credit included in the conference report will make a big difference to families in Utah and all across America. To families struggling to raise their children, this bill spells relief, both immediately and also for 2004.

The second objective accomplished in the Jobs and Growth Tax Act is to spur investment by business entities. Our recent recession was not one born of the lack of consumer spending, but of the dearth of business investment.

Last year's economic stimulus bill included a provision that has proven effective in increasing business investment--a 30-percent bonus depreciation deduction for the first year. The bill before us includes a feature that builds on this provision, and increases the incentive to 50 percent. I have been a strong proponent of bonus depreciation, and despite this not being in the Senate version of the bill, I am pleased that this provision survived in the conference report.

And this is not all. One of the most important elements of the bill before us is the increase in the amount of new equipment purchased that smaller businesses can write off immediately. Not only is the amount of investment allowed to be expensed quadrupled under the bill, but larger businesses can now take advantage of the incentive. This bipartisan and bicamerally supported feature should result in some quick job creation.

The third objective of President Bush's tax plan was to address the onerous and unfair double taxation of corporate dividends. Although the dividend provision in the conference report is not the same as that envisioned by the President, it is a very significant tax cut that will have positive ramifications for the economy and for corporations and their shareholders, for years to come.

The President's original plan called for the elimination of the double taxation of corporate dividends by providing an exclusion for corporate earnings passed through to shareholders to the extent that the corporation paid tax on those earnings. This was a bold and laudable goal that would have far-reaching effects on the very nature of how corporations are established, operated, and governed in this Nation. This was tax reform in the truest sense. And like all real reform, it was met with jeers, criticism, and legitimate concerns.

I want to congratulate many of my Senate colleagues for achieving the difficult task of passing the Senate version of the bill, which included the full exclusion of corporate dividends at the individual level, albeit for a relatively short time. This was a major legislative accomplishment, and Senators Nickles, Kyl, Lott, and many others deserve our gratitude, along with Chairman Grassley and the leadership, for its attainment.

The complete elimination of the double tax on dividends should remain our long-term goal. It was not achieved in this conference report. The political and time constraints placed on the Senate made this impossible. However, I want to emphasize that our inability to achieve this lofty goal, which has been the objective of policymakers for decades, should not overshadow the huge triumph we have achieved in the conference report--the very substantial reduction of tax on both dividends and capital gains for all taxpayers.

Investors in this country--and this now includes over half of all Americans--will wake up tomorrow to find a far greater reward for their investments, whether it be in stocks, bonds, real estate, or other productive assets. A basic economic axiom is that if we want more of something, we should tax it less. By lowering the tax on the fruits of investment, both in the form of capital gains and of dividends, we will get more investment. This tax cut on investments will bode well for our economy both in the next few months and years, and for decades to come.

The conference report before us cuts the tax on dividends by more than half for taxpayers in the higher tax brackets, and it eventually eliminates the tax altogether for those in the lower two brackets. For taxes on capital gains, it cuts the top rate by 25 percent for most investors, and again, eventually eliminates them for millions of taxpayers in the lower tax brackets, who might be just starting out with their first investments. This is a huge change, and it will have a huge impact on investment in America by lowering the cost of capital and giving a huge boost to the stock market.

We should not underestimate the positive effects these changes will have on our economy. When we lowered the maximum capital gains tax rate from 28 percent to 20 percent in the 1997 tax act, the effect on the stock market, and on receipts to the Treasury, was very significant. In fact, a Standard and Poor's DRI study on the effects of the 1997 capital gains tax cut indicated that 25 percent of the increase in stock prices that was enjoyed after 1997 was due to the cut in the capital gains tax. Treasury receipts soared from capital gains realizations and we were able to balance the Federal budget.

Moreover, the study showed that the 1997 capital gains tax cut also had a significant impact on the lives of average Americans by increasing productivity growth, which caused the standard of living to rise. There is no reason to think that the reductions on taxes on capital gains and dividends included in this bill will not have similar effects in 2003 and beyond.

All in all, we should be very pleased with this bill's dividends and capital gains provisions. They will have a very positive effect on economic growth and serve as a substantial platform from which to seek further progress in the future, even that of the total elimination of the double tax on dividends.

The happiness with which I greet this conference report is not complete. It is not perfect, by any means. Like all of my colleagues, I suppose, I would have written a different bill.

For example, I am disappointed that the conference report does not include the Medicare geographic equity provisions approved by the Senate. These provisions, which I strongly support, would have provided more equitable reimbursement rates to Medicare providers in rural States.

However, I am encouraged that the President has signaled his support for addressing this matter through the Medicare legislation that the Senate will be considering in the next month. To me, it is absolutely critical that Medicare beneficiaries in rural States like Utah have access to quality health care. In my opinion, the best way to accomplish this goal is by passing legislation which ensures that Medicare providers in rural areas are fairly compensated. I will continue to work with my Senate colleagues on this crucial issue until this legislation is signed into law by the President.

Moreover, there are many other tax provisions that were included in the Senate version of the bill that would have made excellent additions to this conference report. Among these are provisions supported in an amendment on which I was joined by a bipartisan group of our colleagues that would have provided significant benefits to small businesses operating under subchapter S of the Internal Revenue Code. I hope we can find a way to address these important issues in another bill later this year.

In conclusion, the recession that began in 2000 was real, and our slow recovery is leaving behind pockets of real suffering, both in Utah and across our Nation. But thanks to our President's policies, the Federal Reserve's aggressive, preemptive, rate-cutting, and the

flexibility of our free-market system, our Nation has had unemployment rates much lower than in past recessions. But Congress needs to do more, and to act now, and this conference report is a vital part of the solution.

If we combine this growth and jobs package with some modest restraint on the spending side and some commonsense legal liability reforms, we can grow the economy faster over the next year, and we can set the stage for another decade of record job growth.

Again, I thank Chairman Grassley and the Senate leadership for their hard work, and I urge my colleagues to support the conference report.

Mr. President, the Senator from Iowa has shown remarkable leadership abilities by stewarding through the Senate a tremendous economic stimulus bill, the Jobs and Growth Tax Relief Reconciliation Act of 2003. I recognize this was no easy task and I want to compliment the Senator on his hard work and successful negotiations in getting the bill through a difficult conference with the House. The Nation and the economy will benefit from this great work.

I understand the final version of this bill we are considering today contains $20 billion for State aid, with $10 billion of that aid going to States to help them pay for a state's essential government services. I believe the States will be very grateful for Congress' willingness to provide these funds.

Although the bill clearly says that States may spend these funds on ``essential government services,'' I believe that the States would appreciate some clarification as to the definition of ``essential government services.'' I refer specifically to whether these funds may be used to pay for child care. In my home State of Utah, there is a great need for child care funding to help parents in or near poverty have a safe place for their children to stay while they work to provide money for their families. However, I believe this need is not a Utah- specific issue, but a nationwide problem that needs to be addressed.

I understand the distinguished Senate Finance Committee chairman has a long history of supporting initiatives which not only help children, but help families who may be on the cusp of self-sufficiency and I thank you for your efforts in this regard.

To this end, I would just like to clarify for the record that it is the intent of Congress to include child care expenses as an acceptable expense under the ``essential government services'' clause in the legislation, ensuring that States may use the $10 billion provided in the bill for child care expenses?

I am very appreciative to the Senator from Iowa for this clarification. I know it will be very helpful to those families who rely on these services. I thank the distinguished Finance Chairman for his time.

Mr. President, I express my enthusiastic support for the confirmation of Consuelo Callahan to the Ninth Circuit Court of Appeals. Justice Callahan is an outstanding nominee with broad support on both sides of the aisle. She has the support of both of the distinguished senators from her home state of California, and she was unanimously approved by the Judiciary Committee the day after her hearing.

Justice Callahan received her undergraduate degree from Stanford University and her law degree from McGeorge School of Law. In 1976, she began her 10-year career as a Deputy District Attorney with the San Joaquin County District Attorney's Office where she specialized in the prosecution of child abuse and sexual assault cases. During her 10-year career as a prosecutor, she handled more than 50 jury trials.

Justice Callahan also has first-hand experience with breaking the gender barrier. In 1992, she was appointed to the Superior Court in San Joaquin County, where she was the first female and Hispanic to serve on that court. She was also the first female member of two local social and service organizations. In 1996, Justice Callahan became the first judge from San Joaquin County to be elevated to the California Court of Appeal in more than 73 years.

In addition to her outstanding career as a prosecutor and a jurist, she has donated her time to organizations involved in addressing the problem of child abuse and sexual assault and has received an award for her work in this area. She has received other awards during her career, including the Governor's award for Criminal Justice Programs and the Susan B. Anthony award for Women of Achievement. In 1999, Justice Callahan was inducted into the San Joquin County Mexican-American Hall of Fame.

The Committee has received numerous letters supporting Justice Callahan's nomination to the Ninth Circuit. The La Raza Lawyer's Association of Sacramento described Justice Callahan's professional qualifications in the following way: ``as a state appellate court justice, her opinions have been detailed, thoughtful and supportive of legal precedent. . . . She possesses both the intellect and temperament to be an outstanding justice of the Ninth Circuit Court of Appeals.''

The ten justices that serve with Justice Callahan on the Third Appellate District and work with her every day also sent a letter to the Committee praising her skills as a jurist. They write, ``During her more than six years on our court, Connie has shown that she has the integrity, capacity, collegiality, and diligence to serve with distinction on the Ninth Circuit. Our only reservation in recommending her confirmation is that it will mean a significant loss to our court. We will miss Connie's energy and enthusiasm, her legal skills, and the positive way in which she fulfills her responsibilities as an appellate jurist.''

Her colleagues' loss will be the federal judiciary's gain, as I have great confidence that the beleaguered Ninth Circuit will greatly benefit from her confirmation. I urge my colleagues to support this nomination.

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

Mr. President, I further ask unanimous consent that I be recognized to speak for up to 15 minutes, and that following my remarks, Senator Ben Nelson be recognized for up to 15 minutes.

Mr. President, today I rise to introduce S. 1125, the bipartisan Fairness in Asbestos Injury Resolution Act of 2003, the FAIR Act. I am joined by my colleagues Senators Ben Nelson, DeWine, Miller, Voinovich, Allen, and Chambliss who share my concern on this important issue and have worked very hard to help bring about a resolution up to this point. They have all felt the impact of this situation in their home States and have shown the courage that we need to move forward to legislate a solution.

I also commend the interests of my good friend and Judiciary partner, Senator Leahy, as well as Senators Dodd and Carper, whom I would hope will continue to work with us to improve this important legislation.

I also want to recognize and commend my colleague from Oklahoma, Senator Nickles, who has also been a leader on this issue and recognizes the harm the current system poses to our workers and to our economy.

There can be no doubt that our Nation faces an asbestos litigation crisis. We have all heard the statistics, but they bear repeating. The RAND Institute for Civil Justice tells us that, to date, over 60 companies--I have been informed almost 70 companies--have been forced into bankruptcy--at least three with operations in my own home State of Utah.

The number of claims continues to rise, as does the number of companies pulled into the web of this abusive litigation, often with little, if any, culpability. More than 600,000 people have filed claims, and more than 8,400 companies have been named as defendants in asbestos litigation, some of them for no good reason at all but who are now stuck with horrendous defense costs, even though they would win every case.

This has become such a gravy train for some abusive trial lawyers-- just some--that over 2,400 additional companies were named in the last year alone. RAND also notes that ``about two-thirds of the claims are now filed by the unimpaired, while in the past they were filed only by the manifestly ill.'' Two-thirds of the complaints are filed by people who are not even sick. Former Attorney General Griffin Bell, amongst many others, has denounced this type of ``jackpot justice.''

There is broad support for a comprehensive solution, and I believe that our legislation is a major step in the right direction. I have been and will continue working with my colleagues on both sides of the aisle to resolve this issue. We need to ensure that the truly sick get paid, while providing stability to our economy by stemming the rampant litigation that has resulted in a tidal wave of bankruptcies, endangering jobs and pensions and health care and almost everything else that workers need in these companies. This crisis reaches far and wide, and it hurts everyone.

I am pretty pleased with what we have been able to accomplish to date. I have worked with all kinds of companies. I have worked with the unions. I have worked with some trial lawyers. And I have worked with insurance companies, reinsurers. You name them--they have been to Senator Nelson's office and my office. And Senator Nelson has worked long and hard and diligently side by side with me to be able to come up with what we have right now, which is a pretty darn good package and a good bill.

I am proud of the product we are putting forth today, but we are not done. We know that. But we have made significant progress.

Let me tell you what this bill does. We pay victims faster. The FAIR Act creates a fair and efficient system to resolve claims of asbestos victims in a reasonable way that enables legitimate claimants to obtain recovery much faster and easier than the current system. A new specialized court will pay eligible claimants through a no-fault system within just a few months. Asbestos victims will no longer have to wait several years or more to be paid.

Our proposal will streamline the process and decrease the need for attorneys so that claimants will be able to retain more of their awards, without huge attorney's fees or transaction costs. Transaction costs--most specifically, attorney's fees--have drained essential resources in the current system, to the point where there will not be resources for those who are truly ill, unless we do this bill.

Non-sick claimants will no longer deplete resources that should pay the truly sick victims. In order to direct the resources to those most in need, the FAIR Act implements measured medical criteria and fair dollar values for claimants so that all those who are sick will be able to get compensation. The medical criteria are modeled on the 2002 Manville Trust Distribution Process. These standards were intensely negotiated with the plaintiff's bar before they were enacted, and they represent a fair guideline for determining the respective diseases, and for determining who is impaired and who is not. For those who are not sick, we provide medical monitoring. If and when they become sick, they are ensured access to the fund. This is the FAIR approach.

Payments in the new court process will be fair and reasonable. Claimants will have a reasonable expectation of the amount they will receive. There will not be any more runaway jury awards for people who have never actually been sick, draining the resources away from the victims who truly need our help.

We provide stability and certainty. In order to get the stability we need for victims and the economy, the Fair Act is the exclusive remedy for asbestos personal injury claims. There will be no more ``forum shopping'' abuses that have made a mockery of our justice

system where some legitimate victims are currently left with no recourse while others with no illness at all receive windfalls.

We have taken great pains to ensure adequate funding for claim awards. Awards to claimants are paid out of a newly created fund consisting of contributions over a 25-year period from both the bankrupt and solvent defendants with asbestos liabilities and insurance and reinsurance companies with policies covering asbestos personal injury claims.

The business community receives the certainty they need to protect jobs and pensions. In our legislation, we set out mandatory funding of $90 billion from industry and insurers, with an additional $4 to $6 billion or more available from current asbestos trusts, and the authority to assess another $14 billion from companies that may be avoiding future liability. I am really pleased that the various companies and industry have come together on this. Defendant companies have reached an agreement on allocating their $45 billion in contributions. I am encouraged that the insurers continue to work toward a similar agreement. For now, we have in place a Blue-Ribbon commission that can make those determinations should the insurers be unable to resolve their shares. Overall, the business community has really made tremendous progress to provide funds that are projected to compensate victims appropriately and for the next 50 years.

They haven't been happy to do that but they are going to have to do that. They are not happy with this $108 billion trust fund. It is at least $18 billion more than what they were willing to pay. But I believe that they will, in the end, have to come along with this bill. And many of them are saying that right now. They are not happy but they realize that we are trying to resolve this in a way that is fair to everybody.

We all want to ensure that there is enough money in the fund to compensate claimants. Toward that end, I have included provisions such as a payment guarantee surcharge account and an orphan share account where additional funds will be set aside to grow and be available in the unlikely event of a shortfall. In addition, I provide for contribution obligations to be a priority in bankruptcy and for Attorney General enforcement of contribution obligations.

Over the last few days since I circulated the FAIR Act, I have received a lot of helpful feedback. As a result, we have made a number of changes in response to reasonable concerns. I expect we will make more down the road. All we have to do is have reasonable people work with us in good faith, and we are going to try to improve this bill every step of the way. But we have a limited time in which to get this done. Anybody who does not understand that is going to be somebody who destroys or at least attempts to destroy the only game in town, the only way we can resolve these problems.

We have received some suggestions from Senators Leahy and Dodd. I commend their interest in and leadership on this issue. They have provided some valuable suggestions which we will study. We have already incorporated some of their suggestions in the bill we introduce today.

First, we have included language that permits the Administrator of the fund to refer to the Attorney General for enforcement any information received regarding violations of EPA or OSHA regulations.

Second, we specify that life insurance will not be counted as a collateral source offset to any award granted to victims.

Third, as a further safeguard against imbalance in the appellate procedure, we ensure that the judges of the en banc panel of the new U.S. Court of Asbestos Claims are assigned randomly.

We are considering other proposed suggestions that will further our progress on this issue. Again, I want to thank my colleagues on the other side of the aisle who have been engaged in this issue over the last several months, especially my cosponsors, Senators Nelson and Miller, as well as Senators Leahy, Dodd, Carper, Levin, and Feinstein, who are contemplating cosponsorship down the line but have not been able to do so as of this date. I encourage them to stay involved and work with us during this process.

I also want to thank the leadership of Senators DeWine, Voinovich, Brownback, Nickles, and Zell Miller in particular, who all share my view that this asbestos crisis must be resolved. I know there are other issues that remain. The issue of a potential shortfall in funding at the end is certainly an important one. I think we can work together to address this issue, although it is premature to come up with a solution to that right now. Perhaps exploring private insurance mechanisms or some other avenue may be the way to go. I don't know. But we are willing to listen.

We have to start now, or we don't have a chance of getting a bill through that will help all of those concerned in this area, from the unions to the smallest company and the largest company. As I have said before, I oppose making taxpayers responsible for any potential mismanagement of the fund. If we employ appropriate medical criteria to ensure that those who are actually sick receive the compensation, that will go a long way toward increasing the manageability of this fund so that we don't have to worry about a shortfall. With our funding levels set at the highest level of current projection, I do not expect a shortfall to occur, and I don't think others do as well who have done the accounting work on this. But we can find a way to give more comfort to those who believe that even the highest level may underestimate the number of claims. If the medical criteria are reasonable, then it will be much easier to resolve the issue of ensuring that there will be enough funds to redress future claimants.

As I have mentioned to my colleagues, if the desire for a legislative solution is genuine, then we must take a position and move forward with the legislative process. This complex legislation will require our collective efforts and our serious cooperation.

I would like to go to this chart. This chart is on the effects of asbestos bankruptcies on workers. A lot of people don't realize, a lot of union members don't realize how serious this is. According to a study by the notable Nobel-winning economist, Joseph Stiglitz, commissioned by the American Insurance Association, entitled ``The Impact of Asbestos Liabilities on Workers in Bankrupt Firms'' in December of 2002, bankruptcies led to a loss of an estimated 52,000 to 60,000 jobs. That was in 2002. It is higher now. Each displaced worker at the bankrupt firms will lose on average an estimated $25,000 to $50,000 in wages over his or her career because of periods of unemployment and the likelihood of having to take a new job paying a lower salary. The average worker at an asbestos-elated bankrupt firm with a 401(k) plan suffered roughly $8,300 in pension losses, which represented on average roughly a 25-percent reduction in the value of the 401(k) account.

That is important. If we don't solve this problem within the next month, I believe we will have many more companies headed towards bankruptcy with a loss of jobs, a loss of high-paying jobs, a loss of union members' jobs. I believe in the end, the unions will go broke, too. Because if they have any guts at all and any desire to help their members, they will have to help pick up the health costs for these people among other things. But the pensions are going to be gone. The union jobs will be gone. That is why we have to do something now, not keep trying to get blood out of a stone. Unfortunately, we have some who want to do that.

Let me go to this next chart, which is the New York Times. This shows the surge in asbestos suits, many by healthy plaintiffs. The ones who are very injured, cancer ones, are represented by the red line on the bottom. Look at the black line, which is noncancer victims, many of whom have never suffered a sick day in their lives who are now approaching 70,000 claims, many of whom show no signs of being sick at this point. We provide medical monitoring for them during the lifetime of this trust. We pay for it. If they get sick at any time, they can come in and on a no-fault basis get their compensation without having to pay exorbitant attorney's fees or transactional costs. This is something I think every worker should be cheering and hoping for.

The impact of bankruptcy on employment: After adjusting for the changes in industry employment, the firms for which we have data lost 51,970 jobs in the 5 years prior to bankruptcy.

That is a couple years ago. It is a lot worse than that now. Assuming that employment losses at the firms for which we lack data were proportionate to those for which we have data, the implied total employment loss would be roughly 60,000.

Now, with regard to the change in employment in 5 years prior to bankruptcy, after accounting for changes in industry employment, in firms filing for bankruptcy before January 1998, was 24,551, the number of jobs lost. Firms filing for bankruptcy after January 1998, 27,419 jobs. Total for firms with data, 51,970. The estimated total for all bankrupt firms is 60,000 as of the day that was done. I believe it is now over 70,000.

This is a serious issue. We have to get serious about it. I have tried to work in good faith on behalf of everybody involved. I am calling on all parties--from the unions to the reinsurers--to get together with us and help us to improve this bill.

But realize there is only so much blood you can get out of this stone. If we don't do that, there are going to be hundreds of thousands of union jobs and other jobs lost that literally are going to be devastating to this country and to the individuals involved; and we would deserve the blame in the Congress because this bill would go a long way toward solving it.

Having said that, I praise my colleague, Senator Nelson of Nebraska, and the other cosponsors of this bill. Without Senator Nelson and his encouragement over the last number of months, I don't think we would have reached this far. He has had the guts to cosponsor this bill at this time, and I have nothing but respect for him, and also Senator Miller as well on his side, and the others on our side, who are willing to stand up. I haven't talked to a lot of Senators about cosponsoring, but I will. I pay tribute to my colleague for his stalwart support in trying to do something about this tremendous set of problems we have in our society today.

I yield the floor.

Mr. President, today I am pleased to introduce the ``Medicare Physician Payment Equity Act of 2003,'' a bill that corrects a long-standing inequity in Medicare reimbursement to rural physicians. I am delighted that my colleagues, Senators Jeffords, Grassley, Lincoln, and Bingaman have joined me in addressing this issue and introducing this bill.

Although many Americans are not aware of it, Medicare currently reimburses physicians practicing in many

rural areas at a lower rate than those practicing in more densely populated areas. A complicated formula, the geographic physician cost index, reimburses physicians according to presumed regional differences in the costs of their work, practice expenses, and medical liability insurance premiums. But in almost every case, this formula penalizes physicians who practice in rural settings.

As a result, the unfortunate effect of the current formula is that it may contribute to regional disparities in access to health care. Rural areas tend to have fewer physicians, fewer hospitals and patients often have less access to subspecialty care. Penalizing doctors who practice in rural settings by paying them substantially less than their urban colleagues may contribute to this inequity in access to care.

According to the Rural Policy Research Institute, the Medicare payment for an intermediate office outpatient visit in 2003 is 30 percent higher in New York City, $59.33, than it is in St. George, UT, $45.75, and the reimbursement for an emergency room visit is 22 percent higher in New York City, $161.82, than it is in St. George, UT, $131.96.

Proponents of this system that pays doctors differently for the same work claim that the purchasing power of physician compensation should be similar regardless of where the work is performed. But others, and I am one of them, believe that doctors should be compensated equally and appropriately for their work regardless of where that work is performed. I believe that it is time that we provide physicians with equal pay for equal work. Physicians deserve it and their patients do also. After all, the citizen in Utah pays Federal taxes at the same rate as the citizen in New York. Why should the citizen in Utah receive cheaper service?

The practice expense component of the geographic physician cost index also penalizes rural physicians and their patients. Proponents of the current system claim that it is more expensive for doctors to practice medicine in urban areas where the cost of living is higher and the cost of paying employees is thought to be higher. The practice expense geographic physician cost index rewards physicians in these ``high practice expense'' areas by reimbursing physician services at a higher rate.

While it might be tempting to think that practice expenses in urban areas are higher than those in rural areas, this is not necessarily the case. Rural physicians sometimes must offer higher wages to attract nurses and technicians to work in their communities. Furthermore, the formula that is used to calculate the geographic practice expense does not take certain key elements into consideration. Volume discounts can result in lower costs for capital goods and supplies in densely populated areas. Furthermore, a physician in a rural area who purchases an expensive, but necessary piece of equipment, such as an ultrasound machine, may use that equipment less frequently than a physician from a densely populated area. As a result, the rural doctor may not be able to pay for the capital investment as quickly as the urban physician. The practice expense for the rural physician in such a case is higher.

In fact, we have known for years that additional resources are sometimes necessary to attract doctors to practice in rural settings. Physicians, nurses and allied health professionals are less prevalent and hospitals are fewer and farther between in rural settings. In some cases, certain services and subspecialty care are not available at all. For this reason, Federal and State programs have offered tuition payment and loan forgiveness programs to student physicians who agree to practice in underserved areas, many of which are rural.

Federal payment policy with respect to physician services delivered in rural and underserved areas has been described as contradictory-- paying bonuses to physicians for practicing in rural and underserved areas on the one hand while devaluing physician clinical decision- making and patient services in rural areas less, on the other. The bottom line is this: For many years we have found it difficult in this country to increase access to health care and improve the quality of health care in rural communities. Penalizing physicians for practicing in rural settings just does not make sense.

All Medicare beneficiaries, whether they live in an urban or rural area, deserve excellent health care and access to outstanding doctors. The bill I am introducing today, the Medicare Physician Payment Act, addresses current disparities by creating a system that reimburses physicians equitably regardless of where they practice. The bill addresses all three components of the geographic physician cost index, work, practice expense, and medical liability costs, by increasing reimbursement for physicians in disadvantaged areas over a three-year period and by eliminating disparities in reimbursement altogether in the year four. If we pass this bill, doctors will no longer be discouraged from practicing in the rural communities that desperately need their services. I look forward to working with my colleagues in the 108th Congress to pass this legislation.

Mr. President, today I am pleased to introduce the ``Medicare Physician Payment Equity Act of 2003,'' a bill that corrects a long-standing inequity in Medicare reimbursement to rural physicians. I am delighted that my colleagues, Senators Jeffords, Grassley, Lincoln, and Bingaman have joined me in addressing this issue and introducing this bill.

Although many Americans are not aware of it, Medicare currently reimburses physicians practicing in many

rural areas at a lower rate than those practicing in more densely populated areas. A complicated formula, the geographic physician cost index, reimburses physicians according to presumed regional differences in the costs of their work, practice expenses, and medical liability insurance premiums. But in almost every case, this formula penalizes physicians who practice in rural settings.

As a result, the unfortunate effect of the current formula is that it may contribute to regional disparities in access to health care. Rural areas tend to have fewer physicians, fewer hospitals and patients often have less access to subspecialty care. Penalizing doctors who practice in rural settings by paying them substantially less than their urban colleagues may contribute to this inequity in access to care.

According to the Rural Policy Research Institute, the Medicare payment for an intermediate office outpatient visit in 2003 is 30 percent higher in New York City, $59.33, than it is in St. George, UT, $45.75, and the reimbursement for an emergency room visit is 22 percent higher in New York City, $161.82, than it is in St. George, UT, $131.96.

Proponents of this system that pays doctors differently for the same work claim that the purchasing power of physician compensation should be similar regardless of where the work is performed. But others, and I am one of them, believe that doctors should be compensated equally and appropriately for their work regardless of where that work is performed. I believe that it is time that we provide physicians with equal pay for equal work. Physicians deserve it and their patients do also. After all, the citizen in Utah pays Federal taxes at the same rate as the citizen in New York. Why should the citizen in Utah receive cheaper service?

The practice expense component of the geographic physician cost index also penalizes rural physicians and their patients. Proponents of the current system claim that it is more expensive for doctors to practice medicine in urban areas where the cost of living is higher and the cost of paying employees is thought to be higher. The practice expense geographic physician cost index rewards physicians in these ``high practice expense'' areas by reimbursing physician services at a higher rate.

While it might be tempting to think that practice expenses in urban areas are higher than those in rural areas, this is not necessarily the case. Rural physicians sometimes must offer higher wages to attract nurses and technicians to work in their communities. Furthermore, the formula that is used to calculate the geographic practice expense does not take certain key elements into consideration. Volume discounts can result in lower costs for capital goods and supplies in densely populated areas. Furthermore, a physician in a rural area who purchases an expensive, but necessary piece of equipment, such as an ultrasound machine, may use that equipment less frequently than a physician from a densely populated area. As a result, the rural doctor may not be able to pay for the capital investment as quickly as the urban physician. The practice expense for the rural physician in such a case is higher.

In fact, we have known for years that additional resources are sometimes necessary to attract doctors to practice in rural settings. Physicians, nurses and allied health professionals are less prevalent and hospitals are fewer and farther between in rural settings. In some cases, certain services and subspecialty care are not available at all. For this reason, Federal and State programs have offered tuition payment and loan forgiveness programs to student physicians who agree to practice in underserved areas, many of which are rural.

Federal payment policy with respect to physician services delivered in rural and underserved areas has been described as contradictory-- paying bonuses to physicians for practicing in rural and underserved areas on the one hand while devaluing physician clinical decision- making and patient services in rural areas less, on the other. The bottom line is this: For many years we have found it difficult in this country to increase access to health care and improve the quality of health care in rural communities. Penalizing physicians for practicing in rural settings just does not make sense.

All Medicare beneficiaries, whether they live in an urban or rural area, deserve excellent health care and access to outstanding doctors. The bill I am introducing today, the Medicare Physician Payment Act, addresses current disparities by creating a system that reimburses physicians equitably regardless of where they practice. The bill addresses all three components of the geographic physician cost index, work, practice expense, and medical liability costs, by increasing reimbursement for physicians in disadvantaged areas over a three-year period and by eliminating disparities in reimbursement altogether in the year four. If we pass this bill, doctors will no longer be discouraged from practicing in the rural communities that desperately need their services. I look forward to working with my colleagues in the 108th Congress to pass this legislation.

Mr. President, I ask unanimous consent that Patrick Shen, a detailee on my Judicial Committee staff, be granted the privilege of the floor for the duration of this session.

Mr. President, today I have the privilege of rising to support the Defense authorization bill. As we have seen in the recent conflict in Iraq and Afghanistan, the process of transforming our Nation's military has initially met with great success. Many at home will ask what is transformation and what does it mean to the future of our Nation's military? Simply put, transformation is a process of reform that will revolutionize the way the military conducts operations. We saw a glimpse of this emerging reality during the Iraqi conflict where information was gathered from a variety of sensors, whether on the ground or in the air, and that information was transmitted very quickly to commanders who could then exploit the weakness of our enemy. It was a remarkable operation and it reflects the high level of competence and expertise of our Nation's service men and women.

This Defense bill will accelerate transformation and ensure that our forces maintain their decisive edge. It is an important accomplishment and the chairman, ranking Democratic member and all the members of the committee deserve our thanks. Their efforts to make military transformation a reality has led them to fund the research and development of such revolutionary systems as the Army's Future Combat System, or FCS. FCS will allow our forces to deploy an Army brigade anywhere in the world within 96 hours. The DDX and the Littoral Combat Ship will also be revolutionary in their stealth characteristics, automation systems, and command and control capabilities.

The committee is also continuing its support for the Joint Strike Fighter, the F-35, which will bring a stealth fighter to all of our air and naval/marine air forces. However, I was disappointed to see that the President's request for full funding of the F/A-22 did not occur. This is a system that is a transformational aircraft at its core. The F/A-22's supercruise engines allow for extended supersonic flight--a magnitude longer than its after-burner predecessors. Using stealth capabilities, the F/A-22 is able to penetrate an opponent's airspace and engage enemy aircraft at great ranges. Additionally, unlike our current air superiority fighter the F-15C, the F/A-22 will be able to engage integrated surface-to-air missile systems. Once again using stealth technology, the F/A-22 will be able to approach these missile sites and destroy them, utilizing internally carried GPS-guided bombs. The F/A-22, using this bombing capability, will also have the ability to track and launch attacks against ground-fixed and mobile targets. However, the truly transformational aspect of the aircraft is that it can accomplish all of these missions almost simultaneously. Paraphrasing the Air Force's motto, no aircraft comes close to the F/A- 22's capabilities. I hope that the committee will reverse its decision and fully fund the President's request for 22 of these remarkable aircraft.

I also want to mention my deep concern about the funding of the Radiation Exposure Compensation Program, RECA. The RECA program provides compensation to those individuals who became ill after being exposed to radiation from aboverground nuclear tests or as a result of their employment in the uranium industry. In addition to creating eligibility criteria for compensation, the RECA statute created a trust fund to pay claims. Two years ago, the RECA trust fund ran out of money and individuals whose RECA claims were approved by the Department of Justice were given IOUs. In response to this serious matter, we were able to obtain additional funding for the RECA trust fund through the fiscal year 2002 Department of Defense authorization legislation. This legislation provided a ``capped'' appropriation for the RECA trust fund from fiscal year 2002 through fiscal year 2011.

Unfortunately, the Department of justice recently informed my office that the capped appropriation for fiscal year 2004 will be about $28 million short and that they expect the trust fund to run out of money by next May. In addition, a report issued by the General Accounting Office in April 2003 states that the RECA trust fund will be inadequate from fiscal year 2003 through fiscal year 2007. According to GAO, there will be a shortfall of $78 million through fiscal year 2011.

I am deeply concerned about this funding shortfall and urge my colleagues to do everything possible over the next several months in order to avoid this looming crisis. I do not believe it is fair that RECA beneficiaries, whose compensation has already been approved by the Department of Justice, could be waiting months for their compensation. And that's exactly what will happen if we do not address this situation in a timely manner. So I urge my colleagues to work with me as we pursue every option to find a solution to this very serious problem.

There will always be some elements of disagreement in any piece of legislation, but there is no disagreement that the committee continues to strive to compensate our Nation's service men and women for their hard work and dedication. Though we have a long way to go, I am pleased with this year's progress and the committee's authorization of an across-the-board military pay raise of 3.7 percent and an additional targeted pay raise for certain experienced mid-personnel, ranging from 5.25 percent to 6.25 percent, for an overall raise of 4.15 percent. I am also encouraged to see that the committee has provided for an increase in the family separation to see that the committee has provided for an increase in the family separation allowance from $100 per

month to $250 per month and an increase in the special pay for duty subject to hostile fire or imminent danger from $150 per month to $225 per month.

I would also like to direct the Senate's attention to some for the unsung heroes who have played such important roles in American military victories. These are the thousands of men and women who work in our Nation's depots. They have worked tirelessly to make sure that the weapons, aircraft, and ammunition that our forces use are properly maintained and in fantastic condition. They are the backbone of our military force and they deserve commendation for the tremendous role they have played. Appropriately, when the committee was considering proposals to undermine the strength of our depot system, it was the Senate Air Force Depot Caucus, of which I am proud to be a member, and Senators Inhofe, Chambliss, Bennett, and Nickles, who rose to protect our depots. We have so far been successful in our efforts but we realize that we must be forever vigilant to protect these critical military resources.

Again I would like to thank the chairman, ranking Democratic member and all of the members of the committee for their work on this bill. It will be of great service in the support of our Nation's service men and women.

Mr. President, I rise in support of the Prevention and Recovery of Missing Children's Act. I especially want to commend my colleagues Senator Dodd and Senator Collins for their hard work on this important legislation.

Sex offenders prey upon the weakest and most innocent in our society--our youth--and in astonishing numbers. According to the National Center for Missing and Exploited Children, 3.9 million of the Nation's 22.3 million children between the ages of 12 and 17 have been seriously physically assaulted, and one in three girls and one in five boys are sexually abused before the age of 18. Even more troubling is the fact that most sex offenders are not in our prisons. Instead, they remain in our communities, often targeting their next victim. To illustrate, among the Federal Bureau of Investigation's `Most Wanted Fugitives' is a sex offender who allegedly sexually abused a 12-year old boy over a 6-year period

after he was released from prison for previous acts of sexual abuse.

Time and again we see convicted pedophiles kidnapping, brutally raping, and in some cases, murdering young children. Too often we are unable to thwart such heinous acts because recidivists succeed in evading State registration requirements after they have been convicted and released from prison. We have a duty to our children to ensure that we know where convicted sex offenders are at all times. We also have a duty to take every step to find our missing and exploited children promptly.

The Prevention and Recovery of Missing Children Act of 2003 will enhance our ability to track recidivists and find child victims by strengthening sexual offender registration laws and missing children reporting requirements. This legislation (1) requires States to register sexual offenders prior to their release from prison to ensure that they comply with sex registration requirements; (2) requires States to obtain a DNA sample, as well as a photo and fingerprints, from convicted sexual offenders; (3) requires convicted sexual offenders to obtain a driver's license or State identification card as an additional means of identification; (4) requires convicted sexual offenders to report any change in registration within 10 days; (5) requires convicted sexual offenders to verify their registration information every 90 days; (6) makes it a felony offense to fail to comply with any sexual registration requirement; and (7) strengthens the missing children reporting requirements that are imposed on States.

It is critical that the law enforcement community be able to track down known child predators and to find our missing and exploited children promptly. This legislation provides law enforcement with the tools they need to achieve these goals. I am committed to working with Senator Dodd and Senator Collins to enhance this valuable legislation even further.