Floor Statements

Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that the Senate stand in recess under the previous order.

Mr. President, yesterday, in the Joint Economic Committee, we heard from the chairman of the President's Council of Economic Advisers. As often happens in that committee, there were a number of issues raised. I would like to take the floor simply to clarify where we really are with respect to the economy. There are so many things being said in this election period about the economy that it is always nice to reflect on what the late Senator Moynihan used to say:

Everyone is entitled to his own opinion, but not to his own

facts.

Let's spend a little time talking about the facts and understand where the economy is. With a series of charts, I will try to do it as quickly as I can, with an understanding of where the economy currently is.

This first chart demonstrates economic growth as measured by GDP, gross domestic product. The bars on the chart represent quarters. The quarters with positive GDP growth are represented by blue bars. Quarters with declines in GDP are represented by red bars. If you will notice here in the beginning of 2000, the economy started to shrink-- that which we refer to as the recent recession which began in 2000. These are the quarters in which that happened. We got a recovery starting in the fourth quarter of 2001, but as these bars above the zero line demonstrate, the recovery was pretty anemic. Not much happened for a little over a year, as the recovery did not get traction. The recovery took off in the second quarter of 2003. That happens to be the time that we passed tax relief. Economists will argue as to whether the tax relief that was passed at that time is responsible for the recovery, but as they say in Manhattan, ``it couldn't hurt,'' because the tax relief was passed there, and we see the strong economic growth that has occurred ever since the second quarter of 2003.

Let's go to the next chart. There was talk that, well, we may be in recovery, but we are not getting any jobs; this is a jobless recovery. Where are the jobs? This chart demonstrates that, indeed, that is correct. Starting in 2000, the jobs started to disappear, and we had a long period that went on where the job base was shrinking in this country. In 2003, that turned around, and we started to see strong job creation since the second quarter of 2003. Once again, that is the quarter where we passed tax relief. Did the tax relief cause the job recovery? Nobody can prove that it did or it didn't. Once again, it didn't hurt.

Now we go to the question of business investment. The recession, once again, started in 2000. Business investment went into negative territory all through 2001, 2002, and then, in the third quarter of 2003, after we passed tax relief, business investment picked up. All of these things started going up after this one event of the passage of tax relief. Did the tax relief cause the business investment to go up? No one knows, but once again, it couldn't hurt.

All right. With those facts before us, and they are indisputable, we now hear the argument: Yes, maybe the GDP growth is occurring; yes, maybe the jobs have come back; yes, maybe business investment has come back. But the big problem is that real wages are down; because productivity has gone up, real wages have gone down.

Here is a historic demonstration of the tie between productivity and real wages. This goes back to 1950. The blue line on the chart is productivity growth; the red line is growth in real compensation including benefits. The two grow together. The outstanding increase in productivity we have had since 2003 has not produced a lowering of real compensation to workers. The best thing that can happen for real wages, historically, is for productivity to go up. So those who are bemoaning the increase in productivity, saying, yes, but real wages are down, are ignoring 50 years of history and the current facts.

We are told that the wages people take home are down; the wages people have in their pocketbooks are down in this recovery. Here on this chart, from the Bureau of Labor Statistics, is the evidence of what is happening to real hourly wage growth. We can see that, in previous recessions, every time

there was a recession, real wage growth went down; recession, real wage growth went down; recession, real wage growth went down. In this recession, real wage growth did not go down as much as it historically has; real wages stayed higher than they have been in the past.

During this period of recovery, it looks like--yes, that argument has merit--real wages are going down. However, one of the things we have to recognize is that this chart does not include benefits. When you add benefits to wages and get the total compensation that goes into someone's pocket, the picture changes. Consider the next chart. Again, the dark blue line on the chart is productivity, and it shows that employee compensation in total in a recession goes down as productivity goes up. It goes down as productivity goes up. It goes down as productivity goes up. It goes down as productivity goes up. And then, when the recovery takes hold, real compensation comes back up above the line.

Here are the facts. Taking this as the line between growth and shrinkage, real employee compensation, including benefits, has been in positive territory. It went below that, just as it has in every previous recession, but when the recovery took hold, employee compensation has gone into positive territory and come back up to join productivity, just as it has done historically.

Where do we get these arguments that real wages are going down? It is the difference between the two charts. The difference is that one chart looks at wages only, and ignores benefits. The other shows total worker compensation that includes wages and salaries, but also benefits workers receive. Now we can consider some statistics that I hope make the importance of the distinction between wages only and wages plus benefits very clear. The employment cost index data shown in the final chart shows that in the 1980s, real compensation growth grew at a 0.82 percent rate. In the 1990s, coming after the recession--we have taken the recession out of this--the period of growth during the Clinton administration stayed at virtually the same level. But from 2001 to the present, it is much stronger, at 1.11 percent.

How can that be, given the rhetoric we have heard? Well, if you go to the salary growth, take out the benefits, you find that portion of that wage and salary growth was 0.46 in the 1980s. It was 0.82 percent in the 1990s. It was only 0.39 since the beginning of 2001. This is the number which is being focused on as a demonstration of the fact that people's wages are not that good. But when you look at the benefits growth, you find that benefits grew in the 1980s at 1.76 percent. In the 1990s, at 0.73 percent growth, there was very anemic benefit growth. That is why this number is so close to this number, because the benefit growth actually pulled this number down. But when you get to what has happened from the beginning of 2001 to now, people are contracting for more benefits. The benefit growth is extremely strong, which is why real compensation is stronger in the post-2000 period than it was in either of the previous two decades--not a bad economic record since the year 2000 and the recession we had.

I have more to say on this, but I recognize that other Senators wish to speak, so I will conclude here. I wish to make it clear that the facts demonstrate that we have a strong economy currently going, and the facts demonstrate that real compensation is keeping up with it. Productivity is going up at an accelerated rate, and real compensation is also going up at an accelerated rate. We should be proud of what we have accomplished since coming out of the recession of 2000.

I yield the floor.

Mr. President, I thank my friend from Illinois for the amendment he has offered. It is my understanding that it is the same wording of the amendment to the bill which I offered and which is pending before the Judiciary Committee, cosponsored with Senator Clinton and others but that he has added a section to it which I find very worthwhile. I thank him for his thoughtfulness and for the section that he has added with respect to funerals and cemeteries, and for his diligence in bringing forward that piece of legislation which I had offered and which has been bogged down in the Judiciary Committee for whatever reason. I am grateful to him for his consideration.

I ask unanimous consent that I be added as a cosponsor to his amendment.

Mr. President, while I have the floor, I would like to make

this comment about the debate that is before us.

I have great personal conflicts on this issue because my senior colleague from Utah, Senator Hatch, is the cosponsor and the principal sponsor of the constitutional amendment which would empower the Congress to have the right to take legislative action to protect the flag.

I thank my friend from Massachusetts. I wasn't aware of the time situation.

I have enormous respect for Senator Hatch--not only for his legal ability but perhaps more so for his sincerity and his commitment to this cause.

This is not something he is doing for any cheap political purpose. This is not something he is doing to grandstand. This is something that he is doing because he sincerely believes it. He is sincerely committed to the idea that protecting the flag is an essential thing for us to do, not only to honor our veterans but to teach our children the importance of the flag in the future.

I respect that, and I am with him. But I cannot quite bring myself to amend the Constitution in the manner that he suggests for those purposes. I want to make it very clear that I do not under any circumstances denigrate those purposes. I believe that the legislation I offered--which, as I indicated, is still before the Judiciary Committee--would take care of the challenges of protecting our flag. He disagrees. He insists that my legislation would be unconstitutional based on past precedent.

Checking with legal authorities, I am assured that it is constitutional. That is not the point. The Senate will work its will one way or the other with respect to this.

I simply want to make it clear that although I have come to the conclusion that a constitutional amendment under the present circumstances is not necessary, this does not mean that I surrender one whit of my respect for and loyalty to my senior colleague. The Senate will make its decision. I will be happy with whatever that decision might be.

I once again extend my support and respect for my senior colleague even as I announce my intention to vote in a different path.

Mr. President, I rise today with my friend and colleague on the Banking Committee, the Senator from Delaware, Mr. Carper, to introduce legislation that I believe is of great importance to our economy and to American consumers. This legislation, The Data Security Act of 2006, will help protect individuals and businesses from the crimes of identity theft and account fraud, which are increasing at an alarming rate. These crimes impose higher costs on every consumer and business and can be financially debilitating to individuals whose personal information is stolen.

We are now living in the Information Age. Information drives our economy, from the design and production phase of new products or services to payment and delivery. Information technology and electronic networks have brought conveniences and efficiencies to both producers and consumers in our economy. Producers can better focus their products and services to potential customers, and consumers get the products they want with multiple payment options. Technology and, specifically, information technology makes this process ever more convenient and efficient.

All of the conveniences and efficiencies of the information age which benefit our evolving economy and its consumers have also brought new challenges. Criminals have also entered the information age and are now targeting and using information technology to steal from many of us.

Information databases and electronic information networks that contain sensitive personal information and sensitive financial account information are increasingly targets of sophisticated hackers, organized crime rings, identity thieves, and other criminals. When an individual has his identity or account information stolen from one of these sources and criminals use his or her legitimate name and credit history to create fraudulent accounts, or fraudulently access an existing account, by the time it is discovered, it is often too late to prevent that consumer from the need to invest significant time and effort to clear his or her name. These crimes also impose significant costs on financial institutions which are often liable for the loss of funds from the fraud. These costs are then passed on to all consumers through higher prices. We need to do more to prevent this type of fraud from happening in the first instance.

Currently, we are only partially protecting consumers from account fraud and identity theft. Criminals have shown they know how to exploit any weakness in information databases and networks, so we must do more to protect this information regardless of where it is located. Most of the recent data security breaches have occurred outside of financial institutions.

The Gramm-Leach-Bliley Act requires financial institutions to protect the security and confidentiality of customer information. The Federal banking agencies have issued guidance under the Gramm-Leach-Bliley Act requiring banks to investigate and provide notices to customers of breaches of data security involving customer information that could lead to account fraud or identity theft. Even with GLB and the associated regulations and guidance that have been implemented, many databases and information networks continue to be vulnerable because Federal law generally does not require entities that are not financial institutions to protect the security and confidentiality of sensitive information relating to consumers, or to investigate and provide notices to consumers of breaches that may lead to account fraud or identity theft.

I recognize that many States have enacted security breach notification statutes in an effort to protect their citizens and I commend them for their efforts, but these statutes impose different and sometimes conflicting requirements, thereby providing consumers with uneven protection and subjecting businesses to multiple and confusing standards.

Our credit granting system and financial payments system is a national one and not a state based system. Consumers generally benefit greatly because of our national system. Because of that fact, I believe we need a national uniform system governing data security and security breach notification for financial institutions and other entities that maintain or communicate financial account information or personally identifiable information that could be used by identity thieves.

The standards established as a result of the guidance issued by the Federal banking agencies under the Gramm-Leach-Bliley Act provide an appropriate model for Federal data security and security breach notification requirements and is, therefore, the model for the Data Security Act of 2006.

The Data Security Act of 2006 will provide a uniform national standard for data security and breach notification. Sensitive personal and account information must be protected, and in the event where that protection is breached and there is a risk to the individual of identity theft or account fraud, that individual must be notified so that he or she can take the appropriate steps to protect him or her self.

I encourage my colleagues to c1ose}y review this legislation and I hope we can act quickly here in the Senate to pass the Data Security Act of 2006. I thank my friend from Delaware, Senator Carper, for joining with me today to introduce this legislation.

Mr. President, I rise today with my friend and colleague on the Banking Committee, the Senator from Delaware, Mr. Carper, to introduce legislation that I believe is of great importance to our economy and to American consumers. This legislation, The Data Security Act of 2006, will help protect individuals and businesses from the crimes of identity theft and account fraud, which are increasing at an alarming rate. These crimes impose higher costs on every consumer and business and can be financially debilitating to individuals whose personal information is stolen.

We are now living in the Information Age. Information drives our economy, from the design and production phase of new products or services to payment and delivery. Information technology and electronic networks have brought conveniences and efficiencies to both producers and consumers in our economy. Producers can better focus their products and services to potential customers, and consumers get the products they want with multiple payment options. Technology and, specifically, information technology makes this process ever more convenient and efficient.

All of the conveniences and efficiencies of the information age which benefit our evolving economy and its consumers have also brought new challenges. Criminals have also entered the information age and are now targeting and using information technology to steal from many of us.

Information databases and electronic information networks that contain sensitive personal information and sensitive financial account information are increasingly targets of sophisticated hackers, organized crime rings, identity thieves, and other criminals. When an individual has his identity or account information stolen from one of these sources and criminals use his or her legitimate name and credit history to create fraudulent accounts, or fraudulently access an existing account, by the time it is discovered, it is often too late to prevent that consumer from the need to invest significant time and effort to clear his or her name. These crimes also impose significant costs on financial institutions which are often liable for the loss of funds from the fraud. These costs are then passed on to all consumers through higher prices. We need to do more to prevent this type of fraud from happening in the first instance.

Currently, we are only partially protecting consumers from account fraud and identity theft. Criminals have shown they know how to exploit any weakness in information databases and networks, so we must do more to protect this information regardless of where it is located. Most of the recent data security breaches have occurred outside of financial institutions.

The Gramm-Leach-Bliley Act requires financial institutions to protect the security and confidentiality of customer information. The Federal banking agencies have issued guidance under the Gramm-Leach-Bliley Act requiring banks to investigate and provide notices to customers of breaches of data security involving customer information that could lead to account fraud or identity theft. Even with GLB and the associated regulations and guidance that have been implemented, many databases and information networks continue to be vulnerable because Federal law generally does not require entities that are not financial institutions to protect the security and confidentiality of sensitive information relating to consumers, or to investigate and provide notices to consumers of breaches that may lead to account fraud or identity theft.

I recognize that many States have enacted security breach notification statutes in an effort to protect their citizens and I commend them for their efforts, but these statutes impose different and sometimes conflicting requirements, thereby providing consumers with uneven protection and subjecting businesses to multiple and confusing standards.

Our credit granting system and financial payments system is a national one and not a state based system. Consumers generally benefit greatly because of our national system. Because of that fact, I believe we need a national uniform system governing data security and security breach notification for financial institutions and other entities that maintain or communicate financial account information or personally identifiable information that could be used by identity thieves.

The standards established as a result of the guidance issued by the Federal banking agencies under the Gramm-Leach-Bliley Act provide an appropriate model for Federal data security and security breach notification requirements and is, therefore, the model for the Data Security Act of 2006.

The Data Security Act of 2006 will provide a uniform national standard for data security and breach notification. Sensitive personal and account information must be protected, and in the event where that protection is breached and there is a risk to the individual of identity theft or account fraud, that individual must be notified so that he or she can take the appropriate steps to protect him or her self.

I encourage my colleagues to c1ose}y review this legislation and I hope we can act quickly here in the Senate to pass the Data Security Act of 2006. I thank my friend from Delaware, Senator Carper, for joining with me today to introduce this legislation.

Mr. President, I rise today to introduce legislation to amend the Credit Repair Organizations Act, CROA, to stop abusive class action lawsuits against companies offering legitimate credit file monitoring products. The following is a summary of why we need to pass this legislation.

Credit-monitoring products are offered by consumer reporting agencies, their affiliates, and resellers. These products help consumers access their consumer report information and credit scores on a regular basis. They include credit alert features when derogatory information appears in the consumer's file or someone obtains the consumer's report. The products give consumers a front-line defense against identity theft, and are routinely made available to victims of security breaches. Credit-monitoring products also educate consumers about their credit scores and credit histories. The market is highly competitive. Banks and other creditors also provide these products to their customers.

These products are threatened by abusive class action lawsuits, based on CROA's language. CROA was to combat the assault on the integrity of accurate credit file data by credit repair organizations and by consumers acting on their advice. Under CROA, a credit repair organization is subject to a number of appropriately harsh and specific requirements. The most significant of these is a prohibition on collecting fees before completion of performance of the promised services. CROA also mandates that consumers be given a written warning that the services cannot result in the change or deletion of negative but accurate data. This ``warning'' would be confusing and inappropriate if given to a consumer of credit monitoring products or services.

CROA was enacted before credit monitoring products were created. The CROA definition of ``credit repair organization'' is intentionally broad in order to prevent circumvention of its coverage. Among other things, the definition includes an entity that implies its activities or services can ``improve'' a consumer's credit record, credit history or credit rating. The breadth of the definition has been used by plaintiffs' lawyers an attempt to obtain statutory damages against consumer reporting agencies and their resellers solely for offering these monitoring

products. The class action lawsuits threaten the viability of the credit-monitoring industry.

This result can be prevented through the enactment of a technical amendment to CROA that clarifies the definition of ``credit repair organization'' as it includes ``improving'' a consumer's credit record, etc. The amendment can explain that ``improving'' a consumer's credit record does not include credit monitoring, notifications, analysis, evaluation, or explanations.

Because this is a clarifying amendment, it will not affect the CROA's essential operation or Federal agency enforcement. The Federal Trade Commission has stated that it does not think credit-monitoring products should be subject to CROA. If this amendment is enacted, consumers will continue to enjoy CROA's important rights and protections, including the right to bring private lawsuits against credit repair organizations for violations of the act. The amendment to CROA will also assure the continued availability of credit monitoring products and services for consumers.

I encourage my colleagues to join with me in passing this important legislation.

Mr. President, I rise today to introduce legislation to amend the Credit Repair Organizations Act, CROA, to stop abusive class action lawsuits against companies offering legitimate credit file monitoring products. The following is a summary of why we need to pass this legislation.

Credit-monitoring products are offered by consumer reporting agencies, their affiliates, and resellers. These products help consumers access their consumer report information and credit scores on a regular basis. They include credit alert features when derogatory information appears in the consumer's file or someone obtains the consumer's report. The products give consumers a front-line defense against identity theft, and are routinely made available to victims of security breaches. Credit-monitoring products also educate consumers about their credit scores and credit histories. The market is highly competitive. Banks and other creditors also provide these products to their customers.

These products are threatened by abusive class action lawsuits, based on CROA's language. CROA was to combat the assault on the integrity of accurate credit file data by credit repair organizations and by consumers acting on their advice. Under CROA, a credit repair organization is subject to a number of appropriately harsh and specific requirements. The most significant of these is a prohibition on collecting fees before completion of performance of the promised services. CROA also mandates that consumers be given a written warning that the services cannot result in the change or deletion of negative but accurate data. This ``warning'' would be confusing and inappropriate if given to a consumer of credit monitoring products or services.

CROA was enacted before credit monitoring products were created. The CROA definition of ``credit repair organization'' is intentionally broad in order to prevent circumvention of its coverage. Among other things, the definition includes an entity that implies its activities or services can ``improve'' a consumer's credit record, credit history or credit rating. The breadth of the definition has been used by plaintiffs' lawyers an attempt to obtain statutory damages against consumer reporting agencies and their resellers solely for offering these monitoring

products. The class action lawsuits threaten the viability of the credit-monitoring industry.

This result can be prevented through the enactment of a technical amendment to CROA that clarifies the definition of ``credit repair organization'' as it includes ``improving'' a consumer's credit record, etc. The amendment can explain that ``improving'' a consumer's credit record does not include credit monitoring, notifications, analysis, evaluation, or explanations.

Because this is a clarifying amendment, it will not affect the CROA's essential operation or Federal agency enforcement. The Federal Trade Commission has stated that it does not think credit-monitoring products should be subject to CROA. If this amendment is enacted, consumers will continue to enjoy CROA's important rights and protections, including the right to bring private lawsuits against credit repair organizations for violations of the act. The amendment to CROA will also assure the continued availability of credit monitoring products and services for consumers.

I encourage my colleagues to join with me in passing this important legislation.

I would say to the Senator from Michigan that I am aware of his amendment, but unfortunately cannot support any amendment to the agriculture title of the supplemental appropriations bill which does not have an adequate offset. It is my understanding the amendment Senator Levin has introduced with Senators Stabenow, DeWine, Voinovich and Durbin does not contain any offset for the $15 million requested.

I have been advised of the urgent need for funds in the Midwest.

I say to my friend that we did indeed work with our House counterparts in crafting the final 2006 appropriation, but unfortunately were only able to allocate $10 million in the end.

I tell my friend from Michigan that I will do all I can, in consultation with Members from the affected states and the Department of Agriculture, to craft an appropriations bill which contains adequate funding to combat the Emerald Ash Borer.

Mr. President, I ask unanimous consent, the order for recess notwithstanding, I be allowed to speak for up to 10 minutes as if in morning business.

Mr. President, last week we had numbers that came out with respect to the economy. We also had testimony from the chairman of the Federal Reserve Board with respect to the economy. And as recently as yesterday we had some stunning numbers that came out telling us what is happening in the economy. I would like to review those very quickly for the Members of the Senate.

This chart demonstrates that the economy remains strong. Last week's number said that economic growth in the first quarter was 4.8 percent.

As you can see on the chart, that is the highest number since we had the spike in 2003.

Each one of these dark figures represent a quarter and demonstrates that the economy has now grown ever since the end of the recession in 2001. We had weak growth for the first little while and then the economy has been growing very strongly ever since.

This a very strong and vibrant economy, as Chairman Bernanke made clear in his testimony to the Joint Economic Committee.

People want to talk about jobs. Let us look at the unemployment rate.

If you will notice, the shaded areas in the chart represent the last three recessions. In the recession of the 1980s, unemployment got into double digits--10.8 percent is where it spiked. In the recession that occurred in the early 1990s, unemployment got to 7.8 percent--spiked at that point. In the recession we just had, unemployment spiked at 6.3 percent, a relatively low level, but it has been zinging ever since, and it is now at 4.7 percent.

I have sections of my State--and I trust others have in theirs--where there are more jobs than there are people, where people are looking for jobs. The unemployment rate is going down and demonstrating the strength of this economy as it generates new jobs.

Here is the flip side of that. This chart shows payroll jobs either lost or created.

Here, each bar represents a month. Starting in 2003, instead of losing jobs, we began to gain jobs each month. And there are over 5.1 million new payroll jobs that have been created since the Senate and the House passed the 2003 Tax Relief Act.

More Americans are working today than at any other time in our history. There are more jobs today than at any other time in our history. This is a consequence of the robust economy.

The next chart shows the growth of business investment. You will notice there are no dates. These are quarters. The red shows quarters in which business investment shrank and the blue shows quarters in which business investment grew.

I ask as a test for people: What is the date when the bars went from red to blue? We didn't put them on the chart. If you were to guess that it was the first quarter of 2003, the time when the tax cuts took effect, after which the tax cuts changed the pattern for business investment, you would be correct. You can see the dramatic difference between the quarters that preceded the tax relief and the quarters that succeeded it.

I would be the first to concede that it is not a pure cause-and- effect relationship. But I think the chart demonstrates that you cannot discount the fact that the tax cut had a significant beneficial effect on the economy.

Business activity continues to grow.

This chart gets a little bit busy, but the line in the middle is the line between growth and shrinkage. And the two graphs, the red one is the growth in services, the blue one is growth in manufacturing.

For those who say manufacturing is in trouble, look at the facts.

Again, starting in 2003, manufacturing crossed the line and became positive and has been positive ever since.

Yesterday this appeared in the Associated Press:

Manufacturing cranked up. Builders boosted construction

spending to an all-time high, and consumers opened their

wallets wider, fresh signs that the economy has snapped out

of its end of the year slump.

This was the message coming from the latest patch of economic reports released Monday.

A report from the Institute for Supply Management showed that factory activity expanded with gusto in April. The group's manufacturing index rose to 57.3 in April; from 55.2 in March. The showing was much better than the predicted reading of 55 that economists were expecting.

So business activity continues to grow.

To tick off the facts of what has happened since May of 2003 when the tax cuts kicked in, real gross domestic product growth has averaged 4 percent; over 3\1/2\ million new payroll jobs have been created; the unemployment rate has fallen to 4.7 percent; manufacturing has expanded for 35 consecutive months; service industries expanded for 36 consecutive months; business investment has increased for 10 consecutive quarters, with growth averaging over 9 percent; inflation- adjusted after-tax income has grown by almost 5 percent; the Dow Jones Industrial Average is up 27 percent; the NASDAQ is up 44 percent; and, taxes paid on capital gains was $80 billion dollars last year, compared to taxes paid on capital gains in 2002 which was $49 billion.

We hear a lot of gloom and doom on this floor. We hear a lot of people talking about how bad things are. The facts do not support that.

The economy is strong. The economy is going forward, and the economy is in a boom period and has been since the tax cuts took effect in May of 2003.

I yield the floor.

I appreciate the concerns of the distinguished senior Senator from New Mexico regarding the ECP provision ontained in title III of this legislation. The Senator's understanding of the intent of the ECP appropriation is correct.

Mr. President, today's papers are filled with stories about energy prices and particularly gas costs and editorials demanding that the Congress and the President do something about it. I think perhaps the best comment that appeared was in this morning's Wall Street Journal in a story with the headline ``Bush Aims To Rein In Gas Costs,'' where there is a quote from Robert Ebel, who directs the energy program at the Washington Center for Strategic and International Studies. All of us are familiar with CSIS and the good work that it does. I would like to quote Mr. Ebel because what he has to say is the clear understanding of where we are. He says:

A good politician never admits he's powerless in a

situation, but I don't see anything that the Congress can

propose that will make any difference. We don't stand in

isolation from the rest of the world oil market, and there

are events going on around the world that affect the world

price of oil.

I note that he uses the term ``world''--I could count how many times, but multiple times--and we act as if this is a domestic problem. We act as if this is something we in Congress or the President in the White House can wave a magic wand and do something about.

I would like to point out a few facts and perhaps bring a little humility into this body, something that is in fairly short supply but in great need.

As Mr. Ebel points out, the price of oil is set by a series of world events. It is not set in the Congress. It is not set in the White House. People look at the cost of a gallon of gasoline and say to themselves: You know, it only costs--picking numbers out of the air but being illustrative--$1.50 to put that gallon of gasoline in the tank at the service station, yet the service station operator is charging me $3 to take it out; there is price gouging going on somewhere. The reality is that the price in the tank at the service station is not figured on the basis of what did it cost to get that gallon there; the price at the service station is figured on the cost of what will it cost to replace that gallon there. So the reason a gallon of gas is at $3 at the service station is that all of the forces involved in putting that gallon of gas in there assume that it will cost $3 to replace it; therefore, they better charge $3 for it in the first place.

Now, they may be wrong. It may be that they can replace that gallon of gas for $2.50, and as soon as they come to that conclusion, that gallon of gas will come down to $2.50. It may be that the cost of replacing that gallon of gas will be $3.50, and at that point, everybody will lose some money along the way. But whether it is the production of oil in the oilfield, the transportation of oil around the world, the refinement of oil in the various refineries, the transportation from the refinery to the service station, everyone is making a guess as to what it will cost for the next gallon of gas along the way, and that shows up in what appears at the service station.

So when there is trouble in Nigeria, someone says, by virtue of that trouble in Nigeria, the next gallon of gas is going to cost more than we think, and that is why the price goes up. If there is trouble and difficulty in Iran, well, that is going to cause the price to go up, and let's bet against that future. If there is trouble in Venezuela, then that figures in. When it turns out that the trouble doesn't materialize, the price of gasoline drops dramatically, and we have seen that in this past history.

The primary thing that started gas prices going up was Katrina. Why? Because Katrina wiped out a good percentage of our refinery capability. As the Senator from Montana has pointed out, we haven't built a refinery in this country for several decades. We need to get about it. But that is a 5- to 10-year

problem. We can't instantly create a refinery out of nothing. As the refineries were shut down as a result of Katrina, the price of gas spiked as people anticipated that there would not be enough supply. As the refineries came back on line more rapidly than anybody anticipated, the price of gasoline dropped.

Now refinery capacity is being shut down again. Why? Because we here in this Congress mandated the replacement of MTBE with ethanol, and the refineries have to gear up to make that shift. When they do that, they shut down in order to retool. When they shut down, there is a lack of gasoline, and you have prices going back up again. Once they have made the shift over, we will find those prices will start to come down, unless there is some other unsettling situation somewhere in the world.

The bottom line, to repeat a refrain I have stated ever since I have been in the Senate, is that we cannot repeal the law of supply and demand. We engrave Latin phrases around here--and they are wonderful-- to remind us of our history and our background, but if I could control what we carve in marble and see every day, it would be that statement: You cannot repeal the law of supply and demand. If we had built the facilities in ANWR in 2001 when there were sufficient votes in the House but was killed in the Senate, it is likely that oil would be coming on line now, because at the time people said: Don't get excited about ANWR; it is going to take at least 5 years. Well, 2001 was 5 years ago. If we had done that, we would start to see that oil. Would it lower the price? Of course it would because it would change the equation of expectations of people who are involved in this whole situation.

One last comment. I have talked about ethanol, and I have talked about MTBE. These are additives to lower the emissions that come out of gasoline, and they are good things. They are, however, expensive, and we cannot say on one hand: OK, let's get the price of gasoline as low as possible, and by the way, while we are doing it, let's put new burdens on the refineries that require this additive, that additive, and the other additive, that will require the creation of what are called boutique fuels, so that the refinery, instead of just putting out gasoline in regular or super high test, are putting out a boutique fuel for this part of the country and a boutique fuel for that part of the country and a boutique fuel for the other part of the country. That means constantly retooling, shutting down, starting up, changing, and all of that adds to the cost.

We have added to the cost here in the Congress in the name of environmental protection. I am not saying environmental protection is bad, but I am saying it costs money. We should pay attention to that so when the time comes for us to say what can we do about the high gasoline prices, the answer is we can pay attention and be a little more humble before the power of market forces. If we think Government can intervene with market forces and produce long-term lower prices, all we need to do is dredge up memory of what happened the last time we panicked about this as a nation in the 1970s. Under the leadership of President Carter we created a synfuels corporation, created oil company windfall taxes, and ended up in lines on separate days. You could only get your gas tank filled on alternative days. Ultimately, we saw all of the effort collapse when market forces finally took hold and brought the prices back in line.

I know it is not a message people want to hear. I, like Senator Burns and other Senators, have been out in my constituency during the break, and I heard people talking about: What are you going to do about gas prices? I had two choices. I could either tell them I will come back here and I will fight to lower the gas prices--and make them feel good--or I could tell them the truth. I chose to tell them the truth. This is a long-term problem, it is a serious problem, and it can only be solved by serious policies. The most intelligent serious policy that we can adopt is to do whatever we can to facilitate the kinds of competition and market forces that ultimately will bring supply up and prices down and deal with the demand side as best we can through conservation.

It is not a quick fix. We can't pass a resolution and say, gee, look what we did and see something happen at the pump the day after tomorrow. It is time we recognize that fact and told our constituents the truth.

I yield the floor.

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

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

Mr. President, I ask unanimous consent that calendar No. 374, S. 598, now be referred to the Banking Committee and then immediately discharged and placed on the calendar.

I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 421, which was submitted earlier today.

Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, and the motion to reconsider be laid upon the table, and that any statements relating thereto be printed in the Record as if read.