Floor Statements

Mr. President, I support the intent of the amendment offered by the Senator from Alabama. I think he is right, we need parity, as much as possible, in the disclosure requirements. I also believe he is correct the disclosure reports should be online so they are easily accessible. So the intent of his amendment is one I wholeheartedly support.

As Senator Lieberman does, I have some questions about the universe of Federal employees who would be covered by the amendment of the Senator from Alabama. We have been working successfully with the Senator from Kentucky, who first brought up this issue of parity, to make sure the scope of coverage is appropriate. It seems to me one way to solve these issues is to use a similar scope as we have agreed on with Senator Paul in the amendment that Senator Shelby has brought forth. We would then have a certain consistency that we had vetted the universe of Federal employees that should be covered. That seems to me to be a very appropriate and relatively easy fix to this issue.

I do want to emphasize that I agree with Senator Shelby that those Federal employees should be required to file in the same timeframes as Members of Congress and their staffs, and that certainly those reports should be accessible online.

Mr. President, I suggest the absence of a quorum.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I want to comment briefly on the amendment that has been proposed by the Senator from California to the legislation written by Senator Brown. Senator Gillibrand has a similar bill as well, and I want to explain to our colleagues what the state of the current law is, which I think would be helpful.

Under the Ethics in Government Act of 1978, there is an exemption from disclosure for mortgages secured by real property that are the personal residence of the reporting individual or his spouse.

Under the liabilities section of that same report, which we now file annually, liabilities in excess of $10,000 must be reported that are owed by the Member, the spouse, or the dependent child to any one creditor during any time during the reporting period. Credit card debts, for example, are reported. Other kinds of loans are reported. Mortgages held on investment properties--properties, for example, that are rented--are reported. The exemption only goes to the personal residence of the Member and/or the Member's spouse.

I am unclear, and need to get clarification from Senator Boxer and also the Office of Government Ethics, whether her amendment would extend the new disclosure requirement that she is proposing to executive branch employees or whether it would only apply to the legislative branch. As I read her amendment, it looks as though it only applies to the legislative branch and perhaps only to Members.

I would ask, through the Chair, if the Senator from California could clarify for me--this is truly an informational question--whether she is intending this new requirement to apply to congressional staff and whether she is intending this new requirement to apply to executive branch members who are currently required to file an annual financial disclosure form.

Mr. President, I thank the Senator from California for clarifying that issue and answering my question.

I guess my further question would be, why would we only apply it to Members of Congress and not apply it to members of the executive branch? For example, I would argue that if there are conflict of interest issues or allegations of a sweetheart deal for mortgages that might be revealed by this disclosure, that that would apply equally to, say, Treasury officials--in fact, even more so to Treasury officials or bank regulators--as it would Members of Congress.

I wonder if the Senator's intent is to make sure that Members are not getting sweetheart deals on their mortgages--which obviously no Member should be receiving a sweetheart deal on a mortgage--why that same logic would not apply to executive branch officials, particularly since arguably they have far more direct influence and jurisdiction and regulatory authority over financial institutions than do Members of Congress.

Mr. President, the reason I am raising this issue--I realize the Senator from California has not had the misfortune I have had, of being constantly on the floor listening to the debate on this bill--but a major issue we have been grappling with is parity in the rules. This issue has not just come up with regard to the amendment of the Senator from California, it has come up over and over.

I am not in any way singling out the Senator from California to raise this issue. This has come up on every single issue we have been tackling on the floor, which is, if we are going to have more disclosure for the legislative branch, should we not have the exact same or comparable disclosures for high-ranking executive branch officials?

The issue I raised, I wish to assure the Senator from California, is no means unique to her amendment. It has come up over and over and, indeed, the first amendment that we were supposed to have voted on last night was an amendment by Senator Paul, making clear that this bill applied to the

executive branch and then Senator Shelby had an amendment to make sure there was online disclosure by the executive branch.

This is an issue that has permeated the entire debate on the STOCK Act. It is not unique to the issue that has been raised by the Senator from California.

Mr. President, first, let me make the point to the Senator from California, I am a cosponsor of the STOCK Act. I cosponsored Senator Brown's bill, so it is not that I do not think legislation is needed in this area. I am a cosponsor on this bill and have commended him for his work. But the fact remains that in our committee markup the bill was changed.

I know the Senator was distracted when I answered that question. The bill was changed in committee to extend to the executive branch. It is in the bill that is before us now. The Senator was misinformed in that regard. The bill was changed to make very clear that the insider trading prohibition applied to the executive branch and that executive branch members have a duty to their agencies, to the government. We make that explicit. That was changed in committee.

The Senator is not correct that the bill that was brought to the floor only applied to Congress. It does not. It applies to the executive branch.

The second point I will make is this is not a partisan issue. We have bills on both sides of the aisle. We have amendments on both sides of the aisle. Indeed, we have disclosure amendments that apply to the executive branch coming from both sides of the aisle. Senator Wyden has a disclosure amendment that is similar to that of Senator Shelby's. We are working with both of those offices right now to try to work those out.

I do not know how this all of a sudden became a partisan debate or a debate about the Bush administration or anything. This is a debate about good government and how we can best assure the American people that, regardless of whether public officials are in the executive branch or the legislative branch, they are putting the public's interests ahead of their private interests and that they are not profiting from insider information, nonpublic information that is not available to the public which they are using inappropriately--if, in fact, that is even happening--for personal gain.

I did wish to clarify that the bill, as reported from committee, does apply to the executive branch as well as the legislative branch, that the statement made by the Senator was inaccurate in that regard, and that we have amendments on both sides of the aisle that we are working on right now to extend the disclosure requirements, the reporting requirements to the executive branch. Those are amendments coming from both Democrats and Republicans.

I would like to yield at this point to the Senator from Massachusetts.

Mr. President, I do not know why the Senator from California, first of all, is assuming I am somehow

opposed to her amendment. I have not said that. What I raised was a very legitimate question of asking whether she had considered extending it to the executive branch.

Then her response seems to be an attack; that if I have information that there are problems and sweetheart deals in the executive branch, I should prove them.

I am not making allegations. I do not make unsubstantiated allegations against individuals. What I was trying to tell the Senator from California is that the issue of the scope and applicability of this bill has come up over and over. It came up in committee. We changed the bill in committee to make it clear that the prohibition against insider trading and a duty applied to the executive branch as well as to the legislative branch.

I have not criticized her amendment in any way. I asked a series of questions about the scope of her amendment because this issue has come up repeatedly, on both sides of the aisle. It came up in committee during our markup. It has come up on the Senate floor repeatedly as far as what the disclosure requirements should be and to whom they should apply.

I am the one who is baffled by the response of the Senator from California, since I have not indicated any opposition whatsoever to her amendment.

I have merely brought up the fact that the issue of the scope of this bill has come up repeatedly, so I was curious why she chose to have such a narrow bill rather than applying it to executive branch officials who filed the same kinds of disclosure.

I thank the Chair.

(The remarks of Senator Collins pertaining to the introduction of S. 2044 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. President, I suggest the absence of a quorum.

Mr. President, I thought we had a tentative, informal agreement that we were going to go

back and forth, alternating to make amendments pending, and that we would do one from the Democratic side, then one from the Republican side, and go back and forth.

I thank the Senator.

Mr. President, I, then, ask unanimous consent that we proceed with amendments so that we do alternate from side to side, since there are a number of amendments that have been filed, and I think that would be the fairest way to proceed to make them pending.

Mr. President, earlier we agreed to alternate side to side for the offering of amendments. However, I would say to the Democratic floor manager that there do not appear to be any Democrats right now who are seeking recognition. Therefore, I would ask unanimous consent that the Senator from Arizona be permitted to proceed at this time, given the absence of a Democrat on the floor.

Mr. President, I know of no other speakers who plan to come to the floor before we are scheduled, under the previous order, to recess at 12:30. So I suggest that we might want to move up the recess time by a couple moments.

Mr. President, before the Senator from Oklahoma offers his amendment--and I will not take a great deal of time in my comments--I want to respond to some questions that many of our colleagues have raised about the reporting requirements in this bill. One of my colleagues, for example, has asked if a change in a Member's or staff's allocation in the Thrift Savings Program would be required to be reported under this bill. It would not. It is not required to be reported under the annual financial disclosure and it is not required under this bill.

A second of our colleagues has brought up a question of how would mutual funds be treated. Again, I would say that the treatment is not changed by this bill, other than the time period. Under this bill, as under the annual financial disclosure forms, qualified investment funds--those are the widely available mutual funds that are exempt from trades being disclosed--would be exempt under this bill as well.

As with our annual financial disclosures, you still list the fund and the amount of assets in categories for those funds, but you indicate that they are a qualified exempt fund and there is no requirement for trying to figure out what the trades are within that fund.

I mention these two examples because I fear there is some misinformation about the bill that is circulating. There is a legitimate dispute over whether 30 days is too short a time, whether the 90-day period in the original bill is better, which is my own preference. But the fact is that the information that is being reported is not being changed. The issue is how often it is reported. The inquiries from my colleagues about the implications for the Thrift Savings Plan allocations and for qualified exempt investment funds, widely held mutual funds, remain the same. They are reported, the category of the investment, the amount is reported, but the individual trades within the fund are not reported.

I apologize for surprising the Senator from Connecticut with this inquiry, and hope he will forgive me for that, but I would, through the Chair, pose a question to the Senator from Connecticut, the chairman of the committee, as to whether his understanding is the same as mine with regard to the Thrift Savings Plan and qualified mutual funds?

I thank my colleague and friend from Connecticut, the chairman of the committee.

Thank you, Mr. President, for allowing us to pose a question through the Chair. I hope our colleagues have heard this exchange, this colloquy, which clarifies what appears to be a rather widespread misunderstanding about the reach of this bill. As I said, the 30-day issue is a different issue, a legitimate dispute as to whether that is too aggressive. We have some colleagues who think it should be a 10-day reporting period and an amendment has been filed to implement that. I personally prefer the 90 days in the original bill. I think that is more realistic. But the fact is there is a lot of misinformation and questions regarding what is reported. I appreciate the clarification from the Senator, the chairman of the committee.

At this point I yield to Senator Coburn for the next amendment.

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

Madam President, I thought I would bring our colleagues up to date on what is going on this evening, as it is getting late. We are close, I believe, to working out an agreement for a vote on an amendment that was offered by Senator Paul earlier. It has to do with extending to executive branch officials the same kind of reporting requirement to ban insider trading that would apply to Members of Congress and their staffs. It is an amendment that enjoys the support of both managers and the principal authors of this bill.

We are trying to make sure, however, that we narrow the amendment so that it applies to top-level Federal employees and not to low-level Federal employees, who have no policy responsibilities. So we were looking at limiting it to Senate-confirmed positions. The problem with that is it brings in all of the military appointments that are Senate confirmed, so we want to make sure we exclude those individuals who are clearly not the target of the amendment.

We continue to work--the managers, the sponsors of the bill, and the sponsor of the amendment, Senator Paul--in order to refine his amendment. It is still our hope that we can reach that compromise and have a rollcall vote tonight. We will keep our colleagues informed about whether it will be possible to complete the drafting that would be needed to modify his amendment.

Amendment No. 1490

In the meantime, I want to talk very briefly about an amendment Senator Paul filed, his amendment No. 1490. This is an amendment that would require former Members of Congress to forfeit their Federal retirement benefits if they work as a lobbyist or even engage in any lobbying activity--regardless, I might say, of whether they served 40 years in this body.

I also note that the language in this amendment is extraordinarily broad. For example, the definition of remuneration includes salaries, any payment for services not otherwise identified as salary, such as consulting fees, honoraria, and paid authorship. Think about that. As I read the language, a former Member of Congress who writes a book would be in danger of forfeiting his or her pension. In other words, this is going to apply to authors. It mentions honoraria, so if a former Member of Congress gives a speech and receives $1,000 for giving that speech, that former Member is going to forfeit his or her pension--earned pension?

I don't even know that this would pass constitutional muster. But there is certainly a fairness issue, it seems to me. I don't know if the intent of the Senator from Kentucky was to draft this as broadly as he did to include and define as remuneration paid authorship. In other words, if you wrote a book--and it would not even have to be a book; what if you wrote a newspaper article or an op-ed for the Washington Post and received $250 for that? Do you forfeit the Federal pension? What if you worked in the private sector for a number of years, worked in State government for a number of years, and then worked for a few years serving the people of this country in Congress? Would you then forfeit your pension if you provided some lobbying activities? If you wrote a book? If you gave a speech for money? This is extraordinarily broad.

I see the Senate majority leader is on the floor, so I will stop discussing this amendment. I did want our colleagues to actually read the text of this amendment before we ever vote on it.

It defines remuneration not just as salary or payment for services not otherwise identified as salary, but consulting fees, honoraria, and paid authorship. In other words, if after being in Congress you wrote a book or you wrote an op-ed for which you were paid, you forfeit your Federal pension because you did some lobbying activities? This strikes me as a very sweeping amendment that does not belong on this bill.

Madam President, I want to join in saluting Alan for his many years of work. He is someone all of us know to be an honest broker, who calls them as he sees them, who withstands at times tremendous pressures, and who has extraordinary knowledge that all of us have come to rely upon.

On behalf of the Republican side of the aisle, I am sure I am speaking for our Members as well in saluting Alan and wishing him well, and thanking him for his many years of dedicated public service.

We wish you well.

Mr. President, I rise today to introduce legislation aimed at ensuring that the health of American travelers is not placed at possible risk as our airport security technology evolves. I am very pleased to be joined by Senators Akaka, Coburn, Scott Brown, and Levin, who are cosponsoring this bill.

Our bill has two major components. First, it would require the Department of Homeland Security's Science and Technology Directorate, in consultation with the National Science Foundation, to commission an independent study on the possible health effects of the x-ray radiation emitted by some of the scanning machines we see and pass through in our airports. Second, it would give airline passengers, especially those passengers in sensitive groups such as pregnant women, clear notice of their ability to choose another screening option in lieu of exposure to ionizing radiation.

Some advanced-imaging technology--or AIT--machines rely on x-ray backscatter technology. Time and time again, I have expressed my concern over their use, particularly since there is an alternative screening technology available. While the TSA has repeatedly told the public that the amount of radiation emitted from these machines is extremely small, passengers and some scientific experts have raised legitimate questions about the impact of repeated exposure to this radiation.

Last November, during a hearing on aviation security before our Homeland Security Committee, the TSA Administrator, John Pistole, agreed to my

call for an independent study to address the lingering health concerns and questions about this additional and repeated exposure to radiation. Shortly thereafter, however, he appeared to back away from this commitment, suggesting that a forthcoming report by the Department of Homeland Security's inspector general might be a sufficient substitute for a new, completely independent, thorough study.

Chairman Joe Lieberman and I wrote to the Administrator to press for more details about TSA's plans for an independent study. Two weeks later, having received no reply, I sent another letter to Administrator Pistole asking why he believed the IG report on TSA's use of backscatter machines was a sufficient substitute for an independent study of the health impacts. TSA's response lacked any detail as to why the agency no longer believes an independent study on the health effects of x-ray backscatter machines is warranted, nor did it explain how the IG's review would be a sufficient substitute for an independent study. That is why I have introduced this bill today.

Late last year, the European Commission announced that ``in order not to risk jeopardizing citizens' health and safety,'' it would only authorize the use of passenger scanners in the European Union that do not use x-ray technology. This prohibition gives even more need and justification for an independent study of the safety of the AIT machines.

Some respected experts have warned Congress and the administration of the potential negative public health risks posed by the x-ray backscatter machines. They note that while the risk that someone might develop cancer because of his or her exposure to radiation during one screening by such an AIT machine is very small, we simply do not truly know the risk of this radiation exposure over multiple screenings for frequent flyers, those in vulnerable groups, or TSA employees themselves who are operating these machines.

When a person is scanned by these machines, they receive a dose of radiation--what experts in the field call a direct dose. During the scan, some of the radiation is not absorbed but is scattered in random directions from the person being scanned. Experts call this the scatter dose. Some experts point to anomalies between the scatter dose reportedly associated with these scanners and the scatter dose associated with comparable medical technology. Specifically, the scatter doses for these AIT machines are higher in relative terms than scatter doses for comparable medical devices. What is troubling is that the experts are not sure why the AIT scatter doses are higher. They point to possible deficiencies with the testing equipment or the poor placement of the testing equipment as possible explanations. Overall, they say this anomaly could point to higher direct dose rates and should be yet another impetus for an independent study.

Additionally, some experts note that the safety mechanisms in these machines that would prevent them from malfunctioning have never been independently tested. This means that if a machine malfunctions and the safety features designed to shut the machine down in such an instance do not work, a traveler could receive a higher dose of radiation. Pregnant women, children, the elderly, and as much as 5 percent of the adult population are more sensitive to radiation exposure. At a minimum, this suggests the need for further independent study.

Mr. President, I wish to share with my colleagues a tragic episode involving the daughter of two of my constituents. She underwent screening at the airport with a backscatter x-ray AIT. She was pregnant and directed by TSA to a line for a backscatter x-ray AIT machine. She was completely unaware that she was entering into an x-ray emitting machine before she stepped into it. She thought it was the more traditional magnetometer. Afterward, she was distressed to know she had exposed her unborn child to x-ray radiation. Had she realized ahead of time, she clearly would have opted for the alternative screening methods. Only 2 weeks later, she suffered a miscarriage which she attributes to the radiation she received from this scan. We will never know for certain the cause of this family's loss, but they believe in their hearts that the backscatter radiation is to blame.

Clearly, at a minimum, this young woman should have been informed by a prominent sign that an alternative means of screening was available. That is why my bill also requires TSA to have larger, understandable signs at the beginning of the screening process, not later when it is only noticed, if at all, after a lengthy wait in line. Signs should alert passengers that pregnant women, children, and the elderly can be more sensitive to radiation exposure. These signs should also make clear that passengers can opt out of this type of scanning.

I have urged TSA to move forward using only radiation screening technology, but in the meantime, an independent study is needed to protect the public and to determine which technology is worthy of taxpayer dollars. Surely passengers should be well informed of their screening options.

We Americans have demonstrated our willingness to endure enhanced security measures at our airports if those measures appear to be reasonable and related to real risks. But travelers become frustrated when security measures inconvenience them without cause, cause privacy or health concerns, or when they appear to be focused on those who pose little or no threat.

On this particular issue, Senators Akaka, Coburn, Scott Brown, Levin, and I agree that we are past the time when an independent review of the scanning technology that emits radiation must be undertaken. I urge my colleagues to join us in quickly passing this legislation.

Mr. President, I rise today to introduce legislation aimed at ensuring that the health of American travelers is not placed at possible risk as our airport security technology evolves. I am very pleased to be joined by Senators Akaka, Coburn, Scott Brown, and Levin, who are cosponsoring this bill.

Our bill has two major components. First, it would require the Department of Homeland Security's Science and Technology Directorate, in consultation with the National Science Foundation, to commission an independent study on the possible health effects of the x-ray radiation emitted by some of the scanning machines we see and pass through in our airports. Second, it would give airline passengers, especially those passengers in sensitive groups such as pregnant women, clear notice of their ability to choose another screening option in lieu of exposure to ionizing radiation.

Some advanced-imaging technology--or AIT--machines rely on x-ray backscatter technology. Time and time again, I have expressed my concern over their use, particularly since there is an alternative screening technology available. While the TSA has repeatedly told the public that the amount of radiation emitted from these machines is extremely small, passengers and some scientific experts have raised legitimate questions about the impact of repeated exposure to this radiation.

Last November, during a hearing on aviation security before our Homeland Security Committee, the TSA Administrator, John Pistole, agreed to my

call for an independent study to address the lingering health concerns and questions about this additional and repeated exposure to radiation. Shortly thereafter, however, he appeared to back away from this commitment, suggesting that a forthcoming report by the Department of Homeland Security's inspector general might be a sufficient substitute for a new, completely independent, thorough study.

Chairman Joe Lieberman and I wrote to the Administrator to press for more details about TSA's plans for an independent study. Two weeks later, having received no reply, I sent another letter to Administrator Pistole asking why he believed the IG report on TSA's use of backscatter machines was a sufficient substitute for an independent study of the health impacts. TSA's response lacked any detail as to why the agency no longer believes an independent study on the health effects of x-ray backscatter machines is warranted, nor did it explain how the IG's review would be a sufficient substitute for an independent study. That is why I have introduced this bill today.

Late last year, the European Commission announced that ``in order not to risk jeopardizing citizens' health and safety,'' it would only authorize the use of passenger scanners in the European Union that do not use x-ray technology. This prohibition gives even more need and justification for an independent study of the safety of the AIT machines.

Some respected experts have warned Congress and the administration of the potential negative public health risks posed by the x-ray backscatter machines. They note that while the risk that someone might develop cancer because of his or her exposure to radiation during one screening by such an AIT machine is very small, we simply do not truly know the risk of this radiation exposure over multiple screenings for frequent flyers, those in vulnerable groups, or TSA employees themselves who are operating these machines.

When a person is scanned by these machines, they receive a dose of radiation--what experts in the field call a direct dose. During the scan, some of the radiation is not absorbed but is scattered in random directions from the person being scanned. Experts call this the scatter dose. Some experts point to anomalies between the scatter dose reportedly associated with these scanners and the scatter dose associated with comparable medical technology. Specifically, the scatter doses for these AIT machines are higher in relative terms than scatter doses for comparable medical devices. What is troubling is that the experts are not sure why the AIT scatter doses are higher. They point to possible deficiencies with the testing equipment or the poor placement of the testing equipment as possible explanations. Overall, they say this anomaly could point to higher direct dose rates and should be yet another impetus for an independent study.

Additionally, some experts note that the safety mechanisms in these machines that would prevent them from malfunctioning have never been independently tested. This means that if a machine malfunctions and the safety features designed to shut the machine down in such an instance do not work, a traveler could receive a higher dose of radiation. Pregnant women, children, the elderly, and as much as 5 percent of the adult population are more sensitive to radiation exposure. At a minimum, this suggests the need for further independent study.

Mr. President, I wish to share with my colleagues a tragic episode involving the daughter of two of my constituents. She underwent screening at the airport with a backscatter x-ray AIT. She was pregnant and directed by TSA to a line for a backscatter x-ray AIT machine. She was completely unaware that she was entering into an x-ray emitting machine before she stepped into it. She thought it was the more traditional magnetometer. Afterward, she was distressed to know she had exposed her unborn child to x-ray radiation. Had she realized ahead of time, she clearly would have opted for the alternative screening methods. Only 2 weeks later, she suffered a miscarriage which she attributes to the radiation she received from this scan. We will never know for certain the cause of this family's loss, but they believe in their hearts that the backscatter radiation is to blame.

Clearly, at a minimum, this young woman should have been informed by a prominent sign that an alternative means of screening was available. That is why my bill also requires TSA to have larger, understandable signs at the beginning of the screening process, not later when it is only noticed, if at all, after a lengthy wait in line. Signs should alert passengers that pregnant women, children, and the elderly can be more sensitive to radiation exposure. These signs should also make clear that passengers can opt out of this type of scanning.

I have urged TSA to move forward using only radiation screening technology, but in the meantime, an independent study is needed to protect the public and to determine which technology is worthy of taxpayer dollars. Surely passengers should be well informed of their screening options.

We Americans have demonstrated our willingness to endure enhanced security measures at our airports if those measures appear to be reasonable and related to real risks. But travelers become frustrated when security measures inconvenience them without cause, cause privacy or health concerns, or when they appear to be focused on those who pose little or no threat.

On this particular issue, Senators Akaka, Coburn, Scott Brown, Levin, and I agree that we are past the time when an independent review of the scanning technology that emits radiation must be undertaken. I urge my colleagues to join us in quickly passing this legislation.

Mr. President, I am pleased to join today the chairman of our committee, Senator Lieberman, and the sponsor of this bill, Senator Scott Brown, in urging our colleagues to begin consideration of what is known as the STOCK Act.

This legislation is based on a bill that was first introduced in the Senate by Senator Scott Brown and a similar one introduced by Senator Gillibrand. Put simply, the STOCK Act is intended to ensure that Members of Congress do not profit from trading on insider information.

As a cosponsor of Senator Brown's bill, I wish to commend him for his leadership in this area. I also wish to recognize Chairman Lieberman for moving this important bill forward in such an expeditious manner.

Press reports on ``60 Minutes'' and elsewhere have raised questions about whether lawmakers have been exempt, either legally or practically, from the reach of our laws prohibiting insider trading. At a time when polls show record low public confidence in Congress, there is a strong desire on our part to address the concerns that underpin the public's skepticism and assure the American people that we are putting their interests ahead of our own.

The STOCK Act is intended to affirm that Members of Congress are not exempt from our laws prohibiting insider trading. While several of the witnesses who appeared before our committee's hearing on this bill testified that there is no legal exemption for Members of Congress, confusion and uncertainty nevertheless persists. For example, on the eve of our markup, the Wall Street Journal published an op-ed by a Yale law professor who wrote that ``the Securities and Exchange Commission has determined that insider trading laws do not apply to Members of Congress or their staff.''

This, however, is directly contradicted by the statement for the record submitted to the committee by the SEC's Enforcement Director who said: ``There is no reason why trading by Members of Congress or their staff members should be considered exempt from the Federal securities laws, including trading prohibitions.''

I ask unanimous consent to have printed in the Record the SEC statement at the conclusion of my comments.

Mr. President, to me, this illustrates the confusion over this issue. So I am pleased the committee not only reported Senator Brown's bill but unanimously adopted an amendment I offered with Chairman Lieberman that states clearly that Members and their staff are not exempt from insider trading laws.

The need for this unambiguous statement can likely be traced back to the nature of the insider trading laws. As our committee has learned, our Nation's insider trading laws are not, generally speaking, based on statutes passed by Congress but rather on court precedents. As one of our witnesses, law professor Donna Nagy from Indiana University, pointed out during our hearing:

Congress has never enacted a Federal securities statute

that explicitly prohibits anyone from insider trading. . . .

The explicit statutory ban on insider trading . . . is

entirely absent in U.S. securities law.

Rather, the SEC pursues insider trading cases under the general antifraud provisions of the Federal securities laws, most commonly section 10B of the Securities Exchange Act of 1934 and rule 10b5, a broad antifraud rule promulgated by the Commission. Therefore, what constitutes insider trading has largely been determined by the courts, including the Supreme Court, on a case-by-case basis.

Under the case law, two different types or theories of insider trading violations have developed; one where the defendant is a classic corporate insider using nonpublic information to trade on the company's stock and a second where the defendant has misappropriated inside information in violation of a duty owed to the source of the information, such as a lawyer who trades on advanced notice of a business transaction. Both types of cases, however, share common elements:

There must be a breach of a duty, such as a traditional fiduciary duty or a duty of trust and confidence; the breach must involve material information, which is the type of information a reasonable investor would consider important in making a decision to buy or

sell stock; the information must be nonpublic; and the defendant must receive a personal benefit, which the Supreme Court has said may include not only financial gain but also reputational benefits.

As the Supreme Court has held, under section 10B, the chargeable conduct must involve a deceptive device or contrivance used in connection with the purchase or sale of securities. In criminal prosecutions for insider trading, under rule 10b5, the government must prove that a person willfully violated the provision with culpable intent.

Although the witnesses who came before the committee generally agreed that Congress enjoys no exemption from insider trading laws, they also stressed the need to clarify the relevant duty that applies to Members.

The bill reported by the committee, in language refined by Senator Levin, addressed this issue by affirming a duty arising from the relationship of trust and confidence already owed by Members and their staff to the Congress, the U.S. Government, and the citizens we serve. At our markup, we clarified that this does not create a new fiduciary duty, in the traditional sense, but rather recognizes or affirms our existing duty.

As reported, the bill would also have amended the Congressional Accountability Act to prohibit Members and staff from using nonpublic information gained through the performance of their official duties for personal benefit. This proposed prohibition, however, was not limited to the trading context or otherwise tethered to financial transactions. Because it was not anchored in financial transactions, I expressed some concerns about the potential breadth of this term and the potential for unintended consequences.

These concerns were echoed by several members of the committee during our consideration of the bill. Therefore, following the markup, we continued to refine the bill while adhering to the fundamental principle that Members of Congress should be subject to the same insider trading laws as other Americans. I believe we have come up with a solution that addresses the potential problem that troubles all of us; that is, public officials using public office for private gain. We need, however, to make sure that in doing so, we do not inhibit our ability to gather information so we can serve our constituents to the best of our ability.

The proposed substitute offered by Senator Reid, Senator Brown, and Senator Lieberman reflects the work of our committee members as well as other bill sponsors. It would require the Senate Ethics Committee and the House Committee on Standards of Official Conduct to issue guidance on the relevant rules of each Chamber, clarifying that Members and staff may not use nonpublic information derived from their positions in Congress to make a personal profit. This would cover insider trading matters, as well as land deals and other financial transactions where nonpublic information could be wrongly converted into a private gain.

Similar to the reported bill, the substitute includes a straightforward statement making clear that Members and their staff are not exempt from insider trading prohibitions arising from the securities laws.

In keeping with an amendment that Senator Paul successfully offered at our markup, the substitute applies the same framework--clarification of the prohibition against using nonpublic information for private profit and the affirmation of existing duty that we have--to the employees of the executive and judicial branches, as well as the legislative branch. Similar to the reported bill, the substitute includes earlier deadlines for financial reporting requirements and greater transparency for financial disclosure statements, as the chairman mentioned, by requiring that they be available online and in a searchable format.

I believe we need to reassure a skeptical public that we understand that elective office is a place for public service, not private gain; that it is an honor and a trust we have been given by the people we represent. Underscoring that important message is clearly the intent of this bill, and that is why I support it.

I urge my colleagues to vote yes to vote to invoke cloture on the motion to proceed.

Exhibit 1

[From U.S. Securities and Exchange Commission, Dec. 1, 2011]

Statement on the Application of Insider Trading Law to Trading by Members of Congress and Their Staffs, Before the United States Senate

Committee on Homeland Security and Governmental Affairs

(By Robert Khuzami)

Chairman Lieberman, Ranking Member Collins, and Members of

the Committee:

Thank you for the opportunity to provide a statement for

the record on behalf of the U.S. Securities and Exchange

Commission on the subject of insider trading.

Insider trading threatens the integrity of our markets,

depriving investors of the fundamental fairness of a level

playing field. To deter this conduct and to hold accountable

those who fail to play by the rules, the detection and

prosecution of those who engage in insider trading remains

one of the Division of Enforcement's highest priorities.

My statement provides a summary of the Division of

Enforcement's recent work in the area of insider trading, an

overview of the law of insider trading as developed through

our enforcement program and judicial precedent, and a

description of how the current law of insider trading applies

to securities trading by Members of Congress and their

staffs.

Enforcement's Insider Trading Program

Insider trading has long been a high priority for the

Commission. Approximately eight percent of the 650 average

annual number of enforcement cases filed by the Commission in

the past decade have been for insider trading violations. In

the past two years, the Commission has been particularly

active in this area. In fiscal year 2010, the SEC brought 53

insider trading cases against 138 individuals and entities, a

43 percent increase in the number of filed cases from the

prior fiscal year. This past fiscal year, the Commission

filed 57 actions against 124 individuals and entities, a

nearly 8 percent increase over the number of filed cases in

fiscal year 2010.

The increased number of insider trading cases has been

matched by an increase in the quality and significance of our

recent cases. In fiscal year 2011 and the early part of

fiscal year 2012, the SEC obtained judgments in 18 actions

arising out of its investigation of Galleon hedge fund

founder Raj Rajaratnam, including a record $92.8 million

civil penalty against Rajaratnam personally. The SEC also

discovered and developed information that ultimately led to

criminal convictions of Rajaratnam and others, including

corporate executives and hedge fund managers, for rampant

insider trading. In addition, we recently filed an insider

trading action against Rajat Gupta, a former director of both

Goldman Sachs and Procter & Gamble, whom we allege provided

confidential Board information about both companies'

quarterly earnings and about an impending $5 billion

Berkshire Hathaway investment in Goldman Sachs to Rajaratnam,

who traded on that information.

Among others charged in SEC insider trading cases in the

past fiscal year were various hedge fund managers and traders

involved in a $30 million expert networking trading scheme, a

former Nasdaq Managing Director, a former Major League

Baseball player, a Food and Drug Administration chemist, and

a former corporate attorney and a Wall Street trader who

traded in advance of mergers involving clients of the

attorney's law firm. The SEC also brought insider trading

cases charging a Goldman Sachs employee and his father with

trading on confidential information learned by the employee

on the firm's ETF desk, and charging a corporate board member

of a major energy company and his son for trading on

confidential information about the impending takeover of the

company.

The Division also has targeted non-traditional cases

involving the misuse or mishandling of material, non-public

information. This past fiscal year, the Commission charged

Merrill Lynch, Pierce, Fenner & Smith with fraud for

improperly accessing and misusing customer order information

for the firm's own benefit. The Commission also censured

broker-dealer Janney Montgomery Scott LLC for failing to

enforce its own policies and procedures designed to prevent

the misuse of material, nonpublic information. Charles Schwab

Investment Management was charged for failing to have

appropriate information barriers for nonpublic and

potentially material information concerning an ultra-short

bond fund that suffered significant declines during the

financial crises. This deficiency gave other Schwab-related

funds an unfair advantage over other investors by allowing

the funds to redeem their own investments in the ultra short-

bond fund during its decline. The Commission also charged

Office Depot, Inc. and two of its executives for violating

Regulation FD by selectively disclosing to certain analysts

and institutional investors that the company would not meet

its earnings.

To respond to emerging risks, the Enforcement Division has

developed several new initiatives targeted at ferreting out

insider trading, which have enhanced our effectiveness in

this area. During our recent reorganization, the Division

established a Market Abuse Unit, with an emphasis on various

abusive market strategies and practices, including complex

insider trading schemes.

The Market Abuse Unit has spearheaded the Division's

Automated Bluesheet Analysis Project, an innovative

investigative tool that utilizes the ``bluesheet'' database

of more than one billion electronic equities and options

trading records obtained by the Commission in the course of

insider trading investigations over the past 20 years. Using

newly developed templates, Enforcement staff are able to

search across this database to recognize suspicious trading

patterns and identify relationships and connections among

multiple traders and across multiple securities, generating

significant enforcement leads and investigative entry points.

While still in its early stages of development, this new data

analytic approach already has led to significant insider

trading enforcement actions that were not the subject of an

SRO referral, informant tip, investor complaint, media

report, or other external source.

As part of the reorganization, the Division also

established a cooperation program to encourage key fact

witnesses to provide valuable information. Insider trading

investigations are extremely fact-intensive. Enforcement

staff undertake the often painstaking work of collecting and

analyzing trading data across equity and options markets,

analyzing communications (email, telephone calls and instant

messages, among others) and analyzing market-moving events

(e.g., announcements of corporate earnings, product

development, and acquisitions and mergers) to identify

persons who may have engaged in insider trading or who may

have information about such activity. Our new cooperation

program is a valuable tool that can help us break open an

insider trading investigation earlier in the process, thereby

preserving resources. We are already seeing the effectiveness

of the cooperation program in our insider trading cases and

expect this trend to continue as more cooperators come

forward in our investigations.

With an aggressive investigative approach that includes

early coordination with the FBI, Department of Justice, and

other law enforcement agencies, we have been able to identify

potential cooperators who may assist criminal authorities

with their covert investigative techniques, helping amass

critical evidence in numerous insider trading investigations.

Our work with certain SROs has provided valuable early tips,

helping us mitigate the harm from insider trading schemes by

freezing the illicit proceeds before funds are moved to

offshore jurisdictions.

Law of Insider Trading

There is no express statutory definition of the offense of

insider trading in securities. The SEC prosecutes insider

trading under the general antifraud provisions of the Federal

securities laws, most commonly Section 10(b) of the

Securities Exchange Act of 1934 (``Exchange Act'') and Rule

10b-5, a broad anti-fraud rule promulgated by the SEC under

Section 10(b). Section 10(b) declares it unlawful ``[t]o use

or employ, in connection with the purchase or sale of any

security . . . any manipulative or deceptive device or

contrivance in contravention of such rules and regulations as

the Commission may prescribe as necessary or appropriate in

the public interest or for the protection of investors.''

Rule 10b-5 broadly prohibits fraud and deception in

connection with the purchase and sale of securities. As the

Supreme Court has stated, ``Section 10(b) and Rule 10b-5

prohibit all fraudulent schemes in connection with the

purchase or sale of securities, whether the artifices

employed involve a garden type variety of fraud, or present a

unique form of deception,'' because ``[n]ovel or atypical

methods should not provide immunity from the securities

laws.''

There are two principal theories under which the SEC

prosecutes insider trading cases under Section 10(b) and Rule

10b-5. The ``classical theory'' applies to corporate

insiders--officers, directors, and employees of a

corporation, as well as ``temporary'' insiders, such as

attorneys, accountants, and consultants to the corporation.

Under the ``classical theory'' of insider trading liability,

a corporate insider violates Section 10(b) and Rule 10b-5

when he or she trades in the securities of the corporation on

the basis of material, nonpublic information. Trading on such

information qualifies as a ``deceptive device'' under Section

10(b), because ``a relationship of trust and confidence

[exists] between the shareholders of a corporation and those

insiders who have obtained confidential information by reason

of their position with that corporation.'' That relationship

``gives rise to a duty to disclose [or to abstain from

trading] because of the `necessity of preventing a corporate

insider from . . . tak[ing] unfair advantage of . . .

uninformed . . . stockholders.' ''

The Supreme Court has recognized that corporate

``outsiders'' can also be liable for insider trading under

the ``misappropriation theory.'' Under this theory, a person

commits fraud ``in connection with'' a securities

transaction, and thereby violates Section 10(b) and Rule 10b-

5, when he or she misappropriates confidential and material

information for securities trading purposes, in breach of a

duty owed to the source of the information. This is because

``a fiduciary's undisclosed, self-serving use of a

principal's information to purchase or sell securities, in

breach of a duty of loyalty and confidentiality, defrauds the

principal of the exclusive use of that information.'' The

misappropriation theory thus ``premises liability on a

fiduciary-turned-trader's deception of those who entrusted

him with access to confidential information.'' Under either

the classical or misappropriation theory, a person can also

be held liable for ``tipping'' material, nonpublic

information to others who trade, and a ``tippee'' can be held

liable for trading on such information.

A common law principle is that employees owe a fiduciary

duty of loyalty and confidence to their employers. In

addition, employees often take on contractual duties of trust

or confidence as a condition of their employment or by

agreeing to comply with a corporate policy. Accordingly,

employees have frequently been held liable under the

misappropriation theory for trading or tipping on the basis

of material non-public information obtained during the course

of their employment. This includes prosecution of federal

employees who, in breach of a duty to their employer, the

federal government, trade or tip on the basis of information

they obtained in the course of their employment. For example,

the SEC recently brought insider trading charges against a

Food and Drug Administration employee alleging that he

violated a duty of trust and confidence owed to the federal

government under certain governmental rules of conduct when

he traded in advance of confidential FDA drug approval

announcements.

In light of existing precedent regarding the liability of

employees--including federal employees--for insider trading,

any statutory changes in this area should be carefully

calibrated to ensure that they do not narrow current law and

thereby make it more difficult to bring future insider

trading actions against any such persons.

Application of Insider Trading Law to Trading by Members of Congress

and Their Staff

The general legal principles described above apply to all

trading within the scope of Section 10(b) and Rule 10b-5.

There is no reason why trading by Members of Congress or

their staff members would be considered ``exempt'' from the

federal securities laws, including the insider trading

prohibitions, though the application of these principles to

such trading, particularly in the case of Members of

Congress, is without direct precedent and may present some

unique issues.

Just as in any other insider trading inquiry, there are

several fact-intensive questions--including the existence and

nature of the duty being breached and both the materiality

and nonpublic nature of the information--that would drive the

analysis of whether securities trading (or tipping) by a

Member of Congress or staff member based on information

learned in an official capacity violates Section 10(b) and

Rule 10b-5.

The first question is whether the trading, or communicating

the information to someone else, breached a duty owed by the

Member or staff. Although there is no direct precedent for

Congressional staff, there is case law from other employment

contexts regarding misappropriation of information gained

through an employment relationship. This precedent is

consistent with a claim that Congressional staff, as

employees, owe a duty of trust and confidence to their

employer and that a Congressional staff member who trades on

the basis of material non-public information obtained through

his or her employment is potentially liable for insider

trading under the misappropriation theory, like any other

non-governmental employee.

The question of duty is more novel for Members of Congress.

There does not appear to be any case law that addresses the

duty of a Member with respect to trading on the basis of

information the Member learns in an official capacity.

However, in a variety of other contexts, courts have held

that ``[a] public official stands in a fiduciary relationship

with the United States, through those by whom he is appointed

or elected.'' Commenters have differed on whether securities

trading by a Member based on information learned in his or

her capacity as a Member of Congress violates the fiduciary

duty he or she owes to the United States and its citizens, or

to the Federal Government as his or her employer.

Existing Congressional ethics rules also may be relevant to

the analysis of duty for both Members and their staff. For

example, Paragraph 8 of the Code of Ethics for Government

Service provides that ``Any person in Government service

should . . . [n]ever use any information coming to him

confidentially in the performance of governmental duties as a

means for making private profit.''

The second question is whether the information on which the

Member or staff trades (or tips) is ``material''--that is, is

there ``a substantial likelihood'' that a reasonable investor

``would consider it important'' in making an investment

decision? Materiality is a mixed question of fact and law

that depends on all the relevant circumstances. In some

scenarios, it may be relatively clear that an upcoming

Congressional action would be material to a particular issuer

or group of issuers, while in others it may be more

challenging to establish that.

The third critical question is whether the information on

which the Member or staff traded (or tipped) is

``nonpublic.'' The Commission has stated that ``[i]nformation

is nonpublic when it has not been disseminated in a manner

making it available to investors generally.'' Whether

information is ``nonpublic'' would likely depend on the

circumstances under which the Member or staff learned the

information and the extent to which the information had been

disseminated to the public.

As with all issues of liability with regard to insider

trading and other claims under Section 10(b), the conduct at

issue must be intentional or reckless. Since all of these

issues are inherently fact-specific, it is difficult to

generalize about the likely outcome of any particular

scenario. However, trading by Congressional Members or their

staffs is not exempt from the federal securities laws,

including the insider trading prohibitions.

Application of Tipper and Tippee Liability Theories to Members of

Congress and Their Staff

Communication of nonpublic information to others who either

trade on the information themselves or share it with others

for securities trading purposes, could be analyzed under the

case law relating to tipper and tippee liability and also

would turn on the specific facts of the case.

A person can be liable as a tipper where he or she

discloses information in breach of a fiduciary duty or other

similar duty of trust or confidence and the tippee trades on

the basis of that information. The same duty requirement

described above is applicable in the tipper context, as are

the requirements that the tipped information be nonpublic and

material. In addition, a court may require a showing that the

Member of Congress or staff member personally benefited from

providing the tip.

A person who trades on the basis of material, nonpublic

information conveyed by a Member or staff member in breach of

a duty also could be liable for illegal insider trading as a

tippee. An additional element of liability is that the tippee

knew or should have known of the tipper's breach of duty in

disclosing the information.

Investigations into potential trading or tipping by Members

of Congress or their staff could pose some unique issues,

including those that may arise from the Constitutional

privilege provided to Congress under the Speech or Debate

Clause, U.S. Const. art. I, Sec. 6, cl.1. The Supreme Court

has stated that ``[t]he Speech or Debate Clause was designed

to assure a co-equal branch of the government wide freedom of

speech, debate, and deliberation without intimidation or

threats from the Executive Branch.'' The Clause ``protects

Members against prosecutions that directly impinge or

threaten the legislative process.'' While the ``heart'' of

the privilege is speech or debate in Congress, courts have

extended the privilege to matters beyond pure speech and

debate in certain circumstances. There may be circumstances

in which communication of nonpublic information regarding

legislative activity to a third party falls ``within the

`sphere of legitimate legislative activity,' '' and thus may

be protected by the privilege.

Conclusion

The SEC's continued focus on insider trading and innovative

investigative techniques demonstrates our commitment to

pursuing potentially suspicious trading in a variety of

contexts. While recent innovations in the Division of

Enforcement are enhancing our ability to obtain that

evidence, to establish liability we must satisfy each of the

elements of an insider trading violation, including the

materiality of the information, the nonpublic nature of the

information, the presence of scienter, and a fiduciary or

other duty of trust and confidence that was violated by the

trading or tipping. While trading by Members of Congress or

their staff is not exempt from the federal securities laws,

including the insider trading prohibitions, there are

distinct legal and factual issues that may arise in any

investigations or prosecutions of such cases. Any statutory

changes in this area should be carefully calibrated to ensure

that they do not narrow current law and thereby make it more

difficult to bring future insider trading actions against

individuals outside of Congress.

I now yield the floor to the sponsor of the bill, Senator Brown.

Mr. President, let me first begin my remarks by commending my friend and colleague from Minnesota for leading the way on this very important bill.

There are so many issues that divide us in this Chamber. Surely, this is an issue that should unite us. It is not a Democratic issue. It is not a Republican issue. It is an issue of serious consequence to the American people and to our health care system. I would hope--and the reason Senator Klobuchar and I have come to the floor today--that we can act immediately to pass our bill, get it through the House, and send it to the President.

Physicians, pharmacists, and patients throughout the country are struggling to cope with the surge in shortages of needed drugs which is causing significant disruption in health care and putting patients at risk. I share with my colleague from Minnesota her concern about this critically important problem.

According to the U.S. Food and Drug Administration, the number of drug shortages has nearly quadrupled over the last 6 years, jumping from 61 products in 2005 to a record 231 by the end of November of last year. And there appears to be no end in sight.

Many of the drugs in short supply are vital. They are used in hospitals and cancer centers for anesthesia, for chemotherapy, and for the treatment of infections. There are also continuing shortages of drugs used in emergency rooms and in intensive care units.

I have met with several doctors and other medical professionals and pharmacists in Maine who are extremely concerned about this issue. They have told me that these shortages are causing serious problems around our State and across our Nation, including forcing some medical centers to ration drugs or postpone elective surgeries. Even more tragic, oncologists have told me of situations where they have been forced to change a patient's chemotherapy regime midcourse because they suddenly encountered a shortage of a particular drug. Moreover, for some drugs, such as the leukemia drug Cytarabine, which Senator Klobuchar mentioned as well, there are no effective substitutes.

This crisis is widespread. In a survey by the American Hospital Association, more than 80 percent of our hospitals reported that they have had to delay treatment due to the shortages. Just think what that is like for a patient who has received the diagnosis of cancer and has started treatment and then finds out the lifesaving drug they need is not available. It is hard enough to cope with the devastating diagnosis. To add to that the fact that the drug you need isn't available is just too much to bear. More than half of our hospitals have said they could not provide some of their patients with the recommended therapy.

Drug shortages are also adding to the cost of care. Hospital pharmacists are having to spend additional time--some 8 to 12 hours per week--dealing with shortages, increasing labor costs by an estimated $216 million a year.

That is why I joined with my colleague from Minnesota in cosponsoring the Preserving Access to Life-Saving Medications Act. Our bill will provide the FDA with better tools to better manage and, we hope, prevent shortages of lifesaving medications.

First and foremost, it takes the very commonsense step of requiring pharmaceutical manufacturers to notify the FDA of the discontinuance, interruption, or other adjustment in the manufacture of a drug that would likely lead to a shortage. Providing early warning when a drug will not be available will help both physicians and their patients. It builds on its successful model--the FDA's Drug Shortage Program--which encourages manufacturers to report potential or existing shortages so that the problems can be addressed or other manufacturers can ramp up their production. Through this voluntary approach, the FDA was able to avert 195 shortages last year.

Our bill also directs the FDA to provide up-to-date public notification of any shortages, and it directs the FDA to work with manufacturers to establish contingency plans to address drug shortages due to manufacturing problems, such as the shortage of raw materials or reduction in production capabilities.

Our legislation would give the FDA the information and the tools it needs to help address and prevent drug shortages. This, in turn, will help to ensure that our hospitals and health care professionals are able to provide the best care medical science allows. Most important, it will help ensure that patients have access to the medications they need when they need them most.

I am proud to join with my colleague from Minnesota in sponsoring such an important initiative. I urge our colleagues on the HELP Committee to act quickly to report this bill and the full Senate to act without delay to approve it as well. Surely, this is an issue that should bring this Chamber together and that we should act on immediately.

Mr. President, today, I commend Eliot Elementary School of Eliot, ME, on being named a 2011 National Blue Ribbon School of Excellence. This prestigious recognition of high accomplishment was bestowed by U.S. Secretary of Education Arne Duncan.

Created in 1982, the Blue Ribbon Schools Award is considered the highest honor an American school can obtain. Schools singled out for this national recognition reflect the goals of our Nation's education reforms for high standards and accountability. Specifically, the Blue Ribbon Schools Program is designed to honor public and private schools that are either academically superior in their States or that demonstrate dramatic gains in student achievement.

This award recognizes that Eliot Elementary students achieve at the highest level academically. Eliot Elementary School is a top-performing school on State-required assessments, and staff at the school use assessments throughout the academic year as a tool for improving and customizing instruction. The school works closely with families to forge a strong school community where students are connected and encouraged to pursue their interests.

I applaud not only the students but also the administrators, teachers, staff, and parents of Eliot Elementary School. Together, they are succeeding in their mission to generate excitement and momentum for learning. They are making a difference in the lives of their students, helping them reach their full potential as independent, responsible learners and citizens.

I am pleased that the U.S. Department of Education has selected Eliot Elementary School for this well-deserved honor, and I congratulate the communities of Eliot and South Berwick for this outstanding achievement.

Mr. President. I would like to thank the senior Senator from Alaska and the senior Senator from Tennessee for joining me to discuss an issue of great concern to manufacturers across the country, the Environmental Protection Agency's Boiler MACT regulations. I am pleased to serve with both Senators on the Interior Appropriations Subcommittee on which the Senator from Alaska serves as the Ranking Member.

It has been our shared goal to ensure that rules crafted by the EPA with regard to industrial boilers be achievable, affordable, and protective of public health and the environment while not costing thousands of jobs that we can ill-afford to lose. Unfortunately, EPA did not begin its rulemaking with these goals in mind.

To provide EPA with the time the agency itself said it needed to rewrite the rules to better serve the public interest, I introduced the EPA Regulatory Relief Act earlier this year, which now has the support of 41 of my colleagues on both sides of the aisle. A nearly identical bill passed the House of Representatives with bipartisan support this fall.

With the reconsideration process, EPA has taken steps to respond to some of the concerns raised by U.S. manufacturers. EPA's re-proposed rules, however, still do not address the serious and real concerns of the mills that will be most directly affected by these regulations. Legislative action is still needed to ensure achievable rules, to allow adequate compliance time, and to reduce the risk to business posed by pending litigation.

For these reasons, I was very troubled when the statement of the managers for Division E of the Consolidated Appropriations Act of 2012 included the following:

Boiler MACT.--The conferees are encouraged by the outcome

of EPA's reconsideration of the Boiler MACT rule and offer no

directives regarding Boiler MACT standards. The proposed rule

addresses substantive concerns by including additional

flexibility with respect to compliance costs, and a biomass

exemption.

Could the Senator from Alaska clarify that this language in no way is an endorsement by the conferees of any particular rulemaking concerning the Boiler MACT issue?

I thank the senior Senator from Alaska for clarifying the intent of this language. I remain committed to working with my Senate colleagues and the EPA to help ensure that the Boiler MACT rules are crafted to protect public health without harming the forest products industry, which is the lifeblood of many small, rural communities. Would my friend the senior Senator from Tennessee, who is also an original co-sponsor of the Boiler MACT legislation, like to address this disappointing conference language?

Mr. President, I would like to voice my concerns regarding two provisions included in the conference report, sections 321 and 327. These provisions constitute a major rewrite of depot policies and laws.

These sections have not been sufficiently vetted. They could potentially hurt competition in acquisition programs, harm our public depots, and cause unintended consequences that could significantly affect not only depots, but also the private sector industrial base and the thousands of employees in both sectors.

In February, the Logistics Management Institute, LMI, delivered a report to Congress making recommendations to modify the depot statutes. Both Armed Services Committees asked DOD to offer input on the LMI study, but the Department did not do so.

The Senate held DOD to account in the committee report accompanying this very bill, which states:

The committee is concerned that a lack of Department of

Defense input regarding the findings and recommendations of

the LMI study does not provide Congress with a comprehensive

view prior to enacting legislation that could have unintended

consequences.

But even without DOD input, the House went ahead and included changes to depot provisions when it passed its bill in May.

The Senate-passed bill also included a provision to prohibit any change to the definition of depot maintenance until after the Defense Business Board conducted its own study as well.

Given the concern identified by the Senate Armed Services Committee and the requests for additional fact-based analysis, you can imagine my alarm when I learned that such a rewrite was being considered for inclusion in the conference report.

What surprised me even more was that the proposed rewrite differed significantly even from the provision in the original House-passed bill.

The Senator from Oklahoma, Senator Inhofe, and I voiced our concerns about this in a meeting of the conferees. After that, six Senators and I sent a letter to the leadership of both committees warning of the unintended consequences of including these provisions in the conference report. I ask unanimous consent to have our letter printed in the Record.

The two provisions raise a number of unanswered questions, questions that remain unanswered by the advocates of these provisions, and which could lead to significant consequences for public and private sector components of the industrial base. Let me share two examples.

First, the provision expands the definition of depot maintenance to include the installation of modifications and upgrades to end-items--a measure potentially harmful to competition.

There is a concern that the Army may be required by this provision to direct work related to the Modernized Expanded Capacity Vehicle, MECV, program to the public sector without a full and open competition allowing experienced private entities to bid.

It is my view that the MECV is much more than a modification to a weapon system because it is an acquisition program. I understand this view is shared by the Army, which has consistently said the source selection for the MECV will be full, open, and fair.

Those who have invested in this program deserve to know that this language does not restrict competition or introduce, in any way, an incentive to favor the public or the private sector as it relates to acquisition programs, and the MECV program in particular.

While depot maintenance work is an important component of both the public and private sector industrial base, Congress has consistently supported a strong core requirement at the depots for national security reasons. For example, vital submarine overhauls, refueling, and maintenance work are performed at the Portsmouth Naval Shipyard in Kittery, ME.

It is unclear if the ramifications of the conference report will lead to work flowing away from our public depots, thus jeopardizing the government's core repair capability.

I would ask the chairman to closely reevaluate these provisions to ensure that the two concerns I described, as well as the concerns of other interested Senators, are fully addressed.

This process should allow Members adequate time to reach out to interested parties and a committee hearing to understand the ramifications of these legislative changes to the defense industrial base.

I would also ask the chairman to commit to modifying or repealing these provisions, if necessary, in next year's NDAA.

I would also ask the chairman to ensure that any future proposals pertaining to these sensitive issues be addressed in a more inclusive and deliberate manner.

Finally, given the uncertainty and confusion surrounding these critical depot issues, I would hope that the Department of Defense would exercise much care and refrain from making dramatic changes in its policies.

Mr. President, today, I commend Orono Middle School of Orono, ME, on being named a 2011 National Blue Ribbon School of Excellence. This prestigious recognition of high accomplishment was bestowed by U.S. Secretary of Education Arne Duncan.

Created in 1982, the Blue Ribbon Schools award is considered the highest honor an American school can obtain. Schools singled out for this national recognition reflect the goals of our Nation's education reforms for high standards and accountability. Specifically, the Blue Ribbon Schools Program is designed to honor public and private schools that are either academically superior in their States or that demonstrate dramatic gains in student achievement.

This award recognizes that Orono Middle School students achieve at the highest level academically. Orono Middle School is a top-performing school

on State-required assessments, and staff at the school use assessments throughout the academic year as a tool for improving and customizing instruction. The school also involves students in extracurricular activities, which helps forge a strong school community where students are connected and encouraged to pursue their interests.

I applaud not only the students but also the teachers, staff, administrators, and parents of Orono Middle School. Together, they are succeeding in their mission to generate confidence and momentum for learning. They are making a difference in the lives of their students, helping them reach their full potential as independent, responsible learners and citizens.

I am pleased that the U.S. Department of Education has selected Orono Middle School for this well-deserved honor, and I congratulate the entire community for this outstanding achievement.

Mr. President, I rise today to talk about the urgent need for our government to begin living within our Nation's means. We face a very grave fiscal crisis, one that threatens America today and the American dream for future generations. It demands that we get our Nation's fiscal house in order. So I am pleased the Senate is now debating a balanced budget amendment to our Constitution.

In February 1997, a month after I came to the Senate, I went to the Senate floor to urge my colleagues to pass a balanced budget amendment to the Constitution to prevent our growing debt from swallowing our future prosperity. Unfortunately, that effort came up one vote short. Since that time, our national debt has ballooned to an astonishing $15.1 trillion.

Sometimes when we deal with large numbers, it is easy to lose sense of what they mean and difficult to put them into context. What $15.1 trillion in debt means is that a child born today will automatically inherit a debt burden of more than $48,000. That debt has been largely accrued not for that child's benefit but for our own. It is difficult to imagine a more egregious example of taxation without representation than forcing our children and grandchildren to bear the future tax burden for today's excesses.

Unfortunately, as we have seen over the last decade, the addiction to budget deficits is not simply a Democratic or Republican problem. Both parties have had a difficult time showing restraint when it comes to spending. We have had Gramm-Rudman-Hollings, the Deficit Reduction Act, and the Budget Enforcement Act, and yet deficits not

only persist but have grown larger. The fiscal year that ended on September 30 marked the third consecutive year in which the United States has run deficits in excess of $1 trillion. Deficits have become a part of the way that Washington does business. Spend now and let someone else deal with the consequences later.

Those spendthrift ways are catching up with us. Our skyrocketing debt has become a drag on our economy and a threat to our future prosperity. We simply do not have the luxury of putting off difficult decisions. We are consistently spending more than we take in, and by a large margin. In the last fiscal year, government outlays totaled 24.1 percent of gross domestic product--the second highest level, after 2009, since World War II. Despite the very serious warning signs that we are on the wrong fiscal course, this marks the second consecutive year that the Senate has not even bothered to pass a budget resolution.

It is progress that the Budget Control Act that passed last summer includes caps on discretionary spending, and I have worked very hard with my colleagues on the Appropriations Committee to put together responsible and thoughtful spending bills that live within those caps. But, as my colleagues know, the biggest driver of our long-term debt and deficits is not discretionary spending but the mandatory spending that continues to balloon on autopilot.

Like many of my colleagues, I had hoped that the so-called supercommittee, which was created by the Budget Control Act, would be able to reach bipartisan agreement to reform mandatory spending and change our fiscal trajectory. Unfortunately, that bipartisan agreement remains elusive as both parties failed to come up with a deficit reduction plan that was capable of winning a simple majority of panel members. Instead, we have automatic spending cuts that are set to kick in, which could have very serious consequences for our national defense. Again, Congress has avoided making difficult choices about our national priorities.

The events currently unfolding across the Atlantic, with European leaders scrambling to stop the debt contagion that threatens the economic prosperity of the continent, should be a clear warning signal to us of what could come if we do not stem the tide of red ink that is engulfing our Nation. We must put in place structural reforms that will permanently force Washington to align expenditures and revenues.

Every day when I enter my office building, I am reminded of the famous quote attributed to its namesake, Senator Everett Dirksen. The wry observation he offered some four decades ago--``A billion here, a billion there, and pretty soon you're talking about real money''--seems tragically quaint today. I am convinced, now more than ever, that a balanced budget constitutional amendment is what is needed to address our growing debt and deficits.