[Congressional Record Volume 149, Number 8 (Thursday, January 16, 2003)]
[Senate]
[Pages S1071-S1085]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. DURBIN (for himself and Mr. DeWine):
S. 178. A bill to amend title XVIII of the Social Security Act to
provide adequate coverage for immunosuppressive drugs furnished to
beneficiaries under the medicare program that have received an organ
transplant; to the Committee on Finance.
Mr. DURBIN. Mr. President, I rise to make a few remarks concerning
this bill I am introducing today with my colleague from Ohio, which
will help many Medicare beneficiaries who have had organ transplants.
Last year over 4,400 people died while waiting for an organ
transplant, including 257 in my home State of Illinois. Currently, over
80,000 Americans are waiting for a donor organ with 4,349 waiting in
Illinois. It is this scarcity that has fueled the controversy over
organ allocation.
Given that organs are extremely scarce, Federal law should not
compromise the success of organ transplantation. Yet that is exactly
what current Medicare policy does, because Medicare denies certain
transplant patients coverage for the drugs needed to prevent rejection.
Medicare does this in several different ways. First, Medicare does
not pay for anti-rejection drugs for Medicare beneficiaries, who
received their transplants prior to becoming a Medicare beneficiary. So
for instance, if a person received a transplant at aged 64 through
their health insurance plan, when they retire and rely on Medicare for
their health care they will no longer have immunosuppressive drug
coverage. Transplanation is the only medical condition that Medicare
treats as a pre-existing condition so as to deny a Medicare beneficiary
a health care service that would otherwise be covered.
Second, Medicare only pays for anti-rejection drugs for transplants
performed in a Medicare approved transplant facility. However, many
beneficiaries are completely unaware of this fact and how it can
jeopardize their future coverage of immunosuppressive drugs. To receive
an organ transplant, a person must be very ill and many are far too ill
at the time of transplantation to be researching the intricate nuances
of Medicare coverage policy.
Finally, Medicare has a special program for End Stage Renal Disease,
ESRD, patients. Medicare pays for their dialysis at a cost of over
$100,000 per year and provides for all their health care costs.
However, it a transplant becomes available to an ESRD patient, Medicare
only provides them with health care for three years post-
transplantation. The fact is, however, that they will need to use
immunosuppressive drugs for the rest of their life to maintain their
transplant. But after the three years are up, their entire Medicare
coverage, including immunosuppressive drug coverage is terminated. If
that person's transplant is rejected because they can no longer afford
their immunosuppressive drugs, then Medicare will again pay for their
dialysis and all of their health care costs. This is ludicrous. It
would make more sense for Medicare to continue to provide them with the
lifesaving immunosuppressive drugs that they need.
The bill that I am introducing today, the ``Comprehensive
Immunosuppressive Drug Coverage for Transplant Patients of 2000 Act''
would remove these short-sighted limitations. The bill sets up a new,
easy to follow policy: All Medicare beneficiaries who have had a
transplant and need immunosuppressive drugs to prevent rejection of
their transplant, would be covered as long as such anti-rejection drugs
were needed.
I am introducing this bill on behalf of some of the constituents that
I have met who are unfortunately very adversely affected by the current
gaps in Medicare coverage.
Richard Hevrdejs was a Chicago attorney in private practice until
1993. Unfortunately, he suffered a debilitating heart attack that year,
which left him unable to work and on disability. In 1997 suffering from
congestive heart failure, he was placed on a Heart-Mate machine at the
University of Illinois Medical Center, UIC. In April of 1998, he
received a heart transplant at UIC but because UIC was not at the time
a Medicare approved facility for heart transplants, Medicare will not
cover his immunosuppressive drugs. Richard was near death when he had
his transplant and was in no condition to research the intricacies of
Medicare coverage policies. His drug costs are now around $25,000 per
year. He gets some assistance from the drug company medical assistance
plans and he has a Medigap policy that provides a little assistance.
But for the most part, he is forced to watch all his savings dwindle
because of Medicare's coverage gaps.
Anita Milton was from Morris, Illinois. In 1995, she became so
disabled that she was no longer able to work and was forced onto
disability. The following year, he lungs gave up and she had to have a
bilateral lung transplant. Because Medicare is not available for 2
years after a person becomes eligible for disability, Anita was not on
Medicare when she had the transplant. The huge bills for the transplant
remained at collection agencies till her death several years ago.
Because Anita was not on Medicare when she received her transplant, she
did not receive Medicare coverage for the anti-rejection drugs that she
needs. She received $940 in disability payments per month. She than
went on Medicaid but due to the spend down requirements in Illinois,
she had to spend $689 on drug costs to get Medicare coverage for her
drugs. In effect she got coverage every second month. Anita couldn't
afford her anti-rejection drugs and she tried to scale back on them.
This caused her to nearly reject the transplant. Consequently, she lost
a third of her lung capacity permanently. As Anita said at a Town Hall
meeting in Chicago in January 1998 ``these Medicare and Medicaid rules
make no sense.''
I am introducing this bill on the same day that another bill the
``Living Donor Access Act of 2003'', which I am an original cosponsor,
is also being introduced by my colleague Senator DeWine. The ``Living
Donor Access Act'' also seeks to improve the lives of transplant
patients. The ``Living Donor Access Act'' would prohibit insurers in
the group market from imposing additional premiums or preexisting
condition exclusions on living organ donors. There are currently more
than 25,000 living organ donors, but no law protects these individuals
against discrimination in the group health insurance market. The two
bills are good companions. It is important that we root out all
discrimination against both those who have received transplants and
those who are so generous as to donate.
I ask unanimous consent that the text of the bill, the
``Comprehensive Immunosuppressive Drug Coverage for Transplant Patients
of 2003'', be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 178
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Comprehensive
Immunosuppressive Drug Coverage for Transplant Patients Act
of 2003''.
SEC. 2. COMPREHENSIVE COVERAGE OF IMMUNOSUPPRESSIVE DRUGS
UNDER THE MEDICARE PROGRAM.
(a) In General.--Section 1861(s)(2)(J) of the Social
Security Act (42 U.S.C. 1395x(s)(2)(J)) is amended by
striking ``, to an individual who receives'' and all that
follows before the semicolon at the end and inserting ``to an
individual who has received an organ transplant''.
(b) Effective Date.--The amendments made by this section
shall apply to drugs furnished on or after the date of
enactment of this Act.
[[Page S1072]]
SEC. 3. PROVISION OF APPROPRIATE COVERAGE OF
IMMUNOSUPPRESSIVE DRUGS UNDER THE MEDICARE
PROGRAM FOR ORGAN TRANSPLANT RECIPIENTS.
(a) Continued Entitlement to Immunosuppressive Drugs.--
(1) Kidney transplant recipients.--Section 226A(b)(2) of
the Social Security Act (42 U.S.C. 426-1(b)(2)) is amended by
inserting ``(except for coverage of immunosuppressive drugs
under section 1861(s)(2)(J))'' after ``shall end''.
(2) Other transplant recipients.--The flush matter
following paragraph (2)(C)(ii)(II) of section 226(b) of the
Social Security Act (42 U.S.C. 426(b)) is amended by striking
``of this subsection)'' and inserting ``of this subsection
and except for coverage of immunosuppressive drugs under
section 1861(s)(2)(J))''.
(3) Application.--Section 1836 of the Social Security Act
(42 U.S.C. 1395o) is amended--
(A) by striking ``Every individual who'' and inserting
``(a) In General.--Every individual who''; and
(B) by adding at the end the following new subsection:
``(b) Special Rules Applicable to Individuals Only Eligible
for Coverage of Immunosuppressive Drugs.--
``(1) In general.--In the case of an individual whose
eligibility for benefits under this title has ended except
for the coverage of immunosuppressive drugs by reason of
section 226(b) or 226A(b)(2), the following rules shall
apply:
``(A) The individual shall be deemed to be enrolled under
this part for purposes of receiving coverage of such drugs.
``(B) The individual shall be responsible for the full
amount of the premium under section 1839 in order to receive
such coverage.
``(C) The provision of such drugs shall be subject to the
application of--
``(i) the deductible under section 1833(b); and
``(ii) the coinsurance amount applicable for such drugs (as
determined under this part).
``(D) If the individual is an inpatient of a hospital or
other entity, the individual is entitled to receive coverage
of such drugs under this part.
``(2) Establishment of procedures in order to implement
coverage.--The Secretary shall establish procedures for--
``(A) identifying beneficiaries that are entitled to
coverage of immunosuppressive drugs by reason of section
226(b) or 226A(b)(2); and
``(B) distinguishing such beneficiaries from beneficiaries
that are enrolled under this part for the complete package of
benefits under this part.''.
(4) Technical amendment.--Subsection (c) of section 226A of
the Social Security Act (42 U.S.C. 426-1), as added by
section 201(a)(3)(D)(ii) of the Social Security Independence
and Program Improvements Act of 1994 (Public Law 103-296; 108
Stat. 1497), is redesignated as subsection (d).
(b) Extension of Secondary Payer Requirements for ESRD
Beneficiaries.--Section 1862(b)(1)(C) of the Social Security
Act (42 U.S.C. 1395y(b)(1)(C)) is amended by adding at the
end the following new sentence: ``With regard to
immunosuppressive drugs furnished on or after the date of
enactment of the Comprehensive Immunosuppressive Drug
Coverage for Transplant Patients Act of 2003, this
subparagraph shall be applied without regard to any time
limitation.''.
(c) Effective Date.--The amendments made by this section
shall apply to drugs furnished on or after the date of
enactment of this Act.
SEC. 4. PLANS REQUIRED TO MAINTAIN COVERAGE OF
IMMUNOSUPPRESSIVE DRUGS.
(a) Application to Certain Health Insurance Coverage.--
(1) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is
amended by adding at the end the following:
``SEC. 2707. COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.
``A group health plan (and a health insurance issuer
offering health insurance coverage in connection with a group
health plan) shall provide coverage of immunosuppressive
drugs that is at least as comprehensive as the coverage
provided by such plan or issuer on the day before the date of
enactment of the Comprehensive Immunosuppressive Drug
Coverage for Transplant Patients Act of 2003, and such
requirement shall be deemed to be incorporated into this
section.''.
(2) Conforming amendment.--Section 2721(b)(2)(A) of the
Public Health Service Act (42 U.S.C. 300gg-21(b)(2)(A)) is
amended by inserting ``(other than section 2707)'' after
``requirements of such subparts''.
(b) Application to Group Health Plans and Group Health
Insurance Coverage Under the Employee Retirement Income
Security Act of 1974.--
(1) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.) is amended by adding at the end the
following new section:
``SEC. 714. COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.
``A group health plan (and a health insurance issuer
offering health insurance coverage in connection with a group
health plan) shall provide coverage of immunosuppressive
drugs that is at least as comprehensive as the coverage
provided by such plan or issuer on the day before the date of
enactment of the Comprehensive Immunosuppressive Drug
Coverage for Transplant Patients Act of 2003, and such
requirement shall be deemed to be incorporated into this
section.''.
(2) Conforming amendments.--
(A) Section 732(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1185(a)) is amended by
striking ``section 711'' and inserting ``sections 711 and
714''.
(B) The table of contents in section 1 of the Employee
Retirement Income Security Act of 1974 is amended by
inserting after the item relating to section 713 the
following new item:
``Sec. 714. Coverage of immunosuppressive drugs.''.
(c) Application to Group Health Plans Under the Internal
Revenue Code of 1986.--Subchapter B of chapter 100 of the
Internal Revenue Code of 1986 is amended--
(1) in the table of sections, by inserting after the item
relating to section 9812 the following new item:
``Sec. 9813. Coverage of immunosuppressive drugs.'';
and
(2) by inserting after section 9812 the following:
``SEC. 9813. COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.
``A group health plan shall provide coverage of
immunosuppressive drugs that is at least as comprehensive as
the coverage provided by such plan on the day before the date
of enactment of the Comprehensive Immunosuppressive Drug
Coverage for Transplant Patients Act of 2003, and such
requirement shall be deemed to be incorporated into this
section.''.
(d) Effective Date.--The amendments made by this section
shall apply to plan years beginning on or after January 1,
2004.
______
By Mr. CORZINE:
S. 179. A bill to amend title 23, United States Code, to provide for
a prohibition on use of mobile telephones while operating a motor
vehicle; to the Committee on Environment and Public Works.
Mr. CORZINE. Mr. President, today I am introducing legislation, the
Mobile Telephone Driving Safety Act, to enhance highway safety by
encouraging States to restrict the use of cell phones by drivers while
they are operating a motor vehicle.
I am introducing this legislation because of the significant threat
posed by people who use cell phones while driving. According to a study
by the Harvard Center for Risk Analysis released in December of 2002,
``the use of cell phones by drivers may result in approximately 2,600
deaths, 330,000 moderate to critical injuries and 1.5 million instances
of property damage in America per year''. Other studies have reached
similar conclusions. One, published in the New England Journal of
Medicine in 1997, concluded that the ``use of cellular telephones in
motor vehicles is associated with a quadrupling of the risks of a
collision during the brief period of a call''. That study went on to
say ``this relative risk is similar to the hazard associated with
driving with a blood alcohol level at the legal limit''.
States, counties and municipalities around the country have
considered bans on hand-held cell phone use while driving. New York
actually enacted such a ban in 2001. The Governor of New Jersey has
proposed such a ban and related legislation has been unanimously
approved by the New Jersey State Senate. A number of New Jersey
municipalities also have chosen to enforce bans within their borders,
including Marlboro, Carteret and Nutley.
This patchwork of laws, however, does not take the place of a
consistent, nation-wide ban. Congress needs to step forward and pass
legislation that will ban the use of hand-held cell phones nationwide.
The Mobile Telephone Driving Safety Act of 2003 is structured in a
manner similar to other federal laws designed to promote highway
safety, such as laws that encourage states to enact tough drunk driving
standards. Under the legislation, a portion of Federal highway funds
would be withheld from States that do not enact a ban on cell phone use
while driving. Initially, this funding could be restored if states act
to move into compliance. Later, the highway funding forfeited by one
state would be distributed to other states that are in compliance.
Experience has shown that the threat of losing highway funding is very
effective in ensuring that states comply.
To meet the bill's requirements, States would have to ban cell phone
use while driving. However, such a ban
[[Page S1073]]
need not be absolute. It could include an exception where there are
exceptional circumstances, such as the use of a phone to report a
disabled vehicle or medical emergency. In addition, if a State makes a
determination that the use of ``hands free'' cell phones does not pose
a threat to public safety, such use could be exempted from the ban, as
well.
This is a necessary bill to keep our streets and highways safe. I
urge my colleagues to support this legislation and ask unanimous
consent that the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 179
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Mobile Telephone Driving
Safety Act of 2003''.
SEC 2. MOBILE TELEPHONE USE WHILE OPERATING MOTOR VEHICLES.
(a) In General.--Subchapter I of chapter 1 of title 23,
United States Code, is amended by adding at the end the
following:
``Sec. 165. Mobile telephone use while operating motor
vehicles
``(a) Definition of Motor Vehicle.--In this section, the
term `motor vehicle' means a vehicle driven or drawn by
mechanical power and manufactured primarily for use on public
highways, but does not include a vehicle operated only on a
rail.
``(b) Withholding of Apportionments for Noncompliance.--
``(1) Fiscal year 2005.--The Secretary shall withhold 5
percent of the amount required to be apportioned to any State
under each of paragraphs (1), (3), and (4) of section 104(b)
on October 1, 2004, if the State does not meet the
requirements of paragraph (3) on that date.
``(2) Subsequent fiscal years.--The Secretary shall
withhold 10 percent of the amount required to be apportioned
to any State under each of paragraphs (1), (3), and (4) of
section 104(b) on October 1, 2005, and on October 1 of each
fiscal year thereafter, if the State does not meet the
requirements of paragraph (3) on that date.
``(3) Requirements.--
``(A) In general.--A State meets the requirements of this
paragraph if the State has enacted and is enforcing a law
that prohibits an individual from using a mobile telephone
(other than a mobile telephone used as described in
subparagraph (B)) while operating a motor vehicle, except in
the case of an emergency or other exceptional circumstance
(as determined by the State).
``(B) Hands-free devices.--A State law described in
subparagraph (A) may permit an individual operating a motor
vehicle to use a mobile telephone with a device that permits
hands-free operation of the telephone if the State determines
that such use does not pose a threat to public safety.
``(c) Period of Availability; Effect of Compliance and
Noncompliance.--
``(1) Period of availability of withheld funds.--Any funds
withheld under subsection (b) from apportionment to any State
shall remain available until the end of the fourth fiscal
year following the fiscal year for which the funds are
authorized to be appropriated.
``(2) Apportionment of withheld funds after compliance.--
If, before the last day of the period for which funds
withheld under subsection (b) from apportionment are to
remain available for apportionment to a State under paragraph
(1), the State meets the requirements of subsection (a)(3),
the Secretary shall, on the first day on which the State
meets the requirements, apportion to the State the funds
withheld under subsection (b) that remain available for
apportionment to the State.
``(3) Period of availability of subsequently apportioned
funds.--
``(A) In general.--Any funds apportioned under paragraph
(2) shall remain available for expenditure until the end of
the third fiscal year following the fiscal year in which the
funds are so apportioned.
``(B) Treatment of certain funds.--Any funds apportioned
under paragraph (2) that are not obligated at the end of the
period referred to in subparagraph (A) shall be allocated
equally among the States that meet the requirements of
subsection (a)(3).
``(4) Effect of noncompliance.--If, at the end of the
period for which funds withheld under subsection (b) from
apportionment are available for apportionment to a State
under paragraph (1), the State does not meet the requirements
of subsection (a)(3), the funds shall be allocated equally
among the States that meet the requirements of subsection
(a)(3).''.
(b) Conforming Amendment.--The analysis for subchapter I of
chapter 1 of title 23, United States Code, is amended by
adding at the end the following:
``165. Mobile telephone use while operating motor vehicles.''.
______
By Mr. DeWINE (for himself and Mr. Voinovich):
S. 180. A bill to establish the National Aviation Heritage Area, and
for other purposes; to the Committee on Energy and Natural Resources.
Mr. DeWINE. Mr. President, today I join my friend and colleague from
Ohio, Senator George Voinovich, to introduce the National Aviation
Heritage Area Act, an act to establish a National Aviation Heritage
Area within our home State of Ohio.
For hundreds of years prior to the 20th Century, man dreamt of
flying. Some of the earliest records of mankind reveal a fascination
with birds and the ability to leave the ground. In fact, the
Renaissance revolution in art showed us many of the first recorded
designs for achieving this feat. By 1903, man succeeded, altering the
course of modern history.
This year, we mark the 100th anniversary of manned flight. I am proud
to say that the famed Wright Brothers, Wilbur and Orville, were native
Ohioans. These two men are important symbols of an evolving age of
discovery, an age beginning with the Wright Brothers' first controlled,
heavier-than-air flight on December 17, 1903. A mere half-a-century or
so later, mankind was flying not just above the ground, but above our
planet Earth, which was quickly followed by Neil Armstrong's first
steps on the moon. It is amazing to just sit back and consider that all
of these things, all of these incredible achievements have all occurred
in a very short span of less than one hundred years.
There is so much to say about the historical and cultural
significance of the birth of aviation, but I think one of its unique
educational aspects is its ability to be interactive with students
outside of the classroom. And, that is one of the main reasons we are
introducing our National Aviation Heritage Area legislation today.
Our bill seeks to help foster strong public and private investments
in many of Ohio's aviation landmarks, landmarks that have enormous
educational value. Some of these landmarks include the Wright Brothers'
``Wright Cycle Company,'' located in Dayton and the Wright-Dunbar
Interpretive Center, where students of all ages can learn about the
painstaking measures the Wright Brothers and many of their predecessors
took to achieve what today seems to be so commonplace. Other landmarks
include the Huffman Prairie Flying Field, where, after the Wright
Brothers' famous flight in Kitty Hawk, NC, the Brothers returned home
to perfect the design of the world's first airplane and the Paul
Laurence Dunbar State Memorial, which showcases this great African
American poet's strong international voice for racial equality and
justice. The Heritage Area also includes the Neil Armstrong Museum,
which highlights the great achievements of man's first walk on the
moon. If I may add also, Neil Armstrong is a native Ohioan.
Flight has become a very important square in the patchwork of our
nation's history, and I am proud that my home State of Ohio has played
such a large role in its evolution. We are reminded of how manned
flight has changed our history every time we look skyward and see the
crisscross of jet contrails. We are reminded of this every time we walk
through the Rotunda of our very own U.S. Capitol and see the last
frieze square that depicts the Wright Brothers and their invention.
And, we are reminded of this by one of the great symbols of America,
the eagle, a flying bird that represents the freedom of a people.
It is vital that we protect the sites that have played such an
important role in aviation. In doing so, we can enhance the education
and enrichment of our children and our grandchildren for many years to
come.
______
By Mr. LEVIN (for himself and Mr. McCain):
S. 181. A bill to require a review of accounting treatment of stock
option plans, and the establishment of an appropriate stock option
accounting principle within 1 year; to the Committee on Banking,
Housing, and Urban Affairs.
______
By Mr. LEVIN (for himself, Mr. McCain, Mr. Durbin, and Mr.
Feingold):
S. 182. A bill to amend the Internal Revenue Code of 1986 to provide
that corporate tax benefits from stock option compensation expenses are
allowed only to the extent such expenses
[[Page S1074]]
are included in a corporation's financial statements; to the Committee
on Finance.
Mr. LEVIN. Mr. President, I am introducing today on behalf of myself
and Sen. McCain two separate bills relating to stock options. Stock
options are unfinished business from the last Congress. They are the
800-pound gorilla that has yet to be caged by corporate reform.
Stock options allow a company's employees, usually its top
executives, to purchase company stock at a set price for a specified
period of time, perhaps 10 years. If the stock price rises after the
option is issued, the executive can exercise the option, buy the stock
at the set price, and then sell it on the open market at a profit.
Today, most CEOs of U.S. publicly traded companies receive a large
percentage of their pay from stock options.
Despite their widespread use, stock options remain a stealth form of
compensation because, under current accounting rules, they never have
to appear on the company books as a compensation expense. In fact, they
are the only form of compensation that companies do not have to book as
an expense at any time. In addition, stock options are the only form of
compensation that a company can claim as a deductible business expense
on its tax return, even when no expense is ever recorded on the company
books.
These stock option accounting and tax rules are inconsistent and
illogical. The two bills we are introducing today, the Stock Option
Accounting Review Act, and the Ending the Double Standard for Stock
Options Act, were introduced in the last Congress to address this
problem. Each bill tackles a different aspect of the stock option
issue. One addresses stock option accounting; the other addresses the
stock option tax deduction.
Last year, Senator McCain and I proposed the accounting provision as
an amendment to the Sarbanes-Oxley corporate reform bill that was
before the Senate in July. There appeared to be sufficient support to
pass it at the time, but we were unable to obtain a vote on it or on
any other stock option legislation. That is why we are back this
Congress.
Congress failed to resolve the issue last year, even though stock
option abuses were repeatedly linked to serious corporate abuses and
dishonest accounting. In fact, virtually every corporate disaster that
has struck in recent years has had a stock option component.
Enron, of course, was the poster child. Congressional investigations,
including by the Permanent Subcommittee on Investigations on which I
sit, showed that, at the same time Enron investors and employees were
losing their shirts, Enron executives were cashing in their stock
options for tens or hundreds of millions of dollars. Ken Lay, the
Chairman of the Board, took home $123 million from stock options in
2000 alone. Jeff Skilling, the CEO, took home over $60 million. Another
executive, Lou Pai, topped them all by cashing in Enron stock options,
in 2000, for $265 million.
Stock options also contributed to Enron's inflated earnings, since
despite providing the lion's share of executive pay, this compensation
never appeared on the company books as an expense nor was it ever
deducted from earnings. And many have blamed stock options for
encouraging Enron management to rig the company's financial statements
through other accounting deceptions to help boost apparent income and,
in turn, the company stock price, so they could sell their Enron stock
at enormous profit.
Still others have noted that Enron used about $600 million in stock
option tax deductions to avoid paying any corporate income taxes in
four out of the last five years before its bankruptcy while, at the
same time, touting record amounts of corporate income. What is now only
beginning to be understood is that Enron's stock option tax deductions
played a central role in much of its wrongdoing, after all, Enron was
able to inflate its corporate income with impunity, in part, because
its stock option tax deductions allowed it to avoid paying taxes on any
of its phony inflated income.
Enron was the poster child for stock option abuses, but it was far
from the only company in that category last year. Worldcom, Tyco, Qwest
Communications, and many others have stock option stories that are
equally disturbing.
And the problems did not stop with companies engaged in accounting
deceptions or other corporate misconduct. Even companies that never
appeared on the 2002 rollcall of corporate deception have been
excoriated in media reports for giving huge stock option pay to
executives while socking employees and investors with lower stock
prices, mounting losses, and lousy corporate performance.
High tech companies that have been the biggest promoters of stock
options have been some of the biggest culprits. Company after company
in Silicon Valley paid their executives big bucks via stock options
while laying off employees, losing money or market share, and stiffing
investors. One example frequently cited in the media is Lawrence
Ellison, CEO of Oracle Corp., who exercised options in 2001 to obtain
profits of $706 million, while his company's stock price dropped by
more than 50 percent.
Aggregate stock option statistics are also sobering. Business Week,
for example, has estimated that stock options now account for ``a
staggering 15 percent of all shares outstanding.'' Federal Reserve
Chairman Alan Greenspan estimated that stock options have been used to
overstate reported company earnings by an average of 6 to 9
percent. Perhaps that is why Chairman Greenspan has picked honest stock
option accounting as his number one post-Enron reform.
Stock option abuses have been linked to inflated company earnings,
dishonest accounting, and executive misconduct. These abuses have been
facilitated by existing accounting and tax rules which allow stock
option compensation to never appear on a company's books as an expense,
even when a company claims this compensation as a business expense on
its tax return. This double standard is fueling Enron-style abuses, and
it is time for it to end.
Many in the U.S. business community apparently agree and, unlike the
Congress, have taken direct action on the stock option issue. In fact,
over the last year, there has been significant movement in the business
world to end dishonest stock option accounting.
Over 120 companies, including such American giants as Coca-Cola,
General Motors, General Electric, Dow Chemical, Wal-Mart, and Home
Depot have announced that they will begin expensing options in 2003,
joining longtime expensers like Boeing and Winn-Dixie. Standard and
Poors has created additional pressure for honest stock option
accounting by announcing a new ``core earnings'' calculation for
companies which requires stock option compensation to be subtracted
from a company's earnings.
Accounting experts are also moving. The International Accounting
Standards Board in London has announced that, by the end of 2003, it
will issue accounting standards requiring companies to expense stock
options. The U.S. equivalent, the Financial Accounting Standards Board,
or FASB, has announced that it will decide by the end of the first
quarter of this year whether it will issue stock option accounting
standards similar to those of the International Board.
While there has been a major shift in the U.S. business world toward
honest stock option accounting, not all companies are on board. Some
companies, especially those in the high tech sector, have announced
that they will not expense stock options until forced to do so. That
means, until FASB acts, there will be a discrepancy between those
companies that are voluntarily expensing options and those that are
not, when there ought to be a level playing field where everyone plays
by the same accounting rules. It is this discrepancy that continues to
make our stock option legislation relevant and necessary for
Congressional action this year.
Let me describe both bills.
First is the Stock Option Accounting Review Act. This bill is very
simple. It would direct FASB to conduct a fresh review of the current
accounting treatment for stock options and, within one year, establish
what it deems to be the appropriate stock option accounting standards.
The bill does not specify the stock option accounting standards that
FASB should issue; that matter is left to the experts where it belongs.
But
[[Page S1075]]
the bill does put the Senate on record as urging FASB to review the
existing rules and take appropriate action within one year. This
legislative directive is important, because the only other time the
Senate has spoken on this issue, in 1994, the Senate majority urged
FASB to keep allowing companies to exclude stock option expenses from
their financial statements. The Senate's position contradicted FASB's
position at the time which was to require stock option expensing. It is
long past time for the Senate to rescind its mistaken advice.
The second bill we are introducing today is the Ending the Double
Standard for Stock Options Act. This bill would not address the
accounting treatment of stock options. Instead, it would address the
tax treatment of stock option compensation, ending the costly double
standard in federal law which allows a company to take a tax deduction
for stock option compensation, even if the company does not show that
compensation as a business expense on its financial statements.
Essentially, our bill would prevent a company from claiming a stock
option expense on its tax return unless the company also includes that
expense on its books. It would require companies to be consistent in
how they treat stock options, and take a corporate tax deduction that
mirrors the expense shown on the company books. If a company took the
position that it incurred no expense from stock option compensation on
its books, the bill would allow the company to take that position, but
would also require it to take the same approach on its tax return and
forego any deduction. The bill would stop companies from telling
stockholders one thing, that it has no stock option expenses, while
telling the opposite to Uncle Sam.
And to add insult to injury, in 2001, the IRS issued Revenue Ruling
2001-1 which determined that companies whose tax liability was erased
through stock option expenses were not subject to the corporate
alternative minimum tax. That revenue ruling meant that our most
successful publicly traded companies, if they doled out enough stock
options to insiders, could arrange their affairs to escape paying any
taxes. That absurd result leaves the average taxpayer feeling like a
chump for paying his fair share when a company like Enron can use its
success in the stock market to apparently end up tax free.
One last point. Some opponents of stock option reform argue that
reining in stock options would hurt the average worker, but this
contention is nothing more than a red herring. While many average
workers are eligible for stock options, few actually receive them.
Stock options are overwhelmingly reserved for top corporate executives.
A recent Bureau of Labor Statistics survey did the research. This
nationwide government survey found that in 2000, a banner year for
stock options, only 1.7 percent of non-executive workers actually got
any stock options. The BLS survey also looked at corporate executives
and found that only about 5 percent of these corporate executives
received any stock options. These results are consistent with the
findings of a private sector group not associated with the government
called the National Center for Employee Ownership, which favors stock
options. Looking at a small sample of companies, the Center reported
that 70 percent of all stock options were given to managers rather than
other employees, and about 50 percent were given to the most senior
executives. The reality is that stock options are a perk mainly
reserved for a very small group, and neither average workers nor most
executives would be affected by honest accounting or consistent tax and
accounting treatment for stock options.
It is also important to understand that neither of our bills would
bar any company from issuing stock options. Companies would still be
able to issue stock options to their executives and other employees.
The goal of this legislation is not to stop the use of stock options,
but to promote honest accounting and consistent treatment of stock
options on federal corporate tax returns.
Stock option abuses have damaged investor confidence in American
business. I hope our colleagues will support enactment of these bills
to help restore investor confidence and end stock option abuses. I ask
unanimous consent to have reprinted in the Record after my remarks the
text of both bills.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 181
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stock Option Accounting
Review Act''.
SEC. 2. REVIEW OF STOCK OPTION ACCOUNTING TREATMENT.
Section 108 of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7218, 116 Stat. 768) is amended by adding at the end the
following:
``(e) Stock Option Accounting Treatment.--The standard
setting body described in section 19(b)(1) of the Securities
Act of 1933 shall, for purposes of establishing generally
accepted accounting principles--
``(1) review the accounting treatment of employee stock
options; and
``(2) not later than 1 year after the date of enactment of
this subsection, adopt an appropriate generally accepted
accounting principle for the treatment of employee stock
options.''.
____
S. 182
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Ending the Double Standard
for Stock Options Act''.
SEC. 2. REQUIREMENTS FOR CONSISTENT TREATMENT OF STOCK
OPTIONS BY CORPORATIONS.
(a) Consistent Treatment for Tax Deduction.--Section 83(h)
of the Internal Revenue Code of 1986 (relating to deduction
of employer) is amended--
(1) by striking ``In the case of'' and inserting:
``(1) In general.--In the case of'', and
(2) by adding at the end the following new paragraph:
``(2) Special rules for property transferred pursuant to
stock options.--
``(A) In general.--In the case of property transferred in
connection with a stock option, the deduction otherwise
allowable under paragraph (1) shall not exceed the amount the
taxpayer has treated as an expense for the purpose of
ascertaining income, profit, or loss in a report or statement
to shareholders, partners, or other proprietors (or to
beneficiaries). In no event shall such deduction be allowed
before the taxable year described in paragraph (1).
``(B) Special rules for controlled groups.--The Secretary
shall prescribe rules for the application of this paragraph
in cases where the stock option is granted by a parent or
subsidiary corporation (within the meaning of section 424) of
the employer corporation.''.
(b) Consistent Treatment for Research Tax Credit.--Section
41(b)(2)(D) of the Internal Revenue Code of 1986 (defining
wages for purposes of credit for increasing research
expenses) is amended by inserting at the end the following
new clause:
``(iv) Special rule for stock options and stock-based
plans.--The term `wages' shall not include any amount of
property transferred in connection with a stock option and
required to be included in a report or statement under
section 83(h)(2) until it is so included, and the portion of
such amount which may be treated as wages for a taxable year
shall not exceed the amount of the deduction allowed under
section 83(h) for such taxable year with respect to such
amount.''.
(c) Effective Date.--The amendments made by this section
shall apply to property transferred and wages provided on or
after the date of the enactment of this Act.
______
By Mr. LEVIN (for himself, Mr. Nelson of Florida, Mr. Corzine,
and Mr. Biden):
S. 183. A bill to address Securities and Exchange Commission
authority to impose civil money penalties in administrative proceedings
for violations of securities laws, and for other purposes; to the
Committee on Banking, Housing, and Urban Affairs.
Mr. LEVIN. Mr. President, I am introducing today legislation to
provide the Securities and Exchange Commission with stronger
administrative authority to detect, investigate, and punish corporate
and individual misconduct. This legislation, the SEC Civil Enforcement
Act, among other measures, would provide the SEC with new authority to
impose administrative civil fines on those who violate federal
securities laws. The bill is cosponsored by Senators Bill Nelson,
Corzine, and Biden.
The SEC has repeatedly requested the new enforcement tools that this
bill would provide, and I ask unanimous consent to print in the Record
after my remarks a copy of a letter from SEC Chairman Harvey Pitt
supporting enactment of this legislation.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
[[Page S1076]]
United States Securities and
Exchange Commission,
Washington, DC, August 30, 2002.
Hon. Carl Levin,
Chairman, Permanent Subcommittee on Investigations, Russell
Senate Office Building, Washington, DC.
Dear Chairman Levin: This letter responds to your letter of
August 9th, seeking my views on your proposal to enhance the
Commission's authority to seek civil penalties for violations
of the federal securities laws, increase the penalties the
Commission may seek, and eliminate a procedural requirement
that may slow the Commission's efforts to trace and recover
misappropriated investor funds.
The three additional enforcement tools you contemplate
reflect recommendations we have made previously in an effort
to facilitate our goal of achieving ``real-time
enforcement.'' Especially in light of recent events, I
believe these proposals would enhance our efforts and the
interest of investors. As you know, during this Congressional
session, with the bipartisan support of Congress and the
Administration, the Commission already has been given, and
has begun to implement, greater authority to pursue and
punish corporate wrongdoers and enhance corporate
accountability. The additional authority about which you
inquire would be a welcome addition to our enforcement
arsenal, if the proposals achieve bipartisan support.
Again, thank you for your interest in strengthening
penalties for securities fraud violations. Please do not
hesitate to contact me or Stephen Cutler, Director of the
Division of Enforcement, at (202) 942-4500 if we can be of
further assistance.
Yours truly,
Harvey L. Pitt.
Here is a description of what the bill would do.
First, the bill would grant the SEC additional administrative
authority to impose civil monetary fines on those who violate federal
securities laws. Under current law, only broker dealers, investment
advisers, and certain other persons regulated by the SEC are now
subject to civil fines. Our bill would expand SEC authority to allow it
to impose fines on such wrongdoers as, for example, corporate officers,
directors, auditors, lawyers, or publicly traded companies, none of
which can now be fined by the SEC in an administrative proceeding.
These fines would, of course, be subject to judicial review, as are all
current SEC administrative determinations.
Hearings held and reports issued by the Permanent Subcommittee on
Investigations, which spent the last year investigating Enron's
collapse, determined that the Enron Board of Directors and certain
highly respected financial institutions helped Enron carry out
deceptive accounting transactions or other corporate abuses, misleading
investors and analysts about the company's finances. The latest hearing
in December also highlighted the fact that the SEC needs additional
tools to deal with financial institutions. Our bill would give the SEC
new authority to impose an administrative fine on any bank or
individual banker who violates the federal securities laws including,
as in Enron, by helping a public company doctor its books or engage in
misleading transactions.
Second, this bill would significantly increase the maximum civil fine
that the SEC could impose on those whom it has authority to regulate.
The civil fines that the SEC currently may impose have maximum amounts
that range from $6,500 to $600,000 per violation. In a day and age
where some CEOs are making $100 million in a year, and a company like
Enron reported gross revenues of $100 billion in a single year, a civil
fine of $6,500 is laughable. Here is what one SEC staff document stated
in June 2002, explaining why the agency is seeking an increase in its
civil fine limits:
The current maximum penalty amounts may not have the
desired deterrent effect on an individual or corporate
violator. For example, an individual who commits a negligent
act is subject to a maximum penalty amount of $6,500 per
violation. This amount is so trivial it cannot possibly have
a deterrent effect on the violator.
Our bill would increase the maximum fines from a range of $6,500 to
$600,000 per violation, to a range that goes from $100,000 to $2
million per violation. When we are seeing corporate restatements and
corporate misconduct involving billions of dollars, these larger cash
fines are critical if they are to have an effective deterrent or
punitive impact on wrongdoers in the corporate world today.
Third, the bill would grant the SEC new administrative authority,
when the SEC has opened an official SEC investigation, to subpoena
financial records from a financial institution without having to notify
the subject that such a records request has been made. This authority
will allow the SEC to evaluate financial transactions, trace funds, and
analyze relationships without having to alert the subject of the
investigation to the SEC's actions. Under current law, the SEC either
has to give the subject advance notice of the subpoena or obtain a
court order that can delay notification for no longer than 90 days.
In the cases we are seeing today, where there are allegations that
officers, directors, and companies are using offshore accounts to
deposit millions of dollars, enlist foreign investors, and affect the
accounting and tax treatment of various complex transactions, the SEC
must be able to look at financial records without giving the account
holder an opportunity to move funds, change accounts, and further muddy
the investigative waters. This authority is particularly important in
light of the Patriot Act, which Congress enacted after the 9-11
tragedy, requiring the SEC to be on the lookout for money laundering
through securities accounts. The SEC cannot afford to alert potential
money launderers to the agency's efforts to review their financial
accounts for possible money laundering. This bill would bring the SEC's
subpoena authority into alignment with the subpoena authority of
federal banking agencies that are already exempted by statute from
having to notify account holders of agency subpoenas to review their
financial records. Again, the SEC has requested this new enforcement
tool, and this bill would provide it.
This bill is an important compliment to the new Sarbanes-Oxley law
which stiffened criminal penalties for securities fraud, because this
bill would stiffen enforcement mechanisms on the civil side. Last year,
I tried to incorporate it into the Sarbanes-Oxley Act, but was unable
to obtain a vote on my amendment. That is why I am reintroducing the
legislation this year. Since many corporate and accounting cases
warrant civil rather than criminal treatment, strengthening the SEC's
civil enforcement authority is another critical step in improving its
effectiveness as an enforcement agency to deter and punish this
misconduct.
Given the current disillusionment among the American people and other
investors with American public companies, Congress needs to provide
leadership to restore investor confidence in our markets, in SEC
oversight, and in company financial statements so that investors can
trust them to reflect the true state of a company's financial
condition. I hope my colleagues will join me in supporting this
legislation and winning its enactment during the 108th Congress.
I ask unanimous consent to have printed in the Record the full text
of the bill.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 183
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``SEC Civil Enforcement Act''.
SEC. 2. SECURITIES CIVIL ENFORCEMENT PROVISIONS.
(a) Authority To Assess Civil Money Penalties.--
(1) Securities act of 1933.--Section 8A of the Securities
Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end
the following new subsection:
``(g) Authority of the Commission To Assess Money
Penalty.--
``(1) In general.--In any cease-and-desist proceeding under
subsection (a), the Commission may impose a civil monetary
penalty if it finds, on the record after notice and
opportunity for hearing, that a person is violating, has
violated, or is or was a cause of the violation of, any
provision of this title or any rule or regulation thereunder,
and that such penalty is in the public interest.
``(2) Maximum amount of penalty.--
``(A) First tier.--The maximum amount of penalty for each
act or omission described in paragraph (1) shall be $100,000
for a natural person or $250,000 for any other person.
``(B) Second tier.--Notwithstanding subparagraph (A), the
maximum amount of penalty for such act or omission described
in paragraph (1) shall be $500,000 for a natural person or
$1,000,000 for any other person, if the act or omission
involved fraud, deceit, manipulation, or deliberate or
reckless disregard of a statutory or regulatory requirement.
``(C) Third tier.--Notwithstanding subparagraphs (A) and
(B), the maximum
[[Page S1077]]
amount of penalty for each act or omission described in
paragraph (1) shall be $1,000,000 for a natural person or
$2,000,000 for any other person, if--
``(i) the act or omission involved fraud, deceit,
manipulation, or deliberate or reckless disregard of a
statutory or regulatory requirement; and
``(ii) such act or omission directly or indirectly resulted
in substantial losses or created a significant risk of
substantial losses to other persons or resulted in
substantial pecuniary gain to the person who committed the
act or omission.
``(3) Evidence concerning ability to pay.--In any
proceeding in which the Commission or the appropriate
regulatory agency may impose a penalty under this section, a
respondent may present evidence of the ability of the
respondent to pay such penalty. The Commission or the
appropriate regulatory agency may, in its discretion,
consider such evidence in determining whether the penalty is
in the public interest. Such evidence may relate to the
extent of the person's ability to continue in business and
the collectability of a penalty, taking into account any
other claims of the United States or third parties upon the
assets of that person and the amount of the assets of that
person.''.
(2) Securities exchange act of 1934.--Section 21B(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is
amended--
(A) in paragraph (4), by striking ``supervision;'' and all
that follows through the end of the subsection and inserting
``supervision.'';
(B) by redesignating paragraphs (1) through (4) as
subparagraphs (A) through (D), respectively, and moving the
margins 2 ems to the right;
(C) by inserting ``that such penalty is in the public
interest and'' after ``hearing,'';
(D) by striking ``In any proceeding'' and inserting the
following:
``(1) In general.--In any proceeding''; and
(E) by adding at the end the following:
``(2) Other money penalties.--In any proceeding under
section 21C against any person, the Commission may impose a
civil monetary penalty if it finds, on the record after
notice and opportunity for hearing, that such person is
violating, has violated, or is or was a cause of the
violation of, any provision of this title or any rule or
regulation thereunder, and that such penalty is in the public
interest.''.
(3) Investment company act of 1940.--Section 9(d)(1) of the
Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is
amended--
(A) in subparagraph (C), by striking ``therein;'' and all
that follows through the end of the paragraph and inserting
``supervision.'';
(B) by redesignating subparagraphs (A) through (C) as
clauses (i) through (iii), respectively, and moving the
margins 2 ems to the right;
(C) by inserting ``that such penalty is in the public
interest and'' after ``hearing,'';
(D) by striking ``In any proceeding'' and inserting the
following:
``(A) In general.--In any proceeding''; and
(E) by adding at the end the following:
``(B) Other money penalties.--In any proceeding under
subsection (f) against any person, the Commission may impose
a civil monetary penalty if it finds, on the record after
notice and opportunity for hearing, that such person is
violating, has violated, or is or was a cause of the
violation of, any provision of this title or any rule or
regulation thereunder, and that such penalty is in the public
interest.''.
(4) Investment advisers act of 1940.--Section 203(i)(1) of
the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(1))
is amended--
(A) in subparagraph (D), by striking ``supervision;'' and
all that follows through the end of the paragraph and
inserting ``supervision.'';
(B) by redesignating subparagraphs (A) through (D) as
clauses (i) through (iv), respectively, and moving the
margins 2 ems to the right;
(C) by inserting ``that such penalty is in the public
interest and'' after ``hearing,'';
(D) by striking ``In any proceeding'' and inserting the
following:
``(A) In general.--In any proceeding''; and
(E) by adding at the end the following:
``(B) Other money penalties.--In any proceeding under
subsection (k) against any person, the Commission may impose
a civil monetary penalty if it finds, on the record after
notice and opportunity for hearing, that such person is
violating, has violated, or is or was a cause of the
violation of, any provision of this title or any rule or
regulation thereunder, and that such penalty is in the public
interest.''.
(b) Increased Maximum Civil Money Penalties.--
(1) Securities act of 1933.--Section 20(d)(2) of the
Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended--
(A) in subparagraph (A)(i)--
(i) by striking ``$5,000'' and inserting ``$100,000''; and
(ii) by striking ``$50,000'' and inserting ``$250,000'';
(B) in subparagraph (B)(i)--
(i) by striking ``$50,000'' and inserting ``$500,000''; and
(ii) by striking ``$250,000'' and inserting ``$1,000,000'';
and
(C) in subparagraph (C)(i)--
(i) by striking ``$100,000'' and inserting ``$1,000,000'';
and
(ii) by striking ``$500,000'' and inserting ``$2,000,000''.
(2) Securities exchange act of 1934.--
(A) Penalties.--Section 32 of the Securities Exchange Act
of 1934 (15 U.S.C. 78ff) is amended--
(i) in subsection (b), by striking ``$100'' and inserting
``$10,000''; and
(ii) in subsection (c)--
(I) in paragraph (1)(B), by striking ``$10,000'' and
inserting ``$500,000''; and
(II) in paragraph (2)(B), by striking ``$10,000'' and
inserting ``$500,000''.
(B) Insider trading.--Section 21A(a)(3) of the Securities
Exchange Act of 1934 (15 U.S.C. 78u-1(a)(3)) is amended by
striking ``$1,000,000'' and inserting ``$2,000,000''.
(C) Administrative proceedings.--Section 21B(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u-2(b)) is
amended--
(i) in paragraph (1)--
(I) by striking ``$5,000'' and inserting ``$100,000''; and
(II) by striking ``$50,000'' and inserting ``$250,000'';
(ii) in paragraph (2)--
(I) by striking ``$50,000'' and inserting ``$500,000''; and
(II) by striking ``$250,000'' and inserting ``$1,000,000'';
and
(iii) in paragraph (3)--
(I) by striking ``$100,000'' and inserting ``$1,000,000'';
and
(II) by striking ``$500,000'' and inserting ``$2,000,000''.
(D) Civil actions.--Section 21(d)(3)(B) of the Securities
Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended--
(i) in clause (i)--
(I) by striking ``$5,000'' and inserting ``$100,000''; and
(II) by striking ``$50,000'' and inserting ``$250,000'';
(ii) in clause (ii)--
(I) by striking ``$50,000'' and inserting ``$500,000''; and
(II) by striking ``$250,000'' and inserting ``$1,000,000'';
and
(iii) in clause (iii)--
(I) by striking ``$100,000'' and inserting ``$1,000,000'';
and
(II) by striking ``$500,000'' and inserting ``$2,000,000''.
(3) Investment company act of 1940.--
(A) Ineligibility.--Section 9(d)(2) of the Investment
Company Act of 1940 (15 U.S.C. 80a-9(d)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and inserting ``$100,000''; and
(II) by striking ``$50,000'' and inserting ``$250,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and inserting ``$500,000''; and
(II) by striking ``$250,000'' and inserting ``$1,000,000'';
and
(iii) in subparagraph (C)--
(I) by striking ``$100,000'' and inserting ``$1,000,000'';
and
(II) by striking ``$500,000'' and inserting ``$2,000,000''.
(B) Enforcement of investment company act.--Section
42(e)(2) of the Investment Company Act of 1940 (15 U.S.C.
80a-41(e)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and inserting ``$100,000''; and
(II) by striking ``$50,000'' and inserting ``$250,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and inserting ``$500,000''; and
(II) by striking ``$250,000'' and inserting ``$1,000,000'';
and
(iii) in subparagraph (C)--
(I) by striking ``$100,000'' and inserting ``$1,000,000'';
and
(II) by striking ``$500,000'' and inserting ``$2,000,000''.
(4) Investment advisers act of 1940.--
(A) Registration.--Section 203(i)(2) of the Investment
advisers Act of 1940 (15 U.S.C. 80b-3(i)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and inserting ``$100,000''; and
(II) by striking ``$50,000'' and inserting ``$250,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and inserting ``$500,000''; and
(II) by striking ``$250,000'' and inserting ``$1,000,000'';
and
(iii) in subparagraph (C)--
(I) by striking ``$100,000'' and inserting ``$1,000,000'';
and
(II) by striking ``$500,000'' and inserting ``$2,000,000''.
(B) Enforcement of investment advisers act.--Section
209(e)(2) of the Investment advisers Act of 1940 (15 U.S.C.
80b-9(e)(2)) is amended--
(i) in subparagraph (A)--
(I) by striking ``$5,000'' and inserting ``$100,000''; and
(II) by striking ``$50,000'' and inserting ``$250,000'';
(ii) in subparagraph (B)--
(I) by striking ``$50,000'' and inserting ``$500,000''; and
(II) by striking ``$250,000'' and inserting ``$1,000,000'';
and
(iii) in subparagraph (C)--
(I) by striking ``$100,000'' and inserting ``$1,000,000'';
and
(II) by striking ``$500,000'' and inserting ``$2,000,000''.
(c) Authority To Obtain Financial Records.--Section 21(h)
of the Securities Exchange Act of 1934 (15 U.S.C. 78u(h)) is
amended--
(1) by striking paragraphs (2) through (8);
[[Page S1078]]
(2) in paragraph (9), by striking ``(9)(A)'' and all that
follows through ``(B) The'' and inserting ``(3) The'';
(3) by inserting after paragraph (1), the following:
``(2) Access to financial records.--
``(A) In general.--Notwithstanding section 1105 or 1107 of
the Right to Financial Privacy Act of 1978, the Commission
may obtain access to and copies of, or the information
contained in, financial records of any person held by a
financial institution, including the financial records of a
customer, without notice to that person, when it acts
pursuant to a subpoena authorized by a formal order of
investigation of the Commission and issued under the
securities laws or pursuant to an administrative or judicial
subpoena issued in a proceeding or action to enforce the
securities laws.
``(B) Nondisclosure of requests.--If the Commission so
directs in its subpoena, no financial institution, or
officer, director, partner, employee, shareholder,
representative or agent of such financial institution, shall,
directly or indirectly, disclose that records have been
requested or provided in accordance with subparagraph (A), if
the Commission finds reason to believe that such disclosure
may--
``(i) result in the transfer of assets or records outside
the territorial limits of the United States;
``(ii) result in improper conversion of investor assets;
``(iii) impede the ability of the Commission to identify,
trace, or freeze funds involved in any securities
transaction;
``(iv) endanger the life or physical safety of an
individual;
``(v) result in flight from prosecution;
``(vi) result in destruction of or tampering with evidence;
``(vii) result in intimidation of potential witnesses; or
``(viii) otherwise seriously jeopardize an investigation or
unduly delay a trial.
``(C) Transfer of records to government authorities.--The
Commission may transfer financial records or the information
contained therein to any government authority, if the
Commission proceeds as a transferring agency in accordance
with section 1112 of the Right to Financial Privacy Act of
1978 (12 U.S.C. 3412), except that a customer notice shall
not be required under subsection (b) or (c) of that section
1112, if the Commission determines that there is reason to
believe that such notification may result in or lead to any
of the factors identified under clauses (i) through (viii) of
subparagraph (B) of this paragraph.'';
(4) by striking paragraph (10); and
(5) by redesignating paragraphs (11), (12), and (13) as
paragraphs (4), (5), and (6), respectively.
______
By Mr. DODD (for himself, Ms. Mikulski, Mr. Jeffords, Mrs.
Murray, Ms. Landrieu, and Mr. Dayton):
S. 184. A bill to amend section 401(b)(2) of the Higher Education Act
of 1965 regarding the Federal Pell Grant maximum amount; to the
Committee on Health, Education, Labor, and Pensions.
Mr. DODD. Mr. President, I rise, and am joined by my colleagues
Senator Mikulski, Senator Jeffords, Senator Murray, Senator Landrieu
and Senator Dayton, to introduce legislation to amend the Higher
Education Act to improve access to higher education for low- and
middle-income students by doubling the authorized maximum Pell Grant
within six years. This bill has the strong support of the Student Aid
Alliance, whose 60 organizations represent students, colleges, parents,
and others who care about higher education.
Pell Grants were established in the early 1970s by our former
colleague, Claiborne Pell, of Rhode Island. They are the largest source
of federal grant aid for college students. For millions of low- and
middle-income students they are the difference between attending or not
attending college. But, unfortunately, they don't make as much of a
difference as they used to.
In 1975, the maximum appropriated Pell Grant covered all of the
average student's tuition, fees, room, and board at community colleges.
It covered about 80 percent of those costs at public universities and
about 40 percent at private universities. Today, Pell Grant's
purchasing power has dropped by more than 30 percent at community
colleges and been more than cut in half at universities. It covers only
38 percent of the costs at public universities and 15 percent at
private universities. That's not just a drop, it's a free-fall.
For students from the lowest income families, college is getting
farther and farther out of reach. Since 1975, as a percentage of the
family income of the poorest 20 percent of families, the cost of public
universities has increased by half and the cost of private universities
has doubled. For middle-income families, the cost of college also has
increased significantly as a percentage of income.
As a result of all this, low- and middle-income students who want to
attend college are forced to finance their education with an ever-
increasing percentage of loans as opposed to grants, which effectively
increases their cost of attendance even more and in many cases, keeps
them from going to college at all.
Of course, the President's budget would have frozen the maximum Pell
Grant. So, on top of leaving millions of children behind by failing to
meet the bipartisan promises of the No Child Left Behind Act, the
President's budget would leave even more children behind who work hard
and do well in school and want to go on to college.
We can't kid ourselves, if we're serious about leaving no child
behind, if we're serious about having a society where equal opportunity
for all is more than just rhetoric, then we need to reinvigorate the
Pell program.
The Student Aid Alliance put it very well, in talking about students,
when they said that ``investing in their future is investing in our
nation's future.'' We can start investing in our Nation's future by
supporting the amendment that will be offered to the Omnibus
appropriations bill today to increase the maximum appropriated Pell
Grant to $4,500.
That won't bring Pell Grant's purchasing power back to where it was
in 1975, but it is a critical first step, and I intend to continue the
effort through this bill and other measures as we reauthorize the
Higher Education Act this Congress.
I hope that my colleagues will join me.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 184
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. FEDERAL PELL GRANT MAXIMUM AMOUNT.
Section 401(b)(2) of the Higher Education Act of 1965 (20
U.S.C. 1070a(b)(2)) is amended--
(1) by redesignating subparagraph (B) as subparagraph (C);
(2) by amending subparagraph (A) to read as follows:
``(A) Except as provided in subparagraph (B), the amount of
the Federal Pell Grant for a student eligible under this part
shall be--
``(i) $6,700 for academic year 2004-2005;
``(ii) $7,600 for academic year 2005-2006;
``(iii) $8,600 for academic year 2006-2007;
``(iv) $9,600 for academic year 2007-2008;
``(v) $10,600 for academic year 2008-2009; and
``(vi) $11,600 for academic year 2009-2010,
less an amount equal to the amount determined to be the
expected family contribution with respect to that student for
that year.''; and
(3) by inserting after subparagraph (A) (as so amended) the
following:
``(B) If the Secretary determines that the increase from
one academic year to the next in the amount of the maximum
Federal Pell Grant authorized under subparagraph (A) does not
increase students' purchasing power (relative to the cost of
attendance at an institution of higher education) by at least
5 percentage points, then the amount of the maximum Federal
Pell Grant authorized under subparagraph (A) for the academic
year for which the determination is made shall be increased
by an amount sufficient to achieve such a 5 percentage point
increase.''.
______
By Mr. DeWINE. (for himself and Mr. Durbin):
S. 186. A bill to amend the Employee Retirement Income Security Act
of 1974, the Public Health Service Act, and the Internal Revenue Code
of 1986 to provide health insurance protections for individuals who are
living organ donors; to the Committee on Health, Education, Labor, and
Pensions.
Mr. DeWINE. Mr. President, I rise today to raise further awareness of
an issue that affects over 22,000 people a year, and that issue is
organ donation. The sad fact about organ donations is this: We have the
medical know-how to save lives, but we lack the organs. We lack organs
because most Americans simply are unaware of the life-giving difference
they can make by choosing to become organ donors.
Sadly, each day the waiting list for those needing organs continues
to grow. Today, over 80,000 people remain on the national transplant
waiting list.
[[Page S1079]]
Right now, more than 56,000 people, alone, are waiting for kidney
transplants. That number is expected to double within the next decade.
Additionally, close to 6,000 people die each year just waiting for an
available organ.
To remedy the organ shortage, we must increase public awareness. By
educating the public and raising awareness, more people will choose to
become organ donors. At the very least, through these efforts, we can
encourage more families to discuss what their wishes are and whether
they would want to be organ donors.
But, our efforts must not stop there. We must do more than just
implement public awareness campaigns, because the face of organ
donation is changing. For the first time ever, the number of living
organ donors outnumbered cadaver donors. In 2001, there were 6,082
donor cadavers while 6,534 people opted to become living donors,
usually giving up a healthy kidney to help a family member or friend.
Recognizing this, my colleague, Senator Durbin, and I are introducing
a bill today that would help protect living organ donors in the group
insurance market. Our bill would ensure that those individuals who
choose to be living organ donors are not discriminated against in the
insurance marketplace. Our bill builds on the protections provided by
the Health Insurance Portability and Accountability Act, so that living
organ donors are not denied insurance nor are they applied
discriminatory insurance premiums because of their living organ donor
status.
Quite simply, a brother who donates a part of his kidney to his
sister should not be denied health insurance. But tragically, that is
what oftentimes happens. Frequently, individuals who are living organ
donors are denied health insurance or restricted from the insurance
market. Instead, we should celebrate living organ donors and remove
obstacles and barriers for the successful donation of organs. Insurance
concerns should not undermine someone's decision to be a living organ
donor.
Some states are evaluating how living organ donors affect the market.
States are amending their Family Medical Leave eligibility so that
living organ donors can participate and benefit from the program. The
Federal Government, with the Organ Donor Leave Act of 1999, offered 30
days paid leave to Federal employees who chose to be an organ donor.
But, paid leave and job protection doesn't mean much if people are
denied health insurance or are required to pay higher premiums because
they donated an organ to save another person's life.
The impact of living organ donation is profound. A living organ donor
not only can save the life of one patient, but can also take that
person off the waiting list for a cadaver donation. That means the next
person on the waiting list is ``bumped up'' a spot, giving additional
hope to the 86,000 persons on the national transplant waiting list.
Living organ donors give family members and friends a second chance
at life and the opportunity to reduce the number of people on the
waiting list to receive an organ. It is time for Congress to make a
sensible decision in support of a person's decision to be a living
organ donor.
I encourage my colleagues to join me in co-sponsoring this bill.
______
By Mr. EDWARDS:
S. 187. A bill to provide for the elimination of significant
vulnerabilities in the information technology of the Federal
Government, and for other purposes; to the Committee on Governmental
Affairs.
Mr. EDWARDS. Mr. President, I rise today to introduce the National
Cyber Security Leadership Act of 2003, a bill that calls on the Federal
Government to lead by example in shoring up its computers and
protecting them against cyber attacks.
I introduce this bill because our Nation's computers and networks are
increasingly vulnerable to cyber attacks. A week after the September 11
attacks, a cyber attack spread across 86,000 computers over several
days, causing unknown amounts of financial and economic damage. Two
months before that, a cyber attack called Code Red infected 150,000
computers in 14 hours. According to cyber security experts, Federal
computers have already been used as weapons in large-scale cyber
attack.
There aren't just amateur teenage hackers. Terrorists, including al
Qaeda operatives, have browsed Internet sites offering software that
would help them take down power, water, transport and communications
grids.
One of the principal reasons that companies do not act to secure
their systems is that the Federal Government does not act to secure its
own systems. Unfortunately, Federal agencies continue to be among the
worst offenders failing to protect themselves against cyber attack.
Last November, a Congressional report card gave 14 agencies a failing
grade for their computer security efforts. These vulnerabilities leave
our Federal agencies exposed to hackers, system shutdowns, and cyber
terrorist infiltration.
Clearly, we need to act now to strengthen our computer systems. I
believe the first step in this process is to have our Federal agencies
lead by example.
The National Cyber Security Leadership Act of 2003 would establish
higher standards for Federal Government computer safety. The National
Institute of Standards and Technology would establish the standards
after individual agencies conduct comprehensive tests of their network
systems and report on their weaknesses. These procedures will
strengthen our government's resistance to cyber attacks and will
demonstrate to the business community the tremendous value in
conducting comprehensive security tests and monitoring new
developments.
I have developed this important piece of legislation with assistance
from Mr. Alan Paller, Director of Research for the SANS Institute; Mr.
Franklin S. Reeder, Chairman of the Center for Internet Security and of
the Computer System Security and Privacy Advisory Committee; and
several computer security experts in the Federal Government.
We cannot afford to wait until we experience a computer meltdown. I
urge my colleagues to join with me in helping our Federal agencies to
lead by example.
______
By Mr. FEINGOLD (for himself, Mr. Corzine, Mr. Wyden, and Mr.
Nelson of Florida):
S. 188. A bill to impose a moratorium on the implementation of
datamining under the Total Information Awareness program of the
Department of Defense and any similar program of the Department of
Homeland Security, and for other purposes; to the Committee on the
Judiciary.
Mr. FEINGOLD. Mr. President, I am pleased today to introduce the
Data-Mining Moratorium Act of 2003. Like many Americans, I was
surprised to learn during the last few months that the Department of
Defense has spent hundreds of millions of dollars developing a data-
mining system called Total Information Awareness while permitting the
progeny of Total Information Awareness to appear in places like the
Department of Homeland Security. The untested and controversial
intelligence procedure known as data-mining is capable of maintaining
extensive files containing both public and private records on each and
every American. Coupled with the expanded domestic surveillance already
underway by this Administration, this unchecked system is a dangerous
step forward and threatens one of the values that we're fighting for,
freedom. The Administration has a heavy burden of proof that such
extreme measures are necessary.
The Data-Mining Moratorium Act of 2003 would immediately suspend
data-mining in the Department of Defense and the Department of Homeland
Security until Congress has conducted a thorough review of Total
Information Awareness and the practice of data-mining.
Without Congressional review and oversight, data-mining would allow
the Department of Homeland Security, the Department of Defense and
other government agencies to collect and analyze a combination of
intelligence data and personal information like individuals' traffic
violations, credit card purchases, travel records, medical records,
communications records, and virtually any information collected on
commercial or public databases. Through comprehensive data-mining, as
envisioned
[[Page S1080]]
with Total Information Awareness, everything from people's video
rentals or drugstore purchases made with a credit card to their most
private health concerns could be fed into a computer and monitored by
the Federal Government.
Using massive data mining, like Total Information Awareness, the
government hopes to be able to detect potential terrorists. There is no
evidence that data-mining will, in fact, prevent terrorism. And when
one considers the potential for errors in data, for example, credit
agencies that have data about John R. Smith on John D. Smith's credit
report, the prospect of ensnaring many innocents is real. This approach
might also lead to the same kinds of so-called ``preventive''
detentions that are unconstitutional and put more than 1,100
individuals in jail after September 11. Although none of these people
were ever charged with orchestrating or aiding the attacks, they were
often held for months on end, and went for weeks without access to
counsel. There is every reason to be concerned that uncontrolled data-
mining systems would lead to the same abuse of power.
The Administration's assurances that a data-mining system will not
abuse our privacy rights ring hollow, particularly to those of us who
questioned the breathtaking new Federal powers in the USA PATRIOT Act.
We heard these same assurances when the Administration pressed for
enactment of that sweeping legislation in the months after September
11th, that the government would act with restraint to ensure that its
application of the Act would not infringe on our liberties. The
opposite has turned out to be true. In fact, some of the most serious
infringements on our personal freedoms in the USA PATRIOT Act can now
contribute to the data-mining effort.
The USA PATRIOT Act allows the government to compel businesses to
produce records about people who had only a remote contact with a
person sought in connection with an investigation of terrorism,
including sitting on an airplane with the suspect, or having used the
same payphone as the suspect. Under the PATRIOT Act, any business
records can be compelled, including those containing sensitive personal
information like medical records from hospitals or doctors, financial
records, or records of what books someone has taken out of the
liberary. This information is exactly the kind of data that data-mining
programs like Total Infomration Awareness will use when compiling its
files on the American people.
The danger of data-mining is compounded not only by provisions in the
USA PATRIOT Act, but also by the Administration's loosening of domestic
surveillance restrictions for FBI agents last year, restrictions that
were put in place following FBI abuses under J. Edgar Hoover. These
various initiatives of the Administration are building on each other to
give away more and more of our personal information, and give away more
and more of our personal freedoms.
It is reasonable to ask Americans to sacrifice some personal freedom
like submitting to more extensive security screenings at airports. But
should we allow the government to track our every move, from what items
we purchase online, to our medical records, to our financial records,
without limits and without accountability? I believe most Americans
would say that that's a police state, not the America we know and love.
We would catch more terroists in a police state. I don't doubt that.
But that's not a country in which most Americans would want to live.
Each time we have been told that government authorities would use
restraint with its new powers, but Congress and the American people
should not find comfort in these assurances, especially since they have
been made by an Administration that has been operating in greater and
greater secrecy. The Administration must suspend this massive data
mining project until Congress can determine whether the proposed
benefits of this practice come at too high a price to our privacy and
personal liberties.
I urge my colleagues to support this measure, and I ask unanimous
consent that the text of the bill be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 188
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Data-Mining Moratorium Act
of 2003''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Use of advanced technology is an essential tool in the
fight against terrorism.
(2) There has been no demonstration that data-mining by a
government, including data-mining such as that which is to
occur under the Total Information Awareness program, is an
effective tool for preventing terrorism.
(3) Data-mining under the Total Information Awareness
program or a similar program would provide the Federal
Government with access to extensive files of private as well
as public information on an individual.
(4) There are significant concerns regarding the extent to
which privacy rights of individuals would be adversely
affected by data-mining carried out by their government.
(5) Congress has not reviewed any guidelines, rules, or
laws concerning implementation and use of data-mining by
Federal Government agencies.
SEC. 3. MORATORIUM ON IMPLEMENTATION OF TOTAL INFORMATION
AWARENESS PROGRAM FOR DATA MINING.
(a) Moratorium.--During the period described in subsection
(b), no officer or employee of the Department of Defense or
the Department of Homeland Security may take any action to
implement or carry out for data-mining purposes any part of
(including any research or development under)--
(1) the Department of Defense component of the Total
Information Awareness program or any other data-mining
program of the Department of Defense; or
(2) any data-mining program of the Department of Homeland
Security that is similar or related to the Total Information
Awareness program.
(b) Moratorium Period.--The period referred to in
subsection (a) for a department of the Federal Government is
the period beginning on the date of the enactment of this Act
and ending on the date (after the date of the enactment of
this Act) on which there is enacted a law specifically
authorizing data-mining by such department.
SEC. 4. REPORTS ON DATA-MINING ACTIVITIES.
(a) Requirement for Report.--The Secretary of Defense, the
Attorney General, and the head of each other department or
agency of the Federal Government that is engaged in any
activity to use or develop data-mining technology shall each
submit to Congress a report on all such activities of the
department or agency under the jurisdiction of that official.
(b) Content of report.--A report submitted under subsection
(a) shall include, for each activity to use or develop data-
mining technology that is required to be covered by the
report, the following information:
(1) A thorough description of the activity.
(2) A thorough discussion of the plans for the use of such
technology.
(3) A thorough discussion of the policies, procedures, and
guidelines that are to be applied in the use of such
technology for data-mining in order to--
(A) protect the privacy rights of individuals; and
(B) ensure that only accurate information is collected.
(c) Time for Report.--Each report required under subsection
(a) shall be submitted not later than 90 days after the date
of the enactment of this Act.
SEC. 5. CONSTRUCTION OF PROVISIONS.
Nothing in this Act shall be construed to preclude the
Department of Defense or the Department of Homeland Security
from conducting--
(1) computer searches of public information; or
(2) computer searches that are based on a particularized
suspicion of an individual.
______
By Mr. WYDEN (for himself, Mr. Allen, Mr. Lieberman, Mr. Warner,
Ms. Mikulski, Mr. Hollings, Ms. Landrieu, Mrs. Clinton, Mr.
Levin, and Mr. Bayh):
S. 189. A bill to authorize appropriations for nanoscience,
nanoengineering, and nanotechnology research, and for other purposes;
to the Committee on Commerce, Science, and Transportation.
Mr. WYDEN. Mr. President, far from the stuff of science fiction,
nanotechnology has become a reality in the lives of many Americans.
While there is tremendous potential for further study in this field,
nanotechnology's current impacts range from the pedestrian to the
extraordinary. A TV commercial demonstrates the practicality of
nanotechnology through stain-resistant pants. Prosthetic and medical
implants have been improved through molecularly designed surfaces that
interact with the cells of the body. There is no question that this
field will dramatically change the way Americans live.
[[Page S1081]]
I was pleased that my colleagues in the Commerce Committee in the
last Congress recognized the tremendous potential of nanotechnology and
passed this bill out of committee with unanimous bipartisan support.
Nanotechnology innovations will bring enormous benefits to America's
economy and to nearly every aspect of life in the coming decades. My
own judgment is the nanotechnology revolution has the potential to
change America on a scale equal to, if not greater than, the computer
revolution. I am determined that the United States will not miss, but
will mine the opportunities of nanotechnology. At present, efforts in
the nanotechnology field are strewn across a half-dozen Federal
agencies. I want America to marshal its various nanotechnology efforts
into one driving force to remain the world's leader in this burgeoning
field. And I believe Federal support is essential to achieving that
goal.
Legislation I am introducing today will provide a smart, accelerate,
and organized approach to nanotechnology research, development, and
education. In my view, there are three major steps America must take to
ensure the highest success for its nanotechnology efforts.
First, a National nanotechnology Research Program should be
established to superintend long-term fundamental nanoscience and
engineering research. The program's goals will be to ensure America's
leadership and economic competitiveness in nanotechnology, and to make
sure ethical and social concerns are taken into account alongside the
development of this discipline.
Second, the Federal Government should support nanoscience through a
program of research grants, and also through the establishment of
nanotechnology research centers. These centers would serve as key
components of a national research infrastructure, bringing together
experts from the various disciplines that must intersect for nanoscale
projects to succeed and building a network that includes State-
supported centers. As these research efforts take shape, educational
opportunities will be the key to their long-term success. Through this
legislation, I commit to helping students who would enter the field of
nanotechnology. This discipline requires multiple areas of expertise.
Students with the drive and the talent to tackle physics, chemistry,
and the material sciences simultaneously deserve all the support we can
offer.
Third, the government should create connections across its agencies
to aid in the meshing of various nanotechnology efforts. These could
include a national steering office, and a Presidential nanotechnology
Advisory Committee, modeled on the President's Information Technology
Advisory Committee.
I also believe that as these organizational support structures are
put into place, rigorous evaluation must take place to ensure the
maximum efficiency of our efforts. Personally, I would call for an
annual review of America's nanotechnology efforts from the Presidential
Advisory Committee, and a periodic review from the National Academy of
Sciences. In addition to monitoring our own progress, the United States
should keep abreast of the world's nanotechnology efforts through a
series of benchmarking studies.
If the Federal Government fails to get behind nanotechnology now with
organized, goal-oriented support, this Nation runs the risk of falling
behind others in the world who recognize the potential of this
discipline. Nanotechnology is already making pants more stain-
resistant, making windows self-washing and making car parts stronger
with tiny particles of clay. What America risks missing is the next
generation of nanotechnology. In the next wave, nanoparticles and
nanodevices will become the building blocks of our health care,
agriculture, manufacturing, environmental cleanup, and even national
security.
America risks missing a revolution in electronics, where a device the
size of a sugar cube could hold all of the information in the Library
of Congress. Today's silicon-based technologies can only shrink so
small. Eventually, nanotechnologies will grow devices from the
molecular level up. Small though they may be, their capabilities and
their impact will be enormous. Spacecraft could be the size of mere
molecules.
America risks missing a revolution in health care. In my home State,
Oregon State University researchers are working on the microscale to
create lapel-pin-sized biosensors that use the color-changing cells of
the Siamese fighting fish to provide instant visual warnings when a
biotoxin is present. An antimicrobial dressing for battlefield wounds
is already available today, containing silver nanocrystals that prevent
infection and reduce inflammation. The health care possibilities for
nanotechnology are limitless. Eventually, nanoscale particles will
travel human bodies to detect and cure disease. Chemotherapy could
attack individual cancer cells and leave healthy cells intact. Tiny
bulldozers could unclog blocked arteries. Human disease will be fought
cell by cell, molecule by molecule, and nanotechnology will provide
victories over disease that we can't even conceive today.
America risks missing a host of beneficial breakthroughs. American
scientists could be the first to create nanomaterials for manufacturing
and design that are stronger, lighter, harder, self-repairing, and
safer. Nanoscale devices could scrub automobile pollution out of the
air as it is produced. Nanoparticles could cover armor to make American
soldiers almost invisible to enemies and even tend their wounds.
nanotechnology could grow steel stronger than what's made today, with
little or no waste to pollute the environment.
Moreover, and this is even more important given our struggling
economy, America risks missing an economic revolution based on
nanotechnology. With much of nanotechnology existing in a research
milieu, venture capitalists are already investing $1 billion in
American nanotech interests this year alone. It's estimated that
nanotechnology will become a trillion-dollar industry over the next 10
years. As nanotechnology grows, the ranks of skilled workers needed to
discover and apply its capabilities must grow too. In the
nanotechnology revolution, areas of high unemployment could become
magnets for domestic production, engineering and research for
nanotechnology applications--but only if government doesn't miss the
boat.
Our country's National Nanotechnology Initiative is a step in the
right direction. This Nation has already committed substantial funds to
nanotechnology research and development in the coming years. But
funding is not enough. There must be careful planning to make sure that
money is used for sound science over the long-term. That is the reason
for the legislation I am issuing today. The strategic planning it
prescribes will ensure that scientists get the support they need to
realize nanotechnology's greatest potential.
In 1944 the visionary President Franklin Delano Roosevelt requested a
leading American scientist's opinion on advancing the United States'
scientific efforts to benefit the world. Dr. Vannevar Bush offered his
reply to President Harry S Truman the next year, following FDR's death.
In his report to the President, Dr. Bush wrote, ``The Government should
accept new responsibilities for promoting the flow of new scientific
knowledge and the development of scientific talent in our youth. These
responsibilities are the proper concern of the Government, for they
vitally affect our health, our jobs, and our national security. It is
in keeping also with basic United States policy that the Government
should foster the opening of new frontiers and this is the modern way
to do it.''
Those principles, so true nearly 60 years ago, are truer still today.
I propose that the government now accept new responsibilities in
promoting and developing nanatechnology. I am pleased to be joined on
this legislation by Senators Allen, Lieberman, Mikulski, Hollings,
Landrieu, Clinton, and Levin. I ask unanimous consent that this
statement be entered in the Record.
______
By Mrs. FEINSTEIN:
S. 190. A bill to establish the Director of National Intelligence as
head of the intelligence community, to modify and enhance authorities
and responsibilities relating to the administration of intelligence and
the intelligence community, and for other purposes; to the Select
Committee on Intelligence.
[[Page S1082]]
Mrs. FEINSTEIN. Mr. President, I rise today to offer the Intelligence
Community Leadership Act of 2003. This legislation creates the position
of Director of National Intelligence to provide budget and statutory
authority over coordinating our intelligence efforts. This will help
assure that the sort of communication problems that prevented the
various elements of our intelligence community from working together
effectively before September 11 never happens again.
Today there are 14 different agencies and departments which make up
the Intelligence Community: the Central Intelligence Agency, the
Defense Intelligence Agency, the National Security Agency, the National
Reconnaissance Office, the National Imagery and Mapping Agency, Army
Intelligence, Air Force Intelligence, Marine Corps Intelligence,
intelligence elements of the Departments of State, Treasury, Energy, as
well as the Federal Bureau of Investigation and the United States Coast
Guard. Together they make up a huge network, with thousands of
employees and a significant, secret, budget.
Interestingly, there is no real head of this sprawling Community. In
law the Director of Central Intelligence leads both the CIA and the
Intelligence Community, but in practice he is unable to exercise
meaningful control and leadership. The Community is plagued by acute
turf battles, incompatible information systems and uncoordinated
operations. The present structure makes coordination and movement of
personnel within the Intelligence Community more difficult than it
should be.
Last Spring I offered legislation to address this problem, S. 2645,
which created the position of Director of National Intelligence.
Since then the Joint Inquiry of the Senate and House Intelligence
Committees completed its investigations into the Intelligence Community
role in the attacks of September 11.
The Joint Inquiries' major recommendation was the creation of a
``Director of National Intelligence'', DNI, with real authority to run
the Intelligence Community, separate from the head of the CIA, and thus
free from having to run both the Community and one of its major
constituent agencies.
Working with those recommendations, I have updated the bill I
introduced last year to reflect the Joint Inquiries' findings. The
changes include adding specific language to ensure that the new
Director of National Intelligence has meaningful and effective budget
and personnel authority.
Specifically this legislation would create the new position of
Director of National Intelligence who would head the intelligence
community, serving at the pleasure of the President, with the proper
and necessary authority to coordinate activities, direct priorities,
and develop and execute the budget for our nation's national
intelligence community.
The DNI would be responsible for all of the functions now performed
by the Director of Central Intelligence in his role as head of the
intelligence community, while a separate individual would be Director
of the CIA.
Nominated by the President and confirmed by the Senate, the DNI would
be empowered to create and execute the national intelligence budget in
conjunction with the various intelligence agencies within our
government.
The Director of the Central Intelligence Agency, DCIA, freed from the
double burden as head of the intelligence community, would then be able
to concentrate on the critical missions of the CIA alone: Assure the
collection of intelligence from human sources, and that intelligence is
properly correlated, evaluated, and disseminated throughout the
intelligence community and to decision makers.
I recognize that this bill will certainly not solve every problem
within the intelligence community, but I believe it is an important,
perhaps critical, first step. My hope is that introduction of this bill
will move the much-needed debate on Intelligence Community reform
forward.
______
By Mr. DeWINE:
S. 191. A bill to amend title XVIII of the Social Security Act to
provide adequate coverage for immunosuppressive drugs furnished to
beneficiaries under the medicare program that have received a kidney
transplant, and for other purposes; to the Committee on Finance.
Mr. DeWINE. Mr. President, I rise today to join my friend and
colleague, Senator Durbin, in introducing a bill to help organ
transplant patients maintain access to the life-saving drugs necessary
to prevent their immune systems from rejecting their new organs.
Tragically, today over 86,000 Americans are waiting for a donor
organ. Those individuals who are blessed to receive an organ transplant
must take immunosuppressive drugs every day for the life of their
transplant. Failure to take these drugs significantly increases the
risk that the transplanted organ will be rejected.
We need this bill, because Federal law is compromising the success of
organ transplants. Let me explain. Right now, current Medicare policy
denies certain transplant patients coverage for the drugs needed to
prevent rejection. Medicare does not pay for anti-rejection drugs for
Medicare beneficiaries, who received their transplants prior to
becoming a Medicare beneficiary. So, for instance, if a person received
a transplant at age 64 through his or her health insurance plan, when
that person retires and relies on Medicare for health care coverage, he
or she would no longer have immunosuppressive drug coverage.
Medicare only pays for anti-rejection drugs for transplants performed
in a Medicare-approved transplant facility. However, many beneficiaries
are completely unaware of this fact and how it can jeopardize their
future coverage of immunosuppressive drugs. To receive an organ
transplant, a person must be very ill and many are far too ill at the
time of transplantation to be researching the intricate nuances of
Medicare coverage policy.
End Stage Renal Disease, ESRD, patients qualify for Medicare on the
basis of needing dialysis. If End Stage Renal Disease patients receive
a kidney transplant, they qualify for Medicare coverage for three years
after the transplant. After the three years are up, they lose not only
their general Medicare coverage, but also their coverage for
immunosuppressive drugs.
The amendment that Senator Durbin and I are introducing today would
remove the Medicare limitations and make clear that all Medicare
beneficiaries including End Stage Renal Disease patients who have had a
transplant and need immunosuppressive drugs to prevent rejection of
their transplant, will be covered as long as such anti-rejection drugs
are needed.
In the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act, Congress eliminated the 36-month time limitation for
transplant recipients who both receive a Medicare eligible transplant
and are eligible for Medicare based on age or disability. Our bill
would provide the same indefinite coverage to kidney transplant
recipients who are not Medicare-aged or Medicare-disabled.
I urge my colleagues to support this legislation and help those who
receive Medicare-eligible transplants to gain access to the
immunosuppressive drugs they need to live healthy, productive lives.
______
By Mr. CORZINE:
S. 192. A bill to amend title 23, United States Code, to provide for
criminal and civil liability for permitting an intoxicated arrestee to
operate a motor vehicle; to the Committee on Environment and Public
Works.
Mr. CORZINE. Mr. President, today I am introducing legislation that
would address the serious national problem of drunk driving. This bill,
entitled ``John's Law of 2003,'' would help ensure that when drunken
drivers are arrested, they cannot simply get back into the car and put
the lives of others in jeopardy.
On July 22, 2000, Navy Ensign John Elliott was driving home from the
United States Naval Academy in Annapolis for his mother's birthday when
his car was struck by another car. Both Ensign Elliott and the driver
of that car were killed. The driver of the car that caused the
collision had a blood alcohol level that exceeded twice the legal
limit.
When makes this tragedy especially distressing is that this same
driver had been arrested and charged with driving under the influence
of alcohol, DUI, just three hours before the crash. After
[[Page S1083]]
being processed for that offense, he had been released into the custody
of a friend who drove him back to his car and allowed him to get behind
the wheel, with tragic results.
We need to ensure that drunken drivers do not get back behind the
wheel before they sober up. New Jersey took steps to do this when they
enacted John's Law at the State level. I am pleased to offer a Federal
version of this legislation today.
This bill would require States to impound the vehicle of an offender
for a period of at least 12 hours after the offense. This would ensure
that the arrestee cannot get back behind the wheel of his car until he
is sober.
Further, the bill would require States to ensure that if a DUI
offender arrestee is released into the custody of another, that person
must be provided with notice of his or her potential civil or criminal
liability for permitting the arrestee's operation of a motor vehicle
while intoxicated. While this bill does not create new liability under
Federal law, notifying such individuals of their prospective liability
under State law should encourage them to act responsibly.
John's Law of 2003 is structured in a manner similar to other Federal
laws designed to promote highway safety, such as laws that encourage
States to enact tough drunk driving standards. Under the legislation, a
portion of Federal highways funds would be withheld from States that do
not comply. Initially, this funding could be restored if States move
into compliance. Later, the highway funding forfeited by one State
would be distributed to other States that are in compliance. Experience
has shown that the threat of losing highway funding is very effective
in ensuring that States comply.
Mr. President, I believe that this legislation would help make our
roads safer and save many lives. I hope my colleagues will support it,
and I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 192
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``John's Law of 2003''.
SEC. 2. LIABILITY FOR PERMITTING AN INTOXICATED ARRESTEE TO
OPERATE A MOTOR VEHICLE.
(a) In General.--Subchapter I of chapter 1 of title 23,
United States Code, is amended by adding at the end the
following:
``Sec. 165. Liability for permitting an intoxicated arrestee
to operate a motor vehicle
``(a) Definition of Motor Vehicle.--In this section, the
term `motor vehicle' means a vehicle driven or drawn by
mechanical power and manufactured primarily for use on public
highways, but does not include a vehicle operated only on a
rail.
``(b) Withholding of Apportionments for Noncompliance.--
``(1) Fiscal year 2005.--The Secretary shall withhold 5
percent of the amount required to be apportioned to any State
under each of paragraphs (1), (3), and (4) of section 104(b)
on October 1, 2004, if the State does not meet the
requirements of paragraph (3) on that date.
``(2) Subsequent fiscal years.--The Secretary shall
withhold 10 percent of the amount required to be apportioned
to any State under each of paragraphs (1), (3), and (4) of
section 104(b) on October 1, 2005, and on October 1 of each
fiscal year thereafter, if the State does not meet the
requirements of paragraph (3) on that date.
``(3) Requirements.--A State meets the requirements of this
paragraph if the State has enacted and is enforcing a law
that is substantially as follows:
``(A) Written statement.--If a person is summoned by or on
behalf of a person who has been arrested for public
intoxication in order to transport or accompany the arrestee
from the premises of a law enforcement agency, the law
enforcement agency shall provide that person with a written
statement advising him of his potential criminal and civil
liability for permitting or facilitating the arrestee's
operation of a motor vehicle while the arrestee remains
intoxicated. The person to whom the statement is issued shall
acknowledge, in writing, receipt of the statement, or the law
enforcement agency shall record the fact that the written
statement was provided, but the person refused to sign an
acknowledgment. The State shall establish the content and
form of the written statement and acknowledgment to be used
by law enforcement agencies throughout the State and may
issue directives to ensure the uniform implementation of this
subparagraph. Nothing in this subparagraph shall impose any
obligation on a physician or other health care provider
involved in the treatment or evaluation of the arrestee.
``(B) Impoundment of vehicle operated by arrestee;
conditions of release; fee for towing, storage.--
``(i) If a person has been arrested for public
intoxication, the arresting law enforcement agency shall
impound the vehicle that the person was operating at the time
of arrest.
``(ii) A vehicle impounded pursuant to this subparagraph
shall be impounded for a period of 12 hours after the time of
arrest or until such later time as the arrestee claiming the
vehicle meets the conditions for release in clause (iv).
``(iii) A vehicle impounded pursuant to this subparagraph
may be released to a person other than the arrestee prior to
the end of the impoundment period only if--
``(I) the vehicle is not owned or leased by the person
under arrest and the person who owns or leases the vehicle
claims the vehicle and meets the conditions for release in
clause (iv); or
``(II) the vehicle is owned or leased by the arrestee, the
arrestee gives permission to another person, who has
acknowledged in writing receipt of the statement to operate
the vehicle and the conditions for release in clause (iv).
``(iv) A vehicle impounded pursuant to this subparagraph
shall not be released unless the person claiming the
vehicle--
``(I) presents a valid operator's license, proof of
ownership or lawful authority to operate the vehicle, and
proof of valid motor vehicle insurance for that vehicle;
``(II) is able to operate the vehicle in a safe manner and
would not be in violation driving while intoxicated laws; and
``(III) meets any other conditions for release established
by the law enforcement agency.
``(v) A law enforcement agency impounding a vehicle
pursuant to this subparagraph is authorized to charge a
reasonable fee for towing and storage of the vehicle. The law
enforcement agency is further authorized to retain custody of
the vehicle until that fee is paid.
``(c) Period of Availability; Effect of Compliance and
Noncompliance.--
``(1) Period of availability of withheld funds.--Any funds
withheld under subsection (b) from apportionment to any State
shall remain available until the end of the fourth fiscal
year following the fiscal year for which the funds are
authorized to be appropriated.
``(2) Apportionment of withheld funds after compliance.--
If, before the last day of the period for which funds
withheld under subsection (b) from apportionment are to
remain available for apportionment to a State under paragraph
(1), the State meets the requirements of subsection (a)(3),
the Secretary shall, on the first day on which the State
meets the requirements, apportion to the State the funds
withheld under subsection (b) that remain available for
apportionment to the State.
``(3) Period of availability of subsequently apportioned
funds.--
``(A) In general.--Any funds apportioned under paragraph
(2) shall remain available for expenditure until the end of
the third fiscal year following the fiscal year in which the
funds are so apportioned.
``(B) Treatment of certain funds.--Any funds apportioned
under paragraph (2) that are not obligated at the end of the
period referred to in subparagraph (A) shall be allocated
equally among the States that meet the requirements of
subsection (a)(3).
``(4) Effect of noncompliance.--If, at the end of the
period for which funds withheld under subsection (b) from
apportionment are available for apportionment to a State
under paragraph (1), the State does not meet the requirements
of subsection (a)(3), the funds shall be allocated equally
among the States that meet the requirements of subsection
(a)(3).''.
(b) Conforming Amendment.--The analysis for subchapter I of
chapter 1 of title 23, United States Code, is amended by
adding at the end the following:
``165. Liability for permitting an intoxicated arrestee to operate a
motor vehicle.''.
______
By Mr. HATCH (for himself, Mrs. Feinstein, Mr. Stevens, Mr.
Miller, Mr. Campbell, Mr. McCain, Mr. Breaux, Mr. Craig, Mr.
Ensign, Mr. Lugar, Mrs. Lincoln, Mr. Baucus, Mr. Bond, Mr.
Lott, Mr. Hollings, Mr. Dayton, Mr. Sessions, Mr. Nelson of
Nebraska, Mr. Inhofe, Mr. Bunning, Mr. Allard, Ms. Collins, Mr.
Crapo, Mr. DeWine, Mr. Frist, Mr. Grassley, Mr. Hagel, Mrs.
Hutchison, Mr. Roberts, Mr. Warner, Mr. Allen, Mr. Brownback,
Mr. Burns, Mr. Domenici, Mr. Gregg, Mr. Santorum, Mr. Shelby,
Ms. Snowe, Mr. Graham of South Carolina, Mr. Cornyn, Mr.
Talent, and Mr. Alexander):
S.J. Res 4. A joint resolution proposing an amendment to the
Constitution of the United States authorizing Congress to prohibit the
physical desecration of the flag of the United States; to the Committee
on the Judiciary.
Mr. HATCH. Mr. President, it is with profound honor and reverence
that I,
[[Page S1084]]
together with my friend and colleague, Senator Feinstein, introduce a
bipartisan constitutional amendment to permit Congress to prohibit the
physical desecration of the American flag.
The American flag serves as a symbol of our great Nation. The flag
represents, in a way nothing else can, the common bond shared by an
otherwise diverse people. As a sponsor and long-time supporter of the
proposed constitutional amendment to protect the American flag, I am
very pleased, but not surprised, by the way Americans have been waving
the flag as a symbol of solidarity following the September 11 attacks
of 2001. The emotion that Americans feel when they see the stars and
stripes confirms my view that the flag is much more than a piece of
cloth--it is a unifying force that represents the common core ideals
all Americans share. Whatever our differences of party, race, religion,
or socio-economic status, the flag reminds us that we are very much one
people, united in a shared destiny, bonded in a common faith in our
nation.
More than a decade ago, Supreme Court Justice John Paul Stevens
reminded us of the significance of our unique emblem when he wrote:
A country's flag is a symbol of more than nationhood and
national unity. It also signifies the ideas that characterize
the society that has chosen that emblem as well as the
special history that has animated the growth and power of
those ideas. . . . So it is with the American flag. It is
more than a proud symbol of the courage, the determination,
and the gifts of a nation that transformed 13 fledgling
colonies into a world power. It is a symbol of freedom, of
equal opportunity, of religious tolerance, and of goodwill
for other peoples who share our aspirations.
Throughout our history, the flag has captured the hearts and minds of
all types of people--ranging from school teachers to union workers,
traffic cops, grandmothers, and combat veterans. In 1861, President
Abraham Lincoln called our young men to put their lives on the line to
preserve the Union. When Union troops were beaten and demoralized,
General Ulysses Grant ordered a detachment of men to make an early
morning attack on Lookout Mountain in Tennessee. When the fog lifted
from Lookout Mountain, the rest of the Union troops saw the American
flag flying and cheered with a newfound courage. This courage
eventually led to a nation of free men--not half-free and half-slave.
In 1941, President Franklin Roosevelt called on all Americans to
fight the aggression of the Axis powers. After suffering numerous early
defeats, the free world watched in awe as five Marines and one sailor
raised the American flag on Iwo Jima. Their undaunted, courageous act,
for which three of the six men died, inspired the Allied troops to
attain victory over fascism.
In 1990, President Bush called on our young men and women to go to
the Mideast for Operations Desert Shield and Desert Storm. After an
unprovoked attack by the terrorist dictator Saddam Hussein on the
Kingdom of Kuwait, American troops, wearing arm patches with the
American flag on their shoulders, led the way to victory. General
Norman Schwarzkopf addressed a joint session of Congress describing the
American men and women who fought for the ideals symbolized by the
American flag:
[W]e were Protestants and Catholics and Jews and Moslems
and Buddhists, and many other religions, fighting for a
common and just cause. Because that's what your military is.
And we were black and white and yellow and brown and red. And
we noticed that when our blood was shed in the desert, it
didn't separate by race. It flowed together.
General Schwarzkopf then thanked the American people for their
support, stating:
The prophets of doom, the naysayers, the protesters and the
flag-burners all said that you wouldn't stick by us, but we
knew better. We knew you'd never let us down. By golly, you
didn't.
The pages of our history show that when this country has called our
young men and women to serve under the American flag from Lookout
Mountain to Iwo Jima to Kuwait, they have given their blood and lives.
The crosses at Arlington, the Iwo Jima memorial, and the Vietnam
Memorial honor those sacrifices. But there were those who did not.
In 1984, Greg Johnson led a group of radicals in a protest march in
which he doused an American flag with kerosene and set it on fire as
his fellow protestors chanted: ``America, the red, white, and blue, we
spit on you.'' Sadly, the radical extremists, most of whom have given
nothing, suffered nothing, and who respect nothing, would rather burn
and spit on the American flag than honor it.
Contrast this image with the deeds of Roy Benavidez, an Army Sergeant
from Texas, who led a helicopter extraction force to rescue a
reconnaissance team in Vietnam. Despite being wounded in the leg, face,
back, head, and abdomen by small arms fire, grenades, and hand-to-hand
combat with vicious North Vietnamese soldiers, Benavidez held off the
enemy and carried several wounded to the helicopters, until finally
collapsing from a loss of blood. Benavidez earned the Medal of Honor.
When Benavidez was buried in Arlington National Cemetery, the honor
guard placed an American flag on his coffin and then folded it and gave
it to his widow. The purpose of Roy Benavidez' heroic sacrifice--and
the purpose of the American people's ratification of the First
Amendment--was not to protect the right of radicals like Greg Johnson
to burn and spit on the American flag.
The American people have long distinguished between the First
Amendment right to speak and write one's political opinions and the
disrespectful, and often violent, physical destruction of the flag. For
many years, the people's elected representatives in Congress and 49
state legislatures passed statutes prohibiting the physical desecration
of the flag. Our founding fathers, Chief Justice Earl Warren, and
Justice Hugo Black believed these laws to be completely consistent with
the First Amendment's protection of the spoken and written word and not
disrespectful, extremist conduct.
In 1989, however, the Supreme Court abandoned the history and intent
of the First Amendment to embrace a philosophy that made no distinction
between oral and written speech about the flag and extremist,
disrespectful destruction of the flag. In Texas v. Johnson, five
members of the Court, for the first time ever, struck down a flag
protection statute. The majority argued that the First Amendment had
somehow changed and now prevented a state from protecting the American
flag from radical, disrespectful, and violent actions. When Congress
responded with a federal flag protection statute, the Supreme Court, in
United States v. Eichman, used its new and changed interpretation of
the First Amendment to strike it down by another five-to-four vote.
Under this new interpretation of the First Amendment, it is assumed
that the people, their elected legislators, and the courts can no
longer distinguish between expressions concerning the flag that are
more akin to spoken and written expression and expressions that
constitute the disrespectful physical desecration of the flag. Because
of this assumed inability to make such distinctions, it is argued that
all of our freedoms to speak and write political ideas are wholly
dependent on Greg Johnson's newly created ``right'' to burn and spit on
the American flag.
This ill-advised and radical philosophy fails because its basic
premise--that laws and judges cannot distinguish between political
expression and disrespectful physical desecration--is so obviously
false. It is precisely this distinction that laws and judges did in
fact make for over 200 years. Just as judges have distinguished which
laws and actions comply with the constitutional command to provide
``equal protection of the laws'' and ``due process of law,'' so too
have judges been able to distinguish between free expression and
disrespectful destruction.
Certainly, extremist conduct such as smashing in the doors of the
State Department may be a way of expressing one's dissatisfaction with
the nation's foreign policy objectives. And one may even consider such
behavior speech. Laws, however, can be enacted preventing such actions
in large part because there are peaceful alternatives that can be
equally powerful. After all, right here in the United States Senate, we
prohibit speeches or demonstrations of any kind, even the silent
display of signs or banners, in the public galleries.
Moreover, it was not this radical philosophy of protecting
disrespectful destruction that the people elevated to the status of
constitutional law. Such an extremist philosophy was never
[[Page S1085]]
ratified. Such a philosophy is not found in the original and historic
intent of the First Amendment. Thus, in this Senator's view, the
Supreme Court erred in Texas v. Johnson and in United States v.
Eichman.
Since Johnson and Eichman, constitutional scholars have opined that
an attempt by Congress to protect the flag with another statute would
fail in light of the new interpretation currently embraced by the
Supreme Court. Thus, an amendment is the only legal means to protect
the flag.
This amendment affects only the most radical forms of conduct and
will leave untouched the current constitutional protections for
Americans to speak their sentiments in a rally, to write their
sentiments to their newspaper, and to vote their sentiments at the
ballot box. The amendment simply restores the traditional and historic
power of the people's elected representatives to prohibit the radical
and extremist physical desecration of the flag.
Restoring legal protection to the American flag will not place us on
a slippery slope to limit other freedoms. No other symbol of our bi-
partisan national ideals has flown over the battlefields, cemeteries,
football fields, and school yards of America. No other symbol has
lifted the hearts of ordinary men and women seeking liberty around the
world. No other symbol has been paid for with so much blood of our
countrymen. The American people have paid for their flag, and it is our
duty to let them protect it.
This amendment offers Senators, from both sides of the aisle, the
opportunity to stand united for the protection of the sacred symbol of
our nation.
Restoring legal protection to the American flag is not, nor should it
be, a partisan issue. More than 40 Senators, both Republicans and
Democrats, have already joined with Senator Feinstein and myself as
original cosponsors of this amendment. I am pleased that this amendment
has the unqualified support of our distinguished colleagues: Senators
Ted Stevens; Zell Miller; John McCain; John B. Breaux; Larry E. Craig;
John E. Ensign; Richard G. Lugar; Blanche Lincoln; Max Baucus;
Christopher S. Bond; Trent Lott; Ernest F. Hollings; Mark Dayton; Jeff
Sessions; E. Benjamin Nelson; James M. Inhofe; Jim Bunning; Wayne
Allard; Susan M. Collins; Michael D. Crapo; Michael DeWine; Bill Frist;
Charles E. Grassley; Chuck Hagel; Kay Bailey Hutchinson; Pat Roberts;
John W. Warner; George Allen; Sam Brownback; Conrad R. Burns; Pete V.
Domenici; Judd Gregg; Rick Santorum; Richard C. Shelby; Olympia J.
Snowe; Lindsey Graham; John Cornyn; James Talent; Lamar Alexander; Ben
Nighthorse Campbell.
Polls have shown that 80 percent of the American people want the
opportunity to vote to protect their flag. Numerous organizations from
the American Legion to the Women's War Veterans to the African-American
Women's clergy all support the flag protection amendment. All 50 State
legislatures have passed resolutions calling for constitutional
protection for the flag.
I am, therefore, proud to rise today to introduce a constitutional
amendment that would restore to the people's elected representatives
the right to protect our unique national symbol, the American flag,
from acts of physical desecration.
I ask unanimous consent that the text of the proposed amendment be
printed in the Record.
I am very honored to be a cosponsor with my dear friend from
California, Senator Feinstein. I appreciate the effort and unwavering
support she has put forth in this battle. I am proud and privileged to
be able to work with her.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the joint resolution was ordered to be
printed in the Record, as follows:
S.J. Res. 4
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled (two-thirds of
each House concurring therein), That the following article is
proposed as an amendment to the Constitution of the United
States, which shall be valid to all intents and purposes as
part of the Constitution when ratified by the legislatures of
three-fourths of the several States within 7 years after the
date of its submission for ratification:
``Article --
``The Congress shall have power to prohibit the physical
desecration of the flag of the United States.''.
____________________