[Congressional Record Volume 150, Number 56 (Wednesday, April 28, 2004)]
[Senate]
[Pages S4453-S4466]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   INTERNET TAX NONDISCRIMINATION ACT

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 150, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 150) to make permanent the moratorium on taxes 
     on Internet access and multiple and discriminatory taxes on 
     electronic commerce imposed by the Internet Tax Freedom Act.

  Pending:

       McCain amendment No. 3048, in the nature of a substitute.
       Daschle amendment No. 3050 (to the language of the bill 
     proposed to be stricken by amendment No. 3048), to eliminate 
     methyl tertiary butyl ether from the United States fuel 
     supply, to increase production and use of renewable fuel, to 
     increase the Nation's energy independence.
       Domenici amendment No. 3051 (to amendment No. 3050), to 
     enhance energy conservation and research and development and 
     to provide for security and diversity in the energy supply 
     for the American people.

  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, I came to the floor to urge consideration 
of the Internet Tax Moratorium Act, the proposal, debate, and voting on 
germane amendments. As I came to the floor, I heard this attack on the 
President of the United States and the administration. It was pretty 
rough stuff, calling people chicken hawks and talking about service to 
the country or lack thereof.
  I am sure the statements just made by the Senator from New Jersey 
reflect the intense partisanship and recent discussions and charges and 
countercharges on talk shows and cable television and radio all over 
America. I think it might be an interesting and maybe sometimes 
entertaining exercise--the little drawing of the chicken hawk was kind 
of clever. I have to hand it to whoever the artist is.
  But isn't it a fact that we are now engaged in a war? Isn't it a fact 
right now that, as we speak, our marines are attacking Falluja and I am 
sure incurring casualties, these brave young Americans?
  I don't know if they get C-SPAN over in Iraq, but here they are with 
their lives literally on the line, trying to bring freedom or ensure 
the freedom of the Iraqi people. They get television--if not C-SPAN, I 
know they get Armed Forces Television in many of the bases in Iraq--
what do they see? They see us attacking each other about service or 
nonservice in a conflict that ended more than 30 years ago.
  All of us who stand here--I haven't known of an elected or nonelected 
politician who hasn't said: We are all behind the troops; we are behind 
the men and women in the military; we support them 100 percent no 
matter what. What are they supposed to think? Are we really supporting 
them and are we interested in bringing about a successful conclusion to 
the Iraqi conflict?
  Senator Kerry, the Democrat nominee, says we have to stay the course. 
He may have different views as to exactly how to do that than the 
President and the administration, but we are in agreement. Meanwhile, 
what are we doing on the floor of the Senate? We are attacking the 
President's credentials because of his service or lack of service in a 
war that ended 30 years ago, more than 30 years ago.
  I think that is wrong. I wish we would stop it. I wish we would just 
stop, at least until the fighting in Iraq is over.
  Second, maybe we could devote some of our time and effort and energy 
in coming up with a bipartisan approach to this conflict. Yes, there 
are enormous difficulties. No, things haven't worked out as well as 
they should have. Yes, I, myself, would have had different approaches 
to the challenge in Iraq. But we are there. We are in a very crucial 
moment. Why don't we all join together and sit down and work out, with 
the administration, both sides of the aisle, a common approach so we 
send a single message? Not that we are refighting the Vietnam war, but 
that we are committed to seeing this thing through in Iraq because we 
cannot afford to fail. We cannot afford to fail.
  There will be plenty of time after this conflict is over. We may even 
have a commission. We have commissions for everything else; why not 
have a commission after we have democracy in Iraq to find out where we 
failed in Iraq? That would be fine with me. I wouldn't particularly 
want to serve on it, but let's have a commission.
  But in the meantime, don't you think our focus and attention is 
misplaced? We are talking about chicken hawks. When the President of 
the United States is the one whose most solemn responsibility is to be 
Commander in Chief of our Armed Forces, and to prosecute a conflict 
that was authorized by an overwhelming vote in this body, and we are 
calling him a chicken hawk--please. Is that the appropriate time and 
place for this kind of activity?
  I do know some of my colleagues on the other side of the aisle don't 
like this. I know my friend Senator Lieberman proposed that we all join 
together to try to come up with a common approach. I don't know if that 
is possible in this day and age, but it is certainly something worth 
consideration. But at least, could we declare that the Vietnam war is 
over and have a cease-fire and agree that both candidates, the 
President of the United States and Senator Kerry, served honorably--end 
of story. Now let's focus our attention on the conflict that is taking 
place in Iraq, that is taking American lives as I speak on this floor.
  I don't want to belabor the subject, but I do want to expand on it a 
little bit. It is a symptom of the extreme partisanship that exists in 
this body today on both sides of the aisle.
  Mr. REID. Mr. President, could I ask the Senator to yield for a brief 
comment?
  Mr. McCAIN. I am glad to yield to my friend from Nevada.
  Mr. REID. I had to step off the floor for a phone call, and I 
apologize. But what I wanted to say to the Senator from Arizona, the 
Senator from Arizona, in my opinion, is exemplary in his statements on 
the floor and off the floor about what has been going on between the 
two people who are going to be running for President in November.
  I believe the Senator from Arizona has defended the Democratic 
nominee, his war record.
  Mr. McCAIN. And the President of the United States.
  Mr. REID. That is right. I was going to say, and the President of the 
United States. We would be better off if everyone in this very delicate 
Presidential election would follow the lead of the Senator from 
Arizona. We do not need, in my opinion, to get into what went on in 
Vietnam.
  We are proud of what Senator Kerry has done, and whatever President 
Bush has done, he is Commander in Chief now. It would be better off for 
everybody, I repeat, for the second time, if we followed the lead of 
the Senator from Arizona and not question what went on during those war 
years.
  I would say, though, to my friend from Arizona, I feel as if I am in 
high school now--``They started it,'' that kind of thing. I think we 
need to get back to the real issues; that is, how we are going to 
finish the situation in

[[Page S4454]]

Iraq, what we are going to do about the economy, health care, the 
environment, and all those other issues.
  The third time: We would all be better off if we followed the example 
of the Senator from Arizona. That is basically what I want to say. I 
apologize.
  This is a he-said, she-said, they-said. My friend from New Jersey is 
a war veteran himself. He has a right to speak, as we all know. But I 
am sure he would not have spoken had this not started some other place. 
But I appreciate very much the Senator from Arizona yielding.
  Mr. McCAIN. I thank the Senator from Nevada who is a good and dear 
friend of many years, who I also know decries this.
  Let me repeat one more time that I believe that honorable service was 
performed by the President of the United States in the National Guard. 
Almost 40 percent of the forces that are in Iraq today are guardsmen 
and reservists. They are superb young men and women.
  Obviously, I know the Senator from Nevada shares my view that service 
in the National Guard is honorable service, as is service on Active 
Duty, as that performed by Senator Kerry, in my view. But it is time to 
declare a truce.
  I would also say to my friend from Nevada, there is nothing we can do 
about what talk show hosts do, or outside commentators. That is freedom 
of speech.
  I am sorry so much focus is on that, and I don't pretend to say I 
could do anything about that. But I hope Members of this body could 
declare a truce on this issue, if I may use that word, and then we 
could move forward in addressing the compelling issues of the day.
  I will be glad to hear the response of the Senator or, if he doesn't 
mind--I yield to the Senator from Nevada.
  Mr. REID. Mr. President, that would be easy to do. I think we can get 
people on this side to stop the discussion. If the administration 
wouldn't be doing what they are doing with ads and things of that 
nature, we would all be better off.
  I repeat that I am not questioning someone's military record. As the 
Senator knows, this is an ongoing issue. I can't do anything about talk 
show people, but we can do something about the two Presidential 
candidates--one sitting President and one sitting Senator--and have 
them and their organizations not discuss this. I think it doesn't 
accomplish anything. Someone might say: They started it; we are going 
to try to finish it. We should wash our hands of that and try to start 
anew and not be talking about the service of either one.
  Mr. McCAIN. Mr. President, I would like to leave that particular 
subject, but say that segues in a very rational way into what we are 
facing on the floor of the Senate in consideration of this bill.
  Yesterday, I was under the impression that we were moving forward 
with a vigorous and spirited and passionate debate on the issue of an 
Internet tax moratorium.
  Why is this issue of importance? Because the worst thing we can do to 
small and large businesses in America, around America, is to have an 
atmosphere of uncertainty.
  I think most of my colleagues would agree--this is probably the most 
partisan environment I have seen in the 18 years I have served in the 
Senate and the 4 years that I served in the House.
  What is happening--and I was a bit sarcastic yesterday, I must 
admit--is we come to the floor with legislation which is important. The 
Internet tax moratorium doesn't lend itself to partisanship. In fact, 
the two greatest opponents of this legislation--Senator Dorgan opposes 
it with two Members on this side of the aisle. It is not one of those 
that somehow is a Democrat philosophy versus a Republican philosophy. 
One of the greatest supporters of the Internet tax moratorium is the 
Senator from Oregon. Here we are with this issue which is really 
important to American businesses. Most businesses, obviously, support a 
tax moratorium. But what they fear most of all is uncertainty. They 
have to make plans for their businesses and their futures.
  What we are in danger of right now as we speak is getting hung up on 
extraneous issues, as we have on almost every piece of legislation that 
has come before this body, on extraneous amendments. I understand the 
frustration of my colleagues on the other side of the aisle. I served 
in the minority for the first number of years that I was here. Yet the 
majority sets the agenda. I have said to the Senator from North Dakota, 
I want my issue raised, I want a vote on it, and I am ready to go. I 
have never tried to tie up the Senate on an issue. I have come down 
here for years and forced votes on line-item vetoes. But I said that I 
am willing to have a time agreement and a debate on the issue of 
climate change. Senator Lieberman and I said: Look, we are not going to 
tie up the Senate. We are not going to impede everything from going 
forward. We had a vote. We got 43, I am happy to say.

  My point is, we shouldn't block the passage of legislation. I think 
there is a careful balance between proposing an amendment, getting a 
vote on it, and then allowing the legislation to move on rather than 
just overloading the legislation to the point where it has to be 
withdrawn.
  I hope we can get a vote on the Democratic leader's amendment on 
ethanol. I hope we can get a vote on many of these other issues, 
including minimum wage if necessary. But at some point you cross a line 
between trying to have your views and your issues and your agenda 
addressed to the point where we just end up in gridlock.
  I think most observers, both inside and outside of this institution, 
will agree we are basically gridlocked on almost every issue that comes 
before us. That is not what we are sent here to do. We are sent here to 
act as legislators and to address the issues that are important to the 
American people instead of partisan gridlock.
  I hope we can sit down on both sides of the aisle and at least make 
people aware of what the agenda is. I have a very long relationship 
with both the Senator from Nevada and the Senator from South Dakota who 
are friends of mine. I would like to know what the agenda is. I don't 
think it is a lot to ask what I can expect in managing this bill. At 
least in that way I can try to accommodate the concerns of the agenda 
of the other side of the aisle.
  But to come out here and just spring an amendment I don't think is 
quite fair, and I don't think I would do that if I were in that 
position.
  I hope we can return to some kind of comity and that way perhaps 
decide how we are going to dispose of this bill.
  I said only half sarcastically yesterday that if we are going to 
spend all of our time in gridlock around here, some of us would like to 
go home. It is much nicer in Arizona than in the Nation's Capital. 
Maybe we could leave a couple of Senators on either side to propose 
amendments, have quorum calls, and be in gridlock. Some people would be 
fooled that we are still working. But instead, it is now Wednesday. We 
are supposed to be out Thursday night, and we have addressed one 
amendment to this legislation. I don't think this is a fair way to 
legislate.
  I know my friend from North Dakota is here and wants to say a few 
words, and my friend from Oregon and my friend from Virginia. But I 
also urge those who have amendments which are germane to please come to 
the floor so we can debate them and vote on them since I think it is 
important to do so.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I know my colleague from Oregon has been 
waiting to speak. The Senator from Virginia is in the Chamber as well. 
But if it might be appropriate, I wish to make a couple of comments 
relative to my friend's comments. If it is appropriate, I would like to 
ask consent that the Senator from Oregon be recognized following my 
presentation. My understanding is he is going to speak for a few 
moments.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, let me clear up a couple of issues.
  First, my colleague from Arizona is straight with all the facts. We 
have no disagreements about the facts. He indicated I am opposed to the 
moratorium. I am not opposed to the moratorium. I have voted for an 
Internet tax moratorium. I hope before the end of this week I can vote 
for another Internet tax moratorium.
  Mr. McCAIN. Mr. President, if the Senator will yield, I appreciate 
the

[[Page S4455]]

Senator correcting the Record. I do not mean his opposition to a 
moratorium but his opposition to the definition of Internet access.
  Mr. DORGAN. That is correct. I don't support the specific definition 
of access. We need to work through that. But that doesn't mean I don't 
support the moratorium on taxing the Internet. I have supported that 
previously. I supported the previous moratorium that was in existence, 
and I support it now. In fact, I will offer an amendment that will 
demonstrate that support. I appreciate clearing that up.
  Second, the Senator twice yesterday--I was going to correct him and I 
did not--talked about the fact that the Democrats have a retreat this 
weekend on Friday. We Democrats don't use the word ``retreat.'' We call 
it an ``issues conference.'' We think ``retreat'' is a more negative 
word. So we have an issues conference, as do the Republican members of 
the Republican caucus, I think, have a couple times a year. We have an 
issues conference. We will be doing that beginning on Friday.
  Let me also comment about the Senator from South Dakota, the minority 
leader, Mr. Daschle. He offered his amendment. I know the comments by 
Senator McCain this morning reflect the right of Senator Daschle to 
offer that amendment. I understand that when one is managing a bill, 
the last thing you want is an amendment that is off the particular 
subject. But Senator McCain has correctly stated that the amendment 
offered by Senator Daschle was well within the rules of the Senate. He 
has the right to offer that amendment.
  My guess is, as Senator McCain described his approach earlier in the 
Senate of offering an amendment, that might be extraneous for the 
purpose of getting a vote on the amendment at some point. I think 
Senator Daschle would be very happy to--I can't speak for him--come out 
here and say: I will withdraw that amendment in exchange of Senator 
Frist allowing me a vote on that amendment immediately following the 
Internet tax moratorium. I am guessing Senator Daschle would be very 
happy to do that.
  In any event, because he felt a need to offer that amendment on this 
bill, it doesn't mean he is trying to block this bill. The only block 
is a mental block among those who might not want to proceed now.
  The fact is, I think Senator Daschle would be willing to come out 
here and say: Let us have a 15-minute time agreement or 30-minute time 
agreement, have a vote, and we will dispose of this amendment--however 
it is disposed of. Let us do that. I am sure he would say: I don't 
intend to block this bill but I just intend to exercise my right to get 
a vote on my amendment, which I think is the same approach the Senator 
from Arizona has used very effectively, I might add, over many years.
  If anybody on the floor of this Senate is relentless--and some might 
use other adjectives--in the pursuit of his passions and demands that 
he be heard, it is the Senator from Arizona.
  I expect others who have managed bills who have sat in that very 
chair have from time to time had to grit their teeth in sufficient 
volume to have people hear in the Russell Building when Senator McCain 
comes to the Senate floor, wondering what amendment he will offer and 
what is its purpose.
  The approach with which we legislate in the Senate is not always the 
most efficient approach. The most efficient approach, I suppose, is the 
one used by the other body in the House of Representatives where they 
package up, through the Rules Committee, the exact circumstance under 
which legislation will be considered. They bring a bill to the floor, 
they will allow these six amendments, and they will have 10 minutes 
each. They package it up and zip it real tight. The Senate does not 
work that way. George Washington was happy it does not. So was Thomas 
Jefferson. I am as well. However, it is frustrating from time to time. 
Yesterday was a frustrating day.
  However, I would speak on behalf of the minority leader in saying 
that the issue offered with respect to renewable fuels is a very 
important issue. Let's just move on that. Let's get a vote on that. I 
expect I could ask him to come to the Senate floor, and I expect he 
would be willing to have a short time agreement if he gets a vote on 
his amendment. Since he offered the amendment, Senator Domenici came 
and offered a 900-page amendment dealing with the entire Energy bill, 
rewritten so that is a different issue.
  My goal would be to try to move through this legislation. I hope we 
can find a way to vote on amendments that are offered, have short time 
agreements.
  Mr. REID. Will the Senator yield for a question?
  Mr. DORGAN. I am happy to yield.
  Mr. REID. Is the Senator aware on this side we would be happy to 
agree to set aside, temporarily, the pending amendment? For example, 
Senator Kennedy wants to offer something on minimum wage. He would take 
a very short time agreement on that: 15 minutes divided on each side. 
We would be happy to allow the majority to offer an amendment either as 
it relates to this bill, as the Senator from Arizona wants to do, or 
whatever else they might feel is appropriate. We would look at that and 
see if we could agree to a short time agreement.
  Even though we are in this parliamentary quagmire with three votes 
scheduled for tomorrow, three separate cloture votes, today we would be 
happy to work our way through this, doing one amendment per one 
amendment. Is the Senator aware of that?
  Mr. DORGAN. I am. I was trying to make the point that those who have 
a right to offer amendments do not intend to block the legislation. My 
hope is we can try to determine how we get through this, have votes.
  I heard a presentation earlier this morning in the Senate saying the 
problem with the Senate is we are being obstructed every time we turn 
around. The obstruction is the minute somebody on our side offers an 
amendment, the place shuts down. I don't understand that.
  There is a guy in my hometown who had a Model T. He got drunk one 
night, and when he was driving home he turned the front wheels too 
sharp. The Model T's were the only cars like the red wagon: If you turn 
the wheel too tight, it tips over. He turned the Model T too tight and 
it tipped over. He thought he saw chickens in the road, so he turned 
the wheels too tight and tipped the Model T.

  I was thinking of this in terms of getting this moving. When somebody 
offers an amendment, somebody sees some chickens in the road, so we 
just stop or tip over. We just do not move. Then somebody says, Well, 
we do not want to move anymore because the other side has obstructed 
us.
  I say--whether it is overtime, whether it is ethanol, or whether it 
is on minimum wage--they need not obstruct anything. I believe all of 
those who have offered those amendments have agreed to a very short 
timeframe. Have a vote and dispose of it, and then move forward. 
Because the majority does not want to have that vote, they essentially 
decide we are going to do nothing. We will keep the lights on, we will 
make it look like we are working, but we are not going to move.
  That is unfortunate because there is not obstruction from this side. 
The obstruction would be from those who have decided once my colleague 
offered an overtime amendment we will no longer proceed with the 
corporate finance bill; we will no longer proceed because somebody 
offered an amendment we do not like.
  With respect to this bill in the Senate, the Internet Tax Freedom 
Act, my preference would be whatever somebody offers today, ask them, 
Will you accept a time agreement that is reasonable--15 minutes, 30 
minutes? If they say yes, we ought to have a discussion about it for 
that 15 minutes, call the roll, have a vote, and then move on. We will 
exhaust that pretty quickly. We will get to the amendments that are at 
the center of this bill, find out what the sentiment of the Senate is 
on that, and then, I hope, pass this legislation.
  I hope at the end of the day I will vote in favor of this, as I have 
done on previous pieces of legislation dealing with the Internet tax 
freedom or the moratorium on taxing the Internet. My hope is we can 
find a solution to this definition. I think we are working on one so 
that we can vote for it. I want this to pass.
  I have taken longer than I intended to say something I should have 
said with greater brevity, but my hope is we

[[Page S4456]]

can just proceed. We are now at parade rest again, as is the case with 
every bill, with people saying, Your side is obstructing. We are not 
obstructing. We can have a 15-minute debate on the Daschle amendment 
and then vote for it. I am for that. I think Senator Reid would be for 
that. Let's do that. Then we do not have a worry about the Democratic 
leader offering an amendment. He offers it and the Senate has an 
opportunity to vote on it.
  The place where we should be roundly criticized is if we offered an 
amendment and said, By the way, we do not want to vote on this; we want 
to talk about it for 2 or 3 days. No one I am aware of is in the 
position of doing that. That is not our intention. We simply want to 
vote on the Daschle amendment.
  I know my colleague from Oregon is waiting to talk about the very 
thing that represents the difference on this moratorium issue, and that 
is the definition.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. First, Mr. President, I say to the Senator from North 
Dakota I very much support what the Senator is trying to do in terms of 
procedure. It is time to vote. As the Senator has said, whether 15 
minutes or half an hour, people ought to get on to the task of voting.
  After 8 years of discussing this eye-glazing subject of Internet 
taxes, we always cringe at the prospect of wading once more into this 
incredibly arcane area, so I will take a few minutes to talk about the 
definitions question with respect to Internet access. This is clearly 
the big hangup.
  The Senator from North Dakota is here. He has been exceptionally 
cooperative, even though we have had different views on the subject 
over the last 8 years. I will take a couple of minutes to describe what 
the central concerns are with respect to working out the definition of 
the Internet access.
  The concern on my part is, as the Alexander language is written 
today, in effect it will hide taxes on Internet access, No. 1; and, No. 
2, it opens the door to multiple State and city taxes on the individual 
component parts the American people think of as Internet access. No 
Senator wants to do this. There is no Member of the Senate who gets up 
in the morning and says, I want to have thousands of new Internet 
taxes. However, the way the definition of the Alexander language is 
written today, it will, in fact, open up the opportunity to tax 
wireless Blackberry services, spam-filtering systems, Web hosting, and 
the like.
  I will take a minute to touch on both of these concepts, the question 
of hiding the Internet taxes and the question of opening the entire Net 
to taxing the individual components. We will have to work through those 
two in order to do as the Senator from North Dakota has suggested--get 
this done as we have done on several occasions.
  With respect to the hiding of taxes, it comes in the overall bill the 
consumer receives. We already see this in jurisdictions, for example, 
that tax DSL. Right now, I believe we are discriminating against the 
future. Right now cabling, in effect, gets a free ride. DSL gets taxed 
in a number of jurisdictions. This has special impact for my friend 
from North Dakota and me because DSL, of course, is the way we will get 
broadband into rural areas. The way that tax shows up, of course, is in 
the overall bill. It is just in the overall bill.

  So unless we get equity for DSL relative to cable, what is going to 
happen in America is the Internet tax will be hidden in the overall 
kind of bill, and the consumer will just see, in Oregon and North 
Dakota and everywhere else, a higher bill for broadband than they would 
see right now for cable, and that would be continued.
  So we absolutely, in the area of definitions, have to have 
technological neutrality. That is what we began with 8 years ago when 
we said everything that happens online is the same thing that is going 
to happen offline. To get the technological neutrality this time, we 
have to say that DSL does not get hammered and cable gets a free ride.
  Here is an example. I want to offer this to my colleagues because I 
think it also highlights again our concern with respect to the 
definitions in the Alexander language and how it opens the opportunity 
for additional taxes. The Alexander language stipulates there be no tax 
on services used to ``connect the purchaser of Internet access to the 
Internet access provider.'' But nowhere in that language is the term 
``connect'' defined.
  Does it mean that Internet access ends where a computer hooks into 
the phoneline? Does it mean where the phoneline reaches the central 
office or where the line makes its first point of presence on the Net? 
So the term ``connect'' without any definition is simply uncharted 
territory, and it would again, in my view, allow States and cities to 
tax Internet access, again, through a kind of hidden approach that is 
going to keep the consumer from doing what I and the Senator from North 
Dakota have always tried to do in the consumer protection area: give 
consumers access to information and make sure there is truth in billing 
so they can actually choose between various technologies that best 
assist them.
  With respect to the question of the Alexander legislation opening up 
the door to multiple State and city taxes on the individual components 
people think of as Internet access, we now have 391 separate taxes on 
telecommunications administered in 10,000 jurisdictions. The fact is, 
States tax different technology platforms for Internet access in 
different ways. So we have a cable modem platform, we have a 
traditional landline, we have a wireless dial-up in DSL, and, of 
course, satellites.
  The Alexander proposal says that DSL is not Internet access but a 
telecommunications service, and, in effect, we would then see DSL 
further taxed. I think that would eliminate the competitive playing 
field that has always been the point of this exercise for now 8 years. 
To me, to just force people, particularly in rural areas--in the rural 
areas I care about and the Senator from North Dakota cares about--to 
face this discrimination against broadband is particularly troubling.
  So I know this is exceptionally complicated material, and Senators 
have been barraged by all sides on this over the last few days. I have 
tried to outline how the revenue projections we have discussed over the 
last 8 years, with the States and localities saying they were going to 
lose vast amounts of revenue, have not come true. I have talked about 
how this is an effort, in this iteration of the Internet tax freedom 
bill, to essentially update our original law with respect to 
technology. But it is, as the Senator from North Dakota has correctly 
said, a question of definitions. So this concept, as I have outlined 
with respect to the Alexander language, in terms of how you would 
connect the purchaser of Internet access--without that being defined 
means you can expose jurisdictions to multiple forms of taxation. Then 
there is the question of hiding the Internet tax, which is what the 
Alexander proposal will do, because companies do not eat these costs; 
the companies end up passing them to the consumer.

  So what will happen, all over this country--in North Dakota and 
Oregon and across the country--is that people who order broadband, who 
essentially look to DSL for their broadband services, will just get a 
higher bill. They will get a higher bill than people who order 
broadband through cable. That is regrettable. It certainly violates the 
principle of technological neutrality.
  I repeat, I think the Senator from North Dakota has been very 
constructive on this issue. We have gone through this water torture 
exercise now since late 1996, and I am very much prepared to do this 
once again. But clearly, with respect to these definitions, we have 
some major issues that have to be worked through.
  I also point out, as the chairman of the Commerce Committee did 
yesterday and Senator Allen has as well, in 10 separate areas, as we 
worked even for the managers' amendment, we have made efforts to 
compromise on the definitions question. We have exempted a whole host 
of areas all of the sponsors felt should not be subjected to taxation. 
With respect particularly to voice over, the exciting area where phone 
calls are going to be made over the Internet, we have made it clear in 
this legislation, in the substitute the chairman of the Commerce 
Committee

[[Page S4457]]

is offering, that we would not change the status quo.
  I have heard from California and others that somehow this is going to 
dramatically change the question of taxation for phone calls over the 
Internet. The McCain language clearly stipulates--clearly stipulates--
that in that area California and others have been so concerned about, 
there are no changes.
  So I look forward to working with the Senator from North Dakota. I 
commend him for taking yet another crack, as he has done for 8 years 
with me, on this subject that I have been comparing to sort of 
prolonged root canal work. But we are going to get this done, and 
hopefully it will be this week.
  Mr. DORGAN. Mr. President, will the Senator from Oregon yield for a 
question?
  Mr. WYDEN. Of course.
  Mr. DORGAN. The Senator from Oregon has outlined, I think, the center 
of the discussion and the controversy. To demonstrate the complexity of 
this issue, when we talk about someone connecting to broadband from 
their home computer, they are connecting, perhaps, through their 
telephone system. So it goes from the computer to the telephone wire, 
back to, I guess--through, perhaps--a D-SLAM, up to an ISP, Internet 
service provider. So you have a series of things that are happening 
with respect to the connection.
  Some would say the connection is between the computer and the 
telephone service that is going to be provided at a cost of, let's say, 
$40 a month, and that shall be tax exempt. I agree with that. That 
connection shall not bear the burden of a tax. I think that is what the 
Senator is talking about with respect to part of the definition.
  So then the question goes beyond that. Well, what about the 
architecture that goes back up through the local phone system to the D-
SLAM, to the Internet service provider? What if they are buying a part 
for the facility that allows them to move DSL out to the neighborhood? 
That is part of the DSL stream, but it is upstream in the architecture 
of getting the DSL to the home. So is that part of what the 
architecture is?
  One of the difficulties for me is to try to understand what the 
Senator from Oregon describes as the connection. Is it all the way up 
to the Internet service provider in every purchase--every part, every 
piece, or every bit of construction that exists between the computer 
and the Internet service provider downstream through the architecture? 
If that is the case, we are talking about a substantial amount of 
economic activity, almost all of which is now taxed, incidentally, not 
just for telephone service but similarly for the cable system, which 
would not then be taxed in the future and would affect the revenue base 
of State and local governments. But if the definition of the 
``connection'' is some $40 a month that one might pay for the DSL 
service, that, I think, represents a definition that most of us agree 
with.
  I am just trying to understand a bit, and perhaps the Senator from 
Oregon can describe an answer to those questions so I understand it 
better.
  Mr. WYDEN. Mr. President, with respect to the architecture the 
Senator from North Dakota has described, people have already paid once. 
So this question of what is going to be done with respect to various 
aspects of the architecture is an interesting discussion for us to be 
pursuing in the Senate, and all of these various components and pieces 
of equipment, but people have already paid once. And with respect to 
Internet access, about which we have been concerned, it is almost like 
a carton of milk: You paid for the carton of milk once; you should not 
pay again if you are going to pour it on your cereal or something else.
  The Senator from North Dakota has raised a question about funding for 
what is called the backbone of the communications system. But at the 
end of the day, the bottom line is, people have already paid once. What 
we want to do with this legislation is to say, on the question of 
Internet access, nothing about sales taxes and the like. The Senator 
from North Dakota knows once we get over this, we will have the next 
issue, which is the question of the streamlining of sales taxes. But 
with respect to the architecture the Senator from North Dakota has 
raised, the consumer has already paid once with respect to Internet 
access.
  Mr. McCAIN. Mr. President, will the Senator yield for a question?
  Mr. WYDEN. I am happy to yield.
  Mr. McCAIN. I don't know if the Senator from Oregon had a chance to 
see the article by Senator Allen this morning in the Wall Street 
Journal. I commend it to all. It is funny because Senator Allen's piece 
in the Wall Street Journal dovetails with the information we received 
in the Commerce Committee in the last 2 years about revisiting the 1996 
Telecommunications Act and what we need to do in the future.
  The issue that came up with all the witnesses this morning and came 
up yesterday morning was the United States is falling dangerously 
behind all other nations on DSL. We are now ranked 11th in the view of 
some, 20th in the view of others. If you would have told me 10 years 
ago we would rank behind South Korea on almost any technology, as 
intelligent and hard working and industrious as they are, I would have 
said: We have a problem.
  As the Senator from Virginia points out in his piece, they are trying 
to tax DSL. Some States are taxing DSL. I am not saying it is taxation 
of DSL that has caused the serious problem we have fallen behind at 
least 10--in the view of some, 19--other nations in broadband access. 
But I am saying, why in the world would we want to lay taxes on them at 
a time when we need to expand it dramatically rather than lay a tax on 
it.
  May I mention one other point here that is important. To all of these 
State Governors, the National Governors Association, who keep saying, 
``We are losing all this revenue; why don't you stop spending so 
much,'' revenues have increased in literally every State in America in 
the last couple of years. Instead they are spending more. For them to 
tax DSL at a time when it, in the view of almost everyone, is critical 
to the United States maintaining its technological lead and the growth 
of business, communications, and politics, is outrageous. It is 
insulting. It is disgraceful these greedy Governors are so greedy they 
don't understand the impact of taxation of DSL, which is still only in 
28 percent of our urban and suburban residences and 10 percent of rural 
America. Talk about tunnel vision.

  They and their acolytes come over here and start talking about how 
important it is that they be able to keep taxing and that many of 
them--as Senator Allen points out in his column, they say: We are not 
going to tax hamburgers, so they tax the meat and not the bun--have 
started to tax DSL. It is spreading. Even in our bill, we are going to 
allow them to continue to do so. We are going to allow them, even 
though they are not in violation of the letter of the law, but 
certainly the intent of the law by taxing DSL. Now they want to tax it 
more. Every witness before our committee--we had the Cato Institute and 
the Brookings Institute; we had representatives across the spectrum of 
thought in America--said: You have to increase DSL. You have to 
increase broadband access. You are falling behind every other nation in 
the world.
  So what do the Governors want to do? They want to tax them. We are 
going to have them come over here and talk about unfunded mandates and 
unfairness and fairness. The fact is, if we allow every State in 
America and every municipality in America to start taxing DSL, it is 
absolutely inevitable that we will see a slowing of the growth of 
broadband access. It is obvious if you lay another burden on it.
  There are a number of areas, including overregulation and other 
things. Mr. Notebaert of Qwest pointed out yesterday that in order for 
his corporation to provide DSL to a home, to have permission to do so 
required $130,000 in expenditure and X number of days. I think he said 
something like 24 days. But if a cable company wants to provide exactly 
that same service, they can provide it in less than 24 hours. Obviously 
there is something fundamentally and terribly wrong in the regulatory 
regime, and it needs to be fixed.
  I am not blaming our falling behind other nations on DSL and 
broadband access simply on taxation. But I am saying that increases in 
taxation--and it would be widespread if we opened the door--will have a 
substantial chilling effect in the reduction of what should be one of 
our Nation's highest priorities, as the President of the United

[[Page S4458]]

States said in his speech the day before yesterday, to provide 
broadband access to all Americans no matter where they are.
  I again congratulate my colleague from Virginia for an excellent 
piece in the Wall Street Journal. I recommend it to my colleagues.
  Mr. WYDEN. Mr. President, I still have the floor. I know the Senator 
from North Dakota wants to talk more about the architecture. The point 
that is being made with respect to broadband and that Senator McCain 
has touched on is if we now say the Alexander definitions go forward, 
broadband through DSL is going to be taxed. That is discrimination 
against the future. It is particularly burdensome for rural areas, the 
kind of areas I and the Senators from North Dakota and South Carolina 
represent. The fact is, you are not going to get broadband into small 
areas through cable. It is not economically efficient to do it. You are 
going to get broadband to rural areas through DSL.
  I am prepared--once we make sure DSL is not singled out for 
discriminatory treatment, as it has been in a number of jurisdictions 
in the past--to work with the Senator from North Dakota and others to 
get this matter resolved.
  Broadband through DSL is going to create a tremendous number of jobs. 
Brookings has said there are going to be hundreds of millions of 
dollars worth of investment that come about through broadband DSL. The 
Senator from Arizona is correct in saying we don't have the problem now 
with respect to broadband exclusively because of taxes. But I can 
assure my colleagues we will in the future see this problem compounded 
if broadband secured through DSL is singled out for special treatment. 
Under the Alexander definition, that would be the case. That is 
unfortunate.
  I yield the floor.
  Mr. DORGAN. Mr. President, I have just a couple of thoughts. First, 
my colleague from Arizona was also at the hearing this morning when the 
question to one of the witnesses elicited the answer that taxes really 
are inconsequential or have almost no impact on the movement and 
deployment of broadband. I happen to agree with that assessment.
  What has happened with respect to Japan and South Korea, as an 
example, where they have had this robust, aggressive development of 
broadband, it is a result of a couple things. They had a national will, 
a program, and a determination to make that happen, including loan 
guarantees, among other things--also, including regulation. What was 
the regulation? It was that their Government said incumbent providers 
must make their facilities available to other competitors; their dark 
fiber must be made available to other competitors. They created robust, 
aggressive competition and, therefore, a massive buildout of broadband. 
Good for them. But that was regulation. That was the Government saying 
you have to make your dark fiber available to the incumbent providers. 
They have approached this in different ways.
  Also, we in this Government, right now, have, I understand, over $2 
billion of loan guarantees and loan authority in the U.S. for the 
buildout of broadband. I know that because I offered the amendment 
which allowed that to happen.
  Senator Burns and I and others worked on this for a long while. Yet 
that money has sat down at the USDA and they are not doing much with 
it. We met with the Secretary of Agriculture to say: Let's move, let's 
incentivize and develop the buildout of broadband.
  You have resources, substantial resources. I believe the resources 
used in Japan were $1 billion in loan guarantees. We have more than 
that available; it has been available, appropriated, and ready, and it 
is not being used. While I appreciate the President's speech, I say to 
the President that we have appropriated money for this. Let's get USDA 
to move on it.
  I wish to make the point that there are a couple of things that 
reflect what has happened in Japan, South Korea, and other countries, I 
might add, that has dramatically accelerated their buildout of 
broadband. We ought to be concerned about that. In my judgment, we 
ought to have regulatory authority, and we ought to have the ability to 
use what is already appropriated for loan guarantees. We ought to have 
a national will and a national determination to have a broadband 
buildout that is aggressive. That is going to happen when our 
Government says this is a significant priority for us.
  Attendant to that, I would say, is passage of a moratorium bill. I 
will support that at the end of the week, provided we can reach this 
solution on definition. I don't want to describe that as some nirvana 
that is going to be the event that unleashes some massive, new program 
of the buildout of broadband.
  I agree with the fellow from Brookings who said this isn't 
particularly consequential. It is not the tax issue that is impeding 
the buildout of broadband.
  Having said that, we have previously decided, as a matter of public 
policy, that we did not want to tax Internet service, connection to the 
Internet. I supported that. That moratorium existed in Federal law, and 
then it expired last fall. I prefer at the end of this process, this 
week, I hope, that we will have passed another piece of legislation 
that represents a moratorium. Why? Well, I think incrementally it is 
the right policy. I don't know. We have some people on the floor who 
have law degrees. I guess most of us have advance degrees of some type. 
I will bet there is not one person on the floor of the Senate at the 
moment who can understand their telephone bill--not one. We ought to 
bring them to the floor of the Senate and go over it in some detail. It 
would take a few days. That would be the ultimate obstruction, trying 
to read your personal telephone bill. It is so god-awful complicated, 
nobody can understand it. There is a myriad of charges, fees, and 
taxes.

  For that reason, I am sympathetic to the notion of a moratorium, not 
because I think it unleashes the forces of the buildout of broadband; I 
think it is a reasonable thing to do.
  I have not read the submission of the Wall Street Journal printed by 
the Senator from Virginia today, but I will do that when I have the 
opportunity. I am interested now that it has been raised. I think what 
we should do is the right thing, and we ought to do it the right way. 
So you don't find opposition from me with respect to the objective 
here. I hope we can reach this definition as we move upstream beyond 
the immediate connection of DSL, for example, and that we can define 
what moving upstream means, and exactly what it is we are preventing 
from ever being taxed by State and local governments, which they may 
now tax.
  Once we describe and understand that, I think we can easily find a 
bill that should get 95 votes in the Senate, to say we subscribe to the 
basic principle that we should not tax access to the Internet. That is 
a principle I support, and I hope at the end of the week I will be able 
to manifest my support by voting for the legislation.
  Mr. McCAIN. Mr. President, I know the Senator from Virginia has been 
patient. Briefly, I point out that in the hearing this morning, yes, 
one witness from Brookings said it would have very little, or not much, 
effect. The other five witnesses said it would have great effect. All 
six witnesses said they strongly supported an Internet tax moratorium, 
including DSL, with varying degrees of enthusiasm, including the one 
who said there was very little effect. The other witnesses strongly 
favored it and thought that a tax, particularly on DSL, would have a 
significant impact.
  I think we ought to reflect in the Record the view of all of the 
witnesses.
  Mr. DORGAN. If the Senator will yield on that point, this is like 
being witness to an accident. We all see different things, apparently. 
But it is absolutely true that all of the witnesses at the hearing we 
just attended supported a moratorium on the issue of taxing the 
Internet. No question. I didn't hear from all these witnesses that it 
would have ``great'' effect. I didn't hear that term. Nonetheless, I 
believe they feel, as I do, and as Senator McCain does, that we ought 
to have a moratorium.
  Mr. McCAIN. I thank my friend.
  I point out again, there are a lot of reasons why we are falling 
behind, probably for the first time I know of in a major high-
technology capability. Maybe during the 1970s there was a time we fell 
behind the Japanese in

[[Page S4459]]

certain areas. But this should be of concern to all of us. We should 
remove any impediment or burden. I think the Senator from North Dakota 
and the Senators from Oregon and Virginia agree that we have to change 
the regulatory scheme which has clearly not conformed with these 
advances in technology.
  I point out again, when Dick Notebaert said it costs him $124,000 and 
X number of days to install a DSL line, and a cable company can do it 
in 24 hours, something is wrong. Either one is wrong or the other.
  But I argue that if I were a small businessperson and I saw looming 
ahead of me significant taxes on the way I was conducting my business, 
I would obviously give pause. Small businesspeople have small margins. 
We all know that. That is always a factor in the decisions that are 
made. I think we ought to remove that impediment or certainly that 
cloud of concern that small business in America is considering today.
  I thank my friend from Virginia for his patience. I yield the floor.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.
  Mr. ALLEN. Mr. President, it is an interesting discussion we are 
having. Actually, I think it is very important for folks to understand 
the context of this and how important it is in our efforts--Senator 
McCain's Senator Wyden's, mine, and others.
  This debate is about protecting consumers from taxes, taxes that 
would be burdensome and harmful. It is keeping, not taking necessarily, 
revenues away from any State or local government, but making sure we 
don't have them putting on additional taxes and costs, thereby making 
access to the Internet, and more particularly broadband, in rural areas 
and small towns less affordable. Everyone understands that if you tax 
something or something has a higher cost, fewer people can afford it.
  We are talking about bridging economic digital divides. We are 
talking about what Japan, South Korea, Singapore, Denmark, Sweden are 
doing, and how the U.S. is falling behind.
  One of the reasons the Internet has grown in this country is because 
the national policy for the last 6 years has been, don't tax it. It is 
simple. A fourth grader will understand the basic economics that more 
people will be able to afford something if it doesn't cost as much.
  So the first rule of a national policy in making broadband available 
to all people everywhere in this country is don't tax it. That is 
simple and that is the basic effort of the leadership on this issue.
  You can talk about incentives, and the Senator from North Dakota 
talked about incentives. I have been in favor of many of these 
incentives, and I think the Senator from Oregon has, the chairman of 
the Commerce Committee as well. But the point is, it seems so 
counterproductive. We are going to give incentives to companies to 
invest hundreds of millions of dollars to get broadband high-speed 
Internet access to southwest Virginia or eastern Oregon or northern 
Arizona, but we are going to have to give even greater incentives 
because we are going to have to offset the taxes that are going to be 
imposed on those ultimate consumers. It is illogical and 
counterproductive to have taxes imposed on Internet access.
  For folks who are watching at home, you may think you send e-mails 
across this country and those messages are traveling over the Internet. 
Guess what. You are right; they are. Here is the problem with our 
opponents' proposal. By the way, I wish the folks who are on the side 
of taxing the Internet were in the Chamber. Let's vote on the 
amendments. The Senator from Texas, Mrs. Hutchison, had an amendment 
yesterday. We debated it, and we voted on it.
  We had a cloture vote, and 11 people did not want to go to this bill. 
I wish they were in this Chamber debating and advocating their ideas 
and let the Senators vote on them rather than delaying, dawdling, and 
freezing up this bill.
  Our opponents say e-mails are not Internet services, they are 
telephone services because what they want to do is apply telephone 
taxes to your Internet communications.
  The protax view is, if you happen to choose DSL for your Internet 
service, and you are unlucky enough to fall into one of these taxing 
grandfathered States, then the entire network from your computer to 
your friend's e-mail inbox on the other side of the country is taxable.
  Telephone tax rates can run very high. Here are some examples. This 
is not a proud moment for the Commonwealth of Virginia. Richmond, VA, 
29, almost 30-percent taxes on a telephone bill in Virginia. Texas has 
high taxes, too, 28.5 percent. This is the top 10. Georgia is 19 
percent. I am sure the Presiding Officer is glad to see South Carolina 
is not in the top 10. South Carolina actually ought to be applauded. 
South Carolina was one of the grandfathered States, allowing them to 
tax Internet access, but they said, no, it is harmful to South 
Carolina's ability to attract business, and they removed that tax, as 
did Iowa, the District of Columbia, and Connecticut. Regardless, this 
is the amount of taxes that are put on telephone services.
  The opponents will say they are worried about telecommunications 
migrating. They worry about telecommunications, telephone calls, 
migrating to the Internet with voice over IP. Senator McCain's 
amendment makes sure that issue is not disposed of in this bill. The 
reality is, what they are advocating is having telephone taxes migrate 
onto your Internet access bill.
  The Senator from North Dakota mentioned bills and how we try to 
figure out these bills. What Senator Wyden and Senator McCain and I 
would like to see done if we had a moratorium is have your Internet 
access bill be the way it is now. Whatever that amount is, it is 
simple. This chart shows your monthly bill of $23.90. If it is 
broadband, the amount is probably going to be in the thirties or 
forties. Of course, we like to make sure there is competition whether 
it is wireless, DSL, satellite, and a variety of other areas. The 
Carper-Alexander approach would want that to be taxed.

  Guess what it would look like. The Senator from North Dakota talked 
about how can we figure out these telephone bills, as there are 
multiple local taxes, State taxes, Federal taxes. This chart shows a 
Verizon bill. Here we have gross receipts surcharge, relay center 
surcharge, such and such--all sorts of different taxes, Federal and 
State.
  From the simplicity of your bill with no added taxes, taxes on 
average 17 percent, they want to get into this situation. I say to my 
friends and anybody watching, there was a similar debate, I suppose, 
105 years ago, in this Senate. They needed this money because we were 
in the midst of the Spanish-American War. They said: We need to put a 
luxury tax on this newfangled idea called the telephone. So a luxury 
tax was put on telephone service.
  Guess what. Whether you are in Virginia, North Dakota, Oregon, 
Hawaii, or anywhere in between in this country, Americans, well over 
100 years after that Spanish-American War, are still paying that 
Spanish-American War luxury tax on telephone service. The reason I say 
that is it gives us an idea of how many different taxes there are, but 
also a history lesson of how hard it is and nearly impossible to ever 
remove a tax once a tax is imposed.
  That is why it is so important that we act on this moratorium and 
prevent new States, additional States, localities, counties, and tax 
districts from coming up with new taxes because if you ever try to take 
them off, you will hear all sorts of bleating and whining: Oh, gosh, 
you can't take it off. Again, the prime example is this Spanish-
American War tax that still is on our telephone bills. This is what 
Senator McCain, Senator Wyden, and those of us who are on the side of 
the consumers and against taxing the Internet are advocating.
  If you happen to choose a dial-up service, whether it is cable modem, 
or however you get your Internet access, our opponents will say you 
should be protected from taxation from, they say, ``the last mile'' 
leading up to your house. But then say the Internet backbone still 
should be taxable.
  Let's examine what this means. Let's assume you live on Capitol Hill 
in Washington, DC. I know for some watching on TV that would not be an 
appealing thought. Nonetheless, let's assume you do. Let's assume you 
wanted to send an e-mail to a friend in Los Angeles, CA. Because of the 
way the Internet operates, that e-mail message

[[Page S4460]]

will be broken into various packets of data sent via various routes all 
across this country.
  Let's say one piece of your e-mail goes from Washington, DC. It will 
probably go into Loudoun County, VA, because there is a good server 
there. It is going to go to Chicago, because in Chicago they have a big 
Internet hub, then to Austin, TX, then to northern California because 
they also have a huge hub there, and then on down to southern 
California.
  You begin to get a sense of all the jurisdictions this e-mail passes 
through and the chaos that will result if they, the tax proponents, 
claim to have authority over your e-mail. Obviously, DC and Virginia 
would have an opportunity to tax it, or maybe Loudoun County would tax 
it, going through parts of Ohio and Indiana, through Missouri, 
Arkansas, Oklahoma, Texas, and probably, if you are assuming all these 
are direct lines, it may, for all you know, go on up to Idaho and 
Oregon. Regardless, all of those would claim jurisdiction and authority 
over that e-mail.
  This is a classic example of interstate commerce. Our Founders had a 
concern about multiple burdens imposed by multiple governments and that 
is why our Founders put the Commerce clause in the Constitution giving 
Congress, not unelected bureaucrats, the authority and responsibility 
to make sure interstate commerce and the interests of all of the people 
are defended against potentially harmful burdens imposed by State and 
local governments to taxation.
  Now, according to our opponents, the folks who are advocating taxing 
the backbone, which of the jurisdictions would be free from taxation on 
this Internet backbone? None. None would be prohibited. All would be 
free to tax interstate communications. Every single State, every single 
city, county, town, and municipality on this red line would have 
authority to tax; not just DC, not just Illinois, not just Texas, not 
just California, but all of them.
  Remember, our opponents have promised everyone tax freedom for the 
so-called last mile, which is the last mile right here, which means 
people may enjoy no taxation on the last mile so they will have tax 
freedom there, but they have 3,000 miles of taxes if the Alexander-
Carper proposal is successful. I do not know if that sounds like an 
Internet tax moratorium to my colleagues. It certainly does not to me, 
because State and local governments, while they cannot tax the very 
beginning or the very end of an electronic connection, can tax 
everywhere in between. They can tax from the end of the beginning to 
the middle to the end of the end before you get to the final end. The 
point is, they can tax every other part of this 3,000-mile electronic 
journey.
  The Alexander-Carper alternative would allow for taxes on the 
Internet backbone services in all 50 States and in every local taxing 
jurisdiction, plus taxes directly will be on the consumer in more than 
20 States. The Alexander-Carper amendment would create a nightmare 
scenario our Founders sought to avoid when they wrote the Commerce 
clause of our Constitution where every town and State would tax 
commercial traffic moving through its borders.
  We have 7,600 taxing jurisdictions in the United States. Not a single 
one of those 7,600 taxing jurisdictions would be prohibited from taxing 
the Internet backbone under the Alexander-Carper proposal. In fact, the 
bill makes clear America's 7,600 taxing authorities can tax e-mail in 
every jurisdiction in America as long as they present the bill to the 
Internet service provider instead of directly to the customer. In the 
20 to 30 States, depending on interpretations of the new grandfather 
clauses, they can tax the consumer directly.
  Figure what is going to happen. If there is a 17-percent tax on this, 
who knows, Ohio might have the 17-percent tax, Illinois would have a 
12-percent tax, Texas would have 25 percent, New Mexico 12, Arizona, 
under the great influence of the senior Senator from Arizona, would 
have 1 percent, Nevada being a very free State in many respects, and 
libertarian, would have zero. Then we get to California and San 
Francisco which would have a high tax, say 28 percent, and then as it 
gets to Los Angeles, it is back to 17-percent tax.
  The point is, every single one of these would be able to tax it. So 
the opponents will say we ought to be able to tax this, but if one 
takes an airplane from Dulles Airport to Long Beach, say they flew Jet 
Blue from Dulles Airport to Long Beach, the Federal Government says a 
person is not going to be taxed as they fly over the country, but that 
electronic message will be taxed if the Alexander-Carper amendment 
passes.

  Indeed, if we want to use that analogy going from Dulles Airport in 
northern Virginia to Long Beach, CA, the Federal Government recognized 
that is interstate commerce. Decades ago, the Federal Government said 
you cannot tax not only when you fly over a State but you cannot tax as 
you are leaving and you cannot tax those passengers at their 
destination when they arrive, either.
  I ask my colleagues to say no to 3,000 miles of taxes, and say yes to 
a true and accurate Internet tax moratorium.
  Mr. DORGAN. Will the Senator yield for a question?
  Mr. ALLEN. I ask my colleagues to act. I ask those who have 
amendments to go forward with their amendments, let us debate them, let 
us decide today so we are not delayed, frozen up as it happens from 
time to time in the Senate with not enough time tomorrow night because 
folks are scattering to go to various events and political functions.
  Yes, I yield to the Senator from North Dakota.
  The PRESIDING OFFICER (Ms. Murkowski). The Senator from North Dakota.
  Mr. DORGAN. Madam President, I agree with the last statement. I think 
we ought to proceed and vote on issues that are before us. I would like 
to get to the conclusion of the bill, so I support that.
  Looking at the Senator's chart and listening to his discussion, we 
are not so far apart on all of this. I do not disagree with that which 
he has said with respect to much of his desire to prevent institutions 
of Government from coming in and taking pieces of this and taxing it, 
but I used an example last year I want to use again to describe my need 
to understand exactly what will be covered by the moratorium.
  For example, if we decided to exempt from taxation a loaf of bread 
because we decided bread is important to life and we do not believe 
bread ever ought to be taxed, so we want to exempt a loaf of bread, we 
could have a moratorium on the taxation of a loaf of bread forever. The 
question will be, does that extend then to the grocery store that buys 
the shelf to display the bread, because they are probably going to have 
to pay a use tax to the company they buy the shelf from, and that use 
tax goes to the State and local government. They are going to make the 
case there is a moratorium on the taxation of bread. We actually pay a 
tax on the shelves we are purchasing and that has to be passed along in 
the price of bread so we believe the purchase of the shelves ought to 
be tax exempt as part of this moratorium.
  I am asking that question only to try to understand what the 
moratorium refers to with respect to the electronic transmission. The 
electronic transmission the Senator describes I understand should be 
exempt. The question is, if that facility in Los Angeles the Senator 
describes, or southern California, which is a facility that is an 
Internet hub and reroutes the e-mail that is moving along the system, 
if they are purchasing desks and things in that facility for the 
purpose of furthering this Internet transmission, should they be 
exempt? Will they be exempt? Is that what the Senator intends with this 
definition?
  I think as soon as we fully understand all of this definition issue 
that is being raised, the sooner we can move forward and construct an 
appropriate moratorium, which I will support. So I ask those questions 
of the Senator from Virginia.
  Mr. ALLEN. I thank the Senator from North Dakota for his question. We 
are not talking about a loaf of bread, and if we were talking about a 
loaf of bread we would have a lot of people saying, gee, we rely on all 
the taxes. If one looks at the cost of a loaf of bread--and I know the 
wheat farmers in North Dakota say, Here is the price I get for wheat 
and think of what

[[Page S4461]]

the cost of it is, it is 3 cents out of the loaf of bread, and by the 
time everyone else does different things in packaging and transport, 
there are all sorts of taxes on it, and it ends up being who knows 
what, $1.50 for a loaf of bread, or maybe 79 cents if one is lucky and 
it is a few weeks old. Regardless, all of those component parts 
increase the cost of the loaf of bread to someone who wants to put 
peanut butter and jam on a sandwich for their young son or daughter 
going to school.
  So that economic argument applies to why we do not want to have a lot 
of taxes in between. The simple answer is we do not want the bandwidth 
being taxed. Internet service providers have desks. Internet service 
providers have a physical facility that is subject to property taxes 
and they have personal property taxes on some of the accessories in 
that building. They have to pay the corporate taxes as that 
corporation. If they are an Internet service provider, if they have an 
income, they have to pay a tax in that particular State. The point is, 
though, that for the bandwidth, the actual transport, that should not 
be taxed.
  I thank the Senator from North Dakota. I also recognize that while we 
do not necessarily agree on this issue at this moment, I do appreciate 
that at least when we wanted to proceed to this measure you voted to 
proceed, unlike the 11 who wanted to continue to freeze it.
  Mr. DORGAN. If the Senator will yield further for a question, I think 
I understand a bit more. I think I would want to see a greater 
refinement of it. If the Senator is now saying the definition that he 
believes is appropriate for this moratorium deals with the bandwidth or 
the spectrum that is used--essentially the bandwidth that moves that 
packet of ones and zeros across the country in the form of an e-mail, 
but he is not talking about things other than that--is that correct?
  Mr. ALLEN. Right. There were a great deal of concerns, I think the 
Senator from North Dakota might recollect, in the Commerce Committee 
about what was exempt or what was prohibited from taxation or what did 
the moratorium prohibit taxation upon. There were many concerns. They 
were generally handled, in my view, adequately by the managers' 
amendment that Senator McCain had, that came out of the Finance 
Committee. That made sure what was to be taxable and what was not 
taxable because there were concerns that somehow personal property 
taxes, real estate taxes, corporate taxes, income taxes, and so forth, 
would be prohibited on companies that are involved in providing 
Internet service.
  Our concern is making sure that whomever your Internet service 
provider is in Washington, DC, when you get to, say, Los Angeles and 
there is a slew of other Internet service providers there with a lot of 
competition, in between they don't own all of this. Somebody has to get 
this routed electronically. So that routing of that electronic e-mail, 
so to speak, or those bits, should not be taxed.
  It is looking at this message as being a car, an automobile. You 
could drive across this whole country on an interstate that is a 
freeway. The Alexander-Carper amendment would turn that into a toll 
road. So you wouldn't go this way unless you were lost or taking some 
scenic route. But if you were driving from Virginia to Tennessee, you 
would take Interstate 40 probably, across 81, but you can probably 
drive that whole route, as I have and others have, and not pay a toll.
  But if you have the Alexander-Carper amendment, that turns this whole 
thing into something akin to the New Jersey Turnpike, a toll road. 
Obviously, once you get there it is going to cost you a whole lot more 
to get that packet, that automobile, from Washington, DC, to Los 
Angeles.
  I thank the Senator from North Dakota for his interest, his probing 
questions that allowed me to clarify what we are trying to do.
  I conclude by saying to the opponents, come forward; let's get 
moving; let's get acting. I think it is vitally important to protect 
consumers from these taxes. I think it is vitally important to those 
who are looking to invest in rural areas that they know what the 
policies of this country are, to recognize in what kind of market they 
might be in small towns and rural areas, and let's get about expanding 
economic opportunity, jobs, and prosperity for all Americans everywhere 
in this country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. MILLER. I ask unanimous consent I be allowed to speak up to 12 
minutes as in morning time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Miller pertaining to the introduction of S.J. 
Res. 35 are printed in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Madam President, I am prompted to comment on the 
interesting, provocative, and controversial comments by my colleague 
from Georgia. He knows I have long respected him and was pleased when 
he arrived here in the Senate. I have enjoyed working with him. But I 
must say I don't have quite so hopeless a notion about our country or 
its future. I don't despair about what is happening in this country. I 
think we have incredible challenges to meet, and we must. We have a big 
globe with 6 billion people on it. One-half of them have never made a 
telephone call. One-half of them live on less than $2 a day. One 
hundred fifty million kids are not in school. One and one-half billion 
people don't have access to clean, potable water. Somehow, in this big 
challenging Earth of ours, we ended up right here right now. What a 
remarkable thing for us. It is our time and our responsibility to 
nurture and protect this democracy of ours. There is no other democracy 
like it on the face of this Earth. At a time when our country faces 
challenges, this country somehow provides leadership.
  The McCullough book about John Adams is interesting to me. John Adams 
traveled a lot, because he represented this new country they were 
trying to put together, both in England and in France. He represented 
our interests, and he would write back to Abigail. As he would write to 
Abigail, he would lament in his letters to her: Who will provide 
leadership to put this country of ours together? Where will leaders 
come from? Who will be leaders?
  Then he would plaintively say in his letter: There is only us. There 
is just only us. There is me. There is Jefferson. There is George 
Washington. There is Ben Franklin. There is Mason. There is Madison. 
There is only us.
  In the rearview mirror of history, the ``only us'' represents some of 
the greatest talent ever gathered on the face of this Earth.
  Thomas Jefferson: Have we seen another? I don't think so. George 
Washington was a remarkable person.
  So the questions John Adams asked--where will leadership come from, 
who will be the leaders--have been asked of every generation. Somehow, 
through time, this country has been blessed by leaders who stepped 
forward and said, Let it be me. Let it be us. This country has been 
blessed with remarkable leadership.
  You can take over 200 years a period of 5 years or 10 years in which 
you can suggest perhaps the leadership was less than it should have 
been at that time. But somehow the calling of this great democracy to 
ordinary Americans who have the capability to do extraordinary things 
has produced that leadership. It will, in my judgment, again also 
strengthen and nurture our country.
  I like the original thinking of those who wrote our Constitution. I 
love the Constitution. I think it is one of the greatest documents ever 
written which establishes the basis of our freedom--we the people. We 
have people here who think it is a rough draft. I think we are going to 
vote on three amendments to the Constitution in next couple of months 
in the Senate. It has only been amended 17 times in 2 centuries. Do you 
know why? Because there are not many people who can improve upon the 
work of George Washington, Ben Franklin, and Thomas Jefferson's 
contribution to the Bill of Rights, for example. Outside of the 10 
amendments called the Bill of Rights, we have amended the Constitution 
only 17 times in 200 years. Yet we will, I guess, vote on three of them 
here in just a matter of time because people think it is a rough draft 
and something that is easily changed and easily improved.

[[Page S4462]]

  It is the case I think which perhaps causes some of the despair in 
some quarters in this country, that there is a kind of a crescendo of 
noise from corners of America that aren't very appealing.
  I can tell a story which describes a country in great trouble. I can 
tell that story easily. We have roughly 10 million Americans who do not 
have a job today. They desperately want a job and their country's 
economy hasn't provided them a job. There are 10 million people who are 
out of work, and 30 million to 40 million people are on food stamps. We 
are the murder capital of the world. We consume one-half the world's 
cocaine. What an ugly place. Or I can take up some person's 
dysfunctional behavior and hold it up to a light, and say, Isn't this 
ugly, and run it through about 10 talk show programs and have it on 
every morning show, and say, Isn't this ugly? Yes, it is ugly, but it 
is not America. It is not America. It is somebody's ability and desire 
to try to entertain people with someone else's dysfunctional behavior. 
I can give that speech and I hear it from time to time.

  However, there is another side to this country that gives me cause 
for great hope and does not lead me to the conclusion that we ought to 
take away the right of the American people to vote for public 
officials. Let me describe that, if I might.
  There was a man named Stanley Newberg who died in New York City. 
Stanley Newberg is someone I did not know. I saw a paragraph, maybe two 
paragraphs about him in the New York Times. It simply said this man had 
died and then described something he had done. I asked my staff if we 
could find out a little more about him. Let me tell you about Stanley 
Newberg.
  He came to America with nothing, to escape the persecution of the 
Jews by Nazis. His dad had nothing. He began to peddle fish on the 
Lower East Side of New York. Stanley, beside his dad, walked along the 
Lower East Side peddling fish in New York City. They made some money 
and did fairly well.
  Stanley went to school, went to college. He got his college degree 
and went to work for an aluminum company. He did so well he rose up to 
manage the company. He did so well managing, he decided to buy the 
company. He did very well, and then later he died. When Stanley died 
they opened his will. In his will, this man left $5.7 million, his 
estate, to the United States of America. He said: With gratitude for 
the privilege of living in this great country, with gratitude for the 
privilege of living in this great country of ours. I thought, what a 
wonderful thing, to understand what others see.
  If we did not have immigration laws, this place would be full, just 
plain full. We have folks from all around the world who want to come 
and live in this country. Why? It is a beacon of hope and opportunity.
  We survived the Civil War. We beat back a depression. We beat back 
the oppression of nazism and defeated Adolph Hitler. We have done so 
much. We built the atom. We spliced genes. We invented the silicon 
chip, plastics, radar, the telephone computer, the television set. We 
build airplanes; we fly them; we build rockets; we go to the moon; and 
we are hardly out of breath. We cure smallpox. We cure polio. What a 
remarkable place this is. We have two little vehicles crawling around 
the surface of Mars analyzing rocks. Isn't that something? I must say, 
the pictures they got look very much like a place 5 miles south of my 
hometown, but apparently this is high science and pretty remarkable. 
This is really a very special place.
  Is it the case that we face some pretty big, daunting challenges? You 
bet your life we do. We have a fiscal policy that is way out of whack. 
A few years ago everyone thought we would have surpluses forever. Now 
it looks like we will have deficits forever. We have to fix that. We 
cannot leave that to somebody else. That is our job. That is on our 
shoulders. This President and this Congress need to fix that.
  Iraq, Afghanistan--this country represents the beacon of opportunity 
and freedom around the world. We are involved. We got involved in 
Afghanistan because we are tracking al-Qaida and dealing with people 
who killed innocent Americans, and we need to deal with that. We 
have American troops there, fighting and dying. We do not have a lot of 
options. We have to prevail and persevere and support those troops. We 
will. This is not the darkest of hours for our country. This is a 
great, strong, resilient country--within my judgment, a foundation of 
goodness people around the world understand. For a long, long time, if 
anything happens around the world, who is there first? Which country 
can be looked to to provide help, to say, you are not alone? This 
country. This country tackles issues other countries do not even want 
to acknowledge.

  We had women chaining themselves to the White House gate because they 
were not allowed the right to vote. They said: We demand the right to 
vote. We dealt with that issue. The list is endless. We grapple with 
them. It is not easy. But we are the example of representative self-
government in this world that works. It is messy. The noise of 
democracy is annoying sometimes, but it works.
  Going back to John Adams' lament to Abigail: where is the leadership, 
in my judgment, every generation of Americans has seen leadership 
emerge and develop to lead this great country in times of trouble. That 
will always be the case because this is a special country, and we do 
have people who are willing and able. Right now, there is someone 
running for the Senate someplace in this country whose name I perhaps 
do not know who likely will be a President some day. Why? Because they 
have a passion in their heart and their gut to serve this country and 
want to do right by this country.
  Let me come back to where I started. The only reason I was provoked 
to say these things is my colleague gave a speech this morning about 
something which, as I sat and listened to it--look, I have great 
respect for my colleague from Georgia. His public service is 
extraordinary. I first knew about him when he was Governor of Georgia 
and he was talking about scholarships for kids. I thought, what a great 
idea. Our future is not people who wear dark suits and suspenders who 
some people consider windbags in the Senate; our future is kids. That 
is who will run this country. I have great respect for the Senator from 
Georgia.
  I wanted to say this: At a time when there is so much lament about 
America, I have a great reservoir of hope for the future of this 
country. This country will prevail. I know, as I have traveled around 
parts of the world, one example comes to mind. I was on an Army 
helicopter once that ran out of gas. I learned one of the immutable 
laws of flying: When you are out of gas in a flying machine, you will 
land soon. We landed in an area between Nicaragua and Honduras. I was 
with two other Members of Congress. When we landed, we were out of 
contact with anybody else. We landed in a clearing in kind of a jungle 
area between Nicaragua and Honduras, and campesinos from all around 
came to the helicopter. We were waiting to get rescued. We got rescued 
in 4 or 5 hours. The campesinos had come up and I got to talking to 
some people who had never seen anyone from our country. I was asking 
questions. We had an interpreter with us.
  Do you know what all of them said they would like to do? They would 
like to come to the United States of America--all of them. We asked, 
What would you like? I would like to come to the United States of 
America. I would like that for me, for my kids. We find that all over 
the world. Why? Because they see this country as something unusual on 
the face of this Earth, something very unusual. That did not happen 
just by accident.

  I come to this Senate floor not because I have a political pedigree 
or because I come from a big reservoir of wealth; I come here because a 
Norwegian immigrant came to this country with her husband, and her 
husband had a heart attack shortly thereafter. She was left alone with 
six kids. She took her six kids to a small rural area in southwestern 
North Dakota and started a farm. She pitched a tent, she built a house, 
raised a family, and ran a family farm in Hettinger County, ND. She had 
a son who had a daughter who had me. That is how I got here. And 
virtually everyone here has a similar story about perseverance, 
strength, faith, and hope--almost always about hope.
  Let me conclude by saying while we face many challenges, I have great 
hope that, yes, the talents of the Senator from Georgia--unique 
talents, extraordinary talents--and the talents of

[[Page S4463]]

so many others with whom I have had the ability to serve in this 
Chamber and in the House of Representatives, and also other venues of 
public service in this country, give this country a better opportunity 
for a better future.
  I have had several other opportunities to work in different 
environments. I don't know that I have ever worked with a more talented 
group of people than the men and women, Republicans and Democrats, with 
whom I have served in the Senate. They are extraordinary people who 
come to the call for public service. I salute them and say I have great 
reservoir of hope for the future of this country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. CARPER. Madam President, I was watching the debate earlier that 
dealt with the Internet tax, and I felt it important to explain clearly 
where Senators Alexander, Voinovich, Enzi, Senator Dorgan, and I are on 
this issue.
  Before I do that, I am compelled to comment on a bit of what Senator 
Dorgan has said. I missed most of my colleague Zell Miller's comments, 
but I heard all of what Senator Dorgan said. I am one of those guys who 
are probably like him, who see this glass as almost full; but even if 
it were almost empty, I tend to see it as half full.
  We were here about a week or so ago debating what to do with respect 
to the situation we face in this country with asbestos. We all heard 
the stories that there are people who are sick and dying from asbestos 
exposure and not getting the help they need. There are folks who may 
have been exposed to asbestos, and they are taking away money from the 
folks who ought to be getting it, who are sick and dying.
  In the meantime, in the settlements that are taking place, in 
relation to the transaction costs, the legal fees, maybe half the 
settlements go for legal fees. That is a situation we face. It is not a 
good situation. We all know we ought to do something about it. The 
tough thing is trying to figure out what.
  We have the insurance industry in one corner, the manufacturers and 
the defendants in another corner, the trial bar in another corner, and 
organized labor, which is a proxy for victims, in yet another corner.
  Last week, we voted not to proceed to the bill that Senator Frist had 
introduced. Some of us thought it was premature, given the negotiations 
that have been underway for the last couple months, trying to narrow 
our differences on asbestos litigation reform. As a result, I think 47 
of us voted not to proceed to the bill. We did not proceed to the bill.
  But a very good thing has happened subsequent to that. The very good 
thing is, the negotiations, the mediation led by a retired Federal 
judge from Pennsylvania, a fellow named Becker, who had been the chief 
judge of the Third Circuit for a number of years, now retired, in his 
seventies, a fellow whose health is apparently not good. I probably 
should not say this. He takes chemotherapy, so I think his health is 
not good. But he is in his seventies and an age where he is retired and 
he does not have to work. But he has been drawn, by Senator Specter, 
into trying to mediate the differences between organized labor and the 
trial bar and the insurance companies and the defendant companies to 
see if we cannot come up with a better way to make sure people who are 
sick and dying from asbestos exposure get the help they need, and to 
make sure people who are not sick but have been exposed--but they get 
sick--that we help them, too; and for folks who are not sick, who have 
exposure, to make sure they get their medical costs paid and try to 
reduce outlays from the settlements that occur so the money goes to the 
people who need the help, not necessarily to their attorneys.
  Judge Becker is here today in Washington. He lives in Pennsylvania, 
but he is here today. He was here yesterday. He was here the day 
before. He is leading a mediation that has been anointed, embraced by 
our leaders--Bill Frist on the Republican side, the majority leader, 
and Tom Daschle on our side, the Democratic leader.
  As I speak right now, Judge Becker is holding forth, meeting, 
listening, asking questions, probing, trying to move the disparate 
forces to a consensus. I joined him for a little while over in the Hart 
Building earlier today and said to Judge Becker: My job, I get paid to 
try to build a consensus on difficult issues. That is part of what we 
do in the Senate.
  That is not Judge Becker's job. He is retired. He ought to be 
somewhere taking life easier, and yet he is here. He paid his way down 
on the train today. He did the same thing yesterday. He pays for his 
own meals, his own lodging. He does it out of the goodness of his heart 
because he thinks it needs to be done.

  I raise that just to say that every day, in some corner of this 
Capitol, somebody is trying to make this place work. In this case, it 
is Judge Becker. There are other people of good will who are in that 
room with him trying to get through a tough patch and to help us find a 
way to a more rational, logical, fair way to help people who have been 
exposed to asbestos.
  We voted last week not to go to the bill. I know some people were not 
happy with that vote, but we simply believed it was not time to go to 
the bill, given this mediation process. We urged our leaders to embrace 
that process, and they have done that. I am encouraged--out of that 
embracing of that mediation process, and the infusion of leadership 
authority to it--that something good will come of these negotiations.
  Mr. President, we will have an opportunity to vote tomorrow on 
proceeding to the McCain amendment. Senator McCain has sought to find a 
compromise on the Internet tax legislation.
  Let me back up for a moment and talk about it, if I can. When Senator 
Voinovich and I were Governors of our respective States, we worked with 
the Congress--House and Senate Democrats and Republicans--and 
encouraged then-President Clinton to sign legislation that said the 
Federal Government ought not tell the States to spend money on 
something and not provide that money. The Federal Government should not 
undercut the revenue base of State and local governments without making 
up the difference.
  In 1998, the Congress passed a little bitty unfunded mandate that 
said States could not tax access to the Internet. If you were already 
doing it, you could continue to derive your tax, if you are a State or 
local government, and tax access to the Internet. But the States could 
not have multiple taxes; they could not have discriminatory taxes on 
the Internet. That was the legislation passed in 1998 and extended in 
2001, and that moratorium lapsed last fall, as we know.
  Since that time, States have not jumped in to pass new taxes on 
access to the Internet. They have not passed discriminatory taxes or 
multiple taxes with respect to the Internet. They have been sort of 
sitting back biding their time, waiting to see what we would do.
  I think there are four areas of contention that exist with respect to 
the proposal that Senator McCain has offered. One is the definition of 
what is tax exempt under any moratorium we negotiate. On our side, 
Senators Alexander, Voinovich, Enzi, myself, and others believe the 
existing moratorium actually nails it pretty well, and the idea that 
folks should not have to pay a tax on accessing the Internet on their 
AOL bills, if you will. Whether they access their e-mail, their 
Internet by cable, by DSL, or by wireless, we think folks should not 
have to pay that kind of tax.

  We do not believe folks should have to pay multiple taxes by 
different levels of government on the Internet. We believe there should 
not be discriminatory taxes on purchases, for example, that are made 
over the Internet.
  But we have a clear difference of opinion with respect to defining 
what is to be tax exempt--free from taxation--by State and local 
governments. Our friends on the other side are interested in doing a 
whole lot more than stopping access fees that we pay as consumers. We 
don't want anybody to pay those either.
  They want to go well beyond the moratorium against multiple fees on 
use of the Internet. They want to go beyond discriminatory taxes. What 
they want to do, really, is take away from States and local governments 
the ability, if States want to, to impose business-to-business 
transaction taxes that might involve the Internet. I am not interested 
in taxing those as a Federal legislator, but I don't know that it

[[Page S4464]]

is our part, as Federal legislators, to say to State and local 
governments that they can't do that unless we are willing to make up 
the revenue shortfall that may come as a result.
  So the four areas of difference: One is the definition of what is tax 
exempt under the moratorium we adopt. A second area of difference that 
we have is with respect to the duration of the moratorium that we might 
extend. I said earlier, the first moratorium we passed was 3 years in 
duration from 1998 to 2001. At that time, Congress passed, almost 
unanimously, a further 2-year extension of that moratorium that lasted 
until last fall. Now that moratorium has lapsed.
  I think we have seen suggestions in S. 150, introduced by Senator 
Allen and Senator Wyden, that they wanted to make the moratorium 
permanent, an extension of the moratorium not 2 years, not 3 years, but 
to make it permanent. They define very broadly what is to be exempt 
from taxation under that permanent moratorium, even if it cuts into the 
revenue bases of State and local governments, and even if we do not 
make up the shortfall they may then face. So the second area of 
contention is the duration of the moratorium.
  The third area of contention deals with whether we should grandfather 
in the rights of State and local governments, so if they have already 
put in place some kind of tax on the Internet, our previous moratoriums 
grandfathered them in, protected them, for a period of time, from 
losing those revenues. It held them harmless, if you will. And the 
question is, if we go forward and we have a grandfather clause to 
protect the States that already have imposed some kind of tax measure, 
how long do we extend that grandfather clause for those State and local 
governments that are going to be deprived of revenues they currently 
collect, and that we are not prepared to make up?
  The suggestion has come forward, in Senator McCain's proposal earlier 
this week--maybe yesterday--that there should be a grandfather clause 
to hold the States harmless for a while but not for as long as the 
duration of the moratorium. And that is problematic.
  The fourth area of contention deals with the application of the 
moratorium to what I would describe as traditional taxable voice 
communications, taxable by State and local governments, but the 
application of the moratorium to those traditional taxable voice 
communications when those communications are routed over the Internet. 
It is called VOIP.
  Is it possible to bridge our differences on those four areas? It may 
or may not be. But having clearly defined them, our side is certainly 
willing to discuss them with those who have a different view of these 
issues than we do. One thing we all agree on is, whatever we do, we 
should try to hold the States harmless.
  Somewhere in my talking points today, I have a discussion of why it 
is important that we hold the States harmless. If I can just take a 
minute or 2, I want to share part of this.
  Our States are clearly facing extremely difficult times. We all know 
that. States have cut services and raised taxes over the last 3 years 
as they have scrambled to fill a budget shortfall that approaches $250 
billion. Many States still face significant revenue shortfalls. 
California alone must fill an estimated $16 billion shortfall. New York 
faces a $4 billion shortfall. Both Michigan and Florida still have 
projected deficits of $1 billion. Some States are being forced to make 
cuts that are not only painful and unpopular but which ultimately 
undermine our efforts as part of welfare reform to make work pay. Some 
34 States have adopted cuts that are causing anywhere from 1.2 million 
to 1.6 million low-income people to lose their health insurance. 
Alabama, Colorado, Maryland, Montana, and Utah have all stopped 
enrolling children in their children's health insurance programs. 
Florida has done the same and has built up a waiting list of more than 
10,000 children.
  Meanwhile, Connecticut is cutting coverage for more than 20,000 
parents, and Georgia is cutting coverage for 20,000 pregnant women and 
children. In Texas, the State is actually ending coverage entirely for 
nearly 160,000 children and working families.
  Besides health care, childcare is also on the chopping block. Some 23 
States have cut back on childcare for working families. Florida, for 
example, has more than 48,000 children on a waiting list for childcare. 
Under the State's formula they are actually eligible, but they are not 
able to get it given the State's fiscal challenges. Reducing the 
waiting list is not even an option. I am told the budget in Florida is 
moving through the statehouse and they have cut childcare even more, by 
another $40 million.
  Tennessee faces similar cuts. Tennessee has begun declining 
applications for childcare from all families who are not actually 
receiving welfare payments.
  Altogether, in about half of all States, low-income families who are 
eligible for or in need of childcare assistance are either not allowed 
to apply or are placed on waiting lists. In California alone, over a 
quarter of a million kids, 280,000 children, are on waiting lists in 
that one State.
  I won't go on. The point I am trying to make is just a reminder. 
States face terribly difficult choices these days, whether it is health 
care, childcare, size of the classrooms, or the ability to hire 
teachers and to pay them what they need to attract good math and 
science teachers. States are in a bind. I was Governor in the good 
years, from 1993 to 2001, when we were rolling in money. The States are 
not rolling in money anymore.

  The father of the Presiding Officer is Governor. He will tell us they 
are not rolling in money up in Alaska any more than they are in 
California.
  If States were rolling in money, Senator Alexander and myself, 
Senators Voinovich, Enzi, Hutchison, and others would not be making 
this big fuss over what we believe is an unfunded mandate for State and 
local governments that is represented by S. 150 and, we believe, by the 
alternative offered by Senator McCain. If the States were rolling in 
money, we wouldn't be doing this. If we were providing some kind of 
offset to the revenues that State and local governments would lose, we 
wouldn't be making a big fight about it either. If States could be held 
harmless, we could probably work our way through this. Maybe we ought 
to. I believe we should.
  One thing I know for sure, there is agreement to extend the 
moratorium. I think if we were to vote on a simple 2-year extension of 
the moratorium that expired last November, there would probably be 
votes to pass that.
  I am concerned about the vote on cloture tomorrow on the McCain 
proposal. I urge my colleagues not to vote for it. Last week I urged my 
colleagues not to vote to proceed to the bill on asbestos that Senator 
Frist had introduced, not because I was not interested in getting a 
conclusion or consensus. I believed that by not bringing the bill to 
the floor, it actually increased the likelihood that we are going to 
get consensus on asbestos litigation reform. We are moving in that 
direction, and I am encouraged that we are on the right track.
  I believe if we go to the McCain bill tomorrow, we would be acting 
prematurely. There are still negotiations that can take place and 
should take place around the four elements I discussed. If we are 
forced to take up the bill at that point in time, we foreclose what 
could come out of those discussions, some of which have borne fruit 
already, some which still could.
  There are a number of Senators on my side who want to offer 
amendments of their own. It is ironic. We have on the one hand people 
on the other side of this issue--from Senators Alexander, Voinovich, 
Enzi, and myself--who contend that they want to support the telecom 
industry. I believe in their hearts they want to promote the industry. 
It is a good industry with good people. But there are also folks on our 
side and on the Republican side who have a whole bunch of ideas they 
would like to present and to offer as amendments. I will mention a few 
that might be appropriate.
  If we want to help the industry build a market broadband network, 
there are any number of viable options. Senator Hollings has introduced 
legislation, with a number of cosponsors, that would provide block 
grants to support State and local broadband initiatives.
  Senator Dorgan, the floor manager on our side, has legislation to 
make

[[Page S4465]]

low-interest loans available to countries who would deploy broadband 
technology in rural areas. Senator Rockefeller has introduced 
legislation, with 65 cosponsors, to provide tax credits for companies 
investing in broadband equipment. Senator Burns of Montana has 
legislation that would allow the expensing of broadband equipment. 
Senator Boxer has legislation that allocates the additional spectrum 
for unlicensed use by wireless broadband devices. Senator Clinton and 
others have legislation.

  To the extent that we vote for cloture tomorrow on the McCain 
proposal, many, if not all, of these proposals will not be made in 
order, even though they are germane and they relate to the issue. These 
amendments and, frankly, a lot of others like them could not be 
offered.
  I am not suggesting that all of them should be offered, but some of 
them should. Members who have a strong interest and have worked on the 
issues for a long time deserve that right. They believe strongly.
  As my collegues think about tomorrow's cloture votes, I realize this 
bill has gotten off track. What somehow started off as an Internet tax 
bill and figuring out how we can extend the moratorium and then paying 
a user fee for access to the Internet got off on another side rail on 
energy policy, ethanol, and a number of other things. I think Senator 
Domenici has introduced as an amendment the entire Energy bill. 
Eventually, I hope we will work our way through that. In the meantime, 
I hope we will use the hours ahead and maybe the next couple of days to 
join in a negotiation with our colleagues on the other side of this 
issue and try, maybe one last time, to see if there is someplace in 
between where we are and where they are.
  In the end, if there is a push for the approach Senator Alexander and 
I introduced, which is the straight-ahead, 2-year extension of the 
moratorium, to make sure it is not biased against DSL, we can just have 
that vote. We are not there yet. We have about 24 hours to consider it, 
and maybe cooler heads will prevail. If it comes to it, I will vote 
against cloture, not because I am not interested in finding a 
solution--I think we can. The time just may not be right. It could be 
close.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.
  Mr. REID. Madam President, I ask the Chair to make an inquiry to the 
leadership as to whether it would be appropriate for us to recess at 
about 2:55 until about 4:05. The Secretary of Defense will be here. 
With the parliamentary situation we find ourselves in on the Senate 
floor, it would be appreciated if the Chair would check that out 
through the leadership.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. MURKOWSKI. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. Dole). Without objection, it is so 
ordered.
  Ms. MURKOWSKI. Madam President, I would like to take a little time 
this afternoon to talk about one of the pending amendments. This would 
be the amendment of the Senator from New Mexico regarding energy. It 
has been said on this floor and in the committees in which I have been 
participating, and no doubt it is going to be said again: At a time 
when the American economy is suffering under the weight of high energy 
prices such as the steadily increasing natural gas prices, record high 
gasoline prices as we go into the summer months, and tight 
international oil markets resulting in rising crude oil prices, it is 
time that the Congress act on issues as they relate to energy with a 
comprehensive national energy policy.
  I am pleased the Senate is reconsidering this vital national policy. 
I commend Chairman Domenici for his leadership on this issue. The 
Senator from New Mexico has shown a great deal of willingness to find 
the middle ground on many of these issues addressed in the amendment. I 
believe we should work with him to enact this comprehensive energy 
legislation.
  There are several different components to the amendment. Certainly 
the one I happen to focus on most, coming from Alaska, is that area 
which will help facilitate the construction of an Alaska natural gas 
pipeline. Construction of this pipeline means a great deal to the 
people in my State. It means not only jobs for Alaskans, but it means 
energy, natural gas, to my State.
  But we have to look beyond just what it can provide to Alaska. The 
construction of a natural gas pipeline will create thousands of jobs 
throughout the United States and bring a much needed new supply of 
domestically produced natural gas to our starved lower 48 markets.
  We have seen in the news recently the suggestion, coming from Mr. 
Greenspan, that the future, if you will, is in imported LNG. Once 
again, it is the emphasis that we should place in the national energy 
policy on domestic sources of energy. We have those domestic reserves 
in Alaska, as it relates to natural gas. Let's take advantage of that.
  Residential natural gas customers are paying nearly historic high 
costs to heat their homes, to cool their homes, to keep the lights on. 
Americans are increasingly forced to spend a substantial portion of 
their household income on energy costs. A reasonably priced supply of 
natural gas will allow homeowners to devote a greater portion of their 
disposable income to other pursuits.
  When you think about the state of the economy and what we spend on 
energy, the more disposable income that we have, the less we have to 
spend on energy, the stronger an economy we have.
  But it is not just the residential customers in America who are 
suffering from these sustained high natural gas prices. It is our 
industrial consumers who rely on natural gas to produce the 
petrochemicals, the fertilizers, and other goods. They are losing their 
markets to foreign competitors who have access to less expensive 
reserves of gas. Whether I am sitting in the Energy Committee or the 
EPW, talking about what is happening across the country now, whether it 
is on our farms or whether it is AMAZON.Com not being able to produce 
the packaging bubbles domestically because of the high price of natural 
gas, it affects all of us in all the industries.

  In many instances we are hearing about the companies that are laying 
off workers, closing their factories, because they simply cannot pay 
the current natural gas prices and remain competitive within the global 
marketplace. The layoffs affect thousands of workers in many regions of 
the country.
  Look at what Alaska's natural gas can do. We are a long way from the 
rest of the 48, but with a pipeline getting our reserves of natural gas 
into the lower 48, we can meet that supply need; we can help to reopen 
these factories.
  Natural gas is not only a vital feedstock for industry and home 
heating, it also serves as a major fuel for electricity production. By 
the year 2020, the Energy Information Agency has predicted that natural 
gas will account for 32 percent of all electricity generation. When we 
think back to the situation just last August in the Northeast, 
California's power problems 3 years ago, increasing the investment 
requirements for our Nation's electrical grid and production capability 
will only further the demand for natural gas as plant operators look to 
natural gas as having lower capital costs, higher fuel efficiency, 
shorter construction lead times, and lower emissions as compared to 
traditional coal-fired electrical plants.
  Yet with all of these facts in front of us, recognizing that the 
residential consumer is paying more, that the industrial consumer is 
paying more, and businesses are being closed, recognizing the future as 
it relates to electricity production, and considering the President's 
request, if you will, that we move to a hydrogen-based society, the 
request he made in his State of the Union Address last year when he 
indicated he wanted children who were born today to be driving vehicles 
powered by hydrogen--it is wonderful, but we have to have the natural 
gas to assist with all of this.
  Despite all of Alaska's proven reserves, 35 trillion cubic feet of 
proven reserves on the North Slope with the possibility of upwards of 
100 trillion cubic feet still in the ground, we need to do all we can 
to bring that from

[[Page S4466]]

Alaska's North Slope to the rest of the country.
  Senator Domenici's amendment is not all about natural gas. For 
electricity, about which many of my colleagues have spent a great deal 
of time talking on the floor, the amendment ensures reliable and 
affordable electricity for America.
  We all recognize that we in Congress must address the issue of 
reliability. The amendment would prohibit onerous Federal manipulation 
of energy trading markets that cost consumers money, and it would 
increase the penalties for market manipulation and enhance consumer 
protections.
  To those of my colleagues who have called on the Senate to address 
the electricity issue, the reliability issue, I say support Senator 
Domenici's proposal.
  For coal, which is used to produce 50 percent of our Nation's 
electricity, the amendment authorizes $2 billion to fund the Clean Coal 
Power Initiative. The development of clean coal technology will help 
our Nation use its abundant coal resources in an environmentally 
responsible manner.
  In Alaska, we are working to find new ways to use our very abundant 
reserves while mitigating the impact on our environment. We have a 
little place called Healy, AK, where we have a small experimental clean 
coal plant. This clean coal plant is currently sitting dormant. It just 
barely missed its emissions requirement. We were attempting to utilize 
new technology to again provide very necessary energy to an area that 
was very limited in what it could receive and what it could generate. 
Once the Healy clean coal plant and other clean coal technologies 
demonstrate better ways for us to generate electricity from coal, we 
can utilize our Nation's vast coal resources in an environmentally 
responsible manner for many years to come, as well as provide high-
paying jobs and much needed electricity.
  There is also renewable energy. For renewable energy, the amendment 
reauthorizes the Renewable Energy Production Incentive Program to 
promote the use of clean renewable energy. The amendment would also 
encourage exploration and development of geothermal energy, including a 
call for rulemaking on a new royalty structure that encourages new 
production.
  I could go further in detailing all those very important matters 
contained in the energy amendment, but I think these four examples--
authorizing the Alaska natural gas pipeline, improving our Nation's 
electricity grid, providing research on clean coal technology, and 
promoting the use of clean renewable energy--illustrate the immense 
benefits of a comprehensive energy policy. They are great, but they are 
meaningless to us unless we enact them.
  A comprehensive national energy policy, as envisioned in Senator 
Domenici's amendment, will generate thousands of jobs throughout the 
country. As I said on many occasions, the Energy bill is a jobs bill. 
So is this amendment.
  I commend the Senator from New Mexico for offering this amendment. I 
know my constituents in Alaska don't care whether this bill is enacted 
as an amendment or as a stand-alone bill. My constituents want to see 
the jobs. My constituents want to see the energy, they want to see the 
natural gas, and they want to see movement on an energy policy. I think 
most Americans want the same thing. They want high-paying jobs. They 
want decreased volatility in the energy market. They want increased use 
of renewable energy and improved electricity grids. I think we have 
that within this amendment.
  I urge my colleagues as we move forward to support the amendment of 
the Senator from New Mexico.
  I thank the Chair. I yield the floor. I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. McCAIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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