[Congressional Record Volume 150, Number 128 (Saturday, October 9, 2004)]
[Senate]
[Pages S10957-S10967]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                FSC/ETI

  Madam President, I rise in strong support of the conference report 
for the American Jobs Creation Act. Before we leave, we have to pass 
this bill to protect domestic manufacturers, strengthen our economy, 
better help our U.S.-based multinational firms compete globally, and 
honor our trade obligations.
  I congratulate the chairman and cochairman of the conference, 
Congressman Bill Thomas and Senator Chuck Grassley, for completing the 
bill this week.
  Many thought the task would be difficult or impossible given the 
large differences in the two versions and the

[[Page S10958]]

time constraints we in the conference faced. This could have taken many 
weeks--or even failed--yet they got it done.
  The innovative conference process developed by the chairman and 
cochairman made success possible. Conferencing a large and diverse pair 
of tax bills in the usual fashion could have taken many weeks and led 
to a likely failure to finish this bill before sine die adjournment of 
the 108th Congress. Again, I want to recognize the extraordinary 
achievement of this conference committee and thank its leaders and my 
fellow conferees for their hard and dedicated work.
  Mr. President, this conference report represents what we hope will be 
the culmination of a very lengthy and fascinating issue that had its 
genesis decades ago but has festered into a growing problem over the 
past several years.
  I will leave to others to go into detail about the long history of 
the export subsidies in our tax law that gave rise to this conference 
report, but the unusual nature of this bill and its difficulty in 
passing the Congress are reflections of the complexity of this issue.
  The crux of the difficulty of the bill is that the rulings of the 
World Trade Organization on the trade-legality of our export tax 
subsidies put the Congress in a very tough position. In essence, we 
found ourselves needing to repeal these export subsidies, known as the 
Foreign Sales Corporation (FSC) provision and its replacement regime 
known as the Extraterritorial Income (ETI) exclusion.
  By repealing these provisions, which we must do in order to honor our 
trade obligations, we effectively raise taxes by almost $6 billion per 
year on thousands of U.S. businesses that manufacture goods for export.
  Leaving it at this, Mr. President, is simply unacceptable. Why should 
we have to convert a provision designed to help U.S. manufacturers 
compete in an ever-increasingly difficult global marketplace to a 
situation where they suffer a competitive disadvantage?
  Yet, this is exactly the problem the Congress faces now that it is 
forced to repeal the export tax benefits.
  When confronted with a similar problem in 2000 after the WTO ruled 
the FSC provision to be in violation of international trade rules, 
Congress passed the ETI in its place. With the ETI, we were able 
largely to replicate the benefits of the FSC regime, so that exporting 
taxpayers paid few if any extra taxes with the repeal of FSC. 
Unfortunately, the WTO subsequently ruled that the ETI provision also 
was an illegal trade subsidy that also must be repealed.
  So, the conundrum facing the Congress with this situation was to find 
a way to enact other tax cut benefits for exporting manufacturers, to 
offset the increase from repealing ETI, without violating the WTO 
rules.
  Unfortunately, Mr. President, this has proven impossible, so both the 
Senate and House bills attempted to find rough justice for business 
taxpayers by finding other ways to deliver tax benefits besides basing 
them on exports. Such attempts gave rise to the political and practical 
difficulties of this bill, including the fact that it took many months 
of hard effort to reach the point we are today.
  For example, my own bill to address the FSC/ETI problem was S. 1475, 
the Promote Growth and Jobs in the USA Act, which I introduced in July 
2003. This bill would have delivered rough justice tax relief in two 
ways.
  First, it would simplify and rationalize the international tax rules 
that currently harm the ability of U.S. firms to compete globally, and 
second, it would provide incentives for companies to increase their 
ability to produce goods by acquiring new equipment and engaging in 
more research and development.
  Other FSC/ETI solution bills were also introduced. On the same day I 
introduced S. 1475, Chairman Thomas introduced H.R. 2896, the American 
Jobs Creation Act. The two bills were similar in many ways, and both 
included international tax reforms. The Thomas bill, however, included 
a number of other provisions designed to help U.S. businesses create 
jobs and better compete.
  Another bill, introduced last year by Congressmen Crane, Rangel, and 
Manzullo, offered a different direction still. This bill provided a 
deduction equal to 10 percent of a company's production activities.
  In the Senate, Senators Grassley and Baucus introduced a bill that 
included some of the best elements of all the other bills. Even though 
I preferred the solution set forth in my bill, I cosponsored the 
Grassley-Baucus bill because it represents a solid and reasonable 
solution to the problem. This bill, as modified, became the legislation 
reported by the Finance Committee and passed by the Senate.
  After a great deal of travail and adjustments, the House also passed 
a FSC/ETI bill, and it was quite similar in many respects to the first 
Thomas American Jobs Creation Act. These are the bills the conference 
committee had to combine into one.
  Madam President, I know that you and your colleague, Congressman 
Burr, and others from North California and South Carolina and all over 
the South have worked long and hard. Also, Senator McConnell, Senator 
Bunning and others from Kentucky have long worked to try to resolve 
these problems. I want to pay tribute to you folks for bringing this 
about. You deserve a lot of credit. Let's hope we can pass this bill.
  I admit it is not everything that some wanted it to be, but it is 
certainly a step in the right direction, and it wouldn't have occurred 
except for the distinguished Senator from North Carolina, Mrs. Dole, 
Congressman Burr, and others who have carried this ball very 
effectively up through this point.
  I hope that we do not filibuster this bill. I hope nobody will 
filibuster this bill because it is a bill that just has to pass. If it 
does, much of the credit should go to the people I have just mentioned. 
There are others as well who should be mentioned. I don't mean to leave 
them out. But those in particular I know have been working assiduously 
on this for many years.
  The result, as we know, is a bill that is far from perfect. Its 
enactment will result in a net tax increase for some exporting 
companies that now use the ETI provision, and in a net tax cut for many 
other U.S. manufacturing firms that may have not taken advantage of the 
ETI exclusion.
  And while the bill includes many important other provisions, it 
leaves out some very important provisions that I advocated. For 
example, I am personally very disappointed that the House conferees 
voted against including my bill, the CLEAR ACT, in this conference 
report. This bill, which has passed the Senate at least three times and 
also has passed the House, would transform the auto industry by 
granting strong tax incentives for consumers who buy alternative fueled 
and advance technology vehicles, such as hybrid electric cars and, 
ultimately hydrogen cars.
  From a broader point of view, most of my fellow Senate conferees and 
I would have liked to see the entire set of energy tax provisions from 
the Senate-passed bill included in the conference report. I believe it 
was a mistake to omit these important provisions.
  I also very much regret that the House conferees refused to adopt my 
amendment to bolster our research tax credit. While it is true that the 
research credit was extended for a short time in the most recently 
passed tax bill dealing with individual tax cuts, that legislation left 
out an important element contained in the Senate FSC/ETI bill designed 
to improve the incentives this provisions gives for companies to engage 
in R&D activities.
  Nevertheless, the conference report before us is worthy of our 
support, as we must honor our obligations under the World Trade 
Organization.
  Of more immediate importance is the fact that the Europeans are 
levying an increasing level of trade sanctions against certain of our 
products exported to the EU. This is currently 12 percent and is 
growing by one percentage point per month. It is definitely having a 
very serious negative effect on certain U.S. industries and could 
amount to more than $4 billion in total cost, unnecessary cost to our 
country if this bill is not passed.
  Moreover, the trade sanctions are authorized to continue to increase 
until next March, when they will have reached 17 percent. After this, 
the EU

[[Page S10959]]

may authorize even more serious sanctions against us that would surely 
harm our economic growth.
  If we do not succeed in passing this conference report before sine 
die adjournment of the 108th Congress, we must start the process all 
over again next year.
  Would this result in a better bill? Perhaps. But that is far from 
certain. What is more likely is that the resolution to this issue would 
be delayed for many more months, giving the trade sanctions more time 
to damage our economy and harm U.S. businesses.
  Let me take a few minutes to discuss some of the specific provisions 
that are in the conference report and why I we should enthusiastically 
support them and why I support them.
  Overall, this conference report has a good balance to it.
  In addition to the vital repeal of the ETI provision and the quite 
reasonable transition relief it provides for current ETI users, the 
bill offers significant provisions for both small businesses and large 
multinational firms.
  Mixed in is a generous portion of important tax relief for business 
interests of all kinds.
  Also included in the conference report is significant relief 
specifically for small businesses.
  Foremost in this category are the five sections that would simplify 
and reform the taxation of S corporations.
  These are changes I have long fought for and sought with several of 
my colleagues and I am gratified to see them included by the 
conference.
  Other provisions important to the balance of this bill are those 
designed to simplify and improve the rules by which this Nation taxes 
international business transactions.
  Quite simply, our outdated, international tax rules are appalling.
  Whether large, medium or small, U.S. businesses that decide to expand 
their markets beyond the borders of the United States confront a set of 
tax rules that are mind-numbingly complex. Far worse, these rules often 
result in double taxation and leave our companies on the downside of a 
tilted playing board when compared with competitors based in most other 
industrialized nations.
  The bill before us includes about two dozen provisions that will 
improve the tax law for U.S. companies that have expanded their markets 
overseas.
  As a senator who has long been interested in seeing this type of 
reform enacted--in fact I have introduced bills to do this since the 
mid-1990s--this is a particularly gratifying day.
  Some of my colleagues have incorrectly concluded that improving our 
rules on international taxation will give an incentive to U.S. 
companies to move their jobs overseas. This is unfortunate, Mr. 
President. Cross-border investing is not only a necessity of our modern 
world, it is usually beneficial to both nations. Most U.S. companies 
that invest in expansion into markets in other nations do so to compete 
effectively with other suppliers in those markets and here at home.
  A fact of life of our modern economy is that our U.S.-based business 
enterprises face competition from all parts of the globe. It is 
unrealistic to think that an American business can simply focus on 
markets here at home and thrive. Instead, most of today's businesses 
must be mindful of both markets and material and labor supplies around 
the world if they are to stay in business very long.
  While no one likes to see U.S. jobs move overseas, we should be more 
concerned about creating and maintaining in the U.S. the kind of 
environment that attracts businesses. Part of that environment is 
ensuring that our tax system does not drive businesses offshore to 
other nations that tax them in a more favorable fashion. This bill 
moves our tax system a big step in that direction, and I am pleased to 
see these changes finally reach the point where they are about to 
become law.
  Let me turn to the tobacco issues associated with this conference 
report.
  At the center of the tobacco buyout is the tobacco farmer. The 
tobacco price support and tobacco quota programs have helped to secure 
a reasonable living for many family farmers.
  At the same time, breaking the nicotine dependency of U.S. citizens 
and especially children requires us to address the dependency of 
tobacco growers on the tobacco industry and on the government programs.
  It will not be an easy transition for many tobacco growers, and 
Congress is strongly on record as supporting measures to help these 
families survive it.
  This proposal does a good job of getting the Government out the 
farming business while making temporary assistance available to farmers 
as they adjust to the free market. And, there is no cost to the 
Government.
  As far as the provision requiring the Food and Drug Administration to 
regulate tobacco, let me say that I fully support measures to end 
tobacco use in the United States.
  I can think of few public health dangers worse than tobacco, and this 
is especially true for young people.
  I have heard from many concerned parents and health advocates in Utah 
who point out the need to take action against the devastating health 
consequences of tobacco use.
  In many aspects, the DeWine-Kennedy language was written to achieve 
that goal, and in that spirit I supported it in conference.
  In fact, much of the bill is taken from a measure that I authored 
several years ago with Senator Dianne Feinstein.
  That being said, I am concerned about some aspects of the way the 
bill was written, and especially the impact of this language on the 
resources of the FDA.
  First, the Committee of jurisdiction, the HELP Committee, should have 
the opportunity to consider this legislation--allowing the FDA to 
regulate tobacco--before we vote. Having been the Chairman of that 
Committee for several years, I know full well the complexities of the 
Federal Food, Drug and Cosmetic Act. Three hours of debate on the 
Senate floor was not enough time to consider legislation that made such 
dramatic changes to current law.
  We also must be clear about the impact that such legislation would 
have on the FDA. Does it have adequate resources to regulate tobacco 
and still keep up with its other, extremely important responsibilities? 
I question whether it does. If we are not willing to give them the 
resources, then it is easy to see why that part of the request by 
Senators DeWine, Kennedy, myself, and others should be delayed until 
this matter is addressed.
  While I recognize that user fees were included in the legislation, I 
am not convinced that those fees would have provided the FDA with 
sufficient resources to regulate tobacco. These concerns bear further 
examination.
  They need committee hearings. They need to be examined thoroughly.
  Finally, I want to touch on some of the revenue offsets included in 
the conference report.
  I support the principle of keeping this revenue neutral, and I 
congratulate the conferees for doing so.
  This was a particular sticky problem with the House Members, so I 
especially recognize their hard work in bowing to the Senate's demand 
that this bill be fully offset. I am very pleased to see that several 
revenue offset provisions that were in the Senate bill are not part of 
the conference report.
  One of these is the codification of the economic substance doctrine. 
I believe enactment of this provision would have led to a great deal of 
unnecessary conflicts between taxpayers and the Internal Revenue 
Service and would have unfairly penalized companies for engaging in 
legitimate tax planning techniques.
  One provision that did not make it into the conference report raises 
revenue in connection with the donation of used vehicles. This may 
appear to be a reasonable proviso, particularly in light of some of the 
alleged abuse surrounding the charitable donation of used vehicles. I 
am concerned about the impact of this change on charitable giving. A 
chilling effect on the donation of these used cars could leave many 
worthy charities short of vital funds needed to perform their valuable 
services to needy citizens in Utah and elsewhere. I would keep a 
watchful eye on the implementation of this change in the law to make 
sure it doesn't harm the charities. It may well be that we need to 
revisit this area of the law in the future.
  I had one of my finest constituents call me last night--it may have 
been

[[Page S10960]]

the night before, things have been moving so fast here--she said it 
would really hurt their kidney foundation partners, which have raised 
hundreds of thousands of dollars in donations of used vehicles. She 
recognizes we have to do it right so that the Government is protected 
and our tax system is not abused, but I would hate to see her not have 
these moneys coming in for that important foundation, and others as 
well.
  In conclusion, the conference report before us represents a good bill 
that deserves our support. As I have indicated, the bill is far from 
perfect, but given the difficult political circumstances surrounding 
this bill, it is remarkable that we were able to bring to the Senate 
floor a product as good as it really is. I urge colleagues to support 
the conference agreement.


                  Medicare Prescription Drug Coverage

  Mr. HATCH. Madam President, finally, I have to respond to the 
outrageous charges made by colleagues on the other side of the aisle 
regarding the Medicare statement I delivered on the Senate floor 
yesterday. I was disturbed by several remarks--especially that seniors 
have flatly rejected the Medicare prescription drug benefit. That may 
be the hope of some people on the other side, but that is not reality.
  How is that even possible when the drug benefit doesn't even go into 
effect until January 1, 2006? That is pure, unmitigated bunk. I am 
offended that this argument is even being made on the floor of the 
Senate by my colleagues because it is absolutely not true. It is being 
made to scare our seniors. And that is wrong. How is that possible when 
many Medicare beneficiaries are participating in the Medicare drug 
discount card and have seen savings in their drug costs up to 20 
percent per drug? What is being said is just not true. I don't see that 
as an outright rejection. My colleagues need to be careful about their 
charges, especially when they don't have facts to back them up.
  I take issue with the assertion that our prescription drug law is 
only a drug law in name. What do they mean by that? Let me remind the 
Senator from Illinois that because of this new Medicare prescription 
drug law, 40 million Medicare beneficiaries will have drug coverage if 
they want it. They will have the choice. The bill provides generous 
subsidies to low-income Medicare beneficiaries, who today cannot afford 
to purchase drugs; today they don't have the help. They are talking 
like this bill does nothing--the bill which spends $400 billion-plus to 
improve Medicare for our seniors and the disabled.
  Prior to enactment of the Medicare Modernization Act, these 
beneficiaries had to make tough choices between buying prescription 
drugs and putting gas in their cars or buying prescription drugs and 
putting food on the table or buying prescription drugs and paying their 
rent. Once a Medicare drug plan goes into effect on January 1, 2006, 
those Medicare beneficiaries will no longer have to worry about this 
matter that they have to worry about now. To scare our seniors into 
thinking these benefits are not going to be great for them--it is 
incomprehensible to me that anybody has the gall to make those kinds of 
claims.
  Here is another point that needs to be raised regarding this matter: 
If there were any proposals that deserve to be recognized as offering a 
drug benefit in name only, it is the two Democratic plans of 2 years 
ago, which were supported by 50 and 45 Democrats respectively, 
including the Democrat leader and Senator Kerry, their candidate for 
President. My colleague, Senator Grassley, described these plans a few 
days ago. Let me take a few minutes to recap.
  The first Democratic plan had a drug benefit that lasted just 6 
years; that was the end of it. Talk about offering a drug benefit in 
name only. The second plan didn't even offer a benefit to the vast 
majority of beneficiaries. Seventy percent of beneficiaries would not 
have received any basic coverage, and they are coming on the floor and 
saying this $400 billion-plus plan does nothing? Give me a break. A 
plan that shuts out the vast majority, 70 percent, of beneficiaries--
how can you call that a drug benefit? Those were their plans.
  Guess what those 70 percent got. You are not going to believe this. 
They got a 5-percent discount on their drugs in their plan. Once they 
spent $3,300 out of pocket, they could qualify for catastrophic 
coverage. That was their plan. And they are criticizing this plan, 
which was bipartisan, overwhelmingly passed?
  Some have taken issue with the Medicare reform bill, saying that the 
``benefit'' stops after an initial coverage amount. I remind my 
colleagues on the other side of the aisle that their basic benefit 
would have never even started for 70 percent of beneficiaries--for 70 
percent. They would have been left out by their plan, and they are 
criticizing this plan? Talk about a donut hole. These beneficiaries 
didn't even get a donut.

  The Congressional Budget Office estimated that 66 percent of 
beneficiaries would not even meet the $3,300 threshold. Again, for 
these folks, the only help they would get was a 5-percent discount. And 
they are criticizing our drug discount card where they are getting an 
average of 20 percent and in some cases even more?
  I was also extremely disappointed by the arguments by the Senator 
from Illinois and the Senator from California against what some have 
termed the ``non-interference'' provision. As I outlined, this 
provision has been included in the most prominent Democrat initiatives, 
starting with the Clinton Health Security Act a decade ago. Despite 
that fact--and it was in their bills--here we are listening to 
arguments against this bill. Apparently, what was good in a Democratic 
administration is very bad in a Republican one. They ought to be 
shouting for joy that we are putting some of their provisions into this 
bill. The problem is, these were not their provisions; they were all of 
our provisions, those of us who worked in a bipartisan way.
  What was good in a Democrat Senate is bad in a Republican Senate--
during an election year especially. It is almost as if my colleagues 
were not listening to what I said the other day. The argument that 
there is no authority for the Federal Government to bargain with 
pharmaceutical companies is getting to be a tired, wornout, old 
argument. Again, I will repeat myself from yesterday. First, the 
Democrat-sponsored bill from 2000, introduced by the Senator from South 
Dakota and cosponsored by 33 Democrats, had a specific provision which 
stated the following:

       In administering the prescription drug benefit program 
     established under this part, the secretary may not [this is 
     the Democrat language in their bill, which had almost every 
     Democrat on it] (1) require a particular formulary or 
     institute a price structure for benefits; (2) interfere in 
     any way with negotiations between private entities and drug 
     manufacturers or wholesalers; or (3) otherwise interfere with 
     the competitive nature of providing a prescription drug 
     benefit through private entities.

  Again, this provision is from the bill introduced by Senator Daschle, 
which was cosponsored by 33 Democrats, including not only Senator 
Kerry, their candidate for President, but also Senators Durbin and 
Boxer, who spoke against it on the floor yesterday. It takes time to do 
it correctly. CMS, the agency in charge of the Medicare program, needs 
time to implement the MMA regulations, accept bids from plans that wish 
to participate in the Medicare advantage programs, and, most important, 
it takes time to educate Medicare beneficiaries about the options that 
will be offered to them.

  Let me remind all of my colleagues that even the Democrat proposals 
that have been considered in the past did not have the Medicare 
prescription drug programs go into effect immediately. So that is just 
a ludicrous charge.
  In addition, I remind my colleagues that both the Democratic plans in 
consideration in December of 2002 didn't go into effect until 2005. I 
suspect that the authors of these plans recognized the same thing that 
we did, that it takes time to get a new, comprehensive drug program up 
and running. That is why the drug plan will not be available until 
January 1, 2006.
  So, there is no subterfuge behind the 2006 date in the MMA. Moreover, 
at least the MMA offers immediate assistance through the drug card 
program. Their plans offered nothing until 2005, and then very little 
after that. And cost us a bundle more. They were not even well thought 
out, in my opinion.
  I would also like to respond to the comments of my colleague from 
California comments about the Veterans

[[Page S10961]]

Administration system and the deficiencies which I described yesterday 
morning. If my colleague from California is surprised at the 
Republicans not using the VA model then my only guess is she is even 
more surprised that her own party did not. No, they wanted to have 
private plans negotiate with drug companies, the same approach taken in 
the MMA, the Medicare reform bill.
  The VA system was not a model for any Medicare prescription drug 
plans considered on the Senate floor, advanced by either Democrats or 
Republicans.
  Finally, let me address the idea of importing cheap drugs from 
Canada. First, nobody has a greater desire than I do to make 
prescription drugs more affordable, particularly for our seniors and 
the disabled who depend so heavily upon pharmaceuticals for their 
quality of life. I co-authored the 1984 bill, the Hatch-Waxman Act, 
which in essence created the modern generic drug industry, brought 
generic drugs to the marketplace to become the force for competition 
and affordability that they are today. It has been called the most 
important consumer legislation in the last century by some. It has 
saved at least $10 billion every year since 1984. That law was written 
by a conservative Republican in the Senate, myself, and a liberal 
Democrat in the House, Congressman Henry Waxman, because we were 
willing to put differences aside, get together and do what was right.
  With regard to drug importation, my colleagues seem to forget that 
the MMA does include a provision to permit the importation of 
prescription drugs from Canada, once a program is in place that is 
approved and certified for, guess what, safety and cost by the 
Secretary of the Department of Health and Human Services.
  That sounds logical to me. We want those drugs to be safe and we want 
to know that we can afford to implement this program.
  The bill also calls for the Secretary to establish a 13-member task 
force that will study proposals to make reimportation safe and cost 
effective. HHS Secretary Tommy Thompson has indicated that the panel's 
recommendations will be completed by the end of this year.
  Up to 80 percent of imported drugs coming through our ports today, 
are knockoffs, out-of-date drugs or placebos.
  Can you imagine what could happened if drugs tainted by terrorists 
come into this country? Drugs filled with gradual poison, or even 
instant poison? Our nation must be concerned about these things because 
they impact the safety of our citizens.

  We should not overlook the fact that the FDA has documented many 
cases of what appeared to be FDA approved imported drugs that were in 
fact contaminated or counterfeit, contained the wrong product or 
incorrect dose, or were accompanied by incorrect directions or had 
outlived their expiration date. These drugs would be at minimum 
ineffective and could actually be harmful or even fatal.
  The FDA is also concerned with the safety of allowing companies which 
are not licensed by States to practice pharmacy to sell prescription 
drugs without any limitation on the amount or frequency of drug imports 
permitted for individuals. In addition, reimportation legislation as it 
is written would allow risky drugs that are currently available in the 
U.S. only under strict safety rules or controls, to be reimported in 
any amount or frequency to anyone, even those who are at high risk to 
be seriously injured by the medication.
  The FDA underscored these concerns in the Judiciary Committee's 
hearings on reimportation last July. The Agency stressed that opening 
our tightly regulated closed system of prescription drug distribution 
will open the door counterfeit and otherwise adulterated and misbranded 
drugs being widely distributed to unwitting American public. Mr. 
William K. Hubbard, Associate Commissioner for Policy and Planning for 
the FDA testified at this hearing and I would like to take this 
opportunity to read some of his testimony to my colleagues.
  FDA remains concerns about the public health implications of 
unapproved prescription drugs from entities seeking to profit by 
getting around U.S. legal standards for drug safety and effectiveness. 
Many drugs obtained from foreign sources that either purport to be or 
appear to be the same as U.S. approved prescription drugs are in fact 
of unknown quality. Consumers are exposed to a number of potential 
risks when they purchase drugs from foreign sources or from sources 
that are not operated by pharmacies properly licensed under State 
pharmacy laws.
  Patients are also at greater risk because there is no certainty what 
they are getting when they purchase some of these drugs. Although some 
purchasers of drugs from foreign sources may receive genuine product, 
others may unknowingly buy counterfeit copies that contain only inert 
ingredients, legitimate drugs that have been outdated and have been 
diverted to unscrupulous or dangerous sellers, subpotent or superpotent 
products that were improperly manufactured. Furthermore in the case of 
foreign based sources, if the consumer has an adverse drug reaction or 
any other problem, the consumer may have little or no recourse either 
because the operator of the pharmacy often is not known, or the 
physical location of the seller is unknown, or beyond the consumer's 
reach.
  FDA has only limited ability to take action against these foreign 
operators.
  These safety concerns are real. I strongly believe if we truly care 
about seniors and other patients who depend upon prescription drugs, we 
should not expose them to what currently amounts to pharmaceutical 
Russian roulette.
  The FDA is working with some of my colleague on legislation that 
would give the FDA greater resources, limit the scope of imports, and 
provide greater power to the FDA to police imports. In recent comments, 
former Commissioner Mark McClellan, now head of CMS, has said these 
measures would give the agency the ability to assure the safety of 
prescription drugs imported from Canada.
  In addition to these safety concerns, however, I am also concerned 
that reimported drugs pose a threat to the innovation that Americans 
and the rest of the world have come to expect from our pharmaceutical 
industry, the greatest industry in the world. Canada and other 
countries with lower drug prices generally import superior American 
products, but impose price controls to keep those costs down.
  It may cost as much as $1 billion to produce a new drug, test it, win 
FDA approval, educate doctors, and make the drug available to patients. 
No pharmaceutical company can or would go through this immensely 
expensive process without a chance to recover some of those costs, 
which will not be possible if we impose, in America, however 
incorrectly, Canada's style of price controls.
  But, wait, it not only costs $1 billion to create one of these 
drugs--6,000 experimentations that failed to finally arrive at a drug 
that is efficacious. And, in most cases, about three-quarters of the 
patent life is also consumed by that process. So the companies, to 
recoup that $1 billion and make a profit, they have maybe 5 years, in 
some cases, maybe less, to recoup their profits. That is the reason why 
drug prices are so high. These safety concerns are real and I strongly 
believe if we truly care about seniors and other patients who depend 
upon prescription drugs, we should not expose them to what currently 
amounts to pharmaceutical Russian roulette.
  I do not believe that sacrificing the safety and future supply of our 
drugs by reimportation is the right answer to the high cost of 
prescription drugs.
  I hope I have cleared up some of the misunderstandings that Medicare 
beneficiaries have about the MNA law. Again, we gain nothing by 
spreading untruths about the Medicare bill. I have been discouraged 
with some of the comments made by some of our colleagues who know 
better, or should know better. They need to review the bills that they 
cosponsored and wanted to pass on the Senate floor. In my opinion, 
those bills did not do nearly as much for seniors as the MMA. Frankly, 
those bills were more costly, and provided seniors with less benefits. 
The MMA law passed with bipartisan support in both Houses. The only 
thing that results from charges which have been made on this floor, is 
confusion of Medicare beneficiaries, the very people all of us are 
trying to help. I think that is regrettable.

[[Page S10962]]

  It is astounding to me that some of our colleagues are scaring our 
seniors to death when we are spending $400-plus billion to provide them 
with better Medicare coverage. The MMA helps the truly poor so they 
don't have to worry about donut holes. In my opinion, the MMA is 
something all of us should support.
  What gets me upset are some of the arguments being made on the floor 
that are not only erroneous but, I think, are misleading. I believe 
many are just being made for political purposes.
  I think one Senator called my argument flimflam--yesterday. I defy 
anybody to refute the principles I have discussed here today and the 
remarks I have made here today. You can differ with them, you can 
disagree with them, but I don't think you can disagree with the facts.
  It is time for all of us to start helping seniors by helping them to 
understand this bill so they can benefit from it. Deep down, I think 
one reason some oppose this bill so much is because it represents 
liberty and freedom in the case of the health savings accounts. HSAs 
was one of the most hard-fought provisions in the entire bill by the 
other side. I believe the opponents of the bill do not think the 
American people can save for their own health care. They don't trust 
the American people to save for their own health care. They believe the 
Government is the last answer to everything. They believe without the 
Federal Government telling them how to live, what to do, and what they 
can consume that they can't help themselves.
  Can you imagine a young person who took advantage of that health 
savings account? That young person would have to assume the burden of 
paying for all of these Federal programs in health care. If that young 
person saved $1,000 a year tax free for his or her entire working life 
up to 56 or perhaps 70, because we are all living longer these days, 
that young person would have hundreds of thousands of dollars, if not a 
million, to take care of his or her own health care.
  That is the way it ought to be. Isn't that the American way? 
Shouldn't we try to take care of ourselves first and then help others?
  I believe the Federal Government should help those who cannot help 
themselves. Where I draw the line is I don't believe that the Federal 
Government should help those who could help themselves but won't. I 
think there is a difference between the two. But there is nobody more 
compassionate than I in helping those who truly need the help.
  I wanted to set the record straight. I am disappointed in some of the 
remarks which have been made on the floor against the MMA. Some of 
those remarks have been overly excessive and I hope that type of 
rhetoric will be discontinued.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana has 90 minutes.
  Ms. LANDRIEU. Madam President, I see my colleague from Alabama who 
has been waiting patiently, as I have, throughout the day to speak. He 
only wants to speak for 5 minutes. I yield 5 minutes of my time, and 
then I will reserve my right to speak for the 85 minutes remaining.
  Thank you.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. SESSIONS. Mr. President, I thank the Senator from Louisiana for 
her courtesy. I will contain my time to 5 minutes and ask that I be 
notified at 4 minutes.
  I wish to say while the distinguished chairman of the Judiciary 
Committee is here that he deserves great credit for the Justice For All 
Act. I had serious objections to some of the provisions in that bill in 
committee and objected to it, and thought we would never see the bill 
pass. I declared it at one point a bad bill. But Senator Hatch believed 
there was a problem with DNA analysis in America, and so did I. He 
believed there was a problem that could be improved with death penalty 
representation, and so did I. He worked with Senator Leahy and Chairman 
Sensenbrenner and Congressman Delahunt in the House, and others, and 
was able to deal with the problem in the legislation.
  I am pleased we were able to see that bill cleared today. I think it 
is a bill that will be effective in dealing with the problems that we 
know exist in two of those areas.
  Mr. HATCH. Madam President, if the Senator will yield, I thank the 
Senator for his comments. I thank him for his energetic good work on 
this bill. He and Senator Cornyn in particular helped to improve this 
bill, and we should all be proud of it.
  I thank the Senator.
  Mr. SESSIONS. I thank the Senator.
  One of the problems we had was that the legislation restricted States 
from putting the DNA of those arrested into the system. We offered an 
amendment in committee to fix that. That has been fixed now. States can 
put into the system DNA of people who have been arrested but not 
convicted. In reality, history teaches us that many people kill more 
than once. We watch those ``Cold Case File'' shows, and you see people 
are arrested and not convicted. Later on they are arrested when they 
commit the second, third, or fourth murder. That is too often a 
pattern, unfortunately.
  The bill allows forensic science spending now for other analyses if 
there is no DNA backlog. DNA represents 5 percent of the forensic 
scientific analysis done in these criminal cases. It is a critical and 
wonderful tool, but it is not the only tool to be used. We have a 
little more flexibility in the bill than we did before.
  I was concerned--and I think others were--that the money that would 
be spent for training people to try death penalty cases would be spent 
by a governmental entity that is responsible to the people, not being 
given directly to an unaccountable special interest group. They did 
this in States around the country that have an ideological opposition 
to the death penalty. For some of them, that is their No. 1 goal. We 
have had problems in the past when those organizations received money. 
The Congress ended that in 1996. I think that was a good decision. We 
fixed that in this bill.

  There are some marvelous lawyers who dedicate themselves to 
representation of convicts or people charged with capital murder. I 
respect them. I respect people who do not agree with the death penalty. 
I have concluded it is an appropriate penalty, but regardless, it is 
the law of the majority of the States of this country, and good 
representation is required. We ought to do it in the right way.
  We made progress. Historically, judges appoint lawyers in criminal 
cases. That would have put the original language, put the training and 
payment and selection of attorneys, in an outside entity's hands. The 
commission would be set up in the States that include judges, former 
prosecutors, not current prosecutors, and certainly defense lawyers to 
help select and train trial attorneys. It also says 75 percent of the 
money should be spent on training for the trial, which is the heart of 
the process.
  The appeal follows afterward, and we need fair, good trials, so we 
will focus most of the money on getting a fair trial so the appeals are 
less important. They are less important when the trial is done right to 
begin with than if it is messed up. It provides training for 
prosecutors because prosecutors sometimes also fail to handle the cases 
correctly, and good training can help them conduct a fairer trial with 
fewer problems.
  This is a bill I can support. I was pleased to be able to do so. I 
thank Senator DeWine and others who helped make this bill possible.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. Mr. President, I appreciate the opportunity to speak 
for the next hour and a half, and, depending on whether other Senators 
want to speak later in the night and what the agreements are, I may 
want to speak even longer because the subject I want to speak about is 
extremely important to my constituents and to many constituents around 
the country.
  I spent a couple of hours in the Senate yesterday speaking about the 
tax bill, the $137 billion tax relief bill the Senate and House have 
been negotiating now for 2 years. Not just the last few months, not 
just this Congress, but for 2 years the Congress has been putting 
together a tax relief bill because we basically were forced to put a 
bill together because of a decision made by

[[Page S10963]]

the World Trade Organization, of which we belong and encourage, that 
said part of our Tax Code was not in order.
  I am not on the Finance Committee. The Presiding Officer and I serve 
together on the Appropriations Committee. I am not a member of the 
Finance Committee. The Finance Committee, 2 years ago, began to put a 
bill together to address that situation. It was about a $50 billion 
problem. That is a lot of money.
  What happens around here is every time we open the Tax Code, it is 
very tempting for everyone else to try to get in the bill because if 
you can get in the bill, you can get money out of the Treasury. You 
could ask for additional tax relief. You could correct something that 
you think was an injustice to your business, whether you are a big 
business or a small business, an international business or a domestic 
business. You could ask for all sorts of help.
  What happened was this bill started out as a very specific $50 
billion fix for something that most everyone--not everyone but most 
everyone, including myself--thought we should fix. It has turned into a 
$137 billion tax relief bill. That is the truth. That is very 
troublesome.
  That is not even why I am speaking. There are things in this bill 
that are good and bad, and Senators have had all sorts of ideas and 
expressions of their opinion, including an eloquent speech about an 
important provision by the Presiding Officer for leaving out the 
regulations on tobacco, putting in the buyout provisions from the 
farmers but leaving out the companion regulation that was in the bill 
when it left the Senate.
  Other Senators have come to the Senate today to speak about different 
issues. I come to the Senate not saying those are not important. But 
there is one issue in my mind and in the minds of many of my 
constituents in Louisiana and around the country that transcends all of 
these issues and which is in a total category by itself. It is an issue 
that doesn't have anything to do with corporations or business; it just 
has to do with fairness, justice, truth, loyalty, and honesty.
  The truth is that in 2 years, putting this bill together that went 
from $50 billion to $75 billion to $100 billion to now $137 billion, we 
forgot one group of people. Just one group I think was forgotten. This 
is the bill, $137 billion--pages and pages of the bill. It is like two 
big phone books. Two years we put a bill together. Almost every kind of 
business one can think of is in this bill, from energy companies to 
chemical companies to farmers to hospitals, health insurance; good 
companies that deserve help--I am not saying they don't--and good tax 
provisions. But the one group that is left out--if you read the bill 
from the beginning to the end, read it upside down, backward, in any 
language, you will not find one group of people in the bill. I hate to 
say who that group is because the people in America do not believe we 
could do this. We left out our troops. We left out the men and women on 
the front line.
  This is my problem. They are so far away in Iraq on the front line 
that we cannot see them or we will not see them or we do not want to 
hear them, maybe, because they are on the front line and they do not 
have time to be at the Capitol lobbying for themselves, and so we just 
left them out.
  When the House Members or Senate Members come to the Senate and say 
they cannot understand why we are not rushing through on this bill and 
why some Senators are holding it up, I will tell them why. This Senator 
thinks it is a shame, unconscionable, to work for 2 years and put a 
$137 billion bill together that helps everyone--and you could argue for 
good, for bad--yet leave our troops out.
  Some of us, including the Presiding Officer, Republicans and 
Democrats--had put in the bill when it was in the Senate a very small 
but important provision that only cost $2 billion of the $137 billion--
just $2 billion for our troops. Our troops are taking 100 percent of 
the risk. Our troops are bearing 100 percent of the sacrifice. We only 
asked for less than 2 percent, and we got nothing.
  So this Senator is going to stay on this floor for as many hours as I 
can to tell the truth about this, and perhaps these words will reach to 
somewhere or people will be inspired or encouraged to take the 
political actions necessary to make sure these troops do not get left 
out next time or before we finish.
  Let me read you some of the e-mails I am getting because we put this 
up on our Web page, and I have been doing interviews since I found out 
about this Wednesday night, as many as I can. I am going to continue to 
speak and debate and talk to anybody who wants to interview me about 
it.
  I know some of these e-mails get a little political, but I think it 
is OK for me to read them here. But these are e-mails. I am happy to 
have them in the Record. I am not going to read all the political ones. 
I am trying to pick a mix of them. But I would like to start with this 
one to show the potential of this issue:

       As a Texas Republican voter, you inspired me, and now I 
     will take a harder look at Democrats running for any office 
     because I'm a retired military service member. I have pretty 
     much believed the services were better represented by 
     Republicans, and I voted that way. You showed me that my 
     basic ideas may have been flawed, and I will now look 
     wholeheartedly into that. Thank you for such a beautiful 
     speech demanding that the military be represented in that 
     bill. You really moved me and may have switched my party 
     affiliation with that direct and memorable speech.

  Mr. President, my office is being flooded with e-mails like this, but 
let me read you another one from a Democrat:

       Dear Mary, I'm writing to tell you about how proud I am of 
     work you did on the floor today. As I write, you continue to 
     articulate a logical and, for most of us, a compelling 
     argument as to why the National Guard and Reserve should be 
     treated as first class citizens rather than second class 
     citizens in the tax bill pending before the Senate. Well 
     done. Can I convince you to move to North Carolina?

  This is not about me. I am reading these not because I want people to 
know or because I want to brag about this issue. I want the Members of 
this body, and particularly the House leadership, the House Republican 
leadership, that took this out of the bill, I want them to know, 
Chairman Thomas, Speaker Hastert, and Congressman DeLay, how strongly 
Americans of all parties feel about what was done to our men and women 
in the armed services.
  Let me be just very clear. The Republican leadership in this body 
supported this effort. I want to be very out front about that. The 
Republican leadership in this body, along with the Democratic 
leadership, supported this provision. And it went over to the House. 
Only in conference, at the direction of the Republican chairman, 
Chairman Thomas, was it taken out.
  Now let me say this: I am so tired of seeing our troops in the 
pictures, in the photographs, riding with us in parades, waving the 
flag, taking the pictures, but when it comes time to put them in the 
budget, to give them relief, to put them in the tax credits, they are 
nowhere to be found--only in political propaganda and pictures. And 
this Senator and my constituents have had enough.
  I want to talk about why this is important. This picture is up here 
because I want to demonstrate that one thing in the bill--and I am not 
trying to pick on the ceiling fan importers. I am sure it is a very 
legitimate request. But we have a tax provision to give help to those 
companies that import fans from China. Meanwhile, our troops do not get 
in the bill.
  Now, if anybody needed a fan, our troops need one because it is hot 
in Iraq. It is about 105 degrees. If there were any way for me to get 
some of these fans to them, I would put an amendment on the bill. But 
the fans are in. The troops are out.
  Now, another reason this is important is because the Members who are 
on the Armed Services Committee and many Senators who have served in 
the military understand this. I served on the Armed Services Committee 
for a while. I was very proud to do it. And I plan, hopefully, one day 
to be on the Defense Subcommittee on Appropriations so I can continue 
to fight for them and to articulate some of these views.

  But I am not sure the country understands how much we are relying on 
our Reserve forces. We have a total of about 1.6 million Active troops 
and we have 1.2 million Reserve troops. So it is about 60/40.
  Now, in 1953, not that long ago, during the Berlin crisis, we only 
called up 148,000 Reserve troops. In the Cuban

[[Page S10964]]

missile crisis, we called up approximately 14,000 Reserve troops. To 
fight in the Vietnam war, we only called up 37,000 Reserve troops. This 
comes to a total of 200,000. So for almost 35 years, we only called up 
200,000 Reserve troops. So our Reserve was operating in a place where 
the men and women could sign up, go do their weekend work, get a pretty 
decent paycheck for that, get training, and serve their country.
  These Guard and Reserve, some of them are retired Active military, 
but many of them are policemen and firemen and women who want to serve 
and are happy to be that citizen soldier, that part-time soldier. Their 
goals have not changed, but our country's needs have changed. We made 
the decision in the 1990s to say, to save taxpayer money, to make our 
forces better and stronger, we are going to rely more on our Reserve 
and less on our Active Duty, and we cut our Active strength, therefore 
relying more on our Guard and Reserve.
  The only problem with that is we keep forgetting them. We send them 
to the front line, we deploy them year after year, and then we forget 
about them. We are not sending them the pay they need, the benefits 
they need, the equipment they need. I am wondering, what is going on?
  In the Persian Gulf war we had to call up 238,000 Reserve troops. In 
Haiti, we called up 3,000 Reserve troops; in Bosnia, 29,000; Operation 
Southern Watch, 2,000; Kosovo, 6,000; and the war in Iraq, 410,000 
Guard and Reserve--currently about 5,000 of them are from my State of 
Louisiana.
  Just 2 weeks ago, I went to Leesville, LA, the proud home of Fort 
Polk, where many of our troops train. It is a joint training base. I 
was with my mayors and my Governor, and we saluted our troops. We 
prayed with our troops. We were with them. We sent them off. The 256th 
Infantry Brigade is getting deployed. This is affecting thousands of 
families around Louisiana. This is not just happening in Louisiana. 
This is happening in the State of the Senator from Ohio, in Chairman 
Grassley's State of Iowa, in Texas and California. Thousands of 
families are being separated, husbands from wives, wives from husbands, 
fathers from children, to go fight on the front line.
  So you can see the increase and the frequently that we have called 
them up, so you would think that if we are calling them up more, we 
would help them more. But we help them less. You would think that if we 
have a tax bill going through, this is the group of people who should 
be on the front page. But they are not on any page. They are not on the 
front page. They are not in the middle. They are not on the last page. 
They did not even write a note to say: Sorry we couldn't help you this 
time. Maybe we can help you next time. Not even a PS.
  I have been proud to support tax relief since I have been here for 8 
years. I haven't supported all the tax relief packages, but I believe 
people deserve tax relief. I wish we could live in a world with no 
taxes. As soon as we figure out how to do that, that would make 
everybody happy. I am not sure how to do it, but I am sure somebody 
will think of an idea someday because we sure eliminate taxes right and 
left for everybody.
  We have been spending the last 4 years providing tax relief, $2.1 
trillion. This is direct tax relief, either special benefits, including 
military families and the earned-income tax credit, ideas like their 
combat pay or their severance pay would not be taxed. Tax benefits to 
our military basically amounted to $1.37 billion. Everybody else gets 
$2.1 trillion. But the guys and gals on the front line get $1.37 
billion.
  Someone will say: Surely, Senator, some of the $2.1 trillion will go 
to the military families. And, yes, that will happen. Middle-class 
families generally are in here, and our troops are also middle-class 
families. The Republican side will disagree with this, but what the 
Democratic side says is, since so much of this tax relief is targeted 
to families earning over $100- or $200,000, I would argue that very 
little of this money is going to get to military families. Why? Because 
most of these families only make $50,000. The average is $30,000 in the 
active lower ranks. Very few people in the military make over $150,000. 
So who are we helping? Not the guys fighting the war. Not the guys 
taking the bullets.
  The reason I am particularly offended on behalf of the soldiers is 
that we can afford to help them. If we didn't have the money, if we 
just couldn't afford it, then I would go to them and say: Look, you all 
know more about sacrifice than anybody. It is in the code of the 
military. Sacrifice, it is what they do; it is what they are. So 
everybody has to sacrifice. But the fact is, not everybody is 
sacrificing because everybody else is not sacrificing anything. They 
are getting extra. And only the military is being asked to sacrifice, 
not just their life but their paychecks.
  I guess what really is upsetting, as I learn more about this and as I 
read the materials that are sent out by our own Government, this is the 
``family readiness paradigm.'' It is www.defenselink.military, I think 
from the Pentagon. Secretary Rumsfeld is quoted and President George 
Bush on this chart. I want to quote what the President said:

       The National Guard and Reserve are a vital part of 
     America's national defense. [They] display values that are 
     central to our nation: character, courage, and sacrifice, 
     [and demonstrate] the highest form of citizenship. And while 
     you may not be full-time soldiers, you are full-time 
     patriots.

  That is lovely. It is wonderful. Except these words are not backed up 
with actions because actions would have put the patriots in the bill 
and said: You deserve a portion of this tax cut because the Guard and 
Reserve that go to the front lines are taking a 41 percent pay cut, 
according to the Government Accountability Office study.
  And why is that? Because the Guard and Reserve are citizen soldiers. 
They work in regular life as truck drivers and architects and doctors 
and nurses. They might make $60-, $70-, $100-, $150,000. But when they 
are activated and they go to the front line, they leave their civilian 
paycheck at home and they pick up their Army, Navy, or Marine paycheck. 
And it is only $30,000 or $35,000 or $40,000. Some of these families 
are taking a 50-percent pay cut.
  So while they are on the front lines taking the bullets, their 
families are back home. I have a letter from one of the families in 
Louisiana that said: Thank you, Senator, for fighting for us. We live 
on a very modest and meager income. I have been pouring water in my 
children's cereal to make ends meet because the grocery bill is getting 
pretty high.
  I have to go home and tell that lady in Hammond that we couldn't find 
$1 in the bill to help her with her grocery bill. This is particularly 
upsetting to me.

  The chart says ``Self-reliant families,'' I like that word ``self-
reliant.'' I think it is important for us to be self-reliant, to be 
strong, to not be overly dependent. I believe in self-sufficiency and 
economic independence and pulling yourself up by your bootstraps. But 
why is it that we have to put a chart up for our Guard and Reserve 
asking them to be self-reliant, when this bill doesn't represent self-
reliance? This bill represents companies and individuals who came to 
the Government to ask for help and aid, not self-reliance.
  But in the charts that we send out to these families as they wave 
their loved ones goodbye, we tell them: Forget about being in the bill. 
Here is your brochure that talks about self-reliance. And if you need 
help, call the outreach family readiness coordinator. Maybe we can help 
you organize your finances because we know your situation is tough.
  That is wonderful, except what they really would need from us is a 
whole paycheck. I am not asking for a bonus for them. I am not asking 
for any special tax break. Just make their paycheck whole. Just keep 
their paycheck whole. The way we did that in the Senate FSC-ETI bill 
was by giving the employers in this country, the patriotic employers 
who are basically subsidizing their salaries by saying: Harry is 
leaving us tomorrow. We can't let his family have to live on $30,000 
less.
  So here is a small business. I can just see them now getting together 
in the coffee room: Harry has to go. Can we make it? Can we help him? 
Can we keep his pay going because he is going to be gone for a year?
  That small business digs deep. Harry goes to the front line. They 
keep sending him a check--even though he is not at work for them, he is 
at work for us--

[[Page S10965]]

and keeping that paycheck whole for that family.
  And all of us in the Senate thought that was the right thing to do. 
These are patriotic businesses. Let's give them a tax credit, at least 
half, so those small businesses that are doing this could be rewarded. 
They could be recognized, voluntarily. They don't have to pay their 
active duty Guard and Reserve employees. But if they are doing it, they 
should get a 50-percent tax credit.
  So, in essence, our amendment was creating a partnership between all 
the small businesses in America, patriotic businesses and large 
corporations that are keeping the front line going.
  But Chairman Thomas decided in his committee that this bill and the 
things in it represented a higher priority than keeping the paychecks 
whole for the men and women taking the bullets for us on the front 
line. I am still waiting to hear from Chairman Thomas about why he 
thought that or what it is that I have missed. I haven't heard a thing.
  I would like to read the letter I sent to the President. I put it in 
the Record yesterday. I will read the letter I sent to the President 
because I want to say again, as I said yesterday, I don't think the 
President of the United States knows about this. I think if he did, he 
wouldn't have let it happen. I want to read my letter again. I hope to 
get a response. I just sent it to him yesterday about 24 hours ago.

       Mr. President:
       I am writing to bring a grave injustice to your personal 
     attention. During the Senate consideration of the FSC/ETI 
     legislation, the Members of the Senate added a modest 
     provision to assist our troops. GAO studies have concluded 
     that 41 percent of our Guardsmen and Reservists called to 
     serve their country on the front line must take a pay cut to 
     do so. Fortunately, some companies around the country have 
     stepped up to the plate and taken the patriotic step to make 
     up the pay-gap of these brave men and women. The provisions 
     that we added in the Senate would have provided a tax credit 
     of up to 50 percent to cover the cost of these companies who 
     make up the difference. In doing so, we hoped both to 
     acknowledge the patriotism of the existing companies and at 
     the same time encourage more employers to take this step.
       Mr. President, no doubt that you have traveled the country 
     and you have confronted the same stories I have from some of 
     the military families struggling to make ends meet. We have 
     had to ask an awful lot of our Guard and Reserve. They ask so 
     little from us. So trying to take this worry off the minds of 
     our men and women on the front lines seems to me to be the 
     least that we could do. So it is with deep embarrassment for 
     our Government that I must report that this very modest 
     release for our troops was stripped from the conference 
     report by Congressman Thomas and the leadership of the U.S. 
     House.
       While I am certain that representatives of your 
     administration participated in this conference, I presume 
     that you did not have personal knowledge of this decision to 
     cut support for our military families. Regrettably, this 
     decision has placed all of us in a very difficult position. 
     While I endorse many aspects of this bill, I simply cannot 
     support a measure that places so many lesser priorities ahead 
     of our most important priority.

  It goes on to say that I respectfully request that the President 
exert his significant influence to correct this at the earliest 
possible time. It could be by vetoing this bill and sending it back and 
telling us in a veto order to fix it, which has been done before and 
could be done. That is unlikely. It is very difficult to do, but I 
think these are difficult times. Or the President and the House 
leadership could admit they made a mistake and promise, in writing or 
in other ways, to include it in the next bill through here. This letter 
was signed by myself and Senator James Jeffords from Vermont.
  Many other Senators signed a letter to the conference. For the 
record, I want to make sure that people understand that Senators 
Murray, Johnson, Cantwell, Corzine, Boxer, Kerry, Durbin, Dodd, Pryor, 
Reid, Lincoln, Bond, Graham, Dayton, and many others signed onto a 
letter to the conference committee when this bill was being decided. It 
is addressed to Senators Grassley and Baucus, who are very supportive 
of this measure. It was also sent to Representative Bill Thomas and 
Representative Charles Rangel. I do know that Charles Rangel, the 
Democratic ranking member of the Ways and Means Committee, supported 
this. It was a decision made by the House Republican leadership, and it 
was a bad decision. It is a decision that needs to be changed at the 
earliest possible time.
  Mr. President, one other thing that is very disturbing to me and 
particularly hard or difficult to articulate is that I have met so many 
men and women in uniform. I have met so many men and women in uniform, 
and they trust us to represent them and to do our best by them. When 
they are on the front lines, they don't have time to have lobbyists 
here.
  They have many Members of this Senate who have put in additional 
benefits--I see the chairman of the Appropriations Committee here, who 
has worked very hard for our men and women in uniform--and we have put 
in time and time again help for them. So we have tried to respond in 
the Senate. But they trust us to look out for them.
  In this bill, when it left the Senate, this provision was in the 
bill. When it went to conference, it was taken out. Again, there are 
many other items that were not included. I understand that. I am not 
arguing that anything in this bill is not worth our attention, because 
some Member felt strongly about it or it would not have been in the 
bill. I am not arguing about what is in the bill. I am arguing about 
the one provision that I know about that was left out of the bill. It 
is not Senator Landrieu's provision; it is a provision for our Guard 
and Reserve, to keep their paychecks whole so they can save for their 
future, so they can send their children to college, so they can fight 
and keep their minds on the front line and not have to worry about the 
homefront. I am wondering why they were taken out.
  Again, I feel obligated and very motivated to try to spend some time 
in the last days, as we wind down the session, to speak about a grave 
injustice. That injustice is that we have 1.2 million Guard and Reserve 
in our country, representing about 40 percent of our total force. They 
are fighting on the front line in Iraq, in Afghanistan, in places all 
over the globe. You can see on this chart that these are percentages of 
our Guard and Reserve that have been activated. Thirty-six percent of 
my Guard and Reserve--I think I have close to 12,000 Guard and Reserve 
units in Louisiana--are on the front lines. If you look at Washington 
State on the chart, it is 46 percent. Over here in Florida, it is 47 
percent. You can see the States and the percentages of the Guard and 
Reserve.
  Every one of these percentages represents thousands and thousands of 
families who are being called up to go to the front line. What could be 
more central to our security than the troops going to the front line? 
Why would this Congress, led by the House Republican leadership, spend 
2 years putting together a tax relief bill and leave them out so that 
they have to take a pay cut while everybody else gets a bonus or they 
take a pay cut and everybody else gets extra financial help or 
everybody else gets their tax bill lowered, but they have to pay the 
same taxes, and they get not even a whole paycheck?
  The Senator from Iowa came down earlier to the floor of the Senate 
and made a couple of comments about this conference. I just have to 
respond, and I know he is not here, but it will be in the Record. He 
will be here tomorrow, and we can talk face to face about this. I have 
the utmost respect for the Senator from Iowa, the chairman of the 
Finance Committee. It has been very difficult for him to put this bill 
together, I know. The ranking member from Montana has been very helpful 
in putting this bill together.
  I do want to take issue with something the Senator from Iowa said. He 
said it has been a long road to what I hope will be a final passage of 
this legislation. American workers, especially those in the 
manufacturing sector, put in the work necessary to make the U.S. the 
most productive economy in the world. We Senators should employ the 
same work ethic. We have to match our constituents' work productivity. 
We cannot delay this matter any longer. We cannot leave the jobsite 
without finishing our work.
  I understand we want to get this bill finished, but I think spending 
some time talking about the soldiers on the front line, who were left 
out, is something that is important to do so we can either get this 
fixed before the end of the time for this bill to have to be considered 
or we can cause the focus to be such that it can be fixed in the next 
tax bill that passes this body.
  He goes on to say that in his opinion it was a very open conference. 
Now, that may be his opinion, but from what

[[Page S10966]]

we understand from Members who were there, basically the House 
Republican leadership laid down their mark, and out of a $137 billion 
bill there was only $182 million worth of amendments that were changed 
from the Republican leadership written bill. So of $137 billion, only 
$182 million--only seven items of this entire bill, which could be on 
one page--were added or changed from the House mark. So the House 
leadership wrote the bill and they left the troops out.
  In the conference, the seven items, it could have been any seven, but 
it was rural carriers, letter carriers, were added at a cost of $33 
million. The SUV loophole was closed. The National Health Service Corps 
loan repayment was put in that added $72 million to the cost; small 
issue bonds; electric cooperatives; marginal stripper wells; and 
whatever the blue ribbon task force on tax reform was, it is no longer 
existing because it was taken out.
  So out of $137 billion, there were seven items, for a total of $182 
million, that were changed.
  When the argument is made that it was a very open process and the 
Senate put in some things and the House put in some things and it was 
all open and everybody talked and everybody negotiated, it is not true. 
What is true is for 2 years in many meetings, in many hearings, in many 
speeches, over many hours, a bill was put together and time and time 
again in those meetings and on this floor and in the committee, letters 
were sent to the Republican House leadership, please do not forget the 
troops. But when the final print was done, when the bill was printed 
for distribution, they were left out.
  I have stated until this issue is addressed, I am going to vote 
against this bill. I have not had one person in Louisiana call me and 
say: Senator, how could you possibly vote against my tax relief that is 
in this bill? Because the people in Louisiana are very patriotic and 
they do not think anyone should stand in the front of the line, except 
the troops. Time and time again, the people of Louisiana show their 
respect in real and significant ways to our troops. So while there are 
tax credits in here for the oil and gas industry and for shipbuilders 
and for fishermen, and many things that are important to my State--and 
I want them to know I support those industries--I also know and can say 
with confidence there is not an industry or a business or a person in 
my State that thinks they should be ahead of the Guard and the National 
Reserve, not one.
  I promise that if anyone from Louisiana calls me to tell me they do 
think they should be ahead, I will be happy to admit I was wrong.
  Our troops depend on us in many ways, and in the middle of a war when 
we are fighting one, as we are, with a lot of rancor and different 
views and different opinions, it is important when we can send our 
words of support that our actions match those words and that in every 
way we can tell our troops, because it has been a difficult time, we 
are in an election year, there are different opinions about the way 
this war is being prosecuted, but I would think at this time in 
particular we would want to send, by our action, not our words, real 
support for our troops.
  What could we send more than a paycheck? When we do not take the 
opportunity to put the paycheck in this tax bill--and maybe people will 
come and say, Senator, we put all of the help for the Army and the Navy 
and the Reserve in the Defense bill,--let me say what will happen when 
we leave them out of this tax bill: We end up having to argue in the 
Defense appropriations bill whether we want to spend money for their 
helmets, their rifles, their covered Humvees or do we want to spend the 
money for their paychecks. Why are we making them choose between a 
helmet and a paycheck?
  That is what happens when we just focus on the Defense appropriations 
bill and divvy up the money. It is not fair to them. It is not right. 
It is not what we should do. When we have a tax bill moving through 
that could provide obviously $2 billion of the $137 billion we are 
giving, we could have given them tax relief. If there was a health care 
bill coming through, which there has been, we could provide health care 
provisions out of the general health care bill for our troops. Then in 
the Defense bill, we do our best to allocate those moneys as fairly as 
we can.
  So that is why I am particularly upset, because I have been in those 
discussions on the Appropriations Committee and I know how tough it is. 
Do we give a 10-percent pay increase or do we invest in operations and 
maintenance on the bases? There is never enough money to go around. For 
what our troops are doing for us and the times our country is in and 
the challenges we face, we should not make them have to make those 
choices when we obviously have other options.
  Let me read a couple of other e-mails I have received from people who 
feel strongly about this, because I think it is important.

  I am a retired Army Reservist who was activated and deployed to the 
Gulf during Desert Shield/Storm. Because the company where I had worked 
for 16 years at the time was going through financial difficulties the 
best they could do was to continue with my family health plan, and I 
really appreciated that especially in their predicament.
  Now, think about this. This is a guy going to the front line and he 
is especially appreciative that his company has decided, out of their 
patriotism and generosity, to keep his family receiving health care. 
They are not making his paycheck whole and he is not even angry about 
it. That is how men and women in uniform are. They do not even want to 
ask for help because they believe in self-reliance. They believe in 
sacrifice. But they also believe in fairness and honesty. It is not 
fair to leave them out of the bill. They deserve more. They deserve our 
truthfulness, our honesty, our hard work and our fairness, and we let 
them down.
  He goes on to write:

       Other reservists serving with me but who came from stronger 
     financial private or public work settings enjoyed all prior 
     pay and perks; most soldiers found themselves somewhere in 
     between those two positions.

  So he is saying he went over there with very little. Some went over 
there with the ability of their employers to keep their pay whole, but 
most people fell in the middle, he says.

       Your proposal about the Administration and Congress backing 
     up the rhetoric with real money would benefit employers, 
     employees and in the long run the services in their retention 
     efforts.

  I want to talk about retention.
  I don't know how many times the generals have to come before us to 
speak about retention. I don't know how many times some of us on the 
Armed Services Committee have to come to this Chamber to say we are 
having a tough time recruiting for our armed services, not because we 
don't have brave men and women, not because they don't want to serve, 
but when the compensation and the pay packages get so out of line with 
what people can make in the civilian world, it puts a lot of pressure 
on them. Believe me, I have talked with these soldiers. With tears in 
their eyes, sometimes, they tell me: Senator if it were up to me I 
would go and you wouldn't have to pay me a thing. This isn't about me. 
But I can't bear having to watch my wife take a second job or not be 
able to be home with our two children because I'm away. Please tell 
them I am not asking for myself, I am asking for my spouse. I am asking 
for my children.
  I want to speak for them. Could we not just keep their paycheck 
whole? A report last month let us know--I will supply it for the 
Record--that the Guard and Reserve, for maybe the first time in a long 
time, I don't know exactly the number of years, but for the first time 
in many years, fell short of its goal. It fell short by 5,000 in its 
recruitment.
  You might understand why. It is not because Americans are not 
patriotic. It is because of this issue. It is about pay. It is about 
benefits. It is about whether our Government cares enough for the 
soldier to take care of their family when they are away. The soldiers 
would fight for nothing. They don't eat very well over there, and they 
don't care about it. But they do care about their families and their 
children back home. We should care as much as they do. We can help by 
keeping that paycheck whole, sending it home for our soldiers on the 
front line. But we did not do that when we put this bill together.
  As I said, I am sorry to have to report to the President that is the 
case because I don't think he has any personal knowledge. Maybe he will 
have

[[Page S10967]]

gotten the letter in the last 24 hours. He has been very busy. I know 
it is a very busy time. But I know somewhere in the White House they 
are reading that letter, and I am looking forward to them letting me 
know what they think about it. Do they think it was a good idea? Do 
they think we could fix it shortly in a different bill? Do they think 
we could find $2 billion to keep those paychecks whole?
  Here's another e-mail--

       Let me start by saying that I do not reside in your State 
     but I still listened to you on C-SPAN and I loved it. Yes, 
     the very people who we depend on for our national security 
     cannot make ends meet. This is something many people do not 
     understand, because they have never been affiliated with the 
     military. Painful to note, billions of our tax dollars go to 
     help overseas, but not for our troops' loved ones. I, along 
     with the other girls, we get together for our weekly quilting 
     group. And we opened up other people's eyes about this 
     subject matter many months ago. I don't know that we can get 
     them to vote any differently, but it sure felt good to hear 
     you tell the truth.

  I am not reading this for my own benefit. I am saying that there are 
many people around the country--one of the girls, probably an older 
woman, I would imagine--who quilts with a group of friends. They, 
evidently, talk about this. They know about military families. They are 
probably part of a group somewhere in this community that collects cans 
of food and other helps for the families at home. There is a great 
support network in this country.
  Why can't the Government be part of the support group? I don't 
understand it. The Government has more money than everybody put 
together, and we can't find a half a billion? $250 million? We can't 
find a few thousand dollars in the tax bill? And we have Americans 
sitting around their kitchen tables collecting food for our troops on 
the front line?
  In one way it is a wonderful thought. In another way it is awful to 
think about. I am happy Americans are supporting the troops. Our 
Government should do the same, and not just in the photographs, and not 
just in the pictures but in the budget.
  I am going to have a lot more to say about this subject. Again, for 
people watching, as I wrap up and put us into a quorum call for the 
next little bit, I want to say again, the underlying bill is an 
important bill, and it needs to be passed. This Congress has worked on 
it for 2 years. There are many important provisions in this bill. But 
for the life of me I cannot understand how we have 150,000 troops in 
Iraq, why we left them out. About 40 percent of them are Reserve.
  When they go to that front line they don't take a whole paycheck with 
them. We could have helped make it whole, but we chose other 
priorities. I don't know a higher priority than supporting our troops. 
Again, not just in the pictures, not just in the photographs, not just 
in the parades but in the budget, in our actions not just our words.
  Mr. STEVENS. Mr. President, I have received this letter from Tom 
Ridge, who is the Secretary of the Department of Homeland Security.
  I ask unanimous consent that it be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                U.S. Department of


                                            Homeland Security,

                                  Washington, DC, October 9, 2004.
     Hon. Ted Stevens,
     Chairman, Committee on Appropriations,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: Earlier today the House of 
     Representatives overwhelmingly passed the FY 2005 Homeland 
     Security Appropriations Conference Report. I urge the Senate 
     to pass the final legislation expeditiously, so that DHS can 
     continue the important mission of securing the homeland.
       While the Continuing Resolution currently enacted allows 
     DHS to continue its operations in support of the existing 
     security of our Homeland, we urgently need the additional 
     spending authority and new initiatives contained in the 
     Conference Report on the Department's FY 2005 Appropriation. 
     During this increased period of risk, DHS must continue to 
     improve capabilities in several critical areas including 
     enhancing law enforcement, strengthening our borders, and 
     improving transportation security, I remain concerned about 
     operating under a lengthy Continuing Resolution. For example, 
     under the Continuing Resolution, DHS would not have the 
     funding to maintain the current on-board strength of the 
     Federal Air Marshals; development and deployment work on the 
     legislatively required 2005 deadlines for US Visit will be 
     slowed; the Border Patrol will be unable to continue the 
     critical work to upgrade and update the surveillance 
     technology used on our land borders; and additional Detention 
     and Removal programs and bed space will not be provided. 
     Additionally, necessary program enhancements such as the 
     Container Security Initiative, Radiation Portal Monitors, 
     targeting systems, and critically needed aviation security 
     technology are also on hold. Finally, FEMA's Disaster Relief 
     Fund is in need of supplemental funding as soon as possible.
       I appreciate the Senate's continued commitment and 
     diligence in passing these critical pieces of legislation. If 
     there is anything I or my staff can do to assist in 
     expediting this process, please contact me or Under Secretary 
     Janet Hale.
           Sincerely,
                                                        Tom Ridge,
     Secretary.

                          ____________________