[Congressional Record Volume 153, Number 66 (Tuesday, April 24, 2007)]
[Senate]
[Pages S4871-S4877]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AMERICA COMPETES ACT

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of S. 761, which the clerk will 
report.
  The bill clerk read as follows:

       A bill (S. 761) to invest in innovation and education to 
     improve the competitiveness of the United States in the 
     global economy.

  Pending:

       Bingaman amendment No. 908, to make certain improvements to 
     the bill.

  The ACTING PRESIDENT pro tempore. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I am waiting on the Democratic manager 
of the bill, Senator Bingaman, who should be here right away. Following 
that, we hope to go to the Senator from South Carolina, who has some 
amendments to offer, but it is not appropriate for me to do that until 
Senator Bingaman is here. That will take a moment. Then we will go 
forward, if that is all right with the Senator from South Carolina.
  We had a good discussion yesterday on the America COMPETES Act. To 
remind all Senators, this is the Reid-McConnell legislation, with 56 
cosponsors, which seeks to help our country keep our brainpower 
advantage so we can keep our jobs. It is the result of 2 years of work 
within this body through three committees principally but really five 
or six.
  We asked the National Academy of Sciences to tell us exactly what we 
need to do to keep our competitive advantage in the world in 
competition with China and India so our jobs don't go there, so we can 
keep this remarkable situation we have of producing 30 percent of all 
the money each year for 5 percent of the people, with at least half of 
that based on our technological advantage. The National Academy of 
Sciences gave us a list of recommendations in priority order. The 
Council on Competitiveness formed the basis of a Lieberman-Ensign bill, 
the President made his own recommendations, and all that now has been 
worked through into this legislation.
  I see Senator Bingaman. If I may, I would like to finish 3 or 4 
minutes of remarks and then go to Senator Bingaman. 

  Yesterday, Senator Inouye, Senator Stevens, Senator Domenici, all of 
whom have been leaders on this legislation, spoke on the floor. Senator 
Chambliss as well spoke on the floor. Senator Bingaman, of course, has 
been a leader from the very beginning, asking the questions that helped 
produce this result. So we have before us a leadership bill on a 
subject that is as important as any.
  Almost all Members of the Senate over the last 2 years have had 
plenty of opportunity to influence this bill, and most have in one way 
or the other. It has been a remarkable exercise. But there still is 
time today and tomorrow for us to consider more options.
  The President, last night by e-mail--someone in the White House--sent 
a Statement of Administration Policy to Capitol Hill which outlines the 
administration's views on the pending legislation.
  Mr. President, I ask unanimous consent to have printed in the Record 
the President's remarks on January 31, 2006, from his State of the 
Union Address in which he spoke about the importance of the 
competitiveness initiative.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. ALEXANDER. As a courtesy to the administration, I ask unanimous 
consent to have printed in the Record the administration's Statement of 
Administration Policy following my remarks.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 2.)
  Mr. ALEXANDER. Mr. President, I know how important the President 
believes this is. I have talked with him about it at least a half dozen 
times personally, usually in bipartisan sessions with a number of 
Senators, sometimes individually. I know the Vice President has been 
deeply involved.
  When there is some more time on the floor this afternoon, if we have 
a lull in the debate, I will go through the Statement of Administration 
Policy and talk about it a little bit. Basically, it is very helpful to 
us. It points out that there is not much difference between the amount 
of money the President proposes to spend over the next 4 years and the 
amount we would propose to authorize to spend in this bill. As one 
might expect, the President likes his new programs but doesn't like 
some other new programs, and there are some other suggestions that are 
well taken that we can talk about, perhaps accept amendments, at least 
discuss with the Democratic majority those amendments, and there will 
be some amendments that are offered on the Senate floor.
  I will reserve my comments on the President's Statement of 
Administration Policy. It is good to have it. We will make it part of 
the debate--and taking the President at his word--given the President's 
statement and the administration policy statement that ``The 
administration looks forward to working with Congress to address these 
various policy concerns as the legislative process moves forward.''
  I defer to Senator Bingaman, if I may. Senator DeMint is ready to 
offer amendments and speak about them whenever that is appropriate.

                               Exhibit 1

       State of the Union Address by the President, Jan. 31, 2006

       ``And to keep America competitive, one commitment is 
     necessary above all: We must continue to lead the world in 
     human talent and creativity. Our greatest advantage in the 
     world has always been our educated, hardworking, ambitious 
     people--and we're going to keep that edge. Tonight I announce 
     an American Competitiveness Initiative, to encourage 
     innovation throughout our economy, and to give our Nation's 
     children a firm grounding in math and science.
       First, I propose to double the federal commitment to the 
     most critical basic research programs in the physical 
     sciences over the next 10 years. This funding will support 
     the work of America's most creative minds as they explore 
     promising areas such as nanotechnology, supercomputing, and 
     alternative energy sources.
       Second, I propose to make permanent the research and 
     development tax credit--to encourage bolder private--sector 
     initiatives in technology. With more research in both the 
     public and private sectors, we will improve our quality of 
     life--and ensure that America will lead the world in 
     opportunity and innovation for decades to come.
       Third, we need to encourage children to take more math and 
     science, and to make sure those courses are rigorous enough 
     to compete with other nations. We've made a good start in the 
     early grades with the No Child Left Behind Act, which is 
     raising standards and lifting test scores across our country. 
     Tonight I propose to train 70,000 high school teachers to 
     lead advanced-placement courses in math and science, bring 
     30,000 math and science professionals to teach in classrooms, 
     and give early help to students who struggle with math, so 
     they have a better chance at good, high-wage jobs. If we 
     ensure that America's children succeed in life, they will 
     ensure that America succeeds in the world.
       Preparing our Nation to compete in the world is a goal that 
     all of us can share. I urge you to support the American 
     Competitiveness Initiative, and together we will show the 
     world what the American people can achieve.''
                                  ____


                               Exhibit 2

         Executive Office of the President, Office of Management 
           and Budget,
                                   Washington, DC, April 23, 2007.

                   Statement of Administration Policy


     S. 761 America Creating Opportunities to Meaningfully Promote 
          Excellence in Technology, Education, and Science Act

                (Sen. Reid (D) Nevada and 55 cosponsors)

       One of the more important domestic priorities of the 
     Administration over the last two

[[Page S4872]]

     years has been the American Competitiveness Initiative (ACI), 
     a comprehensive strategy to keep our Nation the most 
     innovative in the world by increasing investments in research 
     and development (R&D), strengthening education, and 
     encouraging entrepreneurship. Thus, the Administration shares 
     the goals of S. 761 to ensure the continued economic 
     competitiveness of the United States through research and 
     education and has been encouraged by the bipartisan support 
     for addressing this vital topic. However, the Administration 
     has serious concerns with S. 761 in its current form. The 
     Administration believes that the bill does not prioritize 
     basic research, authorizes excessive and inappropriate 
     spending, and creates unnecessary bureaucracy and education 
     programs. The Administration looks forward to working with 
     Congress to address these various policy concerns as the 
     legislative process moves forward.
       The research component of the ACI is a targeted effort to 
     focus increased funding on enhancing physical sciences and 
     engineering research at the three highest-leverage agencies--
     the National Science Foundation (NSF), the Department of 
     Energy's (DOE) Office of Science, and the Department of 
     Commerce's National Institute of Standards and Technology 
     (NIST). Unfortunately, the Senate bill creates at least 20 
     new programs across many agencies that, if enacted, would 
     divert resources from and undermine and delay the priority 
     basic research. The Senate bill would cost over $61 billion 
     over the next four years--about $9 billion more than the 
     President's ACI proposals. The bill conflicts with the 
     Administration's well regarded Research and Development 
     Investment Criteria by diverting funds from critical basic 
     research to commercially-oriented research and other efforts 
     that are less deserving of Federal support.
       The education components of the ACI are targeted toward 
     filling clear and specific gaps in the Federal funding 
     portfolio with programs that will improve the quality of math 
     and science education in the Nation's K-12 schools. The 
     Administration appreciates that the bill authorizes most of 
     the Department of Education programs the President called for 
     in the ACI. These include authorizations for: (1) The 
     Advanced Placement Program to increase the number of teachers 
     instructing and students enrolled in advanced placement or 
     international baccalaureate courses in mathematics, science, 
     or critical foreign languages; (2) the Math Now programs to 
     improve instruction in mathematics; and (3) part of the 
     President's National Security Language Initiative proposal to 
     strengthen the teaching and study of critical foreign 
     languages. However, the Administration is disappointed that 
     the bill does not authorize the President's Adjunct Teacher 
     Corps, to encourage math, science, and other professionals to 
     teach in our neediest middle and high schools.
       Also, the Administration is concerned that the bill expands 
     many existing science, technology, engineering, and 
     mathematics (STEM) education programs that have not been 
     proven effective and creates new STEM education programs that 
     overlap with existing Federal programs. In its soon-to-be-
     released report, the Academic Competitiveness Council has 
     identified 105 existing STEM education programs spending over 
     $3 billion annually, including 45 programs that support 
     training of STEM teachers, and found that very few of these 
     programs demonstrated evidence-based effectiveness. Given 
     this, the Administration believes it is premature to expand 
     or begin new STEM education programs that do not have a plan 
     in place for rigorous, independent evaluation or are 
     duplicative of existing Federal programs.
       In addition to the excessive authorization levels, lack of 
     focus on basic research, and unnecessary new bureaucracy, 
     created by S. 761, the specific provisions of serious concern 
     include the following:
       Advanced Research Projects Agency--Energy (ARPA-E). The 
     Administration supports the conceptual goal of ARPA-E ``to 
     overcome the long-term and high-risk technological barriers 
     in the development of energy technologies.'' However, the 
     Administration continues to strongly object to this provision 
     due to serious doubts about the applicability of the national 
     defense model to the energy sector and because a new 
     bureaucracy at the DOE would drain resources from priority 
     basic research efforts. The Administration believes that the 
     goal of developing novel advanced energy technologies should 
     be addressed by giving the Secretary of Energy the 
     flexibility to empower and reward programs within existing 
     DOE offices to fund unique, crosscutting, and high-risk 
     research.
       Innovation Acceleration Research. The Administration 
     strongly objects to requiring each Federal science agency to 
     set aside 8 percent of its research and development budget--a 
     new program of over $10 billion of the Federal R&D budget at 
     dozens of agencies--for projects that are ``too novel or span 
     too diverse a range of disciplines to fare well in the 
     traditional peer review process.'' Such a large earmark of 
     the agencies' ongoing research efforts would certainly have 
     negative, unintended consequences and could well impede the 
     ability of these agencies to carry out their missions.
       Equitable Distribution of New Funds. The Administration 
     strongly objects to a requirement specifying particular 
     funding increases for Education and Human Resources (EHR) 
     activities at NSF. This is especially inappropriate while the 
     Administration is responding to the findings and 
     recommendations of the Academic Competitiveness Council to 
     ensure that funding is targeted toward programs with plans to 
     demonstrate effectiveness.
       Experimental Program to Stimulate Competitive Technology. 
     The Administration believes that additional resources 
     provided to NIST should focus on existing internal 
     innovation-enabling research activities and strongly objects 
     to creating new programs that would drain resources from such 
     activities.
       Specialty Schools for Mathematics and Science. The 
     Administration strongly objects to creating a responsibility 
     for DOE to establish or expand K-12 schools.
       Discovery Science and Engineering Innovation Institutes. 
     The Administration strongly objects to using DOE funds to 
     support State and local economic development activities. In 
     addition to diverting funds from priority research areas, 
     such a focus on commercialization is not a priority of the 
     Federal government and could result in putting the government 
     in the position of competing with private investment and 
     influencing market decisions in potentially inefficient and 
     ineffective ways.
       Experiential-Based Learning Opportunities. The 
     Administration objects to creating new K-12 education 
     programs unless the need is clear and compelling, which is 
     not the case for this program. As illustrated by the Academic 
     Competitiveness Council's findings, the solution to improving 
     the Federal government's impact on STEM education must come 
     from identifying what works and improving the effectiveness 
     of existing efforts before starting new programs.
       Federal Information and Communications Technology Research. 
     The Administration objects to the creation of a new program 
     specifically aimed at ``enhancing or facilitating the 
     availability and affordability of advanced communications 
     services.'' Such an industry- and sector-directed program is 
     well beyond NSF's traditional role of advancing the frontiers 
     of knowledge in the academic disciplines.
       National Laboratories Centers of Excellence. The 
     Administration objects to the use of DOE funds to establish 
     Centers of Excellence at K-12 schools. The establishment of 
     school-based centers is not a proper role for DOE and would 
     divert national laboratory resources that currently benefit 
     their surrounding communities. The Administration believes 
     that the President's Adjunct Teacher Corps proposal is a more 
     promising approach to bringing subject experts into our 
     neediest schools.
       Experimental Program to Stimulate Competitive Research 
     (EPSCoR). The purpose of the EPSCoR program is to build 
     research capacity; it is not an education program. If EPSCoR 
     funds are diverted for the purpose of hiring faculty or 
     providing supplemental K-12 courses to precollege students, 
     there will be less money available for increasing the 
     research capacity in EPSCoR States.
       Robert Noyce Teacher Scholarship Program. NSF's Robert 
     Noyce scholarship program is too new to have been evaluated 
     for its impact on improving the efficacy or retention of 
     teachers who are program graduates. Therefore, it is 
     unreasonable to increase the authorizations of appropriations 
     at the pace and magnitude called for in this provision.
       NASA Funding for Basic Science and Research and Aeronautics 
     Research Institute. The Administration objects to the 
     redirection of unobligated balances from existing NASA 
     programs, because it would disrupt funding for ongoing 
     activities. The establishment of an Aeronautics Institute for 
     Research within NASA is objectionable because it would be 
     duplicative of the agency's existing Aeronautics Research 
     Mission Directorate.
       Constitutional Concerns. Several provisions of the bill 
     incorporate classifications and preferences based on race, 
     national origin, or gender that are subject to the rigorous 
     standards applicable to such provisions under the equal 
     protection component of the Due Process Clause of the Fifth 
     Amendment. (See sections 1405(d), 2003(a) and (d), 4005(b), 
     and 4009.) Unless the legislative record adequately 
     demonstrates that those standards are satisfied, those 
     provisions are objectionable on constitutional grounds.

  Mr. BINGAMAN. Mr. President, I thank my colleague and I thank the 
Senator from South Carolina for their courtesy.
  My understanding is that the Senator from South Carolina wishes to 
set aside the pending amendment and offer an amendment; is that 
correct?
  Mr. DeMINT. Mr. President, the Senator is correct. I wish to bring up 
three amendments and briefly speak on them, if I can.
  Mr. BINGAMAN. Mr. President, I will have to object to offering three 
amendments. I have no problem if he wants to set aside the pending 
amendment and bring one amendment up, whichever amendment he would 
like, and we will deal with them one at a time. I think that will be 
the appropriate procedure for us to follow.
  Mr. DeMINT. That is fine. I thank the Senator.
  The ACTING PRESIDENT pro tempore. The Senator from South Carolina.

[[Page S4873]]

                           Amendment No. 928

  Mr. DeMINT. Mr. President, I ask unanimous consent to set aside the 
pending amendment.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. DeMINT. I ask unanimous consent to bring up amendment No. 928.
  The ACTING PRESIDENT pro tempore. The clerk will report.
  The bill clerk read as follows:

       The Senator from South Carolina [Mr. DeMint], for himself, 
     Mr. Martinez, Mr. Cornyn, and Mr. Ensign, proposes an 
     amendment numbered 928.

  Mr. DeMINT. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The amendment is as follows:

  (Purpose: To amend the Sarbanes-Oxley Act of 2002, with respect to 
      smaller public company options regarding internal controls)

       At the appropriate place, insert the following:

     SEC. ___. SMALLER PUBLIC COMPANY OPTION REGARDING INTERNAL 
                   CONTROL PROVISION.

       Section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
     7262) is amended by adding at the end the following:
       ``(c) Smaller Public Company Option.--
       ``(1) Voluntary compliance.--A smaller issuer shall not be 
     subject to the requirements of subsection (a), unless the 
     smaller issuer voluntarily elects to comply with such 
     requirements, in accordance with regulations prescribed by 
     the Commission. Any smaller issuer that does not elect to 
     comply with subsection (a) shall state such election, 
     together with the reasons therefor, in its annual report to 
     the Commission under section 13(a) or 15(d) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)).
       ``(2) Definition of smaller issuer.--
       ``(A) In general.--For purposes of this subsection, and 
     subject to subparagraph (B), the term `smaller issuer' means 
     an issuer for which an annual report is required by section 
     13(a) or 15(d) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78m or 78o(d)), that--
       ``(i) has a total market capitalization at the beginning of 
     the relevant reporting period of less than $700,000,000;
       ``(ii) has total product and services revenue for that 
     reporting period of less than $125,000,000; or
       ``(iii) has, at the beginning of the relevant reporting 
     period, fewer than 1500 record beneficial holders.
       ``(B) Annual adjustments.--The amounts referred to in 
     clauses (i) and (ii) of subparagraph (A) shall be adjusted 
     annually to account for changes in the Consumer Price Index 
     for all urban consumers, United States city average, as 
     published by the Bureau of Labor Statistics.''.

  Mr. DeMINT. Mr. President, I thank the managers of this bill for 
giving me time to speak on this important issue. The issue of American 
competitiveness is very important to me, as I know it is to all 
Americans. It is the security of our jobs and our economic future. I am 
here today to propose some amendments. I will begin with one that I 
think will improve the bill.
  I wish to first discuss Sarbanes-Oxley and how it relates to 
competitiveness in America. The bill we are discussing, which is S. 
761, the America COMPETES Act, seeks to improve America's international 
competitiveness by strengthening the quality of our labor force. 
However, labor is only one component of economic growth. Capital 
investment is another critical component of any vibrant and growing 
economy. America's competitiveness is being challenged by other 
countries, not only on the labor front but with capital formation as 
well.
  We could say, as Senator Alexander mentioned, this bill focuses on 
brainpower. What we are trying to do is say brainpower plus capital 
equals success in America.
  In 2000, $9 out of every $10 in stock offerings from foreign 
companies were invested inside the United States. In 2005, that number 
completely flipped, and $9 of every $10 in stock offerings from foreign 
companies were invested outside the United States. Some might argue 
this is simply the result of foreign companies wishing to list closer 
to home, but I am afraid that is not the case. Cross-border listings 
are at an alltime high, and we are losing the competition for foreign 
capital.
  This chart demonstrates how the United States is doing compared to 
others when it comes to attracting foreign capital. We begin in 2002 
when Sarbanes-Oxley took effect. One can see this dark-blue line at the 
bottom is the U.S. exchanges, which have stayed basically flat, while 
markets in Hong Kong, London, and Singapore have continued to grow. 
There is no reason we should continue to lose ground to these other 
countries when it comes to investing.
  We need to remember as Americans that the dollars which are used for 
research and development come from investment capital. There is no need 
for us to be spending billions and billions of dollars to encourage 
Americans to be better at math and science if the research and 
development is moving to other countries.
  Some say these trends are simply the result of more sophisticated 
markets springing up abroad, but the evidence suggests otherwise. When 
one speaks with international CEOs making the decisions to list on 
foreign exchanges, they repeatedly cite Sarbanes-Oxley as the reasons 
they have listed abroad. That is why a report commissioned by Senator 
Schumer and Mayor Bloomberg cited section 404 of Sarbanes-Oxley as the 
reason international companies are no longer bringing their capital to 
the United States.
  Section 404 requires public companies to conduct an additional audit 
on their internal controls. These audits are most expensive for smaller 
companies. Numerous reports have found that section 404 produced a 
heavy cost upon small, publicly traded companies without a proportional 
benefit. As a result, the regulatory burdens of section 404 on small 
businesses and companies--well, companies are choosing to raise capital 
in other markets.

  A recent GAO study, requested by Senator Snowe, found the cost for 
small public companies to comply with Sarbanes-Oxley has been 
disproportionately higher than for large companies. Small businesses in 
the United States, afraid of complying with the complicated provisions 
of Sarbanes-Oxley, are choosing not to grow by listing publicly and 
are, instead, staying small and remaining private. This prevents 
capital formation, it stunts job growth, and it makes our country less 
competitive in the global economy.
  This is why Alan Greenspan recently said:

       One good thing; Sarbox requires a CEO to certify the 
     financial statement. That's new and that's helpful. Having 
     said that, the rest we could do without. Section 404 is a 
     nightmare.

  This is not a politically inspired amendment. This is an amendment 
that recognizes we are hurting ourselves and we need to fix it. This is 
why an SEC advisory committee recommended that small businesses be 
exempt from section 404, and this is why I am offering the amendment 
today.
  My amendment, No. 928, would make section 404 of Sarbanes-Oxley 
optional for smaller companies with market capitalization of less than 
$700 million, revenue of less than $125 million, or fewer than 1,500 
shareholders. Section 404 reporting would be optional for these smaller 
companies, but they would have to notify their shareholders in their 
annual report.
  The Senate's Committee on Small Business held a hearing on this topic 
this past week, and I applaud Senator Kerry for looking into this 
important issue. As my colleagues may know, both Republicans and 
Democrats have suggested the need for reform, which makes my amendment 
consistent with the bipartisan nature of this bill. My proposal has 
been introduced as a freestanding bill in this Congress as well as the 
last Congress. It has also been introduced as part of a bill in the 
House by Representative Gregory Meeks, Democrat from New York, and 
enjoys broad bipartisan support.
  Despite broad bipartisan support for my amendment, I expect some will 
object to it based on timing. They may believe the Securities and 
Exchange Commission is preparing to deal with this problem, so we 
should give them more time to work. This is something I believed 
several years ago. But that is not only a weak excuse, it is a complete 
copout. It has been 5 years since Sarbanes-Oxley was enacted, and each 
year that goes by we are chasing more capital out of our country.
  The SEC has a responsibility to address this issue, but so do we. We 
wrote the law. Congress created this problem, and we should not hide 
behind some regulation when we have the ability to fix it. Furthermore, 
it is not clear that future action by the SEC will solve the problem. 
According to the Independent Community Bankers of America, the proposed 
internal control guidance

[[Page S4874]]

under section 404 is unlikely to reduce audit costs, particularly for 
smaller public companies.
  Some may also object because this provision has not been fully 
examined in the committee of jurisdiction. This is a poor excuse as 
well. American competitiveness should not suffer because a committee in 
Congress has failed to do its job. A bill such as Senate Bill 761, 
which seeks to improve the competitiveness of our labor force but does 
nothing for capital formation, may result in a highly qualified labor 
force but without capital to spur economic growth and create the jobs 
they need to make.
  This is a competitiveness issue. It should be debated on this bill 
and we should all support it. There is no plan to consider this 
legislation later this year, and it is probably the last opportunity we 
will have to address it before the next election. My amendment is 
cosponsored by Senators Martinez, Cornyn, and Ensign, and I urge my 
colleagues to support it.
  Mr. President, I yield the floor.
  Mr. BINGAMAN. Mr. President, I appreciate the thought that has gone 
into the amendment, but, frankly, this is an amendment that is in the 
jurisdiction of the Banking Committee. Obviously, the Sarbanes-Oxley 
legislation came out of the Banking Committee and it is squarely within 
their jurisdiction. We are informed they have not had a chance to 
review the amendment, have not had a chance to have hearings on the 
amendment, and wish a chance to come to the floor and discuss it before 
there is any vote. There is some objection to going to any kind of vote 
on it at this point, so I am not prepared to discuss the merits of it. 
I do believe we need to provide an opportunity for those Senators on 
the Banking Committee who want to come and discuss the merits to come 
and engage in that debate.
  However, I mention to the Senator from South Carolina, I am informed 
he also has an amendment related to looking at the Tax Code for 
possible problems with barring innovation; is that correct?
  Mr. DeMINT. Yes, I do.
  Mr. BINGAMAN. Mr. President, we are not in a position to say yet--we 
are trying to talk to the Finance Committee, because, of course, they 
have jurisdiction over tax issues--but we are trying to determine if 
there is any objection to Senator DeMint's amendment relating to taxes.
  Perhaps the right thing to do, since the majority leader has tried--
not just on this bill but as a general matter--to avoid the 
circumstance where we are bringing up amendments, setting aside 
amendments; bringing up amendments, setting aside amendments, without 
ever having disposed of anything for a long period, perhaps the Senator 
could go ahead and describe this other amendment related to taxes. By 
the time he has completed that, we might know whether we are in a 
position to proceed to some kind of action on that.
  Mr. DeMINT. So the Senator would prefer my not bringing it up but 
only describing it?
  Mr. BINGAMAN. As I say, if it is another amendment that is going to 
require a debate and vote here, I think maybe we would want to go ahead 
and try to get the Banking Committee people here to deal with the 
Sarbanes-Oxley amendment before we get the Finance Committee people 
here to deal with the Tax Code amendment.
  Perhaps the Senator could put the Senate on notice as to what the 
amendment entails, and by the time he is through with that discussion, 
we may know enough to be able to tell him whether we could accept the 
amendment or whether there is going to be objection.
  Mr. DeMINT. Mr. President, I thank the Senator, and I think he will 
find this amendment has a lot of bipartisan support. It actually was a 
part of the original bill. It is amendment No. 929, and it expands the 
study on barriers to innovation, which is in section 1102 of the bill.
  What we do is ask that this study include the impact of the IRS Tax 
Code on innovation. It is very consistent with the bill. My amendment 
does not remove anything currently called for in the study, it simply 
adds the provision that allows this study to include the effect of our 
Tax Code on innovation in America.
  Specifically, the amendment calls on the Director of the Office of 
Science and Technology, through the National Academy of Sciences, to 
study all provisions of the Internal Revenue Code of 1986, including 
tax provisions, compliance costs, and reporting requirements that 
discourage innovation.
  The IRS code increasingly overwhelms Americans with its growing 
complexity. It stymies entrepreneurship and economic growth, and it 
threatens to prevent future generations of Americans from enjoying the 
sort of upward mobility their parents and grandparents enjoyed. This 
important provision was originally included in the study in last year's 
bill but it was dropped. My amendment puts it back in, and it will help 
us identify ways the IRS Tax Code is discouraging innovation and 
weakening American competitiveness.
  I ask the Senator if he would still prefer I not bring it up? In the 
interest of time, it may be helpful to have it on the table, and we 
could perhaps then agree to it at a later time. Would the Senator still 
prefer I wait to bring it up?
  Mr. BINGAMAN. Mr. President, I know the Senator from Tennessee has 
some comments on the amendment. Maybe we could continue with that 
discussion and debate for a few more minutes to see if we can get a 
little more of a response from people in the Finance Committee.
  Mr. DeMINT. I thank the Senator, and I yield the floor for the 
Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I want to thank the Senator from South 
Carolina for his amendments and for his initiative for being here and 
offering them. He is helping us jump-start the discussion, and I want 
him to know what we are doing is working on ways to get to action on 
his bills, not the reverse.
  In fact, as far as his suggestion about considering the impact of 
taxes as barriers to innovation, I think he is right about that. That 
was a part of the original legislation. It had 70 sponsors at one time, 
the PACE Act. It was the Domenici-Bingaman act at that time. It is also 
a part of the Augustine report. These were the recommendations of the 
National Academy of Sciences team, which included 21 individuals who 
spent the entire summer and early fall of 2005 looking at exactly what 
we needed to do, and they recommended tax incentives for U.S.-based 
innovation.
  This was a practical group, this Augustine committee. They made 20 
recommendations. They knew there were a number of things that, if they 
recommended them, we wouldn't pass because we would have differences of 
opinion about them. So they stayed away from some areas. For example, 
since kindergarten through the 12th grade was their No. 1 priority in 
terms of improving education and encouraging innovation there, they 
might have felt giving low-income families scholarships or vouchers to 
go to private schools would be a good thing to do. But they didn't put 
that in their top 20 because they knew it was unlikely we would be able 
to agree on that here.
  I think the same is true here with taxes. They specifically said on 
page 10 of the summary of their ``Rising Above the Gathering Storm'' 
that while they recommended making permanent the research and 
development tax credit as one change in tax policy, they realized that 
wasn't enough to consider it. They mention other alternatives that 
should be examined to see if it would be beneficial to the United 
States. These alternatives, the summary said:

       . . . could include changes in overall corporate tax rates 
     and special tax provisions providing research of high-
     technology and manufacturing equipment, treatment of capital 
     gains, and incentives for long-term investment innovation. 
     The Council of Economic Advisers and the Congressional Budget 
     Office should conduct a comprehensive analysis to examine how 
     the United States compares with other nations as a location 
     for innovation and related activities with a view to ensuring 
     the United States is one of the most attractive places in the 
     world for long-term innovation related investment and the 
     jobs relating from that investment from a tax standpoint.

  That is not now the case, is what the Augustine report said. So I 
believe the Senator from South Carolina is making a real contribution 
to the debate here. His amendment which he proposes to bring up would 
improve the bill, in my

[[Page S4875]]

opinion. It was once a part of the legislation that was similar, and I 
am hopeful the Finance Committee will recognize this simply amends a 
study that is already in the bill so tax barriers can be included as 
part of that study.
  Mr. President, I look forward to the response by the Democratic 
manager as to how we shall proceed.
  Mr. BINGAMAN. Mr. President, I am informed we do not have a clear 
response from the Finance Committee. I agree with the substance of what 
the Senator from Tennessee said. I don't see this causes any difficulty 
in the overall thrust of the legislation, so I would be inclined to 
urge the Senator from South Carolina to go ahead and ask permission to 
set aside the pending amendment, bring this up, and then conclude any 
debate he wants to on this amendment related to the study, and then we 
can dispose of it--by voice vote, as far as I am concerned, unless the 
Senator wants a recorded vote.
  The ACTING PRESIDENT pro tempore. The Senator from South Carolina.


                           Amendment No. 929

  Mr. DeMINT. Mr. President, I ask unanimous consent to call up 
amendment No. 929.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from South Carolina [Mr. DeMint] proposes an 
     amendment numbered 929.

  Mr. DeMINT. I ask unanimous consent the reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To require the study on barriers to innovation to include an 
   examination of the impact of the Internal Revenue Code of 1986 on 
                              innovation)

       On page 8, strike lines 7 through 9, and insert the 
     following:
       (10) all provisions of the Internal Revenue Code of 1986, 
     including tax provisions, compliance costs, and reporting 
     requirements, that discourage innovation;
       (11) the extent to which Federal funding promotes or 
     hinders innovation; and
       (12) the extent to which individuals are being

  Mr. DeMINT. Mr. President, I have explained what this amendment does. 
It is very simple. In addition to a study, if we are commissioning a 
study and paying for it, to find out what obstacles we have to 
innovation, the Tax Code is certainly something that is cited often by 
folks who invest and do the research and development, who are actually 
associated with innovation in the marketplace, so it makes sense that 
we include any obstacles in the Tax Code or any opportunities we may 
have, as the Senator from Tennessee suggested, to create incentives for 
investment and innovation.
  There is a relationship between this amendment and the first one I 
brought up. I think we all know that investment, incentives for 
investment, are the catalyst for the research and development that 
results in innovation in the marketplace. As a nation, if we do not do 
more to attract capital, if we do not do more to encourage investment 
in our country, then those investments are not going to be here.
  For many years we have been concerned that because of certain trade 
policies and other things we do internally, we have lost low-wage jobs. 
But increasingly we are hearing that because the investment dollars are 
moving overseas, behind those investment dollars go the high-tech jobs 
that are involved with research and development.
  Both of these amendments are important. I would particularly like 
votes on this because it was stripped out once. I am concerned that if 
we do not have a vote and give the Members an opportunity to show 
support, particularly for this tax study, it will disappear again in 
conference.
  My hope is we can have a vote and the yeas and nays on these 
amendments.
  I yield the floor.
  Mr. BINGAMAN. Mr. President, we need to determine when we would want 
to go ahead since, as I understand the Senator, he wishes a rollcall 
vote. We want to have a chance to check with our floor managers, the 
assistant majority leader, and determine when this is appropriate, so I 
suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Casey). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DeMINT. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 930

  Mr. DeMINT. Mr. President, in the interest of time--I know we are 
discussing two other amendments and the bill managers have asked me not 
to bring up a third. I will not bring it up at this time but I wish to 
speak on it, if that would expedite procedures here on the floor.
  My third amendment, which is amendment No. 930, which we will bring 
up at a later time, establishes a 60-vote point of order against 
appropriations bills that contain congressional earmarks for funds 
authorized in this bill, S. 761, the America COMPETES Act.
  The goal of this amendment is to ensure that funds authorized in the 
bill are allocated according to a competitive or merit-based process. 
As my colleagues know, congressional earmarks circumvent the normal 
competitive or merit-based process and award funds based on politics. 
My amendment is consistent with the stated intent of the bill, which 
says on page 183 that nothing in divisions A or D shall be interpreted 
to require the National Science Foundation to ``alter or modify its 
merit-review system or peer-review process'' or ``exclude the awarding 
of any proposal by means of the merit-review or peer-review process.''
  My goal here is to make sure this new fund does not become a new pot 
for earmarks, that we start directing this new money back to our States 
or congressional districts because we put new funds on the table. If 
these and other funds authorized in the bill are going to be allocated 
in the most efficient and most competitive way, the Senate must take 
steps to discourage the use of earmarks when appropriating funds for 
these programs. My amendment will not only preserve the integrity of 
the competitiveness allocation process but it will make America more 
competitive by making these programs more effective.
  In a bill that is about competition, this amendment makes sure the 
money is allocated on a merit-based competitive system instead of 
turning it into a new slush fund for Congress.
  Out of respect for the managers, I will not bring that amendment up 
at this point but I hope to do that at a later time.
  I yield the floor.
  Mr. BINGAMAN. Mr. President, let me briefly speak to the amendment of 
the Senator from South Carolina related to earmarks. I obviously would 
have to object to it. I think he will find probably any and all 
Senators involved with appropriations would have to object to it. The 
way I read it, it says it is not in order to consider any bill that 
proposes a congressional earmark on appropriated funds unless you have 
60 votes. The definition of a congressional earmark is contained in the 
legislation, but any appropriations bill that comes to the floor 
virtually by definition is going to contain something that falls into 
this definition of congressional earmark. It is one thing to be 
concerned about the addition of earmarks once the Appropriations 
Committee has presented legislation to the Congress or to the full 
Senate. But to say we cannot bring up a bill, an appropriations bill, 
if it has anything in it that might meet this definition is 
substantially more onerous than I would think would be good policy.
  Mr. DeMINT. Will the Senator yield?
  Mr. BINGAMAN. I am glad to yield.
  Mr. DeMINT. For a clarification. The way this amendment is written, 
it is not all appropriations bills, just appropriations bills that are 
appropriating money for this act, the America COMPETES Act. We are not 
bringing in all the appropriations bills that will be brought to the 
floor.
  The point is, we are creating this new fund for competition. Instead 
of us in the future redirecting these funds in all directions, the bill 
has been very careful to lay out where this money will go in a way that 
we think is most efficient. This money will be allocated on a merit-
based system. We have seen some of it before, how the National Science 
Foundation and others are merit based. We want to keep it that

[[Page S4876]]

way. What we are trying to do is avoid, in the future, that this new 
money we have authorized starts being redirected. If something comes up 
that is important, that we agree on, we can always overcome a 60-vote 
point of order. But if we allow this to fester, as we have seen in the 
past, instead of going to create competition in America, it will be 
going off to special projects. So it focuses on this bill and prevents 
politically driven earmarks.

  Certainly we have directed the money for this whole bill. It doesn't 
change that. This is all authorized. We are not talking about 
authorized dollars, we are talking about redirecting it based on 
political motives in the future.
  I thank the Senator for allowing that clarification.
  Mr. BINGAMAN. Mr. President, I thank the Senator for the 
clarification, but I do think the problem remains because this bill is 
far reaching because this bill covers quite a few Federal agencies and 
tries to lay out a blueprint for what we hope we will be able to 
provide by way of appropriations to these agencies in the future, 
whether it is the National Science Foundation, whether it is the Office 
of Science in the Department Energy, whether it is the Department of 
Education, Health and Human Services--there are various agencies that 
would obtain funding to carry out the purposes of this legislation if 
we are successful through the appropriations process.
  For us to be putting a provision in this authorizing bill saying you 
cannot bring an appropriations bill to the floor that contains anything 
we would define as a congressional earmark is unduly restricting the 
authority and the prerogatives of the Appropriations Committee in 
putting together legislation they think makes sense.
  I am well aware there are three sort of distinct hurdles that need to 
be surmounted in order for us to actually get funds to be spent on 
these good purposes that are outlined in this bill. One of those 
hurdles is the Budget Act. We need to be sure there is room in the 
Budget Act for the funding we are calling for in this legislation. We 
offered an amendment to do that. We got very good support here in the 
Senate. Senator Alexander and I offered that and I think that was a 
major step forward.
  The second hurdle, of course, is trying to authorize these programs 
so if the funds are appropriated for these purposes nobody can raise an 
objection that these are not authorized uses of the funds.
  Then the third and perhaps most difficult is, each year over the next 
several years, the period that is covered by the legislation--each year 
we are going to have to try to see that the funds are properly 
appropriated for these agencies to carry out the work as outlined in 
this bill.
  I think it would be foolhardy for us to be requiring that before you 
can bring a bill to the floor that contained funding related to this 
authorization bill, if it could be construed to fall under this 
definition of congressional earmark, you would have to have 60 votes to 
proceed to that appropriations bill. That would be an unprecedented 
procedure for us in the Senate and one that would be very wrongheaded. 
As I say, people involved in the appropriations process would probably 
see it that way as well.
  I yield the floor.
  Mr. DURBIN. Can I make a comment?
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. It is my understanding the Senator is not calling up the 
amendment but is only speaking to it for the Record.
  Mr. DeMINT. Could I make one additional comment?
  Again, I appreciate the Senator's remarks, and obviously we don't 
want to tie the hands of Congress unnecessarily, but when we are 
speaking of earmarks--and we defined it in this amendment ourselves. 
When we take this bill that was created for the purpose of improving 
competitiveness in America and we earmark, which means we target it to 
a specific State, locality, or congressional district other than 
through a statutory or administrative formula-driven or competitive 
award process--when we take what we have done and basically pervert it 
into a system where I want it to go to South Carolina, or the Senator 
wants it to go to Tennessee, that has nothing to do with the original 
intent of the bill, we call that an earmark. We would like to prevent 
that if we could with this one bill, but I appreciate the courtesy of 
both managers to allow us to explain. I hope we will have an 
opportunity to bring it up and offer it later.

  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I am honored to be a cosponsor of this 
legislation. All of us understand we have an obligation in Congress to 
devise policies and means by which the American economy can compete and 
create good-paying jobs. Whether one lives in Pennsylvania or Illinois 
or New Mexico or Tennessee, we have lost a lot of good manufacturing 
jobs over the last few years. We know there have been growth 
industries. We can look at the whole Silicon Valley phenomena. Whether 
it is information technology or computers, the United States has taken 
a leadership position. But in many areas, we are not in leadership 
positions.
  Senators Alexander and Bingaman came together over a year ago to sit 
down with some of the experts in Washington and talk about what we 
needed to do to make America more competitive, the next generation of 
good-paying jobs, the horizons we ought to look to to build for the 
future. They put together a strong bipartisan bill. If Members read the 
cosponsors, they will find plenty of support on both sides of the 
aisle. This may be one of the best examples of bipartisan cooperation 
we have had in the Senate so far this session. I hope we have more. I 
am honored to support it and be a cosponsor.
  I hope we can move beyond the many amendments that are going to be 
offered and consider this bill on a timely basis. It is the nature of 
the Senate that it is a deliberative body. Occasionally, when there is 
a lapse, we actually break into real debate on the Senate floor. People 
across the Nation applaud when they hear that happen. In this 
situation, I am not suggesting that we should not debate amendments to 
the bill. In fact, I will describe one in a moment. But I am prepared 
to pull my amendment back because I don't want to stop this bill. I 
want it to pass the Senate and the House. I want it enacted into law. I 
hope other Members who have a positive belief about this legislation 
will think twice about whether they need to gild the lily and add 
something to a positive and substantive bill.
  The issue I would like to speak to is one I believe in very strongly. 
I have an amendment, but I won't stop this bill to offer it. If it 
appears to have any objection or resistance, I will save it for another 
day. It is one that fits into this competitiveness issue.
  The United States graduates some of the world's best engineers, 
scientists, and mathematicians. However, countries such as China and 
India are catching up. They are educating a higher proportion of their 
students in these fields.
  We have heard the statistics from the National Academy of Sciences 
report ``Rising Above the Gathering Storm.'' In 2004, China graduated 
600,000 engineers. India graduated 350,000 engineers. The United States 
graduated 70,000. In 2004, only a third of the undergraduate degrees 
awarded in the United States were in science or engineering. In China, 
the number was 59 percent; in Japan, 66 percent in science and 
engineering.
  Our country can understand when our economic security and our future 
are at stake, and we have risen to the occasion. I remember back in the 
1950s when the Russians launched Sputnik. We didn't think they were 
capable of that. When they put the first satellite in space, it caused 
great fear across the United States. As a result, Congress did 
something it had never done before: It created Federal assistance to 
higher education. It created a loan program to encourage students to go 
to college. I know about that program because that is the way I went to 
college. It was called the National Defense Education Act. I borrowed 
enough money to get through college and law school, paid it back at a 
modest interest rate, and believe it was a good investment. I have had 
a pretty good life as a result of it and maybe have added something to 
this great country in the process. Thousands of others went through the 
same experience. Congress responded.

[[Page S4877]]

We knew we needed to invest in our country by first investing in 
education.
  The same thing is true with competitiveness. We can talk about a lot 
of actions that might achieve our goals, but education is the starting 
point. We have documented the technological challenges to our country 
from many different angles. The founder of Microsoft, Bill Gates; the 
chairman of Intel, Craig Barrett; a journalist, writer Tom Friedman; 
and the National Academy of Sciences have all told us this. All agree 
we need to strengthen students' proficiency in science, technology, 
engineering, math, and foreign languages. The America COMPETES Act 
invests in the R&D and education our country needs to make sure we 
remain the world's technological innovator.
  In our increasingly global economy, we need more youth to pursue 
math, science, engineering, technological, and critical foreign 
language degrees. Our young people also need an appropriate knowledge 
and understanding of the world beyond our borders. You have heard me 
speak many times on the floor about one of our Nation's greatest public 
servants, my predecessor, the late Senator Paul Simon. Paul understood 
that our country needed to invest in math and science. He also 
envisioned a United States populated by a generation of Americans with 
a greater knowledge of the world, a generation of our Nation's future 
leaders that has been abroad and has a personal connection to another 
part of the world.
  In the months before his untimely death, Senator Simon came to 
Washington. I met with him. We talked as well with his former 
colleagues about the need to strengthen our Nation's international 
understanding in the 21st century. Paul Simon knew that America's 
security, global competitiveness, and diplomatic effforts in working 
toward a peaceful society rest on our young people's global competence 
and ability to appreciate language and culture beyond the United 
States.
  I filed as an amendment to this bill an amendment which we have 
entitled the ``Senator Paul Simon Study Abroad Foundation Act.'' It is 
an initiative that honors Paul's commitment to international education 
and brings his vision one step closer to reality. The Simon Act 
encourages and supports the experience of studying abroad in developing 
countries, countries where people with a different culture, language, 
government, and religion will give a person a different life 
experience. It aims to have at least 1 million undergraduate students 
study abroad annually within 10 years and expands study-abroad 
opportunities for students currently underrepresented.
  The Simon Act establishes study abroad as a national priority and 
provides the catalyst for the education community to commit to making 
study abroad an institutional priority. An independent public-private 
entity, the Senator Paul Simon Foundation, would carry out the goal of 
making studying abroad in high-quality programs in diverse locations 
around the world routine rather than the exception. Students who were 
previously unable to study abroad due to financial constraints would be 
eligible for grants. The grants would also provide colleges and 
universities and other nongovernmental institutions financial 
incentives to develop programs that make it easier for college students 
to study abroad.

  We can't afford not to invest in thoughtful Federal initiatives that 
foster innovation. We must ensure that future leaders understand 
science and engineering and the world in which they live. The future of 
our country depends on having globally literate citizens. I believe the 
Paul Simon Study Abroad Foundation Act would help to achieve that goal.
  There is one other area that would be helpful when it comes to 
competitiveness. Most of us know today what a miracle computers have 
turned out to be. They really bring so much information to our 
fingertips which long ago was hard to find. I can recall as a college 
student walking across the street to the Library of Congress, sending 
in the little slips of paper and ordering a big stack of books and 
searching through them to find information which I can now Google in a 
matter of seconds. That is great. That information is helpful. But if 
one is going to be able to take advantage of that opportunity, one 
needs to have access to high-speed computers.
  There are many parts of America--Washington and Capitol Hill would be 
good examples--that have broadband access now. We take it for granted. 
I represent a diverse State, Illinois, which has the great city of 
Chicago as our largest city but also has a lot of small towns and rural 
areas, not unlike Tennessee or New Mexico. It is important for the 
development of education, health care, and business for us to expand 
broadband access in America to areas that are currently not served.
  I have introduced a bill, which is being considered before the Senate 
Commerce Committee, on broadband access. I would like to share a 
statistic which Members might consider. According to the OECD, the 
United States fell from 4th in the world in broadband access per capita 
in 2001 to 12th in 2006. As of 2006, the International 
Telecommunication Union listed the United States 16th worldwide in 
terms of broadband access. We are now behind South Korea, Belgium, 
Israel, and Switzerland, among other nations.
  In today's highly competitive international markets, our children, 
businesses, and communities are competing with their peers around the 
world for jobs, market share, business, and information. It concerns me 
that with the size and dynamism of our economy, we are falling behind 
in an area where we should have a natural advantage. As we committed 
ourselves to a National Defense Education Act to make sure we had 
trained people, educated people to compete against the Soviet Union in 
that era and now in the world, we also need to make sure the tools for 
competition are available.
  I will be offering this broadband access act not as an amendment to 
this bill but at a later date. I hope those representing States across 
the Nation who believe there are digital divides will join me in making 
sure this important tool is available to every American.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent that at 2:17 
p.m., the Senate proceed to vote on or in relation to amendment No. 
929; that at 2:15 p.m., there be 2 minutes of debate equally divided 
between Senators Baucus and DeMint or their designees and that no 
amendment be in order to the amendment prior to the vote; that upon the 
conclusion of the vote, Senator Kennedy be recognized to speak on the 
bill; that following Senator Kennedy, Senator Coburn be recognized as 
provided for under the previous order.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Mississippi.
  Mr. LOTT. Mr. President, let me inquire of the parliamentary 
situation. I believe, under the agreement, we will now go off this 
legislation, and we are ready to have some remarks with regard to the 
judicial nomination for the Southern District of Mississippi.
  The PRESIDING OFFICER. Under the previous order, that is to begin at 
noon.
  Mr. LOTT. So are we ready to proceed? I ask unanimous consent that I 
be allowed to begin my remarks in support of this nominee.

                          ____________________