[Congressional Record (Bound Edition), Volume 148 (2002), Part 12]
[Senate]
[Pages 15993-16004]
[From the U.S. Government Publishing Office, www.gpo.gov]




                HOMELAND SECURITY ACT OF 2002--Continued


                Amendment No. 4486 To Amendment No. 4471

  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Minnesota [Mr. Wellstone] proposes an 
     amendment numbered 4486.

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

     (Purpose: To prohibit the Secretary of Homeland Security from 
               contracting with any corporate expatriate)

       After section 171, insert the following:

     SEC. __. PROHIBITION ON CONTRACTS WITH CORPORATE EXPATRIATES.

       (a) In General.--The Secretary may not enter into any 
     contract with a foreign incorporated entity which is treated 
     as an inverted domestic corporation under subsection (b).
       (b) Inverted Domestic Corporation.--For purposes of this 
     section, a foreign incorporated entity shall be treated as an 
     inverted domestic corporation if, pursuant to a plan (or a 
     series of related transactions)--
       (1) the entity has completed the direct or indirect 
     acquisition of substantially all of the properties held 
     directly or indirectly by a domestic corporation or 
     substantially all of the properties constituting a trade or 
     business of a domestic partnership,
       (2) after the acquisition at least 50 percent of the stock 
     (by vote or value) of the entity is held--

[[Page 15994]]

       (A) in the case of an acquisition with respect to a 
     domestic corporation, by former shareholders of the domestic 
     corporation by reason of holding stock in the domestic 
     corporation, or
       (B) in the case of an acquisition with respect to a 
     domestic partnership, by former partners of the domestic 
     partnership by reason of holding a capital or profits 
     interest in the domestic partnership, and
       (3) the expanded affiliated group which after the 
     acquisition includes the entity does not have substantial 
     business activities in the foreign country in which or under 
     the law of which the entity is created or organized when 
     compared to the total business activities of such expanded 
     affiliated group.
       (c) Definitions and Special Rules.--For purposes of this 
     section--
       (1) Rules for application of subsection (b).--In applying 
     subsection (b) for purposes of subsection (a), the following 
     rules shall apply:
       (A) Certain stock disregarded.--There shall not be taken 
     into account in determining ownership for purposes of 
     subsection (b)(2)--
       (i) stock held by members of the expanded affiliated group 
     which includes the foreign incorporated entity, or
       (ii) stock of such entity which is sold in a public 
     offering related to the acquisition described in subsection 
     (b)(1).
       (B) Plan deemed in certain cases.--If a foreign 
     incorporated entity acquires directly or indirectly 
     substantially all of the properties of a domestic corporation 
     or partnership during the 4-year period beginning on the date 
     which is 2 years before the ownership requirements of 
     subsection (b)(2) are met, such actions shall be treated as 
     pursuant to a plan.
       (C) Certain transfers disregarded.--The transfer of 
     properties or liabilities (including by contribution or 
     distribution) shall be disregarded if such transfers are part 
     of a plan a principal purpose of which is to avoid the 
     purposes of this section.
       (D) Special rule for related partnerships.--For purposes of 
     applying subsection (b) to the acquisition of a domestic 
     partnership, except as provided in regulations, all 
     partnerships which are under common control (within the 
     meaning of section 482 of the Internal Revenue Code of 1986) 
     shall be treated as 1 partnership.
       (E) Treatment of certain rights.--The Secretary shall 
     prescribe such regulations as may be necessary--
       (i) to treat warrants, options, contracts to acquire stock, 
     convertible debt instruments, and other similar interests as 
     stock, and
       (ii) to treat stock as not stock.
       (2) Expanded affiliated group.--The term ``expanded 
     affiliated group'' means an affiliated group as defined in 
     section 1504(a) of the Internal Revenue Code of 1986 (without 
     regard to section 1504(b) of such Code), except that section 
     1504(a) of such Code shall be applied by substituting ``more 
     than 50 percent'' for ``at least 80 percent'' each place it 
     appears.
       (3) Foreign incorporated entity.--The term ``foreign 
     incorporated entity'' means any entity which is, or but for 
     subsection (b) would be, treated as a foreign corporation for 
     purposes of the Internal Revenue Code of 1986.
       (4) Other definitions.--The terms ``person'', ``domestic'', 
     and ``foreign'' have the meanings given such terms by 
     paragraphs (1), (4), and (5) of section 7701(a) of the 
     Internal Revenue Code of 1986, respectively.
       (d) Waiver.--The President may waive subsection (a) with 
     respect to any specific contract if the President certifies 
     to Congress that the waiver is required in the interest of 
     national security.

  Mr. WELLSTONE. Mr. President, I ask unanimous consent that I have 5 
minutes, without losing my place in the debate, as in morning business.
  The PRESIDING OFFICER (Mr. Carper). Without objection, it is so 
ordered. The Senator is recognized for 5 minutes. Following his 
statement, he will have the floor.
  (The remarks of Mr. Wellstone are printed in today's Record under 
``Morning Business.'')
  Mr. WELLSTONE. Mr. President, I rise to speak to a very simple 
amendment I introduced. I say to my colleagues, this actually was 
passed in the House in the homeland defense bill. It certainly is 
relevant that we bar the Secretary of Homeland Security from entering 
into contracts with U.S. companies that give up U.S. citizenship to 
avoid U.S. taxes.
  I need to really summarize this amendment again. This is a very 
simple amendment that would bar the Secretary of Homeland Security from 
entering into contracts with U.S. companies that give up U.S. 
citizenship to avoid U.S. taxes.
  To about 99.9 percent of people in Minnesota and probably to about 
99.9 percent of the people in the country, this is a very reasonable 
proposition. My colleagues might remember that I had an amendment like 
this to the Defense appropriations bill which passed here by unanimous 
vote.
  Before I get into the specifics of my amendment, let me make a quick 
comment about the relevancy of the amendment. I gather there is an 
agreement among the majority leader and the minority leader to move all 
nonrelevant amendments. That agreement won't affect this amendment 
because it was drafted to be relevant. It deals with government 
contracts. It deals with the Department of Homeland Security.
  The underlying House bill, as I just mentioned, has a similar 
provision. So the substance of my amendment is fully relevant to this 
bill. This is the appropriate place to have this debate, as we debate 
the question of whether we will have a Department of Homeland Security.
  Former U.S. companies that have renounced their citizenship currently 
hold at least $2 billion worth of contracts with the Federal 
Government. I don't think companies that aren't willing to pay their 
fair share of taxes should be able to hold those contracts.
  U.S. companies that play by the rules, that pay their fair share of 
taxes, should not be forced to compete with bad actors who can undercut 
their bids because of the tax loophole. I had a debate on a similar 
provision on ``Nightline.'' I said that the vast majority of companies 
in Minnesota and around the country, if they had the lawyers and the 
accountants, wouldn't do this because they wouldn't believe it was the 
right thing to do, or many of the smaller businesses in my State and 
all around the country don't have the lawyers and the accountants to 
really get such a loophole.
  In the last couple of years, a number of prominent U.S. corporations, 
using creative paperwork, have transformed themselves into Bermuda 
corporations in order to avoid paying their share of U.S. taxes. These 
new Bermuda companies are basically shell corporations. They have no 
staff, no offices, no business activity in Bermuda. This exists for the 
sole purpose of shielding income from the IRS. That is what this is 
about.
  By the way, I am talking about shielding not just profits made abroad 
but profits made in our country that are just shifted. There is a lot 
of cooking of the books that goes on. Does that sound familiar to any 
Senator?
  U.S. tax law contains many provisions designed to expose such 
creative accounting and to require U.S. companies that are foreign in 
name only to pay the same taxes as other domestic corporations. But 
these bad corporate former citizens exploit a specific loophole in 
current law so that the country is treated as foreign for tax purposes 
and, therefore, pays no U.S. taxes on its foreign income--or, for that 
matter, on all-too-often a good part of its U.S. income. Additionally, 
these companies can use accounting tricks, as documented by the Senate 
Finance Committee in their investigations of this issue, to reduce 
their U.S. income on paper and their U.S. tax on even their U.S. 
income.
  By the way, I thank staff on the Senate Finance Committee, majority 
and minority, for their help in working on this amendment. We have 
tried to do this in the right way. I will repeat this point. They use 
these accounting tricks, which have been documented by our Finance 
Committee, to reduce their U.S. income on paper and reduce U.S. tax 
even on U.S. income.
  These are Enron-like schemes involving sham loans and other 
``Imclone'' transfers that allow these companies to reduce taxes on a 
U.S. company, including income from Government contracts. This is 
called earnings stripping.
  I have spent the last 2 weeks, or thereabouts, at the Minnesota State 
Fair. About half the State's population comes. It is quite a happening. 
It is the essence of grassroots democracy. I will tell you one thing, 
people are really indignant about a lot of these inside corporate 
scandals.
  Some Senators may say: Paul, you are just jumping on the issue. Well, 
I don't know; this has been my work for years. I will tell you this. 
Between having some of your savings and putting it

[[Page 15995]]

in stock and seeing it erode in value, or your savings in a 401(k) 
eroding, or CEOs telling them they had an independent audit done and 
everything was great, to invest more of their 401(k), at the same time 
he dumped his stock and made $230 million in profit--people are tired 
of this behavior.
  This is all about corporate accountability. That is what this 
amendment is all about. What I am saying is that these companies are 
not paying their fair share. If they want to renounce their citizenship 
so they don't have to pay their fair share of taxes, fine, but don't 
expect to get Government contracts.
  Now, the loophole that we want to get rid of gives tens of millions 
of dollars of tax breaks to major multinational companies, and these 
are tax cheats. It also puts other companies that are unwilling or 
unable to use this loophole at a competitive disadvantage. No Minnesota 
company, or no American company, should be penalized for staying put in 
our country while others that renounce their U.S. citizenship get a tax 
break. This is a simple proposition. No company that does the right 
thing and stays in our country should be penalized for staying put 
while others renounce their U.S. citizenship just to get a tax break, 
to not pay their fair share of taxes.
  The problem is that when these companies don't pay their fair share, 
the rest of American taxpayers and businesses are stuck with the bill. 
I think I can safely say that very few of the small businesses I have 
visited in Detroit Lakes, or Mankato, or Duluth, or Minneapolis, or 
Northfield, or Faribault, or on the Iron Range, can avail themselves of 
the Bermuda Triangle. As a matter of fact, they would not view it as a 
very patriotic thing to do. They cannot afford the big-name tax lawyers 
and accountants to show them how to do their books Enron style, but 
they probably would not do it anyway if it meant renouncing their 
citizenship. So the price they pay for their good citizenship, good 
corporate citizenship, their good business citizenship, is a higher tax 
bill.
  Now, the House passed an amendment similar to this amendment on their 
homeland security bill. My amendment uses a different mechanism than 
the House bill to get at the same bad behavior. I have worked with 
Senator Grassley and Senator Baucus to conform this amendment with 
their bill that would close the tax loophole. That is what I ultimately 
want to do. Here is how my amendment would work. If a U.S. company 
reincorporated in a foreign country and 50 percent or more of the 
shareholders of the new foreign corporation were the same as the 
shareholders of the old U.S. company, then that company would be barred 
from contracting with any homeland security agency if the company did 
not have substantial business activity in its foreign home. It is that 
simple. That is a perfect operational definition of a sham operation.
  In other words, this is a two-part test, and if a company met both 
tests, it would be barred from contracting with the Department of 
Homeland Security.
  First test: Are a majority of the shareholders of the new company the 
same as the shareholders of the old U.S. company? This test is designed 
to separate the true purchase of two real companies, which is fine, 
from a sham transaction done just for tax purposes when the owners 
change only the home country.
  Second test: Does the new foreign company have substantial business 
activity in its new foreign home? If it doesn't, then the new foreign 
parent company is really just a paper shell designed to take advantage 
of a tax loophole.
  A lot of this is self-explanatory. I am not a lawyer, and some of the 
technical material is hard for me, but this is not too difficult to 
figure out.
  This is contained in the Grassley-Baucus tax bill. I believe Congress 
will close this tax loophole this year. There is growing support for 
doing so in the House. I have introduced legislation to close 24 
loophole, and the Senate Finance Committee has reported a version of 
this legislation, which I strongly support, that would do so as well. 
It is not appropriate for the Senate to close the tax loophole on this 
bill--this is not a tax bill--but it is appropriate for us to say that 
if a U.S. company wants to bid for a contract for U.S. homeland 
security work, then it should not renounce its U.S. citizenship for a 
tax break.
  We all make sacrifices in a time of war. The only sacrifice this 
amendment asks of Federal contractors is that they pay their fair share 
of taxes like everybody else.
  Mr. President, when I was talking about a Mr. Dennis Kozlowski, the 
reason I mentioned it, this was about Tyco Company, which has taken 
advantage of this scheme. It is highly lucrative for these 
corporations. Tyco International saved $400 million last year by 
chartering its space in Bermuda--$400 million. About a month ago, we 
learned that those savings may have helped the company buy the CEO a 
$19 million home in Boca Raton and a $6,000 shower curtain for his 
place in Manhattan. That was in the Wall Street Journal. Here is Tyco 
International which saves $400 million, and the CEO gets a lot of help 
to buy a home and also uses $6,000 to purchase a shower curtain for his 
place in Manhattan.
  Was the company using some of the money that they received in 
Government contracts--$220 million--to pay for that home and apparently 
a very nice shower curtain? Should we feel sorry for these corporations 
that have to scrape and pinch to find some tax savings? This is a 
corporate responsibility issue. I think in the House of 
Representatives, altogether, there were over 300 votes for a very 
similar amendment.
  I know some of my colleagues have an honest-to-goodness philosophical 
objection to this approach, and I understand that and respect them for 
it. On this one, maybe it is the populist in me, but to me this is a 
straightforward proposition. If these companies want to engage in this 
kind of sham or scam, they want to renounce their citizenship, they are 
not going to get U.S. contracts from this new homeland defense agency. 
That is what this amendment says.
  I will wait for other colleagues to speak. I will say to my colleague 
from Tennessee that I have been willing to accommodate anybody's 
schedule--if people want to put off the debate for a while and vote 
tomorrow, or whatever he wants to do. I wanted to begin and get the 
discussion going on the amendment, whatever fits in with the schedule, 
obviously.
  Mr. President, I ask unanimous consent that Senator Reid and Senator 
Baucus be added as original cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Mr. President, I thank the Senator from Minnesota. 
Senator Lieberman can perhaps consult with the Senator from Minnesota 
as to the way we will proceed. If the Senator is willing to set aside 
the amendment for a moment, we will bring it back in due course and 
proceed with the discussion, if that is agreeable.
  Mr. WELLSTONE. Mr. President, I say to the Senator from Connecticut, 
I will accommodate his schedule. I want to get the amendment up and 
have a debate. If the Senator from Connecticut wants to lay the 
amendment aside--whatever best accommodates his schedule. As long as my 
colleagues will be nice to me in the debate and praise me, I am willing 
to do anything he wants.
  Mr. LIEBERMAN. It is easy to find common ground. I thank the Senator 
from Minnesota. I suggest Senator Thompson and I engage in some 
conversation with the Senator from Minnesota. For that purpose, I 
suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Miller). Without objection, it is so 
ordered.

[[Page 15996]]


  Mr. DORGAN. Mr. President, my understanding is the pending business 
is the amendment offered by Senator Wellstone.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. DORGAN. Mr. President, Senator Wellstone has offered an amendment 
that deals with a subject I mentioned this morning, and I wanted to 
speak a bit more about that subject. It is a subject that, by its 
title, most people would not think much about. It is called inversion.
  What does inversion mean with respect to corporate America these 
days? Inversion is a process by which a corporation decides to renounce 
its American citizenship. A number of high-profile corporations have 
done that, saying, we wish to renounce our American citizenship and 
become citizens of another country--in a couple of cases, Bermuda. So 
an American corporation says, we no longer want to be an American 
corporation, we want to be a Bermuda corporation.
  Why would a U.S. corporation decide it wants to renounce its 
citizenship? The answer, of course, is very simple. Because there are 
circumstances under which, in the renouncement of citizenship by a 
corporation, called an inversion, they can save millions, or tens of 
millions, or perhaps hundreds of millions, of dollars in taxation. So 
some companies make a decision, we would like to no longer be U.S. 
citizens in order that we might save money on our tax bill. I happen to 
think that is unpatriotic.
  We are at war. Our country is at war with terrorists. Nearly 1 year 
ago, on 9/11, we were attacked with unspeakable horror by terrorists in 
New York City, in Washington, DC, at the Pentagon, and then there was 
the aircraft that crashed in Pennsylvania.
  Since that time, of course, we have had a remarkable speech by 
President Bush, one of the best I have heard in my service in Congress, 
calling this country to cooperate and to work together for a common 
purpose, to wage this war on terrorism. Then in the middle of all of 
this, we read stories about corporations that decide they want to 
renounce their citizenship so they can save on taxation.
  I ask a question of a company that decides it wants to renounce its 
American citizenship: If it gets in trouble somewhere around the world, 
if some dictator wants to expropriate its assets in some country around 
the world, whom is it going to call? The Bermuda Navy? The Bermuda 
Marines? The Bermuda Army? I do not think so.
  It is shameful to see companies do what are called inversions and 
renounce their American citizenship. They have a perfect legal right to 
do it under today's law, but there are ways to try to plug that hole in 
our Tax Code, and a number of us are working on that.
  The Senator from Minnesota offers another proposal with respect to 
this specific bill, and that is to say those companies that decide they 
want to renounce their American citizenship should not be bidding for 
contracts under homeland security.
  We have a lot to do with respect to the needs in this country, and 
the requirement that we all get together, work together, stay together, 
to fight terrorism and do what we must as Americans to respond to this 
threat. There is something horribly out of step with our requirements 
as Americans, our requirements of citizenship, our requirements as the 
stewards of this democracy, to see some corporations in this country 
decide they no longer want to be American, they no longer want to have 
U.S. citizenship. Technically and currently under the law, they have a 
right to renounce their citizenship, but I think it sends a terrible 
message to our country and to the world when they do that.
  Yes, they can save on taxes by doing it perhaps. The question then 
will be: Who will pay the taxes they do not pay? Which other Americans 
would they choose to burden with this additional tax bill? Americans 
working in the manufacturing plants they used to have in this country 
or perhaps still have in this country? Do they want to shift the burden 
to working people? That is what happens with respect to inversions.
  I indicated I am going to hold some hearings on a couple of these 
issues. There is some unfinished business with respect to this issue of 
corporate responsibility. We passed a bill and the President signed it, 
and that is important because we have seen now the emergence and the 
disclosures of corporate scandals unparalleled in my lifetime.
  You know, I have a card in my pocket. I put it in my pocket this 
morning, because it reminded me of something important. I was on an 
airplane recently. I was sitting in an aisle seat, and a man sitting 
two rows ahead of me in the aisle seat across the aisle, as we landed 
and before we disembarked, passed me his business card. His business 
card named him and the company for which he worked. He is president of 
the company. He wrote on the back of the card with a ballpoint pen and 
passed it to me. I had never met the man, did not know him. He said:

       Dear Senator Dorgan, Good morning. I am president of a 
     corporation. I work very hard and I am honest. I believe 
     there are more like me than not.

  This is the president of a corporation. His first name is John.
  I sent John a letter and said: I do not ever speak of corporate 
scandal without saying I think we ought to understand American business 
by and large in this country is run by wonderful men and women, good 
stewards of the investors' money, people who want to do the right 
thing, people who do not try to find where the line is and cross the 
line, people who do not cook the books, people who work long hours and 
are honest and do the right thing. That is the rule in American 
business, in my judgment. But it is also true that the emergence and 
the disclosures of these corporate scandals tarnish all in American 
business and injure those honest, hard-working people trying to run 
American companies. It injures the ability to raise capital because it 
destroys people's faith in the system. They invest in a stock in a 
company they have never visited. They buy a stock in a company they do 
not know much about, but they trust the CEO, they trust the financial 
statements, they trust the accounting firm that reviewed the 
statements, they trust the law firm that gave advice to the CEO, they 
trust the board of directors. So they invest in a share of stock in a 
company they have never visited or never seen.
  But there have been far too many instances recently of corporate 
executives acting in complete disregard of their responsibilities as 
business leaders. And although we recently passed an accounting reform 
bill to tackle some of these problems, we have unfinished business. One 
issue involves inversions, the issue that Senator Wellstone is bringing 
to our attention today. Another important issue involves bankruptcies, 
and an amendment I tried to offer to the corporate responsibility bill. 
That amendment was blocked by the Senator from Texas, Mr. Gramm. He 
blocked that amendment for a couple of days, and I was not able to put 
it on the bill, but it deals with this. It is an amendment that says, 
if in the year prior to the bankruptcy of a corporation, the major 
executives in the corporation are receiving millions of dollars in 
incentive and bonus payments, there ought to be a disgorgement and 
recapture of that money to go to the stockholders and the employees. It 
is very simple.
  Since the time that I was blocked in offering that amendment, the 
Financial Times did an investigation and an evaluation of the 25 
largest bankruptcies in our country since January of last year.
  What did it show? It showed that 230 top executives in the 25 largest 
companies that filed for bankruptcy took $3 billion out of those 
companies in compensation as those companies headed towards bankruptcy.
  Well, guess what. The investors lost their shirts, they lost their 
life savings, and, as the Financial Times says, the barons of 
bankruptcy, the executives running companies into bankruptcy, went off 
with a pocketful of gold.
  There is something wrong with that. That is a piece of unfinished 
business.

[[Page 15997]]

We ought to pass legislation that says prior bankruptcy, if executives 
are getting bonus and incentive payments as this company heads towards 
bankruptcy, there ought to be the right to recapture that money and use 
it to help offset the perks and costs with respect to investors and 
employees.
  That is one piece of unfinished business. Another piece deals with 
inversions and the tax with respect to those corporations that want to 
renounce their American citizenship. There is unfinished business with 
respect to corporate responsibility. We did a wonderful thing in 
passing that bill. Senator Paul Sarbanes deserves our unending thanks 
for the work he did to put that bill together. The President signed it. 
It is a bill destined to give confidence to people, but there is more 
to do.
  If we stop here we will have stopped before we got to the 
intersection. There is more to do. Part of that deals with inversion, 
and part of it deals with disgorgement and recapturing of funds as CEOs 
took companies into bankruptcy. I intend, in the coming weeks, to be 
among those in Congress who will address these issues. We should not 
decide the bill we passed represents the end of corporate 
responsibility legislation in the Senate.
  I conclude by saying the fellow that passed me his business card on 
an airplane a few days ago is right. He said: I'm president of a 
corporation. I work very hard and I'm honest. I believe there are more 
like me than not.
  He is right about that. Absolutely. And on behalf of people like him, 
we have a responsibility to be tough and to go after those who abuse 
their trust and steal money. We have a responsibility to see to it that 
they do more than 2 years of hard tennis at a minimum security 
institution somewhere.
  The Senator from Minnesota does us a service by offering this subject 
on the floor of the Senate. There is more to do on inversion, but there 
is more to do beyond inversion and corporate responsibility, including 
disgorgement and recapturing of bankruptcy incentive and bonus payments 
to CEOs.
  The PRESIDING OFFICER. The Senator from Nevada.


                Amendment No. 4490 to Amendment No. 4486

  Mr. REID. I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. REID] proposes an amendment 
     numbered 4490 to amendment 4486.

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

     (Purpose: To prohibit the Secretary of Homeland Security from 
               contracting with any corporate expatriate)

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SEC. __. PROHIBITION ON CONTRACTS WITH CORPORATE EXPATRIATES.

       (a) In General.--The Secretary may not enter into any 
     contract with a foreign incorporated entity which is treated 
     as an inverted domestic corporation under subsection (b).
       (b) Inverted Domestic Corporation.--For purposes of this 
     section, a foreign incorporated entity shall be treated as an 
     inverted domestic corporation if, pursuant to a plan (or a 
     series of related transactions)--
       (1) the entity has completed the direct or indirect 
     acquisition of substantially all of the properties held 
     directly or indirectly by a domestic corporation or 
     substantially all of the properties constituting a trade or 
     business of a domestic partnership,
       (2) after the acquisition at least 50 percent of the stock 
     (by vote or value) of the entity is held--
       (A) in the case of an acquisition with respect to a 
     domestic corporation, by former shareholders of the domestic 
     corporation by reason of holding stock in the domestic 
     corporation, or
       (B) in the case of an acquisition with respect to a 
     domestic partnership, by former partners of the domestic 
     partnership by reason of holding a capital or profits 
     interest in the domestic partnership, and
       (3) the expanded affiliated group which after the 
     acquisition includes the entity does not have substantial 
     business activities in the foreign country in which or under 
     the law of which the entity is created or organized when 
     compared to the total business activities of such expanded 
     affiliated group.
       (c) Definitions and Special Rules.--For purposes of this 
     section--
       (1) Rules for application of subsection (b).--In applying 
     subsection (b) for purposes of subsection (a), the following 
     rules shall apply:
       (A) Certain stock disregarded.--There shall not be taken 
     into account in determining ownership for purposes of 
     subsection (b)(2)--
       (i) stock held by members of the expanded affiliated group 
     which includes the foreign incorporated entity, or
       (ii) stock of such entity which is sold in a public 
     offering related to the acquisition described in subsection 
     (b)(1).
       (B) Plan deemed in certain cases.--If a foreign 
     incorporated entity acquires directly or indirectly 
     substantially all of the properties of a domestic corporation 
     or partnership during the 4-year period beginning on the date 
     which is 2 years before the ownership requirements of 
     subsection (b)(2) are met, such actions shall be treated as 
     pursuant to a plan.
       (C) Certain transfers disregarded.--The transfer of 
     properties or liabilities (including by contribution or 
     distribution) shall be disregarded if such transfers are part 
     of a plan a principal purpose of which is to avoid the 
     purposes of this section.
       (D) Special rule for related partnerships.--For purposes of 
     applying subsection (b) to the acquisition of a domestic 
     partnership, except as provided in regulations, all 
     partnerships which are under common control (within the 
     meaning of section 482 of the Internal Revenue Code of 1986) 
     shall be treated as 1 partnership.
       (E) Treatment of certain rights.--The Secretary shall 
     prescribe such regulations as may be necessary--
       (i) to treat warrants, options, contracts to acquire stock, 
     convertible debt instruments, and other similar interests as 
     stock, and
       (ii) to treat stock as not stock.
       (2) Expanded affiliated group.--The term ``expanded 
     affiliated group'' means an affiliated group as defined in 
     section 1504(a) of the Internal Revenue Code of 1986 (without 
     regard to section 1504(b) of such Code), except that section 
     1504(a) of such Code shall be applied by substituting ``more 
     than 50 percent'' for ``at least 80 percent'' each place it 
     appears.
       (3) Foreign incorporated entity.--The term ``foreign 
     incorporated entity'' means any entity which is, or but for 
     subsection (b) would be, treated as a foreign corporation for 
     purposes of the Internal Revenue Code of 1986.
       (4) Other definitions.--The terms ``person'', ``domestic'', 
     and ``foreign'' have the meanings given such terms by 
     paragraphs (1), (4), and (5) of section 7701(a) of the 
     Internal Revenue Code of 1986, respectively.
       (d) Waiver.--The President may waive subsection (a) with 
     respect to any specific contract if the President certifies 
     to Congress that the waiver is required in the interest of 
     national security.
       This section shall take effect one day after the date of 
     this bill's enactment.

  Mr. REID. The Senator from New Hampshire is here and is going to ask 
that the present amendments be set aside so that he can offer an 
amendment. I will first take just a few minutes.
  First of all, I commend the Senator from Minnesota for this 
amendment. I was on the Senate floor when he offered this amendment on 
a previous piece of legislation and spent some time talking about the 
merits of his legislation. It passed by voice vote. The Senator from 
Minnesota recognizes in the House something comparable to this has 
passed, so we have no problems with this legislation as to it being 
relevant or germane.
  This legislation is important to reestablish confidence in what is 
going on in the country. This amendment is designed to attack a tax 
loophole that has allowed scores of U.S. corporations to move their 
headquarters, on paper only, to tax haven countries to avoid paying 
their fair share of our taxes.
  Specifically, the amendment bars the Department of Homeland Security 
from awarding Government contracts for those corporate tax runaways.
  It is a sad reality that under our current law these corporate 
expatriations are technically legal--I say technically. Legal or not, 
there is no reason the U.S. Government should reward tax runaways with 
lucrative Government contracts.
  I had one of these big contractors talk to me. He brought with him 
one of my friends who was no longer in the Senate. Because of my close, 
warm feelings for the person who brought this man in, I wanted to try 
to help. But after listening, I said I cannot help because it is wrong.
  These corporations have turned their back on their country in their 
country's hour of need, but they continue to

[[Page 15998]]

come to Congress and the executive agencies with their hands 
outstretched asking for rewards. We need to end as soon as we can the 
practice of companies that hold billions of dollars in Federal 
contracts renouncing U.S. citizenship. It is wrong that the companies 
that play by the rules and meet the responsibilities of the country 
should be forced to compete with bad actors who shirk their tax bill.
  If the corporations want Federal contracts so badly, I have advice: 
Come home. Come back to your country, to our country, and you will be 
eligible to bid on homeland security contracts. If you do not, you 
can't. Go lobby Bermuda or the Cayman Islands, but leave us alone.
  Let me talk about a few of the companies involved that have handled 
this in an improper manner: Ingersoll-Rand. When I was a little boy and 
went with my dad down in the mines, Ingersoll-Rand was the name on the 
compressor that was above ground and on the jackhammer he used 
underground. In my mind, even today, I can see my father pick up that 
jackhammer and push it into that hard land and drill. Ingersoll-Rand is 
all he had, all I remember, an Ingersoll-Rand jackhammer. This company 
was founded in 1905. They have been headquartered in Woodcliff, NJ, for 
many decades, mostly manufacturing jackhammers, bobcat vehicles, club 
car golf carts, hardware products, security devices, control systems. 
In fact, one of the things they talk about in advertisements is their 
jackhammers made Mount Rushmore.
  But times have changed. Last December, 3 months after September 11, 
Ingersoll-Rand put the finishing touches on renouncing its U.S. 
corporate citizenship. It filed paperwork to set up three British 
employees in a little office in Hamilton, Bermuda. Now it can avoid 
paying $40 million each year in U.S. taxes. This will not stop 
Ingersoll-Rand from lobbying for U.S. Government contracts. As we 
speak, the corporation holds over $40 million in Government contracts, 
virtually all of which are directly related to homeland defense or the 
military. These days, the company has been lobbying the Government to 
buy its airport security screening devices. If they renounce their 
Bermuda citizenship, I am happy to work with them and let them get the 
contract. That is fine.
  There are many other companies. Fruit of the Loom, headquartered in 
Bowling Green, KY, for years, last year decided it wanted to do 
something else and moved offshore. They have millions of dollars in 
contracts.
  Cooper Industries makes tools and hardware needed to transmit natural 
gas. They were founded in 1833 in Mount Vernon, OH. Last year, they had 
revenues of $4 billion, net income of $230 million, and they decided 
they could make a few extra bucks by moving offshore. That is what they 
have done.
  I have page after page of companies that have decided to go offshore. 
Yet they have large amounts of Government contracts, where the 
underlying company had scores, hundreds of offshore Government 
corporations, legal entities set up so they could play around with our 
money.
  Accenture, APW, Carnival Corporation, Cooper Industries, Enron, 
Everest Reinsurance, Foster Wheeler, Fruit of the Loom, Global 
Crossings, Gold Reserve, Halliburton, Harken Oil--Halliburton had units 
in St. Lucia, Liechtenstein, Barbados, Cayman Islands, Cyprus, the 
Netherlands Antilles, and the British Virgin Islands, among others--
Helen of Troy, Leucadia Corporation, on and on.
  The time has come. If they want to move offshore, let them get their 
contracts someplace else.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized.
  Mr. SMITH of New Hampshire. Mr. President, my understanding is the 
pending business is the Wellstone amendment.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. SMITH of New Hampshire. I ask unanimous consent the Wellstone 
amendment be temporarily laid aside for the purpose of offering an 
amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I couldn't hear. What was the request?
  Mr. SMITH of New Hampshire. The request I made was to temporarily lay 
aside the Wellstone amendment for the purpose of offering an amendment, 
which I will not debate at this time.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. Does the Senator from New Hampshire yield the 
floor?
  Mr. REID. Mr. President, I object. Will the Senator from New 
Hampshire restate his unanimous consent request?
  Mr. SMITH of New Hampshire. I ask unanimous consent that the 
Wellstone amendment be temporarily laid aside for the purposes of 
offering my amendment on armed pilots.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                Amendment No. 4491 To Amendment No. 4471

  Mr. SMITH. I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from New Hampshire (Mr. Smith), for himself, 
     Mrs. Boxer, Mr. Murkowski, Mr. Burns, Mr. Bunning, and Mr. 
     Miller, proposes an amendment numbered 4491 to amendment 
     4471.

  Mr. SMITH of New Hampshire. I ask unanimous consent the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text Of 
Amendments.'')
  Mr. SMITH of New Hampshire. Mr. President, this amendment is offered 
on behalf of myself and Senators Boxer, Murkowski, Bunning, Burns, the 
Senator presiding, Senator Miller, and others. Because there is an 
agreement with some of my colleagues that we would not debate it today, 
I will not take any further time from the Senate, other than to say 
that this amendment is the Arming Pilots Against Terrorism and Cabin 
Defense Act of 2002, which will be an amendment that will provide help 
for training for those flight attendants in the cabin, and for pilots 
to be able to carry weapons, lethal weapons, in the cockpit to protect 
our country, our citizens, and those in the aircraft from the aircraft 
becoming weapons of mass destruction.
  The intention is to debate this tomorrow when my other colleagues are 
available, at a time to which the leaders will mutually agree. I very 
much appreciate the assistant leader, Mr. Reid, allowing me to offer 
the amendment at this time.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. BENNETT. Mr. President, I would like to comment on the bill as it 
stands and some of the challenges relating to it rather than any 
specific amendment.
  All of us, as we want to arrive at a position, fall back upon our own 
experience. I have some experience that I think is relative to this 
situation which I would share with the Senate. I have shared it with 
some members of the committee, but I have found in my time in the 
Senate that there is no such thing as repetition. Every speech is given 
as if it is brand new and no one has ever heard any of this before. I 
have learned that from some of my more senior colleagues here.
  First when I arrived here, I found it a little distressing, but after 
I found out how often people listen to what you say, I decided it is 
probably a pretty good thing, because repeating something over and over 
again in this body, many times, is the only way you can get anybody to 
listen to you.
  With that, let me share with you and my colleagues, and any others 
who may be listening, my experience with a similar situation when I 
served in the first term of the Nixon administration.
  In the 18 months prior to President Nixon's election, Joe Califano, 
as the Chief of Staff to President Johnson, conceived of the idea of 
the Department of Transportation. We were one of the few industrialized 
countries in the world that did not have a ministry

[[Page 15999]]

of transport, as it is called in most other countries. We found that 
our transportation functions were scattered all over the Government. 
Mr. Califano, consulting with President Johnson, convinced the 
President that the time had come to create the American version of a 
ministry of transport. So the Department of Transportation was born.
  On paper, it looks like a department that was created at the Harvard 
Business School. You had a series of assistant secretaries who were 
staff officers. You had a series of administrators who were line 
officers. It was put together with modern business terminology and a 
complete understanding of how a large organization should be formed.
  It took the Federal Highway Administration out of the Department of 
Commerce, where it was such a significant part of that Department that 
they had two Under Secretaries, one an Under Secretary for 
Transportation and the other an Under Secretary for everything else. It 
took the FAA from its status as an independent agency reporting 
directly to the President. It was called the Federal Aviation Agency. 
It was renamed the Federal Aviation Administration so that the 
terminology would be comparable.
  It took the Coast Guard out of the Treasury Department. It goes all 
the way back to the time of Thomas Jefferson, perhaps, as being part of 
the Treasury Department looking for smugglers so they could collect 
duties on people who would bring goods into the United States. The 
Coast Guard represents a significant part of our transportation 
activity, and it was recognized it no longer belonged in the Treasury 
Department.
  There was a fledgling group called the Urban Mass Transit 
Administration that was over at HUD, the Department of Housing and 
Urban Development. But they recognized it had nothing, really, to do 
with housing and belonged over in the new Department of Transportation.
  They looked at some other areas where there needed to be some 
initiatives in transportation and created some new agencies solely for 
those--the Federal Rail Administration being the chief among them. Then 
it took some other isolated agencies, folded them in, put them on a 
piece of paper, and said: Here is your new department.
  Alan Boyd, who was the Under Secretary of Commerce for 
Transportation, was made the new Secretary of Transportation and for 18 
months struggled with the challenge of trying to bring these groups 
together. His service was terminated when President Johnson left 
office. John Volpe came down, as former Governor of the State of 
Massachusetts, to assume the Secretaryship of the Department of 
Transportation. The Under Secretary was James Beggs, who came over from 
NASA, where he had performed excellent service as an associate 
administrator there. I was hired to run the congressional liaison 
function for the Department.
  As I say, the Department was 18 months old. When I walked into it to 
take over my new duties, I found that almost no one knew what those new 
duties would be because the challenge of bringing together, at a 
departmental level, all of the people involved in congressional liaison 
had not been successfully met in the 18 months previous. I am not 
putting any blame on Secretary Boyd or on any of the people who worked 
with him during that 18 months. As I became acquainted with the 
Department and its functions, I realized how difficult it was to bring 
together agencies that had no common culture, no common background, 
that had been operating in many different places across the Government, 
and turn them into a clearly, smoothly functioning single unit.
  Indeed, there were some people in that organization who refused to 
admit they were even members of the Department of Transportation.
  An anecdote: One of the personnel officers who worked for the 
Assistant Secretary for Administration got on the elevator and punched 
the button that said eighth floor. Someone behind her said: You are one 
of those DOT types. The eighth floor was the floor that had been 
recommissioned for the offices of the Secretary. The tenth floor was 
where the Administrator of the FAA worked. She turned around and said: 
We are all DOT types.
  Her remark was not favorably received. The folks behind her in the 
elevator said: We are FAA. You are DOT.
  It is a small anecdote, but it demonstrates that after 18 months 
there were still people who had a hard time bringing themselves into 
the new Department.
  To my own specific experience, I found that the FAA still had its own 
congressional relations function. Urban Mass Transit didn't have one at 
all. They had not really brought anything over with them from HUD. The 
Federal Highway Administration had a well-entrenched congressional 
liaison function, and the Coast Guard had been at it for close to 200 
years, and they were not about to give that up to anybody as 
unimportant as a Cabinet officer.
  The new agencies that had been created didn't have any service. They 
didn't know what they were doing. Those officers who had been trying to 
perform congressional relations functions for the Secretary and the 
team of Assistant Secretaries that had been created under him had been 
floundering and flopping around trying to find their way in this 
morass.
  Secretary Volpe and Under Secretary Beggs gave me the challenge of 
trying to pull all of this together. It was one of the most interesting 
and difficult experiences of my then-young life. That was enough years 
ago that I was a young man when I undertook that.
  Eventually, we were able to pull all of those functions together into 
a single office reporting directly to the Secretary. I rearranged all 
of the functions so that everyone involved in that activity reported to 
me either directly or through my deputy. I said: I will give you an 
assignment--as if we were a consulting firm dealing with clients. You, 
sir, your client is the FAA. You, sir, your client is Urban Mass 
Transit, and so on. You will not be acceptable to me if your client is 
unhappy. If the Administrator of the FAA believes he is not getting the 
kind of congressional relations he deserves, he will complain directly 
to me as we meet together in the Secretary's staff meetings, and I will 
be around to see you. But at the same time, you work for me. And, 
through me, you work for Secretary Volpe.
  This meant that when we had an issue that required more manpower and 
womanpower than that particular officer could provide, I could rally 
the resources of the office and the other officers to help on that 
particular issue at that particular time. We were much more flexible. I 
think we were much more efficient and effective.
  As it turned out, a large percentage of President Nixon's domestic 
agenda fell under the Department of Transportation. Congress passed, 
with our help and liaison, a whole series of landmark bills setting 
down the transportation process for this country. It was one of the 
most stimulating experiences of my life.
  What does that have to do with the Department of Homeland Security? 
In making the kinds of changes that I have described, I had to have 
management flexibility so that when, with the Secretary's authority, I 
didn't have--it came from the Secretary--I could say: You no longer 
work for the Administrator of the FAA; you now work for me. You no 
longer report to the Administrator of the Federal Highway 
Administration, you now work for me. This is how we are going to set 
your procedures, and this is how we are going to rationalize salaries 
within the office that I created.
  I was able to do that because the enabling act that created the 
Department of Transportation gave the Secretary management flexibility 
to move people around within the Department without coming back to the 
Congress for approval. He had flexibility to change payroll.
  One of the interesting things that occurred was that in the FAA, 
promotions were all made on even numbers; that is, you went from a GS-4 
to a GS-6; from a GS-8 to a GS-10; from a GS-10 to a GS-12, and so on. 
In other parts of the Department they did two

[[Page 16000]]

numbers per jump, but they were all on odd numbers.
  As I brought all of these people together in the same offices, I had 
some GS-5's and GS-6's. The amount of money they were earning, frankly, 
was the same. It was very interesting to me, coming from the corporate 
world as I was at that time in this somewhat strange and challenging 
world of the U.S. personnel system. We had to rationalize that or the 
office didn't make any sense. We had to make some changes. We didn't do 
it in a way that damaged anyone. No one lost money. No one lost 
position. But someone had to transfer from the odd system to the even 
system, and adjustments had to be made. And they were made on the basis 
of what made the most sense for the office and how it would work. The 
flexibility that was written into the act made that possible.
  One interesting thing that probably doesn't apply anymore but that 
came out of that experience was the result with respect to supergrades. 
In those days, a GS-16, GS-17, or GS-18 was called a supergrade, and 
each Department had a set number of supergrades. That was true of the 
Department of Transportation. I don't remember what the number was, but 
the Department could not have more than 25 or 35 or whatever the number 
was of supergrades.
  As I went through this process of bringing all of these people 
together, I was able to walk into the Under Secretary's office and say: 
I am giving you back three supergrades--because so many of these people 
had held supergrade positions in the previous administration. The way 
we organized this, I only needed two supergrades--one for myself and 
one for my deputy and everybody else was a GS-10 or below.
  I didn't realize what I was doing because the Under Secretary greeted 
me with one of the biggest smiles I have ever received and said: This 
is pure gold because there are other places in the Department where the 
positions deserve supergrades and I don't have any supergrades to give 
them. And you have just freed up three supergrades by virtue of your 
consolidation of this function.
  I don't know where the supergrades went. But they went out to other 
deserving people.
  That is why I feel so strongly in favor of President Bush's position 
that the Department of Homeland Security must be formed with 
flexibility for management and personnel and other decisions on the 
part of the Secretary. I have been there and I have seen how vital it 
is. If we had to go through the kinds of hoops that are created in the 
Federal personnel system in the reorganizing something as insignificant 
as my offices--I am talking about 30 to 35 people max; I am not talking 
about anything approaching the challenge of this new Department--if we 
had to go through all of those hoops in reorganizing my office, I would 
have spent the entire 2 years that I was there working on personnel 
issues and management issues instead of trying to get the program 
passed through the Congress--the landmark legislation that was passed. 
I still have the pens that President Nixon gave me and my picture in 
the Cabinet Room when those bills were signed. We would not have been 
able to get that done. We would have been snarled up in all of the 
internal management challenges of, well, we have to go to Congress to 
get this approved or that approved; we haven't got the flexibility to 
do it.
  I have that personal experience that drives me to stand with the 
President on this issue and to say that I believe the President is 
correct when he says he will veto this bill, if that flexibility is not 
there.
  None of us should have the false assumption that this Department will 
work for at least 3 and more likely 5 years. All of us should 
understand how difficult a management challenge this is going to be 
under the best of circumstances. The Department of Transportation, as I 
say, 18 months after its formation was still not working. John Volpe 
didn't come in and wave a magic wand to make it work overnight. John 
Volpe and Jim Beggs labored for a full 4 years beyond the 18 months 
that it had under President Johnson. It was only toward the end of 
those 4 years that you began to see things really meshed together and 
start to work together and see a real Department of Transportation 
instead of the old turf battles that had been there. The Department of 
Defense took longer than that to come together. It was the kind of 
reorganization more closely paralleling the size of the one we are now 
doing.
  It is instructive to remember that the first Secretary of Defense, 
James Forrestal, committed suicide. The challenge of managing that 
difficult a bureaucracy was sufficiently great that this dedicated 
public servant--perhaps too dedicated because he took it so seriously--
that he ultimately could not cope with it and committed suicide, which 
demonstrates how serious it is for us to do this right.
  I do not want the new Secretary, whoever he or she may be, to have 
any more impediments placed on the challenge of making this Department 
work than are necessary. To not give the Secretary the management 
flexibility that the President has called for is asking for failure in 
this Department.
  As I say, it is not going to work for at least 3, and more likely 5, 
years. That does not mean we should not do it. We should do it because 
if we wait a year, that will just push back a year the 3-to-5-year 
period that it will not work. But let's be realistic about it. Let's 
understand from the model of Government mergers, let's understand from 
the model of corporate mergers, how difficult this is going to be; and 
then let us, in the Congress, fashion a piece of legislation that says 
we are going to make it as easy as possible for the new Secretary to do 
all of the internal kinds of shifting and changing necessary to make it 
work closer to the 3-year figure than to the 5-year figure.
  Now, I hope I am wrong. I hope it will work magnificently in 6 
months. But life tells me that is not likely. So that is why I voted 
against this bill in committee. I said to Chairman Lieberman: If you 
really needed my vote to report out this bill, I would give you my vote 
because I think the bill ought to be reported out. But since you don't 
need my vote, I want to register my deep concern about the management 
flexibility and lack thereof that is written into this bill. And the 
only way I can do that is to cast a vote against the bill.
  Someone has asked me: Well, if it comes out of the Senate and the 
President is not given the management flexibility he has asked for, how 
will you vote on final passage? I will probably vote against it on 
final passage, even though some people say to me: Oh, let it go to 
conference and we'll fix it in conference.
  I have learned around here the motto ``let's fix it in conference'' 
does not always work. Very often it comes back from conference worse 
than when it went to conference, and then you are stuck.
  So I am dedicated to the creation of the new Department. I will do 
everything I can to help the President and the Congress pass 
legislation that makes sense. But I cannot, from my own experience, 
believe this makes any sense if it does not go forward with complete 
management flexibility in every possible way.
  A press conference was held today in which some Members of this body 
were quoted as saying that those of us who believe as I have just 
described are union baiters; that our whole motive here is to bash 
organized labor; our whole motive here is to attack honest working 
people.
  Let me take you back to my experience at the Department of 
Transportation. It was my first experience in an executive branch 
organization. I had served on Capitol Hill as a staffer, as a 
Government employee, but I had never been a civil servant. And I went 
in with some of the standard prejudices that many people in the private 
sector have about civil servants: That they don't work very hard; that 
they are just serving their time until their 40-year period for 
retirement comes along; that they are not very entrepreneurial; that 
they are not interested in new ideas;

[[Page 16001]]

that they take as their motto, ``We were here before you got here, and 
we will be here after you leave, so we don't need to pay any attention 
to you.''
  There were some who had that view, there is no question. There is a 
very small percentage of civil servants who feel that way.
  I was overwhelmed with admiration for the career civil service people 
in our Government who were dedicated, determined to make Government 
work, absolutely determined to do the very best job they could, and 
open to suggestions and comments that may have come from the political 
appointees.
  We had an Assistant Secretary for Administration, a position that is 
a civil-service-protected position, who had been appointed by Alan 
Boyd. He was a known Democrat. But because his position had civil 
service protection, there was not anything that Secretary Volpe could 
do about it. He was as helpful to me in this reorganization effort that 
I have just described as anybody at the Department.
  He sat down with me and helped take me through the labyrinth of 
Federal regulations. And when I made some mistakes--and I made several 
which were beauts--he did not jump all over me. He said: It's our fault 
for not having warned you in advance that that's what would happen if 
you did it that way. And if we had been there, we would have helped you 
do it another way. And let's see to it that it happens the other way.
  These people do not need to be protected from competent managers. 
These people need to be motivated and excited about the creation of a 
new Department. If the new Department is being created with intelligent 
management and flexibility on the part of the management, the civil 
servants will respond, certainly those at the Department of 
Transportation. They will respond with enthusiasm: At least we are 
moving forward in an area where we have been deficient in the past. 
Thank you for the opportunity for this new kind of service that the old 
paradigm would not allow.
  They will be supportive of this. Maybe their union managers are 
fearful of what management might do, but get a competent manager in as 
the Secretary and have him or her choose competent people as the 
Assistant Secretaries and the other administrators, give them the 
flexibility to do the right management thing, and the civil servants 
will not feel attacked. They will not feel under siege. They will feel 
liberated and excited. And they will be part of the solution because if 
this Department is going to work in 3 years rather than 5, it has to 
have the support of the civil servants; it has to have the kind of 
partnership between the civil servants and the political leadership 
that America has seen happen so often in so many other places.
  So I reject the notion that my call for management flexibility is 
somehow an attack on the civil servants or an attack on their unions. 
Instead, it is reaching out and saying: Join with us to make the best 
kind of Department we possibly can and, thus, create for you the best 
working environment you can ever be in in your Federal career. Be part 
of something truly exciting, something truly significant and historic, 
the creation of a new Department in the 21st century dealing with 21st 
century challenges that this country has not had to face in its past 
history.
  But don't let us start out with a traditional 19th-century-style 
management-labor confrontation. Do not let us start out with: We have 
to protect our turf and everything we have now, and we have absolutely 
no confidence at all that the management will do anything but attack 
us.
  Let's put all of that aside and say: What are we dealing with here? 
As I say, we are dealing with a 21st century challenge of the kind this 
country has not faced in its history. We are trying to reorganize the 
assets of the Government to meet this challenge in a cohesive, 
coherent, intelligent way.
  Let us never lose sight of that objective and keep our eye on that 
ball as we write this legislation and as we adopt amendments on the 
floor.
  One of the first amendments that will be offered will be one to give 
the Secretary, through the President, the kind of management 
flexibility I have been talking about. I intend to support that as 
strongly as I know how, for all of the reasons I have laid out here.
  I hope my colleagues will join with me.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CLELAND. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Dayton). Without objection, it is so 
ordered.
  Mr. CLELAND. Mr. President, I would like to speak on behalf of the 
homeland security agency bill.
  It is with humble appreciation of the gravity of the task now before 
us that I rise to advocate the creation of the Department of Homeland 
Security.
  Today, almost a full year since the forces of hatred attacked the 
American homeland, we are poised to transform the Federal Government 
into a sharper, more versatile instrument of peace and security for all 
of our citizens. The people of America and their leaders here in 
Washington, in both Chambers of the Congress, on both sides of the 
aisle, and at both ends of Pennsylvania Avenue, are united on the 
substance of this issue.
  All agree we cannot stand idly by as the enemies of freedom plot our 
destruction. All agree that the homeland security apparatus of the 
Government is at present ill equipped for its grave task. And all agree 
that we are called, therefore, to take decisive action to retrofit the 
Federal Government for the more effective performance of its greatest 
commission--the protection of its citizens.
  Thomas Jefferson once said the real goal of government is the 
protection of life and not its destruction. When Senators Lieberman and 
Specter introduced legislation establishing a Department of Homeland 
Security in May, I am proud to say I was one of four Senators to sign 
on as an original cosponsor.
  Since that time, we all now know, the administration, followed by 
every Member of Congress, has joined us in this critical reform effort, 
so that we find ourselves standing now on the threshold of an historic 
bipartisan achievement. A few points of difference on the details do 
remain. I look forward to a full and healthy debate on these over the 
next few days. But by and large, we are headed in the same direction, 
toward the same ultimate destination--the protection of our Nation.
  I have no doubt that we will get there together. As my good friend 
Congressman John Lewis said after September 11:

       We may have come to this country aboard different ships, 
     but we are all in the same boat now.

  How true that is.
  Under Senator Lieberman's leadership, the Governmental Affairs 
Committee, upon which I sit, has outlined in its bipartisan homeland 
security legislation a blueprint for a robust new Department that hews 
closely in most key respects to that envisioned by the President. The 
committee's measure would construct the Department around the core 
missions already identified by the President: Critical infrastructure 
protection, border and transportation protection, emergency 
preparedness and response, and science and technology.
  With few exceptions, the existing agencies transferred to the new 
Department under the administration's proposal are the same as those 
transferred by the committee's bill. Often where the committee has 
diverged from what the administration has done, as in the case of the 
transfer of the Federal Law Enforcement Training Center in Brunswick, 
GA, to the new Department, the change has been made in close 
consultation with, and with the approval of, the administration. In 
other cases, changes are merely a fleshing out of proposals and 
concepts previously set forth by the administration.
  Among the latter are two amendments I offered during markup of this

[[Page 16002]]

legislation that pertain to the Federal response to terrorism of a 
biological nature. The administration's proposal laid a strong 
foundation by recognizing that public health agencies, such as the 
Centers for Disease Control and Prevention, the CDC, in Atlanta are 
absolutely central to an effective response to biological terrorism and 
by further recognizing that prudence requires that scientists who focus 
on bioterrorism not be separated from the vast expertise and resources 
of the rest of the public health sector.
  My amendments, which the committee adopted during the July markup, 
are efforts to use the lessons of last fall's anthrax crisis culled 
from hours of testimony before our Governmental Affairs Committee to 
build on the solid foundation the President and HHS Secretary Thompson 
have set.
  The inadequacy of our bioterrorism preparedness and response 
capability was exposed in dramatic and painful fashion last fall. In 
reaction, the Governmental Affairs Committee, under the distinguished 
leadership of Chairman Lieberman and Senator Thompson, held a series of 
hearings investigating the roots and potential remedies of that 
inadequacy.
  At a hearing convened at my request on April 18 this year, Secretary 
of Health and Human Services Tommy Thompson, buttressed by a panel of 
experts who followed him, testified to the following unmet needs in our 
Federal counterbioterrorism efforts:
  First, a reorganization of the CDC's Bioterrorism Preparedness and 
Response Program, much like on a smaller scale what we are now doing 
with the Federal Government at large.
  Second, clearer protocols of communication and coordination between 
public health and law enforcement officials.
  And third, a greater commitment of resources to the CDC.
  These recommendations comprise the three-point approach for filling 
in the gaps in our national bioterrorism defenses that I have been 
advocating for some months now. I am pleased that two of these largely 
have been incorporated into the bill we are now considering.
  With respect to the first, I proposed, and the committee adopted, an 
amendment to create in the CDC a Bioterrorism Preparedness and Response 
Division. Why a division, Mr. President? Because that division answers 
directly to the head of the CDC. It is an entity located at the 
intersection of science and security, of public health and law 
enforcement, empowered to respond with speed and with a firm grounding 
in the science of biological warfare to the infectious terror some 
might seek to unleash upon this great Nation. The CDC's existing 
Bioterrorism Preparedness and Response Program is a relatively new 
initiative at the agency, having been created only in 1999 with a 
handful of personnel, little status within the agency, and meager 
funding.
  The program remains as a subsidiary of the National Center for 
Infectious Diseases, a sub-branch of a sub-branch. It should come as 
little surprise then that the many witnesses who testified before our 
committee about last fall's crisis depicted a Federal response that was 
fragmented, confused, and largely inadequate.
  CDC officials, both within and without the bioterrorism program, 
responded commendably, but their ability to do so was clearly 
constrained by, among other factors, an organizational structure that 
led inadequate focus to the unique aspects of a manmade threat to the 
public health.
  The Bioterrorism Preparedness and Response Division, as described in 
this chart, will remedy that. Operating directly out of the Office of 
the Director of the CDC, the division will lead and coordinate the 
agency's counter-
bioterrorism activities. It will train and employ a cadre of public 
health professionals whose specialized training and focus is on 
bioterrorism, and it will serve as a nexus, a meeting ground, between 
the realms of public health and security, including homeland security 
and law enforcement.
  There is a real need in the Federal Government for expertise in the 
intersection of health and security. Terrorists, as a matter of fact, 
hit the seam. They went right between the two. Officials thinking 
exclusively along either law enforcement or public health lines, as is 
too often the case under the current structure, will inevitably 
overlook key bits of information that are not fully appreciable, except 
by individuals with expertise in both areas.
  In the case of bioterrorism--the word itself a fusing of health, bio, 
and security, terrorism--appreciating such bits of information and 
drawing critical conclusions based on these are absolutely essential to 
an effective Federal response. The cadre of bioterrorism specialists 
developed by the Bioterrorism Preparedness and Response Division would 
be specially trained accordingly.
  In addition, while the threat posed by bioterrorism bears a strong 
resemblance to that posed by conventional disease outbreaks, there are 
real substantive differences between a manmade disease outbreak--a la 
the anthrax attack through envelopes that were obviously mailed by a 
human being--and a naturally occurring one--West Nile virus, Ebola 
virus, and the like. Our health officials are highly trained to cope 
with the latter, but most lack a sophisticated appreciation of the 
different considerations that attend a manmade attack.
  The upshot is when a recognition of these different divergences can 
make a difference between effective and ineffective emergency response. 
For example, while epidemiologists knew that contracting inhalation 
anthrax naturally required exposure to between 5,000 to 10,000 spores, 
they failed in the early stages of the crisis to consider the ways in 
which the deliberate weaponization of anthrax, with a substance such as 
silica, might alter the level of exposure required for lethality. 
Consequently, two Postal Service workers died.
  They are not to be criticized. They are scientists, after all, not 
criminal investigators. However, had bioterrorism specialists with 
training in both medicine and criminal behavior been on the case last 
fall, their unique expertise might have led to conclusions that in the 
hands of decisionmakers might have made a difference in recommendations 
and courses of action.
  In academia, there is a growing recognition that the study of 
bioterrorism, though it shares much with the fields of public health 
and counterterrorism, is a distinct discipline. To cite just a few 
leading examples in the world of academia, Mr. President, Johns Hopkins 
University has established the Center for Civilian Biodefense 
Strategies; St. Louis University's School of Public Health has a Center 
for the Study of Bioterrorism; and the University of Texas medical 
branch has established a Center for Biodefense.
  This bill will create in the Bioterrorism Preparedness and Response 
Division of the CDC a career track for the bioterrorism specialist, a 
place for graduates of programs such as these to put to use their 
unique expertise in the service of their country.
  The chart behind me describes the organization of the 
counterbioterrorism efforts of the Federal Government with the 
establishment of the Bioterrorism Preparedness and Response Division 
and a Department of Homeland Security, as under the bill we are 
considering.
  The second part of my plan for improving our bioterrorism defenses is 
contained in an amendment also adopted by the committee in the July 
markup that mandates that law enforcement, homeland security, and 
public health personnel keep each other fully and currently informed in 
the event of a bioterrorist attack.
  One of the objectives of a Bioterrorism Preparedness and Response 
Division of the CDC is to coordinate, cooperate, and communicate with 
other elements of the Federal Government that are involved in a 
biological attack on this country--Department of Homeland Security, law 
enforcement, Department of Justice, FBI, the Department of Health and 
Human Services, and State and local public health entities, all of 
which are in this boat together, Mr. President.
  It was too frequently the case last fall that the different agencies 
with a

[[Page 16003]]

role in the Federal response failed to communicate and coordinate with 
one another often or adequately enough. The requirement of full 
disclosure that will help put an end to that is upon us, but a 
significant part of the same problem relates to confusion in current 
law. Executive branch documents delineating the roles of law 
enforcement and public health agencies vis-a-vis one another say one 
thing while Federal statutes, most notably section 319 of the Public 
Health Service Act, say another.
  In an effort to address this inconsistency, this legislation we are 
considering includes my amendment to direct the Secretary of Homeland 
Security to develop a Federal response plan that accords fully with the 
statutory authorities granted to the Secretary of Health and Human 
Services under the Public Health Service Act.
  By so doing, this bill will mitigate in future crises a good bit of 
the confusion that prevailed last time. As we debate this legislation, 
I will offer an additional amendment to provide further clarity with 
respect to the roles of public health, law enforcement, and homeland 
security in the event of a bioterrorist attack. This amendment will 
provide the Secretary of Health and Human Services with the authority 
and flexibility he needs to carry out the responsibilities of the 
public health sector in the Federal response to bioterrorism.
  Specifically, the amendment provides that no Federal agency may 
supersede the authority of the public health agencies to respond to a 
public health emergency in whatever manner is appropriate and 
necessary.
  Last fall, public health authorities were at times muzzled, 
overridden, and generally kept out of the loop by law enforcement 
agencies. Each was doing its own thing, so to speak. Therein lies the 
problem. The problem arises because public health and law enforcement 
agencies both have essential roles to play in the event of an attack of 
terrorism that is also a threat to the public health. These roles are 
distinct but sometimes overlap. While both are vital, in the event of a 
terrorist-caused public health emergency, the unique life-and-death 
ramifications of such an attack mandate, in my view, that public health 
experts take the lead role in investigating and treating the attack. 
The amendment I will offer would give public health officials the 
authority and flexibility they need to do just that.
  The third point of my bioterrorism response plan calls for providing 
the public health agencies that will play the central role in preparing 
for and responding to bioterrorism with the resources they need to do 
the job. We have to put our money where our mouth is--in this case, our 
money where our mission is, and our mission is to defend this Nation.
  I commend the administration for proposing an unprecedented $4.3 
billion for HHS's bioterrorism initiative in the next fiscal year, a 
45-percent increase over the current year's funding level. These funds 
are badly needed. However, within this considerable request there is 
significant oversight. The administration has proposed actually a 
reduction in funds for revitalizing and securing the CDC's dilapidated, 
World War II-era facilities in Atlanta by $186 million in the next 
fiscal year, a Draconian cut of nearly two-thirds. That does not 
comport with putting our money where our mission is of defending this 
Nation.
  As the chart behind me demonstrates, since fiscal year 2000 when 
Congress first got on board with the CDC's master plan, the 
revitalization of its ramshackle facilities, the budget for building 
facilities and security has steadily increased each year. I have been 
proud to be part of this increase. This increase accompanied a 
recognition on the part of Congress, especially the Senate, and made 
more acute in the aftermath of the anthrax crisis, that if the CDC is 
able to protect us all against the new, more insidious threats to the 
public health we now face, the agency must be equipped with adequate 
modern facilities and its labs must be fortified against potential 
terrorist designs.
  The needed funds will not, of course, be appropriated through the 
legislation we are considering today, but I urge my colleagues to keep 
in mind, when the Labor-HHS appropriations bill reaches the floor, that 
the steps we are taking to combat bioterrorism in this legislation will 
require an adequate commitment of resources if they are to be 
effective.
  In summary, the public health-related provisions of the Governmental 
Affairs Committee bill that were added during the markup of this bill 
are, in my view, perfectly aligned with the administration's approach 
and goals. While they are not contained in the administration's 
original proposal, they are really extensions on concepts contained 
therein.
  On a separate but related matter, however, I must respectfully 
disagree with the approach contained in both the committee's and the 
administration's proposals. The legislation before us would transfer 
the strategic national stockpile--that is the vaccines that are 
strategically placed around America in secret locations known as the 
strategic national stockpile--from the CDC, where it has been 
successfully operated since its creation in 1999, to the Department of 
Homeland Security. I have serious reservations about the proposed 
transfer. Accordingly, I am continuing to work on a bipartisan basis 
with the chairman and ranking member of the Appropriations Subcommittee 
on Labor, Health and Human Services, and Education, and Chairman 
Lieberman, the administration, and others, on an attempt to preserve 
the role of the CDC in the operation of the stockpile.
  The stockpile is collectively 12 secret stashes of vaccines, 
medicines, and other medical supplies placed in strategic locations 
around the country, deliverable in a few short hours to any location in 
the country should the need for massive quantities of emergency 
medicines arise. Decisions related to deploying the medicines in the 
stockpile, what medicines to administer, who should receive medicines, 
what medicines should be in the stockpile, are essentially medical 
questions. They should, as such, be made by public medical 
professionals based on public health considerations. This is the 
reason, in point of fact, that the stockpile was assigned to the CDC in 
the first place.
  The committee's bill would transfer final authority over the 
stockpile to the new department while leaving some operational 
responsibility with the CDC. I am afraid we are borrowing from Peter to 
pay Paul. Leaving aside the problems inherently associated with 
separating operational responsibility from accountability, this 
approach, while retaining some stockpile functions with the CDC, would 
undermine the most important reason to have the CDC involved at all; 
that is, to bring to bear the necessary expertise in making final 
decisions regarding the use of the stockpile.
  If there were a core public health competency in the new department 
that could supervise the stockpile, then the reasons cited by the 
proponents of the transfer--primarily a desire to consolidate all 
emergency response functions in the new department--might be sufficient 
to justify the move. However, the public health expertise of the 
Federal Government was, by and large--correctly, in my view--left where 
it currently resides because of the important synergies, the command, 
control, cooperation, and communication, that would be lost if certain 
public health professionals were to be segregated from their colleagues 
in other public health sectors.
  There is, consequently, no core public health competency in the new 
department. There is no assistant secretary for health, as some have 
proposed.
  An interest in the effective administration of the stockpile demands 
then that it remain in the hands of those who do have public health 
expertise. The CDC has handled the stockpile effectively to date, 
coordinating smoothly its deployment on September 11 and during the 
anthrax crisis with FEMA and other emergency responders.
  We should follow the old dictum that if it ain't broke, don't fix it. 
Whatever the Senate's final decision on this matter, however, let me 
reiterate I am

[[Page 16004]]

fully on board with the President and his team on homeland security. We 
are all in the same boat. We cannot, we will not, stand by idly while 
those who hate us plot our demise. The fundamental reorganization of 
our homeland security apparatus is the surest step we can take now to 
gird ourselves for the threats to come. With sober understanding of the 
moment of the task now at hand, let us complete this good work.
  Above the pyramid on the Great Seal of the United States, in 
reference to the founding of our Nation, it says, in Latin, ``God has 
favored our undertaking.'' May He grant us now His favor again.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. It is my understanding that the matter before the Senate is 
the Smith amendment.
  The PRESIDING OFFICER. The Senator is correct.


                Amendment No. 4492 to Amendment No. 4491

 (Purpose: To amend title 49, United States Code to improve flight and 
                 cabin security on passenger aircraft)

  Mr. REID. I send an amendment to the desk on behalf of Senators Boxer 
and Smith.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Smith of New 
     Hampshire, for himself, Mrs. Boxer, Mr. Murkowski, Mr. Burns, 
     Mr. Bunning, and Mr. Miller, proposes an amendment numbered 
     4492 to amendment No. 4491.

  Mr. REID. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under ``Text 
of Amendments.'')
  Mr. REID. Mr. President, before my friend from Georgia leaves--and I 
know the Senator from Vermont wishes to speak--I want to emphasize how 
important the Centers for Disease Control are to this country and to 
the world. I have traveled with the Senator from Georgia to the Centers 
for Disease Control and seen some of those old, dilapidated buildings, 
some of them built prior to World War II.
  We should allow the Centers for Disease Control to have a space where 
they can work with some degree of quality. They are spread out all over 
the campus, and they need to be brought into one central location. That 
is what is being attempted.
  I say to my friend, this entity was established many years ago to 
fight malaria in the southern part of the United States. After we 
whipped malaria, they had such a presence that we used them for a 
public health entity in this country. They have done remarkable work, 
and not only in America. I had the pleasure of traveling and 
representing this country on the continent of Africa during the August 
break. The Centers for Disease Control has spread throughout that 
continent. It is money that the taxpayers should be proud is being 
spent. Each day that goes by, because of the Centers for Disease 
Control, lives are being saved from mosquito-related problems and, of 
course, AIDS.
  The Senator from Georgia has a tremendous responsibility to convey to 
the rest of the Senate the importance of the Centers for Disease 
Control and make sure they have adequate resources to do the job that 
is necessary to be done, especially post-September 11.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. JEFFORDS. Mr. President, I rise today to express my concerns 
about a central component of the proposed Department of Homeland 
Security--the inclusion of the Federal Emergency Management Agency in 
the new department.
  I understand that in the wake of the horrific events of September 11, 
we would look for ways to strengthen our Nation's defense to prevent 
any future catastrophe. I fully support that goal. But we must be 
cautious, very cautious, to make sure that we work to correct what went 
wrong and not interfere with what went right.
  We know what went wrong, and I firmly hope that we, as a nation, will 
develop a comprehensive plan to address the shortcomings in our 
intelligence gathering and communication efforts. That, I believe, 
should be the prime goal of any new homeland defense effort.
  What went right after September 11 was the response of the Federal 
Emergency Management Agency. In the days after the September 11 
terrorist attacks I visited the Pentagon and World Trade Center. I saw 
firsthand how well FEMA responded to a horrific scene that all of the 
disaster drills and training exercises could not have prepared anyone 
for. I was incredibly impressed by what I saw. Thousands of workers 
from around the country came together to bring calm and order to an 
otherwise chaotic situation.
  Of nearly 400 disasters that FEMA has responded to since the Oklahoma 
City bombing in 1995, only the attacks on the World Trade Center and 
the Pentagon were acts of terrorism. Through the coordination of FEMA's 
director, the agency demonstrated that it was capable of responding in 
such cases, and responding well.
  Yet things have not always gone so smoothly with the Agency. We need 
only to look back to the 1980s, when FEMA's focus shifted to civil 
defense and left the Agency ill-prepared to respond to natural 
disasters. In 1985, after a tornado killed 65 people in Pennsylvania, 
FEMA's poor response prompted then-Congressman Tom Ridge to play a 
central role in efforts to refocus the Agency's mission on victims of 
natural disasters.
  But it took time. After seeing the bungled responses to Hurricane 
Hugo in 1989 and Hurricane Andrew in 1992, my friend from South 
Carolina, Senator Hollings summed up FEMA's performance by saying, ``A 
major hurricane is not one disaster, but two: The natural disaster of 
the hurricane itself, and the unnatural disaster of Federal efforts to 
aid the victims.''
  Over the last decade, with help from Congress and new leadership, 
FEMA has worked hard to regain the trust of its constituents, 
especially those Americans affected by a major disaster. Now we must 
maintain FEMA's independence to ensure that an increased emphasis on 
terrorism will be in addition to, and not at the expense of, the 
Agency's natural hazard programs.
  As it now stands, FEMA is a small, flexible agency with a director 
reporting directly to the President. This chain of command works well, 
but it would be lost if FEMA were moved into the Department of Homeland 
Security. Adding another layer of bureaucracy to the disaster 
declaration process can only slow vital response and recovery efforts.
  Again, I firmly believe that it is critical to prepare America to 
respond to terrorist acts, but we must not lose sight of the fact that 
FEMA's primary focus is to respond to nature's fury. We know that 
fires, floods, tornadoes, earthquakes, and hurricanes will continue to 
cause injuries, deaths, and property damage every year.
  Jeopardizing FEMA's abilities to deal with disasters is not the best 
way to secure our homeland.
  As we move forward, we should be thoughtful and deliberate, and we 
should focus on fixing the failures and not tinkering with the 
successes.
  Accordingly, at the appropriate time I will offer an amendment to 
remove the Federal Emergency Management Agency from the Department of 
Homeland Security. Preserving FEMA's independence is the best way to 
prepare our nation to respond to natural disasters and any future 
terrorist attacks we may face.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER (Mr. Jeffords). Without objection, it is so 
ordered.

                          ____________________