[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Pages 20398-20458]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       ENERGY POLICY ACT OF 2003

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 14, which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 14) to enhance the energy security of the United 
     States, and for other purposes.

  Pending:

       Campbell amendment No. 886, to replace ``tribal consortia'' 
     with ``tribal energy resource development organizations''.
       Durbin modified amendment No. 1385, to amend the Internal 
     Revenue Code of 1986 to provide additional tax incentives for 
     enhancing motor vehicle fuel efficiency.
       Domenici amendment No. 1412, to reform certain electricity 
     laws.
       Motion to commit the bill to the Committee on Energy and 
     Natural Resources, with instructions to report back 
     forthwith, with Frist amendment No. 1432 (to instructions on 
     motion to commit), to provide a national energy policy for 
     the United States of America.
       Frist amendment No. 1433 (to instructions on motion to 
     commit), to provide that all provisions of Division A and 
     Division B shall take effect one day after enactment of this 
     Act.
       Frist amendment No. 1434 (to amendment No. 1433), to make a 
     technical correction.

  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Madam President, as chairman of the Committee on 
Energy, I am ready to proceed at any time. We have no amendments on the 
Republican side, so the amendments are all on the Democrat side. We 
stand ready to accept amendments, to debate them, to vote on them, to 
get rid of them. We are on one of the sections that is clearly 
definable. It has a limited number of amendments, the so-called 
electricity section. We very much would like to proceed and ask the 
other side if they are ready, if they could perhaps start with an 
amendment on the electricity side, and let us know what the remaining 
amendments are so we can see how long it will take us to complete the 
electricity title of this bill.
  I say that, and at the same time I put it as a question to the 
minority leader.
  Mr. DASCHLE. Madam President, could the Chair inform the Senate as to 
what the pending business is?
  The PRESIDING OFFICER. The pending question is the majority leader's 
second-degree amendment to his first-degree amendment to his motion to 
commit.
  Mr. DASCHLE. Do I understand the Chair that the answer is the pending 
business is the motion to commit the bill, not the electricity title, 
is that not correct?
  The PRESIDING OFFICER. The pending question is that motion and the 
amendments thereto.
  Mr. DASCHLE. I inform my colleagues that is the issue.
  Last night, the majority leader filled the tree and made a motion to 
commit, moving off of the floor for consideration of the energy title. 
I will talk about that for a couple of minutes as I consider those 
actions last night.
  We have heard some very creative explanations from the majority about 
how the Senate has gotten into the mess we are in this morning. They 
are doing their best to blame Democrats, as usual. There is one simple 
explanation for why the Senate has not finished its work: Politics. The 
majority has been playing politics with this bill and with other 
issues. That is just not conducive to reaching the good bipartisan 
outcome we expect in the Senate. Republican leaders have been playing 
politics so much that some Members of the Republican caucus have 
themselves begun to protest.
  Conservative Republicans now say their leadership could have finished 
this Energy bill if the Senate had not been repeatedly distracted by 
political matters. I agree.
  In an article headlined ``Frist Schedules Judicial Votes, Slowing 
Energy Bill'' in today's addition of Rollcall, it reported that:

       Though most Republicans are publicly blaming . . . 
     ``obstructionism'' for the sputtering energy debate, many GOP 
     Senators privately acknowledge that the [majority leader's] 
     decision to pepper this week's schedule with unrelated votes 
     on controversial judicial nominees has made it less likely 
     the Senate will pass the energy bill before the August 
     recess.

  That is not Democrats talking; that is what Republicans have said.
  The Rollcall article goes on to quote one Republican Senator:

       It might have been better not to have brought [judges] up. 
     I think it was a mistake.

  That is according to Jim Inhofe, quoted in Rollcall.
  It quotes Senator Larry Craig, ``who is one of the many conservative 
Republicans who have complained about Frist's unwillingness to push the 
energy bill to Senate passage, [and] said the majority leader could 
have avoided the time issue on judges by not bringing them up at all.

       ``It was unwise,'' said Craig, former chairman of the 
     Republican Policy Committee.
       I've been in the leadership--never at [Frist's] level--but 
     I clearly realize the pressures put on you to do other things 
     in the runup to a recess.
       I've also been involved in tough floor debates before, and 
     once you get on them, you stay on them, and you drive it 
     until you finish it.

  Senator Craig Thomas agreed:

       I wish we hadn't gone off it, frankly.

  The Rollcall article went on to state that relatively few debate days 
spent on energy ``have been spread out over the past three months 
causing Craig and others to complain that the on-again, off-again 
schedule has prevented the bill from gaining the momentum to pass.''
  Again, all quotes from Rollcall this morning.
  Last evening provides a good but regrettable example of how this on-
again, off-again Republican schedule has slowed the energy debate. The 
Republican leadership scheduled a vote for this morning on cloture on 
the nomination of one of the most highly controversial nominees we have 
had in this Congress. The outcome of today's vote was never in doubt. 
It was scheduled purely for political reasons, to satisfy a segment of 
the far right. A schedule of this vote elicited a vote

[[Page 20399]]

last night not on energy but on a controversial judicial nominee. The 
Senate spent from 6 p.m. yesterday until 10:17 p.m. debating something 
other than energy, 4\1/2\ hours wasted on political debate brought on 
by Republicans, 4\1/2\ hours that could have been spent productively on 
the Energy bill.
  That is not the only kind of interruption we have had this week. We 
even stopped action on the Senate floor on Tuesday for 2 hours so the 
Senators could attend a meeting at the White House. Guess what the 
purpose of that meeting was. For the Senate to be urged to complete the 
Energy bill. So we took 2 hours off of the floor debating the Energy 
bill to talk about how important it was to complete it--a few blocks 
from here at the White House.
  Hurry up and wait seems to me to be the adage. Stop and start, switch 
gears. That has been the pattern all week long. In fact, that has been 
the pattern now for months. At one point we interrupted the Energy bill 
on June 12th and we did not return to it until the evening of July 
24th, an interruption of 5\1/2\ weeks. To make matters worse, we are 
told the topsy-turvy schedule will continue tomorrow. As if the 
schedule were not bollixed up enough already, Senate Republican leaders 
now say we will be taking up the nomination of yet another 
controversial nominee for another political vote tomorrow.
  As Republican Senators said today in Rollcall, that is just not the 
way to complete action on a major, complex piece of legislation.
  Something else is very important about this debate. It has been 
omitted from what the majority is saying this morning. It is what this 
Energy bill and its debate is supposed to be all about. It is about 
ensuring Americans will have a comprehensive, balanced, reliable energy 
policy that protects consumers from energy market manipulation and high 
energy prices. These are important issues. It takes time to get them 
right. We have a duty to the American consumer to ensure that we fully 
consider what our energy policy should be in the future.
  Without further amendments, this bill, unfortunately, could be billed 
``the Enron Production Act.'' Despite the massive problems experienced 
in our energy markets recently, this bill fails to address some of the 
most basic problems we are facing in our country today. It fails to 
outlaw many of the most egregious scams and frauds that have been 
perpetrated against energy ratepayers all across the country.
  The round-trip trading was one of the scams used in manipulating the 
markets by Enron. Round-trip trading was actually covered in the 
Domenici bill and was also covered in the amendment offered by the 
distinguished Senator from Washington, Senator Cantwell. Fat Boy, 
hiding the profits and then making a number of different calculations 
and begging for others to get involved, the Fat Boy scam is not 
included in the bill. It was included in the Cantwell amendment that 
came up yesterday. Ricochet, which allows Enron and other companies to 
dodge the price caps, was not in the Energy bill but was in the 
Cantwell amendment yesterday. Death Star, the leaking air out of tires 
and then paid to tow, that, also, is something that was not covered in 
the Energy bill but is covered in the Cantwell amendment. All the way 
down, every single one of the scams used by Enron, except for one, was 
intentionally eliminated, removed from the Energy bill.
  There is no protection against the very scams that devastated 
California and devastated Washington and are going to devastate the 
country unless we deal with it. Why have they been left out? I can't 
tell you. But they are left out, leaving consumers with the very likely 
prospect they will get gouged this winter with natural gas prices and 
you will see manipulation like we saw with Enron, over and over again, 
because this bill is unwilling to address those key manipulation 
practices that made Enron the scorn of the country that it is today.
  Democrats are willing to work, as I have said 100 times on the Senate 
floor over the course of this year. We are willing to work with our 
colleagues to come up with a bill that works, that addresses these 
scams, that addresses all the shortcomings, that provides a meaningful, 
comprehensive piece of energy legislation. But to do that, we have to 
address electricity in a meaningful way; we have to look at global 
warming; we have to pass a renewable portfolio standard; we have to 
address CAFE; we have to ensure that hydroelectric dam relicensing is 
included; we have to ensure Indian energy is part of our plan, nuclear 
subsidies, natural gas, energy efficiency incentives, wind energy, 
carbon sequestration. All of those issues are legitimate, worthy 
considerations for debate, amendment, and ultimate decision by the 
Senate as to what kind of energy policy we ought to have in this 
country.
  These are not single amendment issues. Each one of these areas is 
going to take a little time. But you don't have that time to deal with 
these questions when you have debated William Pryor for 4 hours in a 
prime time opportunity last night. You are not going to deal with it 
today when we have to explain why Carolyn Kuhl is a nominee about whom 
we have great concern. You are not going to do it, as our Republican 
colleagues have said, when you get waylaid and you are taken off the 
bill for days, if not weeks, at a time.
  So it is no surprise that we are in this mess this morning. We faced 
a very difficult time last year passing an Energy bill. But you know 
what we did? We stuck to it; we stayed with it. It took us days and 
days. We entertained 144 amendments. We had rollcall after rollcall on 
every one of these issues. We ultimately passed the bill 88 to 11. But 
that is how you work in the Senate. That is how you get the job done. 
You don't bounce around taking this from that, moving from this to 
that, and ultimately not having the kind of momentum it takes to finish 
a bill on time.
  We have only spent, realistically, 8 days on this bill--8 days. We 
have only had a few rollcall votes. We have considered 102 fewer 
amendments than we did last year.
  I am not suggesting that somehow we have to replicate what happened 
last year. I think we can do it faster than that, and I have come to 
talk to the distinguished manager on more than one occasion to say we 
are prepared to work with him.
  I don't know of anybody who has worked harder to accommodate our 
majority and to work to see that we find ways in which to work through 
these amendments such as the Energy title, more than Senator Reid has, 
our assistant Democratic leader. No one has worked harder than he has 
to get to a point where we can actually consider these amendments one 
by one. Nobody is trying to delay this bill. But it is impossible to 
finish it with all of the extraordinary diversions we have had.
  I will end where I started. This is politics. This is blame the other 
guy. This is, we can't get it done so we will just tell everybody it is 
the Democrats' fault.
  I thank our colleagues for their candor in Roll Call this morning 
because they have laid the facts bare. They know and we know why we 
don't have this bill done. They know and we know that until we get 
serious about meaningful consideration of amendments on these difficult 
issues, we are not going to get it done.
  We are prepared to work. But as long as we have nominations such as 
we have this morning that is impossible. I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Madam President, first, let me say I am very 
appreciative of the efforts that have been put forth by Senator Reid, 
working with the Senator from New Mexico and others, as we move through 
this bill.
  Second, I am absolutely positive that the issues which the 
distinguished leader raises, in terms of the people of our country 
needing protection and his long litany--I am absolutely concerned that 
when the day is done and the bill is passed, that the Senate will find 
that each and every one of them are covered and they are in this bill.
  We didn't work forever to leave the kinds of loopholes to hurt the 
American people that are described in that

[[Page 20400]]

litany of items that the distinguished majority leader says remain 
undone. I understand. He would rather we prove that on the floor of the 
Senate. I assume that is what he is talking about, by way of debate.
  But so there will be no misunderstanding, this is a good bill. The 
electricity section covers every one of those issues that were raised. 
The question is, How long should it take for us to get those issues 
before us, debated, and completed?
  I am not here to discuss the policy of our leader. He is here; our 
whip is here. They can discuss that. But I know we could have 
accomplished a lot more than we have as of today on the Energy bill. We 
could have accomplished, in my humble opinion, without any question, 
the entire electricity portion of this bill. Every reasonable amendment 
anybody has could have been debated. We took 1 full day when we did 
absolutely nothing because one Senator said we could not change from 
one amendment to another when everybody knew that was what we were 
going to do upon our return.
  We had an Indian amendment that even the Democrat manager of the bill 
wanted to set aside for a few changes so we could proceed, and the 
whole day passed because one Senator said you will stay on it and you 
can't do anything else.
  I submit that 1 day, being the day of Monday, we would have completed 
one, two, or even three of the sections on the most important part of 
this bill, the electricity section.
  Far be it for this Senator to go through each day over the last 7 or 
8 and talk about what has happened by way of interruptions. But I can 
say, only speaking for myself, that the Energy bill is the most 
important remaining legislation that we have for this year. I say that 
not just for myself, not just for my distinguished minority friend and 
leader, but for the majority leader. There is no more important 
legislation than the Energy legislation. And Senator, I say to you, I 
don't think you have ever said it is not, and I do not imply that. It 
is filled with important issues. It is filled with proposals which will 
lessen our need for imported oil. It is filled with provisions which 
will turn our electric system into a real system instead of a 
hodgepodge that accomplishes little or nothing other than each region 
of the country provides more and more and the country, as a whole, is 
shortchanged.
  It provides alternatives. It provides the energy sources we have all 
been worried about being shortchanged--wind energy, bio energy, and the 
like. It has a tax section which will sensitize and provide incentives 
so that we will bring these kinds of energy on board.
  Why do I talk about them in light of the speech which we have just 
heard? Because I submit that it is easy to find reasons not to get this 
bill done. It is easy to find justifications for saying we could not 
get it done. But I believe it should be very difficult to justify not 
proceeding.
  For instance, right now we have the entire days of today and 
tomorrow. Neither of these days is planned for anybody's vacation--
anybody's use. I beg the other side, let's finish the electricity 
section today.
  The answer is, we can't do bills in pieces. My response is why not? 
The electricity section of this bill is a section that is, indeed, all 
by itself. The amendments I have heard about are about two-thirds 
finished. Our leader is willing to remove the impediments which are 
technical in nature so we can proceed.
  So I beg the minority, let's do the electricity provisions in this 
bill. Let's do it now. Let's do it tomorrow. Granted, we will have more 
to do, but what is wrong with doing one big piece of this bill now? 
What is wrong with completing the sections, if in fact the minority 
leader is correct in the chart that he showed? This Senator says he is 
not, but if he is, let's talk about them today. Let's see the 
amendments and let's vote on them.
  It is now 11 o'clock. Even if we do not want to work very hard we can 
work 7 hours today and 7 hours tomorrow. I submit you can finish five 
or six amendments on electricity, Senator Lott, before that time has 
elapsed, and we will not complete everybody's desires on this bill but 
that is pretty important.
  We can either do that or we can stand up here and say the 
distinguished minority leader is correct. He has just quoted a bunch of 
Republicans who are second-guessing the majority leader or who are 
being misquoted--maybe they really did second-guess him, maybe they 
didn't, but it looks good. The way the quotes are used, it looks as if 
they are criticizing him. But, nonetheless, it does not mean we can't 
get something done.
  I submit it is as simple as this. If they will agree to do that, I 
will get the majority leader to agree that we go home on this recess 
and we return and we will take up this bill as soon as we return and 
finish it.
  That is a pretty bona fide offer. It is pretty fair to the Democrats 
and pretty fair for the American people. Let me repeat it. Let's do the 
electricity provisions now. Let's work hard and complete them. That 
means we work until 7 or 8 tonight. Tomorrow night, we might not have 
to work that very hard.
  I saw those lists. Those are not difficult amendments. We will be 
finished with what everybody says is the most complicated and most 
difficult portion of this bill. Then we can ask, Where are we? Then we 
can agree and say to the Senate we can go home on recess. And, Mr. 
Majority Leader and Mr. Minority Leader, won't you agree that upon our 
return, we come back to work? We come back on a Wednesday. We will have 
a Wednesday, a Thursday, and a Friday, and we will set those three days 
aside unequivocally--absolutely nothing else but the Energy bill. We 
can do that. Then we can stop blaming. We can do something productive, 
constructive--not completion of everything but pretty much.
  What else would the minority like us to do? Would they like us to do 
something about the other pending judge? Let us ask the leader about 
this other pending judge, and get on with what I am just describing as 
a manager of a very positive approach to this bill.
  For some reason, it would appear to some that we must set aside 3, 4, 
5, 6, 7, or up to 8 days and leave them there in order to consider the 
Energy bill in its entirety. I see no relationship in discussing with 
the American people the electricity section of this bill and a section 
on clean air which might be offered at another time. They are 
completely different. As a matter of fact, the second one doesn't even 
belong on this bill. It could be offered 6 months from now on an 
Environment and Public Works bill, to be honest. But we intend to offer 
it here. It need not be done on the same day in the same week in some 
kind of togetherness so we can tell the people the entire story. We can 
do the biggest piece of this without any difficulty today.
  I believe I am just talking because that is what is expected. But the 
other side has made up its mind. I have found that sometimes when you 
make a proposal that is halfway reasonable, somebody listens to it. I 
am making one. The Senator from New Mexico sometimes offers 
unreasonable proposals. Most of those were when I was doing the budget. 
That was because people thought I didn't want to spend some money that 
was patently unreasonable. But what I have just offered is not 
unreasonable. I submit it should be done. I ask that it be done. I 
implore the minority to let us do it. I ask that they sit down for a 
moment off to the side of the Senate and agree to it.
  I also ask, since the majority leader was able to put a chart up and 
list seven items, if I counted right--maybe it was six--that perhaps he 
could let us see six amendments on electricity, or five or seven. Who 
knows? We might be able to agree on three or four of them. We can't get 
that done either.
  That is normally the way we do it. It is not as if we have to be 
hiding these issues. They are either real or they aren't. If somebody 
can really show the American people a piece of legislation that says 
the electricity bill is going to hurt the American electricity user, 
here is the language or not. It ought to be audible, understandable, 
and clear enough so we can get it out there and look at it. I have not 
been able to do that yet.

[[Page 20401]]

  I haven't seen any amendments on the other side that clearly say the 
electricity section was put together and is supported by all method, 
manner, and kind of electric generating and electric distribution 
companies in America. Did you know that? The section is supported by 
all kinds. With one exception, it has everybody's support. It would 
seem to me that it is pretty good. Let us see what is wrong with it, 
and let us get those solved.
  I apologize to the Senate for taking so much time. But I have a 
hunch, from what I just heard, that maybe I will not be speaking for a 
couple of weeks on the subject, in which event this might be the last 
you will hear from me for a while about this subject. But I beg you not 
to cut it off this morning, and not to leave here with some kind of a 
pick and with some kind of partisan ill feeling. Just as you might have 
them on your side, I am sure some have them on our side, partisan-wise. 
If mistakes were made, I am sure on our side of the aisle somebody will 
get up and say you have made mistakes. But please don't get up from the 
Judiciary Committee when I am finished--none of you--and talk about how 
we made mistakes with reference to the judges. Let us put that off for 
a while to see if we can't stay on electricity for a few minutes, if 
you do not mind. I beg you.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Ensign). The Senator from North Dakota.
  Mr. DORGAN. Mr. President, the Senator from New Mexico, chairman of 
the committee, has great passion for this legislation, as do I. I know 
that last evening I perhaps offended some in this Chamber by standing 
around here and objecting to everything for a while because last 
evening, at a time when I thought we should be on the Energy title, we 
were preparing to move this Senate to debate on a judgeship that didn't 
have to be debated. So I sat out here and objected to everything, and 
it upset people. I understand that. But I had the same goal that the 
Senator from New Mexico has. I thought we should be on the Energy bill 
and on the electricity title. I believe we ought to do that title. I 
would like us to start now and do that title.
  My colleague, Senator Cantwell from the State of Washington, sat here 
for 2 hours last night wanting to offer an amendment and go back to the 
electricity title of the Energy bill but couldn't because we were on a 
judgeship that we didn't have to do. We shouldn't have had to do that 
now.
  Let me make a comment. I think the way to approach this--I happen to 
have the same goal--is I believe we ought to go back to the electricity 
title right now. I would like to have amendments offered and debated. I 
am willing to stay here all night and get through the electricity 
title.
  I tell you how I think we should best do that. I think we should 
vitiate the motion to recommit the Kuhl nomination. We don't need a 
vote and debate on another judge, and especially a controversial one. 
Clear those things out of the way right now and begin the next 
amendment on the electricity title. I don't know what that amendment 
is, but let us have a debate on it.
  Let me also say that the Senator from New Mexico--in fact, both 
Senators from New Mexico, the chairman and ranking members of this 
committee I think provide pretty good leadership for this Chamber. I am 
pleased they have the role they have.
  There is a legitimate disagreement on the electricity title with 
respect to the protection for consumers. That is a legitimate 
disagreement.
  I have a letter from Mr. Eliot Spitzer. Mr. Spitzer testified at 
hearings I held in the Commerce Committee on the Enron issues and also 
the Wall Street issues about 2 years ago. It is addressed to Senators 
Domenici and Bingaman. I believe other Members have copies of it. He is 
one side of this agreement.
  He said:

       I applaud your efforts to protect our energy markets from 
     fraud and manipulation through legislation currently under 
     consideration on the floor of the U.S. Senate. I am, however, 
     concerned that certain provisions of the proposed legislation 
     would make it difficult for States to protect their citizens 
     from such fraud and manipulation.

  Then he went specifically into sections 1171 and 1173. He said:

       Sections 1171 and 1173 of the proposed amendment would 
     undercut State law enforcement and regulatory agency efforts 
     to stop fraud and abuse in the energy markets.

  I know Eliot Spitzer. He is attorney general of New York. He has done 
extraordinary work. He has taken all of them on in behalf of consumers. 
He has a view here that is very important and which we should consider 
very seriously. We have different views about how we protect the 
consumers.
  With respect to west coast electricity manipulation--the manipulation 
of the markets to the tune of billions of dollars--I assume at the end 
of the day all of us want to end all of that opportunity by any company 
that would manipulate the markets. If we have the same goal at the end 
of the day, then, look, in my judgment, let us begin offering 
amendments. Let us have the staff and the relevant Members begin 
working them out and talking through compromises that are necessary, 
and then finish the electric title. At least let us do that title.
  But that can only be done, it seems to me, if we get rid of the 
extraneous issues. We have a motion to commit. And I am told--I have 
not seen that motion in detail, but I am told the motion to commit 
excludes, for example, some amendments that already have been passed.
  I had an amendment, and a pretty strong vote on my amendment, dealing 
with targets and timetables with respect to hydrogen economy and fuel 
cells. My understanding is that is not included in the motion to 
commit. So the motion to commit has all kinds of issues attached to it.
  Let's get rid of that, and let's get rid of the Kuhl judgeship 
nomination, and then move to the electricity title, stay on it, and 
finish the title. As far as I am concerned, I sign up to do that. I 
would hope the majority leader would. I hope most of my colleagues 
would. And I hope there is no one on the floor of this Senate who says: 
Let's dig in our heels and not do this.
  I happen to agree with the Senator from New Mexico, the chairman of 
the committee. He does not have to beg anybody, not me, and not 
anybody, I hope, on this side to want to finish this bill, beginning 
with: Let's finish this title, the electricity title.
  Let me say, finally, this title is critically important to this bill. 
This bill is about incentivizing production. It is about conservation. 
It is about efficiency. It is about incentivizing limitless and 
renewable sources of energy. It is about a wide range of issues.
  But in the electricity title it is also about paving the road for a 
philosophy that some want dealing with ``restructuring'' in which you 
will move electricity from some areas of the country to other areas and 
of which consumers in areas where they enjoy low-cost power--my State, 
for one--will see that power move to other parts of the country where 
they now pay higher rates for power, and they want our lower cost 
power, so it will be replaced with higher cost power.
  A study by the Department of Agriculture some while ago said 
consumers in a State such as mine, under this deregulation and 
restructuring, will end up paying substantially higher electric rates. 
That is not what I want for my State. So there is a lot of discussion 
about whether deregulation and restructuring is appropriate.
  We have been deregulated and restructured to death. We have seen it 
in the airlines. We have seen it in the railroads. We have seen it in 
trucking and so many areas. Every time we have been restructured, I 
tell you this, the rural States lose. So we need to think through this 
very carefully.
  In the electricity title, especially, if we end up with concentrated 
markets, fewer firms, with more muscle and more power, then consumers 
need to have the opportunity to protect themselves. We must have 
adequate protections in this title for consumers because we have seen 
what happens without it.
  I tell you, when I began to see the results of what was happening in 
the west coast electrical markets and energy markets, including natural 
gas,

[[Page 20402]]

the first information we received about that was almost unbelievable. 
You would read some of these internal memos that were sent to us by 
people inside the companies, and you would say: Well, this clearly 
can't be right. They wouldn't write a memo in which they said: Let's 
construct a strategy by which we cheat, and we will put a name on it, 
Fat Boy. But, in fact, the more we dug, the more we found. And the more 
we found, the more disgusted we became because west coast consumers got 
cheated. It was stealing. And there are now substantial criminal 
investigations underway.
  The interesting point about that is, the hearings that we held in the 
Energy Committee during that period of time were hearings in which we 
had the Federal Energy Regulatory Commission come up and testify. They 
are supposed to be, remember, the referees, the people who wear the 
striped shirts, the ones with the whistles, the ones who call the 
fouls. They came up and sat and did their best imitations of a potted 
plant, acting as if they were dead from the neck down--and neck up, for 
that matter--acting as if nothing was going on. They said: Well, there 
is no manipulation. There is nothing happening that is untoward. This 
is the market system.
  It was not the market system. It was crooked. It was criminal. It was 
systematic and relentless cheating of consumers. That is why this title 
is so important. We have to do this, and we have to do it right.
  Now, I don't want, at the end of the day today, tomorrow, or 
Saturday, or Sunday--I don't care--I don't want, at the end of the day, 
for any of us to think we failed to do an Energy bill, that I think we 
should do, to finish an electricity title, that I think we should 
finish, because those who schedule this place said: Well, this is 
urgent, but we should do this judgeship first; this is urgent, but we 
should do the second judgeship next; this is urgent, but we should do 
some trade bills, some free-trade amendments.
  I don't understand that. If this is urgent--and the President called 
us down to the White House to say it was; in the Cabinet Room he told 
us, we need to get this done--if it is urgent, why all the starting and 
stopping?
  Mrs. BOXER. Will my friend yield for a question?
  Mr. DORGAN. Why don't we start? If it is urgent, why don't we start 
at this moment and get to the finish line on the electricity title?
  My colleague, Senator Domenici, suggested we do that. I say, let's do 
it. Two steps are required: vitiate this motion to commit and get rid 
of the Kuhl nomination, which, incidentally, in my judgment, should not 
come to the floor, in any event; and then let's get on electricity, 
stay on electricity, and I will be here with Senator Domenici and 
Senator Bingaman until we are done with that title. Then let's see what 
is left and see if we don't find the finish line in this bill. That is 
the way we should do this bill.
  Now, look, I don't run this place. I understand that. Others do. We 
are not the majority. Others are. But the question of what is urgent 
and what is important is a function of scheduling.
  I would just say to the majority leader, and others, I believe at 
this moment our responsibility--if this is an urgent bill; and I do 
believe it is an urgent bill--our responsibility is to clear the deck--
clear the deck--and move ahead. You clear the deck by getting rid of 
this motion to commit, getting rid of the judgeship, allowing Senator 
Cantwell to offer her next amendment, allowing others to offer their 
next amendment, working through them, one by one by one, using a little 
common sense about how we improve this Energy bill so all of us can 
pass a piece of legislation that we are proud of, and one that advances 
the interests of the country.
  Mrs. BOXER. Will the Senator yield for a question?
  Mr. DORGAN. I am happy to yield.
  Mrs. BOXER. First of all, I thank the Senator for his, as usual, very 
concise reasoning over where we are. We are at a bit of an impasse 
because of what my colleague said.
  I want to ask my friend, is he aware that for the Kuhl nomination 
both Senators from her State oppose her confirmation? Is my colleague 
aware of that?
  The PRESIDING OFFICER. The Senator will direct her questions through 
the Chair.
  Mr. DORGAN. Mr. President, responding to the Senator's question, I am 
aware of that. It is unusual because the rules used to be if both 
Senators from a State oppose the nomination, then it would not come to 
the floor. As I understand it, that was always the rule. That rule has 
apparently been abrogated or at least changed with respect to this 
nomination.
  Mrs. BOXER. I want to further say to my friend, when Bill Clinton was 
President and Orrin Hatch was chair of the Judiciary Committee, if one 
of the two Senators from that particular State did not send back a 
permission slip--or, as we call it around here, a blue slip--the 
nomination never moved forward.
  Is my colleague aware that rule is changed by the chairman and, 
indeed, ignoring Senators' views? I would say through the Chair, is my 
colleague aware that Senator Hatch changed that rule?
  Mr. DORGAN. Mr. President, responding to the Senator from California, 
I am not aware of the internal machinations of the Judiciary Committee. 
I read about what that committee does from time to time. And while I 
suppose it is entertaining, because there seems to be a fructus over 
there on most of these issues, there has been one consistent thing that 
has happened in the Judiciary Committee with respect to judgeships; 
that is, the judgeships are circumstances where the President proposes 
and we dispose. We have a constitutional obligation and requirement. 
Normally speaking, the Judiciary Committee has relied on the judgment 
of the two Senators from a State before it decides whether to move a 
judgeship.
  My understanding is, the judgeship that is to be moved to the floor 
for a vote--a cloture vote in the middle of this Energy bill; and, 
incidentally, preceding a vote I assume there has to be debate on this 
judge--this particular judge has been opposed by both Senators of the 
State.
  There is no reason, there is no reason at all, for that to be debated 
now or to have a cloture vote in the middle of an urgent piece of 
business such as the Energy bill. I do not have the foggiest idea why 
that is brought up, unless it is to advance some political interest 
someplace. But that ought not be here.
  Senator Domenici is absolutely right. What we ought to do at this 
moment is go back to the starting line on electricity, and then decide 
that between now and the end of the electricity title we are not going 
to be interrupted--no interruptions for anything. I agree with Senator 
Domenici, let's do that. I pledge I will stay here on the floor and 
work with my colleagues. Let's get the electricity title done. And 
let's not move off to these extraneous issues. It makes no sense, if 
this is, in fact, an urgent matter, to move off it onto judgeships that 
shouldn't be debated and shouldn't have to be voted on prior to the 
break.
  Mrs. BOXER. Mr. President, I have one last question for my colleague 
through the Chair.
  I just want to say, as someone from a State that has been painfully 
hurt by the electricity scams that went on on the west coast--and I 
think Senator Cantwell has put it best when she relays the story that 
when she goes home--and I can tell her, it happens to me, too--people 
say: Why isn't Ken Lay in jail--Ken Lay, the head of Enron Corporation?
  They ask me about Jeff Skilling who came before the Commerce 
Committee and defended these schemes. He didn't know anything about all 
the schemes that came to light that hurt the people of California to 
the tune of probably an $11 billion theft.
  So I ask my friend, through the Chair, this question: We have no 
control over when and if ever Ken Lay goes to jail or the other 
scoundrels who did this to the people of the west coast by making these 
phony shortages and stealing their money for things they need to 
survive. We don't control that. The administration does, through the

[[Page 20403]]

Attorney General's Office. I hope they are moving aggressively, but it 
is awful slow.
  Mr. LOTT. Regular order, Mr. President.
  Mrs. BOXER. What we do control is this Energy bill and this 
electricity title. My friend is so right to try and protect his people 
and the people from every State in the Union from what my people went 
through in California and Senator Cantwell's people went through.
  The PRESIDING OFFICER. The Senator yielded for a question only.
  Mrs. BOXER. I am asking my question. Isn't it true, I say to my 
friend, that this is the only way the Congress can assert itself since 
we have no control over what happens in the courts, that we can do 
something about sparing your people and the other people around this 
country from what California went through?
  Mr. DORGAN. Mr. President, responding to the Senator from California, 
I believe that is the case. This is the place to have that discussion. 
As I mentioned to Senator Domenici, there is a respectful disagreement 
perhaps about what words mean and what protection might or might not 
exist. But surely we can work that out, offer amendments, have votes, 
and get to the end of the electricity title.
  I referenced a letter that has been sent to Members of the Senate 
from Eliot Spitzer, the Attorney General of New York. I ask unanimous 
consent to have the entire letter from Attorney General Spitzer printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                State of New York,


                               Office of the Attorney General,

                                      New York, NY, July 30, 2003.
     Hon. Pete V. Domenici,
     Chairman, Committee on Energy & Natural Resources, 
         Washington, DC.
     Hon. Jeff Bingaman,
     Ranking Minority Member, Committee on Energy & Natural 
         Resources, Washington, DC.
       Dear Chairman Domenici and Ranking Member Bingaman: I 
     applaud your efforts to protect our energy markets from fraud 
     and manipulation through legislation currently under 
     consideration on the floor of the United States Senate. I am, 
     however, concerned that certain provisions of the proposed 
     legislation would make it difficult for States to protect 
     their citizens from such fraud and manipulation. In addition, 
     the failure of this legislation to remove the so-called 
     ``Enron Exemption'' codified in the Commodity Futures 
     Modernization Act of 2000 will allow electronic trading and 
     other activity in the energy market to escape oversight.
       Sections 1171 and 1173 of the proposed amendment would 
     undercut State law enforcement and regulatory agency efforts 
     to stop fraud and abuse in the energy markets. Requiring that 
     ``any request by any Federal, State, or foreign government, 
     department or agency or political subdivision'' for 
     information from energy market participants be directed to 
     the Commodity Futures Trading Commission (CFTC), the proposed 
     legislation would hamper States' investigation of violations 
     of laws related to the energy markets. Interposing this 
     federal screen between the States and the perpetrators of 
     abuses is inappropriate.
       In addition, by expanding the CFTC's jurisdiction over 
     electricity and gas markets, the amendment would inhibit the 
     authority of States as well as federal agencies to address 
     abuses in these markets, markets that, as a result of the 
     Enron Exemption, are not subject to CFTC oversight.
       As the United States Senate seeks to protect our nation 
     from energy market abuses, I urge you not to diminish the 
     ability of the States and of federal agencies to prevent, 
     detect and eliminate threats to American consumers and 
     shareholders.
           Sincerely,
                                                    Eliot Spitzer,
                                                 Attorney General.

  Ms. LANDRIEU. Will the Senator yield for a question?
  Mr. DORGAN. I am happy to yield for a brief question.
  Ms. LANDRIEU. I wanted to ask my distinguished colleague if I had 
heard the Senator from New Mexico correctly when he suggested that one 
way to proceed to move us past this very difficult hurdle would be to 
take up the electricity section and try to finish that before we left? 
If that is what I heard, was that a suggestion made by the chairman of 
the committee, who has worked so hard to try to put a bill together, 
thinking we could perhaps resolve some of those difficult issues on the 
electricity section? Is that what the Senator understood the chairman 
of the committee to say?
  Mr. DORGAN. The chairman of the committee has great passion about 
wanting to finish this bill. I serve on the committee, as does the 
Senator from Louisiana. I understand that passion because I believe 
energy is a significant priority. He indicated he would beg that we get 
back on the electricity title and finish the title. I happen to think 
that makes a lot of sense. I believe we should do that posthaste and 
move through the amendments.
  It is almost as if the Senate as an institution has attention deficit 
disorder. We just go from one subject to another and then back. And 
then we say, OK, focus, focus, this is urgent, this is important. And 
then an hour later, we are off on another subject for a bit because we 
have to vote on a judgeship in California; we have to vote on a 
judgeship here or a trade agreement there.
  I suppose in real life you could be medicated for that, but as an 
institution, all we have to do is decide that we are going to focus on 
that which we believe is urgent. The Senator from New Mexico has said 
this is an urgent bill. He is correct about that. I have watched him 
for several days. He has great frustration, I am sure, at not making as 
much progress as he would like to make.
  I mentioned a moment ago, I was here last evening. Senator Cantwell 
was here waiting for 2 to 3 hours to offer an electricity amendment but 
could not do it. Why? Because we were off debating a judgeship that 
should not have been debated and didn't need to be voted on. There 
needed to be no cloture vote on that. But the leadership said, you have 
to be off on that.
  I understand the Senator from Mississippi is waiting to speak. He is 
probably going to remind all of us that the Senate isn't run by 100 
Senators; somebody has to schedule. I recognize that at one point he 
had to schedule this place. It is not easy. Scheduling is not easy 
under the best of circumstances, but it is made much more difficult if 
you have conflicting language, saying this is an urgent bill that must 
get done, but then you can't stay on it because you provide all these 
other issues. In the middle of this urgent situation, you decide you 
want to take some time to have a seventh cloture vote on Mr. Estrada. 
Is that urgent? I don't think so.
  So with respect I say, let's now go to the electricity title, and 
let's work through the Energy bill. We ought to get this title done 
tonight. I agree with Senator Domenici; there is no reason we should 
not get the electricity title done, give everybody a chance to address 
those issues.
  I especially think we will want to address Attorney General Spitzer's 
admonition and concerns as well.
  I want to be constructive. I know last night I was objecting to 
people's unanimous consent requests. It was not because I had any 
animus. I just wanted us to get back to the electricity title. I could 
not do that. Eventually they went on and spent the whole night on the 
judgeship because we had this cloture vote scheduled.
  That is my frustration. I share the same frustration that I think 
Senator Daschle expressed earlier and Senator Domenici expressed. The 
best way for us to proceed is to clear the deck, get all the extraneous 
things out of the way and decide we are going to proceed now on the 
electricity title. I for one pledge cooperation to try to get this 
title done. That is what we ought to do.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. Mr. President, I tread out of these waters somewhat 
hesitantly because in the past I have gotten involved in similar 
situations. I know the Majority Leader will be here shortly to respond 
to some of the things that have been said today. But because of some of 
the things I have experienced, I would like to remind my colleagues 
that Senator Dorgan is right: the Majority Leader is the leader. The 
Majority Leader, working with the Minority Leader, has a tough job. He 
has to juggle a lot of balls.
  The idea that there is something unusual about considering two or 
three or four issues intermittently, that that is

[[Page 20404]]

something new, is ridiculous. We have had double tracking, triple 
tracking. I learned it from my Democrat predecessors when they were 
Majority Leaders. To intersperse with a legislative bill executive 
calendar nominations is done every day, every week. There is nothing 
new or unusual about that.
  Until you have walked in the Leader's shoes, I urge you to be careful 
about trying to second-guess him in trying to juggle these different 
balls. It is a tough job.
  We should be voting on judges. We should be confirming judges. I 
really don't appreciate the criticism that I think is being indirectly 
cast at the Leader. I am sure he is going to comment more on the days 
we have spent on this and other work we need to do. Everything is 
urgent all of a sudden. I know how it works. For 3 or 4 months around 
here the Leader is dredging for legislation to call up. And then all of 
a sudden, in May or July, everybody shows up and says: Hey, I'm ready. 
I want my bill. We want to do something about class action lawsuits. We 
want to do the Energy bill. We want the State Department authorization 
bill which, by the way, had to be pulled down because of totally 
unrelated issues. For the first time in 15 years we were about to get a 
State Department authorization, and it was basically forced off the 
floor because of unrelated, irrelevant amendments that were offered to 
it.
  We will get through this if we work together. I am worried about the 
institution right now. We are fiddling while our energy is burning. For 
3 years we have been hacking away at getting a national energy policy. 
We don't have one. And it's absurd for us now to be pontificating, 
saying we haven't made enough progress, when I don't know how many days 
we have been on this bill--I think 16 days, to be exact. There is no 
question this bill is being slow rolled. Everybody knows that. For some 
reason, and I don't know why, the Democrats are dragging it out, 
slowing it down. They don't want this Energy bill to be finished and go 
to conference. That is my opinion, one Senator's opinion.
  This is a bill that has ethanol in it. We had this big agreement way 
back there. We thought once we got an ethanol agreement--a huge 
agreement--that would grease the slides and this legislation would go 
right through. Here we are, a month later, and we are not making good 
progress.
  I think we should quit trying to say this side is delaying or that 
side is going to different issues. We need to get this done. We are 
talking about production, more production in America. We need more oil 
and natural gas. I don't know what the statistics are now but about 56 
percent of our energy needs are coming from foreign oil. People, I 
guess, want to kill the bill because they don't like the environmental 
provisions, or they are afraid ANWR will be opened to actually produce 
more oil. I don't quite understand the fear.
  This is a balanced bill. The committee did a good job. It was a 
bipartisan bill, more production--even going to the excessive ethanol 
that is included in it. Conservation, it has encouragement of 
conservation. It has alternative fuels to the point of being 
ridiculous. It has the tax provision that came out of the Finance 
Committee--a huge package of unbelievable things. We have an abundance 
of desire to try to solve this problem, and I think we need to solve 
it.
  On the electricity section, I have some problems with that. I don't 
like several pieces of it. I am not particularly happy with so-called 
SMD and the regional transmission organizations, RTOs. I think it is a 
problem for my region of the country but I am not about to be a part of 
trying to drag it out or delay this bill. It may be in my interest 
locally to do that or to work to get it changed, but for our country we 
are going to stand here and accuse each other of not handling this 
right, while ``Rome'' and Washington, DC, burns.
  This is ridiculous. Now, on judges, we don't look good, my 
colleagues. This is mutually assured destruction. It continues to 
escalate to ``you did it to us, so we are going to do it to you.'' Now 
we have employed a new mechanism; we are going to filibuster judges. 
This is a huge mistake for this institution and it will not be allowed 
to stand.
  Now we are beginning to question each other's motives. I was 
concerned about what I saw last night in the Senate. We seem to be 
spiraling downward. Somebody needs to sit down and say, look, we are 
going to stop these accusations, stop the filibusters, and we are going 
to vote on these judges. This is personal to me because I believe Judge 
Pickering of Mississippi was very badly and unfairly treated last year. 
I believe the vote on him will be different this year.
  Now it is Pryor. There is no reason to oppose the Attorney General of 
the State of Alabama with his record--not to mention Priscilla Owen, 
Miguel Estrada, and Kuhl. We have circuits now--the Sixth Circuit, I 
believe, includes Tennessee, Kentucky, Ohio, Michigan--with a 25-
percent vacancy. I didn't know Senators could use a blue slip to block 
a judge from their circuit. We don't pick the judges for the circuits; 
the President of the United States picks those. In my circuit, they can 
come from Louisiana, Mississippi, or Texas. I don't think I have a blue 
slip or an ability to block a judge in that circuit that is from my 
State, or from another State, even though I might not particularly like 
him or her. Now we have appellate court judges being stopped in 
circuits all over this country because one or two of the Senators from 
the appellate circuit might want to try to stop them. I haven't served 
on judiciary; maybe that is what happened some in the past. That is 
another example of what is really getting to be a problem.
  I urge the leadership on both sides of the aisle on the committee to 
find a way to stop this because you are going to filibuster these good 
men and women. Then we are going to question your motives and you will 
question ours. I think the Senate needs to take a deep breath. Maybe 
what we need is an August State work period--go home for a while and 
cool off.
  I am not going to affix blame, but I think the way this Energy bill 
is being handled is a huge problem for our country. I hope we will calm 
down, get an agreement to move forward, give the Leader the opportunity 
that he should have to bring up judges, or other Executive Calendar 
nominees, as all Leaders do, and let's have a meeting in September and 
find a way to stop what is going on with judges.
  I admit that I made some mistakes when I was Majority Leader in how I 
handled them, too; but it has gotten worse since then. I don't think 
anybody can deny that. This mutually assured destruction must stop. I 
have said this before.
  Heaven forbid, if we ever have another Democrat President and a 
Democrat Senate, we are going to filibuster your nominees for the 
courts. It will happen. Some of our colleagues may even say they want 
that right. That is wrong. You have a lot of ways you can slow down or 
delay hearings or judges but filibustering judges on either side is 
wrong. I won't be a part of it if the tables are turned, and I was not 
a part of it when I was Majority Leader. I stood right there and spoke 
against filibusters when I was Leader. I voted against a filibuster and 
forced votes on judges with whom I vigorously disagreed.
  Two from California, Paez and Berzon, I will never really be 
comfortable with what I did there. I said we are not going to 
filibuster these judges on the floor of the Senate. So this is a 
terrible precedent and the Leader cannot let this stand.
  So, my colleagues, I sound like a schoolteacher lecturing but, 
because of the experiences I have been through, I plead with the 
institution to get on the Energy bill, make progress, and vote on these 
judges. A couple of judges might not even get 50 votes but that is the 
way it works. If you get a vote, you win; if you don't, you lose.
  Mr. McCONNELL. Will the Senator yield for a question?
  Mr. LOTT. Yes.
  Mr. McCONNELL. The Senator raises an important point on the Berzon 
and Paez nominations. I can remember the Senator, in his capacity as 
Majority Leader, encouraging us to support cloture on two judges about 
whom none of

[[Page 20405]]

us were very enthusiastic. I remind my colleague that 75 percent of the 
Republican Senators voted for cloture.
  The PRESIDING OFFICER. The Senator is reminded to address his 
questions through the Chair.
  Mr. McCONNELL. Mr. President, I ask the Senator from Mississippi if 
he remembers that 75 percent of the Republican Senators voted for 
cloture on both of those judges, and many of us voted against them once 
we got to the up-or-down vote.
  Mr. LOTT. I remember that very well. We did the right thing. That is 
what I am asking now of my colleagues on both sides of the aisle. Let's 
find a way to do the right thing on these judges. It is totally 
indefensible, for instance, that on Miguel Estrada we cannot work 
something out where he won't be defeated by a filibuster.
  I remember other votes, too. I have said on this floor two or three 
times that I voted for Ruth Bader Ginsburg to go on the Supreme Court. 
I didn't agree with her philosophically at all, and I don't agree with 
many of the rulings she is coming out with. President Clinton was the 
President; he nominated her. But she was qualified by education, 
experience, and demeanor, and I voted for her. I think we deserve that 
kind of return of courtesy.
  The Majority Leader is here, so I will stop. I say to the Majority 
Leader, I was talking about the difficult job he has, and I know he is 
going to have some statistics that will indicate what has been 
occurring.
  I yield the floor.
  The PRESIDING OFFICER. The Majority Leader is recognized.
  Mr. FRIST. Mr. President, I will be happy to follow the assistant 
leader very shortly.
  The PRESIDING OFFICER. The Senator from Kentucky is recognized.
  Mr. McCONNELL. Mr. President, briefly, it has been said by Senator 
Lott and others that there is nothing unusual about the so-called 
double-tracking of issues, nothing unusual at all. The distinguished 
majority leader offered to our colleagues and friends on the other side 
an opportunity to have the four cloture votes on judges this week with 
no debate at all. It would have taken up no time on the Energy bill.
  The fact is, this is the 18th day we have been on the Energy bill 
this year; that is more than any other bill. The distinguished majority 
leader made the right call to go to energy this week. He made the right 
call to try to bring to closure four of the President's distinguished 
nominations for the circuit court benches.
  I think Senator Lott is correct. We need to, as he put it, take a 
deep breath, settle down here, and remember that we all came here to do 
the people's business. Energy is important.
  I know the Majority Leader is committed to finishing this important 
legislation for the people of America. I hope there are a significant 
number of our friends on the other side of the aisle who would also 
like to see an Energy bill. I am confident the majority leader is going 
to give all of us an opportunity at some point this year to finish this 
bill.
  I say to my friend, the Majority Leader, I think his scheduling 
decisions for the week were excellent, correct, and consistent with the 
best interests of the American people, and we support him fully in 
those scheduling decisions.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. FRIST. Mr. President, we have worked very hard over the course of 
this week to address the people's business with the schedule that was 
set out weeks ago to address energy in a focused way, a way that would 
allow for debate and amendment, and bring to conclusion the debate on a 
bill that is important to every American listening to me now--every 
American.
  The President initially called for an Energy bill over 2 years ago 
and laid down a policy 3 months ago, and the House of Representatives 
has acted in delivering such a bill.
  As the distinguished assistant leader has mentioned, we have now 
spent 18 days debating energy policy. That is longer than any other 
bill this year and, in truth, as we all know in this body, we have been 
debating energy policy now for 3 years.
  It is true that during the last Congress, we spent 7 weeks on an 
Energy bill, and the other side of the aisle comes forward and says: We 
spent 7 weeks last year, so we are going to have to spend 7 weeks or 8 
weeks or more time on this Energy bill. I appreciate their concern 
because I, too, want to make sure we address these issues thoroughly. 
But what we have is just obstruction, flat out obstruction of our 
commitment to answer to the American people when they ask: Where is our 
national energy policy?
  The distinguished Democratic leader said: Now we have politics 
injected. I do believe that statement is disingenuous when he throws 
the politics on our side and, at the same time, we have a commitment--
and I have said again and again and under the able leadership of our 
managers, I know they are committed to addressing this bill and 
bringing it forward to the American people who do and will continue to 
suffer under skyrocketing natural gas prices.
  I say that because now--and I said it last night after conversations 
we had both on and off the floor--it is clear that we were not going to 
be able to finish the Energy bill this week. We do not have the 
amendments. We do not have the amendments, and we have had a difficult 
time getting an accurate list of amendments.
  When I talk to the managers, they may say we have one or two 
amendments on a particular issue, and then as I talk to other 
colleagues and they say: No, we have 7, 8, 9, 10 amendments. It is that 
lack of pulling together that I am most disheartened about in 
addressing the Nation's business.
  It comes to obstruction, and I do think at this point in time the 
Democrats are bringing progress on this critically important issue of 
energy to a screeching halt. The fact is, we are ready to go today and 
we are ready to go tomorrow, and, if they are willing, we are ready to 
go the next day on the people's business on this Energy bill, and 
basically they are saying no. They are hiding under the allegation: Oh, 
it is judges you are bringing forward--and I will comment on that 
point, but they are hiding behind that issue because they do not want a 
bill.
  They say: We want a bill. I say: Let's get a bill. They say: We want 
a bill but it is going to be sometime off in the future.
  As the former majority leader said, and as the leader on the 
Democratic side said, it is tough scheduling. It is not impossible but 
it is tough scheduling. But one thing that the Republican leadership 
does have to demand is that people are working in good faith to 
complete bills in a timely way. I am beginning to lose faith in the 
other side of the aisle because they are obstructing--flat out 
obstruction.
  The fact is, whether they are in a cornfield in Iowa or whether they 
are in a cornfield in South Dakota or in the mountains of New England, 
Americans want us to pass an Energy bill, not at some vague time in the 
future but right now, an Energy bill--this is what the American people 
understand--that will bring down the soaring cost of energy while 
ensuring an adequate supply. And that is what they are being denied by 
this obstruction by the Democrats.
  It has gotten to where we are hearing this term--it was used earlier 
today--with ``ism'' on it, obstructionism, that we are seeing so much 
obstruction today from the other side of the aisle, whether it is 
bioshield, which we are trying to bring to the floor, or whether it is 
the judges. All we are trying to do is get them to the floor and have 
that debate and discuss them. We can't even bring them to the floor to 
talk about them.
  I come back on energy for one second. People are willing to watch 
this obstruction go forward and not continue to push and do not 
continue to push when we are trying to stay on the Energy bill today 
and tomorrow, and they say: No, we can't do it; we throw up our hands; 
why don't we just go home? That is not in the Nation's interest.
  I plead with the other side of the aisle, let's not obstruct. Let's 
debate

[[Page 20406]]

energy over the course of the day and into tonight. If there are so 
many amendments on the other side--remember, on the other side--let's 
address them one by one. It is simply not acceptable not to address the 
amendments. I believe it is a dereliction of our duties. We are here to 
pass a bill. We are ready to pass a bill. We are waiting for those 
amendments, and the Democrats are obstructing.
  Earlier this morning the minority leader did talk about the virtues 
of the Energy bill and gave the rhetoric, and I appreciate the rhetoric 
and the platitudes, but it is offensive, at least to our side of the 
aisle, when at the same time we are talking these platitudes both here 
and around the Nation in our own States and then we see the same side 
of the aisle, the other side of the aisle, obstruct in a steady, 
consistent pattern. Americans are waking up finally to this consistent 
pattern of obstruction, whether it is on the judges or whether it is on 
the Energy bill which we have before us.
  I have mentioned to the leadership on the other side of the aisle--
they talk about judges; quit bringing up judges at this point--I said: 
Let's just not do judges today. Let's put them aside. Can we finish the 
Energy bill this week? Again the answer was: No, no, we are not ready 
to finish the Energy bill this week. So I think in this call of crying 
politics from the other side of the aisle, the Democratic leadership 
really is showing their own hand. They talk about energy but do not 
deliver.
  It is not just about the Energy bill itself--and we have touched upon 
the judicial nominees this morning, which again all we are asking for 
is a simple up-or-down vote on these nominees when I have asked 
consent. It is not to debate these judges now, although people come out 
of the woodwork for that. It is just to get consent that at some time 
in the future we will have the opportunity to talk about these judges 
and give every Senator their right--and that is through advise and 
consent--to have an up-or-down vote.
  The Democrats--and I come back to the word--obstruct our opportunity 
to advise and consent. That is all we are asking in terms of the 
judges.
  Obstruction--again, people do not see all that is going on. They see 
what is on the floor. But right now the obstruction does fall over to 
other fields--fields such as bioshield. We have worked very hard to 
address an issue which does have an impact on national security, and we 
cannot get consent to bring resolution to a very important initiative 
that provides over $6 billion over 10 years to purchase new 
countermeasures, whether it is on the biological entities, such as 
botulinum, anthrax, or plague, a bill that expands research and 
development so that we will be best prepared in the event terrorists 
use these agents against us. It is legislation that protects us all, 
but it is being obstructed.
  The economy, energy, the judiciary, it is obstruction again and 
again. I do not fully understand why. I think we can all only 
speculate. We do have the Presidential election cycle that is 
approaching. The outside interest groups may be holding sway. I do not 
know. It may be obstruction for its own sake. It is not in the best 
interest of the American people. The American people want us to 
progress. They want us to move America forward, whether it is on any of 
the issues I have talked about today, and all they hear is obstruction.
  I do want to share with my colleagues once again, and those people 
who are listening, and to remind my colleagues on the other side of the 
aisle on the judicial nominees, the requests we have made would not 
mandate in any way consideration of those nominees right now or during 
the Energy bill. That is not the purpose. That is not the way the 
request was put forth. Those consents to be able to bring them up at 
some time in the future, not on the Energy bill, were objected to by 
the other side of the aisle.
  The consents would have allowed votes on the nominations at some time 
in September or October, and the requests were made, lest my colleagues 
forget, for 4 hours to debate these judicial nominees sometime in the 
future, and they said no. Then I said, these are Presidential 
nominations that come to us. We are to give advice and consent. Can we 
bring them up and debate them in an orderly fashion for 8 hours at some 
time in the future--not on the Energy bill but sometime in the future? 
And they said no. Then I asked consent if we could, sometime in the 
future, debate these judicial nominees for 10 hours. Object, object.
  We did schedule cloture votes this week, and they were simply that, 
20-minute cloture votes. Why? Because they objected to bringing these 
judges up and having adequate debate in September or October. What 
alternative does one have but to file a cloture vote to bring them up? 
That is a 20-minute vote.
  I very specifically came to this floor and said that those 20-minute 
votes could be expected in between other Energy amendment votes, 20 to 
25 minutes. All the requests for debate time on those cloture votes 
have come from the other side of the aisle, not our side of the aisle.
  I further remind my colleagues that we tried on numerous occasions to 
reach consent to have a filing deadline on Energy amendments last week. 
Again, objection from the other side of the aisle. I mentioned earlier 
the problem the managers are having is getting their arms around the 
amendments that we are waiting for the other side to offer. Yet they 
are not materializing.
  So if there is any question of the commitment to finishing this bill, 
I think it is clear which side of the aisle is pressing for it and 
which side of the aisle is not pressing forward. It leads me to the 
conclusion that we want an Energy bill, a good Energy bill, for the 
American people, consistent with appropriate production, conservation, 
use of renewable fuels, and tax incentives, to make sure that our 
energy supply is appropriate. We want that type of Energy bill worse 
and are willing to fight for it longer and harder than the other side 
of the aisle.
  It was the Democratic side of the aisle that refused to grant 
consent--that is, obstruct--to have the debate on the electricity 
title. It was the Democratic side of the aisle who refused to enumerate 
the number of second-degree amendments that would be offered.
  I made it crystal clear 6 weeks ago that we were going to be going to 
this bill on this Monday to work Monday, Tuesday, Wednesday, Thursday, 
Friday, to complete this bill. Yet, on Monday, the Democratic side of 
the aisle refused to grant consent to have that debate on the 
electricity amendment. That refusal really did not rob us, but it meant 
we could not use Monday as productively as we should have used it. 
Again, that lack of participation makes it very difficult to achieve 
what is in the best interest of the American people.
  The chairman of the committee, the manager, Senator Domenici, earlier 
this morning indicated there are amendments on the other side of the 
aisle. There is only so much we can do. We cannot really reach over to 
the other side of the aisle and pull those amendments out of their 
pockets or wherever they are. They have to offer those amendments for 
us to consider them. So we have to sit and wait for those amendments to 
come forward so that the Senate can work its business on this Energy 
bill.
  As has been said, we are prepared to have amendments offered. I think 
it is important that we use today and tomorrow to focus on Energy. I 
think we should be able to reach some sort of time agreement to bring 
this bill to completion. I think we need to be working toward voting on 
the issues as we go forward, and I plead with the other side that we 
stay on Energy, we stay focused, and we bring this bill to completion 
as we go forward.
  I yield the floor.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. Mr. President, I listened with great interest to the 
distinguished majority leader. I would offer him advice again, for 
whatever it is worth. I have offered him advice as we have personally 
and publicly discussed progress on the Energy bill. Rather than shrill 
charges of obstructionism

[[Page 20407]]

that nobody believes, I suggest that he tear down the tree, take away 
all of the obstacles that he laid down last night to considering the 
Energy bill, and I believe we could make constructive progress. I think 
we could perhaps finish the electricity title by the end of this week, 
but we cannot do that and then also do what he is now asking of us, 
which is to debate one of the most controversial nominees to be passed 
out of the Judiciary Committee. We cannot do both.
  He wants us to have a vote on that nominee tomorrow morning, and I 
see no other option but simply to debate the nominee. He also would 
like very much for the trade bill to come up. There are 6 hours of time 
locked in for that. I do not know how we do the trade bill, an 
extraordinarily controversial nominee for the Ninth Circuit, and then I 
know he wants to do the supplemental bill as well. That is going to 
take some time. So how do we do all of these?
  Having been the majority leader, I must say it is one of the most 
challenging parts of the job, but I think his colleagues were right; 
they said publicly he made a mistake, and I think they were right in 
their estimation of the schedule for this week. If we really wanted to 
finish the bill, we would not have had all of these diversions. If we 
can learn from our mistakes this week, I think the only answer is to 
let us not repeat them. The only way one can avoid repeating the same 
mistakes is to take out from underneath all of the underbrush the 
obstacles, the diversions, the other priorities that the majority 
leader has.
  As I say, the Senator from Washington has been sitting in the 
Chamber. She sat here last night for hours waiting to debate another 
amendment on the electricity title. There are other Senators who have 
expressed an interest in coming to the floor to debate the electricity 
title.
  How do we do that, No. 1, when we are not even on the electricity 
title anymore? We are actually on a motion to commit. We cannot even 
offer an amendment to the electricity title given the majority leader's 
current parliamentary maneuvers.
  Then, of course, we have this enormously controversial nominee from 
California.
  If I could offer one more piece of advice--and as I consider this, it 
is all the more troubling. If our Republican colleagues really wanted 
to get a bill, what would have been wrong with taking the bill that 88 
of us voted for last year and starting with that? What would have been 
wrong with saying, we spent 8 weeks on a bill last year, how about 
taking that 8 weeks' of effort, that investment in time, bringing that 
to the committee, and then bringing it to the floor? My guess is we 
could have avoided hundreds of amendments. We could have said, what 
reason would there be to offer an additional amendment because we have 
now taken up the very thing the Senate passed last year? But for 
whatever reason, the committee decided to pass an ``Enron protection 
act.'' They wanted to be sure, apparently, that they could lock in 
protection for these incredibly manipulative schemes used by Enron to 
bilk consumers that changed dramatically the nature, the character, of 
the bill itself.
  If our Republican friends would have wanted to complete the bill or 
at any time if they would want to do so in the future, we could take up 
where we left off. As it is, we are left with a bill that many have not 
seen. We are left with titles given to us virtually at the last minute 
and expected to offer amendments under those circumstances.
  I say to my distinguished colleague and friend, it is still within 
our grasp to finish this bill in a meaningful and timely way. In order 
to do that, we have to work at it. We have to finish this work on the 
electricity title, we have to go to the other titles in a way that 
accommodates Senators with amendments, and we have to stay on the 
legislation. Diversions, especially ones involving issues of great 
controversy, will never allow the Senate the luxury of the confidence 
we need to finish this bill at any time in the foreseeable future.
  I stand ready to work with him, to work with the manager of the bill, 
the chairman of the committee, to work with our distinguished ranking 
member and others so we can finish the bill. Shrill charges of 
obstructionism will not get the job done, nor will it get the job done 
to finger point and try to lay blame. We are here; they have the 
majority. We are willing to work with them to see under their 
leadership we accomplish a good deal. We have on so many other bills 
already this year. We can do it on this bill if we have the 
determination to show the bipartisanship it will require.
  I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. FRIST. Mr. President, I appreciate the advice and counsel of the 
distinguished Democratic leader. He and I do have the opportunity to 
talk which, indeed, I appreciate very sincerely. As we all know, we 
have heard from three majority leaders commenting on the schedule--the 
former majority leader, Senator Lott, myself, and the distinguished 
Democratic leader.
  We have a challenging week, remaining week with a lot to do. We have 
important issues before the Senate, critically important issues. I am 
delighted we have expressed that commitment to address issues, first 
and foremost energy. That is our number one priority. Everything else 
is secondary. I said we would have these cloture votes this week on the 
judges for 20 minutes and time demands have made that expand for hours, 
like last night. I am not accusing anyone of trying to delay the bill 
by talking on these judges, but remember my initial consent was we want 
to talk on these judges and we want to do it sometime in the future. 
Just give us consent to do that. That is what has been denied.
  Chile and Singapore was mentioned. Before we leave, whether it is 
Friday or Saturday, the Chile and Singapore trade agreements are 
important. I don't want to focus on those because I want to stay on 
energy and keep driving on energy. I have the distinguished manager, 
the chairman of the committee, with me. I know he will keep driving 
ahead. I am delighted we will do that. It is important.
  We have the supplemental, something we absolutely have to deal with. 
We can deal with that tomorrow and hopefully that can be done and 
wrapped up in a very short period of time.
  Last night, to clarify, I did file a Frist amendment which includes 
the text of S. 14 as reported by the Energy Committee. It includes the 
ethanol amendment already adopted by the Senate, it includes the Bond-
Levin CAFE amendment, it includes the Domenici electricity substitute, 
and the Finance Committee-reported energy tax title. That is the 
amendment I put forward.
  As I said earlier in the day, to facilitate the amendments which I 
hope the Democrats will bring forward if they have them, I will gladly 
withdraw the first and second-degree amendments to offer them, to allow 
them the opportunity to offer their amendments to push this debate 
forward. I would be glad to enter into time agreements on their 
respective amendments in order to move forward.
  I will not withdraw this cloture vote tomorrow. The more I hear the 
other side mention ``politics,'' the more I realize how important it is 
we have a cloture vote to see who is serious about finishing this bill 
and who is not tomorrow. We will gladly have discussions so we can 
consider amendments.
  The Democratic leadership wants a bill. I know they want a bill. It 
is really a matter of, is it some time off in the future or now. The 
Democratic leader made a suggestion that is one I think is important 
because we need to move ahead, we need to act today--not just talk and 
talk about politics and talk about obstructionism, with rhetoric and no 
action. I want a bill. I want a bill that is good, that is fair to the 
American people, and that addresses the issues of supply and the 
soaring costs which we feel. It is incumbent upon us to act.
  The Democratic leader mentioned last year's bill was passed with a 
bipartisan vote and suggested bringing that up. Let's do that. Let's 
pass that bill if

[[Page 20408]]

it is the great bill he says. We would be willing to do that. I will 
turn to the manager of this bill and the chairman, but if we have the 
opportunity to take that bill up, as suggested by the Democratic 
leader, let's do it and pass it today and then we can move on.
  Mr. REID. Would the distinguished majority leader yield for a 
question? Is the majority leader saying the bill that passed the Senate 
88-11 last year, it would be brought to the floor and passed in the 
form it left the Senate?
  Mr. FRIST. Mr. President, because the proposal was just made, my 
inclination is to basically say we would move in that direction. I want 
to consult with the manager of the bill since it was just proposed, but 
if that is the Democratic proposal and that is what is on the table--
the American people deserve an Energy bill.
  Let me turn to my distinguished colleague, the chairman of the 
committee, to comment. If so, we would proceed.
  Mr. REID. If I could, briefly, before the majority leader leaves, if 
the proposal is the bill that passed the Senate 88-11 last year be 
brought to the Senate floor today in the form it passed, you got 
yourself a deal.
  Mr. DOMENICI. No amendments and passed, as is, and sent to 
conference. Could we have just a few moments and come back and discuss 
it with you?
  Mr. REID. Yes.
  Mr. DOMENICI. Mr. President, I suggest the absence of a quorum.
  Mr. REID. If the Senator will yield, we have some people to speak, if 
the Senator will withhold the request.
  Mr. DOMENICI. I withhold.
  The PRESIDING OFFICER. The Senator from Washington.
  Ms. CANTWELL. Mr. President, I know my colleagues have now for the 
last hour discussed the fact that we need to move on an energy plan and 
yet allow Members to have some discussion of policy. While I think we 
now have a proposal to discuss, it is important to point out we were 
very willing to talk about an electricity title. We were very willing 
last night, while the Senate wanted to debate judges--and I sat here as 
my Republican colleagues spoke for hours--I was willing to offer an 
amendment on electricity.
  People are talking about moving ahead on an Energy bill because it is 
good for our economy, because it will help with supply. While we were 
sitting here wasting our time yesterday talking about judges, another 
company in my State with 700 workers from Bellingham, WA, temporarily 
shut down their facility. Why? Because of the high cost of electricity 
in our State.
  So this is not about a problem that might happen. It is a problem 
that has already happened.
  The parliamentary, procedural ruse that has been played on us to not 
go to the electricity title has been incredible. I was standing here, 
waiting to offer amendments, only to find out that we were going to go 
to a judge.
  Yes, the Senator from New Mexico was right; we wanted to go to the 
electricity title. But we didn't even have the language from his 
proposal when we left town last week on Friday night. It wasn't even 
available Friday until late Friday night. So, yes, as soon as we got 
that language we started poring through it.
  Now the question is whether this body wants to debate an electricity 
title, whether they want to consider the issues at hand.
  Last night, the amendment I wanted to offer was actually shared with 
the minority staff. The majority staff is now saying we don't know what 
amendments are going to be offered. We had seven amendments to file 
this morning, only to find out they are no longer in order because of 
the motion to commit in the document that is now available only in two 
copies of 800 pages, making it impossible for us to offer our second-
degree amendments.
  What happened when we shared what we wanted to offer in an amendment? 
We ended up getting an e-mail threat back from the majority side 
saying, if you offer your amendment, we are going to do X to you. So 
much for sharing ideas about amendments. It is no secret this Senator 
from the State of Washington, who believes this underlying electricity 
title could potentially move higher cost electricity onto the 
transmission lines in my State and ultimately force my consumers to pay 
a higher rate, doesn't like the electricity title and wants to see it 
changed. This Senator from Washington State does not believe that my 
State should be forced into that kind of regional transmission 
organization planning or standard market design planning in which my 
region might get charged higher electricity rates while the State of 
Texas gets a sweetheart deal.
  Yes, that is right. The State of Texas gets a sweetheart deal because 
they are exempted from that section on regional transmission 
organizations and standard market design. If this electricity title is 
so good for all of America, why isn't it good for Texas? That is 
because Texas does not want to share in this plan. They don't want to 
share their power, and they don't want to necessarily have their 
transmission lines with higher cost energy on them. I don't want it in 
my region. But I know this: If it is good for me, it ought to be good 
for them.
  The bottom line is the other side of the aisle doesn't want to take 
the time to hear about electricity amendments and debate them. With the 
west coast economy getting a $6 billion black eye, that is $6 billion 
that the ratepayers have had to pay because of increased energy prices, 
when the market has been knowingly manipulated. That was admitted to by 
Enron, admitted to by the Department of Justice citing Enron's 
manipulation, it has been admitted by the Federal Energy Regulatory 
Commission that such manipulation has happened. We ought to have our 
day here on the Senate floor.
  The distinguished majority leader said let's not talk about the 
politics of this. But I have to say I don't want to stand here and be 
part of what he is labeling as obstruction when this is the body to 
which my constituents look to have their issues debated. This is the 
place where we come to represent constituents. This is their 
opportunity to be heard. I am their representative. I have the right to 
offer amendments dealing with one of the biggest pyramid schemes, 
financial crises to affect the Northwest. I deserve to be heard. My 
constituents deserve to be heard.
  My constituents did not get invited to a meeting at the White House 
with Vice President Dick Cheney to talk about the energy plan. They 
were not invited.
  My constituents didn't get a password code to get on the conference 
call with the Federal Energy Regulatory Commission when they discussed 
with Wall Street financiers of Enron what legal standard they were 
going to use in reviewing the contracts of Enron, and whether 
ratepayers were going to get relief. My constituents didn't get that 
password code. We didn't get to be on that call.
  My constituents don't have high-paid lobbyists like the Weststar 
Company, which is under Federal investigation for their donations to 
various political groups that were all keyed around trying to influence 
the energy policy of this body.
  We may not win on our amendments about market manipulation and 
improving the way energy policy is regulated, but, by God, we deserve 
to be heard on this Senate floor and have a debate about electricity. 
You cannot have an amendment like that of Senator Dayton that basically 
is trying to stop the repeal of the consumer protection law that is 
currently on the books, that the Domenici underlying title erases, and 
not have a debate on that. How can you not have a debate on the Dayton 
amendment that stops the repeal of the Public Utility Holding Company 
Act?
  As the Washington Post said yesterday in a headline on the front page 
of the business section: ``Energy Monoliths Could Return.'' There was 
more debate yesterday in the Washington Post about the Dayton amendment 
trying to stop the return of this monolith than there has been on the 
floor of the Senate.
  I think the public should get their due. They paid $6 billion. Gee, 
for $6 billion in increased power rates you ought to at least give them 
a couple of days on the Senate floor to talk about these issues. These 
issues are a significant change to current law. The whole

[[Page 20409]]

notion of regional transmission organizations and standard market 
design is a move toward deregulation that this body ought to understand 
and understand well.
  Since the Federal Energy Regulatory Commission decided even though 
the markets had been manipulated they were not going to give relief to 
west coast ratepayers, we have not even had a hearing. We have not even 
had a hearing. That was just a few weeks ago.
  For 2\1/2\ years my colleague and staff member, Angela Becker-
Dippman, and myself have probably paid more attention to the energy 
issue than just about anybody in this body, save maybe the California 
Members. Why? Because a crisis happened in our State starting in late 
2000, and we lobbied for price caps. We asked, before the Federal 
Energy Regulatory Commission: Give our State relief. It took them a 
year plus, a year and a half before they finally came in with any 
relief.
  Then people said it was all about supply and don't worry, it is all 
going to get straightened out. It is not about manipulation. Nobody 
manipulated anything.
  Then we find out they actually manipulated something and admitted it. 
They said: Don't worry, you'll have your day. It will all go before the 
Federal Energy Regulatory Commission. They will take care of it. 
Something will happen.
  They have done nothing to protect the consumers once that 
manipulation was known. They have done nothing. They have done nothing 
but get on a phone call with the financiers of the Enron deal and say 
to them, in private password conversations: Don't worry, you'll be 
protected.
  So, yes, my amendments deserve debate. We are not going to be an 
apologist for Enron, nor condone their actions. But we should have a 
healthy policy debate about:
  No. 1, whether this country needs more deregulation of the energy 
industry. Why not have that debate? Some of my colleagues on the 
Democratic side of the aisle actually believe there should be 
deregulation. I don't agree with them. What is wrong with having that 
debate?
  No. 2, we ought to debate whether we have enough consumer protection 
in this legislation to protect from future market manipulation that 
might happen as we continue to see the rise in natural gas prices. We 
should have that debate.
  No. 3, we could have a debate about whether we really understand what 
regional transmission organizations and standard market design actually 
do.
  I can't tell you how many people in California thought it was no big 
deal about how most of the legislators didn't really understand what 
was going on in the legislation and went ahead and passed it only to 
then find out that basically they had turned electricity over to the 
free market. Electricity isn't just a commodity; it is a necessity. 
People need it. They cannot be gouged by high prices. That is exactly 
what has happened.
  We ought to debate whether we understand what regional transmission 
organizations and standard market design really do.
  I am all for joining with my colleagues if they want to make this a 
voluntary experiment. If they want to make this section of the 
electricity title voluntary, I am happy to make it voluntary. But it is 
not voluntary now. It is a mandate. The Federal Energy Regulatory 
Commission came up with hearings, with pricing schemes, and with a rule 
that would ultimately go into place after 2005. So wait 2 years to get 
your plans in place and then implement them.
  As the Senator from North Dakota adequately explained, this isn't 
about whether we are going to build a national grid system and whether 
cheap electricity in his region is going to get displaced by more 
costly electricity from somewhere else and forced on his consumers. Why 
should he agree to that? We need to have a debate about whether we 
really know and understand where this title is leading us. I am happy 
to do that. I am happy to do it. More importantly, I am happy to do it 
on Saturday.
  My constituents deserve to be heard on this issue. When they are 
stuck with a 56-percent rate increase for the next 5 years because they 
signed an Enron contract and they get no relief from the Federal 
Government, they deserve to be heard. When Enron can turn around and 
sue them to continually force my ratepayers to pay a higher rate on 
manipulated contracts, they deserve to be heard.
  I am not being an obstructionist. The majority leader talked about 
doing something in the public interest. This is about the public 
interest. This is about saying this body is going to protect consumers 
from market manipulation. We are not going to guess at it. We are not 
going to pretend that we know.
  We are not going to pass something the Attorney General from New York 
sends us a letter about basically saying, Excuse me. Thanks for your 
hard work, but you are not getting it done. Your language not only 
doesn't protect us enough but it might actually undermine the current 
State laws that are in place. Or a letter from the National Securities 
Exchange executive saying the same thing. The National Securities 
Exchange doesn't say they think the language in the underlying bill 
curtails their efforts on getting the kind of oversight that needs to 
happen to protect consumers from market manipulation.
  I couldn't disagree more with the majority leader. I supported the 
Energy bill last year. I wanted to get it out here. I didn't like 
everything in it. I was willing to compromise to move something ahead. 
But a financial disaster happened in my State and it is going to 
continue for years to come. This electricity title on which the 
majority party has filed a motion to commit prohibits us from offering 
those amendments. Maybe our leadership is in the back room working out 
some sort of agreement. Maybe they are back there saying let us start 
backward on the electricity title. Maybe they are bifurcating some of 
these issues about supply.
  But why not say to the American public we are going to make clear to 
you there is no doubt that this isn't a supply issue, and we have made 
sure manipulation has been taken care of?
  We cannot leave here giving the American people the impression that 
if you have enough money you can rely on the energy policy. Electricity 
is a necessity, and we need to fight to make it affordable. This Member 
will stand here for as long as it takes to make sure my constituents 
have their day on these amendments.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Graham of South Carolina). The Senator 
from California.
  Mrs. BOXER. Mr. President, thank you very much. I thank my colleague 
from Washington for her continued leadership and information about what 
is a very complicated matter. It isn't easy to understand and follow 
all the market manipulation that occurred in our Western States. But 
she has explained it. I intend to do so as well.
  Let me say this: When the majority leader says we have to have an 
Energy bill, I agree we need an Energy bill. However, we need a good 
Energy bill. We don't need a bad Energy bill. If we have an Energy bill 
which doesn't attack what happened in the west coast, then I want to 
say to my colleagues from every State in the Union--and I will be 
speaking for about 15 or 20 minutes--I will tell every colleague here 
from every State in the Union their people could very well go through 
what my people went through in California.
  Mrs. HUTCHISON. Mr. President, will the Senator yield for a unanimous 
consent request that I be allowed to speak immediately following her?
  Mrs. BOXER. Absolutely.
  Mrs. HUTCHISON. I ask unanimous consent to be recognized immediately 
following the remarks of the Senator from California.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. Mr. President, the reason I waited for 2 hours this 
morning to speak today is to send a warning to my colleagues. Read what 
you are about to do. I find it incredible that instead of

[[Page 20410]]

continuing on the present path--which is to amend the electricity title 
in a way that would make it better, in ways that would protect the 
American people from the type of scam we witnessed in the west coast, 
which in my State alone cost us about $9 billion, if not more, and 
which is responsible for about a third of the problems we are facing 
financially in my State--instead of fixing that electricity title, what 
do we have? We have an amendment filed stopping our ability to make any 
changes to it, and which, by the way, eviscerates all of the 21 
amendments we have worked so hard on during the 8 days we have been on 
this bill, including amendments by Republicans and Democrats alike, 
dealing with biomass, LIHEAP, oil independence, clean coal, hydrogen, 
and so on.
  Even the 21 amendments we worked so hard on have been left out of 
this bill which is now pending, and if we go to it, those 21 amendments 
will be gone.
  I also hope that leadership is working now to straighten out where we 
are. We are in chaos, in my opinion, right now.
  When the majority leader says we need an Energy bill, I want to say 
we need a good Energy bill.
  The last thing we need is a bad Energy bill. Let's look at this bill. 
This bill has an electricity title which goes forward with deregulation 
in the face of the disaster we had on the west coast. Why colleagues 
would go ahead with this is beyond me.
  But I have to say, in California, every single member of the 
legislature--Republican and Democrat--years ago voted for such a bill. 
It was signed by Pete Wilson, who is the one who brought it to the 
legislature. And it led to a total disaster. So maybe my colleagues 
don't understand the fact that this is one where you better read every 
line and you better understand what you are voting for because this one 
could come back to bite you really hard.
  In the bill we have huge subsidies for nuclear power. We don't even 
know what to do with the waste. I see my colleague from Nevada crossing 
the floor. He is struggling with this. What are you going to do with 
the waste that lasts thousands of years that is so dangerous? We don't 
even know. But this subsidizes new nuclear powerplants.
  This bill has done nothing about fuel economy--zilch. The amendment 
that passed was backed, frankly, by the big auto companies, and it does 
nothing, at a time when we are hoping to change our dependence on 
foreign oil.
  What we have is a bill that ignores what happened to us in 
California. I see that my senior Senator is here. And no one knows 
better than she and I what this has meant to our people. And we are 
trying to be good colleagues to our colleagues to say: Wait. Stop. Time 
out. Don't go down that path that we went down.
  In the midst of the crisis, I got a letter from a gentleman who lives 
in Bishop, CA. I ask unanimous consent to have that letter printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                   Zack Ranch,

                                        Bishop, CA, April 8, 2001.
     Senator Barbara Boxer,
     Hart Senate Office Building.
     Washington, DC.
       Dear Senator Boxer: I am writing to ask for your help. Our 
     family has owned and operated an alfalfa ranch in the Hammil 
     Valley since 1965. Our crop is irrigated in the summer with 
     water pumped from wells, by electric pumps. We have just been 
     informed by Edison that our power rate will double this 
     summer, and will possibly be raised beyond that in the 
     future. Since we have a narrow profit margin to begin with, 
     this will effectively put us out of business. Edison has told 
     us that there is to be no break for farmers. In the past we 
     have been on a ``time of use'' program in the summer where we 
     pump only during off peak hours, but we aren't able to find 
     if this program will continue. Any information you can offer, 
     or any help you can give us, will be greatly appreciated.
           Sincerely,
                                                         Ann Zack.

  Mrs. BOXER. This gentleman wrote to me. His name is Zack Ranch. 
Actually, his wife wrote:

       I am writing to ask your help. Our family has owned and 
     operated an alfalfa ranch in the Hammil Valley since 1965. 
     Our crop is irrigated in the summer with water pumped from 
     wells, by electric pumps. We have just been informed by 
     Edison that our power rate will double this summer, and will 
     possibly be raised beyond that in the future. Since we have a 
     narrow profit margin to begin with, this will effectively put 
     us out of business. Edison has told us that there is to be no 
     break for farmers. In the past, we have been on a ``time of 
     use'' program in the summer where we pump only during off 
     peak hours, but we aren't able to find if this program will 
     continue. Any information you can offer, or any help you can 
     give us, will be greatly appreciated.

  Well, we lost so many small businesses and farmers during this 
period. It would have been worse if the State did not go in. Governor 
Davis, at that time, took over from the power companies and protected 
the people from the types of increases that consumers in Washington 
had, although we went up 25 percent, which is very hard to take, 
especially for a small business that is working on a small profit 
margin.
  Let me show you a chart that demonstrates what happened to us at the 
height of our problems. This is the Enron scam. I would say to you, Mr. 
President, in this bill it is even going to be worse for your people 
because this bill has done away with the one agency that protects you 
against big mergers; it has essentially eviscerated the power of the 
FERC.
  In this situation, eventually FERC was able to step in. But what we 
have done in this bill so far is not going to make that possible.
  Let me show you what happened with the wholesale electricity prices. 
It started to spike up when all these scams--unbeknownst to us; I will 
go into those scams--hit. Enron led these scams. Other companies 
apparently did the same. The prices peaked over here, way up here. And 
then they started to go down when the rate caps were placed in.
  In between this period and this period, as shown on the chart, our 
people suffered greatly. This represents a theft of about $9 billion 
from my people into the pockets of unscrupulous energy companies led by 
Enron.
  Let me tell you what happened during this period. We have an overlay 
for this chart which I showed at the Commerce Committee which 
investigated this matter. Just to add a little spice to it, this 
overlay shows how much money Ken Lay and Jeffrey Skilling, the two 
corporate leaders--if I could use that term--of Enron, made during this 
period when we were being ripped off.
  Mr. Lay sold $5 million worth of stock here in December 2000, $6 
million worth of stock in February of 2001, and another $3 million 
worth of stock in May of 2001.
  Mr. Skilling made millions of dollars as well. So here we are: $3 
million, $3 million, and $2 million, the number of shares they sold 
into the hundreds of thousands. And the price per share, they sold out 
between $85 and $54.
  When it was all over, where were the employees of Enron? Flat broke. 
They lost their jobs. They lost their life savings.
  They knew what they were doing. They were ripping off the people of 
my State and selling their stock. And they are not in jail.
  What do we do in this bill? We make it possible for that to continue 
because the electricity title does nothing but make matters worse by 
tying the hands of the people who could stop this nonsense from 
happening.
  So when we get a little bit upset and emotional, it is because we 
have met with the people in our State. We know how they have suffered. 
We have met with the business community. We know what happened. And we 
don't see Ken Lay in jail. We don't see Jeffrey Skilling in jail. Do 
you know what? That is up to the administration to go after them. I 
urge them to do it. They are going after Martha Stewart. They went 
after Sam Waksal. Fine. Go after people who do bad things.
  What happened here is a disaster. These men pocketed tremendous 
amounts of money. The people who worked for them lost their jobs, lost 
their retirement. People all over the country went broke with their 
pension plans. And this electricity title does nothing at all to stop 
this from happening.
  Now, I never thought I would have to come out on the floor and bring 
out

[[Page 20411]]

these charts again because, honest to God, I thought in the Energy bill 
we would come up with we would stop these shenanigans. And we can't put 
Ken Lay in jail here. That is up to the courts. It is up to the 
Attorney General. We can't put Jeffrey Skilling in jail. We can't get 
the money back to the people. But what we can do is make sure this does 
not happen again. And we are not doing it. That is why we are so upset.
  And when colleagues on the other side say let's stop talking about 
this; we have talked for 16 days, the truth is we have talked for 8 
days. The truth is they are putting in judges, controversial judges. 
And I have one from my State the two Senators from my State oppose. 
They are throwing that in the mix, when we ought to be talking about 
this issue.
  I want to show you one more thing before I put away this chart. 
During this period of time, the California delegation, Republicans and 
Democrats alike, went to seek Dick Cheney. We begged him to take 
action. We begged him to take action. We said: You are an expert on 
energy. You know this is a scam. We showed him a chart which showed 
that plants were being taken offline for so-called maintenance at a 
rate that was about 10 times higher than had been the normal case. So 
we were getting shorted electricity on purpose--manipulation.
  We went to Dick Cheney and we said: Can you help us? Do you know what 
he said? I will never forget it. He said: Listen, I have one thing to 
say to you. Your people use too much energy.
  Well, let me say, my people are No. 1 in terms of the least energy 
used per capita. Let me repeat that: the least energy used per capita. 
And look at this chart. As we saw the spikes go up, demand was going 
down. This was not a market. This was manipulation.
  Demand was down; electricity was soaring. What Maria Cantwell and 
Patty Murray and I and Senator Feinstein are trying to tell you is, 
don't let the California experience go to waste. Look at what happened 
to us. Look at the corporate thieves that pocketed millions of dollars 
while our people were taken to the cleaners, while the employees of 
these companies lost their jobs, lost their pensions. If I have to see 
another one of these cases again, it would just be tragic. Can't we 
learn from history? That is what we are supposed to do, learn from 
history.
  So when we stand up and say we want to fight for our amendments, we 
want to make sure that the Federal Government can step in and stop this 
robbery, it isn't because we are trying to derail anything. If 
anything, we are trying to get an Energy bill on track that is going to 
spare other States the tragedy that our State experienced.
  It isn't anything about too much demand. Our demand was down, and the 
prices soared. Why did that happen? Because scams were put into place. 
I will just show a few of these scams.
  Here is Get Shorty:

       In order to short the ancillary services, it is necessary 
     to submit false information that purports to identify the 
     source of the ancillary services.
       The traders are careful, however, to be sure to buy 
     services right at 9:00 a.m. so that Enron is not actually 
     called upon to provide ancillary services.

  That comes straight out of the lawyer's letter.
  I ask unanimous consent to print the letter in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                               Memorandum


                                              Stoel Rives LLP,

                                                 December 6, 2000.
                                               To: Richard Sanders
                            From: Christian Yoder and Stephen Hall
        Re: Traders' Strategies in the California Wholesale Power 
                                            Markets/ISO Sanctions.


     Confidential: Attorney/Client Privilege/Attorney Work Product

       This memorandum analyzes certain trading strategies that 
     Enron's traders are using in the California wholesale energy 
     markets. Section A explains two popular strategies used by 
     the traders, ``inc-ing'' load and relieving congestion. 
     Section B describes and analyzes other strategies used by 
     Enron's traders, some of which are variations on ``inc-ing'' 
     load or relieving congestion. Section C discusses the 
     sanction provisions of the California Independent System 
     Operator (``ISO'') tariff.


                           A. The Big Picture

       1. ``Inc-ing'' Load Into The Real Time Market
       One of the most fundamental strategies used by the traders 
     is referred to as ```inc-ing' load into the real time 
     market.'' According to one trader, this is the `oldest trick 
     in the book' and, according to several of the traders, it is 
     now being used by other market participants.
       To understand this strategy, it is important to understand 
     a little about the ISO's real-time market. One responsibility 
     of the ISO is to balance generation (supply) and loads 
     (demand) on the California transmission system. During its 
     real-time energy balancing function the ISO pays/charges 
     market participants for increasing/decreasing their 
     generation. The ISO pays/charges market participants under 
     two schemes: ``instructed deviations'' and ``uninstructed 
     deviations.'' Instructed deviations occur when the ISO 
     selects supplemental energy bids from generators offering to 
     supply energy to the market in real time in response to ISO 
     instructions. Market participants that increase their 
     generation in response to instructions (``instructed 
     deviation'') from the ISO are paid the ``inc'' price. Market 
     participants that increase their generation without an 
     instruction from the ISO (an ``uninstructed deviation'') are 
     paid the ex post ``dec'' price. In real-time, the ISO issues 
     instructions and publishes ex post prices at ten-minute 
     intervals.
       ```Inc-ing load' into the real-time market'' is a strategy 
     that enables Enron to send excess generation to the imbalance 
     energy market as an uninstructed deviation. To participate in 
     the imbalance energy market it is necessary to have at least 
     1 MW of load. The reason for this is that a generator cannot 
     schedule energy onto the grid without having a corresponding 
     load. The ISO requires scheduling coordinators to submit 
     balanced schedules; i.e., generation must equal load. So, if 
     load must equal generation, how can Enron end up with excess 
     generation in the real-time market?
       The answer is to artificially increase (``inc'') the load 
     on the schedule submitted to the ISO. Then, in real-time, 
     Enron sends the generation it scheduled, but does not take as 
     much load as scheduled. The ISO's meters record that Enron 
     did not draw as much load, leaving it with an excess amount 
     of generation. The ISO gives Enron credit for the excess 
     generation and pays Enron the dec price multiplied by the 
     number of excess megawatts. An example will demonstrate this. 
     Enron will submit a day-ahead schedule showing 1000 MW of 
     generation scheduled for delivery to Enron Energy Services 
     (``EES''). The ISO receives the schedule, which says ``1000 
     MW of generation'' and ``1000 MW of load.'' The ISO sees that 
     the schedule balances and, assuming there is no congestion, 
     schedules transmission for this transaction. In real-time, 
     Enron sends 1000 MW of generation, but Enron Energy Services 
     only draws 500 MW. The ISO's meters show that Enron made a 
     net contribution to the grid of 500 MW, and so the ISO pays 
     Enron 500 times the dec price.
       The traders are able to anticipate when the dec price will 
     be favorable by comparing the ISO's forecasts with their own. 
     When the traders believe that the ISO's forecast 
     underestimates the expected load, they will inc load into the 
     real time market because they know that the market will be 
     short, causing a favorable movement in real-time ex post 
     prices. Of course, the much-criticized strategy of 
     California's investor-owned utilities (``IOUs'') of 
     underscheduling load in the day-ahead market has contributed 
     to the real-time market being short. The traders have learned 
     to build such underscheduling into their models, as well.
       Two other points bear mentioning. Although Enron may have 
     been the first to use this strategy, others have picked up on 
     it, too. I am told this can be shown by looking at the ISO's 
     real-time metering, which shows that an excess amount of 
     generation, over and above Enron's contribution, is making it 
     to the imbalance market as an uninstructed deviation. Second, 
     Enron has performed this service for certain other customers 
     for which it acts as scheduling coordinator. The customers 
     using this service are companies such as Powerex and Puget 
     Sound Energy (``PSE''), that have generation to sell, but no 
     native California load. Because Enron has native California 
     load through EES, it is able to submit a schedule 
     incorporating the generation of a generator like Powerex or 
     PSE and balance the schedule with ``dummied-up'' load from 
     EES.
       Interestingly, this strategy appears to benefit the 
     reliability of the ISO's grid. It is well known the 
     California IOUs have systematically underscheduled their load 
     in the PX's Day-Ahead market. By underscheduling their load 
     into the Day-Ahead market, the IOUs have caused the ISO to 
     have to call on energy in real time in order to keep the 
     transmission system in balance. In other words, the 
     transmission grid is short energy. By deliberately 
     overscheduling load, Enron has been offsetting the ISO's real 
     time energy deficit by supplying extra energy that the ISO 
     needs. Also, it should be noted that in the ex post market 
     Enron is a ``price taker,'' meaning that they are not 
     submitting bids or offers, but are just being paid

[[Page 20412]]

     the value of the energy that the ISO needs. If the ISO did 
     not need the energy, the dec price would quickly drop to $0. 
     So, the fact that Enron was getting paid for this energy 
     shows that the ISO needed the energy to balance the 
     transmission system and offset the IOU's underscheduling (if 
     those parties own Firm Transmission Rights (``FTR'') over the 
     path).
       2. Relieving Congestion
       The second strategy used by Enron's traders is to relieve 
     system-wide congestion in the real-time market, which 
     congestion was created by Enron's traders in the PX's Day 
     Ahead Market. In order to relieve transmission congestion 
     (i.e., the energy scheduled for delivery exceeds the capacity 
     of the transmission path), the ISO makes payments to parties 
     that either schedule transmission in the opposite direction 
     (``counterflow payments'') or that simply reduce their 
     generation/load schedule.
       Many of the strategies used by the traders involve 
     structuring trades so that Enron gets paid the congestion 
     charge. Because the congestion charges have been as high as 
     $750/MW, it can often be profitable to sell power at a loss 
     simply to be able to collect the congestion payment.


                  b. representative trading strategies

       The strategies listed below are examples of actual 
     strategies used by the traders, many of which utilize the two 
     basic principles described above. In some cases, the 
     strategies are identified by the nicknames that the traders 
     have assigned to them. In some cases, i.e., ``Fat Boy,'' 
     Enron's traders have used these nicknames with traders from 
     other companies to identify these strategies.
       1. Export of California Power
       a. As a result of the price caps in the PX and ISO 
     (currently $250), Enron has been able to take advantage of 
     arbitrage opportunities by buying energy at the PX for export 
     outside California. For example, yesterday (December 5, 
     2000), prices at Mid-C peaked at $1200, while California was 
     capped at $250. Thus, traders could buy power at $250 and 
     sell it for $1200.
       b. This strategy appears not to present any problems, other 
     than a public relations risk arising from the fact that such 
     exports may have contributed to California's declaration of a 
     Stage 2 Emergency yesterday.
       2. ``Non-firm Export''
       a. The goal is to get paid for sending energy in the 
     opposite direction as the constrained path (counterflow 
     congestion payment). Under the ISO's tariff, scheduling 
     coordinators that schedule energy in the opposite direction 
     of the congestion on a constrained path get paid the 
     congestion charges, which are charged to scheduling 
     coordinators scheduling energy in the direction of the 
     constraint. At times, the value of the congestion payments 
     can be greater than the value of the energy itself.
       b. This strategy is accomplished by scheduling non-firm 
     energy for delivery from SP-15 or NP-15 to a control area 
     outside California. This energy must be scheduled three hours 
     before delivery. After two hours, Enron gets paid the 
     counterflow charges. A trader then cuts the non-firm power. 
     Once the non-firm power is cut, the congestion resumes.
       c. The ISO posted notice in early August prohibiting this 
     practice. Enron's traders stopped this practice immediately 
     following the ISO's posting.
       d. The ISO objected to the fact that the generators were 
     cutting the non-firm energy. The ISO would not object to this 
     transaction if the energy was eventually exported.
       Apparently, the ISO has heavily documented Enron's use of 
     this strategy. Therefore, this strategy is the more likely 
     than most to receive attention from the ISO.
       2. ``Death Star''
       a. This strategy earns money by scheduling transmission in 
     the opposite direction of congestion; i.e., schedule 
     transmission north in the summertime and south in the winter, 
     and then collecting the congestion payments. No energy, 
     however, is actually put onto the grid or taken off.
       b. For example, Enron would first import non-firm energy at 
     Lake Mead for export to the California-Oregon border 
     (``COB''). Because the energy is traveling in the opposite 
     direction of a constrained line, Enron gets paid for the 
     counterflow. Enron also avoids paying ancillary service 
     charges for this export because the energy is non-firm, and 
     the ISO tariff does not require the purchase of ancillary 
     services for non-firm energy.
       c. Second, Enron buys transmission from COB to Lake Mead at 
     tariff rates to serve the import. The transmission line from 
     COB to Lake Mead is outside of the ISO's control area, so the 
     ISO is unaware that the same energy being exported from Lake 
     Mead is simultaneously being imported into Lake Mead. 
     Similarly, because the COB to Lake Mead line is outside the 
     ISO's control area, Enron is not subject to payment of 
     congestion charges because transmission charges for the COB 
     to Lake Mead line are assessed based on imbedded costs.
       d. The ISO probably cannot readily detect this practice 
     because the ISO only sees what is happening inside its 
     control area, so it only sees half of the picture.
       e. The net effect of these transactions is that Enron gets 
     paid for moving energy to relieve congestion without actually 
     moving any energy or relieving any congestion.
       3. ``Load Shift''
       a. This strategy is applied to the Day-Ahead and the real-
     time markets.
       b. Enron shifts load from a congested zone to a less 
     congested zone, thereby earning payments for reducing 
     congestion, i.e., not using our FTRs on a constrained path.
       c. This strategy requires that Enron have FTRs connecting 
     the two zones.
       d. A trader will overschedule load in one zone, i.e., SP-
     15, and underschedule load in another zone, i.e., NP-15.
       Such scheduling will often raise the congestion price in 
     the zone where load was overscheduled.
       The trader will then ``shift'' the overscheduled ``load'' 
     to the other zone, and get paid for the unused FTRs. The ISO 
     pays the congestion charge (if there is one) to market 
     participants that do not use their FTRs. The effect of this 
     action is to create the appearance of congestion through the 
     deliberate overstatement of loads, which causes the ISO to 
     charge congestion charges to supply scheduled for delivery in 
     the congested zone. Then, by reverting back to its true load 
     in the respective zones, Enron is deemed to have relieved 
     congestion, and gets paid by the ISO for so doing.
       e. One concern here is that by knowingly increasing the 
     congestion costs, Enron is effectively increasing the costs 
     to all market participants in the real time market.
       f. Following this strategy has produced profits of 
     approximately $30 million for FY 2000.
       4. ``Get Shorty''
       a. Under this strategy, Enron sells ancillary services in 
     the Day-ahead market.
       b. Then, the next day, in the real-time market, a trader 
     ``zeroes out'' the ancillary services, i.e., cancels the 
     commitment and buys ancillary services in the real-time 
     market to cover its position.
       c. The profit is made by shorting the ancillary services, 
     i.e., sell high and buy back at a lower price.
       d. One concern here is that the traders are applying this 
     strategy without having the ancillary services on standby. 
     The traders are careful, however, to be sure to buy services 
     right at 9:00 a.m. so that Enron is not actually called upon 
     to provide ancillary services. However, once by accident, a 
     trader inadvertently failed to cover, and the ISO called on 
     those ancillary services.
       e. This strategy might be characterized as ``paper 
     trading,'' because the seller does not actually have the 
     ancillary services to sell. FERC recently denied Morgan 
     Stanley's request to paper trade on the New York ISO.
       The ISO tariff does provide for situations where a 
     scheduling coordinator sells ancillary services in the day 
     ahead market, and then reduces them in the day-of market. 
     Under these circumstances, the tariff simply requires that 
     the scheduling coordinator replace the capacity in the hour-
     ahead market. ISO Tariff, SBP 5.3, Buy Back of Ancillary 
     Services.
       f. The ISO tariff requires that schedules and bids for 
     ancillary services identify the specific generating unit or 
     system unit, or in the case of external imports, the selling 
     entity. As a consequence, in order to short the ancillary 
     services it is necessary to submit false information that 
     purports to identify the source of the ancillary services.
       5. ``Wheel Out''
       a. This strategy is used when the interties are set to 
     zero, i.e., completely constrained.
       b. First, knowing that the intertie is completely 
     constrained, Enron schedules a transmission flow through the 
     system. By so doing, Enron earns the congestion charge. 
     Second, because the line's capacity is set to ``0,'' the 
     traders know that any power scheduled to go through the 
     intertie will, in fact be cut. Therefore, Enron earns the 
     congestion counterflow payment without having to actually 
     send energy through the intertie.
       c. As a rule, the traders have learned that money can be 
     made through congestion charges when a transmission line is 
     out of service because the ISO will never schedule an energy 
     delivery because the intertie is constrained.
       6. ``Fat Boy''
       a. This strategy is described above in section A(1).
       7. ``Ricochet''
       a. Enron buys energy from the PX in the day of market, and 
     schedules it for export. The energy is sent out of California 
     to another party, which charges a small fee per MW, and then 
     Enron buys it back to sell the energy to the ISO real-time 
     market.
       b. The effect of this strategy on market prices and supply 
     is complex. First, it is clear that Enron's intent under this 
     strategy is solely to arbitrage the spread between the PX and 
     the ISO, and not to serve load or meet contractual 
     obligations. Second, Ricochet may increase the Market 
     Clearing Price by increasing the demand for energy 
     (Increasing the MCP does not directly benefit Enron because 
     it is buying energy from the PX, but it certainly affects 
     other buyers, who must pay the same, higher price.) Third, 
     Ricochet appears to have a neutral effect on supply, because 
     it is returning the exported energy as an import. Fourth, the 
     parties that pay Enron for supplying energy to the real time 
     ex post market are the parties that underscheduled, or 
     underestimated their load, i.e., the IOUs.

[[Page 20413]]


       8. Selling Non-firm Energy as Firm Energy
       a. The traders commonly sell non-firm energy to the PX as 
     ``firm.'' ``Firm energy,'' in this context, means that the 
     energy includes ancillary services. The result is that the 
     ISO pays EPMI for ancillary services that Enron claims it is 
     providing, but does not in fact provide.
       b. The traders claim that ``everybody does this,'' 
     especially for imports from the Pacific Northwest into 
     California.
       c. At least one complaint was filed with the ISO regarding 
     Enron's practice of doing this. Apparently, Arizona Public 
     Service sold non-firm energy to Enron, which turned around 
     and sold the energy to the ISO as firm. APS cut the energy 
     flow, and then called the ISO and told the ISO what Enron had 
     done.
       9. Scheduling Energy To Collect the Congestion Charge II
       a. In order to collect the congestion charges, the traders 
     may schedule a counterflow even if they do not have any 
     excess generation. In real time, the ISO will see that Enron 
     did deliver the energy it promised, so it will charge Enron 
     the inc price for each MW Enron was short. The ISO, however, 
     still pays the congestion charge. Obviously a loophole, which 
     the ISO could close by simply failing to pay congestion 
     charges to entities that failed to deliver the energy.
       b. This strategy is profitable whenever the congestion 
     charge is sufficiently greater than the price cap. In other 
     words, since the ex post is capped at $250, whenever the 
     congestion charge is greater than $250 it is profitable to 
     schedule counterflows, collect the congestion charge, pay the 
     ex post, and keep the difference.


                             c. iso tariff

       The ISO tariff prohibits ``gaming,'' which it defines as 
     follows:
       `Gaming,' or taking unfair advantage of the rules and 
     procedures set forth in the PX or ISO Tariffs, Protocols or 
     Activity Rules, or of transmission constraints in periods in 
     which exist substantial Congestion, to the detriment of the 
     efficiency of, and of consumers in, the ISO Markets. `Gaming' 
     may also include taking undue advantage of other conditions 
     that may affect the availability of transmission and 
     generation capacity, such as loop flow, facility outages, 
     level of hydropower output or seasonal limits on energy 
     imports from out-of-state, or actions or behaviors that may 
     otherwise render the system and the ISO Markets vulnerable to 
     price manipulation to the detriment of their efficiency.'' 
     ISO Market Monitoring and Information Protocol (``MMIP''), 
     Section 2.1.3.
       The ISO tariff also prohibits ``anomalous market 
     behavior,'' which includes ``unusual trades or 
     transactions''; ``pricing and bidding patterns that are 
     inconsistent with prevailing supply and demand conditions''; 
     and ``unusual activity or circumstances relating to imports 
     from or exports to other markets or exchanges.'' MMIP, 
     Section 2.1.1 et seq.
       Should it discover such activities, the ISO tariff provides 
     that the ISO may take the following action:
       1. Publicize such activities or behavior and its 
     recommendations thereof, ``in whatever medium it believes 
     most appropriate.'' MMIP, Section 2.3.2 (emphasis added).
       2. The Market Surveillance Unit may recommend actions, 
     including fines and suspensions, against specific entities in 
     order to deter such activities or behavior. MMIP, Section 
     2.3.2.
       3. With respect to allegations of gaming, the ISO may order 
     ADR procedures to determine if a particular practice is 
     better characterized as improper gaming or ``legitimate 
     aggressive competition.'' MMIP, Section 2.3.3.
       4. In cases of ``serious abuse requiring expeditious 
     investigation or action'' the Market Surveillance Unit shall 
     refer a matter to the appropriate regulatory or antitrust 
     enforcement agency. MMIP, Section 3.3.4.
       5. Any Market Participant or interested entity may file a 
     complaint with the Market Surveillance Unit. Following such 
     complaint, the Market Surveillance Unit may ``carry out any 
     investigation that it considers appropriate as to the concern 
     rasied.'' MMIP, Section 3.3.5.
       6. The ISO Governing Board may impose ``such sanctions or 
     penalties as it believes necessary and as are permitted under 
     the ISO Tariff and related protocols approved by FERC; or it 
     may refer the matter to such regulatory or antitrust agency 
     as it sees fit to recommend the imposition of sanctions and 
     penalties.'' MMIP, Section 7.3.

  Mrs. BOXER. This is a letter we got ahold of in the Commerce 
Committee where the lawyers were, in essence, going into all of these 
schemes and basically telling Enron they were running afoul of State 
law, and yet the schemes continued. They went on and on.
  Here are the rest of the strategies used that Senator Cantwell is 
trying to do away with, trying to do away with these schemes. That is 
why she has a number of amendments.
  Death Star:

       Enron gets paid for moving energy to relieve congestion 
     without actually moving any energy or relieving any 
     congestion.

  This is detailed in the letter I just put in the Record.
  Load Shift:

       By knowingly increasing the congestion costs, Enron is 
     effectively increasing the costs to all market participants 
     in the real time market.

  This is a great one. Exporting California power:

       This strategy appears not to present any problems, other 
     than a public relations risk arising from the fact that such 
     exports may have contributed to California's declaration of a 
     Stage 2 Emergency.

  They were taking power out of my State, robbing my State of its 
power. Be careful. This could happen to you. As Senator Dorgan said, he 
gets cheap power. In this bill that cheap power can be brought out of 
his State and suddenly they are faced with a lack of power. Is this the 
kind of Energy bill we need so badly, to take these schemes and allow 
them to happen in your States?
  Inc-ing Load:

       The answer is to artificially increase (inc) the load on 
     the schedule submitted to the ISO.

  It is all fraud. It has all been exposed. We know now why we faced 
the kind of crisis we faced. Yet we can't get colleagues to listen to 
Senator Cantwell, to vote for her amendment. Then we get yelled at that 
we are not doing the right thing for the country.
  I don't understand what is going on here. If we truly care about our 
constituents as we say we do, if we truly want to fight for our 
families, if we care about our small businesses, why would we pass a 
bill that allows these scams to continue? Why do we have to get 
lectured about the fact we are derailing something? I am trying to 
spare what happened to me and my constituents in my State from 
happening to you and your constituencies in your States. For that, we 
are being called obstructionist.
  This is another way to look at what happened. Our demand for 
electricity in California during our crisis period went up 4 percent. 
Remember, I told you, we were the most energy efficient. The reason it 
went up 4 percent is we are growing. I must remind you, I represent 35 
million people. We have the fifth largest economy in the world. So our 
electricity demand went up 4 percent and our wholesale cost of 
electricity went up 266 percent.
  No business could survive if our State hadn't come in and taken over 
when the power companies went under. Our power companies went under. 
Our electric utility companies went under. It is hard to imagine. They 
had been in business for 100 years or more.
  I know my friend from Texas is raring to give her statement so I 
won't go on anymore.
  I think before there are charges of obstructionism, we ought to take 
a deep breath and think about what happened to the largest State in the 
Union, when we were scammed by the private sector, by people with no 
morality, by people with no ethics, by people who should be in jail. We 
were scammed, and we are trying to prevent that from happening all over 
the country.
  Instead, what we have is a bill that makes it easier for these scams 
to continue. What we have is a bill that continues on this path that 
will hurt consumers all over the country.
  What Senator Cantwell has been fighting for is the opportunity to 
offer amendments. With what has happened here now, that is no longer 
possible. So, yes, some of us are going to continue to tell the story. 
Some of us are going to say: Let us learn from history. This isn't 
ancient history; this is 1999 and 2000.
  What we want to do is make sure we have a system that will protect 
small business and will protect families and will protect us all from 
robber barons who come in and set up elaborate scams, giving them 
names: Death Star, Fat Boy, Get Shorty, Inc-ing, Ricochet. This isn't 
just some one person who had a thought. This was a conspiracy to harm 
consumers.
  As Senator Cantwell said, electricity is a necessity. It is more than 
a commodity. You can do without a new suit; you can do without a pair 
of shoes if you already have one; but you cannot do without 
electricity, if you are in

[[Page 20414]]

business or if you live in some of the desert areas in my State where 
senior citizens can get a heatstroke if they don't have their air-
conditioner on. Senator Cantwell and I and others simply want to make 
sure that what happened to us does not happen to us again and what 
happened to us does not happen to you in your States.
  I thank the Senate for its indulgence. I am very hopeful that our 
leaders are working out a way for us to walk away from this electricity 
title which is so damaging and move forward with a bill that doesn't 
hurt the people we represent. None of us wants to do it. Let's not do 
it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas is recognized under the 
previous order for up to 20 minutes.
  Mrs. HUTCHISON. Mr. President, I think it is very important that we 
revamp and talk about what is going on here because we have been trying 
to pass this Energy bill, really, since May. Our leader, Senator Frist, 
and the committee chairman, Senator Domenici, have asked people to come 
forward and offer their amendments time and time and time again. We 
have not had amendments offered; we have not had time agreements; we 
have not had the momentum to move forward on this bill.
  Senator Frist, as is usual around here, did allow other business to 
be done in between because we were not able to make headway on this 
bill. Senator Frist announced at the first of this week that we were 
going to finish this Energy bill. But time and time again, it has 
broken down, amendments have not come forward, we have not had time 
agreements, and we have not been able to move forward.
  The bill we are working on is a bill that came out of committee. It 
was hammered out by the committee under the leadership of the chairman 
and the ranking member--the two Senators from New Mexico. It came to 
the floor in relatively good shape. There were certainly amendments in 
order, and that is the right of every Senator. But it is also the 
responsibility of a Senator to say what the amendments are, put them 
forward, make the arguments, and let's move on. That is how you get a 
bill off the floor. We have been thwarted in those efforts time and 
time and time again.
  We import 56 percent of the energy needs of this country. How can we 
be so blind when we see what is happening in the Middle East right now? 
We know the Middle East is volatile, we know it is the largest source 
of our imported energy. Yet we have been working on this Energy bill 
for actually 2 years and, if we don't pass an Energy bill, we are not 
going to become more self-sufficient. How can we miss this opportunity? 
It is an issue of consumer availability. It is an issue of responsible 
regulation. It is also an issue of security for our country--that we 
have the supplies that are sufficient so we will not be beholden to any 
other country in the world for our energy needs, and so we will have 
the ability to keep our economy strong and protect the people of our 
country. At no time was that made more clear than on September 11, 
2001.
  We need to finish this bill. I think a fair offer has been made. It 
does close out some amendments. It closes out some amendments on which 
I was working. I think if we all look at the big picture, we will 
determine that it is better to pass the bill that we had on the floor 
last year, which passed 88 to 11, after the Senate wrote the bill on 
the Senate floor. I didn't like all of it, but it was a good start at 
making our country more energy self-sufficient. Furthermore, it would 
have put people to work. Why on earth would we not, in this very hard 
economic time, realize that we need to put our people back to work? 
There are many parts of the bill that we are working on that came out 
of committee. There are many parts of the bill we passed last year that 
will put people back to work.
  This bill is very balanced. It assures that we will have more energy 
coming from our country in the traditional ways, such as oil and gas 
exploration and trying to encourage clean coal, because we have an 
abundance of coal and it can be used in a clean, environmentally safe 
way if we enact the amendments and the bill from last year that 
encourage clean coal development. It also encourages new forms of 
energy--renewable energy, energy that comes from different sources, 
alternative sources, such as wind and ethanol--different sources even 
than we know about today--through research.
  It is very important that we develop our own sources of energy. 
Nuclear energy is clean energy. It has been wiped out in our country 
because of the liability and the extremism that has kept anyone from 
making an investment in a nuclear powerplant for about the last 15 
years. But nuclear energy is a major source in many European countries, 
and it is very clean and safe if it is done right.
  So I think it is very important that we have this bill, or pass last 
year's bill, and that we stop talking about who is delaying. We have 
had the bill on the floor for a week and we have not been able to get 
through all of the stalling. So I think it is time for us to fish or 
cut bait before we leave. I think a fair offer has been made, and I 
think it is time for us to go forward and pass an Energy bill for our 
country.
  Let's have the debate, let's vote up or down, and let's try to use 
the good parts of this bill for the future of our country. It 
encourages new and marginal well drilling. A lot of people say, well, a 
13-barrel-a-day well is not going to make us more energy self-
sufficient. But, at one time, before prices got so low that the little 
guys could not make it, we had 500,000 marginal wells drilling in our 
country. That provided a lot of jobs, and it also equaled the amount of 
oil we import from Saudi Arabia every day. But the little guys have 
very low margins at 13 barrels a day, and they cannot make it when the 
price of oil falls below $18 a barrel. So if we just have a mechanism 
by which you get some tax relief if prices fall below $18 or $17 or $16 
a barrel, then those people will know they can stay in business; they 
will go out and find the oil and they will take the time and the 
expense to drill. They will not take the time to drill if we don't give 
them some assurances. This bill does that, and so did last year's bill. 
It is very important to encourage our people to go out and look for oil 
and gas resources.
  The Gulf of Mexico is the second largest capability we have after 
Alaska. We have been prohibited from drilling in ANWR, and that is not 
in the bill. But the Gulf of Mexico is available and it is the second 
largest resource we have in this bill before us, as in last year's 
bill. We do have incentives that would allow people to go to the great 
expense of a deep gulf drilling because they will know they will have 
the capability, if they find oil or gas, to be able to afford to get it 
out and keep those jobs in our country.
  There is a reason for us to stay on this bill. The reason is the 
national security of our country. That is why our leader, Senator 
Frist, has said from the beginning of this week that we have already 
spent 2 weeks on this bill and now is the time for the Senate to act.
  There is no reason for us to leave without an Energy bill. We have 
given it time. If people are sincere about wanting an Energy bill to 
pass, this is a good bill. Last year's bill is a bill with which we can 
work. We have already voted on a major amendment, the Bond-Levin CAFE 
amendment, which will have good science in fuel efficiency standards. 
The Senate has spoken on that issue.
  Why don't we keep going? Why don't we close out the electricity title 
to this bill? It has been very controversial, but we put all the groups 
together, we have gone through all the disagreements, and we have come 
to some terms. Why don't we go forward on this bill?
  Yes, a few people would not be able to offer their amendments because 
they did not come forward all these weeks we have had the bill before 
the Senate. Some people have, and we have voted on their amendments.
  We do not need to be pointing fingers. The majority brought up the 
bill. Senator Domenici has been working on this bill diligently. 
Senator Domenici gave up the last 2 years of his chairmanship of the 
Budget Committee,

[[Page 20415]]

which he loved, because he was dedicated and committed to getting an 
Energy bill out of the Senate and to the President's desk. He has not 
had the cooperation he deserves to do what he has been trying to do all 
these years.
  Senator Domenici put the bill through the committee. He did not 
bypass the committee as was done last year. He put it through the 
committee, and he worked with all of the factions and interest groups. 
He deserves to finish this bill this week as we proposed to do.
  We have tax incentives in this bill that will encourage the new kinds 
of energy that might be what will make the difference in sufficient 
energy in our country. Maybe it will be the clean coal power initiative 
that will get us over the hump to gasify coal in an environmentally 
safe way.
  If we continue to put regulatory hurdles in front of our ability to 
develop new sources of energy in a responsible way, we are going to do 
two things: We are going to continue the deficit in our ability to 
provide our own energy for the people of the United States of America, 
and we are going to send jobs overseas at a time when unemployment is 
at a high point this year. I do not see the wisdom in that, and that is 
why we have been pushing all week to get this bill completed.
  The United States has the 12th highest proven oil reserves in the 
world. Sixty-five percent of those reserves are concentrated in Alaska 
and the Gulf of Mexico. This bill will help the Gulf of Mexico, and it 
will help get the resources from Alaska through a pipeline down to the 
lower 48. This bill does not allow drilling in ANWR, but it does allow 
us to have a direct pipeline that will take the natural resources--the 
gas--out of Alaska and bring it down to the lower 48.
  This is a huge job creator and a huge benefit for the consumers and 
the businesses of our country that must have energy to keep their 
businesses and their manufacturing operations open. I have talked with 
farmers and small business people about the increasing rates of natural 
gas and electricity, and it is driving their costs up at a time when 
they are not able to get higher prices for their products, and that is 
an alarming hit on our economy.
  Why are we still talking about this bill instead of working on the 
electricity title and getting this bill through the Senate or taking up 
the offer that was made by the leadership that we take up last year's 
bill that passed this body 88 to 11, pass it, and go to conference and 
continue to work on getting a bill to the President of the United 
States?
  Even if everything in this bill or last year's bill is not to my 
liking, which it is not, it is a major step for energy sufficiency, a 
major step in conservation, and a major step in job production for our 
country at a time when we need it.
  I hope we will be able to move forward on this bill or on last year's 
bill with the goal that we will finish this bill this week. That is 
what we can do if we will stop talking--and I am talking because we do 
not have an agreement yet, but I will gladly yield to anyone who comes 
to the Chamber and says, We have an agreement to go forward, because I 
want an Energy bill this week. That is why Senator Frist laid it before 
the Senate and why Senator Domenici got it out of committee and why we 
have been trying to pass this bill since last year, since early this 
year, since May when it came out of committee and we first tried to 
pass it. We have seen delay after delay.
  I hope we will buckle down in the next hour and start the electricity 
title again or enter into an agreement that we are going to pass last 
year's bill, debate it, let everybody have their say, and see if we can 
move forward, even if it is not 100 percent what people want. I have 
not seen a bill come out of the Senate very often that is 100 percent 
of what I want. That is why we have 100 Senators representing 50 States 
and the required compromises that produce a bill.
  I hope we will stop the delays and that we will work with Senator 
Domenici. He has made every offer that can possibly be made in an 
effort to move this bill forward. He has offered to keep going through 
the electricity title. Let's finish that. That would be a major 
accomplishment. And then let's go on to the tax title. A lot of people 
could be put back to work with the tax title because it encourages more 
sources of energy, and we can do that before the end of this week if we 
will start working and stop the delay we have seen week after week and 
month after month.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Bunning). Will the Senator withhold her 
request?
  Mrs. HUTCHISON. I withdraw my request for a quorum call.
  The PRESIDING OFFICER. The request is withdrawn.
  The Senator from Rhode Island.
  Mr. REED. Mr. President, I ask unanimous consent to speak in morning 
business for up to 30 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                                  Iraq

  Mr. REED. Mr. President, I wish to take this opportunity to discuss 
the issues involving our ongoing conflict in Iraq. I will discuss the 
issues of intelligence, planning, and the challenges ahead.
  These topics are critically important in their own right. But, they 
take on even more profound and consequential aspects when you recognize 
that failures and missteps in Iraq could play out again as we face 
future threats, the most alarming of which is the deepening crisis over 
North Korea.
  Today, I find myself expressing many of the concerns that I initially 
stated last October when I opposed a unilateral approach to confronting 
the Saddam Hussein regime. But the obligation to review our activities 
in Iraq is less about the past and much more about the demanding 
present, both within Iraq and around the globe.
  With each passing day, the struggle in Iraq claims additional 
American lives. These losses are the most tangible and poignant symbols 
of the increasingly difficult burden that we have chosen to bear. Our 
stunning military success in the first phase of the war gave us the 
hope that our conventional victory would lead quickly to a decisive and 
final cessation of hostilities. Our hopes are periodically renewed when 
our forces are able to capture or kill another prominent member of the 
regime. Most recently, the 101st Airborne routed Saddam's sons, Qusay 
and Uday, from their hiding place and killed them in a fierce 
firefight. We even seem to be closing in upon Saddam himself. Yet still 
the attacks against our troops go on. Our military leaders have wisely 
cautioned us that we can expect more attacks and more casualties. The 
situation in Iraq will likely get worse before it gets better, and our 
military presence will be of long duration.
  But, also, with each passing day, several important aspects of the 
preemptive attack on Iraq become clearer.
  The intelligence used by the administration to justify the war was 
selectively shaped to support their preconceived views of the threat 
posed by Saddam. Their declarations of the presence of weapons of mass 
destruction posing an imminent threat to the United States and their 
statements linking the Iraqi regime to terrorists associated with al-
Qaida were questionable when uttered and, to date, have been 
unsubstantiated. These distortions were deliberate and calculated to 
sway opinion rather than to properly inform it.
  Planning for occupation activities was woefully lacking. The 
administration appeared to believe its own oversimplified view of Iraq; 
namely, that it was a country that would welcome us with open arms once 
we removed Saddam. This was the line advanced by Iraqi exiles who had 
for many years been the proteges or associates of numerous 
administration officials. Apparently, the view of Iraq from Paris or 
London was just as distorted as the view from Washington think tanks. 
Complicating this unrealistic view of Iraq was a power struggle between 
the Department of Defense and the Department of State over 
responsibility for post-hostility planning. The Department of Defense 
won and the planning

[[Page 20416]]

process lost. Expertise was sacrificed for enthusiasm and loyalty. 
Then, with the avalanche of pressing details concerning the pending 
attack, post-attack planning took a predictable back seat.
  Today, American forces are engaged in suppressing a well-armed and 
well-financed insurgency. Iraq is awash in weapons. The coalition 
provisional authority acknowledged the obvious when it authorized each 
homeowner to retain an AK-47. Even so, it is amazing to read on a daily 
basis of the seizure of hundreds of RPG's and hundreds and hundreds of 
pounds of explosives. And, there appears to be a lot more that has yet 
to be discovered. More serious, of course, is the daily casualties 
among our troops caused by these weapons. Also, the insurgents to date 
appear to have an ample supply of cash. Another amazing revelation of 
my recent trip to Iraq was the frequency that our forces turned up 
sizable quantities of cash and valuables as they rounded up even low 
ranking members of the Saddam regime.
  The insurgency in Iraq has not been transformed into a popular 
movement to attack American forces and to eject us from Iraq. That is 
good news. But we are in a frantic race to improve security, 
reinvigorate a devastated economy and establish an Iraqi government 
deemed legitimate by the people of Iraq before popular frustration and 
incipient nationalism are ignited by those who do wish to attack and 
eject us from the ground.
  One of the more thoughtful and even-handed military analysts, Anthony 
Cordesman at the Center for Strategic and International Studies, has 
accurately summarized the record of the administration's intelligence 
activities leading up to Operation Iraqi Freedom.

       [T]here are many indications that the U.S. intelligence 
     community came under pressure to accept reporting by Iraqi 
     opposition forces with limited credibility and, in some 
     cases, a history of actively lying to either exaggerate their 
     own importance or push the U.S. towards a war to overthrow 
     Saddam Hussein. In what bore a striking resemblance to 
     similar worst case interpretations of the global threat from 
     the proliferation of ballistic missiles under the Rumsfeld 
     Commission, U.S. policymakers not only seem to have pushed 
     for the interpretation that would best justify military 
     action, but to have focused on this case as if it were a 
     reality, rather than a possibility. In the U.S., this 
     pressure seems to have come primarily from the Office of the 
     Vice President and the Office of the Secretary of Defense, 
     but it seems clear that the Bush Administration as a whole 
     sought intelligence that would support its case in going to 
     war, and this had a significant impact on the intelligence 
     community from 2002-onwards.

  The administration did not use intelligence to help make a difficult 
decision. It used intelligence to sell a preconceived notion. The long-
term, fixed view of the administration held that deterrence and 
international inspectors were inherently incapable of containing 
Saddam. Only the elimination of the regime could suffice. Moreover, 
regime change could have the added benefit of precipitating a 
transformation of the entire region.
  In January of 1998, Secretary Rumsfeld, Secretary Wolfowitz and other 
prominent neo-conservatives wrote to President Clinton urging him to 
use military force to remove Saddam.
  In their words:

       The only acceptable strategy is one that eliminates the 
     possibility that Iraq will be able to use weapons of mass 
     destruction. In the near term, this means a willingness to 
     undertake military action as diplomacy is clearly failing. In 
     the long term, it means removing Saddam Hussein and his 
     regime from power. That now needs to become the aim of 
     American foreign policy.

  This letter predated the attack on Iraq by 5 years. Indeed, it 
predated September 11 by more than 3 years. This last point is 
instructive. Recently, Secretary Rumsfeld has been defending his 
judgment regarding the military campaign against Iraq as simply seeing 
intelligence in light of September 11. But it seems clear that he 
reached his conclusion about Iraq well before September 11, and 
September 11 certainly did not change his mind.
  September 11 did, however, horrifically foreshadow the gravest threat 
facing the Nation: sophisticated terrorist cells armed with nuclear 
weapons. And, in so doing, gave the administration the template for its 
arguments. The President's assertion, that Iraq was actively seeking 
uranium from Niger, was false and known to be false at the highest 
levels of the administration, but it provided an irresistible element 
in the case the administration wanted to make against Iraq. Similarly, 
Secretary Rumsfeld made claims that he had ``bulletproof'' evidence of 
active collaboration between the Saddam Hussein regime and al-Qaida. In 
the weeks since the fall of the regime, no evidence has emerged to 
validate this claim.
  These distortions and exaggerations are a dangerous disservice. They 
undermine confidence in the information that the public and decision 
makers must rely upon to make difficult judgments. Moreover, they 
suggest that the administration is not interested in understanding the 
world, but simply changing it along lines agreed to in policy seminars 
years ago.
  Despite warnings of the difficulties inherent in stabilizing Iraq 
after the defeat of Saddam Hussein, planning for post-hostilities was 
an afterthought. The Defense Department wrested control of the process 
from State and insulated the planners from broad-based collaboration. 
Then it went on to bet that Iraqi gratitude, together with an exile 
government, would provide for a cheap and easy exit strategy.
  Defense officials point out that they planned for many events that 
did not take place and executed a military plan that minimized 
potential humanitarian, economic and environmental problems. In fact, 
the military plan executed by CENTCOM was brilliant and did seek to 
minimize collateral damage through judicious targeting as well as 
actively seizing key installations, particularly oil facilities, to 
avoid sabotage.
  But, the further one moves away from formal military plans into the 
province of policing, civil administration and economic development the 
clearer it becomes that the post war planning was grossly inadequate.
  The first overt sign of planning inadequacies was the initial 
indifference to large scale looting. The collapse of the Iraqi police 
was not compensated for by aggressive action by our military. The 
systematic looting went unchecked for a prolonged period and undermined 
an already fragile and antiquated infrastructure.
  The failure to incorporate experts on Iraq from the State Department 
and other agencies led to reliance on an ad-hoc group of retired 
military and administration operatives to try to organize a political 
and economic response. Initial efforts were disappointing and led to 
General Garner's early departure. Ambassador Bremer has filled the 
leadership void with more of a presence, but the realization is taking 
hold that this will be a long and expensive process with a still 
uncertain outcome.
  The United States faces serious challenges in Iraq.
  The preeminent challenge is security. Our forces are facing 
increasingly sophisticated attacks. In the first few days of the 
occupation, our troops were engaged with small arms on an opportunistic 
basis. The attacks have stepped up with more organization and more 
lethal weapons like RPGs. Lately, the insurgent's use of remotely 
detonated landmines and explosives demonstrates an increasing 
sophistication in training and planning.
  A disturbing escalation in potential lethality of these attacks came 
with the recent report of a man-portable antiaircraft missile attack on 
an aircraft over Baghdad International Airport. This attack begs the 
question of the number of these MANPADS in Iraq and whether any have 
been removed from Iraq for use elsewhere. One or more successful 
attacks on aircraft would have a serious impact on both the security 
climate and the closely related efforts to restore a sense of 
predictability for economic investment and development.
  Our military forces are aggressively attempting to preempt these 
attacks. The key to any successful counter-insurgency is intelligence, 
and we have begun an all-out effort to target the middle range of 
former Iraqi security officials to identify the insurgents and

[[Page 20417]]

their support mechanisms. Nevertheless, the number of desperate and 
determined regime diehards with access to weapons and knowledge of the 
terrain and our dispositions indicates that these attacks will 
continue. In addition, it is reasonable to assume that infiltration of 
foreign terrorists will take place. This development could add an even 
more lethal, sophisticated and longer-term element to the battle. Our 
forces will likely face successive waves of violence over many months.
  The next military challenge is to sustain our forces in Iraq. We 
cannot do so over the next year without additional international 
support or by activation of additional National Guard and Reserve 
forces. Our quest for international support was compromised from the 
beginning by the administration's insistence on an essentially 
unilateral approach to Iraq. Unless the administration is able to 
recruit an additional international division, the current rotation plan 
will have a huge gap next February when the 101st Airborne Division is 
scheduled to return. Since the administration has yet to ask NATO for 
support and major European countries like France and Germany remain 
estranged on this issue, likely candidates are Turkey and, perhaps, 
Pakistan. Each of these countries would demand significant financial 
and logistical support. And, the introduction of the Turks could cause 
problems within Iraq. The introduction of Pakistani forces could 
further incite domestic criticism of Musharraf at home.
  The need to activate reserve forces is becoming more pressing with 
each passing day. I support General Barry McCaffrey's recommendation 
that we immediately activate nine National Guard Brigades, not just the 
two currently planned to be activated. Such a decision cannot be 
deferred much longer since these brigades must receive intensive 
training before they are deployed. Given the indefinite nature of our 
mission in Iraq and the potential for additional crises around the 
globe, these brigades should be made part of our active force structure 
and replenished through active duty recruitment.
  The security challenge is matched by the need to create a functioning 
government that is legitimate in the eyes of the Iraqi people. We have 
begun this process through some arduous efforts in Baghdad. However, 
even more difficult and controversial actions lie ahead. The selection 
of a Governing Council was a start, but also revealed the problems that 
we face.
  First, we are still saddling ourselves with Chalabi and the exiles. 
My initial instincts, that I shared with Ambassador Bremer in Baghdad, 
questioned the wisdom of placing these individuals in positions of 
power. Since that time, the first credible survey of Iraqi opinion 
conducted by the National Democratic Institute for International 
Affairs has been published. Among its conclusions is the finding that 
there exists ``[c]ynicism about leaders, especially acute regarding 
some exiled leaders who were objects [of] vilification campaigns led by 
the previous regime. . . .''
  Second, we have necessarily put off the most divisive political 
decision. Who will be the ``face of Iraq''? The Council represents a 
broad spectrum of Iraq, but it has yet to produce a personality that 
will be that Iraqi face. The ``executive'' of the Council is a nine 
member body dominated by the exiles. One member rotates as the 
``Executive'' each month. Eventually, a personality will emerge. Will 
that emergence set off a political crisis when disgruntled factions 
realize that they will not lead Iraq? I believe that there is a 
substantial likelihood of such a development and that would further 
complicate our presence.
  Finally, our political tasks in Iraq must be accomplished with 
greater speed and a more deliberate and effective strategy to explain 
our actions. After the Saddam regime, the people of Iraq are steeped in 
misinformation and cynicism. According to the NDI survey, ``antipathy 
for the United States and Britain is not overcome by the fact that 
these two countries are responsible for the country's liberation from 
the tyrant they despise.'' Moreover, ``virtually no one, excepting some 
Kurds in the north, believes the United States intervention in Iraq is 
motivated by a desire to help the Iraqi people. Usually people say the 
U.S. `is acting in its own interest'--which is often viewed in terms of 
access to Iraq's oil reserves.''
  The political situation in Iraq is not without some encouragement. 
According to the NDI Survey, there is no widespread support for the 
attacks against our forces. However, Iraqis do want foreign military 
forces to depart. There is a strong commitment to the integrity of the 
Iraqi state. Nevertheless, continued security problems, economic 
difficulties and political controversies can quickly sap these 
encouraging signs.
  The serious consequences of selective intelligence and poor planning 
are playing themselves out today in Iraq. But, of equal or even greater 
concern, is the effect of the administration's operating style in other 
areas and issues of concern. The most notable and, to my mind, the most 
dangerous of these issues is North Korea's rush to develop significant 
quantities of fissile material and nuclear weapons.
  In North Korea, we have, according to their demonstrated conduct and 
their public declarations, the type of threat that the administration 
claimed required a preemptive military attack in Iraq. Nowhere in the 
world do the lines of sophisticated terrorists and nuclear material 
come closer to intersecting than in the conduct of the North Koreans. 
By all accounts, North Korea is one of the most persistent and 
prodigious proliferators in the world. They sell military products to 
the highest bidder. With plutonium, they will likely get offers from 
terrorists.
  The administration's response has been slow to develop and 
characterized by many of the pitfalls found in the prologue to Iraq 
with one other major factor. Our commitment to Iraq has seriously 
strained the capacity of the Administration to deal with North Korea 
and other problem areas.
  The stress on our land forces inhibits a diplomatic strategy 
complemented by unquestioned military power. The public preoccupation 
with the turmoil in Iraq makes it very difficult to marshal the 
necessary popular support to engage in another high profile 
international confrontation at this time. The amount of energy and time 
that is devoted to Iraq crowds out the agendas of decision makers.
  Thus, the administration is in a holding pattern. It is promoting a 
multinational, diplomatic approach that is laudable but not productive. 
It appears that just below the surface, some of the Beltway battles 
that preceded our operations in Iraq are being fought to a standstill. 
Once again, it seems that dogma is clashing with diplomacy. The 
doctrine of regime change is pitted against a diplomatic approach that 
requires as a prerequisite the tacit recognition, at least, of non-
aggression against the North Korean regime as part of an overall, 
verifiable agreement to eliminate nuclear weapons.
  The effect of all of this is that crucial time is being squandered. 
As former Secretary of Defense Bill Perry declared, the situation in 
North Korea--

     was manageable six months ago if we did the right things. But 
     we haven't done the right things.

  The President has to address this issue now by settling the debate 
within his Administration in favor of diplomacy and not dogma. He has 
to take steps now to bolster our military forces to complement a 
diplomatic approach.
  It would be tragic if our efforts in Iraq allowed a more ominous 
situation to develop in North Korea.
  I yield the floor and the remainder of my time.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I came here after the distinguished 
Senator from West Virginia, and he is my senior. I am a youngster. But 
I wondered if I could speak before him and he said of course.
  I ask consent that I be permitted to speak for up to 7\1/2\ minutes 
and that the Senator from West Virginia be the next recognized for his 
comments.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, one might think, having been immersed in

[[Page 20418]]

this Energy bill and waiting for a possible solution to the situation, 
that I rise to speak of that. But I do not.
  Senator Byrd, I know the Senator is busy but I would like him to 
listen to the few comments I have because, while they are not borrowed 
from him, I have heard him speak about America's involvement in other 
countries and I want to talk about that.
  It bothers my mind, as I look at Iraq, and Afghanistan, Somalia, and 
the possibility now of Liberia and other countries, and I want to talk 
about some words that we Americans and our leaders have been using ever 
since I was a little kid and for all the years I was here. We used to 
say: we don't want to build countries. We are not in the business of 
constructing countries. We don't want to be called upon to put a 
country together. We don't want to be the builders of countries--
leaving the distinct impression that we want the other countries to 
build themselves up.
  The Senator and I would not object to that, as a thesis. That sounds 
like a theology of Americans. But Mr. President, I say to my good 
friend, the problem is that it almost implies that we will not put 
together the ability, the capacity to help a country build itself.
  We must, as a nation, it seems to this Senator, have within our 
Government the capacity to help a country such as Iraq build itself 
up--or a country such as Afghanistan. We can't say the Defense 
Department is now in charge of Iraq and they know how to see that Iraq 
gets built up. That is not plausible.
  Look what goes on every day in that country. Does all of that flow 
naturally to the Department of Defense for some colonel or general or 
the Secretary of Defense to make the decision? Of course not. There are 
issues of construction of a country, the building of an infrastructure, 
putting schools back into operation, making sure health clinics that 
have broken down get built. I am not suggesting that we build them in 
every respect but we need to have the governing capacity to have 
somebody in charge, seeing that it gets done.
  I have said that in my own way to this administration and I am very 
pleased that there has been some response. I said to them on one 
occasion: Why don't you tell the American people what is your plan for 
Iraq for the next 5 years? You know, all they are seeing is the bad 
things. They don't know that in 6 months you are going to have a 
certain number of policemen trained; in 1 year, you are going to have 
Polish soldiers coming in; in 2 years, you are going to have all the 
water done.
  I have said to them: In order to do that, you have to have, not the 
Department of Defense in charge, you have to have a reconstruction team 
in charge. A reconstruction team is different. In fact, it might be a 
layman with very big municipal authority who would be in charge. It 
might be a great builder who knows how to sit in an office and delegate 
so the things that have to be put together, the contracts that have to 
be let, get let; the countries that have to be called upon to do 
things--that it happens.
  So I thought I might just share that with the Senator, since he has 
shown great concern about what we are going to do.
  The Senator from New Mexico is totally on this President's team. I am 
totally his defender in terms of having taken over Iraq. I don't even 
spend any time worrying about those 15 words on nuclear weaponry. That 
is just me. I am not speaking about anybody else.
  I think I ought to be listened to on some of these other issues. I 
know what the average folks in my hometown are thinking about. I know 
that they are reading in the paper about soldiers dying and the 
Secretary of Defense responding. I think they would feel much better if 
they knew there was a game plan for the reconstruction, and that 
America had within its Government a capacity to reconstruct what is 
needed and then kind of put the bricks and mortar and the building 
blocks together and be able to tell us, our people, and the world, what 
is going on month by month, 6 months by 6 months.
  As an example, today I could go home to my hometown and I could speak 
at lunch to some people and I could pull out the blueprint for the 
reconstruction of Iraq. I could say to them: Folks, it may change here 
or there but, this is what the plan is. We have a way to do it. It is 
not American soldiers who are going to be over there for 5 years 
carrying out all the details of every little thing that has to be done. 
We are in a reconstruction mode to rebuild that country.
  That part of our Government would be more credible when they tell us: 
We didn't have a water works. That is why we are still over here 
hurting. This fellow, Saddam Hussein, broke the water works down and 
there wasn't anything there for the people to drink water from. That is 
a lot different than saying our soldiers are running around trying to 
find water for the people and they got killed doing it. It is a lot 
different than saying we thought we had a production line to get the 
oil from here to there but it had decayed and we had to bring in a 
company to build another one, rather than reading a story that somebody 
shot an American soldier as we were attempting to build a pipeline for 
the oil and gas.
  The Senator from New Mexico is totally immersed up to his head in the 
subject of an Energy bill for America. I pulled myself away from it to 
let other Senators talk about it. I thought I would come down to the 
floor and discuss this issue. I don't do that very often. I kind of 
stick to my area. But this is an important issue. We are in the 
business of reconstructing that country. We can say all we want--that 
we aren't and we don't want to--but we can't expect our soldiers, our 
tanks, and our men with machine guns to do that. They have to be there, 
of course. They are going to be there in large numbers. But we need to 
have something that is a reconstruction approach. The government of our 
country has to be wise enough, the great builders we are. We are the 
builders. We are the builders of the world. We surely ought to be able 
to put together a master plan with a master builder for the rebuilding 
and reconstruction.
  I yield the floor. I thank the Chair. I thank the Senate.
  The PRESIDING OFFICER. The Senator from West Virginia is recognized.
  Mr. BYRD. Mr. President, I thank the Chair. I thank the distinguished 
Senator from New Mexico.
  Mr. President, I have been asked by the distinguished Senator from 
South Carolina to ask unanimous consent that he be recognized following 
me.
  The PRESIDING OFFICER. Without objection, it is so ordered.


          Threat of the Bush Administration's Budget Deficits

  Mr. BYRD. Mr. President, an apocryphal tale is often told by 
professors of economics in classrooms across the country. It is a tale 
about a king who asks his advisers to teach him the laws of economics. 
The king's advisers return with a book on the subject. But the king 
tells his advisers that his time is precious, and he asks them to 
summarize the book. The king's advisers return with a single piece of 
paper. But the king again tells his advisers that his time is precious 
and he sends them away to summarize the lesson even further. The king's 
advisers finally return with a single line, summarizing all of the 
known laws of economics.
  The king reads: ``There is no such thing as a free lunch.''
  For most people, this is a universally accepted truism--just plain 
common sense--that nothing is free. There are tradeoffs and opportunity 
costs to every decision we make. Even a child can understand this most 
basic economic principle. But for the Bush administration, you can beat 
them over the head with their own budget and still they will not 
acknowledge the tradeoffs and opportunity costs of the budgetary 
decisions they have made.
  On July 15, the administration released its mid-year budget and 
economic forecast, the so-called ``Mid-Session Review.'' The Office of 
Management and Budget revealed to the American people that the 
Government would run an incredible, record-breaking $455 billion 
deficit in the fiscal year 2003. Worse, the deficit will increase to 
$475 billion in the fiscal year 2004. I daresay

[[Page 20419]]

that is a low figure. The administration estimates that if the Congress 
enacts the President's policies, we will increase the public debt by $2 
trillion over the next 6 years.
  The OMB Director assured the public that these deficits were 
``manageable . . . sustainable . . . not a problem.''
  In other words, a free lunch.
  When the Bush administration promises almost $3 trillion in tax cuts, 
a prescription drug benefit, a record increase in defense spending, 
more money for education and health care, claims that it will protect 
Social Security and Medicare for future retirees, and asks for nothing 
in return--that is more than a free lunch; it is a cost-free invitation 
to a White House banquet.
  The American people may recall the last free lunch this 
administration tried to peddle.
  Prior to the war in Iraq, the Bush administration promoted a vision 
of Saddam's removal from power as a quick, easy, and bloodless 
exercise. Indeed, most of the support for this war was based on the 
rationale that America's tremendous military superiority over Iraq 
would confine the costs of this war to a relatively painless contest 
between the United States' awesome military might and the relatively 
weak, conventional military of Saddam Hussein.
  But now the true costs of the war are becoming more apparent. The 
number of U.S. casualties in Iraq has risen to 248 soldiers--and rising 
by 1 soldier per day or more--more than double the 123 deaths at the 
time the President declared victory in Iraq on May 1.
  Families of reservists and national guardsmen, who thought that their 
sons and daughters, brothers and sisters, husbands and wives would 
return after major combat had ended, are now realizing that their 
family members will be in Iraq indefinitely.
  Administration officials who were counting on U.S. allies to assist 
in peacekeeping efforts in Iraq are now realizing that our strong arm 
tactics have alienated many of our closest allies.
  The United States is now committed to a long-term endeavor to rebuild 
Iraq, which is costing the American taxpayer $4 billion per month.
  The administration hid the potential costs in the buildup to the war. 
Now, the American people are realizing that free lunch will be paid for 
with our Nation's treasure, prestige, and blood.
  So I take little comfort when this administration promises another 
free lunch, when it describes its budget deficits as ``manageable'' and 
``not a problem.''
  With $475 billion in budget deficits projected for the upcoming 
fiscal year, this Nation is experiencing budget deficits never before 
seen. They amount to roughly one-fifth of the entire Federal budget. 
This forces the Federal Government to borrow $1 out of every $5 it 
spends. And much of that money will have to be borrowed from our allies 
overseas--that is, those allies that we have not already alienated.
  With a $475 billion budget deficit, next year, the Federal Government 
will have to borrow more than the entire defense budget. For every 
military operation underway right now--in Iraq, Afghanistan, Liberia, 
the Balkans--and to maintain our current military defenses, the 
administration will have to borrow the money to pay the equivalent of 
those costs.
  With a $475 billion budget deficit, the recently enacted tax cuts are 
not free. Ultimately, the American people will have to repay every 
dollar to balance the budget.
  When the President is pinned down about the mounting deficits, he has 
two replies. First, they are small and not a threat. But the deficits 
assumed in his budget are the highest ever recorded, and, as long as we 
are running deficits, we are not saving to ensure the solvency of the 
Social Security and Medicare programs. There is no escaping that 
budgetary fact--none.
  Without more savings, we are endangering the Social Security and 
Medicare programs.
  The President tells us that we can grow out of deficits. Well that 
sounds nice, but it won't happen. The Congressional Budget Office, 
which is now headed by a former White House economist, formulated nine 
different economic models to predict how the recently enacted tax cut 
would affect the economy, and the CBO concluded that the President's 
proposal would have only a negligible effect.
  Even with strong economic growth, the White House budget office is 
still projecting that the Nation will accumulate $2 trillion in new 
debt under this administration's proposals, and that doesn't include 
the $5 billion per month the administration is spending in Iraq and 
Afghanistan.
  So, Mr. President, we are drowning in a sea of red ink. We are 
gasping for air. And all this administration can do is promise more 
cost-free White House banquet dinners as they claim it is ``not a 
problem.''
  But it is a problem! We are already seeing these deficits eat into 
our budget. Just look at the amendments that were opposed by the 
administration on the recently passed appropriations bill for the 
Homeland Security Department.
  Under pressure from the administration, Senators voted down amendment 
after amendment after amendment designed to enhance the security and 
the safety of the American people. Spending for vital homeland security 
functions is being denied each time with the same excuse--that our 
budget doesn't allow for it. We are spending nearly $4 billion per 
month in Iraq, but we could not afford a $1.75 billion amendment that I 
offered to secure our ports, to equip and train our first responders, 
and to secure our borders.
  It is incredible! The budget that calls for astronomical tax cuts 
does not allow for the safety and security of the American people 
within their own borders.
  Al-Qaida has not yet been destroyed. It is very much alive and 
kicking. It is still alive and well, and planning attacks now, attacks 
against U.S. citizens. Al-Qaida are patient, persistent killers. And, 
yet, this administration continues to oppose, right here on this floor, 
essential homeland security funding. Just this week, the Department of 
Homeland Security issued a new advisory about the potential hijacking 
of planes, and yet the administration opposed my amendment to secure 
cargo on passenger aircraft. Our ports, our borders, our airlines, our 
chemical facilities, our nuclear powerplants are still perilously 
vulnerable.
  Have we not learned anything, Mr. President?
  The war on terrorism can only be won with both a strong defense and a 
strong offense. And, yet, the ratio of defense to homeland security 
spending is 12 to 1. That is $1 of spending to build up our homeland 
defenses for every $12 spent on our military.
  We are seeing only a halfhearted effort by this administration to 
address the vulnerabilities in our infrastructure.
  We talk about the infrastructure in Iraq. What about our own 
infrastructure? The administration says they are going to do something, 
but not enough to thwart terrorist attacks. It should frighten us all. 
It certainly frightens me.
  When I stop to think, I say to Senator Hollings, that you and I and 
these people around us who are sitting at the desks--the President at 
the desk, the desk of the workers here--when I stop to think that we 
are alive today, in all likelihood, because there were a few courageous 
men on that airplane that went down in Pennsylvania who had heard about 
the attacks on the Twin Towers and the Pentagon. And because their own 
plane was a little late in taking off, they heard these other things. 
They knew what was happening. They knew what was happening to that 
plane and they decided that plane would not reach its objective. And 
from all indications that I have heard, its objective was this Capitol. 
So we owe our lives to them. We would not be here today. That is the 
way I see it.
  Now, we also hear that these terrorists don't forget, that they are 
persistent, they are patient. They take their time and they come back. 
What they fail to do in the first instance, they will try again. We 
better take these things seriously.

[[Page 20420]]

  The President has established a track record for being strong on 
rhetoric and short on resources. In his State of the Union, he said:

       We will not deny, we will not ignore, we will not pass 
     along our problems to other Congresses, to other Presidents 
     and other generations.

  Yet, according to the White House's latest deficit estimates, the 
President's policy is to have a deficit of $455 billion this year, $475 
billion in fiscal year 2004, and an increase in the public debt of $2 
trillion over 6 years. That is rhetoric without resources.
  In May of this year, the President signed the United States 
Leadership Against HIV/AIDS Act, which authorized $15 billion over 5 
years to attack global AIDS and authorized $3 billion for fiscal year 
2004. He traveled to Africa and pressed for the Congress to support the 
$15 billion commitment. Yet, the President requested only $1.9 billion 
for global AIDS programs for fiscal year 2004. That is rhetoric without 
resources.
  In January of 2002, the President signed the No Child Left Behind Act 
with great fanfare. He said:

       Today, begins a new era, a new time in public education in 
     our country. As of this hour, America's schools will be on a 
     new path of reform, and a new path of results . . . And our 
     schools will have greater resources to meet these goals.

  And, yet, President Bush's budget for fiscal year 2004 proposes to 
cut funding for No Child Left Behind Act programs by $1.2 billion below 
the levels that Congress approved for the current fiscal year, to a 
level that is $6.1 billion below the level authorized in the law that 
he, the President, signed 18 months ago. More rhetoric without 
resources.
  The President has called for the National Service AmeriCorps program 
to have 75,000 volunteers to tutor, mentor, and teach our children, 
provide services for our elderly, and clean up our communities. This 
month, the Senate approved a $100 million supplemental that would have 
prevented the elimination of 20,000 volunteers, reducing the program to 
30,000 volunteers. The President did not lift a finger--he did not lift 
a finger--in support of the program when the House stripped those funds 
from a supplemental bill last week.
  The President and members of his party have passed three tax cuts, 
taking $2.25 trillion out of the phoney surpluses that the President 
projected in 2001. Each time the President proposed these tax cuts, he 
promised that the tax cuts would create jobs. But the facts are 
different. Instead, we have seen 3.1 million jobs disappear from the 
private sector since the beginning of this administration, including 
more than 300,000 jobs lost within the past 5 months. So, once again, 
we hear rhetoric, but we see no results. More false promises.
  We are seeing the same halfhearted effort when it comes to preserving 
the Social Security and Medicare programs. The Bush administration 
often refers to the long-term problems facing the Social Security and 
Medicare programs, but the Bush administration has not set aside any 
money to make them financially solvent.
  In the coming decade, as the baby boomers begin to retire, the 
American people are going to realize yet another cost from these budget 
deficits--namely that there will not be enough money saved to pay the 
benefits promised to our Nation's seniors. Our Nation's seniors ought 
to take note of that, and the children of our Nation's seniors ought 
likewise take note of that.
  The administration's budget deficits are a problem for State 
governments, as well. Federal budget deficits have contributed to a $30 
billion gap in State budgets because of a lack of Federal payments to 
States. This is to say nothing of the $68 billion shortfall in State 
budgets that we read about in recent weeks. Without Federal support, 
States are forced to cut Medicaid and health care-related programs. For 
the first time ever, K through 12 education programs are being cut by 
States to make up for a lack of Federal funds. This year, Oregon school 
districts were forced to close some schools a month early because of 
these budget deficits.
  The administration vehemently opposes any increase in Federal taxes 
to cover its budget deficits. But what the White House doesn't admit is 
that State governments across the country are already raising taxes to 
fill this budget gap. Governors in 29 States have proposed tax or fee 
increases in their latest budgets.
  President Bush likes to justify his tax cuts for the rich by 
asserting that it's the people's money. ``It's your money,'' he says. 
Well, thanks to Mr. Bush's tax cuts, we are facing a public debt of 
$5.5 trillion by 2008. Do you know how long it takes to count $1 
trillion at the rate of $1 per second? Thirty-two thousand years. That 
is $1 trillion at the rate of $1 per second. So we are facing a public 
debt of $5.5 trillion by 2008. That is $18,890 of debt for every man, 
woman and child in this country. By 2008, we will be spending $260 
billion on interest on that debt. In 2017, when the Social Security 
Trust Fund is in the red, the 65 million Americans who expect to 
receive their social security benefits, will ask, Where is our money? 
They were told ``it is your money.'' They will be saying: Where is our 
money?
  Everything costs something. There is no free lunch. Yet the 
administration continues to play the role of the savvy salesman, 
handing out tax cuts and telling the American people that it will cost 
them nothing in return.
  The administration will be forced to reconcile the budgetary quagmire 
they have created. Nothing is free. There is no such thing as a free 
lunch. That much, even an apocryphal king could learn.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Alexander). The Senator from South 
Carolina.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that at the 
termination of my comments, the distinguished Senator from Montana be 
recognized.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                               Free Trade

  Mr. HOLLINGS. Mr. President, it is somewhat out of order when I make 
comments on trade in that the distinguished majority leader says he 
wants to do energy, he wants to do judges, he wants to do the 
supplemental, and he wants to do trade. I talked to him earlier this 
morning, and I said: I would be glad to fill in at any time they have a 
lapse. He said: Well, it wouldn't be until tomorrow. Then later in the 
exchange--there has been an intramural all morning long on procedures--
he said: Perhaps on Saturday.
  So I thought once the Pastore rule had been complied with and rule 
19(1)(b), the three hours had been completed--the distinguished former 
leader, the Senator from West Virginia, and I are the only two that 
remember the Pastore rule. Now that I have the floor, I have time to 
comment in a deliberate fashion. And while my distinguished former 
chairman and now ranking member of the Finance Committee is on the 
floor, since I am talking about trade, I want to express a frustration 
and make this observation.
  The main problem we have is how to pay our bills. The President has 
just put out a budget deficit projection of just a $455 billion 
deficit. That is on page 1 of his report. But on page 57 of the report, 
you will see the deficit will really reach $698 billion this year. As 
of this minute, the public debt to the penny is $503 billion. But 
second to that particular problem is the matter before us of jobs, 
economic strength, and manufacturing capacity.
  I will never forget Akio Morita, former chairman of the board of 
Sony. Morita was visiting Chicago, and lecturing about Third World 
countries. And he admonished that a Third World country had to develop 
a strong manufacturing capacity in order to become a nation state. And 
later on, he diverted and pointed and said to me about the United 
States: That world power that loses its manufacturing capacity will 
cease to be a world power.
  At the end of World War II, we had 40 percent of the workforce of 
America engaged in production manufacturing. Now we are down to 11.2 
percent, and soon it will be 10 percent. So as a result of the scheme, 
I should call it, of the Finance Committee, we will have 10

[[Page 20421]]

percent of Americans working, and the other 90 percent eating or 
talking about it. And I hear these big voices around saying: World 
power, we are the only world. We are not a world power. No, no. We are 
in a very weakened position.
  Right to the point, when I came to the Senate I got on the Commerce 
Committee. I had practiced customs law. I thought I was getting into 
trade because the Commerce Committee used to be the Committee of 
Foreign Commerce. Under article I, section 8 of the Constitution, the 
Congress of the United States shall regulate foreign commerce--not the 
President, not fast track, not some wavering trade minister running 
around Doha saying he is going to do away with dumping laws--but the 
Congress.
  And I found out that my distinguished chairman, Senator Magnuson at 
the time, was interested in exports, since he represented Boeing. 
Foreign commerce had reverted over to the Finance Committee. They had 
the reciprocal trade agreement. They had the Special Trade 
Representative. And indirectly, I became a sort of a study of the 
Finance Committee. I had a fellow named Claude Wilde from Texas come up 
to me, when I was just a freshman Senator. I was taken to the third 
floor of the old Statler Hilton. And he said: Yes, we are going to get 
rid of that fellow Yarborough. We are going to get that fellow Bentsen 
up here because he is better on oil.
  I said: On oil.
  He said: Oh, yes, that Finance Committee, we oil boys run it. We look 
out for oil.
  So the farmers are smarter than the oil boys. They have moved in with 
the Senator from Montana and the Senator from North Dakota and all the 
rest of them.
  I notice my distinguished ranking member. He put out a complaint to 
the WTO on agriculture. I have lost 61,000 textile jobs since he 
proposed NAFTA. He didn't ask the WTO about the special provisions for 
textiles. But he wants to petition. He immediately becomes alert. I 
have had to fight agriculture, I have had to fight the oil boys, I have 
had to fight that Finance Committee to sober up this Congress and let 
us go to work on producing jobs.
  The policy at this minute is to export jobs, eliminate jobs, get rid 
of all jobs--not just textile, not just hard manufacture, not just 
service jobs, not just high-tech jobs, but all jobs, except politicians 
and the press. If we started importing politicians and press, I believe 
we would finally stop, look, and listen, and we would begin to 
understand the problem.
  We have to struggle in order to debate trade as a result. It is easy 
to fix the Finance Committee--and they are fixed. They get their little 
amendments in there, and everything else like that. I am ready to vote 
for the Chile trade agreement. I have been saying that for 5 years, 
except they put on immigration.
  Mr. BAUCUS. We didn't.
  Mr. HOLLINGS. You didn't, but you didn't knock it off. They had a 
vote 3 years ago on the H-1B visas, with that Silicon Valley crowd. 
They wanted to get all the Indians and Chinese cheaper, and bring them 
in to take American jobs. The vote was 99 to 1. I was the one against 
that immigration. I am against this immigration, and if you didn't have 
fast track, Mr. President, I could put up a little amendment, like any 
Senator, and we would have the normal process, and we would have an up-
or-down vote, and I probably could pass it. I notice, on the other side 
of the aisle, some Republican colleagues are concerned about the 
immigration provision. Chile is better than us. Chile has a free market 
economy; they have labor laws; they have environmental laws; they have 
a respected judiciary; they have a balanced budget.
  Even when they brought up NAFTA, I said, why not Australia? They are 
the best friend we have; they immediately supported us in Iraq, in 
Afghanistan, in Vietnam, and in Korea--the best friend we have and we 
don't have a free trade agreement with them.
  Now they want us to have a free trade agreement with a corporate 
state, Singapore. I said long ago I could compete with any company in 
Japan, but I could not compete with the country of Japan. So here I am 
being asked to give the country, which is really a corporate State, 
free trade status. The government of Singapore owns the port; shipping 
and logistics; property; the airlines, telecom, media, banking, and 
financing services industries; powers, utilities, technology, 
engineering, and the rail.
  Mr. President, I ask unanimous consent to have this list printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                 State-Owned Corporations in Singapore

       Investment: Temasek Holdings, Ltd.
       Port: PSA Corporation.
       Marine: SembCorp Marine and Keppel Offshore & Marine.
       Shipping and Logistics: SembCorp Logistics and Neptune 
     Orient Lines.
       Property: CapitaLand.
       Airline: Singapore Airlines.
       Telecom and Media: Singapore Telecoms and Media Corporation 
     of Singapore.
       Banking and Financial Services: DBS Bank.
       Power and Utilities: Singapore Power, PowerSeraya, Senoko 
     Power, and Tuas Power.
       Technology: Chartered Semiconductor Manufacturing and ST 
     Assembly Test Services.
       Engineering: SembCorp Industries and ST Engineering.
       Rail: SMRT Corporation.

  Mr. HOLLINGS. Mr. President, that is a corporate state. There isn't 
any question that what we have here is a loading dock, a veritable 
loading dock from Indonesia. Let me read this. Here is a headline:

       Officials tout manufacturing services benefits from U.S.-
     Singapore FTA.
       U.S. Ambassador to Singapore Frank Lavin this week said the 
     greatest economic benefits to U.S. companies from the 
     recently-concluded U.S.-Singapore free trade agreement would 
     come in the areas of financial services, intellectual 
     property and manufacturing in the electronics sector.
       Lavin said that in the long run, the ``most significant 
     aspect of this FTA'' could be provisions allowing products 
     assembled in the two Indonesian out-islands to be counted as 
     Singaporean in origin for the purposes of the FTA. That would 
     allow U.S. electronics manufacturers to take advantage of low 
     wage rates on those islands to assemble components from 
     Singapore into electronic products that can enter the U.S. 
     duty free, Lavin said.

  Mr. President, where are we? Here we are trying to create jobs, and 
our good friend, Don Evans, the Secretary of Commerce, is running all 
over, jobs and growth, jobs and growth, jobs and growth, and we will 
give you a tax cut, jobs and growth as if that's going to help.
  My distinguished friend on the House side--the smartest fellow 
perhaps in the Congress is John Spratt from South Carolina, the ranking 
member of the Budget Committee. He voted for NAFTA. I said, John, for 
Heaven's sake how could you? And he said he had a promise that we can 
get 500 additional Customs agents. He said we need them badly, and he 
was right. We needed them badly.
  We never got the 500 Customs agents. They keep cutting that budget 
particularly. They need help. In Charleston, we have to lend the local 
sheriff's sniffing dog to the Customs agents. My office is in the 
Customs building. I keep up with them and I know what is going on down 
there.
  Mauritius, the little island off the coast of Africa, was inundating 
us with imported textiles, but they didn't have a textile plant. It was 
all made in China, and coming through Africa to South Carolina. These 
transshipments, Customs people will tell you, are to the tune of $5 
billion. When you go to them and ask them, wait a minute, can't you 
enforce the law, they say: Senator, you want me to enforce the law now 
on terrorism or textiles? I said: Heavens, no, on terrorism. Do you 
want me to enforce the law on drugs or textiles? Oh, no, I want you to 
enforce the law on drugs.
  So we have lost 61,000 textile jobs, and who is leading the way? The 
Department of State is leading the way in Singapore. I hate to say that 
about Singapore because I have visited there and I have the greatest 
respect for anybody in the Far East, specifically the former Prime 
Minister, Le Quan Yu.

[[Page 20422]]

  As a young Senator, in the early 1970s, I went there and Senator 
Mansfield, the majority leader, said: Fritz, you have to call on him. 
He is the wise man of the East. I had the most interesting conversation 
just the year before last. I called on him again, with the 
distinguished chairman of the then Intelligence Committee, Senator 
Shelby, because I wanted the Prime Minister to relate a particular 
observation he had made to me back then with respect to the defenses 
and the concerns we had in the Far East, which is another subject for 
debate. I was prepared to vote for Singapore. But we got fast track.
  With fast track you cannot say anything; you cannot do anything. You 
have to disrupt the Senate, in the middle of the energy debate, to be 
heard. We have fast track on jobs in America. We fast track jobs 
offshore--that is what it is. If we did not have fast track, I could 
put up a little amendment to strike the provision in the Singapore 
agreement that they couldn't have transshipments from the Malaysian 
Islands. This will just open the door for everything in the Malaysian 
Islands to come through Singapore. Listen to what the State Department 
ambassador said:
  With fast track, you have to disrupt the orderliness of business 
around here.
  I apologize to both leaders who have had a very difficult time 
getting business back on track today, but, Mr. President, I can tell 
you now, I do not apologize to anybody about the importance of this 
particular subject. It is not discussed, it is not debated, and it is 
not considered. It is fixed.
  I know something about trial lawyers, and I have seen some fixed 
juries that I have had to go up against. If there has ever been a fixed 
jury, it is this U.S. Congress. And I do not speak in a partisan 
fashion. I remember NAFTA. We had that beat until President Clinton 
went out and picked up 23 votes. He gave a golf round here for this 
particular Congressman, a golf round there. Jake Pickle, the 
Congressman from Texas, my good friend, got a cultural center. Another 
Congressman down in Texas got two C-17s. Oh, yes, the White House has 
the power. I do not speak loosely or lightly. I speak authoritatively. 
It has been reported in the press. They fixed the vote.
  This vote was already fixed, unbeknownst to the members of the 
Finance Committee, so that when the treaties got here, they found this 
hidden provision on immigration and we cannot vote on it.
  Finally, they put in a provision with respect to the transshipments 
to Singapore, and we cannot amend it. So the Senator from South 
Carolina under fast track is forbidden from voting his will with 
respect to these particular trade agreements.
  I am really worried. I just mentioned to the distinguished Senator 
from West Virginia about production in this country. I go right back to 
Morita. We were talking about manufacturing. That has been the strength 
of Japan. It is now the unquestioned strength of China. We think we are 
strong. We passed a resolution in the United Nations at the end of the 
eighties for the General Assembly to have hearings on human rights in 
China. China went around us, to the leadership in Africa, in the 
Philippines, in Malaysia, in Australia, and in New Zealand. They picked 
up the votes, and we never had a hearing on human rights, even though 
we had it adopted in that particular committee.
  One can say under domestic politics, it's the economy, stupid; one 
can say under foreign policy, it's the economy, stupid, because it is 
the economic strength of our Nation that is in question here.
  I just finished reading a book, ``An Army at Dawn'' by Rick Atkinson. 
He reminded me of the strength we had in World War II and how we really 
won that war. I have been on several panels, having been a 3-year 
veteran starting out in Africa and ending up on V-E Day in Austria. As 
much as anyone, Rosie the Riveter won that war. I hope in this big 
ceremony they have for World War II that they will have a statue for 
Rosie the Riveter because I can tell you right now, it was the American 
production that won that war. As has been said, we did not defeat the 
Germans in North Africa, we overwhelmed them because we had that kind 
of production.
  As I said earlier, at the end of World War II, we had 40 percent of 
our workforce in manufacturing, in production. As of yesterday 
afternoon, my check showed it was 11.2 percent, and we are going to get 
new figures on Friday, and probably it will be down some more. For the 
last 3 years the manufacturing strength and economy of the United 
States has diminished.
  What happens is, we have 10 percent of the people producing and we 
have 90 percent of the people eating and talking about it. That is not 
a country. Let's not run around here about energy, and run around here 
about judges, and run around here about supplemental bills, and 
whatever else. Let's sober up and start rebuilding this country, 
rebuilding jobs, and quit exporting them. Let's put a tourniquet on 
this outflow hemorrhage of jobs to any and everywhere but the United 
States.
  We have a 6.5 percent unemployment rate. The real unemployment rate 
is not just the 6.5 percent.
  Mr. President, there are those who have not applied, so it is a real 
unemployment rate of some 10 percent.
  My colleagues can see why I am worried when we see ``The Jobless and 
Hopeless May Quit the Labor Force.'' That is how we get to 10 percent. 
This is another Times article dated April 26.
  Mr. President, if you think I am worried, let's go to Mort Zuckerman, 
the editor in chief of U.S. News and World Report. I quote:

       The statistics are enough to make an incumbent assume the 
     fetal position: 2.7 million fewer private-sector jobs than 
     two years ago; the longest decline (32 months) in industrial 
     employment since the Great Depression: the longest continuous 
     decline in jobs in more than 50 years. Making matters worse, 
     the stock market has been off by double digits for three 
     years in a row. That's the first time that happened since the 
     1930s. The markets' plunge wiped out over $5 trillion in 
     value, including the retirement savings of millions of 
     Americans.
       As if all that were not enough, the $5.6 trillion Federal 
     surplus we saw during the 1990s has been turned upside down 
     into an estimated $4 trillion deficit. Business activity is 
     as weak as it has ever been outside of a recession, and we do 
     not know whether this signals the onset of another recession, 
     the dreaded double dip.

  That is Mort Zuckerman.
  Some might say, Hollings, you are all wound up about Texas. I am not 
wound up about Texas. I am wound up about the country. We are in the 
worst shape I have ever seen, and they are running around here with tax 
cuts for jobs and growth. We have lost 2 million jobs since we passed 
the tax cut. We have lost 2.7 million since President Bush has taken 
office, according to Mr. Zuckerman.
  The Wall Street Journal on July 21: ``Laid Off Factory Workers Find 
Jobs Are Drying Up For Good.''
  I ask unanimous consent that the article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, July 21, 2003]

       Laid-Off Factory Workers Find Jobs are Drying Up for Good

                          (By Clare Ansberry)

       Butler, PA.--The two Karenbauer brothers and their cousin, 
     Danny Mottern, have worked alongside each other for much of 
     their lives. Working with their hands comes naturally to all 
     three. As young boys they were dispatched to feed the cows 
     and plant corn on their grandfather's 134-acre farm.
       Later, they all ended up in the same Trinity Industries 
     Inc. factory, building parts for railroad cars. Brad 
     Karenbauer, 39 years old, was a tool and die man. Mr. 
     Mottern, 42, was a welder. Jim Karenbauer, 60, ran the forge 
     shop. They found challenge and satisfaction in their ability 
     to take a rought piece of metal and fashion it into the door 
     or roof of a sturdy railroad car that could whisk people, 
     coal and grain across the country.
       ``I was making something. I had something to show for 
     myself at the end of the day,'' say Mr. Mottern.
       But Trinity started laying off workers in 2000 and a year 
     ago, in a bid for efficiency, shut down the Butler factory 
     where the Karenbauers and Mr. Mottern worked. After, the 
     three men have begun scrounging for work. They moved from job 
     to job--shoveling snow, stocking a Wal-Mart Supercenter--but 
     nothing has added up to the pay or fulfillment of their old 
     jobs.
       While hundreds of factories close in any given year, 
     something historic and fundamentally different is occurring 
     now. For manufacturing, this isn't a cyclical downturn. Most 
     of these basic and low-skill factory jobs aren't liable to 
     come back when

[[Page 20423]]

     the economy recovers or when excess capacity around the world 
     dissolves.
       Railroad cars, unlike buggy whips, are still needed, as are 
     toys, appliances and shoes. But the task of making these 
     goods is increasingly being assumed by more efficient 
     machines and processes. Or they've been transferred to 
     workers who earn less and live in another country. While 
     these changes have been going on to a limited extent for 
     years, the economic slowdown has greatly accelerated and 
     broadened this historic shift. By some estimates, roughly 1.3 
     million manufacturing jobs have moved abroad since the 
     beginning of 1992, the bulk in the past three years to Mexico 
     and East Asia.
       Other plants around Butler also have closed, including one 
     that fabricated steel and another that made vinyl siding. 
     Hundreds of manufacturing workers have been left without jobs 
     and their options for similar work have narrowed 
     significantly in this city of 15,000, and hour north of 
     Pittsburgh.
       ``For people who work with their hands, there isn't going 
     to be much out there for them for long,'' says Brad 
     Karenbauer.
       After he was laid off last summer, he couldn't keep up with 
     the rent of his apartment. He moved with his girlfriend, Lisa 
     Schnur, and their infant daughter into a trailer owned by Ms. 
     Schnur's aunt.
       Meanwhile, a landscaper gave Mr. Karenbauer odd jobs, 
     mowing lawns and putting down mulch, paying him under the 
     table. That lasted until the snow fell. He doesn't mind 
     getting dirty or working outside and admits he's not 
     comfortable behind a desk. ``That's just not my cup of tea,'' 
     he says. ``Hands on is what I like to do. I like to work 
     hard. Growing up, if there was work to do, you did it. After 
     a while, you just got used to it.''
       Now he finds himself stranded in the labor pipeline along 
     with a generation of assemblers, welders, and tool and die 
     men who learned their trade on the job and know little of 
     computer-driven machines and new age manufacturing 
     techniques. In June, manufacturing cut 56,000 jobs, the 35th 
     consecutive monthly decline and the longest string of layoffs 
     in that industry since World War II.
       ``We're saving corporate jobs by moving production jobs to 
     lower-cost areas,'' says Daniel Meckstroth, chief economist 
     with the Manufacturers Alliance, a public policy and business 
     research group in Arlington, Va.
       The shift also means income for secretaries, maintenance 
     workers, and counter people in lobby coffee shops and staff 
     parking garages. Furthermore, off-loading much of the low-
     skill production work saves money and makes companies more 
     competitive. That means they can focus on innovation and 
     potentially create other jobs.
       Stan Donnelly, whose Alexandria, Minn., company makes 
     plastic parts for big equipment manufacturers, imports tools 
     from China to save money. In the long run, bypassing U.S. 
     toolmakers is a mistake, he believes. Those kinds of jobs 
     helped create and sustain the middle class, and he's not sure 
     displaced workers will learn new skills and become higher 
     paid. ``Look, we've got millions of people who have failed to 
     get through high school. If their minds are not their 
     salvation, what's wrong with letting their hands be their 
     salvation?'' asks Mr. Donnelly. ``Over the last two 
     centuries, America has developed a balanced society, with 
     opportunities for a large cross section of people. We're 
     gutting that.''
       In Brad and Jim Karenbauer's childhood home, work was part 
     of the natural rhythm of the day, filling the space between 
     school and supper and most daylight hours during weekends. If 
     they weren't helping around their own house, they were 
     dispatched to their grandparent's farm, as were Danny Mottern 
     and other cousins. They plowed fields and stacked hay. 
     Surrounded by John Deere tractors, they learned how to take 
     machines apart and put them back together.
       Their grandmother fried up homemade sausage in her iron 
     skillet to welcome them back from the fields. Afterward, they 
     relaxed under an oak tree, with a bottle of pop and, when 
     older, a cold beer.
       The Karenbauers' father worked in a small fabrication shop, 
     welding steel for bridges and buildings. With six kids, money 
     was tight, but they never felt poor. They had a half a cow in 
     the freezer. ``If you didn't have it, you didn't need it,'' 
     says Brad Karenbauer. College wasn't an option. Even if they 
     had the money, he wouldn't have gone: ``I was not a school-
     oriented person,'' he says.
       In their community, working with machines was nothing to be 
     ashamed of and there were plenty of opportunities to make a 
     comfortable living. Brad Karenbauer took three years of 
     welding in high school and after graduation in 1981 worked 
     16-hour days for a brother-in-law who had a boiler-repair 
     business. ``It was a blast,'' he says. ``My brother-in-law 
     didn't believe in an eight-hour day. You went to a job and 
     stayed until it was done. I was bringing home more money than 
     I could spend.''
       Then as now, manufacturing paid more and had better 
     benefits than many other jobs. In Butler County, population 
     174,000 about 20 percent of the work force is in 
     manufacturing, but those jobs contribute 30 percent of the 
     county payroll. Nationwide, manufacturing jobs averaged 
     $54,000 in pay in 2000--20 percent higher than the average of 
     what all American workers earn, according to the National 
     Association of Manufacturers.
       One of the prized jobs in Butler County was building 
     railroad cars, an industry with a storied past. A century 
     ago, the flamboyant Diamond Jim Brady, who made a fortune 
     selling railroad parts, and engineer John Hansen built the 
     world's largest freight-car plant, half a mile long, in 
     Butler, according to local historian Ralph Goldinger.
       Inside, more than 1,110 welding machines melted steel 
     pieces together, producing at its peak 27,000 railroad cars a 
     year. At first it was called Standard Steel Car Co., but the 
     company merged with Pullman Inc. of Chicago, to become the 
     well-known Pullman-Standard Co., whose posh cars made 
     comfortable cross-country travel a reality.
       Civic-minded Pullman donated its eight-acre ballpark to 
     Butler in the 1940s. The New York Yankees sometimes played 
     exhibition games there, giving locals a chance to cheer 
     Whitey Ford, Joe DiMaggio and Lou Gehrig. Streets were named 
     after the company founders. Mr. Hansen built a mansion with 
     seven fireplaces on West Pearl Street. It still stands today.
       Jim Karenbauer started at Pullman in 1965, when he was 22 
     years old and fresh out of the Air Force. He worked in the 
     storeroom, then transferred to the forge department because 
     he could learn and earn more. Eventually, he became foreman, 
     earning $32,000 a year when Pullman closed its doors in 1982.
       Jobs were scarce, but he found one with the Butler Township 
     zoning department, inspecting buildings and property. He quit 
     after three years. ``I couldn't take the politics,'' he says. 
     He sold insurance for a while, walking up and down Butler's 
     streets, knocking on doors.
       Two years after Pullman closed, Trinity came in and started 
     making replacement parts for railroad cars in the same 
     factory. Jim Karenbauer got a call in 1987 asking him to run 
     the plant's forge operation. ``They got the old Pullman guys 
     who knew how to run that stuff,'' he says. About six months 
     later he brought home applications for his younger brother 
     and cousin.
       While Jim Karenbauer made the coupling rods that hook 
     together railroad cars, Mr. Mottern welded chutes for coal 
     and grain cars. Brad Karenbauer moved around the floor 
     adjusting machines that were clogged or not working properly. 
     He learned the tool and die trade, the craft of making the 
     tools that form parts, from his supervisor. ``He took a 
     liking to me and taught me,'' Mr. Karenbauer says. That sort 
     of informal teaching was invaluable to companies and workers 
     who couldn't afford other education. And for generations, it 
     sufficed.
       A die, or mold, shapes metal part much as a waffle iron 
     shapes a waffle. Brad Karenbauer's job of maintaining them 
     was critical and he was paid relatively well. At the time he 
     was laid off last year, he earned $14.50 an hour.
       For him, the challenge of figuring out how to fix problems 
     was as rewarding as the pay. ``I loved my job. I never did 
     the same thing every day. I'd build a new die. Or fix the old 
     one that died,'' he says. Co-workers voted him ``employee of 
     the month,'' which was noted on a sign outside the plant and 
     acknowledged with a $150 gift certificate from Sears. ``I 
     bought a couch with that,'' he says.
       Once he was invited to Trinity's headquarters in Dallas to 
     explain his solution to a glitch that had been causing many 
     pieces of a metal post to be scrapped. He figured out that 
     the post was moving slightly when it was in the press, 
     causing a wrinkle. He built a device to hold it firmly. His 
     cousin, Mr. Mottern, came up with a design to replace a part 
     that had been made by welding two pieces of metal together. 
     That eliminated the welding, and helped the department make 
     twice as many pieces of higher quality.
       His employers gave him a framed certificate and a grainy 
     video of his talk, which he still shows visitors. ``All the 
     bigwigs were down there,'' he says.
       Trinity closed the Butler plant and in 2002 and one other, 
     citing the slowdown in the rail industry. ``We no longer 
     needed to maintain all the facilities previously supporting 
     our parts business,'' it said in a statement. The company, 
     which has operations in Mexico, the Czech Republic and 
     Romania, said the Butler work would be done at its plant in 
     Texas.
       ``We'll never find a job like that,'' says Mr. Mottern. 
     While working at the Trinity factory, he was able to buy 40 
     acres of land. He cleared a hilltop and built a tidy ranch 
     house at the end of a long driveway, flanked by tiny 
     evergreen saplings. A barn is filled with a half-dozen pieces 
     of John Deere equipment, including a 1952 model he and his 
     cousins rode on their grandparents' farm.
       ``I'm not going to lose this,'' he says. ``I'm willing to 
     work so I know someone out there is going to hire me. I 
     always figured I could just go and work with my hands. It's 
     all I know,'' says Mr. Mottern.
       After Mr. Mottern was laid off last summer he worked for a 
     landscaper. That winter he shoveled snow and ran errands for 
     an elderly judge. Mr. Mottern doesn't want to leave Butler 
     because his family and girlfriend are here.

[[Page 20424]]

       He and Brad, his cousin, sometimes meet for a breakfast of 
     eggs-over-easy and home fries at Eat'N'Park restaurant. they 
     often discuss their growing fear that they are becoming 
     obsolete. Both feel they are behind on computer technology, 
     which is increasingly important in factories. Brad Karenbauer 
     recently saw a John Deere tractor with a computerized panel 
     in the engine. ``It was way out of my league,'' he says.
       Prospects for workers with their skills are dim. 
     Pennsylvania has lost one out of 10 manufacturing jobs, or 
     90,300 jobs, in the past three years. Industrial cities such 
     as Butler have been disproportionately hit by job loss. 
     Earlier this year, unemployment in the county jumped to 7.3 
     percent the highest level since 1994.
       Moreover, even though inflation-adjusted output by 
     manufacturers nationally is expected to grow 36 percent over 
     the next decade, employment is expected to grow only 3 
     percent, or by 577,000 jobs, according to the Manufacturers 
     Alliance. The bulk of the new jobs will be given to those 
     with computer, mathematics and management skills, while 
     production workers are expected to decline as a share of all 
     manufacturing occupations.
       The Butler Eagle carries some ``help wanted'' ads, but the 
     skills and pay don't fit their levels. United Plate Glass 
     Co., with 45 employees, plans to expand, but it can't afford 
     these workers. ``They have 10 to 12 years with a company and 
     I can't afford the salary level they have reached,'' says 
     President William Cully.
       It's especially tough for midcareer workers with family 
     responsibilities. Almost 40, Brad Karenbauer has three kids. 
     Along with his 14-month-old, he is supporting a 17-year-old 
     daughter and 13-year-old-son. He passed over a job paying 
     $6.50 an hour. Another paid $8 an hour, but involved 
     industrial chemicals, which he thought would be dangerous. 
     Mr. Karenbauer has a friend from Trinity who went to work for 
     the township, making $13 an hour. ``I'd take a job that makes 
     that,'' he says.
       So far, though, he hasn't found one. The $7,000 in his 
     401(k) is gone. He used it to buy a car and pay off debt. 
     With his unemployment running out and in need of health 
     insurance benefits, he finally took a job in April at Harmony 
     Castings, a 60-person foundry that paid $8.85 an hour. He 
     drove 45 minutes to get to the foundry and worked a midnight 
     shift.
       Standing in one spot eight hours a night, he took one 
     aluminum part after another and grinded off burrs to smooth 
     them. ``To be honest with you, I'm not liking it at all,'' he 
     said shortly after taking the job. ``It's repetition and I 
     hate repetition.''
       For challenge and additional cash, he buys broken weed 
     eaters and lawn mowers at yard sales to repair and sell at a 
     profit. He recently bought one for $15, put in a new spark 
     plug and sold it to a friend--for $15. ``They were in the 
     same predicament I'm in,'' he says.
       His cousin, Mr. Mottern, lucked out and landed a job, also 
     in April, working on a railroad track crew. It pays $12 an 
     hour, a $1.30-an-hour pay cut from his old job at Trinity, 
     but after a winter of shoveling snow and summers of planting 
     trees by the highway, he is thrilled. The job also has the 
     potential for benefits. ``I'm going to go down and bust my 
     rear end for them,'' he says.
       Most of the available jobs have been at malls. Mr. 
     Karenbauer's older brother, Jim, now works at the Wal-Mart 
     Supercenter, which opened last year. ``There's four or five 
     of us here now,'' says Jim Karenbauer, referring to his 
     former Trinity co-workers. He refinanced his house a few 
     years ago to pay for his daughter's college, and lost a chunk 
     of his retirement savings when the stock market sank, so he 
     can't retire.
       He'd prefer work in a forge department but couldn't find a 
     job in one. At Wal-Mart he makes $6.25 an hour, half of what 
     he earned at Trinity. He stocks shelves with VCRs and rings 
     the cash register. He wheels televisions sets out to the 
     parking lot on a dolly. ``Lifting them into the car is the 
     hard part,'' the 60-year-old says. ``They get pretty heavy.''
       After a month at the casting foundry, Brad Karenbauer 
     recently gave up his job. He couldn't juggle the night shift 
     and taking care of his daughter, while his girlfriend worked. 
     A landscaper put him to work mowing lawns and doing odd jobs 
     for cash. The work will dry up again once winter arrives, so 
     he's still looking.
       He doesn't regret not going to college, or working with his 
     hands. ``I think I've done better than my father,'' he says. 
     ``I just wonder where things are going. That trade of working 
     with your hands is just about gone now.''

  Mr. HOLLINGS. I picked up my August 4 issue of Time magazine: ``Where 
The Good Jobs Are Going. Forget Sweatshops. U.S. companies are now 
shifting high-wage work overseas, especially to India.''
  I ask unanimous consent that this article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   [From Time Magazine, Aug. 4, 2003]

 Where the Good Jobs Are Going; Forget Sweatshops, U.S. Companies Are 
       Now Shifting High-Wage Work Overseas, Especially to India

                  (By Jyoti Thottam with Sean Gregory)

       Little by little, Sab Maglione could feel his job slipping 
     away. He worked for a large insurance firm in northern New 
     Jersey, developing the software it uses to keep track of its 
     agents. But in mid-2001, his employer introduced him to Tata 
     Consultancy Services, India's largest software company. About 
     120 Tata employees were brought in to help on a platform-
     conversion project. Maglione, 44, trained and managed a five-
     person Tata team. When one of them was named manager, he 
     started to worry. By the end of last year, 70% of the project 
     had been shifted to India and nearly all 20 U.S. workers, 
     including Maglione, were laid off.
       Since then, Maglione has been able to find only temporary 
     work in his field, take a pay cut of nearly 30% from his 
     former salary of $77,000. For a family and mortgage, he says, 
     ``that doesn't pay the bills.'' Worried about utility costs, 
     he runs after his two children, 11 and 7, to turn off the 
     lights. And he has considered a new career as a house 
     painter. ``It doesn't require that much skill, and I don't 
     have to go to school for it,'' Maglione says. And houses, at 
     least, can't be painted from overseas.
       Jobs that stay put are becoming a lot harder to find these 
     days. U.S. companies are expected to send 3.3 million jobs 
     overseas in the next 12 years, primarily to India, according 
     to a study by Forrester Research. If you've ever called Dell 
     about a sick PC or American Express about an error on your 
     bill, you have already bumped the tip of this ``offshore 
     outsourcing'' iceberg. The friendly voice that answered your 
     questions was probably a customer-service rep in Bangalore or 
     New Delhi. Those relatively low-skilled jobs were the first 
     to go, starting in 1997.
       But more and more of the jobs that are moving abroad today 
     are highly skilled and highly paid--the type that U.S. 
     workers assumed would always remain at home. Instead Maglione 
     is one of thousands of Americans adjusting to the unsettling 
     new reality of work. ``If I can get another three years in 
     this industry, I'll be fortunate,'' he says. Businesses are 
     embracing offshore outsourcing in their drive to stay 
     competitive, and almost any company, whether in manufacturing 
     or services, can find some part of its work that can be done 
     off site. By taking advantage of lower wages overseas, U.S. 
     managers believe they can cut their overall costs 25% to 40% 
     while building a more secure, more focused work force in the 
     U.S. Labor leaders--and nonunion workers, who make up most of 
     those being displaced--aren't buying that rationale. ``How 
     can America be competitive in the long run sending over the 
     very best jobs?'' asks Marcus Courtney, president of the 
     Seattle-based Washington Alliance of Technology Workers. ``I 
     don't see how that helps the middle class.''
       On the other side of the world, though, educated Indian 
     workers are quickly adjusting to their new status as the 
     world's most sought-after employees. They have never been 
     more confident and optimistic--as Americans usually like to 
     think of themselves. For now, at least, in ways both tangible 
     and emotional, educated Americans and Indians are trading 
     places.
       Uma Satheesh, 32, an employee of Wipro, one of India's 
     leading outsourcing companies, is among her country's new 
     elite. She managed 38 people who work for Hewlett-Packard's 
     enterprise-servers group doing maintenance, fixing defects 
     and enhancing the networking software developed by HP for its 
     clients. Her unit includes more than 300 people who work for 
     HP, about 90 of whom were added last November when HP went 
     through a round of cost-cutting.
       ``We've been associated with HP for a long time, so it was 
     an emotional thing,'' Satheesh says. ``It was kind of a mixed 
     feeling. But that is happening at all the companies, and it's 
     going to continue.'' Satheesh says that five years ago, 
     computer-science graduates had one career option in India: 
     routine, mind-numbing computer programming. Anything more 
     rewarding required emigrating. ``Until three years ago, the 
     first preference was to go overseas,'' she says. Nowadays her 
     colleagues are interested only in business trips to the U.S. 
     ``People are pretty comfortable with the jobs here and the 
     pay here''--not to mention the cars and houses that once 
     seemed out of reach. Employees in her group earn from $5,200 
     a year to $36,000 for the most experienced managers.
       And as American companies have grown more familiar with 
     their Indian outsourcing partners, they have steadily 
     increased the complexity of work they are willing to hand 
     over. Rajeshwari Rangarajan, 28, leads a team of seven Wipro 
     workers enhancing the intranet site on which Lehman Brothers 
     employees manage personal benefits like their 401(k) 
     accounts. ``I see myself growing with every project that I do 
     here,'' Rangarajan says. ``I really don't have any doubts 
     about the growth of my career.''
       Her experience with a leading brokerage will probably help. 
     Financial-services companies in the U.S. are expected to move 
     more than 500,000 jobs overseas in the next five years, 
     according to a survey by management

[[Page 20425]]

     consultant A.T. Kearney, and India is by far the top 
     destination. U.S. banks, insurance firms and mortgage 
     companies have been using outscouring to handle tech support 
     for years. Now these firms are using Indian workers to handle 
     the business operations--say, assessing loan applications and 
     credit checks--that the technology supports. Kumar Mahadeva, 
     CEO of the thriving outsourcing firm Cognizant, explains the 
     appeal: ``It becomes logical for them to say, `Hey, you know 
     everything about the way we do claims processing. Why not 
     take a piece of it?''
       The next logical step, says Andrea Bierce, a co-author of 
     the A.T. Kearney study, is jobs that require more complex 
     financial skills such as equity research and analysis or 
     market research for developing new business. Evalueserve, a 
     niche outsourcing company in Delhi, already performs research 
     for patent attorneys and consulting firms in the U.S. In 
     April, J.P. Morgan Chase said it would hire about 40 stock-
     research analysts in Bombay--about 5% of its total research 
     staff. Novartis employs 40 statisticians in Bombay who 
     process data from the drug company's clinical research.
       But as educated workers in India are finding new 
     opportunities, those in the U.S. feel the doors closing. Last 
     week Bernie Lantz drove 1,400 miles from his home in Plano, 
     Texas, to begin a new life in Utah. He is 58 years old, a 
     bachelor, and had lived in the Dallas area for 24 years. 
     ``I'm leaving all my friends,'' he says with a sigh. ``It's 
     quite an upheaval.'' Lantz used to earn $80,000 a year as a 
     troubleshooter for Sabre, a company based in Southlake, 
     Texas, whose software powers airline-reservations systems. 
     But over the past two years, Sabre has gradually standardized 
     and has centralized its software service. As Sabre began to 
     outsource its internal IT services, Lantz says, he became 
     convinced that jobs like his were becoming endangered. He was 
     laid off in December. (A company spokesman denies that 
     Lantz's firing was related to outsourcing.)
       Discouraged by a depressed job market in Dallas, Lantz 
     realized he would have to do something else. In the fall he 
     will begin teaching computer science a Utah State University 
     in Logan, and in the meantime he has learned a lesson of his 
     own: ``Find a job that requires direct hands-on work on 
     site,'' Lantz advises. ``Anything that can be sent overseas 
     is going to be sent overseas.''
       Pat Fluno, 53, of Orlanda, Fla., says she, like Maglione, 
     had to train her replacement--a common practice in the 
     domestic outsourcing industry--when her data-processing unit 
     at Germany-based Siemens was outsourced to India's Tata last 
     year. ``It's extremely insulting,'' she says, ``The guy's 
     sitting there doing my old job.'' After 10 months of looking, 
     she is working again, but she had to take a $10,000 pay cut.
       To protect domestic jobs, U.S. labor activists are pushing 
     to limit the number of H-1B and L-1 visas granted to foreign 
     workers. That would make it harder for offshore companies to 
     have their employees working on site in the U.S. ``Those 
     programs were designed for a booming high-tech economy, not a 
     busting high-tech economy,'' says Courtney of the Washington 
     Alliance of Technology Workers. Courtney and his allies are 
     starting to get the attention of lawmakers. Several 
     congressional committees have held hearings on the impact of 
     offshore outsourcing on the U.S. economy, and lawmakers in 
     five states have introduced bills that would limit or forbid 
     filling government contracts through offshore outsourcing.
       Stephanie Moore, a vice president of Forrester Research, 
     says companies are concerned about the backlash but mainly 
     because of the negative publicity. ``The retail industry is 
     very hush-hush about its offshoring,'' she says. But within 
     the boardroom, such outsourcing enjoys wide support. In a 
     June survey of 1,000 firms by Gartner Research, 80% said the 
     backlash would have no effect on their plans.
       The advantages, businesses say, are just too great to 
     ignore. They begin with cost but don't end there. Jennifer 
     Cotteleer, vice president of Phase Forward, a Waltham, Mass., 
     company that designs software for measuring clinical-trials 
     data for drug companies, has for the past two years used 
     offshore employees from Cognizant to customize the 
     application for specific drug trials. Lately she has been 
     relying on their expertise to develop even more-tailored 
     programming. ``I certainly couldn't have grown this fast 
     without them,'' Cotteleer says. Her company is growing 30% 
     annually, on track to reach $65 million in revenue this year. 
     ``What I've been able to do in very tough economic times is 
     manage very directly to my margins,'' she says. ``I'm 
     providing job security for the workers I do have.''
       Creative use of offshore outsourcing, says Debashish Sinha 
     of Gartner Research, offers benefits that outweight the 
     direct loss of jobs. In an economy that has shed 2 million 
     jobs over two years, he contends, the 200,000 that have moved 
     overseas are less significant than the potential for cost 
     savings and strategic growth. But he concedes that ``when 
     you're a laid-off employee who can't find a job, that's hard 
     to understand.''
       Perhaps some will follow the example of Dick Taggart, 41, 
     of Old Greenwich, Conn. After 18 years in financial services, 
     most recently at J.P. Morgan Chase, he now works for Progeon, 
     an affiliate of the Indian outsourcing giant Infosys, as its 
     man on Wall Street. One week out of every six or seven, he 
     takes securities firms to India to show them the savings that 
     are possible. He knows the transition is painful for the 
     workers left behind, but he has seen it before. ``It was the 
     same thing when we moved from Wall Street to New Jersey and 
     then to Dallas,'' he says. ``Guess what? This is next.''

  Mr. HOLLINGS. What happens is that when we used to argue for 
manufacturing jobs, they said, oh, don't worry, the service economy 
will produce jobs. Then when the service economy was leaving, they said 
high tech, will be the motor of growth. Then there was Y2K, that was to 
be the next motor of growth.
  The high-tech jobs are gone. The service jobs are gone. As they told 
England at the end of World War II, do not worry, instead of a nation 
of bronze, you are going to be a nation of brains; instead of providing 
products, you are going to provide services; instead of creating 
wealth, you are going to handle it and be a financial center.
  Of course, England has gone to economic hell in a hand basket. 
Downtown London is an amusement park. Let's not go that way. We have to 
produce.
  As they crown the queens and bring out the kings and everything else 
of that kind, we are in a position where we do not make anything 
anymore. For example, footwear, 83.6 percent of our shoes are imported; 
70 percent of our clothing is imported.
  Ceramic household articles, 87 percent is gone; cooking and kitchen-
ware, gone. And I can read on and on, right on down the line.
  I ask unanimous consent that this list be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

------------------------------------------------------------------------
                                                          Percent import
                          Item                              penetration
------------------------------------------------------------------------
Footwear................................................            83.6
Ceramic household articles..............................            87.0
Cooking and kitchenware.................................            58.4
Industrial thermal-processing equipment and furnaces....            60.6
Household appliances, including commercial applications.            44.3
Textile machinery.......................................            86.5
Metal forming machine tools.............................            49.6
Semiconductor manufacturing machinery...................            52.3
Boilers, turbines, and related machinery................            56.6
Electrical transformers, static converters, and                     49.7
 inductors..............................................
Aircraft engines and gas turbines.......................            42.2
Office machines.........................................            51.7
Consumer electronics (except televisions)...............            89.8
Television receivers and video monitors.................            79.2
Radio and television broadcasting equipment.............            77.3
Electrical capacitors and resistors.....................            75.7
Computers, peripherals, and parts.......................            59.8
Optical goods, including ophthalmic goods...............            53.9
Handbags................................................            88.8
Musical instruments and accessories.....................            64.6
Bicycles and certain parts..............................            68.8
Toys....................................................            84.0
------------------------------------------------------------------------

  Mr. HOLLINGS. We do not make anything anymore. We are just jabbering 
to each other. We are not producing.
  The Secretary of Commerce is burdened with the duty--and the current 
occupant of the chair would be interested in this--of listing some 500 
critical articles to our national security for defense purposes. We 
have a $5 billion deficit in the balance of trade. We had to wait 5 
months before we went into Desert Storm to get mainframes from the 
Japanese. Now we have to go to other countries before we can go to war. 
We do not make those things anymore. We have an advanced technology of 
a $2 billion a month deficit in the balance of trade, over $24 billion 
a year, in advanced technology.
  The Japanese have given up. They moved their advanced technology and 
research to Shanghai. The most modern automotive research is in 
downtown Shanghai. General Motors put it there. We can go right on down 
the list. The Chinese are saying before anyone can come with factories, 
they have to bring their research.
  The technology community of the United States is concerned about our 
technological capability. We do not have as many Americans engineers as 
there are in China. We maintain our security by a superiority of 
technology, and we are draining the tub of technology just as fast as 
we can. Yet in this Chamber, we want to talk about an Energy bill, want 
to talk about a judge--don't we want to talk about trade? Put fast 
track on the Energy bill. Why not? Unless, by gosh, we get serious and 
start talking about jobs in America, the economic strength, the 
industrial backbone of this Nation.
  Tax cuts loses jobs. Free trade loses jobs. We have a race to the 
bottom to

[[Page 20426]]

Mexico. In South Carolina we have lost 61,000 jobs--incidentally, we 
were supposed to get 200,000 jobs in America by signing NAFTA. That is 
what NAFTA was going to create for us. Nationally, we have lost 450,000 
jobs to Mexico, but not for long because those same Mexican jobs 
formerly in America are now going to China.
  It is different than what Henry Ford said. Henry Ford said, I want 
the man making that automobile to be able to buy it. He produced a 
minimum wage and he produced health benefits. So we built up middle 
America. Now, instead, with a trade policy of free trade, like monkeys 
on a string, there is no such thing as free trade. That is an oxymoron. 
Trade is something for something. If it is free, it is a gift. But with 
that particular policy, we have to race to the bottom in the United 
States of America.
  I have an article from the New York Times, July 20, that I wanted to 
read, which points out our tremendous difficulty. I ask unanimous 
consent to have this article printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, July 20, 2003]

          Economic View; Producing Abroad Is Harming Recovery

                          (By Louis Uchitelle)

       For nearly 29 months, the nation has struggled through a 
     recession and a weak recovery. That is a long struggle, a new 
     form of hardship for many Americans, who are tantalized with 
     incessant forecasts that a decisive upturn is about to 
     happen. But as the months wear on, the dogged optimism 
     detaches from reality.
       For starters, the forecasters seem not to grasp how much 
     the American economy has deviated from the standard business 
     cycle and the standard cures. A major reason for the 
     deviation is the mobility of American companies, particularly 
     the ease with which they now shift operations to China and 
     India. ``The wholesale movement of jobs and production 
     overseas is handcuffing the recovery,'' said Mark M. Zandi, 
     chief economist at Economy.com.
       In other downturns since World War II, the economy moved 
     from healthy growth to contraction and back to healthy 
     growth, all in less than two years. The downward swings were 
     relatively easy to fix. The swings began when companies found 
     themselves producing more goods and services than people 
     bought. Inventories built up, particularly in manufacturing, 
     and companies responded by cutting output until it was below 
     demand. Rather than produce more, companies filled orders 
     from stockpiles. As output declined, unemployment rose and 
     wages stopped increasing. Capital spending also suffered. 
     After all, why expand when the capacity to produce already 
     exceeds demand?
       But the damage did not last long. The Federal Reserve 
     stepped in, cutting interest rates to encourage spending. 
     Unemployment insurance, public spending, and sometimes tax 
     cuts, helped resurrect demand. As spending picked up and 
     inventories disappeared, prices began to rise, which 
     encouraged more production. Hiring resumed, as did capital 
     spending.
       These various remedies are being used now, and there is 
     some strength in spending. Yet inventories have failed to 
     diminish, so prices, production, hiring and capital spending 
     do not rise.
       The difficulty is that companies have a choice that was not 
     as available in the last downturn 12 years ago. Rather than 
     halt production at home, they shift it abroad to cut costs, 
     particularly labor costs. They feel compelled to do this. If 
     they did not, their competitors would upstage them with their 
     own lower-cost, overseas production that takes away sales 
     back home.
       In the process, the mechanism for restoring our economy to 
     healthy growth--by reducing inventories and excess capacity--
     fails to function properly. Inventories may seem to diminish 
     when only ``Made in America'' is counted. But in the new 
     global economy, what's made in America and what's made abroad 
     both contribute to inventories and capacity. The total does 
     not shrink, and the economy flounders month after month.
       Still, there is some relief. Super-low interest rates, 
     mortgage refinancing, stepped-up military spending and some 
     of the Bush tax cuts augur a temporary pop in economic 
     growth. But temporary is the operative word. The more 
     enduring pressure on the economy is downward, not upward.
       The biggest beneficiary appears to be China. Abundant 
     transportation has made China an ever-easier place for 
     American companies to shift production of goods and services 
     for sale in the market back home.
       The nation's trade deficit, the excess of our imports over 
     exports, has risen by 31 percent since the recession began in 
     March 2001. The increase, totaling $114 billion, would add 
     one percentage point to American economic growth--enough to 
     turn a weak recovery into a strong one--if the rise in output 
     were at home, not abroad. One-third of the total increase 
     represents imports from China, Mr. Zandi says. Honing the 
     figures, Steven S. Roach, chief economist at Morgan Stanley, 
     finds that China's total exports have tripled since 1994, and 
     that 65 percent of the $244 billion increase comes from 
     foreign companies in China.
       ``We are criticizing the Chinese as if they were cleaning 
     our clock and the only part of China that is cleaning our 
     clock is the part that we put there,'' Mr. Roach said.
       What is to be done? If we do anything, we are likely to 
     pressure the Chinese to float their currency. A floating yuan 
     would rise against the dollar, making Chinese exports more 
     costly in the United States. Pressure is already coming from 
     Congress for the Bush administration to negotiate the float.
       We could also force American companies, through 
     regulations, to stay out of countries that fail to observe 
     minimal labor and environmental standards. Regulation is not 
     popular in America. But it could regain its popularity, if 
     the alternative is a continual loss of jobs in every state.

  Mr. HOLLINGS. Of particular significance, the article quotes Steven 
Roach, the chief economist of Morgan Stanley. He finds that China's 
total exports have tripled since 1994, that 65 percent of the $244 
billion increase comes from foreign companies in China, most of them 
United States.
  Then I want you to listen to this economist about the economy, Mr. 
Mark M. Zandi. Before I quote him, let me say I am not an economist but 
I finally found one that is going to correct Alan Greenspan, because 
Mr. Greenspan is looking to consumer demand.
  But before you can have consumer demand, you have to have consumers. 
Before you have consumers, you have to have producers. Before you have 
producers, you have to have jobs. Here is what he says:

       For starters, the forecasters seemed not to grasp how much 
     the American economy has deviated from the standard business 
     cycle and the standard cures. A major reason for the 
     deviation is the mobility of American companies, particularly 
     the ease with which they now shift operations to China and 
     India. The wholesale movement of jobs and production overseas 
     is handcuffing the recovery.

  Why do they have a jobless recovery? Because the economy of the 
United States is handcuffed with this silly cutting of the taxes, jobs 
and growth, jobs and growth, free trade, free trade, free trade.
  Maybe it is not jobless growth, it is just jobless in the United 
States. This tax incentive, this stimulation is not going to create 
jobs in downtown Nashville, TN. The jobs will be in Shanghai, China. If 
you are in Nashville, TN, and you get a good fat tax break, the 
question arises, should you build the plant in Nashville? No, your 
competition has gone to China. If you are going to meet the 
competition, you are going to have to put that new plant, use that tax 
break, that stimulation--not to invest in the United States but to 
invest in China.
  We are missing the point of history when everyone talks of this free 
trade nonsense. I remind them of Alexander Hamilton, a good Republican. 
Some of them want to replace him with the inventor of voodoo I, Ronald 
Reagan, on the $10 bill. You got some crazy things going on in this 
town. Imagine putting Ronald Reagan on the $10 bill rather than 
Alexander Hamilton--one of the greatest of the great. Hamilton not only 
helped with the Constitution, not only helped Madison with the 
Federalist Papers, but created a ``Report on Manufacturers.'' I have it 
right here.
  What happened was the fledgling colony had just won its freedom when 
the British corresponded with us back in New York, because that is 
where the Capitol was at the time. They said what you ought to do back 
in the colonies since you won your freedom, was to trade with us what 
you produce best and we will trade back with you what we produce best. 
The doctrine was David Ricardo's, the economic doctrine of comparative 
advantage. It was Alexander Hamilton who won out. He even persuaded 
Madison, who voted for it.
  He issued the ``Report on Manufacturers.'' It is too long to include 
in the Record. The original copy is at the Library of Congress. It can 
be expressed in one expression: Hamilton told the British to bug off. 
We are not going to remain your colony, shipping to you our 
agriculture, our foodstuffs, our rice, our cotton, our indigo, our 
coal,

[[Page 20427]]

our iron ore. We are not going to remain a colony; no, we will become a 
nation state.
  The first bill to ever pass Congress was for the seal of the United 
States--but the second bill on July 4, 1789, that passed this Congress 
was protectionism, a tariff bill of 50 percent on 60 articles.
  We built this country over a 160-year-period with protectionism. I 
will never forget, every time they would tell me: Senator, you are 
nothing but a protectionist.
  I am for free trade, free trade. The opponents do not know what the 
heck they are talking about. I feel sorry for them. Protectionism built 
the country. We did not even have the income tax until 1913. We built 
it on tariffs.
  After Hamilton came Lincoln. People told Lincoln that to build the 
transcontinental rail we ought to get steel from England. The father of 
the Republican Party said: No, no. We are going to build our own steel 
mills and when we get through we will not only have the rail equipment, 
we will have our steel production.
  Then Roosevelt in the depth of the Depression protected agriculture. 
People do not think I know anything about farming. But I get the farm 
vote every time I run. I love campaigning out in Iowa. I can tell you 
right now Roosevelt protected agriculture. And Eisenhower protected oil 
in the 1950s with quotas. We built the country with protectionism.
  I will never forget when we had to have President Reagan's second 
inauguration right out here in the Rotunda. He raised his hand and he 
said, ``preserve, protect and defend.'' Then we came back here and we 
debated something on trade. I said something about protection and the 
majority jumped all over me: You are a protectionist, protectionist.
  We have the Army to protect us when the enemy is out. We have Social 
Security to protect us from old age. We have Medicare to protect us 
from ill health. We have environmental laws, clean air and clean water, 
to protect the environment. The fundamental foundation of government is 
to protect.
  Let's say you wanted to start an Alexander Manufacture Company. But 
before you can open Alexander Manufacture, you have to have a minimum 
wage. You have to have clean air; you have to have clean water; you 
have to have Social Security; you have to have Medicare; you have to 
have Medicaid; you have to have safe machinery; you have to have a safe 
working place; you have OSHA coming around looking at you; you have to 
have plant closing notice; you have to have parental leave. I could go 
on and on. Or you can open a plant in China for 60 cents an hour, and 
have none of that. So companies go to China.
  I will never forget, I had a friend who organized his own company out 
in California. I saw where he was very successful and I said: I helped 
you. I got your water and sewer lines when you came to South Carolina, 
when you had an expansion. I want you to give us that plant in South 
Carolina.
  He said: I don't build anything in the United States. He said: I do 
it in China. I got research, I got sales--for 10 percent of the costs.
  He did not say this but I know it: They build the factory. They 
provide the employment. They give people a year-to-year contract. They 
don't have to worry about the cycle that the economists talk about. If 
the cycle goes down, they do not have to renew the contract next year. 
They cannot lose. We are in one dickens of a fix.
  I was reading the book ``Theodore Rex,'' the patron saint of my 
Republican friends. He is one of my heroes, too. In the book, on page 
20, let me read at the turn of the century what we really had was 
protectionism.

       The United States was already so rich in goods and services 
     that she was more self-sustaining than any industrial power 
     in history. Indeed, it could consume only a fraction of what 
     it produced. The rest went overseas at prices other exporters 
     found hard to match.

  As Andrew Carnegie said:

       The nation that makes the cheapest steel has other nations 
     at its feet.
       More than half the world's cotton, corn, copper and oil 
     flowed from the American cornucopia, and at least one-third 
     of all steel, iron, silver and gold. Even if the United 
     States were not so blessed with raw materials, the excellence 
     of her manufactured products guaranteed her dominance of 
     world markets. Current advertisements in British magazines 
     gave the impression that the typical Englishman waked to the 
     ring of an Ingersoll alarm, shaved with a Gillette razor, 
     combed his hair with Vaseline tonic, buttoned his Arrow 
     shirt, hurried downstairs for Quaker Oats, California figs, 
     Maxwell House coffee, commuted in a Westinghouse tram, body 
     by Fisher, rose to his office in an Otis elevator, worked all 
     day with his Waterman pen under the efficient glare of Edison 
     lightbulbs. ``It only remains,'' one Fleet Street wag 
     suggested, ``for us to take American coal to Newcastle.''
       Behind the joke lay real concerns. The United States was 
     already supplying beer to Germany, pottery to Bohemia, 
     oranges to Valencia. As a result of this billowing surge in 
     productivity, Wall Street was awash with foreign capital. 
     Carnegie calculated that America could afford to buy the 
     entire United Kingdom and settle Britain's national debt into 
     the bargain. For the first time in history, transatlantic 
     money currents were thrusting more powerfully westward than 
     east. Even the Bank of England had begun to borrow money on 
     Wall Street. New York City seemed deemed to replace London as 
     the world's financial center.

  Mr. President, you can see exactly what happened. We built it up. At 
the end of World War II, my dear friends, we had the only economy. In 
order to prosper, we had to spread prosperity. The way we did that was 
very sanguine: the Marshall plan. And it worked. We sent over money, 
80-some billion in today's dollars. We sent over the equipment, the 
finest machine tools, automotive equipment and otherwise. We sent over 
the expertise, and we rebuilt Europe, we rebuilt the Pacific rim, and 
capitalism defeated communism. It worked.
  Our trouble is it worked too well for these eager-beaver 
manufacturers. I remember them well because I have been in this thing, 
now, for 50-some years. I can see them--Oh, I get jet lag; I hate to 
go; oh, man, I don't want to go; and everything else of that kind.
  No more, not with the computer, not with the Internet. You can send 
some young, aggressive executive to Shanghai to run your plant. You can 
set it up on your computer. You can see what is happening daily. You 
can be in touch on the Internet. You can run it from the 32nd floor on 
Sixth Avenue in New York and, man, you have it made. And they are all 
doing it.
  So what happened with the Marshall plan? We not only spread that 
prosperity but we really taught these people a bad lesson because they 
don't think about the country. You know, you and I are supposed to 
think about the country. They are supposed to think about profits. They 
do not have a duty.
  Of course, being Americans, you would think they would be a little 
bit more patriotic. Their organizations are against us. Now who is the 
enemy? in other words.
  The toast of the town, Jack Welsh of GE, he believed in squeezing the 
lemon.
  This says:

       One of General Electric's CEO's, Jack Welsh's favorite 
     phrase is ``squeeze the lemon'' for wringing out the cost. To 
     help them meet the stiff goals, several of GE's business 
     units, including aircraft engines, power systems, industrial 
     systems, have been prodding suppliers to move to low-cost 
     Mexico where the industrial giant already employs 30,000.

  That was 4 years ago.

       GE even puts on supplier migration conferences to help them 
     make the leap.

  He goes on:

       Welsh's widely admired status in corporate America has lent 
     legitimacy to a model of business success that is built on 
     job and wage cuts.

  This is Business Week. This is the bible of the business community, 
the weekly bible. Here it is, and I am quoting:

       The internal report, a copy of which Business Week 
     obtained, says: ``GE set the tone early and succinctly: 
     `Migrate or be out of business; not a matter of if, just 
     when'. This is not a seminar just to provide information. We 
     expect you to move and move quickly.''

  The followup: Even though GE's profits were up 80 percent at that 
particular time, they wanted more. You know, they are not just Jesse 
Jackson in civil rights. This is Jack Welsh in Business Leadership: I 
want it all. My time has come. I want it all.
  So the 80 percent didn't suit him. But you don't jump on poor Jack; 
he has

[[Page 20428]]

gone now, and he has had other troubles. Let's go to last month. 
General Motors and Ford: Automotive News.
  I ask unanimous consent to have this article printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                 (From Automotive News, June 23, 2003)

Ford, GM Push Vendors Toward China; `World Price' Frenzy Threatens U.S. 
                                  Jobs

                (By Robert Sherefkin and David Sedgwick)

       Ford Motor Co. and General Motors are pressuring their 
     North American suppliers to join the great migration to 
     China.
       Embroiled in a price war with their foreign rivals, Ford 
     and GM have delivered an ultimatum: Suppliers must match a 
     ``world price'' that is increasingly set in China, or they 
     must build factories in China.
       Megasuppliers such as Delphi Corp., Visteon Corp. and Denso 
     International already operate in China. Now smaller suppliers 
     are joining them. One such company is Hella North America 
     Inc., the American unit of German lighting manufacturer Hella 
     KG Hueck & Co.
       Hella, which supplies all of the Big 3, already owns four 
     subsidiaries in China. Now its North American operation 
     ``continues to receive pressure from our customers to source 
     some of their components from China,'' says company CEO Joe 
     Borruso. ``We are working with them to develop a sourcing 
     plan.''
       China will generate a flood of exports, but domestic 
     Chinese parts makers will be minor players (see related story 
     on page 39). They cannot compete with international suppliers 
     that are spending billions on joint-venture factories in 
     China.
       Only international suppliers that have built factories in 
     China have the clout to influence world prices.
       The shift to Chinese production eventually will cost 
     hundreds of thousands of manufacturing jobs in the United 
     States. And it will put more pressure on smaller, cash-
     strapped suppliers to make a risky investment on a distant 
     continent.
       Both Ford and GM are offering a two-continent deal. If a 
     supplier builds a factory in China, it can sell parts to a 
     Ford or GM assembly plant in China, then export parts to the 
     automaker's North American assembly plants.
       Those deals are starting to add up. According to the U.S. 
     Department of Commerce, total imports of Chinese auto 
     components totaled $2.2 billion last year, nearly triple the 
     volume of imports in 1997.
       China will dwarf the impact Mexico has had on the U.S. auto 
     industry, says Detroit economist David Littmann. From the 
     perspective of North America's purchasing mangers, Littmann 
     says, ``China is vastly more encouraging than Mexico.''


                            Asian migration

       For automakers, China looks like a bargain. For suppliers, 
     that price can be steep. In the years to come, segments of 
     the U.S. supplier industry may migrate to Asia. For example, 
     U.S. mold and die makers already have lost an estimated 6,000 
     jobs to Chinese rivals in recent years.
       The shift toward parts buying in China is following one 
     transition that already is well under way. Automakers and 
     suppliers have shifted tool-and-die purchasing to China, 
     damaging the fortunes of companies such as Commercial Tool & 
     Die Inc. of Grand Rapids, Mich.
       For 50 years, the family-owned company manufactured molds 
     that automotive suppliers use to produce interior trim. But 
     Ford and other customers have instructed suppliers to seek 
     bids from Asian mold makers.
       Company owner Doug Bouwman has two sons that are 19 and 20 
     years old. ``They would both like to work in the business and 
     possibly take it over,'' Bouwman says. ``When I got in, it 
     was a long-term career. It's not clear it will be that way in 
     the future.''
       The overall erosion of industrial jobs will dwarf the 
     losses experienced by the tool and die industry. By the end 
     of the decade, China's expansion could cause the loss of 
     900,000 industrial jobs in North America, predicts Craig 
     Fitzgerald, an analyst for the consulting firm Plante & Moran 
     in Southfield, Mich.


                              No apologies

       The instigators of this great migration--the automakers 
     themselves--offer no apologies.
       At an April briefing in Detroit, GM executives told 
     suppliers that the automaker's annual purchases of Chinese 
     parts soon will top $10 billion, according to a major 
     supplier who attended the meeting. That goal represents a 
     sharp increase from current purchasing levels; GM's parts 
     purchases in China last year totaled $1.1 billion.
       While most of those parts are used to build vehicles in 
     China, many will end up in U.S. assembly plants.
       Last week, a GM spokeswoman declined to specify when GM 
     expects to reach the $10 billion goal. One GM supplier's 
     estimate: three to five years.
       GM imports only 3 percent of the components that it uses in 
     North America. But that understates China's true role: North 
     American suppliers now are expected to match Chinese prices--
     whether or not they have plants in China.
       And that is true for suppliers to Ford and Chrysler, not 
     just GM. The Chrysler group ``is clearly investigating 
     China,'' says Peter Rosenfeld, who becomes Chrysler's 
     executive vice president for procurement and supply in 
     December.
       The Chrysler group already has issued a ``world price'' 
     order to suppliers.
       This year the Big 3 are picking up the pace. GM has formed 
     80 ``creativity teams''--consisting of engineers, purchasers 
     and quality control experts--to analyze the cost of its 
     components.
       Following one team's suggestions, the automaker decided to 
     import radios from China.
       Last year, Ford intensified its search for Chinese 
     suppliers after President Nick Scheele told of plans to 
     import $1 billion worth of Chinese parts to North America in 
     2003. By 2010, Ford expects its purchases to rise to $10 
     billion.
       If so, it will represent a big portion of Ford's North 
     American parts purchases, which totaled $45 billion last 
     year. If Ford hits that target, it would represent a sharp 
     year-to-year increase. Last year, Ford's worldwide purchases 
     of Chinese components were less than $100 million.


                               core group

       To reach its goal, Ford is counting on a core group of 75 
     to 100 suppliers. Many of them are clustered around Ford's 
     Chongqing assembly plant, which will produce the Fiesta. Half 
     of those suppliers are joint ventures with Chinese partners, 
     and foreign suppliers wholly own 20 percent. Only 30 percent 
     are traditional Chinese suppliers.
       To augment that group, Ford has begun asking smaller Tier 1 
     suppliers to build factories in China. The automaker also is 
     using the ``China price'' to demand lower prices from 
     suppliers in North America.
       ``In some instances we are seeing best-in-class prices from 
     suppliers'' in China, says Andrew Hinkly, Ford's director of 
     global commodity management. ``So they are indeed setting the 
     world parts price. There is a lot of momentum.''


                             tough choices

       Suppliers who don't want to migrate to China are feeling 
     the heat. Consider the plight of Wescast Industries, Inc. 
     Wescast, of Wingham, Ontario, controls 70 percent of the Big 
     3's exhaust manifold business in North America. Ford told 
     Wescast this year that it would transfer $50 million of its 
     purchases from Wescast to Chinese factories, according to an 
     industry source.
       Wescast CEO Ray Finnie declined to comment on Ford's plans. 
     But he said the Big 3 ``are asking for very significant price 
     reductions because it is a matter of their survival.''
       Tier 1 vendors are not the only suppliers affected by the 
     China price. The Big 3's focus on China is beginning to 
     cascade through the supply chain. Tier 1 suppliers are 
     starting to transfer their supply chains to China.
       Poised to exploit that trend is former Wall Street banker 
     Jack Perkowski, who is based in Beijing and runs Asian 
     Strategic Investment Corp., a company backed by U.S. 
     investors that operates 15 Chinese factories.
       The company exports a variety of components such as brake 
     seals, diesel injector bodies and engine blocks. This year, 
     Asian Strategic Investment projects sales of $250 million and 
     says exports to North America will account for 20 percent of 
     that.
       Ford's billion-dollar import target was a wake-up call, 
     says company Vice President Matt Snyder. ``Eight months ago, 
     the Tier 1 suppliers were not interested,'' he says. ``Today 
     they are calling me.''


                            60 cents an hour

       For manufacturers of labor-intensive components, China is 
     an attractive location. According to Chinese government data, 
     manufacturers in Shanghai typically pay workers $1 an hour, 
     plus 42 cents an hour in benefits. Factories in rural areas 
     generally pay wages of 60 cents an hour.
       That is significantly lower than pay in Mexico, which range 
     from $2 to $2.50 an hour, including wages and benefits, 
     according to Richard Sinkin, managing director at 
     InterAmerican Holdings Co., a San Diego consulting firm that 
     focuses on Mexican manufacturing. He also is part owner of a 
     Mexican parts maker.
       But suppliers cannot afford to be mesmerized by China's low 
     wages. Unwary newcomers who choose the wrong partners often 
     are saddled with unexpected costs. Consider the plight of a 
     Fortune 500 automotive parts supplier that recently set up a 
     Chinese factory.
       This U.S. supplier had assumed it would pay its unskilled 
     workers $1 an hour. But its Chinese partner threw in various 
     employee subsidies--for heating oil allotments, medical care, 
     a housing allowance, free lunches and even a clothing 
     allowance.
       The venture's $1 hourly labor costs quickly ballooned to $3 
     an hour, says a U.S. vice president assigned to uncover the 
     joint venture's hidden costs.
       Among the hidden costs was a car allowance for company 
     managers. ``They neglected to tell us about the two new 
     Buicks

[[Page 20429]]

     they bought so they could claim a car allowance,'' he says. 
     ``You have to be insistent as hell. We're still digging.''


                                 Exodus

       While many suppliers are preparing to join the migration to 
     China, one portion of the auto industry--tool and die 
     makers--already has been decimated.
       This is an industry dominated by small family-owned 
     businesses--companies that are ill-equipped to expand into 
     China. Commercial Tool & Die's plight illustrates the trend.
       The company's 150 employees once made molds for toys and 
     appliances. In the 1990s, Bouwman lost that business to Asian 
     rivals. Now he's losing automotive customers, too.
       To stay competitive, Bouwman purchased expensive tooling 
     and computers to design his molds. But he cannot match the 
     labor costs of his Asian rivals. A Chinese engineer is paid 
     about $5,500 per year; Bouwman's health care premiums alone 
     average $7,000 an employee.
       Bouwman is thinking about setting up operations in China. 
     ``We're feeling the pressure,'' says Bouwman, 50. ``China is 
     taking jobs out of the U.S. And they won't be back.''

  Mr. HOLLINGS. Mr. President, just this last month:

       Ford Motor Company and General Motors are pressuring their 
     North American suppliers to great migration in China. 
     Embroiled in a price war with their foreign rivals, Ford and 
     GM have delivered an ultimatum. Suppliers must match a world 
     price that is increasingly set in China, or they must build 
     factories in China.

  How do you like that? That is not textiles, that is the automotive 
backbone of the United States of America. I voted for the Chrysler 
bailout, so now Daimler can own them. The foreigners own all the 
foodstuffs. They are going to have all the banks. Now they are going to 
have all the automobile business.
  I wish Don Evans was up in Michigan. He would tell them you get a tax 
cut, you get $300. What are you going to do? We are going to have 
growth, growth, and jobs.
  Here, within the week, the Automotive News says you have to go to 
China and you are going to lose 900,000 industrial jobs.
  Go up into Indiana, Ohio, and Illinois to what I call the rust belt. 
The automotive parts makers are gone. By 2010, Ford expects its 
purchases of parts from China to rise to $10 billion. Last year, Ford's 
worldwide purchases of Chinese components was less than $100 million.
  I quote further:

       Suppliers who do not want to migrate to China are feeling 
     the heat. Consider the plight of Wescast Industries. Wescast 
     controls 70 percent of the Big Three's exhaust manifold 
     business in North America.
       Ford told Wescast this year that it would transfer $50 
     million of its purchases from Wescast to Chinese factories, 
     according to the industry source.

  Don't give me the service economy. I know about it. My light bill in 
Charleston, SC, is administered in Bangalore India. My insurance policy 
is administered in Dublin, Ireland. That is the service economy. Here 
is the automotive, hard machine tools industry.
  I quote further:

       For manufacturers of labor-intensive components, China is 
     an attractive location. According to the Chinese Government 
     data, manufacturers in Shanghai typically pay workers $1 an 
     hour, plus 42 cents an hour in benefits. Factories in rural 
     areas generally pay wages of 60 cents an hour.
       That is significantly lower than pay in Mexico which ranges 
     from $2 to $2.50 an hour, including wages and benefits. Here 
     is the poor Senator from South Carolina fussing about 61,000 
     textile jobs lost to Mexico. But we find now that the Mexican 
     jobs they got from South Carolina are now on the way to 60 
     cents an hour with no benefits in the rural areas of China. 
     It is beg thy neighbor; a race to the bottom. That is the 
     trade policy. That is the job policy. That is the economic 
     policy. Don't worry about energy policy.

  Heavens above, why can't we catch Kenny Boy? I raised the question at 
that particular time when Larry Thompson became Deputy Attorney 
General. He is in charge of corporate corruption enforcement and 
violations enforcement. Before he came to Justice, he worked in a law 
firm in Atlanta. His firm was representing who? Kenny Boy Lay, of 
Enron. So I raised the question of a conflict of interest. What did he 
say? Oh, he didn't work on that particular client. He didn't have 
anything to do with it.
  But I run a firm, and you make money, and I make money.
  Come on. Here it is 2\1/2\ years later--and we have gotten everybody, 
including Martha Stewart--for one little stock thing. This fellow, 
Larry Thompson, wants to know what he should be indicted for. I can 
draw it up for him. We had the hearing in California before the 
Committee on Commerce, Space, Science and Transportation.
  I turned to the witness, David Freeman. I said: Now, Mr. Freeman, you 
say all this happened with Enron, and Kenny Boy may not have known 
anything about it. I said: In fact, this morning on television I saw 
Mrs. Lay, his wife, and she said Kenny Boy didn't know anything about 
it.
  Mr. Freeman said he was the architect. He knew all about it. He 
designed it. Take that testimony of the knowledge of what is going on, 
the Enron fraud of California, the wrecked economy, and they are now 
calling for a recall of the Governor because of the problems Enron 
helped create in that state.
  I heard my distinguished colleague from Idaho. He said the economy 
went from a surplus to a deficit, and the Governor didn't do anything 
about it.
  Let us transfer that to Washington. The President started off with a 
surplus. He said he even had a $1 trillion rainy day fund. The budget 
was $53 billion in the red when he talked on February 27, 2001 to the 
Congress. He talked about the $2.6 billion he would set aside for 
Social Security. He said there was $2 billion for the budget needs in 
defense security, and he said he had $1 trillion left over. He was in 
the red then. But we have Enron accounting here in Washington. If he 
has gone from a $5.6 trillion surplus to a $4 trillion deficit, is 
anybody asking for the recall of the President? Of course not.
  But they think that is par for the course out there in the political 
intramurals in California. Come on. What is going on.
  It is not just GE. It is not just Ford. It is not just General 
Motors, or IBM--Big Blue.
  This was last week, July 22, from the New York Times: ``IBM Explores 
Shift of Some Jobs Overseas.''
  I ask unanimous consent to have it printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, July 22, 2003]

              I.B.M. Explores Shift of Some Jobs Overseas

                         (By Steven Greenhouse)

       With American corporations under increasing pressure to cut 
     costs and build global supply networks, two senior I.B.M. 
     officials told their corporate colleagues around the world in 
     a recorded conference call that I.B.M. needed to accelerate 
     its efforts to move white-collar, often high-paying, jobs 
     overseas even though that might create a backlash among 
     politicians and its own employees.
       During the call, I.B.M.'s top employee relations executives 
     said that three million service jobs were expected to shift 
     to foreign workers by 2015 and that I.B.M. should move some 
     of its jobs now done in the United States, including software 
     design jobs, to India and other countries.
       ``Our competitors are doing it and we have to do it,'' Tom 
     Lynch, I.B.M.'s director for global employee relations, said 
     in the call. A recording was provided to The New York Times 
     recently by the Washington Alliance of Technology Workers, a 
     Seattle-based group seeking to unionize high-technology 
     workers. The group said it had received the recording--which 
     was made by I.B.M. and later placed in digital form on an 
     internal company Web site--from an I.B.M. employee upset 
     about the plans.
       I.B.M.'s internal discussion about moving jobs overseas 
     provides a revealing look at how companies are grappling with 
     a growing trend that many economists call off-shoring. In 
     decades past, millions of American manufacturing jobs moved 
     overseas, but in recent years the movement has also shifted 
     to the service sector, with everything from low-end call 
     center jobs to high-paying computer chip design jobs 
     migrating to China, India, the Philippines, Russia and other 
     countries.
       Executives at I.B.M. and many other companies argue that 
     creating more jobs in lower cost locations overseas keeps 
     their industries competitive, holds costs down for American 
     consumers, helps to develop poorer nations while supporting 
     overall employment in the United States by improving 
     productivity and the nation's global reach.
       ``It's not about one shore or another shore,'' an I.B.M. 
     spokeswoman, Kendra R. Collins, said. ``It's about investing 
     around the world, including the United States, to build 
     capability and deliver value as defined by our customers.''

[[Page 20430]]

       But in recent weeks many politicians in Washington, 
     including some in the Bush administration, have begun voicing 
     concerns about the issue during a period when the economy is 
     still weak and the information-technology, or I.T., sector 
     remains mired in a long slump.
       At a Congressional hearing on June 18, Bruce P. Mehlman, 
     the Commerce Department's assistant secretary for technology 
     policy, said, ``Many observers are pessimistic about the 
     impact of offshore I.T. service work at a time when American 
     I.T. workers are having more difficulty finding employment, 
     creating personal hardships and increasing demands on our 
     safety nets.''
       Forrester Research, a high-technology consulting group, 
     estimates that the number of service sector jobs newly 
     located overseas, many of them tied to the information 
     technology industry, will climb to 3.3 million in 2015 from 
     about 400,000 this year. This shift of 3 million jobs 
     represents about 2 percent of all American jobs.
       ``It's a very important, fundamental transition in the I.T. 
     service industry that's taking place today,'' said Debashish 
     Sinha, principal analyst for information technology services 
     and sourcing at Gartner Inc., a consulting firm. ``It is a 
     megatrend in the I.T. services industry.''
       Forrester also estimated that 450,000 computer industry 
     jobs could be transferred abroad in the next 12 years, 
     representing 8 percent of the nation's computer jobs.
       For example, Oracle, a big maker of specialized business 
     software, plans to increase its jobs in India to 6,000 from 
     3,200, while Microsoft plans to double the size of its 
     software development operation in India to 500 by late this 
     year. Accenture, a leading consulting firm, has 4,400 workers 
     in India, China, Russia and the Philippines.
       Critics worry that such moves will end up doing more harm 
     to the American economy than good.
       ``Once those jobs leave the country, they will never come 
     back,'' said Phil Friedman, chief executive of Computer 
     Generated Solutions, a 1,200-employee computer software 
     company. ``If we continue losing these jobs, our schools will 
     stop producing the computer engineers and programmers we need 
     for the future.''
       In the hourlong I.B.M. conference call, which took place in 
     March, the company's executives were particularly worried 
     that the trend could spur unionization efforts.
       ``Governments are going to find that they're fairly limited 
     as to what they can do, so unionizing becomes an attractive 
     option,'' Mr. Lynch said on the recording. ``You can see some 
     of the fairly appealing arguments they're making as to why 
     employees need to do some things like organizing to help 
     fight this.''
       The I.B.M. executives also warned that when workers from 
     China come to the United States to learn to do technology 
     jobs now being done here, some American employees might grow 
     enraged about being forced to train the foreign workers who 
     might ultimately take away their jobs.
       ``One of our challenges that we deal with every day is 
     trying to balance what the business needs to do versus impact 
     on people,'' Mr. Lynch said. ``This is one of these areas 
     where this challenge hits us squarely between the eyes.''
       Mr. Lynch warned that with the American economy in an 
     ``anemic'' state, the difficulties and backlash from 
     relocating jobs could be greater than in the past.
       ``The economy is certainly less robust than it was a decade 
     ago,'' Mr. Lynch said, ``and to move jobs in that environment 
     is going to create more challenges for the reabsorption of 
     the people who are displaced.''
       The I.B.M. executives said openly that they expected 
     government officials to be angry about this trend.
       ``It's hard for me to imagine any country just sitting back 
     and letting jobs go offshore without raising some level of 
     concern and investigation,'' Mr. Lynch said.
       Those concerns were pointedly raised on June 18, when the 
     House Small Business Committee held a hearing on ``The 
     Globalization of White-Collar Jobs: Can America Lose These 
     Jobs and Still Prosper?''
       ``Increased global trade was supposed to lead to better 
     jobs and higher standards of living,'' said Donald A. 
     Manzullo, an Illinois Republican who is the committee 
     chairman. ``The assumption was that while lower-skilled jobs 
     would be done elsewhere, it would allow Americans to focus on 
     higher-skilled, higher-paying opportunities. But what do you 
     tell the Ph.D., or professional engineer, or architect, or 
     accountant, or computer scientist to do next? Where do you 
     tell them to go?''
       The technology workers' alliance is highlighting I.B.M.'s 
     outsourcing plans to help rally I.B.M. workers to the union 
     banner.
       ``It's a bad thing because high-tech companies like I.B.M., 
     Microsoft, Oracle and Sun, are making the decision to create 
     jobs overseas strictly based on labor costs and cutting 
     positions,'' said Marcus Courtney, president of the group, an 
     affiliate of the Communications Workers of America. ``It can 
     create huge downward wage pressures on the American work 
     force.''
       Mr. Mehlman, the Commerce Department official, said 
     companies were moving more service jobs overseas because 
     trade barriers were falling, because India, Russia and many 
     other countries have technology expertise, and because high-
     speed digital connections and other new technologies made it 
     far easier to communicate from afar.
       Another important reason for moving jobs abroad is lower 
     wages.
       ``You can get crackerjack Java programmers in India right 
     out of college for $5,000 a year versus $60,000 here,'' said 
     Stephanie Moore, vice president for outsourcing at Forrester 
     Research. ``The technology is such, why be in New York City 
     when you can be 9,000 miles away with far less expense?''
       Company executives say this strategy is a vital way to 
     build a global company and to serve customers around the 
     world.
       General Electric has thousands of workers in India in call 
     center, research and development efforts and in information 
     technology. Peter Stack, a G.E. spokesman, said, ``The 
     outsourcing presence in India definitely gives us a 
     competitive advantage in the businesses that use it. Those 
     businesses are some of our growth businesses, and I would say 
     that they're businesses where our overall employment is 
     increasing and our jobs in the United States.''
       David Samson, an Oracle spokesman said the expansion of 
     operations in India was ``additive'' and was not resulting in 
     any job losses in the United States.
       ``Our aim here is not cost-driven,'' he said. ``It's to 
     build a 24/7 follow-the-sun model for development and 
     support. When a software engineer goes to bed at night in the 
     U.S., his or her colleague in India picks up development when 
     they get into work. They're able to continually develop 
     products.''

  Mr. HOLLINGS. Mr. President, a California IBM employee relations 
executive said:

     . . . three million service jobs were expected to shift to 
     foreign workers . . . I.B.M. should move some of its jobs now 
     done in the United States, including software design jobs, to 
     India and other countries.

  I could read on and on. But you can see it. It is in the Record.
  You have Business Week, ``High-Tech in China.'' I don't want to 
include the magazine itself. But this is a quote from a Business Week 
article from earlier this year:

       Is Your Job Next? A new round of globalization is sending 
     up-scale jobs offshore. They include chip design, engineer, 
     basic research, financial analysis. Can America lose these 
     jobs and still prosper?

  You have not just Business Week but Fortune magazine from June of 
this year. Here is one of the executives quoted here:

       ``I've been in this business for over 20 years, and it's 
     the worst I've ever seen'', says David Hoffmann, CEO of DHR 
     International, a Chicago-based recruiting firm. ``Nothing 
     even comes close to this.''
       . . . relocation of the jobs to offshore sites. Machines--
     or low-wage foreigners--could just as easily do their work.
       . . . shifting jobs to cheaper locales like India and the 
     Philippines. It's not just call centers anymore. Indian 
     radiologists now analyze CT scans and chest X-rays for 
     American patients in an office park in Bangalore, not far 
     from where Ernst & Young has 200 accountants processing U.S. 
     tax returns. E&Y's tax prep center in India is only 18 months 
     old . . . but the company already has plans to double its 
     size. Corporate America is quickly learning that a cubicle 
     can be replicated overseas as easily as a shop floor can.

  Irwin Kellner, who is now at Hofstra University, was at Manufacturers 
Hanover. We have had him before committees of the Congress year in and 
year out. I quote:

       ``White-collar workers and college graduates are in a state 
     of shock,'' says Kellner. ``It appears these job losses are 
     permanent. They're not necessarily coming back when the 
     economy does.''

  Mr. President, we are in deep trouble. We are into a real trade war. 
We are into a thing of national survival.
  Let me see here. Quoting:

       At the University of Chicago Graduate School of Business, 
     96 percent of grads in 2000 had an offer when they collected 
     their sheepskin. Only 72 percent of last year's grads were as 
     lucky--and this year isn't shaping up any better. Even at 
     Harvard the percentage of grads without job offers has gone 
     from 3 percent in 2000 to 13 percent now. For schools further 
     down the food chain, almost half the class will graduate 
     without even one offer.

  Quoting further:

       . . . in the past two or three years companies have turned 
     to India and the Philippines for much more sophisticated 
     tasks: financial analysis, software design, tax preparation, 
     even the creation of PowerPoint presentations.

  Quoting still further:

       And how cheap. Starting pay for an American accountant, 
     says Kline, typically ranges from $40,000 to $50,000 [in the 
     United States]. In Bangalore the accountants are paid less 
     than half that.


[[Page 20431]]


  Another quote from the article:

       . . . Forrester Research predicts that 3.3 million service 
     jobs will move to countries like India, Russia, China, and 
     the Philippines.

  The firm of A.T. Kearney talked about shifting 500,000 jobs, or 8 
percent of the U.S. workforce, abroad by 2008.
  I quote:

       Any function that does not require face-to-face contact is 
     now perceived as a candidate for offshore relocation.

  So, Mr. President, I could go on and on. But let me just say, we are 
in a struggle for our economic survival. I have talked to you that free 
trade is a loser. We are losing all those jobs. And who is the enemy? 
Not just General Motors, not just IBM. I say it authoritatively because 
I know who wants this losing trade bill--you can start with the 
National Association of Manufacturers. I got into a struggle with 
Victor Schwartz there in the 1970s, 25 years ago. But it is not only 
the National Association of Manufacturers. It is the Business 
Roundtable, the Conference Board--yes, my dear colleagues, the United 
States Chamber of Commerce.
  The United States Chamber of Commerce is no longer interested in main 
street America. It was. I won U.S. Chamber of Commerce awards during my 
1992 race. Bob Thompson of Greenville, SC, was the president. And I was 
the poster boy of the United States Chamber of Commerce. We had stopped 
labor law reform. We had eight cloture votes. My distinguished friend 
Russell Long was chairman of the Finance Committee, and we agreed the 
eighth vote would count. That would decide it. We would not go any 
further. And up until about 20 minutes before the vote, he had me beat. 
I heard from a friend that I might be able to persuade Ed Zorinsky of 
Nebraska, and I raced over to the fourth floor of the Russell Building. 
The rollcall had already been called. And I saw Ed coming down the 
hall, and I said: Ed, I need your help. And he said: I will help you, 
Fritz.
  And we called that roll, and we won the eighth rollcall vote on 
cloture. This crowd gets steamed up over two or three cloture votes. So 
let's get to the record. I helped defeat an eighth cloture vote myself. 
And as a result, I was the poster boy of the United States Chamber of 
Commerce.
  Now, Tom Donohue--a nice fellow, absolutely honest--I worked with him 
when he represented the truckers. He knows nothing about international 
trade, but he is going for the money. He is for tort reform. I never 
heard him mention a bit about tort reform when he represented the 
truckers. But now he is, by gosh, the expert on free trade, free trade.
  When I ran in 1998, they put out pamphlets against me. They endorsed 
my opponent, even though I had been their poster boy. I had not changed 
my vote. I was the same way in trade in 1998 as I was in 1992. But you 
can see how this crowd is. They headed for the overseas barn. I can 
tell you that right now.
  So you have the National Association of Manufacturers, you have the 
Business Roundtable, you have the Conference Board. You have the United 
States Chamber of Commerce. I have won about six of these National 
Federation of Independent Business small business awards, but now they 
are being taken over. The U.S. Chamber and the Business Roundtable have 
gotten hold of them and said: Oh, we are going to get you some 
writeoffs, some tax breaks, too. So they are for free trade now.
  To increase consumer demand, you have to have consumers. In order to 
have consumers, you must first have producers. And in order to have 
producers, you have to have jobs. And we are losing them hand over 
fist.
  I have been the author of five textile trade bills that have passed 
the Senate. Four of those bills have gone to the President of the 
United States. Four have been vetoed--vetoed. President Carter vetoed 
one. President Reagan vetoed two. And President George Herbert Walker 
Bush vetoed the last one. And we came within two votes over on the 
House side of over turning the veto. We had a majority, but we did not 
have the two-thirds necessary to override.
  The other enemy is the Retail Federation. They order so many hundred 
thousand dozen shirts, or whatever it is, from China. Then, if the 
market is good, and they run short, they call up New Jersey quick and 
get another hundred thousand dozen.
  Now, what they get from New Jersey and what they get from China is 
not the same price. They get a much greater profit on the Chinese 
import than they do on the New Jersey shirt. I know because I got a New 
Jersey shirt on. Yes, sir, I believe in domestic production.
  Years ago, I used to represent Pontiac folks, and a bunch of other 
automobile dealers. Once I bought a new car, and I was so careful to 
buy a domestic car; no foreign car. My neighbor said: Fritz, how much 
did you pay for this new Pontiac? I was looking at the sticker price, 
when I see on the sticker: FOB Montreal. I had bought a foreign car. I 
had bought a foreign car and didn't even know it. Pontiac had gone to 
Canada to make it because they saved $800 on the health bill on every 
car.
  So you can understand, this has been going on for years. But we are 
draining the swamp. There aren't jobs left in America.
  And you cannot find a hometown newspaper that has endorsed 
protectionist trade--I don't mind saying the word.
  You have to protect your standard of living. We Republicans and 
Democrats, we say: Clean air, clean water, minimum wage, Medicare, 
Medicaid, plant closings, parental leave. If you put that requirement 
on manufacturers, you have to protect it. You can't just go over where 
they have none of those protections and 60 cents an hour.
  The newspapers make a majority of their profit on retail advertising. 
So the retail federation and all the big stores call the main 
advertisers. They go down to the editors and they give them a handout. 
I have compared the editorials in different parts of the country. They 
give them the handout, and they write the editorial. Free trade, free 
trade--they think they are being wise.
  Free trade loses jobs. We are losing the jobs right and left. But 
everyone is for free trade: the hometown newspaper, the Business 
Roundtable, the Conference Boards, the United States Chamber, the 
retailers, all of K Street. Have you ever had a K Street lawyer come 
here and ask you to vote against free trade? You can't find one.
  You and I are paid to protect the jobs of America. We are not paid to 
make a profit. But come on, you can't find a K Street lawyer who wants 
to protect jobs.
  In the Administration they think this is wonderful. They can open up 
the islands of Indonesia and transship through Singapore the electronic 
parts back into America from cheap labor. So they are all working 
against us.
  It is not just President Bush. President Clinton was for free trade, 
free trade. He is the one who passed NAFTA. He was the one who was 
going to open up and create 200,000 jobs. He impoverished the State of 
South Carolina, I can tell you that. We have lost 61,000 textile jobs 
in my little State. Where we have a BMW plant, 3 years ago we had 3.2 
percent unemployment. It is over 8 percent unemployment now.
  Don't tell me about free trade, free trade. I have watched the 
outflow here. So you have the Government against us. Then if everyone 
is against us, who could be for us, asks the Good Book? Us. That is all 
I am trying to do, is wake my colleagues up to get out of this 
nonsense. I see the Senator from Wisconsin. I know the plants out 
there, too. I did work for them. I carpetbagged a few of those plants, 
too. I brought them to South Carolina.
  But we have to move to rebuild America. We have to stop whining: I am 
for fair trade. I am for balancing the field, leveling the field.
  That is all garbage. That is baloney, if I have ever heard it. We 
have to start and compete in the international economy. It is a trade 
war. It is very viable. It is very fair. It is very understandable. We 
have to get in there. Having rebuilt Europe and the Pacific rim, we 
have to, by gosh, get in there, and in order to remove a barrier, raise 
a barrier. Then remove them both, go by their rule book. We are Goody 
Two-

[[Page 20432]]

shoes, and we want to set the good example like we have done for 50 
some years. And we have lost our shirt in manufacturing.
  We can go right to the tax law. I am going down the list now. We can 
go to the tax law that says if you manufacture overseas and keep your 
profit, you can build a new plant. You don't have to pay taxes on that 
profit. Or we can turn around and go along with Charlie Rangel on the 
House side--I have the bill in on the Senate side--and say if you 
manufacture and keep your jobs in America, you get a tax credit. If you 
go overseas, you lose. You get a tax increase.
  That is what we ought to do. Make it so rather than trying to revive 
Europe and the Pacific rim, we have to revive the United States.
  Mrs. BOXER. Will the Senator yield for a question?
  Mr. HOLLINGS. I am delighted to.
  Mrs. BOXER. It is very interesting that you said this because when we 
heard from Mr. Wolfowitz in front of the Foreign Relations Committee 
where we had a hearing on the rebuilding of Iraq, the first thing he 
said matched what Mr. Bremer said, who is in charge of the rebuilding. 
He said: Those people over there need jobs. They need to get the 
economy going. They need jobs.
  And I say to my friend, isn't there something ironic about that, that 
there is a total understanding of what the folks in Iraq need, when I 
could say in my State and yours and all through America, this should be 
the priority of the President in this country.
  Mr. HOLLINGS. Certainly, it ought to be. That is our duty here in the 
Congress. Article I, section 8 of the Constitution says not the 
President but the Congress of the United States shall regulate foreign 
commerce. But what have we done? We have got in a fix through the 
Finance Committee and Ways and Means. They got fast track. And I would 
like to vote for Chile because Chile has a free economy, a market-based 
economy, a revered judiciary, labor rights, environmental laws, and a 
balanced budget. But I can't vote with that immigration thing included. 
Under fast track, I can't amend. I can't debate. I can't discuss. I 
can't do anything.
  Let me bring up a red herring that will excite everybody. I 
introduced it in January. I said: Good gosh, we are going to war, and 
we don't have a way to pay for it. We paid for the Revolutionary War 
with a property tax. That is the first property tax that passed in this 
country. We got to the Civil War, and Abraham Lincoln put on an estate 
tax and a dividend tax. And we were running around here talking about 
taking off the estate and dividend tax.
  I said, come on, we paid for World War II. We paid for Korea. We paid 
for Vietnam. We paid for the gulf war. The Saudis did a good bit of 
that, as we all know.
  I said, I am going to put in a value-added tax. Every industrialized 
country has a value-added tax. Why? Why do I want to do that? It is 
twofold: One, if I take and manufacture this desk in Washington, DC, I 
have to pay all the income, sales, corporate taxes. And when I ship it 
over to Paris, France, I add on a 17 percent VAT.
  If I manufactured that same desk in Paris, France, when it leaves the 
port of La Havre to come to Washington, we rebate the 17 percent. And 
so it is a 17 percent advantage to manufacture in Paris rather than in 
Washington. I want to reconcile that differential immediately with a 
value-added tax. I want to pay for the war. That is the trouble this 
country is in.
  Bill Clinton brought the budget deficit down. He put in an increase 
in tax. I voted to increase Social Security. I voted to increase the 
gasoline tax.
  I voted to increase the top payer income tax. We voted also to cut 
spending, and we had an 8-year economic boom. And now we just had three 
quarters of recession in 2001, a bad economy all through 2002, and they 
kept blaming it on the war. The war in Iraq only costs $4 billion a 
month. That is $48 billion year, and when the President talked on 
February 27, he said: I have $1 trillion for unforeseen needs.
  The tax cuts have wrecked the economy. Everybody knows it. They are 
running around--jobs and growth, jobs and growth--like a bunch of 
children trying to sell that nonsense. So we ought to pay for the war, 
reconcile this trade differential and manufacturing differential. We 
ought to, by gosh, enforce our dumping laws. The competition is not for 
money or profit. The competition is for market share.
  When the Japanese sell below cost in the United States and make it up 
in the domestic market in Tokyo, we have to enforce dumping laws. The 
special Trade Representative runs out to do that and says we are going 
to do away with the dumping laws. That is loss leaders.
  I had an antitrust case and carried it to the Supreme Court on a loss 
leader. I know the law of loss leaders. That is what you have in 
international competition. There are a bunch of loss leaders and they 
keep taking over, even this year, a greater share of the American 
automobile market. So we have to enforce our dumping laws. We have to 
eliminate the Trade Commission. That is another gimmick put in by the 
Finance Committee.
  The Finance Committee--when you have a dumping violation, you file it 
before the International Trade Administration. They investigate and 
make a finding. After they make a finding, they have a sweetheart deal. 
They kick it over to the International Trade Commission, and they never 
find injury. I can tell you they have two or three exceptions since I 
have been talking about it, but we can save $43 million and let the 
finding entity, the International Trade Administration, that gives the 
penalty on what is to be done. We can save money there.
  We need more Customs agents, and we need a department of trade. We 
have the Department of Manufacturing in the Commerce Committee. We can 
gear up for the trade war. Don't worry about the Afghan war. I think we 
may have created more terrorists than we have gotten rid of. The jury 
is out in Iraq, as to whether or not we can work out the peace. I can 
tell we don't have any friends in downtown Baghdad. It is a shooting 
gallery. They are killing our soldiers every day.
  What we have to do is get into this trade war and compete.
  Now, finally, the administration says they are going to get up 
consumer confidence. They have passed three voodoo tax cuts. Of course, 
Ronald Reagan passed voodoo 1, and George Herbert Walker Bush is the 
one who called it voodoo. How are you going to cut your revenues and 
increase your revenues? You never do that. You will never find a 
government doing that. But come to Washington, and they know everything 
up here. So they are going to increase the consumer confidence with tax 
cuts they had in 2001, 2002, and already this year.
  With those three tax cuts of over $3.1 trillion, here is the news 
that came out yesterday: the consumer confidence index dropped 7 points 
to 7.6 in July, a sharp and unexpected drop.
  We have a $698 billion budget deficit projected for this year. It is 
already $503 billion.
  (Mr. Crapo assumed the Chair.)
  Mr. President, you can see the effects. You can see Wall Street is 
frozen. They are not going to invest when the interest rates are on the 
increase.
  The Concord Coalition, headed up by former colleagues, Senator 
Kerrey, Senator Nunn, and Senator Rudman and now chaired by none other 
than a Republican, Pete Peterson, former Secretary of Commerce under 
President Nixon, released its report on fiscal responsibility. Overall, 
you have the Republican chairman of the Concord giving them an ``F.''
  So there we are. We don't want to compete. We have a job policy in 
the U.S. Congress of actually eliminating jobs like gangbusters.
  Our security is like a three-legged stool. We have the one leg of the 
values that we have as a nation. Everyone in the world--at least until 
Iraq--knew that we stood for human rights, individual freedom, and 
democracy. That second leg, military, is unquestioned. The third leg, 
economic, is fractured--intentionally so with the Marshall Plan. But we 
prevailed with capitalism over communism in the cold war. It worked.

[[Page 20433]]

  But now we have taught corporate America a bad lesson, and in order 
to compete and make even greater profits, whether it is high-tech or 
service or hard manufacture, they are leaving the Nation in droves. We 
are sitting by talking about a little Energy bill or a judgeship.
  The country is going to hell in an economic hand basket and we are 
the ones responsible under the Constitution and we are not doing 
anything about it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent that I may speak 
in morning business, and then be followed by the Senator from 
California, Mrs. Boxer.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                          U.S. Policy in Iraq

  Mr. FEINGOLD. Mr. President, I enjoyed the comments very much of the 
Senator from South Carolina, and I agree so much with his comments 
about our trade policy. I think it is possibly the leading issue in the 
country right now.
  Mr. President, I rise to comment on U.S. policy in Iraq. We have 
heard much about the President's reference in the State of the Union 
Address to intelligence suggesting that Saddam Hussein had recently 
attempted to secure uranium from Niger. Now we know our own 
intelligence agencies did not believe that information to be credible. 
It was employed in a reckless effort to sell the American public on a 
predetermined policy course.
  I do applaud President Bush for taking responsibility for his words, 
but for weeks this administration reacted with a combination of denial 
and spin, and by choosing to make the Central Intelligence Agency, and 
then much later the Deputy National Security Advisor, the scapegoats 
for this incident.
  I wish to state for the record that in all of the briefings leading 
up to the decision to go to war in Iraq, I found the CIA to be among 
the most straightforward and the most professional of those making 
presentations to help Members of Congress understand the facts. The 
facts in the briefing room never matched the public rhetoric of the 
administration's hard sell.
  The hard sell was an encompassing thing. It included an array of 
justifications for taking up arms that seemed to shift from day to day 
and week to week. Today we find the administration returning to that 
menu of reasons for invading Iraq, claiming that whatever happened with 
the State of the Union, Saddam Hussein was a brutal dictator and so at 
any case we did the right thing.
  Saddam Hussein was a brutal dictator, and I join the vast majority of 
the world in being happy to see him removed from power. But that was 
never the bottom line. The bottom line was the regular invocation of 
the line: ``We don't want the smoking gun to be a mushroom cloud.'' The 
bottom line was weapons of mass destruction. To pretend otherwise now 
is to suggest to the world that the United States of America will 
invoke one pretext for invading another country and then conveniently 
drop the subject later. That suggestion is so far from what this 
country's foreign policy should ever be about, so removed from what I 
firmly believe to be the intentions and desires of the vast majority of 
Americans, that it must be repudiated. But I fear that the hard sell, 
the use of debunked intelligence, the implied linkages to other issues 
have fostered that perception around the world, and that will make it 
harder for others to cooperate with us on the real foreign policy 
priority. The real foreign policy priority is the fight against 
terrorism.
  The administration's hard sell recognized that fighting terrorists 
who attacked this country on September 11, 2001, is the most important 
national security issue for Americans. So even though they were selling 
us something else--selling us an invasion and occupation of a major 
Middle Eastern country even though intelligence did not reveal solid 
ties to al-Qaida--the administration, nonetheless, incorporated 
reference to al-Qaida in its hard sell, and they still do.
  President Bush told us in his speech on the USS Lincoln that the 
battle of Iraq was won in a war that began on September 11. But this 
administration has never made any kind of compelling case to suggest 
that one had anything to do with the other.
  This week, before the Senate Foreign Relations Committee, Deputy 
Defense Secretary Paul Wolfowitz suggested that Iraq--Iraq--rather than 
Afghanistan is the ``central battle'' in the fight against terrorism, 
and he claimed that al-Qaida attacks occurred in part because the 
United States was pursuing a policy to contain Saddam Hussein.
  Secretary Wolfowitz did not say that the Iraqi Government had 
anything to do with the planning of the attacks on Khobar Towers or the 
attack on the USS Cole, but there these things are, in the same breath, 
in the same context. The rhetorical linkages continue because the hard 
sell is a hard job, especially now as the magnitude of the task before 
us is becoming clearer.
  Five American soldiers were killed in Iraq over the weekend and 
another was killed on Monday and another on Wednesday and another on 
Thursday, marking 51 United States combat deaths and over 100 United 
States troops killed since the President declared the end of major 
combat operations in Iraq in May. We can all hope and pray that these 
attacks will decrease in their frequency and lethality, but there is no 
certainty that the attacks will let up anytime soon.
  Despite the ``triumphant mission accomplished'' rhetoric in which the 
administration indulged several weeks ago, the friends and families of 
our men and women in uniform are living with the possibility of the 
knock on the door, the horrible news coming home. They are suffering 
with every news story, with every report, desperately worried about 
their husbands and wives, sons and daughters, and fathers and mothers. 
While, of course, they feel proud of their loved one's service, they 
also feel tremendously worried.
  Yes, across America, there is a growing sense of unease--unease about 
the hostility our troops are facing; unease about the fact that the 
United States and the United Kingdom are nearly alone in trying to take 
this on, having alienated potential allies in the lead-up to war; 
unease about the giant task that lies ahead and the tremendous 
resources that will be required in terms of manpower, in terms of time, 
and in terms of money to see this through; unease about intelligence 
suggesting that the terrorists are planning more hijackings this 
summer, just as we read reports about insufficient homeland security 
resources forcing cuts in the number of flights that will have Federal 
air marshals on board. The fact is, many Americans do not feel more 
secure today; they feel vulnerable.
  Months ago, I found I could not support a march to war without 
getting real answers to some basic questions about the cost and 
commitments we would be undertaking in the name of the American people. 
And I could not support a march to war when it appeared that our 
unilateral approach to Iraq would harm the progress of the fight 
against terrorism. But I want to tell you, Mr. President, I was deeply 
concerned about the issue of weapons of mass destruction. So I kept 
asking about the plan for securing such weapons and the means to make 
them so that they would not slip away in the chaos of war, secreted 
across borders or sold off to the highest bidder. No matter how hard I 
tried, over and over, I never got a real answer. And today we still 
have not found this material, a plain fact that raises very serious 
security concerns.
  At some point in this debate, some seemed to be under the impression 
that asking questions and demanding that questions be answered 
signified something less than full support for our Armed Forces and 
something less than a complete commitment to the security of the United 
States of America. They were dead wrong. Asking questions, demanding 
answers, and exercising our judgment are just what the American people 
send us here to do. It is how we protect our interests. It is

[[Page 20434]]

how we ensure that the brave men and women of our military do not find 
themselves in harm's way without an adequate explanation of their 
mission, without adequate training for the task before them, without 
the sense of futility or confusion that makes it that much harder to 
cope with constant threats and pervasive danger.
  Now that we are beginning to get some answers, now that we are 
hearing that our military presence alone is costing about $1 billion a 
week, now that it is clear that rosy scenarios about reconstruction in 
Iraq will be self-financing are revealed to be the worst kind of self-
deluding, wishful thinking, it is now that we need to look at the facts 
and adjust our course accordingly. Now we have GEN Tommy Franks' 
successor, General Abizaid, acknowledging that our troops are facing a 
``classical guerrilla-type campaign'' that is ``getting more 
organized.''
  Do you know what is happening? The hard sell is giving way to the 
hard truth. These probably are not the answers the American people were 
expecting when their questions were met with evasion or with vague 
exhortations to ``just trust us.'' I did not support the decision that 
led us to this place, but I wholeheartedly support the troops who are 
in the hot seat now, and I support their families. I support the next 
generation of Americans who deserve better than to be saddled with 
massive debts, in part because their Government was unwilling to do 
what it takes to get capable partners on board to help us shoulder the 
burden that now weighs so very heavily on this country.
  I believe we must keep the questions coming. We must get real 
answers, and we must all work together to move toward a wiser approach. 
I do not want to hear a hard sell anymore. I want to hear the answers 
to the hard questions, and I want to work on the hard problems and the 
hard choices that are before us.
  Mr. President, I yield the floor.
  Mrs. BOXER. I ask unanimous consent that at the completion of my 
remarks, Senator Baucus be recognized for as much time as he may 
consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            Funding For Iraq

  Mrs. BOXER. Mr. President, before Senator Feingold leaves the 
Chamber, I thank him for his comments. Since he is my seatmate on the 
Foreign Relations Committee, which in itself is an honor for me, I 
recall that we were very skeptical from the start about going it 
essentially alone in Iraq. He and I have pressed very hard to work 
through the U.N. weapons inspectors and to have the whole world 
breathing down Saddam's neck. Now, as it turned out, we essentially did 
it alone and we are bearing the burden of these tragic deaths every 
day, deaths that are almost going, I hate to say, unnoticed now, 
although some of us talk about the brave soldiers we are losing.
  When it comes to the funding of this war, we are up to $45 billion to 
$50 billion a year, even without the rebuild. As my friend knows, 
because he has been a major force for fiscal responsibility, we cannot 
even share that burden. Even when countries such as the Poles come 
forward, and we are grateful to them for sharing the burden on the 
ground, we are paying for it. How can we sustain these costs at a time 
when our deficits are skyrocketing?
  So we are in a bit of a mess, and I hope the President will move more 
forcefully toward internationalizing the rebuilding of Iraq and sharing 
the burden because that is the answer. That is what a real leader has 
to do.
  We all said that the 21st century would be America's century but that 
does not mean we do it alone. It means we lead the world against 
tyrants and against the war on terror. So I wanted to thank my friend 
before he left the Chamber.


                     Nomination of Carolyn B. Kuhl

  Mrs. BOXER. Mr. President, I rise today to talk about a judicial 
nomination that has gotten no attention on the Senate floor thus far 
and yet we are going to have a vote on this nomination, as I understand 
it, tomorrow, the nomination of a woman from California which was ill 
advised from the start because there was no advice and consent done at 
all from this administration, at least to this Senator.
  When I was notified that this nomination was going forward, I had 
several meetings with the Bush administration people and I asked, why 
are you choosing someone who is so far out of the center and so far to 
the extreme right, when the President said he would govern from the 
center?
  In fact, I will never forget the night he declared victory, after the 
Supreme Court made their ruling, and the President came out, very 
appropriately, and I thought somberly, and said, I am going to bring 
this country together and I am going to govern from the center. I took 
him at his word.
  When President Clinton was in office, I got a pretty stern lecture 
from Chairman Orrin Hatch, for whom I have great respect. He said, 
Barbara, I want you to know that if you recommend any judges that are 
outside the center, forget about it. It is not going to happen. We are 
not going to let it happen. We want moderates.
  I do not understand why that does not apply now. It applied to 
President Clinton. It ought to apply to President Bush. When President 
Bush said, I want to govern from the center, I took him at his word.
  When the Constitution says the Senate shall be part of the advice and 
consent function, that does not mean we roll over and play dead to any 
President, be he or she Democrat or Republican. It means the President 
should seek our advice and must win our consent.
  So when we see a judicial nominee come to this floor, where one of 
the home-state Senators never even sent back what we call the blue 
slip, which is sort of the permission slip, giving permission to move 
forward, when we see that being ignored after it said for many years on 
the slip, this nomination will not go forward unless you send back the 
slip--I ask unanimous consent that the blue slip be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                      U.S. Senate,


                                   Committee on the Judiciary,

                                          Tuesday, August 1, 2000.
       Dear Senator: You will kindly give me, for the use of the 
     Committee, your opinion and information concerning the 
     nomination of:      to be      .
       Please return this form as soon as possible to the 
     nominations office in Dirksen G-66. No further proceedings on 
     this nominee will be scheduled until both blue slips have 
     been returned by the nominee's home state senators.
           Respectively,
                                                   Orrin G. Hatch,
                                                         Chairman.
       Via courier to:

                                 REPLY

     To: Senator Hatch, Chairman

     ___I approve

     ___I oppose

     Comments:_____
                                                             _____
                                                     U.S. Senator.

  Mrs. BOXER. There is a note from Senator Hatch when he was Chairman 
of the Judiciary Committee during the Clinton administration, which I 
would like to read. The blue slip we used to receive from Senator Hatch 
said: ``Please return this form as soon as possible . . . No further 
proceedings on this nominee will be scheduled until both blue slips''--
that means from each Senator--``have been returned by the nominee's 
home State Senators.''
  That is what we all used to receive from Chairman Hatch. That was his 
former policy. Then all of a sudden it changed when the President 
changed.
  So on process, this was a nomination that should not be before us. 
Then the bar kept being raised. Senator Feinstein said, let's have a 
hearing on this nominee and let me see whether I think she ought to 
move forward. Senator Feinstein listened, asked deep questions, 
pondered, and then said, no. And she will express for herself why she 
said no.
  So we have two home State Senators against this nomination. What 
happens? The nominee is coming to the floor for a vote. We have not 
even debated it or discussed it.
  I wanted to apologize to my friend from Montana, because I know he is

[[Page 20435]]

talking on another subject, but this is crucial. I predict this Senate 
will not give the go-ahead to this nominee and I want to make the 
record clear as to why.
  It is pretty clear that if we look at the values shared by the 
American people on such matters as privacy, civil rights, women's 
rights, access to the courts, whistleblower protection, legal 
intimidation, the right to the disabled and the environment, on every 
single one of these very key American values this nominee is way 
outside the mainstream. There are years of actions that prove what I 
have said.
  I do not relish this situation. Everyone who knows me knows that I 
fight so hard for women's rights and for women to move forward and to 
break the glass ceiling, but when we see the record of this nominee, I 
have no choice. I do not deserve to be here if I do not make the case 
against this nomination and why I believe the proceedings should not 
move forward.
  So let me first show how many groups are against this nominee and how 
controversial this nomination is. I am going to go through these. I am 
not going to read every name on it but I want to give a sense of this 
list: the AFL-CIO, the Alliance for Justice--I am skipping some--Asian 
Pacific American Labor Alliance, Association of Flight Attendants, 
Breast Cancer Action--and I am going to explain why--Breast Cancer 
Fund, California Women's Law Center, Clean Water Action, Committee for 
Judicial Independence, Communications Workers of America, Defenders of 
Wildlife, Earthjustice, Feminist Majority.
  Let's go to the next chart. I am skipping many of these because of 
the time constraints I feel but let me continue. Foundation for a 
Smoke-Free America--and I will explain why they got involved--Friends 
of the Earth, Japanese American Citizens League, International 
Federation of Professional and Technical Engineers, Los Angeles African 
American Women's Political Action Committee, Mineral Policy Center, 
MoveOn.org, NARAL Pro-Choice America, National Center for Lesbian 
Rights, National Council of Jewish Women, National Employment Lawyers 
Association, National Organization for Women, National Women's Law 
Center, Natural Resources Defense Council. Again, I am reading a 
partial list here.
  Another list, and this is incredible. This is one judicial nominee 
that is coming before us the day before we leave when we are in the 
middle of an Energy bill that the other side says is so important. They 
are throwing at us one of the most controversial nominees one could 
find. Office and Professional Employees International Union, 
Progressive Jewish Alliance, San Francisco Board of Supervisors, San 
Francisco La Raza Lawyers Association, Sierra Club, Smokefree 
Educational Services, the Foundation for Taxpayer and Consumer Rights, 
UNITE, United American Nurses, United Farm Workers, United Food and 
Commercial Workers International Union. Again, I am reading a partial 
list.
  The last chart: Union of Needletrades, Industrial and Textile 
Employees; Wilderness Society; Women's Committee, Labor Committee for 
Latin American Advancement; Women's Leadership Alliance; Women's 
International League for Peace and Freedom, and a number of members of 
the California delegation. This gives a sense of the breadth of 
opposition.
  Let me start off telling a story why so many people are so upset 
about this nomination. It has to do with a case Judge Kuhl decided in 
the California courts that deals with a woman who is a cancer victim. I 
will read this woman's public statement.

       My name is Azucena Sanchez-Scott. I am a survivor of breast 
     cancer and Judge Kuhl's courtroom. I stand before you now 
     because I want to tell my story so that other people will 
     never have to re-live it.

  This is a woman who was harmed by Judge Kuhl in a way she will never 
forget for the rest of her life.

       Nothing about my cancer is easy. Not the chemotherapy, not 
     the fear, and certainly not the emotional pain or 
     disfigurement. As a person battling cancer, each visit to the 
     doctor brings questions about my future and my health. That 
     is where I was when my doctor and a stranger walked in. The 
     doctor offered no introduction and proceeded to examine me 
     and asked that I disrobe. It was only when I left the office 
     and inquired with the receptionist that I learned that the 
     stranger was a sales representative for a drug company with 
     no medical reason for being there.

  She continues:

       As a cancer survivor, I trusted that my doctor would make 
     decisions in my best interest and my doctor violated that 
     trust. The injustice, however, did not end there.
       Judge Kuhl heard my case and found no fault in the doctor's 
     actions. She ruled that it was my obligation to protect my 
     privacy in his exam room. That I should have battled cancer 
     and my doctor's judgment at the same time. And, she denied my 
     request to allow a jury trial to determine if the intrusion 
     was highly offensive to a reasonable person.
       We were taught not to question our doctors and I know as a 
     medical health professional that I have an obligation to 
     protect my client's privacy. I was shocked to find that the 
     doctor did not honor this obligation and I think that is why 
     Judge Kuhl's decision was unanimously reversed on appeal. If, 
     however, there is any duty for a citizen to ask questions as 
     a standard to protect our rights to privacy, it lies with the 
     Judiciary Committee.

  The point is, a woman has breast cancer. She goes to the doctor for a 
brutally difficult exam. She is humiliated in the office of that doctor 
by a total stranger, a drug salesman she later finds out, and Judge 
Kuhl rules against this woman, against her privacy rights, and tells 
her she should have asked, she should have known to ask who this 
stranger was that her doctor brought into the room.
  This is someone the Bush administration wants to promote and give a 
lifetime judgeship to?
  I can tell you what the breast cancer groups say. They normally do 
not get involved in these fights, but they are involved in this one. 
This is from Breast Cancer Action:

       On behalf of Breast Cancer Action and our over 8,000 
     members in California, I am writing in support of your 
     opposition to the nomination of Judge Carolyn Kuhl to the 
     Ninth Circuit Court of Appeals.

  They say:

       Based on Kuhl's refusal to protect fundamental woman's 
     rights in cases such as this, the BCA opposes her nomination.

  This is highly unusual.
  We have another letter from another organization I want to share.
  How can anyone be so cold and heartless as to tell someone suffering 
like this that they have to ask, Who is in the room? in a doctor's 
office?
  The Breast Cancer Fund wrote:

       Quite simply, Judge Carolyn B. Kuhl does not show the level 
     of sound judgment necessary for an appellate court judge.

  I know we have mostly men in the Senate, although we are moving 
forward with about 14 women. But any woman in the Senate will tell you, 
going for that type of an exam, even if you are totally healthy and not 
just coming out of a breast cancer operation, it is very difficult, it 
is very nerve racking, it is very embarrassing.
  To have a woman judge rule against Ms. Sanchez-Scott's privacy is 
extraordinary to me. To have these kinds of letters from groups like 
this is extraordinary, and it ought to be extraordinary to every single 
Senator who should vote not to allow this nomination to go forward.
  I will quickly go through the other issues where Carolyn Kuhl is 
outside the mainstream. We mentioned she is outside the mainstream on 
privacy rights. She is outside the mainstream on civil rights.

       Kuhl urged the Reagan administration to adopt a position 
     that would grant tax-exempt status to Bob Jones University. 
     More than 200 lawyers in the Justice Department's civil 
     rights division signed a letter in opposition to this 
     position. The New York Times (May 26, 1983) characterized her 
     as part of a ``band of young zealots'' who urged the legal 
     switch.

  She went forward and defended tax-exempt status for Bob Jones 
University even though it discriminated on the basis of race. Is this 
someone we want to elevate? She is outside the mainstream on civil 
rights.
  She is also outside the mainstream on access to the courts. What 
makes our country so great is that we have the ability to go to the 
courthouse door and get into that courtroom. We have that right as 
Americans.
  She argued that organizations do not have standing to sue in Federal 
court

[[Page 20436]]

on behalf of their members. She called on the Supreme Court to reject 
the principle of associational standing, effectively undermining the 
ability of unions to enforce labor laws.
  So if you believe, as she does, that a union does not have a right to 
sue on behalf of the members, that even, say, the NRA, the National 
Rifle Association, does not have a right to sue, whether the Chamber of 
Commerce should not have the right to sue, whether an environmental 
organization should not have the right to sue on behalf of its members, 
then go ahead and support her. But that undermines a basic, fundamental 
principle of our laws that organizations have standing to sue on behalf 
of their members. Whether it is the PTA or any other group, they should 
have the right and have their day in court.
  Carolyn Kuhl is outside the mainstream on women's rights. As I go 
through this, I hope everyone understands it is not as if there were 
not other people who could have been nominated in California, great 
people who were Republicans in my State. And I begged the 
administration to do it. They said: Send a list. And I sent them a list 
of several wonderful Republicans in my State who would have been great 
nominees. No, they were going to go forward with this extreme 
nomination--whatever their reasons, I cannot say--even in the face of 
the two home State Senators' opposition.
  Carolyn Kuhl supported a gag rule on title X funds, filing an amicus 
brief on behalf of the American Academy of Medical Ethics, an 
organization which represents more than 25,000 doctors who oppose 
abortion. She argued for restricted access to contraception, imposing 
additional requirements on recipients of title X funds.
  We all know our country is divided on the right to choose. My State 
is very strongly pro-choice, that is true. But in the country it is 
split. I cannot believe we are split on the issue of contraception. 
Here we have a nominee who is for limiting access to contraception. 
This is outside the mainstream on women's rights. She ruled against a 
rape victim in favor of an insurance company when she had the 
opportunity to rule in favor of that victim and get that victim 
support.
  She supported a restriction on access to abortion and urged reversal 
of Roe.
  This is when she worked for the Department of Justice. This is what 
she said:

       . . . Roe v. Wade is so far flawed . . . that the Court 
     should reconsider that decision and . . . abandon it.

  That is what she argued.
  On the environment, Kuhl represented a large oil company that wanted 
to avoid cleaning up polluted land.
  Is that an American value, to stand on the side of a polluter and say 
let the people take care of it if an oil company polluted their land? I 
say it is outside the mainstream on the environment.
  Legal intimidation--and this is very serious:

       Kuhl ruled against an individual subjected to intimidation 
     and legal costs as a result of speaking out against Medicare 
     and insurance fraud. In unanimously overturning Judge Kuhl's 
     decision--

  Unanimously overturning Judge Kuhl's decision--how far out of the 
mainstream can you be when a court that is dominated by Republicans 
overturns you unanimously?--

     the California State Court of Appeals found her ruling 
     ``would prolong both the [individual] defendant's predicament 
     and the [corporate] plaintiff's outrageous behavior.

  Outside the mainstream on tobacco.

       Kuhl was part of a team representing a tobacco company in 
     its effort to manipulate public policy.

  That was the case State of Minnesota et al v. Philip Morris et al. On 
the wrong side, out of the mainstream.
  She was out of the mainstream on exposing corporate fraud. Kuhl 
challenged the ability of whistleblowers to expose fraud against the 
Government.
  Imagine, instead of taking the side of the whistleblowers--and who 
are whistleblowers? People who are willing to come out and tell the 
truth. She challenged the ability of whistleblowers to expose fraud 
against the Government. The case was United States ex rel Jason R. 
Madden v. General Dynamics Corporation.
  She also misrepresented the U.S. Government's position on the 
constitutionality of the Federal whistleblower law in United States ex 
rel Rohan v. Newert, in 1993.
  Outside the mainstream on rights for the disabled. She argued airline 
carriers do not have to abide by antidiscrimination statutes relating 
to the disabled.
  Do you know whom she took on in this case? The Paralyzed Veterans of 
America.
  It is hard for me to believe this record. It is hard for me to 
believe you are going to have to vote to move this nomination along. 
Why do we have all these groups very upset? Because they understand 
what her record has been. Fighting on the side against paralyzed 
veterans--it is unbelievable. Let me just say we will have a little 
more debate on this tomorrow, but I want my colleagues to understand 
that the way this nomination came to this Senate was just plain wrong. 
It went against Senator Hatch's own rules that he laid down when 
President Clinton was President. He said you had to have both Senators 
sending back their slips to allow this to go forward. Senator Hatch has 
changed that rule now that we have a different president.
  Then, when we had two Senators against this nomination--we never 
expected it would be here--when I spoke to the President's men, they 
said: ``Give us some ideas of some mainstream people you might support. 
I was happy to do it. I sent them a list of wonderful people.
  As a matter of fact, one of the people I recommended is known to the 
Senator from Oregon. One of the people I recommended for this position 
was known to the Presiding Officer.
  Instead of reaching out to the Senators from California and coming in 
with a consensus nominee, for whatever reason the President chose to 
continue with this nomination. I can tell you, in all my years, I have 
never seen such an outcry from the people of this country.
  I will close. A letter was sent to Senator Feinstein on May 6, 2003, 
by Shirley Hufstedler, a former Ninth Circuit judge, and the first U.S. 
Secretary of Education. She said:

       I do not question Judge Kuhl's skill as a highly trained 
     lawyer. I am troubled by her lack of candor before her Senate 
     hearing and by her apparent insensitivity to the impact her 
     rulings have on some of the people who have come before her 
     as a judge.

  That is an important point about which I didn't tell you. There were 
a number of statements Judge Kuhl made before the committee that, when 
asked in further detail after the hearing, she had to correct and 
clarify what she had said to the members of the Judiciary Committee. 
She said, Oh, I made a mistake. I was wrong. I didn't exactly say it 
right.
  So whether you look at her performance before the Judiciary 
Committee, her actions within the Department of Justice during the 
Ronald Reagan years, her actions as a private lawyer, or her actions as 
a California judge, it all adds up to outside the mainstream, way 
outside the mainstream. And it goes against what I believed President 
Bush made as a commitment to the American people--that he would govern 
from the center.
  I have voted for many judges here, probably 90 percent, maybe high 
80s. Many were judges I did not agree with, who were conservative, who 
would not view the world as I view it. It is very rare--very rare--that 
I have taken to the floor to make this point. I do not do it lightly.
  This is not a personal attack. I have met Carolyn Kuhl. She is 
delightful to talk to. But this is not about personalities and it is 
not about gender and it certainly is not about religion. It is about 
whether or not the advice and consent of the Senate was really sought 
in this. It is about how Senators were disregarded, the home State 
Senators who wanted to cooperate, who put forward names, and it is 
about her lifetime of fighting for everything that is outside the 
mainstream of America.
  I do not think, after that decision on the breast cancer victim, and 
that alone, that someone who would be that

[[Page 20437]]

insensitive to say to someone who was fighting breast cancer that you 
have to come in and you have to ask your doctor who is in the room with 
you, that it is your job--that kind of decision fails the test of 
compassion, sensitivity and, above all, the law. She was wrong on the 
law. She was overturned on the law.
  For all those reasons, I beg my colleagues to stop this nomination 
from going forward. Let's get another nominee, a Republican nominee, I 
am sure--which President Bush has every right to do--but one who comes 
from the mainstream, with mainstream values and mainstream life.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Smith). The Senator from Montana.
  Mr. BAUCUS. Mr. President, I thank my good friend from California, 
Senator Boxer, for the statement she just made. For some, it is not 
easy to stand up on the floor of the Senate and oppose the nomination 
of a judge nominated by the President of the United States. For others, 
it is not quite as difficult. But for the Senator from California, I 
admire her for the clarity of her thinking and the position she has 
taken because, frankly, I agree with it.
  All of us in this body took an oath of office to uphold the 
Constitution of the United States. The main framework of that 
Constitution is the separation of powers with its powers allocated 
equally among the legislative, executive, and judicial branches. When 
our Founding Fathers wrote that Constitution, they were unsure about 
what to do about judges. They debated. One of their proposals was that 
the Congress send the names of potential judges to the President and 
that the President choose from among those judges which one the 
President wanted, and that is the one that would be named. It was a 
very difficult issue to resolve. Why? Because the two branches of 
government would be deciding which people would have lifetime 
appointments serving in the third branch of Government; that is, the 
judicial branch.
  Why is this so important? It is so important because judges must be 
impartial, and they must be fair. They have a very difficult job of 
trying to interpret laws and interpreting the Constitution. We as 
Americans feel much safer and we feel much better the more we know that 
the judges in the district courts, the courts of appeal, and the 
Supreme Court are people of the highest caliber.
  Let me tell you that one of the greatest privileges I believe we have 
as Members of the Senate is to recommend the names of potential 
judicial nominees to the President of the United States. I have been 
able to do that several times. It is very much a privilege to me 
personally. In the exercise of that privilege, this is the process I 
followed. I think it is one that honors the position of the judge in 
either district court or the United States Courts of Appeals.
  I asked in each instance seven or eight people in my State of 
Montana--Republicans, Democrats, it didn't make any difference, some 
lawyers, some law professors, businesspeople, people who I respected as 
some of the best and smartest and most able in my State--to come up 
with three names, one for the district court and one for the circuit 
courts of appeal. I asked them to give me the three very best people in 
my State. I don't care whether they are Republicans, Democrats, whether 
they are known as conservatives, whether they are known as liberals, 
just give me the best. And they did. I sat down with each of the three 
and interviewed each of the three for several hours.
  I can tell you it was a very difficult decision because they are 
tremendous people.
  Finally, I decided after a lot of thinking about all of this to 
recommend to President Clinton the name of Don Malloy. Thankfully, he 
nominated Don Malloy to the Federal District Court in the State of 
Montana. He is a terrific Federal judge.
  Why do I say terrific? I say terrific because both the plaintiffs bar 
and the defense bar think he is just super. He is tough, he is fair, he 
runs that court well, and he works very hard. Both plaintiffs and 
defense attorneys think he is very fair and a very good judge. That 
says a lot to me.
  I did the same in the other case. When we had the opportunity to 
recommend to President Clinton the nominee for the Ninth Circuit Court 
of Appeals, it was the same process. I asked for the best. I didn't 
care whether they were Republicans or Democrats. It didn't make any 
difference. Who were the best? The group I selected came back with 
three people--all just terrific people. You would be very proud of all 
of them, Mr. President.
  Again, I had a hard time deciding which one was the best. But I made 
a decision. That person now serves on the Ninth Circuit. His name is 
Syd Thomas. He has the reputation of being one of the best judges on 
the Ninth Circuit Court of Appeals.
  It is very important that we get the best judges. These are people 
who are nominated and serve for life. That is extremely important. It 
is important so they can maintain their independence. It is also 
important since once they are confirmed, they are there forever.
  We self-destruct. As Senators we self-destruct every 6 years. House 
Members self-destruct every 2 years--some Governors 4 years and some 
2--to go back and face the people, as we should go back and face 
reelection. Should we be continued in these offices, if we seek them, 
or not? It causes us to be very close to the people. In some cases, we 
are more attuned to the political currents that flow in our respective 
States. Not so judges. Judges are not to be attuned to political 
currents. They are to be independent, to be impartial, to go beyond 
politics, to do what is right according to what the law says and what 
the Constitution says. That is who we want.
  This is no light matter. One of the strengths of America is our 
independent judiciary. That is not true in most other countries. Most 
peoples in the world live where the continent might be under a system 
where the judiciary is not independent of the executive branch, not 
independent of the legislative branch; rather, it is under the thumb of 
one or the other. They are not independent.
  That is one reason why this country has grown so strongly, why it has 
prevailed, and why we have risen so quickly and so far. It is because 
we have an independent judiciary, by and large, of judges who are 
extremely capable men and women. It engenders confidence so when people 
go before a judge they have the feeling this person can be fair and 
this person can be honest. They may not like the outcome, but at least 
it is a fair process. At least the President or the Governor didn't put 
his thumb on this judge and it wasn't a political decision. It was a 
decision a person made on the merits.
  I say this because we as Members of the Senate have a higher 
obligation in passing upon judges than we do of other nominations--
certainly of other executive branch nominations. When the President 
nominates somebody to be Treasury Secretary or somebody to be Secretary 
of State, or someone to be Defense Secretary, those are important jobs, 
very important. But they are executive branch nominations, and they are 
people who will be working for the President, and by and large the 
President should have people with whom he can work. We should, in my 
judgment, not have quite the same standard for executive nominations as 
we do for judicial nominations.
  For judicial nominations, the standards should be of the highest. 
What should they be, roughly? They should be people who have the 
highest integrity and honesty. They should be people who are extremely 
competent, who know the law, and people who basically don't have an ax 
to grind or an ideological ax to grind; that is, they are basically in 
the mainstream. America is a mainstream country. We are not a country, 
hopefully, of ideologues, of people who have axes to grind, of people 
who want to work with each other and who live with each other. We 
should have judges who reflect America and in fact set the highest 
standards for America.

[[Page 20438]]

  In my opinion, it is not even a close question. It doesn't even begin 
to be a close question. Some of the nominees before the Senate do not 
rise to those standards. They don't begin to. Some do. Most do. But 
some don't. Where they don't, we in a sense should also forget the 
politics and just do what is right. Is this nominee a person so 
qualified that he or she should be a district court judge or a judge on 
one of the courts of appeal? That should be the test.
  It is easy for us to decide what is best and what is not best. We 
should not push pell-mell to follow the political flood and rush on 
either side of the aisle just because the President appointed the 
person, or because a group came out against their nominee we should or 
should not confirm that person.
  This is a high solemn obligation we have, Mr. President. I urge all 
of us to take this responsibility under the Constitution, the 
Constitution which we all swore to uphold, very carefully.
  Mr. President, turning to another matter, I would like to speak about 
an amendment I intended to offer today on the Energy bill that I think 
promotes a good commonsense solution to an issue that I think is very 
important to my constituents in Montana, and that is, protecting 
Montana's magnificent Rocky Mountain Front.
  What is the Front? The Front, as we call it back home, is one of the 
largest and most intact wild places left in the lower 48 States. We 
call it the Front because that is kind of what it is; it is a front. 
Anyone driving across the State of Montana, driving westward, first 
encounters open plains and prairies; and then, suddenly, out in the 
distance, the Rocky Mountains, the Continental Divide just seems to 
jump out of the plains--this huge mountain range--and that is what we 
call the Eastern Front.
  That is the eastern side of the Rocky Mountains which kind of juts 
out from the plains. It is magnificent. It is one of the largest and 
most intact wild places left in the lower 48 States.
  This map I have is not a good map to show the beauty of it. But, 
rather, this is a map that shows where the Front is with respect to the 
Blackfoot Indian Reservation, the oil and gas leases, and some of the 
wilderness areas there. But to the north of the Front is an area here. 
This is the Blackfoot Indian Reservation. Glacier National Park is over 
to the northwest on this map. The area shaded in red is called Badger-
Two Medicine. It is call Badger-Two Medicine in large respect because 
the Blackfoot Indian Reservation has ancestral rights and claims. It is 
a very special area to the Blackfoot. It is also a gorgeous area. I 
have hiked it many times. I think it is a very special place in the 
United States of America. This is sacred ground, Badger-Two. It is the 
area on the map that is shaded red located next to Glacier Park.
  In January 2002, portions of the Badger-Two area, known as the 
Badger-Two Medicine Blackfoot Traditional Cultural District, were 
declared eligible for listing in the National Register of Historic 
Places.
  If you turn just south of the Badger-Two, the Front includes about a 
400-square-mile strip of national forest land and about 20 square miles 
of BLM lands. The BLM lands are scattered in through here, as shown on 
this map. These include three BLM Outstanding Natural Areas. As I 
mentioned, they are located right through this area shown here.
  Now, the Front harbors the country's largest bighorn sheep herd--the 
country's largest--and the second largest elk herd in the entire 
country. That is on the Front.
  The Rocky Mountain Front supports one of the largest populations of 
grizzly bears south of Canada and is the only place in the lower 48 
States where grizzlies still roam from the mountains to their historic 
range on the plains, just as they did when Lewis and Clark came across. 
Actually, they crossed right up through here. Marias Passway is over 
here. So Lewis and Clark, when they came up, saw that area. Actually, 
they came the south. One of the groups came across Marias Pass.
  Because of this exceptional habitat, the Front offers unsurpassed 
hunting, fishing, and recreational opportunities. Sportsmen, local 
landowners, local elected officials, hikers, local communities, and 
many other Montanans have worked for decades to protect and preserve 
the Front for future generations for nearly a century.
  Now let me show you a couple of pictures of the Front so you get a 
sense of the feel for this magnificent landscape. This is a photograph 
of Ear Mountain. It is supposed to be shaped like an ear. If you have a 
good imagination, maybe you can see the ear. Frankly, a couple summers 
ago, I hiked up to the top of the ear with a good friend, Rick Graetz, 
and another friend, Jim Scott, and Jamie Williams, and it was just a 
gorgeous climb.
  When you get to the top of the Ear--this picture, of course, was 
taken a little more in the wintertime, but at the top of the Ear, if 
you look east, you can see forever. It is wonderful.
  We feel very strongly about the Front. The majority of Montanans 
believe very strongly, frankly, that oil and gas leases on the Front 
and throughout Montana's Rocky Mountain Range just don't mix. We think 
that because the habitat is too rich, the landscape too important to 
subject it to the roads and the drills and the pipelines and the 
industrial equipment and the chemicals and noise and human activity 
that come with oil and gas development.
  Let me show you a couple for photos of the Front before I proceed.
  This is typical--and I mean typical. I am not exaggerating. This is 
what Montana looks like. It is what the eastern Front looks like. It is 
gorgeous.
  Here is another picture. This gives you a sense of the pristine 
nature of the area. It is special. We are known as the Big Sky State. 
And when you are out here, you can understand why we call Montana the 
Big Sky State.
  Those are some of the photographs.
  To give my colleagues some idea of what the area might look like if 
oil and gas were developed, I show you a picture of extensive oil and 
gas development along the Canadian Rocky Mountain Front in Alberta.
  This is the Front. If you were to continue from Montana up north, 
this is what it would look like--with the roads and the development of 
the oil and gas leases.
  So we believe such development is not warranted and it is not needed 
in Montana.
  The administration recently completed an inventory of onshore oil and 
gas reserves on Federal lands at five basins in the interior West, 
including the Rocky Mountain Front, which is part of the Montana 
overthrust belt. The administration's study found that the overthrust 
belt area contains the smallest volumes of potential oil and gas 
resources of all five of the western inventory areas.
  In addition, the administration's study concluded that in reality the 
vast majority of Federal lands in the interior West are available for 
leasing with few, if any, restrictions; that is, there are not many 
restrictions in the vast majority of the Federal lands of the interior 
West. And that is, we are not talking about the Front, we are talking 
the interior of the United States.
  Although a large percentage of Federal lands in the Front are 
currently unavailable for leasing, many of those lands are unavailable 
in the Front because they lie under Glacier National Park, they lie 
under Indian lands, and already established wilderness areas. These 
areas comprise much of the Federal land in the Front.
  As shown on the map, here is the Scapegoat Wilderness Area, Bob 
Marshall Wilderness Area, Great Bear Wilderness Area, Glacier National 
Park, Badger-Two, and the Blackfoot. So much of this is already 
restricted. So not only is the Front relatively poor in terms of oil 
and gas reserves, many of those reserves, by congressional mandate, 
Executive order or treaty, will never be available for leasing. So 
there is no oil or gas bonanza on the Rocky Mountain Front.
  My amendment builds upon local conservation efforts in Montana that 
started nearly a century ago; that is,

[[Page 20439]]

back in 1913. It also builds on previous congressional initiatives 
championed by former Members of the Montana congressional delegation, 
such as Congressman Pat Williams and the late Senator Lee Metcalf.
  I ask unanimous consent that a time-line of these efforts be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

        A Conservation History of Montana's Rocky Mountain Front

       Montana's Rocky Mountain Front has been the focus of 
     conservation efforts for over 90 years:
       1913--The Montana state legislator takes the first step in 
     protecting the wildlife habitat of the Rocky Mountain Front 
     by designating the Sun River Game Preserve.
       1928--Bob Marshall takes his first hike into the wild 
     country which will bear his name, starting the Swan Range at 
     Jewel Basin and walking over 100 miles to Holland Lake.
       1940--Secretary of Agriculture H.A. Wallace signs an order 
     uniting three Forest Service ``primitive areas'' and 
     additional lands into the Bob Marshall Wilderness Area.
       1947--The Sun River Game Range, first of five state and 
     private wilderness reserves, is established on the Rocky 
     Mountain Front. Choteau rancher Carl Malone put up the money 
     for the purchase, until the state Fish and Game Department 
     could raise funds.
       1950s--Hunters and ranchers fended off Bureau of 
     Reclamation proposals for the Sun Butte Dam, which would have 
     flooded a vast portion of the upper Sun River.
       1953--Flathead sportsmen initiate campaign to add portions 
     of the Swan Range, Spotted Bear, and upper Middle Fork 
     Flathead River to the Bob Marshall Wilderness.
       1972--Conservationists persuade Congress to add the 
     Lincoln-Scapegoat area to the Bob Marshall Wilderness. This 
     was the first citizen-established wilderness in the country.
       1973--Blackfeet Tribal Council passes resolution declaring 
     the entire Badger-Two Medicine area of the Rocky Mountain 
     Front as ``sacred ground.''
       1978--The Great Bear Wilderness is designated, and a 
     portion of the Teton-Birch Creek area of the Rocky Mountain 
     Front is added to the Bob Marshall Wilderness.
       1983--At the urging of Rep. Pat Williams, the U.S. House 
     Natural Resources Committee orders an emergency withdrawal of 
     the Bob Marshall Wilderness from oil and gas leasing.
       1984-1994--In ten separate bills Congress adds lands to the 
     Bob Marshall Wilderness complex.
       June 1993--Secretary of Interior Bruce Babbitt establishes 
     a moratorium on oil and gas development within the Badger-Two 
     Medicine area. Later extended to 1996.
       May 1994--The U.S. House of Representatives passes H.R. 
     2473 which includes additions to the Bob Marshall Wilderness 
     complex, wilderness study area designation for the Badger-Two 
     Medicine, and mineral withdrawal of lands near Gibson 
     Reservoir.
       February 1997--Montana's Senate Natural Resources Committee 
     rejects an industry resolution urging extensive leasing of 
     public lands within the Rocky Mountain Front.
       September 1997--Lewis and Clark National Forest Supervisor 
     Gloria Flora issues a historic decision to remove all 
     national forest lands within the Rocky Mountain Front from 
     further oil and gas leasing for the next 10 to 15 years.
       January 2001--All national forest land in the Rocky 
     Mountain Front is withdrawn from mineral entry to hard rock 
     mining for 20 years.
       May 2001--The 9th Circuit Court of Appeals upholds Flora's 
     1997 decision to ban new oil and gas leases in the Rocky 
     Mountain Front (the decision had been appealed by industry).

  Mr. BAUCUS. Most recently, in 1997, following significant public and 
private investment and an extensive public comment process, the Lewis 
and Clark National Forest decided to withdraw 356,000 acres in the 
Front of any new oil and gas leasing. This was a significant first step 
in protecting the Front from development, and I wholeheartedly 
supported it.
  However, in many parts of the Rocky Mountain Front, oil and gas 
leases do exist, and they predate that 1997 decision, or they are 
located on BLM lands.
  Many of the leases that predate the 1997 decision are located in the 
Badger-Two Medicine area. That is shown up here on the map, close to 
the Blackfoot Reservation. And that has been under an administrative 
lease suspension since 1996, pending review of the Blackfoot 
Traditional Cultural District.
  This lease suspension could be lifted at any time now that the 
Blackfoot Traditional Cultural District has been declared eligible for 
listing in the National Register of Historic Places.
  All of these existing leaseholders have invested time and resources 
in acquiring their leases. I understand that and am sympathetic. 
Several leaseholders have applied to the Federal Government for permits 
to drill.
  In fact, the BLM and the United States Forest Service plan to begin 
analysis of about four leases in the Blackleaf Area of the front this 
fall.
  These leases are subject of the study proposed in my bill.
  However, history has shown that energy exploration and development in 
the front are likely to result in expensive and time-consuming 
environmental studies and litigation. It will take forever. This 
process rarely ends with a solution that is satisfactory to the oil and 
gas lessee. There are so many interests involved.
  For example, in the late 1980's both Chevron and Fina applied for 
permits to drill in the Badger Two Medicine portion of the Front. After 
millions of dollars spent on studies and years of public debate, 
Chevron abandoned or assigned all of its lease rights, and Fina sold 
its lease rights back to the original owner. It was not worth it.
  We should obviously be fair to those leaseholders. We want them to 
continue to provide for our domestic oil and gas needs, and we want to 
encourage them to find new domestic supplies. But they are going to 
have a long, difficult and expensive road if they wish to develop oil 
and gas in the Rocky Mountain Front.
  My legislation would direct the Interior Department to evaluate for 
study, non-producing leases in the Rocky Mountain front and look at 
opportunities to cancel those leases in exchange for allowing 
leaseholders to explore for oil and gas somewhere else, namely in the 
Gulf of Mexico or in the State of Montana. In conducting this 
evaluation, the Secretary would have to consult with leaseholders with 
the State of Montana, the public and other interested parties.
  When Interior concludes this study in 2 years the bill calls for the 
agency to make recommendations to Congress and the Energy and Natural 
Resources Committee on the advisability of pursuing lease exchanges in 
the front and any changes in law and regulation needed to enable the 
Secretary to undertake such an exchange.
  Finally, Mr. President, my bill would continue the current lease 
suspension in the Badger-Two Medicine Area for three more years. This 
lease suspension would only apply to the Badger-Two Medicine Area, not 
the entire front.
  This suspension will do two things: First, it will give the Secretary 
adequate time to conduct this study and make recommendations to 
Congress; second, it will give the Blackfeet Tribe some breathing room 
to negotiate with the Interior Department about the long-term 
protection of Blackfeet historic and sacred sites in the Badger-Two 
Medicine area.
  That's it. That is all my amendment would do. It doesn't predetermine 
any outcome. It doesn't impact any existing exploration activities or 
environmental review processes.
  It just creates a process through which the Federal Government, the 
people of Montana and leaseholders can finally have a real, open and 
honest discussion about the best way to resolve the status of oil and 
gas leases along the Rocky Mountain front. My amendment is balanced and 
fair to all parties.
  We look for ways to fairly compensate leaseholders for investments 
they've made in their leases if they decide to leave the front rather 
than waste years and millions fighting to explore for uncertain--and 
small--oil and gas reserves. And, a lot of Montanans, including me, 
just don't want to see the front developed, and they will fight to 
protect it.
  Here is the alternative: So, developers can wait years, or decades, 
or most likely never, for oil and gas to flow from the front.
  Or we can look at ways to encourage domestic production much sooner, 
in much more cost effective, appropriate and efficient ways somewhere 
else.
  Let me quote from an editorial in the Missoulian, a Montana paper 
based in Missoula, MT, that emphasizes what I hope my bill will 
accomplish. They said:


[[Page 20440]]

       One of the things we ought to do, as part of setting our 
     national energy policy, is quit squandering our own energy 
     fighting the same old battles that will never yield a single 
     BTU. Montana's Rocky Mountain Front has for too long been a 
     battlefield for just that sort of energy-sapping conflict . . 
     . There are no known reserves of oil and gas in there--just 
     speculation that it might, based on the fact that similar 
     geology north of the Canadian border has proved productive.

  That editorial concluded by stating that my amendment ``acknowledges 
the property rights of lessees, but also the reality that they likely 
will be stymied indefinitely in any attempt to drill along the front. 
This is a proposal that protects a place Montanans so clearly desire to 
preserve. And it offers an opportunity to focus public and private-
sector energies on actually producing useful energy.''
  Montanans have spoken loudly and forcefully on this issue. We don't 
want any drilling in the front.
  Montana is a natural resource-rich State and we are proud of our 
natural resource heritage. Montana has made, and continues to make, 
tremendous contributions to this Nation's economy through the 
development of its precious metals like copper, platinum, palladium and 
gold, through development of its coal, its oil and gas, its timber, and 
other natural resources. We will continue to do so because that's the 
right thing to do for Montana's economy and the Nation.
  But the front is special to Montanans. Because we're also proud of 
our outdoor heritage, of preserving special places to take our kids 
hunting and fishing and hiking, just like we did when we were kids. We 
balance these two Montana priorities all the time. In this case, 
Montanans determined that the resources that might be under the front 
just don't justify endangering the front's unparalleled landscape.
  That's why this amendment is so important, so we can strike the right 
balance in Montana on the Rocky Mountain Front. Let's listen to the 
locals.
  I ask my colleagues for their support.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. STEVENS. Mr. President, I would like to utilize the time 
allocated to me on H.R. 2738, the United States-Chile free-trade 
agreement.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                    U.S.-CHILE FREE-TRADE AGREEMENT

  Mr. STEVENS. Mr. President, I objected to the consideration of this 
bill by unanimous consent because I wished to make this statement 
concerning the salmon fishing industry.
  The U.S. salmon fishing industry is facing an economic crisis. Chile 
has dramatically increased their production of farmed fish and flooded 
the U.S. market with pen-raised, chemically altered farmed salmon. Last 
year the United States imported $400 million in farmed salmon from 
Chile--a 100 percent increase from 1997. In 1998 Chile exported 51,000 
metric tons of farmed salmon to U.S. markets. By 2002 Chile's farmed 
salmon production capabilities doubled and exported over 100,000 metric 
tons of farmed salmon fillets to U.S. consumers.
  This farmed salmon comes into the U.S. each year largely unrestricted 
and considering a study that was released this week on the high levels 
of PCBs and other pollutants in farmed salmon, we may want to consider 
greater testing of this product. Additional analysis may be needed to 
determine the levels of contamination in farmed salmon and warn 
consumers of any potential health risks.
  It is these factory-scale farms that have developed contaminated, 
genetically altered fish and created a glut in the domestic salmon 
market, causing prices for wild-caught salmon to plummet. Increased 
competition from farmed salmon has significantly impacted the 
livelihoods of the men and women that participate in the salmon 
fishery. The U.S.-Chile free trade agreement will not address any of 
the adverse economic impacts faced by the U.S. salmon industry.
  These adverse effects are not limited to the salmon industry alone. 
In my state of Alaska, the economy has taken the brunt of this crisis 
with processing plant closures, lost jobs and fishing boats that 
remained tied up at the docks. The Alaska commercial fishing industry 
as a whole is feeling the effects of deflated price in salmon.
  Alaska's commercial fishing industry is a primary employer, providing 
47 percent of private sector jobs, and is second only to the oil 
industry in generating revenue to the state. In 2001, the fishing 
industry in Alaska provided tax revenues to the State of over $51 
million, down roughly $8 million from 2000. The Division of Commercial 
Fisheries in Alaska reports that more than 4.7 billion pounds of fish 
and shellfish with an ex-vessel value of $871 million were harvested in 
waters off Alaska in 2001. Of this amount the ex-vessel value for 
salmon in 2001 was $229 million.
  The Alaska Department of Fish and Game reports the ex-vessel value of 
Alaska's 2002 salmon season was roughly $140 million for a catch of 130 
million fish.
  This continues a trend of declining season values for salmon. The 
Bristol Bay sockeye salmon catch received its lowest value since 1977, 
receiving approximately $25 million for 10 million fish. At 40 cents a 
pound, Bristol Bay salmon in the 2002 season were at prices lower than 
those received nearly 30 years ago.
  Western Alaska fishing-dependent communities were extremely hard-hit 
by the depressed prices in salmon and declared an economic disaster 
area by the State of Alaska. The administration recognized this 
situation and last fall directed the Economic Development 
Administration, under the Department of Commerce, and the Labor 
Department to assist these communities experiencing sudden and severe 
economic dislocation.
  Several antidumping investigations were initiated against Chile. 
There appeared to be strong spikes of increased imports of Chilean 
farmed-salmon during the summer months, the only time of the year that 
fishermen can deliver fresh wild-caught salmon to market. This is 
obviously unfair advantage taken of these exporters in the United 
States. The International Trade Commission ruled that there was a 
reasonable indication that material injury was caused to U.S. producers 
of salmon. Subsequently, antidumping orders were placed on various 
Chilean companies. These cases involved U.S. aquaculture concerns that 
were ultimately bought out by foreign companies and are strong evidence 
that the U.S. salmon industry has been adversely affected by 
unrestricted imports of Chilean farmed salmon.
  Considering this history of bad acts and numerous concerns raised by 
the Alaska delegation and Alaska seafood producers, the U.S. trade 
representative was put on notice about the problems faced by the 
domestic salmon industry. However, the trade representative only 
negotiated recommendations that Chile make their trade practices more 
transparent.
  The fact is, U.S. fishermen are treated far differently than other 
contributors to the domestic economy. Last year we passed an 
unprecedented farm bill that provided significant relief for U.S. 
farmers; the steel industry benefits from tariffs on imported steel; 
tariffs are levied on Canadian timber; and tariffs have increased 
substantially on imports of farmed catfish. The salmon industry does 
not receive any such protections, and it should have received a greater 
recommendation from our trade negotiators.
  The reality for the salmon industry is they must go it alone and hope 
they can weather this dramatic change in world markets for salmon. My 
ardent hope is for this fishery to survive, and it can only survive if 
the trade representative and the other negotiators for the United 
States wake up.
  This year, we have not taken any further efforts to block this bill. 
We will not do so. I want to put the Senate and administration on 
notice that this is the last year this will be allowed to continue. 
With the increased information we now have concerning the harm that 
this fish causes to our consumers--and we know the harm that is already 
caused to fishermen--it is time for the Congress and administration to 
work to protect our wild salmon production, and to help it get to 
market and not face this unreasonable competition.

[[Page 20441]]

  I point out, the spikes in their imports take place when our fish are 
available. They are destroying the price by flooding the market with 
their product, which is a tainted product. Something ought to be done 
about it soon.
  Mr. President, I yield back the remainder of my time and suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. MURKOWSKI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Cornyn). Without objection, it is so 
ordered.
  Ms. MURKOWSKI. Mr. President, in 2002, Congress passed legislation 
providing more than $270 billion for farmers over a 6-year period. This 
included price support programs for commodities such as: wheat, cotton, 
rice, oilseeds, dairy products, peanuts, sugar, wool, and honey, just 
to name a few. This is not to mention other programs in existence today 
that buoy the price of products like lamb meat and apples.
  Our Nation's farmers receive subsidies for their product through the 
Commodity Credit Corporation, to ensure their economic livelihood when 
market prices are low.
  Overall, in 2000, corporate credit payments reached a record $32.3 
billion for all farm-related programs and activities.
  Also in 2002, the President imposed safeguard tariffs of up to 30 
percent on a broad range of steel products. There were anti-dumping and 
countervailing duties of 29 percent slapped on imports of softwood 
lumber from Canada.
  Taken together, 2002 was a banner year for industries seeking relief 
from foreign competition.
  Just recently, the U.S. International Trade Commission upheld a 
determination to impose import duties on Vietnamese catfish--actually, 
basa--of up to 64 percent, a victory for domestic catfish farmers.
  Unlike those other industries in the United States that face foreign 
competition, America's salmon fishermen are not on the receiving end of 
Federal largess. There are no safeguard tariffs put in place, nor are 
price supports implemented to aid this important industry. Suppliers of 
imported salmon do not face tariff rate quotas that benefit so many 
other domestic industries.
  In 2002, America's salmon fishermen faced imports of nearly $400 
million worth of Chilean salmon, the vast majority of which is farm-
raised, which we consider to be a distinctly inferior salmon to the 
wild-caught salmon that comes from Alaskan waters. By comparison, in 
1997, Chile imported less than $200 million worth of salmon. The amount 
of imports from that country has sky-rocketed in the past few years.
  There is a direct correlation between the increasing amount of 
imported Chilean salmon and the decline in price that fishermen receive 
for their catch.
  Between 1998 and 2002, Chilean salmon exports to the United States 
more than doubled from just less than 51,000 metric tons to over 
102,000 metric tons. During the same time period, the price of sockeye, 
or red salmon, fell from $1.23 a pound to $0.55 a pound.
  Now, while Alaskan fishermen are being put out of work by these 
increasing imports, Congress is set to provide preferential trade 
status to Chilean companies, to provide Chilean companies with greater 
access to the United States' marketplace.
  I fully support the concept of free and fair trade. I recognize the 
benefits that trade gives to developing nations: strengthening a market 
economy; growing a middle class; and promoting the seeds of democracy.
  Trade provides the American consumer with the ability to purchase a 
quality product at a reasonable price.
  I also appreciate that many American companies support this 
preferential trade agreement as a means to level the playing field with 
Canadian and European competition. I am concerned, however, that this 
trade agreement is not fair to the State of Alaska and Alaska's 
fishermen.
  This past April, I wrote to U.S. Trade Representative Bob Zoellick 
outlining my concerns about the impact a Chile Free Trade Agreement 
would have on Alaska's fishermen. The response I received suggested 
that the provisions of this preferential trade agreement ``strike a 
reasonable balance between the very strong export interests of Chile, 
and the concerns of Alaskan salmon producers.''
  I have to ask, at what point are the concerns of Alaska's salmon 
producers ever addressed in this trade agreement? How is eliminating 
all tariffs on imported salmon a reasonable balance to putting Alaskan 
fishermen out of work?
  I am told that Chile will eliminate all of its duties on fresh and 
prepared seafood products--that the United States is Chile's seventh 
largest supplier of fresh and frozen seafood--that this is a reasonable 
balance.
  For a reality check, let's look at the numbers. And these numbers 
come from the U.S. Department of Agriculture, Foreign Agriculture 
Service.
  Again, in 2002, Chile exported nearly $400 million worth of salmon to 
the United States. Over 100,000 metric tons.
  On the other side of the equation, in 2002 the United States exported 
just $3,000--not millions--worth of canned salmon and zero dollars 
worth of salmon not in a can. So we have $3,000 versus $400 million.
  In whose book is this a reasonable balance for America's salmon 
fishermen and Alaska's fishing-dependent communities? It is not just 
the salmon we are talking about. In 2002, Chile imported a total of 
$809 worth of fishery products from the United States, the vast 
majority of which fell under the catchall category of ``other fishery 
products.''
  And while we are busy putting Americans out of work, they have 
nowhere to turn to seek relief. Alaska fishermen are not generally 
eligible for traditional trade adjustment assistance programs. They are 
self-employed and not part of a firm or group of workers.
  Many fishermen independently own and operate their vessel with the 
help of their family, selling their catch to the local fish processor 
or cannery. They do not work for a company or firm, nor do they receive 
unemployment benefits when they are unable to fish.
  In essence, America's fishermen have been, for too long, treated like 
a second-class citizen when compared with America's farmers or steel 
workers. While these workers have their income supplemented by federal 
dollars, fishermen face foreign competition to the best of their 
ability. And trade agreements like this, only deepen their plight.
  As a result, I cannot support granting preferential trading rights to 
Chilean companies.
  Not when Alaskan fishermen are being put out of work because of 
increasing imports of farm-raised salmon. Alaskan fishermen will tell 
you receiving TAA benefits would be nice, but it is not the same as 
being able to do their jobs, to put food on their tables to feed their 
families, to ensure that their children are cared for and have a future 
filled with hope.
  Our fishermen face an uphill battle in keeping their jobs when faced 
with the onslaught of imported Chilean salmon. Maybe the rest of the 
nation benefits from this trade agreement. Alaska suffers.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Cornyn). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. JEFFORDS. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. JEFFORDS. Mr. President, I send to the desk a resolution.
  The PRESIDING OFFICER. Is the Senator asking the resolution be 
introduced and referred?
  Mr. JEFFORDS. It is my intention to have the resolution introduced, 
that is correct.
  The PRESIDING OFFICER. The Senator from Vermont is recognized.
  Mr. JEFFORDS. I thank the Chair.
  (The remarks of Mr. Jeffords pertaining to the submission of S. Res. 
209 are located in today's Record under

[[Page 20442]]

``Submission of Concurrent and Senate Resolutions.'')
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, we are in this very odd circumstance where 
we are waiting to learn what the decision will be with respect to the 
Energy bill. As one member, I send a message to those who are 
deliberating that if the best we can do is pass last year's bill, let's 
do it. We have a circumstance in which our energy dependence continues 
to grow. We are now more than 50 percent dependent on foreign sources 
of crude oil. That makes America vulnerable.
  While last year's bill is not perfect, it did have broad bipartisan 
support and clearly will improve the energy situation in this country.
  I believe last year's bill passed on a vote of 88 to 12, or very 
close to those numbers. It received long and careful attention on the 
floor. I believe there were over 140 amendments considered. I believe 
there were over 30 rollcall votes. I think there were actually 35 
rollcall votes on that bill. We spent weeks deliberating the provisions 
of the Energy bill last year.
  I would be the first to say I would prefer that we had concluded work 
on the Energy bill this year. I, for one, don't know why we wound up 
spending hours and hours talking about judges and engaging in what last 
night I thought was a very ugly scene on the floor of the Senate. 
Frankly, I was embarrassed for the Senate, to watch some of the 
statements being made last night. That did not reflect well on this 
body.
  There should not be a religious test in any way for any position in 
the United States of America. This is a country dedicated to religious 
freedom. Whether people choose to be actively engaged in a church or 
not should play no role in the consideration for positions of 
responsibility in this country.
  Thomas Jefferson, who played such a critical role in the formation of 
our Nation and its institutions, had written on his gravestone what he 
believed were his greatest accomplishments. One of those was the 
religious freedom that was part of the Constitution of the State of 
Virginia, a commitment to religious freedom which he thought was 
fundamental to the United States.
  I hope cooler heads are going to prevail when we return in September 
and we are not going to see the kind of personal invective that 
infected this floor last night. That was an ugly scene. That is not the 
road we should go down as an institution. It is not the road we should 
go down as a country.
  We can have a strenuous debate on candidates for judges. We do not 
have to slip over into a discussion of religion or who is a good 
Catholic or who is not so good a Catholic. My goodness, what is going 
on around here? That is not the Senate.
  Returning to the Energy bill, we have an obligation. We have an 
obligation to reach a conclusion and, if the vehicle that allows us to 
reach a conclusion is the bill that was passed last year, let's do it. 
Let's do it on a bipartisan basis. Let's do it now. That bill had a lot 
of good and productive provisions in it that will make a meaningful 
difference over time.
  No, it is not a perfect bill. It is the product of compromise. That 
is what this system is about. We do not all get our own way. None of us 
gets our own way. But if we work together, we can make meaningful 
progress.
  I think last year's bill represents that. I urge my colleagues, we 
are not going to complete the bill that was out here. There are still 
hundreds of amendments pending. I have amendments pending on that bill. 
I have amendments pending I would like to have considered that I think 
are serious, productive amendments. But I am willing to forgo the 
opportunity to offer those amendments to get a bill passed.
  When we get to September we are going to have appropriations bill 
after appropriations bill demanding our attention. The end of the 
fiscal year comes at the end of September. I plead with my colleagues 
on both sides, let's end this session on a productive and bipartisan 
note. Let's end the squabbling and the personal invective that has 
infected this body in the last 48 hours. It is not healthy. It is not 
productive. It does not build momentum for the work that faces us in 
the fall.
  Let's get back to attempting to produce legislative outcomes that are 
positive for this country and that reflect well on this body. We have 
an opportunity to do it.
  I say to my colleague from Vermont, who has deep feelings about 
energy policy and environmental policy, and has been a leader in this 
body on these issues, I say to him and others of our colleagues, 
please, let's come together and pass last year's bill and move it to 
conference and there try to improve it further. That strikes me as the 
only responsible course now remaining before us. There is no 
conceivable way we can finish work on the Energy bill that we have been 
contemplating. It is not going to happen.
  I believe it would be irresponsible to leave here without finishing 
action on a bill. We have a bill on which a tremendous amount of time 
was spent last year. It does improve the energy circumstance for this 
country and we ought to pass it.
  I hope somebody is paying attention. I thank my colleagues for 
listening. I hope we can move this ball off dead center and reach 
conclusion.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Vermont.
  Mr. JEFFORDS. Mr. President, I intend to use an extensive length of 
time on the Chile-Singapore free-trade agreements. I see my good friend 
from Iowa. If he would desire to precede me, I would be happy to yield 
to him.
  Mr. GRASSLEY. No, go ahead.


                 Chile-Singapore Free-Trade Agreements

  Mr. JEFFORDS. Mr. President, I rise today to express my strong 
opposition to the implementing legislation for the Chile-Singapore 
free-trade agreements. I do so not because I oppose these trade 
agreements but because I have serious concerns about the effect of 
these agreements on congressional authority over immigration and the 
negative effects it will have on the needs of our unemployed and 
underemployed citizens.
  I know the importance of trade on our country and my State. In fact, 
trade with Canada and the rest of the world is an important part of 
Vermont's economy, which has led me to be a strong advocate of free-
trade agreements in the past.
  During my time in Congress, I have worked to promote free trade with 
other countries, both near and far. For example, I voted for the North 
American Free-Trade Agreement. I did so not because I believed it was 
crucial that we begin to integrate the economies of North America. I 
was concerned about the disparities in the economic opportunities 
available to Mexicans and Americans. I thought that only by giving our 
southern neighbors access to the engine of the American economy could 
we address important issues such as poverty, immigration, and 
exploitative labor practices.
  I am aware, though, of the downside of international trade. When 
factories are closed or jobs move offshore because of more liberal 
trade policies, constituents have taken me to task because of my 
support for free trade. I do not blame them. Our trade policy must 
include strategies to help those adversely affected by the trade.
  I have long supported a vigorous trade adjustment assistance program. 
In addition, I believe it is important that trade agreements include 
strong environmental and labor provisions.
  Expanded trade should not lead to an ``environmental race to the 
bottom'' resulting in relaxation of environmental or labor standards 
that give our trading partners a competitive advantage over U.S. 
businesses subject to more rigorous regulation. Because of its 
provisions guarding against relaxation of environmental controls and 
labor standards, I supported the Jordan Free Trade agreement during the 
last Congress.
  I have also voted in favor of fast track procedures. I appreciate 
that foreign trade negotiators will never put their best offers on the 
table if they have to worry that Congress will endlessly amend a 
negotiated trade agreement. But when I supported fast track procedures, 
I expected them to be limited to areas related to trade. In giving

[[Page 20443]]

up our rights to debate and amend trade legislation, I expected and 
intended that those concessions would relate to issues that are 
specifically trade-related.
  However, the free trade agreements we face today violate this belief. 
My opposition to these agreements is not based on what I consider to be 
the crux of free trade agreements, the reduction of tariffs, it is 
based on something more. My stance today is based on my concern with 
the erosion of Congress' constitutional power, and the treatment of our 
nation's un- and under-employed.
  As I mentioned earlier, I supported the imposition of fast-track 
procedures for trade agreements when it passed Congress in 2002. 
However, what I see in front of us today, and the rumor that these 
agreements are to be the template for future agreements, makes me 
reconsider this support.
  The reason for this change lies squarely in the provisions of this 
free trade agreement that affect our immigration laws. These agreements 
create new categories of visas with different standards than currently 
exist in our immigration law, a law that has been considered and passed 
by Congress.
  I have looked in my copy of the Constitution and it clearly states in 
Article 1, Section 8, Clause 4 that Congress has the power to establish 
a uniform rule of naturalization. Congress, not the United States Trade 
Representative, has this authority. What we have in front of us today 
is the executive branch telling Congress what the nation's immigration 
policy should be, and I for one could not let this go unchallenged.
  In addition, this policy that is being forced upon Congress is not in 
any way uniform. These bills create new categories of visas, modify the 
standards and requirements of existing limits, and do so for people 
from only two countries. Is this any way to make immigration policy?
  Rhetorically, I will answer that it is, if you work in an executive 
branch that is interested in usurping Congressional power for 
yourselves, and can do so by replicating these provisions in future 
free trade agreements.
  Finally, and what I consider to be the greatest insult to 
Congressional power over immigration, Congress has very limited ability 
to change these provisions in the future. Congress could decide, with 
the full support of the administration at that time, that the need for 
temporary H-1B visas no longer exists. However, Congress could not 
modify or remove the provisions contained in these free trade 
agreements without the assent of Chile and Singapore.
  We need to wake up in Congress to what enactment of these provisions 
means. Ultimately, if we keep passing this type of legislation there 
will be no immigration law for Congress to oversee, it will all be 
negotiated by the United States Trade Representative with other 
countries.
  We need to make a stand and let the administration know that this 
type of negotiating will not be accepted.
  While it is commendable to pass, and I fully support, a Sense of the 
Senate resolution stating that future trade agreements should not 
contain similar type provisions, we need to change the fast track 
authority to ensure that power-hungry administrations can no longer put 
the Congress in this quandary. I pledge to work today with all 
interested members to ensure that the constitutional right and power of 
the Congress over immigration law is protected.
  I would like to take this opportunity to more fully inform my 
colleagues on how these free trade agreements differ from current law 
and what they will be enshrining permanently in our immigration law if 
the Senate passes these bills.
  The Chile and Singapore Free Trade Agreements create an entire new 
category of visas for professional workers separate from the existing 
H-1B program. This legislation would allow 6,800 professional workers 
into the United States under this new visa each year with 5,400 coming 
from Singapore and 1,400 from Chile. Yet, under the current H-1B 
program 4,000 workers from these two countries are already coming into 
the United States each year. In addition, as we are not currently 
hitting the cap of the current H-1B program, why do we need to create a 
new type of visa for another 2,800 workers? I believe the differences 
between the current H-1B program and the new type of visa will answer 
that question.
  First of all, the proposed Chile and Singapore agreements do not 
require H-1B dependent employers to make attestations that they are: 
No. 1, seeking to recruit U.S. workers; and No. 2, that they are not 
displacing U.S. workers. These two provisions in current law help 
ensure that employers do not negatively impact the U.S. labor market, 
and yet they are completely missing from the Chile and Singapore 
implementing legislation. They are missing.
  This omission will enable employers of foreign workers to operate 
with less oversight from the Department of Labor. The legislation goes 
so far as to deny the department the right to self-initiate 
investigations based on information of abuse or fraud in the Chile and 
Singapore visa programs. This will allow employer abuse to go 
unchecked.
  Secondly, the Chile and Singapore legislation does not explicitly 
forbid employers from demanding that their employees reimburse them for 
the $1,000 H-1B visa application fee. Beyond this, if Chile or 
Singapore decides to challenge the fee the agreements stipulate that a 
panel of international trade lawyers and not the administration or 
Congress makes the decision on what fees are allowed.
  Another crucial difference between the impending legislation and 
current law is that the Chile and Singapore agreements do not limit the 
number of times that an individual is able to renew his or her visa, 
enabling the non-immigrant to remain in the United States on a 
permanent rather than temporary basis.
  This stands in sharp contrast to the current H-1B program that puts a 
6-year limit on non-immigrant visas. Consequently, an employee with one 
of the new visas could legally remain in the United States 
indefinitely.
  Finally, the agreements define the term ``specialty occupation'' 
differently than current H-1B law. The new visas will only require that 
the nonimmigrant have knowledge that is ``specialized'' as opposed to 
the ``highly specialized'' knowledge demanded by the current H-1B law. 
This could be a substantial lessening of the requirements professional 
workers currently have to meet to be able to escape our immigration 
law.
  What needs to be remembered concerning the substantial differences 
between this new visa category and the current H-1B program is that 
these provisions can not be changed by Congress. That may sound 
unusual. I think it is, so hopefully it will not ever be allowed. But, 
anyway, that is the way it is stated.
  These provisions to our immigration policy are in effect a permanent 
change to our immigration law that was negotiated by the United States 
Trade Representative and not considered in the normal process by 
Congress.
  My concern with these immigration provisions extends beyond its 
impact on Congress' constitutional authority, to its affect on our 
Nation's unemployed and underemployed. The United States has a serious 
problem right now with our economy.
  The current unemployment rate is at a 9-year high of 6.4 percent. Mr. 
President, 15.3 million people are unemployed, underemployed in part-
time jobs, or have given up looking for work. In June, the United 
States lost 56,000 manufacturing jobs, bringing the total to 2.4 
million manufacturing jobs that have disappeared since January 2001. 
Finally, the Nation's economy has shed 3.1 million private sector jobs 
since President George Bush took office. That is 3.1 million private-
sector jobs lost since President Bush took office.
  The preceding statistics lay out a serious problem, but are we 
considering legislation to address these problems today? No, to the 
contrary, we are considering these free trade agreements that will 
exacerbate an already terrible

[[Page 20444]]

crisis. We should be expanding the Federal financial commitment to 
education and job training initiatives, not expanding the number of 
foreign workers allowed in this country.
  This is where our answer lies. Since this Nation was founded in the 
late 1770s, we have struggled with the roles the various parts of our 
Government should play in our education delivery system. In the late 
1940s, with the creation of the GI Bill, the percentage of the entire 
federal budget dedicated to education was 10.7 percent. Some 50-plus 
years later, that amount has dwindled to slightly less than 3 percent, 
which includes elementary, secondary, and higher education.
  The first significant financial influence by the Federal Government 
into elementary and secondary education occurred in 1965. Under the 
leadership of President Johnson, the original Elementary and Secondary 
Act came into existence. The original purpose was to distribute money 
to compensate for inequality of educational opportunity and to 
stimulate plans for school integration.
  Throughout the last 38 years, that purpose has continued to be the 
foundation of the Elementary and Secondary Education Act. However, 
sufficient funding has never been provided and the purpose has yet to 
be fulfilled. Since its inception in 1965, Title 1--the heart of the 
ESEA law has served less than 50 percent of the children who should be 
served under the program.
  Horace Mann, who is often credited with developing the American 
public school system said--and I am paraphrasing--that every human 
being that comes into the world has the right to an education. Horace 
Mann made that statement in the 19th century. Two centuries later, we 
seem to still be baffled as to how we provide a quality education to 
all who seek it. I don't believe the answer is that complicated.
  First and foremost, the Federal Government must increase its role in 
funding. It must reach back into history and return to dedicating 10 
percent of the entire Federal budget to education.
  Right now, in this fiscal year, the Federal Government is providing 
$50 billion in discretionary funding for education. This compares to 
almost $400 billion for defense programs.
  Providing sufficient funding for defense is very important. However, 
it is just as important to provide sufficient funding and leadership to 
have the world's greatest education system. And we do not.
  Some may ask, where can we find the money for education? We can find 
the money when we all finally understand that it will be a severe 
detriment to the survival of this Nation if we do not.
  By vastly improving the Federal Government's monetary responsibility 
to education, we would go a long way to provide the resources needed 
to: first, serve every student who needs title I assistance; next, 
cover many of the mandates included in the No Child Left Behind Act--
the President's new law--next, provide for quality early childhood 
education; also, provide additional funding for Pell Grants and other 
student financial aid programs to improve access to postsecondary 
education; in addition provide quality professional development for all 
school personnel, with a special emphasis on math and science; and 
provide the full Federal share for the Individuals with Disabilities 
Education Act, IDEA.
  When I first arrived in Congress in 1975, one of the first bills I 
worked on was the law that created special education, now known as the 
Individuals with Disabilities Education Act, IDEA. The purpose of this 
legislation is to ensure that children with disabilities receive the 
special education and related services they need and are 
constitutionally entitled to receive.
  We recognized that children with disabilities often require 
specialized services and that educating children with disabilities 
could be twice as costly as educating children without disabilities. 
Therefore, we authorized the Federal Government to pay up to 40 percent 
of each State's excess cost of educating children with disabilities. 
Unfortunately, we have failed to actually provide the States with that 
40 percent we promised. We are currently only providing slightly over 
17 percent of the 40 percent we promised 28 years ago. That promise is 
far from being fulfilled.
  Our education system is also stressed at the postsecondary level. We 
have a higher education system that is the envy of the world. However, 
many in this country are unable to pursue postsecondary education 
opportunities, not only because of not being prepared academically, but 
also because of the astronomical financial burden.
  One-third of all seniors graduating from higher education 
institutions graduate with more than $20,000 in Federal loan debt. The 
financial strain is having a direct impact on our job market.
  Almost every community is facing a teacher shortage. How many 
graduates leaving college with at least a $20,000 debt are willing to 
sign up for a teaching job that pays on average a beginning salary of 
about $25,000 to $35,000?
  The cost of higher education is a particular problem for the high-
tech industries and the health care industries. A number of jobs in 
these two areas require postgraduate work. Many do not go on to 
graduate programs because they can't finance the first part of it. This 
has been a factor in the dramatic increase over the last decade of the 
number of H-1B visas that have been issued, which I talked about 
earlier. Our country is lacking the skilled workforce necessary to 
address many of our needs.
  One initiative designed to address our job training needs is the 
Workforce Investment Act, which provides job-training activities for 
adults and youth. Unfortunately, Federal funding for job training 
programs have dropped $1.63 billion since 1985. These funds have 
dropped at the time when they have been needed the most and we are 
cutting.
  Mr. President, these are the initiatives that we should be focusing 
on to ensure that our citizens are prepared for and qualified for these 
jobs, not legislation that is going to fill these jobs with foreign 
workers.
  The Senate needs to take a stand today. We need to make this stand 
not only for the protection of Congressional authority, but also for 
the protection of our unemployed and underemployed citizens.
  Mr. President, I reserve the remainder of my time and yield the 
floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, would I be in order to speak on the 
Chile and Singapore free-trade agreements?
  The PRESIDING OFFICER. Without objection, the Senator may use his 
time for that purpose.
  Mr. GRASSLEY. Mr. President, I rise in strong support of these two 
trade bills.
  The Chile and Singapore trade agreements are state-of-the-art 
agreements that will provide real economic and strategic benefits to 
America's workers, farmers, consumers and industry.
  S. 1416, the U.S.-Chile Free Trade Agreement Implementation Act, 
implements into law our first bilateral free trade agreement with a 
South American country. And I think it is appropriate that Chile be one 
of the first.
  Chile's open economy is a model for much of Latin America. Because of 
its free market philosophy, Chile is one of the fastest growing 
economies in the world. Over the past decade it has established itself 
not only as a strong democracy, but also as a leading advocate of free 
trade.
  Chile already has trade agreements with sixteen other countries, 
including Mexico, Canada, Mercosur, and the European Union. As a 
result, its trade with these economies has grown while the U.S. share 
of Chilean imports has dropped over 30 percent between 1998 and 2002. 
Years of delay in reaching a free trade agreement with Chile has 
reportedly cost U.S. companies over $1 billion in lost export 
potential. Clearly, it is time for us to get back in the game.
  I also want to note how pleased I am about the strong agriculture 
market access provisions found in the U.S.-Chile FTA. More than three-
quarters of U.S. farm goods exported to Chile will be duty free within 
4 years of the agreement's implementation. Immediate elimination of 
tariffs on U.S.

[[Page 20445]]

products will provide up-front gains to U.S. exporters and, 
importantly, will level the playing field for our farmers, ranchers and 
workers as they compete with products from the EU and Canada. These 
provisions are complemented by the removal of unnecessary sanitary and 
phytosanitary barriers to U.S. agriculture exports.
  But this agreement doesn't just benefit U.S. agriculture. It also 
provides groundbreaking market access across the board. The agreement 
will immediately eliminate tariffs on more than 85 percent of all U.S. 
goods, with most of the remaining tariffs eliminated within four years.
  The U.S.-Chile FTA also opens new opportunities for U.S. banks, 
insurance, and telecommunications services. It provides new protections 
for U.S. investors and high levels of intellectual property rights 
protection. The U.S.-Chile FTA can also strengthen momentum in the 
ongoing negotiations to create a Free Trade Area of the Americas. In 
short, the agreement vastly enhances our economic opportunities in a 
growing and important region of the world.
  S. 1417, the U.S.-Singapore Free Trade Agreement Implementation Act, 
implements into law our first free-trade agreement with an Asian 
Pacific nation. Singapore is our largest trading partner in Southeast 
Asia and our twelfth largest in the world. Singapore is also a strong 
ally in the war against terrorism.
  The U.S.-Singapore FTA is good for America. It opens up new markets 
and creates new opportunities for many sectors of our economy.
  This FTA will guarantee fair and non-discriminatory treatment for 
U.S. services firms. This benefits our service industries, such as 
banking, insurance and the telecommunication industries.
  The agreement also includes state-of-the-art provisions on e-
commerce, transparency and competition, and strong intellectual 
property rights protection. This agreement continues our goal toward 
greater trade liberalization and higher standards, not only in the 
Pacific, but throughout the world.
  Both agreements we are discussing today are the first to be 
considered under Trade Promotion Authority, or TPA, procedures. This is 
the first time in our history that the Senate has approved two free 
trade agreements in a single day. The fact that we were able to achieve 
this goal is a testament not only to the high quality of these 
agreements, but also to the power of Trade Promotion Authority.
  It was almost a year ago today that the House and Senate gave final 
approval to the conference report for the Trade Act of 2002. This 
historic piece of legislation empowered the President, for the first 
time in almost a decade, to negotiate free trade agreements utilizing 
Trade Promotion Authority procedures. Today, with the passage of these 
two agreements, we are using TPA to take some of our first steps toward 
reengaging the world through international trade. It is a welcome 
development.
  A fundamental part of TPA procedures is consultations. The TPA act 
requires that the Administration consult closely with Congress 
throughout the negotiating process. I know the Bush administration took 
these consultation requirements to heart. A number of modifications to 
the agreements and to the implementing legislation were adopted as a 
result of these procedures. That is the way the process is supposed to 
work--a partnership between the Congressional and executive branch to 
craft the best trade agreements for the American people.
  Like any partnership, the more you put into it, the more you get out 
of it. I am disappointed that some of my colleagues who did not engage 
on these agreements early in the process are now complaining about some 
of the provisions they contain. I hope we can avoid similar problems as 
we work on future agreements.
  Without Trade Promotion Authority, the United States fell behind on 
trade. But now we are back on track. The goal of TPA is to knock down 
barriers to trade and allow U.S. companies to compete on a level 
playing field around the world. These two agreements achieve that goal 
and more. I strongly urge my colleagues to join with me today and vote 
to approve these two solid agreements.
  Mr. President, at this time I wish to highlight a number of the ways 
in which we stand to benefit from the United States-Chile Free Trade 
Agreement and the United States-Singapore Free Trade Agreement. I have 
spoken previously on how our farmers will benefit from improved market 
access for our agricultural exports as a result of these agreements. I 
want to elaborate on the benefits to agriculture, particularly with 
respect to sanitary and phytosanitary measures. I also want to take a 
moment to focus on some of the other benefits of these agreements, 
specifically the benefits of the telecommunications, services, and 
intellectual property provisions in the agreements, as well as the 
benefits for U.S. exporters of manufactured goods. Finally, I want to 
clarify how the short supply mechanisms for textiles will operate in 
these agreements.
  With respect to agriculture, the agreement with Singapore commits 
Singapore to maintain its current open market for the importation of 
farm products from the United States, while the Agreement with Chile 
removes numerous barriers that previously limited U.S. exports of 
agricultural goods to that country. Chilean tariffs on 75 percent of 
U.S. agricultural products will go to zero within four years. These 
products include soybeans, corn, pork, and beef, all of which are major 
Iowa commodities.
  Chile is committed to removing its price band on edible vegetable 
oils, wheat, wheat flour, and sugar under the FTA. Chile used its price 
band mechanism to protect its domestic producers of these products by 
keeping domestic prices within a predetermined range through the use of 
additional duties. As recently as 2000, this price band caused 
effective tariffs on wheat imported into Chile to rise as high as 90 
percent. With the implementation of the agreement, Chile will eliminate 
its price band mechanism with respect to U.S. exports over a 12 year 
period.
  U.S. agriculture will benefit in yet other ways under the Chile 
agreement. For example, up until now, the failure of Chile to recognize 
U.S. beef grading programs effectively blocked U.S. beef in consumer 
cuts from entering the Chilean market. This situation will change with 
the implementation of the agreement, as Chile is committed to recognize 
the equivalency of U.S. beef grading programs.
  As a result of talks held in conjunction with negotiations of the 
free-trade agreement, Chile agreed to remove various non-science based 
barriers to imports of U.S. agricultural products. Of particular 
interest to Iowa's hog and cattle producers, Chile agreed to recognize 
the equivalency of the U.S. meat inspection system. Prior to this 
decision, Chile prohibited the importation of pork, beef, and lamb from 
U.S. facilities unless those facilities paid for Chilean inspectors to 
travel to the United States to inspect and certify them. Given the 
costs involved with this process, few U.S. plants were eligible to 
export meat to Chile.
  With Chile's new meat inspection equivalency policy, and with duties 
going to zero under the agreement, barriers to the entry of U.S. pork, 
beef, and lamb into Chile will be removed. Following further review of 
its sanitary and phytosanitary, SPS, measures in conjunction with talks 
with the United States, Chile also agreed to permit the importation of 
grapefruit from Florida and cherries and stonefruit from California.
  Achieving the removal of unjustified SPS measures through talks with 
Chile demonstrates that enhancing our trade relations with other 
countries can indeed provide the impetus for our trading partners to 
remove non-science based barriers to imports of U.S. agricultural 
products. Our experience with Chile creates an important precedent for 
other trade agreements the United States is negotiating, such as the 
Australia FTA, the Central America FTA, and the Free Trade Area of the 
Americas. The fact is, without the removal of scientifically unfounded 
barriers to trade, duty-free treatment under future trade agreements 
will mean little.

[[Page 20446]]

I'm pleased that talks with Chile led to the lifting of these 
unjustified SPS measures.
  With respect to telecommunications, these agreements introduce an 
important new concept on flexibility of choice and technology 
neutrality. Under Article 13.14 of the agreement with Chile, and 
Article 9.13 of the agreement with Singapore, Chile and Singapore will 
endeavor to not prevent suppliers of public telecommunications services 
from having the flexibility to choose the technologies that they use to 
supply their services, including commercial mobile wireless services. 
This technology neutral approach to the regulation of commercial 
wireless mobile services is consistent with the practices of the U.S. 
Federal Communications Commission, FCC, which neither promote nor 
impede the use of particular wireless technologies in the U.S. market.
  These provisions constitute an important first step. They introduce a 
key regulatory concept into free trade negotiations that can help to 
enhance competition and consumer choice. These provisions can also 
create export opportunities for U.S. manufacturers of communications 
equipment and thereby preserve U.S. jobs that depend on trade in 
technology products.
  However, I view these provisions as only a first step because they 
are non-binding commitments. As such, they should be viewed as a floor, 
and not a ceiling, on standards for future free trade agreements. Going 
forward, we should strive to negotiate binding and enforceable 
commitments in our free trade agreements, to ensure that suppliers of 
commercial mobile wireless communications services are not prevented by 
governmental action from using the technology of their choosing to 
provide such services. Only then will we guarantee that U.S. technology 
suppliers enjoy market opportunities and benefits similar to those that 
foreign suppliers receive in the U.S. market.
  Services are another critical component of our economy. Services now 
account for 65 percent of the U.S. economy, and 28 percent of the value 
of our exports. With respect to services, the agreements establish an 
important precedent by adopting a comprehensive ``negative list'' 
approach, whereby any exception to the liberalization obligations 
contained in the agreements must be specified. This broad approach is 
preferable to that contained in the WTO General Agreement on Trade in 
Services GATS, whereby countries specify their commitments rather than 
exceptions. The negative list approach means more obligations for Chile 
and Singapore to liberalize their services exports and more jobs right 
here in the United States. The agreements also broaden commitments, so 
that they apply to government-owned or government-controlled 
enterprises.
  With respect to intellectual property protection, these agreements 
generally set out among the highest standards of protection and 
enforcement for copyrights and other intellectual property yet to be 
achieved in a bilateral or multilateral trade agreement. These 
protections will permit the growth of trade in digital technologies and 
products while still protecting the legitimate rights of copyright 
owners. Strong enforcement provisions require the application of 
criminal procedures and penalties in cases of trademark counterfeiting 
or copyright piracy on a commercial scale, and both Chile and Singapore 
commit to seize, forfeit, and destroy counterfeit and pirated goods and 
the equipment used to produce them. These protections will apply to 
goods-in-transit and mandate both statutory and actual damages under 
Chilean and Singaporean law for intellectual property rights 
violations.
  The agreements also incorporate a principle of ``first in time, first 
in right'' to trademarks, whereby the first to file for a trademark is 
granted the exclusive right to that name, phrase, or geographical place 
name. This approach creates an important precedent that we should seek 
to replicate regionally and globally, particularly in the face of 
efforts by the European Union to unduly expand protections for 
geographical indications in the WTO.
  With respect to manufactured goods, Chile's commitment to eliminate 
tariffs immediately on 85 percent of U.S. exports, including such key 
sectors as computers and other information technology products, 
provides immediate benefits to U.S. manufacturers. By entering into 
this agreement, Chile will embrace the duty reduction commitments 
reflected in the 1996 Information Technology Agreement. These 
commitments can create new export opportunities for our manufacturers, 
which is critical in this period of increasing unemployment.
  The National Association of Manufacturers has estimated that the 
absence of a free trade agreement with Chile has cost us about 20,000 
job opportunities annually, and over $1 billion dollars in export 
potential. Well, that's about to change with the implementation of this 
agreement. And that is just the start. We need to aggressively pursue 
additional free trade agreements that will expand market access 
opportunities for our farmers and our manufacturers, to help add jobs 
to our economy and reverse the current trend in unemployment.
  Finally, I note that the Finance Committee has received inquiries 
regarding the textile commercial availability provisions in the Chile 
and Singapore Agreements. I asked the Office of the United States Trade 
Representative to clarify the operation of the short supply provisions 
in these agreements, and I want to share that clarification today.
  All products designated as not commerically available prior to 
November 2002 under the African Growth and Opportunity Act, AGOA, and 
Caribbean Basin Trade Partnership Act, CBTPA, preference programs would 
be deemed as not commercially available under the Singapore agreement. 
The Chile agreement does not incorporate such a provision. In the 
future, for both the Chile and Singapore agreements, to designate an 
item as not commerically available would require consultations under 
the provisions for revision of the rules of origin contained in each 
agreement. These provisions require the parties to consult, upon 
request, to consider whether particular goods should be subject to 
different rules of origin to address issues of availability of the 
supply for fibers, yarns, or fabrics in the free trade area, and 
require the parties to endeavor to conclude their consultations within 
60 days. I hope that this clarification proves helpful.
  In sum, I strongly support the Chile and Singapore free-trade 
agreements. I support them because they open markets for U.S. exports 
of agricultural products and manufactured goods. I support them because 
they open markets for U.S. exports of a wide array of services. I 
support them because they will create opportunities for job growth here 
in the United States. I support them because they enhance protections 
for intellectual property rights holders here in the United States. And 
I support them because they establish important precedents for future 
negotiations. For these reasons, I urge each of my colleagues to 
support the implementing bills before us today.
  Mr. President, I rise to address the benefits to U.S. agriculture 
from the United States-Chile Free-Trade Agreement. U.S. agriculture 
needs trade agreements to expand sales and farm incomes. Since 96 
percent of the world's population resides outside the United States, 
access to foreign markets is essential for the continued growth and 
viability of U.S. agriculture. Bilateral agreements such as the Chile 
FTA are essential because they provide strong benefits to U.S. farmers.
  This agreement will provide America's farmers and ranchers new access 
to Chile's market of 15 million consumers. This agreement is 
comprehensive, calling for eventual duty-free, quota-free access for 
all products.
  On tariffs, more than three-quarters of U.S. farm goods exported to 
Chile will be duty free within 4 years of the agreement's 
implementation. Let me just name some of the specific U.S. products 
that will benefit. Under the FTA, Chile will provide immediate duty-
free access for soybeans and pork, two major Iowa products. Chile will 
also immediately eliminate its tariffs

[[Page 20447]]

on U.S. apples, pears, cherries, breakfast cereals, pasta, and bread. 
Corn grown in Iowa and other States will receive duty-free treatment in 
2 years. The agreement provides for duty-free access for beef offal 
immediately, and for all U.S. beef products within 4 years.
  Under the FTA, Chile commits to recognize U.S. beef grading programs. 
I should note as well that, through talks held in conjunction with the 
FTA negotiations, Chile agreed to recognize the equivalency of the U.S. 
meat inspection system. Chile's recognition of the equivalency of U.S. 
meat inspections and U.S. beef grading should greatly facilitate the 
export of U.S. pork and beef to Chile.
  Chile's price band mechanism has been a major concern to many U.S. 
agricultural exporters. Well, under this agreement Chile will not only 
allow U.S. exports of durum wheat and pasta to enter duty free, but 
will also eliminate its price band mechanism for common wheat and flour 
in 12 years. This will open Chile's market to U.S. exporters for wheat 
and wheat flour.
  American agriculture recognizes a good deal when it sees one. Let me 
read an excerpt from a July 9 letter from 32 agriculture organizations:

       Mr. Majority Leader, the undersigned organizations urge 
     your support and vote for the Free Trade Agreement with 
     Chile. The U.S.-Chile FTA, provides new market opportunities 
     for U.S. agriculture products and resolution to outstanding 
     trade concerns that U.S. producers have experienced with 
     Chile.

  And the letter is signed by such groups as the American Farm Bureau, 
the American Soybean Association, the National Corn Growers 
Association, the National Pork Producers Council, and many, many 
others.
  This is a strong agreement for American agriculture. It sets a new 
standard for what we can achieve for American agriculture in a free-
trade agreement. I urge my colleagues to do the right thing for 
American agriculture and support this strong trade agreement.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mrs. LINCOLN. Mr. President, I ask unanimous consent that after I 
complete my statement, the Senator from Louisiana be recognized for 15 
minutes, and then the Senator from Texas, Mr. Cornyn, be recognized.
  The PRESIDING OFFICER. Is there objection?
  Mr. HARKIN. Reserving the right to object, I understand the consent 
request is for the Senator from Arkansas, then the Senator from 
Louisiana, and then the Senator from Texas. For how long is the Senator 
from Texas going to speak?
  Mrs. LINCOLN. Fifteen minutes.
  Mr. HARKIN. Mr. President, I would like to amend that request so that 
after the Senator from Texas speaks, this Senator from Iowa be 
recognized for 15 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                       Honoring Our Armed Forces

  Mrs. LINCOLN. Mr. President, in March, Senator Hutchison from Texas 
and I joined to coordinate a daily tribute to the troops in recognition 
of the men and women serving in combat in Iraq. We developed these 
tributes as a way to honor the sacrifices of the soldiers serving in 
the Middle East as they fought to depose the brutal regime of Saddam 
Hussein.
  The response was impressive, and I thank Senator Hutchison for 
working with me on this initiative, not to mention all of our 
colleagues who contributed, who came to the floor to share with one 
another, as well as the rest of this Nation, the incredible sacrifices 
being made by the service men and women of this country.
  Given recent developments in Iraq, I wish to take a few minutes today 
to revisit the tribute to the troops.
  On Tuesday, I learned that Jonathan Marshall Cheatham, an Army PFC 
from Camden, AK, assigned to the 498th Engineer Battalion, died in Iraq 
on Saturday.
  Jonathan's convoy came under attack by enemy forces firing rocket-
propelled grenades while traveling near Baghdad. Jonathan was killed in 
the attack. He was 19 years old. Our thoughts and our prayers--all of 
ours, not just mine as a Senator from Arkansas, but from all of the 
U.S. Senators--are with his mother Barbara Prochia and with his family 
and friends at this time of loss.
  Jonathan was one of 51 American soldiers who have been killed in 
combat since the President declared an end to major combat operations 
on May 1.
  In all, 164 U.S. soldiers have died in combat in Iraq. This is a 
stark and vivid reminder that, even though the major combat portion of 
the war may have been declared over, our troops are still fighting and 
they still face grave threats.
  Let us not forget the challenges that these troops are encountering.
  Marine Cpl Jason Smedley of Little Rock, who worked in my office 
prior to his service in Iraq, was wounded in combat on March 28.
  I am happy to report that Jason has recovered from his injuries and 
has returned to work as a member of my staff here in Washington, DC, 
this week.
  Jason has regular contact with his friends and comrades with whom he 
fought in Iraq. Some have returned home.
  Many have spent months thousands of miles away from their homes and 
families, stationed in a desert where the mail does not flow regularly 
and where they receive little news of what is happening at home.
  For many of these young men and women, the undependable nature of 
communication causes tremendous stress and anxiety.
  Many of them, trained for combat, are frustrated that they lack the 
training and tools to meet the challenges of a peace-keeping mission.
  Others tell of the difficulties of being separated from their 
families.
  Jason tells me of one Marine, Sergeant Eric Johnson, whose wife gave 
birth to a child in February. Only recently did Sergeant Johnson hold 
his five-month-old son for the first time.
  I have no doubt that there are many other families trying to cope 
with similar difficulties.
  Among the reservists who are serving in Iraq, there are other 
pressures.
  Many of the troops serving in the Reserves have now been on active 
duty for up to 6 months or longer, meaning that they have been drawing 
only reserve pay over that time.
  Their families are struggling to make ends meet, but they have no 
idea when their tour of duty will end or when their financial 
difficulties will be alleviated.
  The sacrifices that these young men and women are making for their 
country are simply astonishing, and it is unlikely that we will ever be 
able to adequately repay the debt we will owe them.
  Earlier this month, I received word from a doctor, a native of 
northeast Arkansas, who is currently serving in Iraq.
  He and his unit were traveling to a military hospital about 45 miles 
north of Baghdad, where he would treat U.S. casualties.
  He wrote of a vehicle traveling in front of his in traffic being hit 
by a rocket-propelled grenade, killing one person and injuring three 
others critically.
  Upon arrival at the hospital, his camp received mortar fire three 
times in one night. He noted that ``luckily, the Iraqis are poor 
shots.''
  On the Fourth of July, this young man was flown on short notice back 
to Baghdad, where extra surgeons were needed.
  He noted that after he departed for Baghdad, his camp was attacked 
yet again, and that a tent about 100 meters from his was hit by mortar. 
Ten casualties resulted from that attack, he reported.
  I point to this dramatic narrative because it illustrates a couple of 
important points I hope we do not lose sight of.
  First, the war in Iraq is far from over.
  I will note that each of the communications we have received from 
this brave young doctor, he has talked about coming under mortar fire 
from Iraqi irregulars, or watching coalition forces launch counter-
attacks.

[[Page 20448]]

  A good part of his labor centers on treating men who have been 
wounded in combat.
  Clearly, even if the end of combat operations has been declared, the 
threat to our troops is ongoing.
  As casualties mount and our troops continue to face daily dangers, it 
is important that we redouble our efforts to stabilize the country and 
help Iraq on the way to become a democracy.
  Secondly, we should all recognize that, although our troops are faced 
with extremely difficult conditions, they continue their mission with 
courage and with a sense of duty and commitment. And they are making 
progress.
  We learned last week that Saddam Hussein's brutal sons and 
presumptive heirs were killed by coalition forces in a firefight near 
Mosul.
  Since then, coalition soldiers have received more tips and more 
information which will lead to the capture or elimination of Baath 
party holdouts and Iraqi guerrilla fighters.
  Indeed, each day brings news that the noose may be tightening around 
Saddam Hussein himself, as bodyguards, aides, and others close to the 
former dictator are captured and interrogated.
  We should do all we can to ensure that this progress continues, and 
we should ensure that our armed forces have the troops, materiel, and 
supplies they need to get the job done.
  Finally, I would like to note that a National Guard unit from 
Arkansas, the 39th Infantry Brigade from Little Rock, is expected to be 
deployed in Iraq in April of next year, to augment security and to 
allow for troop rotation so that troops currently stationed in Iraq can 
be relieved.
  With 3,400 people in the brigade, it is expected to be the largest 
deployment of National Guard troops from Arkansas in our State's 
history.
  These men and women are preparing to spend a year in Iraq, at great 
sacrifice to themselves and to their families, so that we can look 
forward to a more secure future.
  We owe all of them a tremendous, tremendous debt for their service.
  All of us in this body are proud of the service men and women who are 
serving under incredible circumstances, in incredible times, and doing 
the best they can possibly do. We wish them the best, and we wish they 
are able to finish the job and return home as soon as possible.
  I know my colleagues join me in again paying tribute to the troops, 
recognizing the incredible service of these service men and women who 
serve our Nation so proudly from each of our States. The different 
soldiers who are going out into battle, who are putting themselves in 
harm's way, we are lifting them up daily in our prayers, as well as 
their families, their needs, and their concerns. We hope we can bring 
this to a speedy end and we can make sure that they are all brought 
home as safely.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. Mr. President, I associate myself with the remarks of 
my colleague from Arkansas who, along with our colleague from Texas, 
has organized and continues to organize a very appropriate tribute to 
our troops to let them know that while we work, while we try to fashion 
an Energy bill, while we pass trade legislation, while we attempt to 
pass the 13 appropriations bills that fund this Government, including 
the Department which funds their operations, we keep them in our minds. 
They are on our minds in the morning, at noontime, the early afternoon, 
and early evening, as it is today. I thank my colleague for her 
remarks, and I know she wishes the troops from Arkansas well and that 
they return home safely, as I do those from Louisiana, as does our 
whole Nation. So I thank her.
  I will spend a few minutes speaking about the major issue at hand, 
and that is our Energy bill and our attempts to fashion an energy 
policy for our Nation. For a great part of the time since last Friday, 
the Senate has been engaged in a very important debate on this very 
complicated and far-reaching subject. That debate has followed along 
several weeks of intense debate and hard work done on the part of 
Democrats and Republicans on the Energy Committee to try to fashion a 
bill a majority of the Senators could support.
  I have been in meetings myself all day on and off the floor about 
that very subject, and hopefully those meetings are proceeding well, 
trying to come up with some compromises to move us forward, to proceed 
so we do not get stalled on this energy legislation.
  I remain very hopeful at this hour that those negotiations will be 
fruitful so we can continue our push, our bipartisan effort, to fashion 
a bill that increases supply, reduces demand, puts new measures in 
place that require conservation and that also will protect consumers in 
a new, more deregulated way.
  Those are high goals, but they are important goals because if we do 
it right, consumers can save a great deal of money. If we do it right, 
we can save jobs. If we do it right, we can help this economy to get a 
strong foothold toward recovery. If we do it right, we can help our 
industries be more competitive and, in doing so, save and preserve jobs 
in the United States and increase prosperity.
  I wanted to take a moment, while we had this time, to focus on one of 
the most important aspects of an energy policy, and, first, to 
recognize that most of the debate this week has rightly been Senators 
expressing their outrage at what went wrong in the last 12 or 15 
months: The description brought again so vividly to the Senate floor by 
the Senator from Washington, Ms. Cantwell; the comments made by Senator 
Feinstein; the comments made by other Senators on the travesty that 
occurred in California and the outrage of the constituents there 
because of the doubling and tripling and quadrupling of energy prices.
  I most certainly understand. We, ourselves, in Louisiana have been 
experiencing higher prices for different reasons. I understand that 
frustration.
  As much as I support some--not all but some--of their efforts to 
remedy that situation, I will spend a few minutes talking about one of 
the real causes of that problem. While there was deception, there was 
manipulation, there was wrongdoing--and people like Ken Lay and others 
need to be on their way to jail, and we hope the prosecution will be 
vigorous for that wrongdoing--we would not be giving our constituents 
the whole picture if we did not talk for a minute about the underlying 
cause of that debacle. It is simply a lack of supply.
  We have for the last 20 years implemented policies in this Congress 
that have mandated a dramatic increase in natural gas. Yet we have also 
mandated the same policies or allowed policies to develop that 
decreased our chances of producing natural gas.
  As my chart shows, our main energy problem--what has happened and the 
reason we are spending weeks, and if we have to spend months, so be 
it--is we have to close this gap between natural gas demand and natural 
gas availability. That is what is causing the price of natural gas to 
be at historic highs and, quite frankly, at dangerous levels because it 
undercuts this economy.
  Let me give a few specifics. Natural gas provides nearly 25 percent 
of the energy that powers our $10.5 trillion economy. I repeat: 25 
percent of our entire economy rests on our natural gas policy. It is 
out of whack. When it is out of whack, it causes serious problems and 
serious consequences. That is what we are experiencing. More than 55 
percent of residential customers use natural gas.
  Visualize walking along any neighborhood in the country. In New 
Orleans, along Napoleon Avenue where I grew up; think about walking 
down Grand Isle, little Main Street on an island. I was just there a 
few weeks ago. Maybe you are in a suburb right close to Washington or 
maybe right on East Capitol Street. Every other house--50 percent of 
residential consumers--has natural gas access.
  We have a shortage. When there is a shortage, prices go up. This 
country will see an increase, it is estimated, from $534 in 1999 to 
$900 in 2003. That means consumers--every other house,

[[Page 20449]]

basically--will pay $70 billion more for gas in 2003 than they did in 
2002. We gave a tax cut of $340 billion. Average it over 10 years, it 
is $34 billion. We are giving a tax cut of $34 billion. Yet because of 
our energy policy, we are taking $70 billion out of the pockets of 
residential customers.
  It makes no sense. That is why people can say: Thanks for the tax 
cut, but I am not really feeling it because you are giving it on the 
one hand and taking it away on the other.
  We have a solution. Natural gas is not only a fuel but an essential 
raw material for feedstock. Each year, the U.S. chemical industry 
converts 20 percent or $20 billion of natural gas-based fuel and 
feedstock into more than $200 billion of essential consumer products. 
When people say to me, Senator, your State is a natural gas State, you 
are concerned about natural gas, I am concerned about natural gas 
because, of course, it fuels every other house in the country, but also 
because it fuels so many of the plants that create all of the products 
we use for a variety of our entities, a variety of goods in our economy 
that we use every day, from plastics to chemicals to fertilizers. More 
than a million people work daily in the U.S. chemical industry, and 5 
million people work in dependent jobs; that is 6 million jobs.
  If I have to stay on the Senate floor all day today, all day 
tomorrow, if I don't leave for the August recess, it is fine with me 
because we need to get people back to work. I know that even if we 
passed the most well-crafted tax policy, no matter if we pass the most 
well-crafted trade laws, no matter what we pass, if we do not pass an 
Energy bill that gives some vision for the future, confidence to the 
market and an increased supply and conservation, we are not going to be 
able to do anything else here that will save these jobs or create jobs 
for Louisiana or for the Nation as a whole.
  This is not just an Energy bill; it is a jobs bill. At a time when 
our economy is weak, this Senate needs to be about jobs. That is why I 
hope these negotiations will be fruitful. We need a good bill.
  In my State of Louisiana, ammonia plants in particular are feeling 
the effects. For these plants, the cost of natural gas represents 70 to 
90 percent of the total cost of manufacturing. If I cannot get them 
relief on their price of natural gas, if I cannot help get this bill 
through, and we do not have some relief in sight, these plants will 
close, thousands of jobs will be lost, they will move overseas, and 
they are not coming back.
  It is not like closing an office temporarily until conditions improve 
and then everyone shows up a few months later. These plants are huge. 
There is a tremendous amount of steel and processing equipment. When 
they close, they are not going to reopen.
  We have gone from nine companies employing more than 3,500 people to 
three companies employing less than 100.
  There is a solution: Improving our drilling opportunities in 
appropriate places for natural gas--out West, in the gulf coast, and 
importing liquefied natural gas is a start.
  In my last 3 minutes I will explain one basic issue that gets to the 
heart of what I am trying to communicate. Again, let me say so that no 
one can say that Senator Landrieu is not concerned about deception and 
manipulation and scams that went on, I promise, the manipulation, 
deception, and scams were not the primary cause of our dilemma today. 
It was a cause, it was a significant cause, and it was criminal in many 
cases, but it was not the primary cause.
  The primary cause is some States, in the last 20 or 30 years, 
consumed a lot of energy, but do not produce energy. I have a chart 
illustrating statistics from our Energy Department, including all types 
of fuels and energy: Nuclear, hydrogen, geothermal, wood, wind, waste, 
solar, oil, natural gas, and coal. This is from the U.S. Department of 
Energy, the Energy Information Agency. This includes all types of 
energy minus consumption. The States in dark red on the chart are the 
States that consume much more energy than they produce. And they are 
rated from the top, which is California; the second is New York; third 
is Ohio; and fourth is Florida. And it goes down to the States that 
produce more than they consume. They become net exporters of energy, 
the best State being Wyoming, then Louisiana, then West Virginia, 
Alaska, and it goes up.
  Let me be quick to point out, because this is a very important chart, 
the country can never be energy independent until these States, and the 
regions they are in, become energy independent. One of the things the 
chairman, the Senator from New Mexico, has been trying to help this 
Congress understand is that you cannot even begin to be energy 
independent until these States and these regions come to terms with the 
fact that they are consuming huge amounts of energy and they are not 
producing. They have two choices: They can either cut their 
consumption, they can cut their consumption and can conserve anything 
they want, or they can produce more energy.
  So that is part of what our chairman and ranking member, both from 
New Mexico, have been trying to explain to us.
  I am going to submit this for the Record.
  We have an energy deficit in this Nation. No matter how you look at 
it, no matter how many people you put in jail, no matter how much 
consumer regulation you put in place, we have a serious energy deficit. 
Until this is corrected, no matter what we do, we are still not going 
to have the kind of energy policy in this Nation that will help us keep 
jobs in America and strengthen our economy.
  In conclusion, I want to say how proud I am that Louisiana is a 
producing State and we not only consume what we produce but we export 
energy. We are proud to do that, and we will continue to do that in 
appropriate, environmentally sensitive ways.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. CORNYN. Mr. President, I have a few remarks I would like to make 
on the free-trade agreements with Chile and Singapore. Before that, I 
have some matters of housekeeping.
  Mr. President, I ask unanimous consent that the time Senator Hollings 
consumed be counted against the time he controlled on H.R. 2738 and 
H.R. 2739, the trade agreements.
  The PRESIDING OFFICER. Without objection, it is so ordered.


             free-trade agreements with chile and singapore

  Mr. CORNYN. Mr. President, I rise today to speak in favor of the free 
trade agreements with Chile and Singapore.
  These agreements are consistent with the longstanding policy of the 
United states to negotiate agreements that reduce foreign trade 
barriers, increase export opportunities for American businesses, and 
create jobs for American workers.
  I understand the concerns of my colleagues about certain immigration 
provisions contained within these two agreements. I recently helped 
chair a Judiciary Committee hearing where representatives of the United 
States Trade Representative's office explained the reasoning for such 
provisions. I also had the opportunity to discuss this issue with 
Ambassador Zoellick last week in person.
  The fact is that our lack of a free-trade agreement with Chile today 
costs American exporters an estimated $800 million per year in sales, 
affecting approximately 10,000 U.S. jobs. That's an enormous amount and 
that's just one of the reasons I am in favor of these free-trade 
agreements, because I believe they will be good for American markets, 
American businesses and American workers.
  Immigration policy is the responsibility given to Congress under the 
Constitution. I assure my colleagues that enactment of these agreements 
does not infringe in any way on that authority or responsibility.
  The United States Trade Representative has been very responsive and 
open to the concern of Senators. On at least seven occasions since 
October of last year, USTR provided formal briefings to Judiciary 
Committee staff about the

[[Page 20450]]

immigration sections in these treaties. USTR has welcomed the input of 
Senators on immigration and other issues covered by these treaties.
  Over the past several months, some of my colleagues have expressed 
reservations about the temporary nature of the visits under these 
agreements, as well as the funding for the new visa program, time 
limitations for these temporary visas, and numerical limitations.
  The legislation we are being asked to vote on today represents the 
results of negotiations between the members of both parties on the 
Judiciary Committee and the USTR. With respect to the substance of the 
immigration provisions, there was bipartisan consensus about the 
content. All of us want to promote trade, but we also want to protect 
American workers from those who abuse our immigration laws.
  Ambassador Zoellick recently expressed to me that he does not 
approach negotiations with the intention of including immigration 
provisions. Circumstances vary according to each negotiation and each 
country involved. Negotiating flexibility must be maintained to produce 
agreements that provide maximum benefits to American workers.
  The inclusion of the immigration provisions protects the interests of 
U.S. businesspeople and will better enable them to pursue overseas 
opportunities to increase American exports. In most immigration 
matters, the United States expands the number of visas for foreign 
workers without receiving reciprocal assurances from other countries 
for access for Americans.
  The Chile and Singapore free-trade agreements will enable an 
unlimited number of American businesspeople to reside in these two 
countries while capping the number of annual entries at 1,400 from 
Chile and 5,400 from Singapore.
  These limits will protect American business interests and American 
workers. And I applaud the U.S. Trade Representative's office for its 
efforts in reaching these agreements with Chile and Singapore.
  At the same time, I believe this initial experience with this new 
authority which Congress has conferred on the President, to negotiate 
these agreements subject to an up-or-down vote in the Congress, has 
given the U.S. Trade Representative an increased appreciation for the 
need to actively consult with Congress on matters as sensitive and 
significant as immigration issues. Failing that, there is no question 
in my mind that future free-trade agreements are unlikely to receive 
Senate approval, and that would be a shame.
  The United States-Chile free-trade agreement will provide numerous 
opportunities for United States workers and manufacturers.
  U.S. companies currently operate at a disadvantage because 
competitors such as Canada, Mexico, and the European Union already have 
free-trade agreements with Chile. As I said before, our lack of an 
agreement costs American exporters an estimated $800 million per year 
in sales, affecting approximately 10,000 U.S. jobs.
  The agreement with Chile will eliminate tariffs immediately on more 
than 85 percent of consumer and industrial goods, and most remaining 
tariffs will be phased out within the next 4 years. The result will be 
a $4.2 billion increase in the US GDP and a $700 million increase in 
Chile's GDP.
  The U.S.-Singapore free-trade agreement will have a similar effect on 
trade and economic liberalization in Southeast Asia.
  Despite its small size, the economy of Singapore is robust and highly 
competitive. Roughly 1,300 American firms have a significant presence 
in Singapore, including 330 regional headquarters for American 
businesses. The establishment of a free-trade agreement with Singapore 
will further increase opportunities for American workers through 
improved access to this important market.
  I believe these free-trade agreements will be good for American 
markets, American businesses and American workers, and I will vote 
accordingly. I respectfully ask my colleagues to do the same.
  I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Iowa is recognized for 15 minutes.
  Mr. SESSIONS. Mr. President, I wonder if the Senator from Iowa would 
allow me to proceed for 2 minutes.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the Senator 
from Alabama be recognized for 3 minutes after which I then be 
recognized for my 15 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I very much thank the Senator from Iowa.
  I have been inclined to be supportive of these two treaties with 
Singapore and Chile. They came up in the Judiciary Committee. I was 
very surprised to see we will be amending immigration law. As I 
listened to the debate from other members of the committee, I concluded 
at that point I could not support the treaties. I voted no. I don't 
think there were a large number of people in the committee who voted 
no. But I did not like the fact that the first fast-track treaty had 
come up with amended immigration law which is under the plenary power 
of the Congress, and it is not capable of being amended. It is not 
capable of being changed. I think it is a bad mistake to do that.
  Subsequent to that, we have worked hard to put in as part of the 
passage of this treaty a sense of the Senate. That sense of the Senate 
says:

       Trade agreements are not the appropriate vehicle for 
     enacting immigration-related laws or modifying the current 
     immigration policy; and future trade agreements to which the 
     United States is a party and the legislation implementing the 
     agreements should not contain immigration-related provisions.

  This is really an important issue. I want to support this treaty. I 
hope to be able to support this treaty. Maybe I will be able to support 
this treaty. But I certainly respect the people of Singapore and 
respect the people of Chile. They are allies and friends. We want to 
work with them and improve trade. Hopefully, we will be able to do 
that.
  In my home State of Alabama, Singapore has a 1,000-personnel company 
that is doing great business. I am proud of their work and enjoy 
getting to know those people. It is an important part of the community 
of which I am a part, which is an example of some of the good things 
that come from trade.
  But we are concerned. A lot of the Members of this body are 
concerned. This crystal-clear sense of the Senate without equivocation 
says do not bring us any more treaties with these kinds of amendments 
on them. If you do, they are going to be in danger.

Immigration Provisions in the Singapore and Chile Free Trade Agreements

  While I want to support agreements, the inclusion of immigration-
related provisions in the legislation before us is deeply troubling.
  Let met tell you what has happened. The U.S. Trade Representative, 
USTR, by implementing new immigration provisions in treaty 
negotiations, has encroached on the role of the legislative branch, 
without consent from this Congress.
  The ``temporary entry'' sections that are in the Singapore and Chile 
trade agreements should not be there. Because of the fast-track 
process, Congress is not allowed to take out the immigration provisions 
that we don't like, no amendments are allowed. We are only allowed to 
vote up or down on these agreements.
  The inclusion of immigration provisions in the Free Trade Agreements 
with Chile and Singapore has directly interfered with Congress' plenary 
power to regulate the nation's immigration policy. The power to make 
immigration law belongs to Congress alone and includes both the 
temporary and permanent admissions of foreign nationals into the United 
States.
  Article I, Section 8, clause 3 of the Constitution authorizes 
Congress ``to regulate Commerce with foreign Nations, and among the 
several States'' and Article I, section 8, clause 4 of the Constitution 
provides that Congress shall have power to ``establish a uniform Rule 
of Naturalization.''
  The Supreme Court has long interpreted the Constitution to grant 
Congress plenary power over immigration policy. As the Court found in 
Galvan v.

[[Page 20451]]

Press, 347 U.S. 522, 531 (1954), ``the formulation of policies 
[pertaining to the entry of aliens and their right to remain here] is 
entrusted exclusively to Congress has become about as firmly imbedded 
in the legislative and judicial tissues of our body politic as any 
aspect of our government.'' And, as the Court held in Kleindienst v. 
Mandel, 408 U.S. 753, 766 (1972) (quoting Boutilier v. INS, 386 U.S. 
123 (1967)), ``[t]he Court without exception has sustained Congress' 
`plenary power to make rules for the admission of aliens and to exclude 
those who possess those characteristics which Congress has 
forbidden.'''
  At the hearing before the Senate Judiciary Committee on these 
agreements, the witness for the U.S. Trade Representative, Mrs. Regina 
Vargo, was asked what legal authority the U.S. Trade Representative, 
USTR, was relying on as a basis for including immigration law 
negotiations in trade treaties.
  The USTR witness responded by differentiating between temporary and 
permanent entries into the United States, stating that because the 
Chile and Singapore Free Trade Agreements only contained provisions 
regarding temporary entries of foreign persons, the USTR was acting 
within the bounds of its negotiating authority.
  This assumed authority was again stated by the USTR in the written 
answers that they submitted to the written questions submitted by 
members of the Judiciary Committee. This is not the case and I want to 
make it clear to the USTR that they do not have the authority to 
negotiate immigration law on behalf of the Congress. By negotiating and 
including immigration law provisions in a binding bi-lateral treaty 
that Congress does not have the power to amend, the USTR has 
established a dangerous precedent that will not be tolerated in future 
trade agreements.
  Instead of changing the immigration law under these agreements for 
citizens of Singapore and Chile, it would have been especially 
appropriate for the USTR to ensure that employers who repeatedly use 
the visa programs established under these trade agreements abide by all 
current U.S. laws governing the entry of these foreign workers.
  As a Senator of this committee, which has jurisdiction over 
immigration policy, it is my duty to preserve the plenary power of 
Congress to make immigration policy. I am dedicated to opposing any 
erosion of that power. After the Judiciary Committee Hearing, I, along 
with Senator Graham of South Carolina and Senator Feinstein, sent a 
letter to the USTR asking them to withdraw the trade agreements and 
submit them again without the temporary-entry/immigration provisions.
  Before we vote on the Chile and Singapore Trade Agreements, this 
Senate will unanimously pass a resolution I introduced. The resolution 
states that it is the sense of this Senate that:

       Trade agreements are not the appropriate vehicle for 
     enacting immigration-related laws or modifying current 
     immigration policy; and future trade agreements to which the 
     United State is a party and the legislation implementing the 
     agreements should not contain immigration related provisions.

  I am glad that a strong statement defending Congress' authority over 
immigration law will be made today. I fully intend to defend that 
statement and ensure that future trade agreements comply with the 
unanimous desire of this body.
  One reason I am so concerned about the inclusion of the immigration 
provisions is that four visa categories are permanently affected by the 
agreements. The legislation before us today effects four types of 
current visas:
  No. 1. The H-1B--``highly skilled worker'';
  No. 2. the B-1--business visitor;
  No. 3. the E-1--treaty trader or investor visa; and
  No. 4. the L-1--intra-company transfer visa.
  H-1B requirements under the Chile and Singapore agreements are weaker 
than the requirements for other H-1B workers. The agreements require, 
without numerical limit, that business persons in the other three visa 
categories be entitled to entry. Under the H1-B category, this 
legislation permits the admission of up to 5,400 professionals from 
Singapore and up to 1,400 professionals from Chile each year.
  This legislation also permits the almost unlimited renewal of the H1-
B visas each year, which could have the effect of turning a temporary 
entry visa program into a permanent visa program; and
  These agreements also require that dependent spouses and children be 
allowed to join the H1-B professionals that enter under these 
agreements--with no numerical cap.
  I am concerned about including permanent immigration changes in trade 
agreements when we have unemployment among U.S. workers. I am dedicated 
to preserving the jobs of U.S. workers whenever possible. I welcome, 
when appropriate, foreign industries within our borders, and, when 
appropriate, I fully support foreign workers coming here to work.
  But, I also believe that the suspected abuse surrounding some 
immigration visas should be examined--such abuse is possibly 
contributing to the level of unemployment in the U.S.--including the 
record unemployment level for U.S. high-tech workers. The only way to 
protect the job market for American workers is to preserve Congress' 
plenary power to make laws that affect the ability of foreign workers 
to displace American workers from their jobs. That is why the Judiciary 
Committee has hearings to oversee how the visa programs we have enacted 
are working. Just this week we held a hearing to examine the L-1 visa, 
one of the visa categories affected by these trade agreements.
  After that hearing, Congress may decide that we need to reform the L-
1 visa category. Any provision of a future trade agreement that 
restricts the ability of this Congress to reform such programs and to 
therefore protect U.S. jobs will not be looked upon favorably. If the 
U.S. Trade Representative continues to negotiate treaty terms such as 
the ones before us today, I will be unable to support them.
  I deeply desire to support Chile and Singapore and had fully planned 
on voting for the Free Trade Agreements at every turn. I look forward 
to working with colleagues from each nation, but in particular, the 
businessmen and women who are engaged in the expansion of trade between 
our respective business communities. In Alabama we are indeed fortunate 
that several companies from Singapore found opportunities in Alabama--
opportunties they developed into thriving businesses.
  One such business is located in my home town of Mobile, Alabama. 
Mobile Aerospace Engineering--MAE--is Singa- pore owned, but more 
importantly it is a vibrant business employing over 1,000 local 
workers. MAE is a community leader not just in the number of its 
employees, but in its community outlook and community involvement. My 
visits have revealed that Singapore is indeed a valued economic partner 
and trusted ally.
  I believe the Governments of Singapore and Chile clearly understand 
the message my colleagues and I have communicated to the USTR. Our 
commitment to trade is not diminished; our message however is quite 
clear: trade agreements are not the appropriate vehicle for enacting 
immigration-related laws or for modifying current immigration policy.
  I thank so much the distinguished Senator from Iowa for his courtesy.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. HARKIN. Mr. President, I am a long-time supporter of policies 
designed to open foreign markets to our Nation's exports through new 
trade agreements. I have fought to break down the barriers that many 
other countries have erected to block our exports, and I have sought to 
reduce the practices by which many of them seek to compete unfairly in 
world markets. More fair trade can create jobs here at home, and 
American consumers can benefit from the resulting competition.
  In 1991, I took a trip to Chile to gauge the prospects of entering 
into a free trade agreement with Chile, and I returned favorably 
disposed. I thought that we should negotiate a free trade

[[Page 20452]]

agreement with Chile before doing so with Mexico, and I communicated 
that to the President at the time.
  However, trade is not just about commercial transactions and whether 
or not imported products become cheaper and exporting companies 
increase their profits. Trade policy and the consequences of trade are 
linked with the preservation of the natural environment in both 
countries that are party to an agreement, as well as the legal rights 
and working conditions of workers. I take these matters into 
consideration when I determine whether or not to support a given trade 
agreement, as well as the economic gains that may be generated.
  I am aware that U.S. groups representing a considerable variety of 
agricultural products support the Chile FTA. A total of 32 farm groups, 
producer groups, and agribusiness interests signed a letter in July, 
urging support for the agreement. Even some of those organizations have 
concerns about market access for specific products, or about addressing 
trade reform through a bilateral, rather than a multilateral agreement.
  Over the 1998-2001 period, U.S. companies shipped an average of $125 
million worth of agricultural goods to Chile, accounting for about 10 
percent of their total agricultural imports. Until now, or major 
competitors in the hemisphere, Argentina and Brazil, have had an 
advantage in the Chile market because of their proximity and Chile's 
status as an associate member of Mercosur, the South American regional 
trade agreement. This FTA should help to level the playing field, 
although the cost of shipping goods more than 5,000 miles to the Chile 
market will always be a factor in determining the attractiveness of 
U.S. products.
  Both of the trade agreements we are considering--the Chile and the 
Singapore agreements--also are good for the U.S. financial services 
sector. The president of Principal International, Norman Sorensen, 
testified recently before the Senate Finance Committee, and he listed a 
number of benefits for Principal and for other financial services 
companies. I note that Principal Financial Group is a major private 
employer in my State of Iowa.
  Trade agreements--on the right terms--promise many benefits and 
opportunities. Notwithstanding these benefits, we have increasingly 
come to realize in recent years that issues previously not considered 
to be trade issues in fact are trade issues intellectual property being 
one of those most prominent. That is why I have worked hard to improve 
the labor provisions in various trade measures, concentrating 
particularly on abusive and exploitative child labor. I want trade 
agreements to promote fair trade, fair competition, environmental 
protection and good labor conditions in all countries. That means trade 
agreements that support and reinforce existing international child-
labor standards, not undercut them.
  In examining any trade agreement, we must weigh the balance of these 
considerations. In the cases of the agreements now before us, I have 
reluctantly concluded that the benefits do not outweigh the potential 
harm.
  As many of my colleagues know, I have been working on reducing 
abusive and exploitative child labor around the world for over a 
decade. I first introduced a bill on this issue in 1992. According to 
the best estimates by the International Labor Organization--ILO--there 
are at least 352 million child laborers between the ages of 5 and 17 
who are engaged in today's global economy.
  Of these 352 million child laborers, 246 million have never seen the 
inside of a classroom. These 246 million powerless children are working 
in the most hazardous conditions in mines in fishing operations and on 
plantations. It is appalling that this is still occurring in the 21st 
century. These children are robbed of their childhoods. Many are denied 
any hope for a brighter future. In this new century, they will grow up 
illiterate and exploited, creating a wellspring of future social 
conflict and strife.
  We have made some progress over the years by increasing funds for 
programs to rehabilitate child laborers through our contribution to the 
ILO's International Programme for the Elimination of Child Labor--IPEC. 
In 2000, I and Senator Helms successfully amended the Trade and 
Development Act with a provision directing that no trade benefits under 
the Generalized System of Preferences--GSP--be granted to any country 
that does not live up to its commitments to eliminate the worst forms 
of child labor. We required that the President submit a yearly report 
to Congress on the steps being taken by each GSP beneficiary country to 
carry out its commitments to end abusive and exploitative child labor.
  I want to explain clearly to my colleagues what I mean when I refer 
to abusive and exploitative child labor. It is not children who work 
part-time after school or on weekends. There is nothing wrong with 
that. That is not the issue. What I am referring to is the definition 
set out by ILO Convention 182 on the Worst Forms of Child Labor.
  This is not just a Western or a developed world standard; it is a 
global standard that has been ratified by 138 countries. It has been 
ratified by Chile. It has been ratified by Singapore. The United 
States, I am proud to say, was the third country to ratify this 
convention. Unfortunately, the implementing legislation now before the 
Senate for free trade with Chile and Singapore actually would take us 
and the world a step backward when it comes to protecting children. 
That is right. This freetrade agreement with Chile, which replaces GSP 
provisions in governing the trade between our two countries, will take 
us backward with respect to abusive and exploitative child labor.
  Under GSP, the President must report to Congress annually regarding 
Chile's child labor practices. And under GSP, if Chile is not meeting 
the obligations that Chile undertook as a signatory to the ILO 
Convention 182, if Chile is not acting to eliminate the worst forms of 
child labor, then trade sanctions are available to us to require 
enforcement in Chile of internationally recognized child labor 
standards. That is so that our companies, and our workers here in 
America, are not subjected to the unfair competition that abusive 
exploitation of children allows.
  Under this new implementing legislation for free trade that we have 
before us now, if it is enacted, neither of those things I just 
mentioned will be true. The President will not be required to report on 
Chile's practices or Singapore's. And even if egregious violations of 
international child labor standards are reported, no trade remedy will 
be available. This new agreement merely allows voluntary cooperation 
between the two countries on issues such as abusive and exploitative 
child labor.
  Our trade negotiators, for some reason, in this agreement before us, 
explicitly weaken existing protections against abusive and exploitative 
child labor.
  They took us from mandatory Presidential reporting, with trade 
sanctions available, to the mere possibility of voluntary cooperation 
with no recourse to trade sanctions as enforcement.
  My colleagues, we voted here in the Senate 96 to 0 in the year 2000 
to include these protections. Senator Helms and I offered that 
amendment to the GSP. This Senate voted--with our eyes open, ears 
open--96 to 0 to include these protections in the GSP. It received 
unanimous, bipartisan support.
  None of us in this body have voted for, and I am sure none of us have 
sought to have, those child labor protections undercut by our trade 
negotiators in an agreement with Chile or Singapore or any other 
country. But that is what they have done. And now, thanks to fast-track 
rules, which don't allow us to amend this legislation, we will not even 
be able to restore the protections we voted for 3 years ago in this 
agreement. If we vote for this trade agreement, we are voting to remove 
the protections that all of us here--96 Senators--voted 3 years ago to 
put into place to end the practice of abusive and exploitive child 
labor.
  I would like to support a free-trade agreement with Chile. As I said, 
I went there 11 years ago to help promote a free-trade agreement. But I 
cannot vote for this because our negotiators took away from us the one 
thing we

[[Page 20453]]

put in 3 years ago to end abusive and exploitative child labor.
  This takes us in the wrong direction with respect to the world's 
children. Supporting abusive and exploitative child labor abroad does 
not help create jobs in America, it is just the opposite; it hurts that 
effort. Our workers and our local businesses should not be competing 
with the worst forms of child labor abroad. Our trade negotiators 
should not be weakening protections that we in Congress put in place to 
ensure that free trade can be consistent with respect for international 
child labor standards. What our negotiators did is wrong.
  It has been said that these trade agreements with Chile and Singapore 
can be a model for future trade agreements, for example, with Central 
American countries. In the area of abusive and exploitative child 
labor, I hope that is not the case. A better model would be the free-
trade agreement with Jordan, which we adopted in September of 2001. 
That agreement had broad support from business and labor. I supported 
it. In that case, we successfully moved the issue of abusive and 
exploitative child labor and other labor rights right into the body of 
the agreement where they rightfully belong. I cannot understand why we 
would turn back from that agreement and from the GSP provisions.
  I am sorry to say this is not an academic or rhetorical issue in the 
case of labor practices in Chile. Chile is far from the worst 
government, even in our hemisphere, when it comes to meeting its 
international obligations to protect its children.
  I don't mean to single Chile out. In fact, Chile has done a great 
thing in getting rid of the Pinochet dictatorship and returning 
democracy and free markets to Chile. But there is broad agreement among 
international observers--our own Department of Labor, the Department of 
State, UNICEF, the International Labor Organization--that the problem 
of abusive child labor persists in Chile. Approximately 65,000 Chilean 
children between the ages of 12 and 17 are working rather than 
attending school as they should. This is according to the ILO, UNICEF, 
and our own State Department. These kids are engaged in mining, 
agriculture, including street children, domestic workers.
  The Government of Chile may be seeking to reduce the problem, as it 
should. But we should not be weakening our sole existing trade 
mechanism that allows us to monitor their progress and to back up the 
international standard with trade action. That is not the way forward 
for free and fair trade. That is not the way to lift up the Chilean 
economy or working families in the United States. Abusive child labor 
perpetuates the cycle of poverty across generations. No country has 
achieved broad-based economic prosperity on the backs of working kids. 
Weakening our existing protections against the worst forms of child 
labor certainly should not occur in an agreement that might be a model 
for free trade with Central America.
  Lastly, I am also concerned about the selective changes in 
immigration law on these trade agreements. These trade agreements would 
allow 1,400 foreign workers from Chile per year and 5,400 workers from 
Singapore per year to obtain 1-year visas to work in the United States, 
visas which are renewable indefinitely. That is a significant change 
from our current H-1B visa policy, where workers are granted 3-year 
visas that can be renewed only once. We should not be promoting the 
importation of skilled foreign workers for indefinite stays in the 
United States when there are 9 million Americans currently out of work.
  I have a further concern with a provision inserted in the Singapore 
free-trade agreement. The integrated sourcing initiative, or ISI, 
allows predominantly information technology goods produced in third 
countries to be treated as if they had been produced in Singapore for 
the purpose of satisfying rules-of-origin provisions.
  This ISI provision could allow goods produced in countries that 
routinely violate workers' rights, such as Indonesia, and possibly 
Burma, to be transshipped through Singapore in order to avoid United 
States limitations and bans. That is in the Singapore free-trade 
agreement.
  I regret that our negotiators have presented us with flawed 
agreements. In the case of Chile, it is either sloppy work or they 
deliberately changed the child labor provisions. By allowing third 
countries to transship through Singapore, again, it is either sloppy 
work or deliberately trying to undercut United States limitations and 
bans on certain countries.
  I particularly hoped that I could support an agreement for free trade 
with Chile. I started working for that over 10 years ago. But I do not 
believe trade can be called free when it promotes the exploitation and 
abuse of children by weakening our existing protections against the 
worst forms of child labor.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, I yield myself time under the time allotted 
for Senator Sessions.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAIG. Mr. President, I, too, rise this evening to express 
concern over the pending free-trade agreements with Chile and 
Singapore. My colleague from Iowa has just spoken to that. I will 
approach it from a slightly different manner but with the same 
concerns.
  These trade agreements should have been focused largely on trade 
issues because our trading partners in this case need a relationship 
with us, and we have worked hard over the years to develop one with 
them. We have heard that our agreement with Chile would expand the GDP 
of this country by $4.2 billion and allow 75 percent of U.S. farm goods 
to enter Chile tariff free within 4 years. Both the Senator from Iowa 
and I would have to agree that is the way it ought to be. Certainly, I 
applaud our trade ambassador for working in that direction.
  Unfortunately, during negotiations, our representatives went beyond 
the issues of free trade and threw our immigration laws on the table 
for negotiating purposes. As a result, the agreements with Chile and 
Singapore contain immigration provisions that I think raise very 
troubling issues.
  Let me be the first to acknowledge that these immigration provisions 
may arguably benefit some U.S. companies, including companies in my 
home State. I have already visited with many of those companies. 
However, there are also problems with these provisions, problems with 
how they came into being in the first place, problems with their 
substance, and problems with their potential impact. What intensifies 
our dilemma today is that we run the risk that similar provisions would 
be included in future trade agreements, as the Senator from Iowa has 
already said, and I say here. Why? Because our trade ambassador has 
said it.
  What we deal with tonight are templates or foundations from which we 
will deal with other countries in establishing free-trade agreements. 
Those negotiations are already underway with Australia and Morocco and 
South Africa, Central America, and 34 countries in the western 
hemisphere we are currently engaging with in free-trade agreements. I 
will tell you, if this is a template and if he plans to negotiate 
immigration law in the midst of a free-trade agreement, this is one 
Senator who will work very aggressively to block them until our trade 
ambassador understands that he is outside his prerogative.
  Many of my colleagues will remember that last year more than 60 
Senators expressed concern about our U.S. trade remedy laws being 
negotiated away and changed by our U.S. Trade Representatives without 
congressional consent or input. As we all know, once these trade 
agreements are sent to Congress, they cannot be changed or amended. 
Again, more than 60 Senators expressed concern about items that are 
within congressional purview and should be guided by Congress, not 
unelected officials down at the Trade Representative's office. These 
same fears and concerns apply to immigration provisions within the 
free-trade agreement.
  It is Congress and not our trade negotiators that should be making 
changes

[[Page 20454]]

in U.S. immigration law. Senators have been rightly concerned about how 
much consultation should be done with Congress before these provisions 
are finalized. It is my understanding that the USTR consulted with six 
private sector advisory committees when negotiating terms of the free-
trade agreement, including the labor advisory committee which was 
critical to the temporary entry provisions. The USTR published a 
Federal Register notice soliciting comments on both agreements.
  However, under the Trade Promotion Authority Act, the administration 
is required to consult with Congress while conducting negotiations. In 
this case, consultation was brief and given on very short notice, 
certainly with regard to the Judiciary Committee of which I am a 
member.
  But what troubles me more--and would have been resolved had Congress 
been meaningfully consulted--is the substance of the proposed 
immigration provisions themselves and Congress' limited ability to 
amend the provisions even in the face of fraud or abuse that could 
occur within this trade agreement.
  The free-trade agreement addresses four specific categories of 
temporary nonimmigrant admission currently governed by U.S. immigration 
law. These are business visitors, or B-1; treaty traders and investors, 
the E-1s and E-2s; intracompany transferees, the L-1s; and professional 
workers, the H-1Bs.
  The potential for fraud in these visa programs is substantial. The 
free-trade agreement is specific that neither party may ``as a 
condition of temporary entry, require prior approval procedure 
petitions, labor certification tests, or other procedures of similar 
effect. . . .''
  Yet labor certification requirements ensure that foreign workers do 
not displace or adversely affect the working conditions of Americans.
  Current H-1B law requires attestation of H-1B dependent employees in 
order to reduce potential fraud. This requirement is necessary to 
prevent repeat users of H-1B visas from using temporary foreign labor 
as a strategy to avoid paying higher salaries to American workers. This 
requirement is not mentioned in the implementing language.
  Also, while the administration has included a cap on the number of 
professionals entering under the H-1B category, there are no such 
limitations on the number of temporary workers entering under other 
visa categories, including the B-1 visa, the E-1 visa, and the L-1 
visa. None of these categories are numerically limited under the 
agreement and, once enacted, Congress may not subsequently impose caps 
on these categories for national entry.
  This is particularly problematic within the context of the L-1 visa 
category. Neither of the FTA agreements requires workers to be citizens 
of either Chile or Singapore. They can be from any country as long as 
they are working for a company located in either Chile or Singapore.
  Many employers are exaggerating the specialized product knowledge of 
their professional workers so they qualify as L-1 visa applicants. As a 
result, the L-1 visa program is receiving an increased amount of 
scrutiny by the State Department, as we speak. The Department of 
Homeland Security is looking at it as we speak. Members of Congress and 
the General Accounting Office are doing the same. GAO is also 
investigating the L-1 visa program. And the Judiciary Committee 
recently held hearings on this issue.
  What Congress must realize is that because the proposed legislation 
is implementing a free-trade agreement between the United States and 
Chile and Singapore, Congress' power to amend the proposed legislation 
is minimal even when Americans are being adversely affected.
  Only those amendments that do not conflict with the free-trade 
agreement can be amended without violating the agreement. This is the 
interesting catch-22 of what we are about to do. In fact, when asked 
whether Congress would be able to enact laws making changes in the H-1B 
or the L-1 visa programs that affect Chilean and Singaporean 
nationalities, once Congress approved the implementing language, the 
USTR, in a written response to questions submitted during a Judiciary 
Committee hearing, stated: ``[the United States] may make modifications 
to the immigration law that was amended by the proposed legislation to 
the extent consistent with the obligations of the United States Under 
the Chile and Singapore Agreements.
  This means that the United States ability to protect against fraud or 
protect U.S. workers from displacement by Chilean and Singaporean 
workers is reduced. The USTR states that ``neither agreement precludes 
the United States from modifying its law and regulation related to 
temporary entry after the Agreement enters into force, as long as those 
modifications do not unduly impair or delay trade in goods or services 
or the conduct of investment activities under the Agreements.'' 
However, the USTR has also stated that ``the international mobility of 
business persons, whether in their personal capacity or as employees 
providing services, has become an increasingly important component of 
component of competitive market for suppliers and consumers alike.'' 
This means that any restriction on visas may be viewed as unduly 
impairing or delaying trade in goods or services or the conduct of 
investment activities under the Agreements because employee services 
are so valuable.
  As we have witnessed in this post-September 11th world, our 
immigration laws are a delicate work in progress as we try to find a 
solution to many of our immigration problems. As we continue to work on 
immigration provisions to further protect our nation we now have a new 
roadblock--a provision created and placed in these free trade 
agreements.
  Should Congress, in the future, try to amend or change any of our 
current immigration provisions we must now always keep an eye on the 
provisions contained in these trade agreements. Why? Because should 
Congress change any of our immigration laws to adapt in this new 
world--and change any immigration laws that are subsequently also 
contained in these agreements--those new laws may in fact violate these 
very trade agreements--cause a tremendous problem. The problem is 
embodied within the provision.
  As a result, Chile or Singapore, or any future country we negotiate 
with, could challenge us by challenging our immigration laws in an 
international court.
  In other words the Senate of the United States, within these 
provisions, could be found in violation of the agreement, and therefore 
has lost control of its own ability to change our laws.
  Having our immigration laws challenged in an international court is 
something I firmly believe Americans do not want questioned or subject 
to an international body. It is simply called national sovereignty.
  Many of my constituents have always been concerned that, as we 
increasingly internationalize our economy, somehow we would lose our 
own ability to legislate and govern ourselves and control domestic 
policy. Tonight, with passage of these free-trade agreements, we have 
made a step, I believe, in that direction.
  Effectively, the immigration provisions contained in these FTAs are 
tying the hands of Congress as it relates to ensuring American workers 
are not displaced or working conditions are adversely affected. Should 
something happen in the United States where Congress deems it 
absolutely necessary to change our immigration laws in the interest of 
National Security--I say good luck without incidentally dragging these 
trade agreements down and throwing the entire agreement into question 
or into an international tribunal, where we could easily be out-voted.
  Many should be seriously asking the question why our Trade 
Representative is now our point person on immigration laws. The 
safeguards our Trade Representative left in these agreements in regards 
to the immigration provisions is minimal. Do these trade agreements 
allow the United States to block certain individuals of interest

[[Page 20455]]

who are tying to come to this country under these new provisions? Yes 
it does. However, we did not negotiate a safeguard to suspend these new 
provisions without throwing the United States into violation of a Free 
Trade Agreement.
  The bottom line is Congress has its hands tied. Should we try to 
correct an immigration law in the future, we may also be creating an 
additional problem while trying to correct another.
  If these laws were vital to the free-trade agreement, I am certain 
the USTR, or those parties who have an interest in them, could and 
should have brought them to Congress as a freestanding amendment to our 
immigration laws and proposed them to us as a critical part of passing 
a free-trade agreement. That was not done. They were incorporated in 
the free-trade agreement because our trade ambassador knew they could 
not be amended once they were embodied. We would have to take them in 
part and in parcel.
  However, under this agreement, now our hands are tied. I don't 
believe the American people want our hands tied when it comes to 
immigration law. They want us to be flexible, they want us to regain 
control of our borders, they want us to protect our workforce, while at 
the same time expanding where necessary, and an international workforce 
is needed. Clearly, in this country and in the future, that will be 
necessary. I hope we move in that direction. I will oppose these 
tonight because of that.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. HATCH. Mr. President, as I understand it, the Presiding Officer 
would like to deliver his remarks. I ask unanimous consent that he be 
permitted to speak and then I be permitted to speak.
  The PRESIDING OFFICER. Is there objection?
  Mr. REID. Mr. President, I wasn't able to hear that.
  Mr. HATCH. I asked that the Senator from Texas, who is now presiding, 
be able to speak and then that I may speak immediately thereafter.
  Mr. REID. The leaders are wishing to get the floor. How long will it 
be?
  Mr. HATCH. Not very long.
  Mr. REID. I have no objection.
  The PRESIDING OFFICER (Mr. Craig). The Senator from Georgia is 
recognized.
  Mr. CHAMBLISS. Mr. President, I thank my friend from Utah for letting 
me do this.
  I rise in support of the resolution offered by our colleague from 
Alabama, Senator Sessions. I have always been a supporter of free-trade 
agreements, as long as those free-trade agreements were fair.
  My State has been a huge beneficiary of trade agreements. We are a 
strong economic factor in the United States. We want to continue to be, 
and we will continue to benefit from trade agreements as long as those 
agreements are fair.
  But there is a problem here tonight with the two agreements we are 
going to be voting on--the agreements with Singapore and Chile. We are 
in very difficult economic times in this country. As a result of those 
difficult economic times, we have seen unemployment in this country 
reach the level of 6 percent, and actually now a little above 6 
percent. My State has suffered just as every other State around the 
country with our fair share of those unemployed individuals.
  Part of the displacement of those individuals is due to the 
immigration policies we have in effect in our country today, which 
allow people from other countries who want to come to America to work. 
We have always had an open-door policy, and we should continue to have 
an open-door policy, welcoming people from other countries to come to 
the U.S. to improve the quality of life for them and their families.
  At the same time, with that open-door policy, we should not have a 
policy that displaces American workers when the American workers want 
and need the jobs they are losing because of individuals coming into 
this country.
  As chairman of the Subcommittee on Immigration and Border Security of 
the Judiciary Committee, I held a hearing this week on one of our visa 
programs. It is called the L-1 program whereby individuals can come 
into this country on a visa from anywhere around the world and be put 
in a position that supposedly is not being used to displace an American 
worker.
  As we found out at our hearing this week, it is happening over and 
over where the situation in the system is being taken advantage of, 
which results in abuses of that program that has the effect of 
displacing American workers.
  We are going to hold another hearing in that subcommittee in 
September on the H-1B program. This has been a very valuable program to 
our country and particularly the high-tech industry that needed, during 
the nineties, an increase in the caps under the H-1B program to 
accommodate the technicians they needed to operate their businesses 
successfully.
  What we found is that these individuals who come in under the L-1 and 
H-1B programs are being paid at lower rates than American workers they 
are displacing. With the slowdown in the economy and with the increase 
in unemployment, we are seeing that those H-1B and L-1 visa individuals 
who are coming into the United States are maintaining their jobs while 
Americans have been displaced. In part because of the abuses, the 
Americans, having been paid at a higher rate, are losing their jobs, 
and that is not right.
  Lo and behold, with an agreement that is supposed to be an economic 
stimulus creating trade with Chile and Singapore, what do we see but 
the Office of the U.S. Trade Representative negotiating as a part of 
these agreements with Chile and Singapore a policy change in our 
immigration law which now allows some 5,400 individuals from Singapore, 
and 1,400 individuals from Chile per year, over and above all of the 
limits which are presently in place under H-1B, L-1, and L-2, and every 
other visa program we have in place, to come into the United States 
with no provision in these trade agreements for any kind of attestation 
that these people will not be allowed to come in from Singapore and 
Chile if they are displacing American workers. That is not right. That 
is also not the function of the Office of the U.S. Trade 
Representative.
  It is the function of the U.S. Congress to set policy when it comes 
to the immigration laws of this country. We should not allow the U.S. 
Trade Representative to usurp that power and that authority which is 
given to Congress.
  I rise tonight in strong support of the resolution offered by Senator 
Sessions. I think we need to send a shot across the bow telling the 
Office of the U.S. Trade Representative that we are not going to let 
him usurp the authority and the power that is given to the Congress of 
the United States by law in our immigration policy. It is our 
obligation to set that policy and not the obligation of the Office of 
the U.S. Trade Representative.
  I have very grave concerns about these two agreements. I understand 
there are other agreements that are already being negotiated that have 
these same provisions in them. It was never the intention of any of us 
who voted to grant fast-track authority to the administration that the 
administration would be allowed to set immigration policy. It is wrong 
and it should not happen. Therefore, I strongly support the resolution 
of the Senator from Alabama.
  The PRESIDING OFFICER. The Senator from Utah is recognized under the 
unanimous consent agreement.
  Mr. HATCH. Mr. President, I ask unanimous consent that the remaining 
time of the distinguished Senator from Alabama, Mr. Sessions, be 
yielded back.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. I ask unanimous consent that immediately following my 
remarks on these two speeches, that Senator Max Baucus from Montana be 
permitted to speak.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HATCH. Mr. President, I rise today to speak in support of 
legislation

[[Page 20456]]

implementing the free-trade agreements that have been negotiated 
between the United States and Chile, S. 1416, and between the United 
States and Singapore, S. 1417. I appreciated the remarks of my 
colleague who is the chairman of the Immigration Subcommittee of the 
Senate Judiciary Committee. I have great admiration for him, and I 
believe he has given an appropriate warning to the Trade Representative 
and the administration with regard to some of the criticisms that have 
been lodged against these agreements.
  Let me begin by commending the Bush administration for negotiating 
these agreements with Chile and Singapore. Both Chile and Singapore are 
countries that represent economic stability and growth in their 
respective region of the world. These trade agreements will provide new 
market access for American workers and products including agricultural, 
manufactured products, telecommunications equipment and other high-
technology products.
  Let me also commend Senators Grassley and Baucus for bringing these 
agreements through the Finance Committee in the same bipartisan fashion 
that has characterized all of the recent congressional actions with 
respect to international trade. I am pleased to work with them on trade 
matters in the Finance Committee.
  As chairman of the Judiciary Committee, I note that both of these 
agreements contain chapters on matters of great importance to our 
Committee. These include: intellectual property; antitrust; e-commerce; 
telecommunications; and, last and certainly not least, immigration. In 
many ways, the substance of the negotiations on matters that fall 
within the jurisdiction of the Judiciary Committee focused on ways to 
encourage our trading partners to harmonize their law with current U.S. 
standards. We should take pride in this dynamic.
  Let me turn first to S. 1416, the United States-Chile Free Trade 
Agreement. Despite its status as a relatively new democracy, Chile is 
regarded by many to be a model for the successful implementation of 
market-oriented economic reform measures since its first democratic 
elections in 1989. Although we have seen a slight trade deficit emerge 
in our trade with Chile over the past few years, I believe a free trade 
agreement between our countries is likely to stimulate growth in both 
economies.
  The United States-Chile FTA will provide new market opportunities for 
United States workers and businesses. American companies currently 
operate at a competitive disadvantage in terms of trade with Chile, 
because many key foreign competitors, such as Canada, Mexico and the 
European Union already have executed free trade agreements with Chile. 
In fact, the National Association of Manufacturers estimates that 
without an FTA with Chile, U.S. exporters lose roughly $800 million per 
year in sales, which affects approximately 10,000 American jobs. With 
the adoption of the Chilean agreement, America would see an immediate 
elimination of tariffs on more than 85 percent of consumer and 
industrial goods. This will help eliminate the current trade deficit 
and will provide for increased export opportunities for U.S. companies.
  Some estimates place the potential annual economic benefits of the 
United States--Chilean Free Trade Agreement at an impressive $4.2 
billion annual increase in the U.S. gross domestic product and a $700 
million increase in the Chilean GDP.
  The Chilean FTA will provide numerous economic opportunities for my 
State of Utah, which is important to me. Currently, Utahns export 
approximately $657 million worth of consumer goods to Chile every year. 
The major sectors of Utah's economy that will benefit most from a Chile 
FTA are manufacturers of computer machinery and components, high-tech 
computer software developers, manufacturers of medical devices, and 
dietary supplement companies.
  Tariff-free trade with Chile will also result in expanded markets for 
America's farmers and ranchers, with more than 75 percent of U.S. farm 
goods becoming tariff-free within 4 years after enactment of the 
agreement. The agreement would also provide greater access for U.S.-
based financial service companies to operate in the Chilean financial 
markets. This will result in new growth opportunities for U.S. banks, 
insurance companies, securities firms, and telecommunications 
companies.
  Before entering into trade negotiations with the United States, Chile 
was required to adopt all provisions required for membership in the 
World Trade Organization. This includes the Trade-Related Aspects of 
Intellectual Property Rights Provisions, the so-called ``TRIPS'' 
provisions. The TRIPS provisions protect U.S. patent, copyright, and 
trademark owners.
  The United States-Chile Free Trade Agreement is a very important step 
in building stronger political and economic ties, not only with Chile, 
but with all of South America. As I see it, Chile is a strategic ally 
in South America. Chile provides a strong economic and political base 
in a region of the world that is currently experiencing extreme 
economic hardships. The adoption of the Chile FTA is an important first 
step toward the expansion of hemispheric wide-open trade relations 
throughout North and South America through the proposed Free Trade 
Agreement of the Americas.
  The United States-Singapore Free Trade Agreement, S. 1417, would have 
a similar effect on trade and economic liberalization in Southeast 
Asia. Like Chile, Singapore is a leader in its region for free trade-
oriented reforms. It is very important to note that the United States-
Singapore Free Trade Agreement is the first free trade agreement that 
the United States will have negotiated with an Asian nation.
  Singapore is a relatively small nation geographically. It encompasses 
only 246 square miles and has a population of only four million people. 
Its economy is robust and highly competitive. It is one of the most 
open, well-regulated and secure markets for investment in Asia. 
Approximately 1,300 American firms have a significant presence in 
Singapore and all indications are that the establishment of an FTA with 
Singapore will provide additional opportunities for American industries 
through increased market access.
  An FTA with Singapore also provides an opportunity for expansion in 
Utah's economy. Singapore currently receives almost 6 percent of Utah's 
international exports, amounting to more than $263 million. The top 
exports to Singapore from Utah include electronic machinery, plastics, 
perfumery, cosmetics, and telecommunications services and equipment.
  The United States-Singapore Free Trade Agreement provides for 
reciprocal levels of market access, eventually eliminating the few 
remaining tariffs on American goods and services, and eliminating or 
reducing all non-tariff barriers to American exports. The Singapore FTA 
also requires observation of the TRIPS provisions.
  The agreement with Singapore will provide opportunities for economic 
expansion and encourage free trade throughout Southeast Asia. This 
agreement merits the support of the Senate.
  The Senate will soon have a chance to vote for, or against, both of 
these important free trade agreements. Last year a broad bipartisan 
group of 66 Senators voted for trade promotion authority. One of the 
chief reasons for adopting fast track procedures is to prevent trade 
treaties from death by amendment and procedural delays. Although no 
amendments are in order under the fast track rules, all Members of the 
Senate retain their ultimate authority to accept or reject any treaties 
or implementing legislation that the Administration proposes.
  Because the Trade Act of 2002 calls for up or down votes without 
opportunity for amendment, it is important that Congress be fully 
consulted. This should occur at each step of the process. I know that 
this inability to amend the implementing language of these agreements 
has concerned many members of the Judiciary Committee.
  From the perspective of the Judiciary Committee, I can tell my 
colleagues that the most controversial provisions of these trade 
agreements

[[Page 20457]]

are those addressing the temporary entry of professional workers and 
intra-company transfers. Many members of the Judiciary Committee, 
Republicans and Democrats alike, have expressed their dismay over the 
immigration provisions.
  Many Senators have unequivocally stated their objections to the 
manner in which the temporary entry provisions were transmitted to 
Congress. I share many of their concerns. The administration must 
consult with Congress, and specifically with the Judiciary Committee, 
on all matters within our committee's jurisdiction. At our mark-up on 
this implementing language, many members of the Committee made it plain 
that individual trade agreements are not the best forums for raising 
matters of general immigration law and policy. I trust that USTR will 
heed this message in the future.
  To be fair to USTR, I understand that there were six briefings at the 
staff level prior to the transmission of the final implementing 
language. In addition, USTR briefed the committee staff on the proposed 
implementing language before it was finalized. There were also numerous 
additional informal consultations among committee staff on both sides 
of the aisle, and between committee staff and USTR and other 
administration officials over the last few weeks. Most, although not 
all, members of the Judiciary Committee sent representatives to these 
meetings.
  Finally, the Judiciary Committee held a hearing on July 14 to allow 
the members of the committee to question USTR's principal negotiators 
on the draft implementing language for thee two agreements.
  USTR worked to address the concerns expressed by Judiciary Committee 
members. Three main issues surfaced: first, time limits on the 
professional workers' visas; second, numerical limits on such 
professional workers; and, third protection of American workers. I want 
to discuss how these matters were resolved in the legislation.
  With respect to the concern that there is a lack of a time limit for 
the professional workers' category, I note that contrary to how some 
may read the implementing language, the legislation does not allow 
indefinite stays. While it is true that the professional visa provision 
in the trade bills does not set a time limit, it does have to be 
renewed every year and is subject to section 214(b) of the Immigration 
and Nationality Act. This means that at each renewal, the applicant 
must show that the stay in the US is temporary and that there is not 
immigrant intent. In that sense, the safeguard against someone 
circumventing the permanent residence requirements is arguably greater 
than the safeguard contained in the traditional H1-B visa, which is 
expressly exempted from section 214(b).
  With respect to the numerical cap, I would emphasize that the 
allocations for Chile and Singapore come under the overall cap for 
current H1-B visas. Therefore, there is no net increase of foreign 
workers because of these agreements. Moreover, the annual limits for 
Chile and Singapore, set at 1,400 and 5,400 respectively, are statutory 
ceilings. Our Government does not have to allocate the full amount 
every year.
  Some of my colleagues are concerned about the fact that these 
agreements do not allow labor certification. First of all, I want to 
clarify that currently there are no labor certification requirements in 
our immigration laws for any visa category comparable to the ones 
described in the trade agreements. However, for the temporary 
professional workers, there is a requirement for certain employers to 
complete labor condition attestations. Before hiring a foreign worker, 
the employer must attest, among other things, that prevailing wages 
will be paid and the foreign workers will not be used as leverage in 
any labor dispute. In fact, if there is a strike or lock-out, foreign 
workers are not even permitted to come into the United States.
  The implementing language also provides appropriate penalties for 
errors and fraud in the attestations. Contrary to the suggestions made 
by some of my colleagues, the implementing language does indeed 
authtorize the Department of Labor to initiate random investigations of 
anyone who has failed to meet a condition of the attestation. The 
implementing language does expressly prohibit displacing American 
workers through lay-offs within 90 days of the filing of a visa 
application. As for labor certification or numerical limitations on 
business visitors, traders and investors, or intra-company transferees, 
we must understand that these visas, if used properly, are not intended 
to threaten American jobs at all. In fact, business visitors are not 
even permitted to receive a salary in the U.S. and may only remain for 
a few months just like tourists.
  I appreciate the reality that some unscrupulous American employers 
have used the visa categories I just described to commit immigration 
and labor fraud. The visas have become ways for some to hire cheap 
foreign labor, and that has unfairly hurt American workers. I am 
sensitive to the difficulties faced by out-of-work Americans and their 
families. However, we need to understand that the existence of 
temporary worker visas in our laws is not the problem. The problem is 
the misuse of these visas by those who do not respect our laws.
  We should not tolerate fraud and abuse of our immigration and labor 
laws. We should take appropriate actions to curb fraud and abuse in 
this area.
  I understand that the Labor Department already has the authority to 
investigate visa fraud of this nature if a complaint is filed. But, if 
conferring more investigative authority upon the Labor Department is 
the key to solving the problem, then Congress should examine that 
option notwithstanding the lack of any labor certification. I was 
informed by USTR that the implementing language excluded some language 
in the current H1-B scheme because those provisions are due to sunset 
at the end of this fiscal year, but if those provisions are extended, 
they certainly may be applied to these treaty visas.
  I would also like my colleagues to keep in mind that these agreements 
are reciprocal. Every gesture of courtesy extended to Chilean and 
Singaporean citizens is extended to American citizens. The same is true 
for all restrictions. A good illustration is the provision calling for 
disputes to be resolved in a so-called ``international review panel.'' 
The panel does not bind the U.S. government, and does not interpret 
U.S. law. It is a forum, however, where American businesses can address 
their grievances before an impartial reviewer. As Assistant USTR Ralph 
Ives testified before the Judiciary Committee the July 14 hearing, 
these review panels do not take the place of U.S. courts, and do not 
even review individual cases. Instead, they review allegations of 
patterns or practices by either party of the trade agreements.
  Finally, some have raised a very good question about whether the 
Trade Act of 2002 confers authority to include matters of immigration 
in trade agreements. As early as the Commerce and Navigation Treaty 
with Great Britain of 1815, immigration provisions have been included 
in trade agreements that allowed for the entry of foreign nationals to 
conduct trade. Moreover, section 2102 of the Trade Act of 2002 calls 
for the President to reduce barriers to trade in services. Implicit in 
that authority is the mandate to provide access for U.S. businesses, 
including small to mid-size businesses, to foreign markets.
  It is clear to me that the language we consider today has benefited 
from the interaction between Congress and the executive branch. Despite 
these improvements, some friction remains on the matter of taking up 
matters affecting general immigration policy as part of the 
negotiations on particular trade agreements.
  Anyone present at either the Senate Judiciary Committee or House 
Judiciary Committee mark-up of the immigration implementing legislation 
for the Chile and Singapore FTAs got the message: Tread lightly and 
consult heavily.
  Before I close, I want to reiterate that I have faith in the American

[[Page 20458]]

worker. I have no doubt that with the right training, our workers can 
compete with the best in the world. I also believe that competition is 
good for America. We have no reason to fear foreign competition in the 
global economy so long as we are all playing by the same rules and on a 
level playing field.
  I introduced The American Competitiveness in the Twenty-First Century 
Act that authorizes funds collected from H1-B visa application fees to 
be invested in training American workers in the fields where we have 
traditionally relied on foreign workers. I ask my colleagues to join me 
in efforts and prepare American workers to fill the needs of our job 
market, especially in the fields of math, science, and high technology. 
It is my hope that, in due time, we will no longer rely on foreign 
workers to help fill our needs in any sector of the job market.
  In a global marketplace, American workers and firms must be given the 
opportunity to conduct business abroad. Indeed, we live in a world 
economy where free trade is vital to our economy. As I see it, the 
flexibility to send essential personnel from the United States to 
another country in order to provide much-needed, service-oriented 
support is an essential part of international commerce. Consequently, 
within the parameters of sound immigration policy, the United States 
must reciprocate the courtesy that we expect our trading partners to 
extend to American citizens working and trading abroad.
  I support these two implementing bills. the FTAs with Chile and 
Singapore are good treaties. On balance, this legislation, despite some 
of the sensitivities in the area of immigration, will help bring the 
benefits of these trade treaties to the American public.
  I think that a review of the record shows that after extensive 
discussion with both the Senate staff and the House staff, the 
administration satisfactorily addressed the vast majority of the 
concerns expressed by Republican and Democratic members of the 
Judiciary Committee.
  When all is said and done, these are good trade agreements. One of 
the lessons I hope the administration has learned is that including 
immigration-related provisions in individual trade agreements that 
raise General matters of immigration policy is a very, very sensitive 
issue to us up here. In the future, I expect the administration will 
avoid negotiating immigration matters in trade agreements unless the 
Congress is broadly supportive of the provisions. If there are 
compelling circumstances to negotiate such agreements, I expect 
extensive consultation between the administration and Congress at both 
the Member level and staff level so that all of our concerns can be 
adequately addressed.
  The issue of immigration aside, I believe there is a wide consensus 
that, overall, we have two good trade treaties and two good 
implementing bills. I urge every Member to vote in favor of the United 
States-Chile and United States-Singapore Free Trade Agreement 
implementing language.

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