[Congressional Record (Bound Edition), Volume 149 (2003), Part 7]
[Senate]
[Pages 8686-8706]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          LEGISLATIVE SESSION

                                 ______
                                 

                            CARE ACT OF 2003

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate 
now return to legislative session and proceed to the consideration of 
S. 476, the CARE Act, as provided under the previous order.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report the bill by title.
  The bill clerk read as follows:

       A bill (S. 476) to provide incentives for charitable 
     contributions by individuals and businesses, to improve the 
     public disclosure of activities of exempt organizations, and 
     to enhance the ability of low-income Americans to gain 
     financial security by building assets, and for other 
     purposes.

  The Senate proceeded to consider the bill.
  Mr. GRASSLEY. Mr. President, I have a few remarks on the legislation. 
I am sure my good colleague, Senator Baucus, has remarks as the manager 
for the Democratic Members. We would also like to take quick action on 
a managers' amendment that is in order under a unanimous consent 
agreement. There are a few issues that have to be cleared on the 
amendment.
  I rise to speak on the CARE Act of 2003. I will first talk generally 
about the charitable provisions in the bill and then talk about those 
provisions designed to combat corporate tax shelters.
  The CARE Act seeks to support that great American tradition--helping 
a neighbor in need. Our Nation's tradition of caring and charitable 
support goes back to the founding. When faced with tragedy or hardship 
in our communities, we have always been a people who have rolled up our 
sleeves to pitch in, rather than leaning on a shovel waiting for the 
government to show up.
  The charitable tradition in America has certainly been for the common 
good. Unfortunately, there are not many K Street lobbyists for 
charities and for the common good.
  That is why this legislation is a direct testimony to the leadership 
of President Bush. There is no question that but for his efforts, this 
legislation for the common good would not have seen the light of the 
Senate floor.
  Let me note that commentators have rushed to state that the 
President's efforts to strengthen America's charitable tradition has 
been watered down. Nothing could be further from the truth. This 
legislation goes far in meeting the President's ambitious goals for a 
greater role for charities in assisting those most in need.
  And legislation is only part of the story. The President's speeches 
and visits have done even more to energize the charitable sector of 
this country. Hardly a week goes by when I am not stopped by someone 
who runs a charity, or is active in a charity, and they ask me how they 
can get involved in the President's proposal, how they can help. 
Clearly, President Bush's words have been heard by America's charities 
and they are eager to turn his words into deeds of compassion and aid.
  In addition to this legislation being a tribute to President Bush's 
leadership, let me also note the tremendous efforts of Senators 
Santorum and Lieberman to bring this bill to the Senate floor. I 
commend them for their energy in making the CARE Act a reality. 
Finally, I'm pleased to have worked with Senator Baucus, the ranking 
member of the Finance Committee. This legislation continues our 
bipartisan efforts as to tax legislation.
  Mr. President, for the benefit of my colleagues let me now highlight 
some of the major tax provisions of the CARE Act that encourage 
charitable giving.
  First, is the creation of a charitable deduction for nonitemizers. 
Given that over half of Americans do not itemize their tax return, this 
provision will encourage taxpayers to give to charities, regardless of 
income. The legislation allows for charitable deduction of up to $500 
for a married couple giving over $500 per year. For an individual 
filing single, it is a deduction of up to $250 for a person who gives 
over $250 per year. For example, an individual who doesn't itemize and 
gives $400 to charity, could deduct $150 from their taxes. This 
provision was designed to encourage new giving and also limit possible 
abuses.
  Next is a major provision that will provide for tax-free distribution 
from Individual Retirement Arrangements, IRAs, to charities. This is a 
provision that is important to many major charities, particularly 
universities. The Finance Committee heard testimony from the President 
of the University of Iowa about the importance of this provision in 
encouraging new giving. The legislation provides that direct 
distributions are excluded from income at the age of 70\1/2\ and 
distributions to a charitable trust can be excluded after the age of 
59\1/2\.
  We then have language that encourages donations of food inventory, 
book inventory and computer technology. I would note that my 
colleagues, Senator Lugar, and Senator Lincoln, a member of the Finance 
Committee, were strong advocates for the legislation involving food 
donation. I'm particularly pleased that this legislation

[[Page 8687]]

will give farmers and ranchers a fairer deal when it comes to donation 
of food.
  Conservation is also a part of this bill. Efforts to conserve our 
land and limit development benefit our Nation as well as farmers and 
ranchers who work on the land. The CARE Act contains language I have 
long supported that will encourage conservation of land through a 25-
percent reduction in the capital gains tax of the sale of undeveloped 
land, or conservation easements. The sale must be to a charitable 
organization and the land must be dedicated for conservation purposes. 
I am pleased that President Bush also included this proposal in his 
budget.
  The bill also encourages gifts of land for conservation purposes. 
This is an issue long advocated by Senator Baucus, which I am pleased 
to support.
  These are the major tax provisions that encourage charitable giving 
contained in this bill. I would note that I am pleased that the 
legislation does contain provisions requiring greater sunshine and 
transparency in the work of charities. It is my belief that just as we 
are encouraging people to write more checks, we need to ensure that 
those checks are being cashed for a charitable purpose. In addition, 
the bill authorizes a serious increase in funding for the Exempt 
Organizations Office at the IRS to better police the few bad apples 
among the nonprofits.
  My colleagues should also be aware that this legislation addresses 
the abuse of charities by terrorist organizations, making it easier to 
shutdown or suspend such organizations.
  Let me note also that this bill contains $1.4 billion in new funding 
for Social Services block grants, SSBG. This is a very important 
provision that will greatly benefit the States and, more importantly, 
those in need. I would note that this was a matter of great priority 
for me, and I am glad to see we have been able to include this funding. 
The provision also gives States greater flexibility in how to use the 
SSBG funds.
  My colleagues will be pleased to know that this bill is fully paid 
for. I turn now to discuss those provisions regarding abusive corporate 
tax shelters that are of great importance.
  We have known for many years that abusive tax shelters, which are 
structured to exploit unintended consequences of our complicated 
Federal income tax system, erode the Federal tax base and the public's 
confidence in the tax system. Such transactions are patently unfair to 
the vast majority of taxpayers who do their best to comply with the 
letter and spirit of the tax law.
  As a result, the Finance Committee has worked exceedingly hard over 
the past several years to develop several legislative discussion drafts 
for public review and comment. Thoughtful and well-considered comments 
on these drafts have been greatly appreciated by the staff and members 
of the Finance Committee. The collaborative efforts of those involved 
in the discussion drafts combined with the recent request for 
legislative assistance from the Treasury Department and IRS formed the 
basis for our most recent approach to dealing with abusive tax 
avoidance transactions.
  The antitax shelter provisions contained in the CARE Act encourages 
taxpayer disclosure of potentially abusive tax avoidance transactions. 
It is surprising and unfortunate that taxpayers, though required to 
disclose tax shelter transactions under present law, have refused to 
comply. The Treasury Department and IRS report that the 2001 tax filing 
season produced a mere 272 tax shelter return disclosures from only 99 
corporate taxpayers, a fraction of transactions requiring such 
disclosure.
  Today's bill will curb non-compliance by providing clearer and more 
objective rules for the reporting of potential tax shelters and by 
providing strong penalties for anyone who refuses to comply with the 
revised disclosure requirements.
  The legislation has been carefully structured to reward those who are 
forthcoming with disclosure. I wholeheartedly agree with the remarks 
offered by a recent Treasury Assistant Secretary for Tax Policy, that 
``if a taxpayer is comfortable entering into a transaction, a promoter 
is comfortable selling it, and an advisor is comfortable blessing it, 
they all should be comfortable disclosing it to the IRS.''
  Transparency is essential to an evaluation by the IRS and ultimately 
by the Congress of the United States as to whether the tax benefits 
generated by complex business transactions are appropriate 
interpretations of existing tax law.
  To the extent such interpretations were unintended, the bill allows 
Congress to amend or clarify existing tax law. To the extent such 
interpretations are appropriate, all taxpayers--from the largest U.S. 
multinational conglomerate to the smallest local feedstore owner in 
Iowa--will benefit when transactions are publicly sanctioned in the 
form of an ``angel list'' of good transactions. This legislation 
accomplishes both of these objectives.
  This year's legislation contains a new provision that would clarify 
the economic substance doctrine. The economic substance doctrine was 
created by the courts as a flexible text to determine whether a 
transaction is a tax scam or valid business deal.
  Last year, there were several court rulings that, in my view, 
misapplied this doctrine. These rulings now stand as legal precedent 
that can be used to justify abusive schemes in the future. Today's 
clarification is intended to overturn those rulings. If a court finds 
that a shelter violates our clarification, the shelter participant 
would be subject to a strict 40 percent penalty on any tax due. This is 
a very tough anti-shelter provision.
  Mr. President, I appreciate my colleagues' patience as I have 
reviewed the key provisions of the CARE Act. I think it is legislation 
that provides needed encouragement for charities and charitable giving 
in this country. In addition, it takes real steps toward addressing 
corporate tax shelters. I strongly encourage my colleagues to support 
this legislation.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BAUCUS. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. Mr. President, I thank the chairman of the Finance 
Committee, Senator Grassley, for the great job he has done in putting 
this bill together. It is not easy. There are lots of different 
components and many Senators have legitimately different points of 
view. I commend him for his yeoman work. He is not here at the moment, 
but I want him to know, in the arena of the Senate, and publicly, he 
has done a great job. The folks in Iowa must be very proud of him.
  The chairman and I together are considering a bill designed to help 
charitable organizations--that is the main goal here--and, therefore, 
to help our communities.
  The bill is called the Charity Aid Recovery and Empowerment Act, 
otherwise known as CARE. Our President said it well:

       In order to fight evil we must do good. [And] it is the 
     gathering momentum of millions of acts of kindness and 
     compassion which define the true face of America.

  I think that is very true. More than peoples in any other country, 
Americans are noted for their openness, their generosity, and their 
kindness. At a time when Americans are at war and our economy is 
sagging, this bill is more important than ever.
  The economy is in worse shape than it has been in over a decade. Too 
many Americans go to bed hungry at night. Two million Americans have 
lost their jobs since 2001. Men, women, and children are increasingly 
relying on charities to meet their needs. The problem is made worse 
because our States are strapped with huge budget deficits. States are 
actually the No. 1 provider of social services, but presently they are 
experiencing the largest deficits they have had in 40 years.
  This is where charities come in. Charities deliver food, water, 
clothing, and counseling to those in need. They

[[Page 8688]]

are the first responders to these quiet tragedies. Let me give a few 
examples from my own home State of Montana.
  Each year, the Montana Food Bank Network serves 1.5 million meals, 
including 200,000 meals to our State's children. Clearly our children 
can't learn if they go hungry.
  There are roughly 30 adult literacy programs in Montana serving over 
5,000 people.
  Programs such as the Adult Literacy Center in Billings, MT, and the 
Literacy Volunteers of America in Butte provide free adult literacy 
classes to anyone who walks in the door, free to anyone who walks in. 
Groups like the Blackfoot Challenge provide local voluntary solutions 
to environmental problems like restoring stream habitat.
  I copied the model of Senator Bob Graham of Florida. He has what is 
called workday projects once a month and I do, too. One day I worked at 
Blackfoot Challenge and all of us together in the Blackfoot Valley--not 
all but a bunch of us, 15 people--volunteered our time and work to 
restore a stream habitat. Ranchers in the old days just plowed a 
straight channel through their places and eliminated the meandering 
nature of streams, which made it difficult for bull trout to come up 
and spawn. We decided to do this project together, in part because the 
higher-ups couldn't agree on anything. The Fish and Wildlife Service, 
State Fish and Wildlife, and Parks and all the government agencies 
couldn't get together, so locally we just said we are going to do it 
ourselves--and we did. It is such volunteer, charitable efforts that 
make a huge difference.
  Our State's economy also benefits from tourism, and keeping our 
streams clean and teeming with fish is good for our economy. In fact, I 
might say, I was delayed coming to the floor because I was talking to a 
fellow who could hardly wait to get back to Montana because the right 
hatch is going on now. He is going to go fishing in the next couple of 
days. He couldn't wait to get back home.
  The list goes on: Montanans, working in homeless shelters, churches, 
libraries, schools, boys and girls clubs, substance abuse centers, and 
jails.
  Our State is not alone. This is true all across our country. In 
communities, millions of Americans depend upon the generosity of their 
neighbors and upon charitable organizations. The CARE Act is designed 
to help these organizations, helping them by creating incentives to 
encourage more contributions to charity--help them receive more 
contributions.
  Let me describe some of the main provisions of the bill. The 
provision that has received the most attention is the above-the-line 
deduction for charitable contributions for people who do not itemize 
their deductions. Most Americans actually use the standard deduction--
about 70 percent. This says: OK, all you folks who use the standard 
deduction--that is, you do not itemize your deductions--we will provide 
for an above-the-line charitable contribution for you as well, even 
though you do not itemize.
  I must say, I have some concerns about this provision. Why? Because 
we tried this before. It didn't work very well. That is why we 
eliminated the deduction in 1986. More specifically, I am concerned 
that the deduction will not provide much of an incentive for charitable 
giving while making the Tax Code even more complicated. Nonetheless, 
the President has made this particular proposal a top priority and, in 
light of that, I am willing to give the proposal a chance. So we 
limited the proposal to 2 years to give us time to study it and see how 
it is working and gain from the experience.
  While the nonitemizer deduction has received most of the attention, 
there are several other provisions of the bill that have strong 
bipartisan support. They could provide a significant boost to 
charitable giving. First, we provide enhanced deductions for 
contributions of food, of books, and computers. In response to growing 
economic hardship and hunger that has gone along with it, we have 
increased the deduction for contributions of surplus food. In most 
cases, the Tax Code provides the same tax deduction for food hauled to 
a landfill as it does for food donated to charities. That does not make 
a lot of sense.
  Businesses that choose to contribute food instead of throwing it away 
are faced with the added costs of storing, packaging, and trucking the 
food to the charity.
  So our new enhanced deduction will encourage business, farmers, and 
ranchers to contribute the food by offsetting these costs associated 
with the donations.
  This makes it easier for the farmer in Montana to receive a fair 
deduction for giving food to a local food bank, for example.
  We also make it easier for a publisher to donate extra books to a 
local library. Sometimes lots of books get stacked up and cannot be 
sold. I think it is a good idea to be able to donate them. And kids 
will be able to get much better access to computers and cutting edge 
technology.
  Second, we expand the IRA rollover exception to allow individuals to 
donate their IRAs directly to charity without taking a tax hit.
  Under current law, taxpayers, say, who are prospective donors would 
include their IRA income as taxable income and then take a 
corresponding charitable deduction, subject to limits, when they want 
to donate that IRA to a charity. The provision in the bill makes that 
easier, allowing direct giving; that is, streamlining the process and 
eliminating the limits that impede giving.
  Third, in this bill we provide several important new incentives for 
voluntary conservation; for example, incentives to encourage 
contributions of conservation easements, which are so important, 
especially for my State of Montana and throughout the Nation. This 
means that cash poor/land rich farmers--which I must say, regrettably, 
is the rule, not the exception--can donate the conservation rights of 
their property and get a tax benefit and still keep the family farm in 
the family.
  While the majority of the provisions in this bill encourage giving to 
charities, there are also provisions that help ensure that charities 
are responsible public citizens. As many have noticed, national 
newspapers have recently detailed the secretive use of charities by 
terrorist organizations. This is, obviously, a serious problem. The 
large majority of American charities are law abiding and serve an 
invaluable function. But there are a few exceptions.
  So this legislation gives authority to the IRS to immediately revoke 
the tax-exempt status of charities that are suspected of giving aid to 
terrorist groups. When there is a crisis in confidence with respect to 
charities, it hurts honest groups. The charities that have worked hard 
to further their noble missions should not be jeopardized because of 
bad ``charities'' doing bad things.
  The Finance Committee bill attempts to cure this by giving watchdogs 
and donors better tools to monitor the activities of charities. The 
CARE Act gives State attorneys general more authority to review the IRS 
filings of tax-exempt organizations.
  In addition, the bill lets donors see more information about 
communications between charities and the IRS. These important steps 
will go a long way to help restore America's confidence in charities.
  I have just provided some highlights of the bill, but there are a 
number of other important provisions. All told, this package includes 
many proposals that enjoy widespread support. It has bipartisan 
support. In fact, many provisions have been approved by the Senate.
  With war costs on the horizon, and current budget deficits, it is 
essential we pay for this bill. I applaud Chairman Grassley for 
insisting that these tax cuts be paid for. So let me turn to the 
provisions which cover the costs.
  First, we have included a proposal that takes aim at the 
proliferation of abusive tax shelters. I, along with Senator Grassley, 
introduced the Tax Shelter Transparency Act to encourage more timely 
and accurate disclosure of these abusive transactions. Under the 
proposal, we provide a disincentive to

[[Page 8689]]

promoters, advisors, and taxpayers by subjecting them to stiff 
penalties for failing to acknowledge these transactions to the IRS.
  The proposal also clarifies a definition of what is known as economic 
substance. That means it forces companies to engage in real business 
planning instead of tax-driven hoaxes. The Joint Committee on Taxation 
recently released its Enron report. The transactions it reviewed 
demonstrate the need for strong anti-avoidance rules to combat tax-
motivated transactions. These deals might satisfy the technical 
requirements of the Tax Code, as well as administrative rules, but they 
serve little or no other purpose than to generate income tax or 
financial statement benefits; that is, there is no economic substance 
to the transactions. And the American taxpayers are cheated, frankly--
those who do not have the ability to hire high-paid counsel and 
accountants to find these very complicated measures which, frankly, 
even the IRS cannot figure out in a lot of cases.
  It is just not right when the majority of taxpayers--such as the 
hardware store owner, say, in Butte, MT--have to pay their fair share 
of taxes while these big corporations twist their way out of paying 
their own fair share. That is, I think, simply wrong. But it is the 
right thing to do to use this proposal to pay for tax incentives to 
benefit the charitable community. It is the right thing to do and the 
right time to do it.
  I urge my colleagues to support this legislation.
  I yield the floor.
  Mr. DURBIN. Mr. President, I rise today to discuss the CARE Act and 
my concerns regarding the implementation of President Bush's faith-
based initiative.
  Like many of my colleagues, I am a person of faith. I support the 
good work that religious organizations undertake every day. I agree 
with President Bush and the sponsors of this legislation that there is 
an important role for the Federal Government to play in encouraging 
religious organizations to do more for the good of society.
  In fact, I support many of the provisions of the CARE Act before us 
today. For example, I have been an original cosponsor of the Charitable 
IRA Rollover Act and a cosponsor of the Good Samaritan Hunger Relief 
Tax Incentive Act in the last two Congresses. I also support the 
increased funding for the Social Services block grant.
  However, when I read the specific details of how the President is 
implementing his faith-based initiative, I am concerned that the good 
intentions behind this proposal may be lead to troubling, unintended 
consequences.
  It appears that what the President wants to achieve with this 
initiative is to fundamentally change the historic balance in the 
relationship between government and religion that our founding fathers 
struck over 200 years ago.
  I believe and many of my colleagues agree: this Senate debate is 
historic. With our deliberations, we will test Constitutional 
principles regarding the place of religion in America in a way they 
have never been tested.
  That is why many Senators joined me in insisting that the Senate take 
all deliberate time and attention to carefully review this bill and to 
add language to clarify and improve the bill.
  Since the Senator from Pennsylvania has agreed not to add language 
that would raise concerns with respect to church and state, I have 
joined with Senator Jack Reed of Rhode Island in agreeing not to offer 
our amendments at this time. However, I would like to take this 
opportunity to express my concerns regarding the President's 
implementation of his faith-based initiative which, if offered at a 
later time, I hope will be subject to a vigorous, important, and 
historic debate in the Senate.
  We should begin this debate at the beginning. The opening words of 
our Bill of Rights state that:

       Congress shall make no law respecting an establishment of 
     religion, or prohibiting the free exercise thereof.

  For over two centuries, those 16 words have served us well and have 
protected religious freedom in America.
  We must continue to respect the diversity of belief in America and 
remember that freedom from government interference was one of the few 
principles that early Americans, with a variety of religious 
backgrounds, could agree on.
  In fact, many of the settlers who colonized America fled from 
religious persecution by government officials in their native countries 
and they still do.
  James Madison recognized that this history of religious persecution 
was based upon Government involvement in establishing official 
churches. He believed that Government support of certain religions 
could threaten the liberty of every citizen to hold his or her own 
religious convictions.
  Madison suggested that the Government support of religion differs 
only in a matter of degree, and he vehemently opposed the payment of 
taxes in support of any religion.
  Before the American Revolution, the State of Virginia rescinded a tax 
in support of the Anglican Church, which was their so-called 
established church, and instead granted its citizens religious liberty. 
However, in 1784, Patrick Henry became concerned with the moral decline 
of Virginians and he proposed a bill to restore the tax to support 
``teachers of the Christian religion.''
  Madison responded to this proposal with his ``Memorial and 
Remonstrance against Religious Assessments.'' This document--written 16 
years before the Bill of Rights was adopted--reveals the earliest 
origins of the concepts behind the first amendment: Madison expressed 
his opposition to Government involvement in religion because he 
believed such involvement would interfere with citizens' right of free 
exercise. Madison also believed that the right of religious freedom was 
as important as freedom of the press, trial by jury, and the right to 
vote.
  According to Madison, his Memorial was so widely accepted that 
Henry's proposal failed and Virginia instead enacted Thomas Jefferson's 
``Bill for Establishing Religious Freedom in Virginia.''
  In this bill, Jefferson expressed his belief that religious liberty 
is necessary to ensure that individuals are not forced to support 
religious opinions with which they disagree, to practice faiths they 
find abhorrent, or to voice allegiance to one faith over another, and:

       To compel a man to furnish contributions of money for the 
     propagation of opinions which he disbelieves and abhors is 
     sinful.

  During their Presidencies, Jefferson and Madison had the opportunity 
to illustrate their understanding of the first amendment to the 
Constitution.
  In 1801, the Danbury Baptist Association wrote a letter to President 
Jefferson because it feared that the State of Connecticut would 
establish the Congregationalist Church as the official religion.
  Jefferson responded to the Danbury Baptist Association with a letter 
on January 1, 1802, in which he reaffirmed his belief that each 
individual has the right to hold whatever opinion he or she may choose 
and that the Government should not interfere in religion. This reply 
contained his now-famous view that the purpose of the first amendment 
was to build a--in Jefferson's words--``wall of separation between 
church and state.''
  President Madison, in his 8 years in office, vetoed only seven 
bills--two of which he believed violated the Establishment Clause of 
the first amendment.
  In 1811, Congress passed a bill entitled ``An act incorporating the 
Protestant Episcopal Church in the town of Alexandria in the District 
of Columbia.'' This bill would have enacted the rules of the church as 
a matter of law, thereby giving legal force to the provisions of the 
church's constitution.
  Madison believed that even supporting churches in their charitable 
functions would give religious organizations too much power in public 
and civic affairs. He wrote that the bill would be ``precedent for 
giving to religious societies as such a legal agency in carrying into 
effect a public and

[[Page 8690]]

civic duty.'' Think of those words in the context of the proposal 
before us.
  Madison also vetoed a bill ``An act for the relief of Richard Tervin, 
William Coleman, Edwin Lewis, Samuel Mims, Joseph Wilson, and the 
Baptist Church at Salem Meeting House, in the Mississippi Territory.'' 
This bill would have given a Baptist Church specific Federal Government 
property for the church's use.
  Madison believed that:

       reserving a certain parcel of land of the United States for 
     the use of said Baptist Church comprises a principle and 
     precedent for the appropriation of funds of the United States 
     for the use and support of religious societies, contrary to 
     the article of the Constitution which declares that 
     ``Congress shall make no law respecting a religious 
     establishment.''

  Thanks to Jefferson and Madison, first amendment protections have 
made America the most tolerant society in the world--a tolerance many 
of our critics around the world neither understand nor accept. They 
live in nations where government and religious belief are so closely 
entwined that diversity of creed is officially discouraged, if not 
prohibited.
  Each of us, when we return home, can drive through our cities and see 
a Protestant church down the street from a Catholic church, next to a 
Jewish synagogue which is not too far from a Muslim mosque, and perhaps 
across the street from a Sikh Gur-dwala. Some churches even share their 
facilities with congregations from other religious and ethnic groups. 
To me, this is proof positive that the wisdom of the first amendment is 
alive and well in America today.
  Although some may argue that the faith-based initiative does not 
``establish a religion,'' the Supreme Court has ``long held that the 
First Amendment reaches more than classic, 18th century 
establishments.''
  Indeed, the Supreme Court has examined the history of the first 
amendment and has come to the same conclusion that I have reached:

       For the men who wrote the Religion Clauses of the First 
     Amendment the `establishment' of a religion connoted 
     sponsorship, financial support, and active involvement of the 
     sovereign in religious activity.

  That comes from the case of Walz v. Tax Commission in 1970.
  This is one principle that President Bush seems to be willing to 
accept. I am heartened that the White House publication Guidance to 
Faith-Based and Community Organizations on Partnering with the Federal 
Government is clear that faith-based organizations cannot use any part 
of a direct Federal grant to fund religious worship, instruction, or 
proselytization. Such activities must be separate in time or location.
  The President also agrees that faith-based organizations cannot 
discriminate against beneficiaries or potential beneficiaries of a 
social service on the basis of religion.
  However, one area where we clearly diverge is the issue of employment 
discrimination on the basis of religion.
  The Civil Rights Act of 1964 prohibits most public and private 
employers with 15 or more employees from discriminating in their 
employment practices on the basis of race, color, national origin, sex, 
and religion.
  However, religious employers have an exemption with respect to 
religious discrimination, which was expanded in 1972.
  I will read the current exemption:

       This subchapter shall not apply . . . to a religious 
     corporation, association, educational institution, or society 
     with respect to the employment of individuals of a particular 
     religion to perform work connected with the carrying on by 
     such corporation, association, educational institution, or 
     society of its activities.

  In 1987, the Supreme Court upheld this title VII religious exemption 
in the case of Corporation of Presiding Bishop of the Church of Jesus 
Christ of Latter-Day Saints v. Amos.
  I support this right of religious organizations to use religious 
criteria in hiring people to carry out their religious work. I have no 
quarrel with the title VII religious exemption. It makes sense for 
people of common faith to work together to further their religion's 
mission.
  At the same time, I recognize that discrimination ``on the basis of 
religion'' can often include discrimination based on other factors that 
are prohibited by civil rights laws, such as race, ethnicity, and sex.
  Dr. Martin Luther King, Jr., observed that the hour of worship is one 
of the most segregated hours in American society. Sadly this is still 
true today, but many people of similar racial or ethnic backgrounds do 
prefer to worship together, and there are churches throughout this 
Nation that target only certain races or ethnic groups.
  So, unfortunately, allowing religious organizations to hire only 
members of their own religion, in many cases, can also mean hiring only 
members of a certain race or ethnic background.
  For example, if employment is limited to the co-religionists of the 
recipients, how many African Americans will be hired by Orthodox Jewish 
groups? How many white people will the Nation of Islam employ as 
security guards in public housing? And what of the many Protestant 
groups that are overwhelmingly White or overwhelmingly Black or 
overwhelmingly Hispanic?
  The courts also have read the title VII exemption very broadly to 
allow discrimination on the basis of religion to include the religion's 
``tenets and teachings.'' This broad reading has resulted in situations 
where people of faith who do not necessarily follow the accepted 
lifestyle or private behavior of that religion have lost their jobs.
  Here are some examples of how this law discriminates against people's 
everyday behavior in addition to their religious beliefs:
  In the case of EEOC v. Presbyterian Ministries, Inc., a Christian 
retirement home fired a Muslim receptionist after she insisted on 
wearing a head covering as required by her faith.
  The Church of Jesus Christ of Latter-Day Saints fired several 
employees because they failed to qualify for a ``temple recommend,'' 
that is, a certificate that they were Mormons who abided by the 
church's standards in such matters as regular church attendance, 
tithing, and abstinence from coffee, tea, alcohol, and tobacco.
  This exemption, unfortunately, has had a particularly harsh impact on 
women and people of different sexual orientation. Here are some 
examples of how courts have interpreted this exemption to allow 
employment discrimination against women and gays under the current 
title VII exemption:
  Numerous Christian schools fired female teachers for having 
extramarital sex or committing adultery; upheld by the court. A 
Catholic school fired a teacher who remarried without seeking an 
annulment of her first marriage in accord with Catholic doctrine; 
upheld by the court. A Catholic school fired a teacher for marrying a 
divorced man; upheld by the court. A Catholic university refused to 
hire a female professor because her views on abortion were not in 
accord with Catholic teaching; upheld by the court. A Baptist nursing 
home fired a student services specialist after she was ordained a 
minister in a gay and lesbian church that advocated views on 
homosexuality ``which were inconsistent with the [school's] perception 
of its purpose and mission''; upheld by the court. A church terminated 
the employment of an organist on the grounds that his homosexuality 
conflicted with the church's belief; upheld by the court.
  I regret that these may be unintended discriminatory consequences 
today under the title VII exemption where religious organizations hire 
people using money raised by the church from its own congregation. But 
what of the case we are discussing? We are not talking about a 
situation where churches are spending their own money for their own 
religious purposes and following their own employment codes and 
practices under the title VII exemption. We are talking about opening 
up a new world where tax dollars are taken from the treasury and given 
to these same churches. What if the money is not raised by the 
congregation or coreligionists, but the money is being raised from the 
taxpaying public? What standard should we use?
  Most scholars agree it is an open legal question as to whether a 
religious organization can take taxpayer money and use it to 
discriminate in hiring employees on the basis of religion. It

[[Page 8691]]

would seem to me that the obvious answer to this question is no. Any 
other response would result in taxpayer-funded discrimination. I will 
return to this question and the reasons for my answer after examining 
how this issue fits into the broader picture of the President's faith-
based initiative.
  The faith-based initiative has been marketed as a proposal to ``level 
the playing field'' for religious organizations that seek government 
funds to pay for social service programs. However, it appears that the 
supporters of the initiative do not want to level the playing field; 
they want to create a special set of rules for religious organizations 
which would result in special treatment that other nongovernmental 
organizations do not currently enjoy.
  President Bush has demonstrated, through his Executive orders and 
agency regulations, that his faith-based initiative goes far beyond 
religious icons, religious names, religious language in chartering 
documents or religious criteria for membership on governing boards. I 
do not object to any of those stated goals which I have heard from the 
Senator from Pennsylvania and the Senator from Connecticut as well as 
the President. I have seen the enforcement of rules and standards which 
I think have gone way too far.
  I can think of my own hometown of Springfield where there is a long-
simmering controversy still brought up regularly about whether a 
teacher could come in and teach a driver training course at the 
Catholic high school if that teacher were paid for out of public school 
funds and that Catholic high school and its classroom had a crucifix on 
the wall. It rubbed a lot of people of my Catholic religion the wrong 
way, that people would argue that the mere presence of that crucifix 
was somehow offensive or violated the law. That argument goes to the 
extreme. I do not hold those views. I support the position stated time 
and again by the Senators from Pennsylvania and Connecticut that we 
ought to draw a more reasonable line. The House of Representatives, 
with mottos on the walls ``In God We Trust,'' with our currency 
reflecting that, with chaplains in the House and Senate, we can state a 
reasonable standard that does not violate the basic freedom of religion 
or establishment clause of our Constitution. But I do object to the 
administration bypassing Congress to write one set of rules for secular 
organizations and another for religious organizations.
  For example, all recipients of government grants currently are 
required to abide by a host of regulatory requirements, including 
filing IRS documentation and complying with all State and local laws. 
Supporters of the faith-based initiative would like to exempt religious 
organizations from complying with these important regulations, such as 
those dealing with health and safety. Explain that for a moment.
  If in the State of Illinois or my city of Springfield someone wants 
to run a daycare center and we have decided, for the safety of the 
children in the daycare center, there should be perhaps a sprinkler 
system, a fire alarm, or a fire escape, certain doors so that kids can 
get out in case of emergency, why, if this becomes a faith-based 
childcare center, should we reduce or limit that same application of 
health and safety standards? It doesn't make sense. One of the 
amendments which needs to be offered as part of this conversation on 
faith-based initiatives will address that.
  Take a look at the Teen Challenge substance abuse program which 
President Bush has mentioned many times. In 1995, the Texas Commission 
on Alcohol and Drug Abuse threatened to close Teen Challenge after 
issuing a 49-page list of violations of State health and safety codes. 
The list included unlicensed counselors, food preparation that created 
a health hazard, a broken smoke detector system, and exposed wires and 
electrical outlets. Then-Governor Bush responded by exempting faith-
based drug treatment programs from all of the State health and safety 
regulations that were followed by their secular counterparts.
  I don't know how you could reach that conclusion. It is one thing to 
be imbued with a religion; it is another thing to ignore the obvious. 
If there is a terrible accident or fire or some disaster, children in 
faith-based institutions deserve the same level of legal protection as 
those in institutions run as businesses.
  This special treatment was not limited to drug treatment programs. 
Faith-based childcare centers and residential children's homes could 
use an alternative accreditation program that would exempt them from 
State licensing. The special treatment for these alternatively 
accredited facilities was that there were no unannounced inspections of 
the facilities as required by State law. As a result, the rate of 
confirmed abuse and neglect at alternatively accredited facilities was 
25 times higher than that of State-licensed facilities. Whom are we 
doing a favor for by exempting the faith-based charity from standards 
of unannounced inspections to make certain that they are living up to 
the letter of the law?
  The complaint rate at alternatively accredited facilities was 75 
percent compared to 5.4 percent at State-licensed facilities. Due to 
these staggering outcomes, this accreditation program sunset in 2001 
and has never been renewed.
  The White House has also given indications it may provide special 
treatment to religious organizations by exempting them from State and 
local laws addressing employment discrimination. I have a great deal of 
respect for the Salvation Army. They do wonderful work, not only in the 
United States but around the world. But they had a rather embarrassing 
incident in July of 2001 when an internal report was discovered that 
stated their group had received a ``firm commitment'' from the Bush 
White House to protect religious charities from State and local laws 
regarding sexual orientation discrimination and domestic partner 
benefits. I hope that is not the goal of the Bush White House in 
pushing this faith-based initiative.
  Over the past 2 years, President Bush and his faith-based initiative 
have repeatedly eroded 200 years of carefully protected separation 
between church and state. In what the Washington Post called ``faith-
based by fiat,'' President Bush signed Executive Order 13279, in 
December of 2002, to overturn principles of nondiscrimination in 
Federal contracts that have stood for over 60 years.
  The House of Representatives is currently considering the 
reauthorization of the Workforce Investment Act. The legislation has 
been marked up in the House, and it would repeal 20 years of civil 
rights protections against religious discrimination. The House also has 
held hearings regarding the reauthorization of the Corporation for 
National and Community Service, known as AmeriCorps. In its proposed 
legislation, the House would repeal a decade of civil rights 
protections against religious discrimination in employment that were 
signed into law by President Bush's father.
  Finally, the Department of Housing and Urban Development has proposed 
rules to allow religious organizations to use Federal funds to build 
centers where religious worship is held as long as parts of the 
building are also used for social services.
  Supporters of the faith-based initiative want to know why we are 
raising these issues now, when Congress included charitable choice 
provisions in legislation we passed as far back as 1996. The difference 
is this: Then-President Clinton made it clear, as part of the technical 
corrections package to the welfare reform bill, that nothing included 
therein would change the fundamental protections against religious 
discrimination which were currently in the law. President Clinton did 
that as well in the reauthorization of Community Services Block Grant 
Programs in 1998 and the reauthorization of the Substance Abuse Mental 
Health Services Act in 2000. Unfortunately, in this debate, that same 
assurance has not been given.
  I want to go to a point which really gets to the heart of the issue. 
It is a difficult one. It is one for which I don't have an answer. When 
you talk about faith-based initiatives, you are talking about religion 
in America. The obvious and important question is: What is a religion? 
There are many that we readily will recognize as being established

[[Page 8692]]

religions of all different denominations. But when it comes to the 
definition of religion, many people self-define their beliefs and 
activities as religion.
  Jim Jones led people to a mass suicide in Guyana, and David Koresh 
and his Branch Davidians in Waco, TX, have become scarred in the 
American memory as tragic reminders of what happens when people are 
blindly led by fanatics who use the guise of religion for their own 
personal, violent agenda. I represent a State which is the home of the 
so-called World Church of the Creator, which has to be one of the most 
perverted extremist groups in America that I know of, which claims 
itself to be a religion. On its Web site, the so-called ``Reverend'' 
Matt Hale--who graduated from law school but was not allowed to be 
licensed under the rules and practices of the bar in Illinois--proudly 
welcomes visitors, saying:

       We are a religious, nonprofit organization, with our world 
     headquarters in the State of Illinois. At the time of this 
     writing, we have 24 regional and local branches of the church 
     and members all over the world.

  What are the tenets of his church and religion, of this World Church 
of the Creator? Here is what he says in his own words:

       After 6,000 years of recorded history, our people finally 
     have a religion of, for, and by them. Creativity is that 
     religion. It is established for the survival, expansion, and 
     advancement of our white race exclusively. Indeed, we believe 
     that what is good for the white race is the highest virtue, 
     and what is bad for the white race is the ultimate sin.

  I cannot think of any more hateful rhetoric spewed in the name of 
religion. That is exactly what is happening today. Recently someone 
challenged their dismissal of employment because they were members of 
this church. The court came back and said it is a religion and has to 
be treated as such for the purpose of the Civil Rights Act of 1964.
  So here we come to a point where we are talking about giving Federal 
dollars to those who call themselves religions for the purpose of 
performing social services. What is the threshold question we should 
ask? Is this truly a religion or is this something else in the guise of 
a religion? What are we doing with taxpayer dollars? Would we want to 
spend $1 supporting the racist views of the World Church of the Creator 
because they tell the Federal Government they have a program to deal 
with drug abuse or to provide childcare services in central Illinois? I 
hope not. But once you have opened this door and start talking about 
Federal dollars given to religion for social services, you open up a 
can of worms, a set of questions and great challenges that we have not 
faced for many years, if ever.
  I am worried as I look across the various religions of the world, not 
just those purporting to be Christian but some who are members of 
different religions that have taken what in fact are extreme views.
  It was only a little more than a year ago that the people of 
Afghanistan were still suffering under the violent and oppressive 
regime of the Taliban, which suppressed and punished its people in the 
name of Islamic fundamentalist religious beliefs.
  Thanks to the leadership of the United States and our military, we 
have now liberated the Afghan people from the Taliban, which, like Al 
Qaeda, had distorted the peaceful religion of Islam for their own 
destructive purposes.
  The leaders of the Taliban were trained in ``madrassas,'' which are 
characterized as religious schools. But those familiar with these 
institutions often call many of them ``jihad factories'' because of the 
extreme nature of their ``religious'' indoctrination and the militancy 
they train.
  At madrassas, the Taliban preached that freedom afforded to women is 
the main reason for social degradation, and that the best place for 
women was inside the four walls of their homes--cut off from education 
and cut off from opportunity.
  They also preached that television is the ``spark of hell'' 
responsible for moral degradation, and watching it or listening to 
music was un-Islamic and sinful. And when they came to power, the 
Taliban put all of these distorted lessons to practice against their 
own people.
  The Taliban is perhaps the most recent example of extremism in the 
name of religion that we have witnessed.
  But since the 1979 Islamic revolution in Iran, we have seen numerous 
radical Islamic fundamentalists utilize their religious ideology as the 
driving force behind the most active Middle Eastern terrorist groups 
and state sponsors.
  For example, Hizballah of Lebanon calls itself the ``Party of God'' 
although there is nothing godly about its terrorist activities.
  Hizballah was founded in 1982 as a faith-based organization by 
Lebanese Shiite clerics who were inspired by the Islamic ideology of 
Iran's Ayatollah Khomeini. Its original goal was to establish an 
Islamic republic in Lebanon. But many of the Shiite Muslims who rule 
Hizballah studied in Iran's theological seminaries while receiving 
terrorist training there as well.
  The trainings paid off as this terrorist group became responsible for 
the detention of most, if not all, American and other Western hostages 
held in Lebanon during the 1980s and early 1990s. Eighteen Americans 
were held hostage during that period, three of whom were killed.
  Hizballah is also suspected in the April 1983 suicide truck bombings 
of the U.S. Embassy in Beirut and the U.S. Marine barracks in October 
1983 that killed 220 Marine, 18 Navy and 3 Army personnel.
  And Hizballah is also suspected to have been behind the hijacking of 
TWA Flight 847 in 1985, and the killing of a Navy diver, Robert 
Stethem, who was on board.
  Hamas, Al-Jihad, Abu Sayyaf, and Islamic Movement are some of the 
other better-known extremists that argue their organizations are based 
on Islamic religious beliefs.
  There are radical Jewish groups as well, such as Kach and Kahane 
Chai. These two Jewish movements seek to expel all Arabs from Israel 
and expand Israel's boundaries to include the occupied territories and 
parts of Jordan. Founded by extremist Rabbi Meir Kahane, these groups 
also argue for strict implementation of Jewish law in Israel.
  I do not mean to suggest here that the President's faith-based 
initiative will necessarily lead to such religious extremism.
  At the same time, I want to make it clear that this is not an easy 
question. To dismiss it simply as a question about whether or not we 
are tolerant of religion is one thing, but the question of whether we 
are going to subsidize religious belief that reaches the extreme is 
really something else.
  The important message we must send is that religious organizations 
that take taxpayers' money should not be able to use those funds to 
discriminate in hiring employees on the basis of religion. The American 
people have been asked their opinion on this issue. The response is 
interesting.
  According to the Washington Post, in a 2001 survey conducted by the 
Pew Research Center:

       When people were asked whether ``religious groups that use 
     Government funds [should] be allowed to hire only those who 
     share their religious beliefs,'' 78 percent said ``no'' and 
     18 percent said ``yes''--a degree of objection that so 
     surprised researchers that they repeated the question three 
     different ways. . . .

  They received the same answer time and time again. On the other hand, 
the Bush administration believes that Government-funded discrimination 
in hiring on the basis of religion is acceptable.
  According to a U.S. Department of Justice Office of Legal Counsel 
memorandum on June 25, 2001:

       We conclude, for the reasons set forth more fully below, 
     that a faith-based organization receiving direct Federal aid 
     may make employment decisions on the basis of religion 
     without running afoul of the Establishment Clause.

  In the only case that directly addressed whether the Title VII 
exemption applies to a position funded by government funds, the 
Southern District Court of Mississippi ruled that it did not.
  In the 1989 case Dodge v. Salvation Army, Jamie Dodge was employed by

[[Page 8693]]

the Salvation Army in its Domestic Violence Shelter as the Victims 
Assistance Coordinator.
  After the Director of the shelter saw Ms. Dodge using the Salvation 
Army's copy machine, Ms. Dodge admitted that she had made copies of 
manuals and information on Wiccan rituals.
  Soon after making these admissions, Ms. Dodge was terminated.
  She filed a complaint that because the shelter where she worked 
received substantial federal and state funds, the Title VII exemption 
could not be applied to her.
  The District Court ruled that ``even though the religious exemption 
does permit the Salvation Army to terminate an employee based on 
religious grounds, the fact that the plaintiff's position as Victims' 
Assistance Coordinator was funded substantially, if not entirely, by 
federal, state, and local government, gives rise to constitutional 
considerations which effectively prohibit the application of the 
exemption to the facts in this case.''
  Furthermore, the Court held that ``Based on the facts in the present 
case, the effect of the government substantially, if not exclusively, 
funding a position such as the Victims' Assistance Coordinator and then 
allowing the Salvation Army to choose the person to fill or maintain 
the position based on religious preference clearly has the effect of 
advancing religion and is unconstitutional.
  Despite this ruling, the issue is considered an open legal question 
because the case was not considered beyond the District Court and there 
are several other cases which at least partially address this question.
  However, this is not just a legal question or a hypothetical line we 
are drawing in the sand.
  One of the cases I would like to point out is a case that really 
talks about discrimination firsthand. It is the case of Alan Yorker and 
his experience with United Methodist Children's Home in Decatur, GA. 
The children's home, which receives almost half of its money from 
Government sources, provides residential group foster care for 70 young 
people, many of whom are in State custody.
  Mr. Yorker responded to an advertisement in the Atlanta Journal-
Constitution for a position at the home. As a psychotherapist with over 
20 years experience counseling young people and their families and over 
a decade of experience teaching in Emory University professional 
schools, the home determined that his credentials placed him among the 
top candidates for the position. He was rushed in for an interview, 
where he was required to disclose in an application form his religious 
affiliation, his church and minister. Mr. Yorker, a Jew, supplied the 
names of his synagogue and rabbi. During the interview, an 
administrator noted that Mr. Yorker was Jewish and told him that this 
children's home doesn't hire people who are Jewish. He was shown the 
door.
  Let me tell you that this didn't happen decades ago; this is of 
recent vintage. The same administrator told another employee that it is 
the home's practice to throw the resumes of applicants with Jewish-
sounding names in the trash. The Yorker name got past her.
  Ironically, Yorker has not always been the family name. Alan Yorker's 
Jewish paternal grandfather, Harry Monjesky, spent many years as a 
conductor on the New York Central Railroad. When the railroad began to 
face tough times, Jewish and African-American workers were singled out 
for layoffs first, regardless of their seniority. Mr. Monjesky was 
fired and left without a livelihood. Several years later, when Alan's 
father reached adulthood, he changed his name to Yorker. He wanted to 
make sure that his children would be judged by their merit and not by 
their surname or private religious beliefs.
  That is how Alan Yorker's resume landed at the top of the pile 
instead of the home's trash bin. And nearly a century after his 
grandfather was turned away by the Railroad because of his religion, 
Alan Yorker faced the same discrimination when applying for a 
government-funded position.
  I will conclude by saying that these are examples of what is being 
done in the name of religion. For it to be done by a religious 
organization to achieve a religious goal, with funds raised by co-
religionists, is certainly allowed in title VII of the Civil Rights 
Act. To say, however, that we are going to open the Federal Treasury 
and provide millions of dollars to religions for social services, and 
then approve of their discriminatory activity in the name of religion, 
is branching out in a direction that our Founding Fathers could never 
have considered, let alone condoned.
  In light of this complex constitutional issue, I think it is fair to 
ask why we even need a faith-based initiative. President Bush believes 
it is necessary because ``people should be allowed to access money 
without having to lose their mission or change their mission.'' 
However, current law already permits groups that are affiliated with 
religious entities to provide social services with Government funding.
  Catholic Charities, Lutheran Social Services, Jewish Federations, and 
many other religious organizations have received--and continue to 
receive--taxpayer funds from the Government to provide much-needed 
services that our Government is often unable and unavailable to 
provide.
  These organizations access Federal funds without changing their 
missions. For example, Catholic Charities has a publication entitled 
``10 Ways Catholic Charities are Catholic.'' At the same time, Catholic 
Charities in Chicago, which I am proud to represent, also issues the 
following statement on its Web site:

       Catholic Charities employs more than 3,000 dedicated, 
     compassionate and professional men and women, regardless of 
     race, religion, or ethnic background.

  Many Catholic Charities across the Nation have similar equal 
opportunity statements.
  As thousands of Americans visit our Nation's Capital, many will stop 
at the Jefferson Memorial and read the following inscription, in the 
words of Thomas Jefferson:

       No man shall be compelled to frequent or support any 
     religious worship ministry or shall otherwise suffer on 
     account of his opinions in matters of religion.

  These words, from Jefferson's ``Bill for Establishing Religious 
Freedom in Virginia,'' are as relevant now as they were in 1785. 
Although we don't debate the faith-based initiative proposal in its 
entirety today, I look forward to the opportunity to continue to 
protect our historic balance in the relationship between church and 
state.
  I yield the floor.
  Mr. KENNEDY. Mr. President, the CARE Act is a significant bipartisan 
effort to create improved opportunities for charitable giving. That is 
a goal I wholeheartedly support. Charitable giving is a continuing 
reaffirmation of the deeply held community spirit of the American 
people. It recognizes our responsibility to help the less fortunate, 
and the work of charitable organizations is essential in protecting the 
well-being of millions of our fellow citizens.
  The key provision of the bill will at long last allow those who do 
not itemize their deductions to receive a tax deduction for their 
charitable contributions. This deduction will benefit millions of low 
and middle-income families who are already making significant 
charitable contributions each year, and it will encourage even more 
charitable contributions in future years.
  The agreement to remove the controversial title 8 makes sense, so the 
bill can move quickly through Congress. All of us share the goal of 
enhancing community-based services for low-income people through 
public, private, and faith-based organizations. Our concern with title 
8 was that it failed to see that faith-based organizations do not use 
these public funds to discriminate on the basis of religion.
  Many of us continue to be concerned about a separate development on 
the discrimination issue. The President has issued an Executive order 
repealing more than 60 years of Federal protections against religious 
discrimination in publicly funded programs. Under the President's 
order, organizations can receive public funds and then refuse to

[[Page 8694]]

hire persons because of their religion, their marital status, or their 
sexual orientation. As the Senate considers future legislation to 
support and fund community-based organizations that provide social 
services, including faith-based organizations, I look forward to 
working with my colleagues to see that civil rights protections are 
safeguarded.
  I am pleased that the CARE Act restores funding for the social 
services block grant. Congress made a promise in 1996 to do so, and it 
is essential to keep that promise, so that vulnerable Americans can 
continue to rely on the funding in the years ahead.
  For too long, Congress has ignored its responsibility to those most 
in need. Since 1995, annual funding for SSBG has been cut by more than 
$1 billion, from a high of $2.8 billion to the current level of $1.7 
billion. This bill will restore the amount to $2.8 billion in the next 
fiscal year.
  The social services block grant pays for critical services for 11 
million children, families, seniors, and persons with disabilities each 
year. In 2000, $683 million in these funds was used to support child 
protective services, foster care, and adoption services alone. Twelve 
percent of the funds was used for disability services, and $181 million 
was used to provide services to the elderly. This program is the only 
Federal source of funding for Adult Protective Services, which provides 
assistance and protection for elderly and disabled adults who are 
victims of abuse.
  Restoring these funds is especially important now, when most States 
are cutting and even eliminating the very services and programs that 
the social services block grant was enacted to support. The economic 
downturn, escalating State deficits, and reduced funding for social 
services, has left State program officials with the impossible task of 
deciding who to help and who to turn away.
  We must do all we can in Congress to ensure that States have the 
resources they need to support their most vulnerable citizens. I 
commend my colleagues on the Finance Committee on the provision to 
restore SSBG in the CARE Act for the coming year. Our goal now is to 
see that we keep doing that in future years as well.
  Today's action should not be just a temporary, 1-year fix. We owe a 
lasting commitment to the children, families, and seniors who need our 
help the most, and I look forward to working with my colleagues to 
achieve this goal.
  Mr. JEFFORDS. I would like to briefly discuss one of the provisions 
in the CARE Act, an incentive that will encourage the conservation of 
environmentally sensitive land. This conservation incentive will allow 
landowners who own environmentally sensitive land to exclude part of 
the gain they realize if they sell their land to conservation 
organizations for the purpose of conservation.
  We are losing our farms, ranches, and open spaces at an alarming 
rate. Many landowners would like to transfer their land to a 
conservation organization that would conserve it or preserve its 
original use. For many of them, however, donating land to a 
conservation organization is not an option. Their land is an important 
asset, the sale of which will yield an important source of income.
  The CARE Act creates a new tax incentive for these ``land rich/cash 
poor'' taxpayers who cannot take advantage of the current law's 
charitable deduction. This new incentive is an exclusion from income 
for one-fourth of the gain that taxpayers realize upon a sale of land, 
when the land is sold for conservation purposes, to a conservation 
organization. The exclusion will also be available for a transfer of a 
partial interest, such as a conservation easement. With this provision, 
landowners would pay less tax when they transfer land for conservation 
purposes.
  I first introduced a bill similar to the CARE Act provision in the 
106th Congress. In 2000, both Presidential candidates endorsed this 
approach. This year, and in the previous 2 years, a provision like the 
conservation exclusion in the CARE Act has been included in the 
President's budget proposals. It has also been endorsed by a diverse 
range of interest groups, including the Farm Bureau, Ducks Unlimited, 
the Land Trust Alliance, the American Farmland Trust, and the Nature 
Conservancy.
  My bill--and President Bush's budget proposals--called for a 50-
percent exclusion. If, as I believe, this tax incentive proves to be an 
effective way to encourage conservation, I hope that we will someday be 
able to increase the exclusion. This new tax incentive will mean more 
conservation with no new appropriations, and no new restrictions on 
land use. It adopts a new, market-based approach to conservation, using 
funds that have either been privately raised or set aside by State and 
local governments.
  Mr. LUGAR. Mr. President, I rise today in support of the Charity, 
Aid, Recovery, and Empowerment Act. I am proud to be an original 
cosponsor of this important legislation, which would encourage more 
citizens to contribute to non-profit programs and institutions. I want 
to commend my colleagues, Senators Santorum and Lieberman, for 
introducing this important bipartisan legislation. The CARE Act is 
designed to promote charitable giving at a time when charities report 
increasing demands on their services along with a decline in 
contributions.
  After the tragedy of September 11, charitable contributions were 
greatly diminished. Donations to charitable organizations dropped last 
year by 2.3 percent and they are lagging even further behind this year. 
At the same time, more people are turning to charities for help because 
of job lay offs, health concerns, and the needs of our children. The 
tax incentives contained in the CARE Act to encourage charitable giving 
are needed now more than ever.
  Included in this bill is language to encourage charitable giving by 
allowing a tax deduction for charitable giving for non-itemizers. 
Eighty-six million Americans do not presently itemize their deductions 
on their tax returns. This provision would allow for a tax deduction up 
to $250 for individuals and $500 for couples. Organizations such as the 
American Red Cross, the March of Dimes, and other charitable 
organizations that rely on low dollar donations believe that they will 
be able to generate more donations if everyone could take a deduction 
regardless of which form they file with the Internal Revenue Service.
  The ability to roll over excess funds from Individual Retirement 
Accounts to a charitable organization or university is also a part of 
this legislation. Many organizations and universities benefit from 
planned gift revenues. The IRA rollover provision will allow charities 
to increase the number of planned gifts, while being able to diversify 
their planned gift portfolios.
  I have been a supporter of Individual Development Accounts and was 
pleased that this initiative to expand these accounts is included in 
the bill before us. These accounts are made up of dollar-for-dollar 
matching contributions up to $500 from banks and community 
organizations to be used by lower-income working families to buy a 
home, start or expand a small business, or pay for college.
  I believe that one of the most important provisions that has been 
included in this bill is the Hunger Relief Tax Incentive Act. This 
important provision allows for expanded charitable tax deductions for 
contributions of food inventory to our nation's food banks. Demand on 
food banks has been rising, and these tax deductions would be an 
important step in increasing private donations to the non-profit hunger 
relief charities playing a critical role in meeting America's nutrition 
needs.
  As I have traveled around Indiana, I have visited many food banks in 
our state. They have confirmed the results of a study by the U.S. 
Conference of Mayors that showed demand for food at food banks has 
risen significantly. The success of welfare reform legislation has 
moved many recipients off welfare and into jobs. In many states, 
welfare roles have been reduced by more than half. But we need to 
recognize that these individuals and their families are living on 
modest wages. As the states' unemployment rates have risen, so has

[[Page 8695]]

the demand placed on the food banks and soup kitchens.
  According to the Conference of Mayors survey, during the last year, 
requests for emergency food assistance has increased one hundred 
percent. Forty-eight percent of the people requesting emergency food 
assistance are either children or their parents. The number of elderly 
persons requesting food assistance has increased by ninety-two percent.
  Private food banks provide a key safety net against hunger. According 
to an August 2000 report by USDA, 31 million Americans are living on 
the edge of hunger.
  USDA statistics show that up to 96 billion pounds of food go to waste 
each year in the United States. If a small percentage of this wasted 
food could be redirected to food banks, we could make important strides 
in our fight against hunger.
  The food bank provisions under the CARE Act would allow farmers and 
small business owners to take a deduction when they donate food to 
their community food bank. Currently this deduction is available to 
large corporations but not to small businesses. This approach would 
stimulate private charitable giving to food banks at the community 
level.
  Each citizen can make an important contribution to the fight against 
hunger at a local level. I have been especially impressed by the 
remarkable work of food banks in Indiana. In many cases, they are 
partnered with churches and faith-based organizations and are making a 
tremendous difference in our communities. We should support this 
private sector activity, which not only feeds people, but also 
strengthens community bonds and demonstrates the power of faith, 
charity, and civic involvement.
  I would like to thank Senators Santorum, Lieberman, Grassley, and 
Baucus for their efforts in helping America's charities meet their 
funding goals, and to those individuals who take advantage of the 
services provided by these groups.
  Mr. GRAHAM of Florida. Mr. President, I am pleased that the Senate is 
considering the CARE Act today. By enacting this legislation, Congress 
acknowledges the inherent good in millions of Americans.
  The bill includes a number of changes to the tax rules that will make 
it easier for individuals to donate to the tens of thousands of 
worthwhile charities that operate across this nation. By making the 
charitable deduction available to those taxpayers who don't itemize 
their deductions, married couples can deduct as much as $500 of the 
contributions they make to charity.
  Provisions in the legislation also make it easier for individuals to 
donate funds they have saved in an IRA. Rather than having to report 
this amount in income and then take a commensurate deduction for the 
contribution, the new rule allows the funds to be transferred directly 
to the charity.
  The bill also eases the burden of gaining tax benefits for those 
individuals who wish to make donations of food, books, and scholarly 
compositions to charity.
  While these charitable giving incentives are useful to many citizens 
and the charities they desire to help, this legislation may be even 
more important because it contains strong provisions that will help the 
Internal Revenue Service and the Nation's courts crack down on abusive 
tax shelters.
  In his last report to the IRS Oversight Board, the IRS Commissioner 
Charles Rossotti identified abusive corporate tax shelters and 
promoters of tax schemes of all varieties as among the most serious 
compliance problem areas. In addition to the revenue lost by the 
Federal Government--funds that could be used for defending the 
homeland, education, and protecting the environment--the proliferation 
of these schemes represents in Commissioner Rossotti's words ``a 
failure of fairness to the millions of honest taxpayers whose 
commitment to paying their taxes is based on the principle that the IRS 
will act if they or their neighbors do not pay their fair share.''
  This administration has been slow to embrace measures that crack down 
on those who manipulate the Tax Code to avoid paying their taxes. 
Despite the previous administration having identified the proliferation 
of tax shelters as a large and growing problem as far back as 2000, 
President Bush's initial budget contained no legislative 
recommendations to stem the proliferation of tax shelters.
  Only after it became clear that Congress was going to address this 
issue, did the Bush Administration take notice. Even then, their 
approach to combating this problem was, at best, timid. The Bush 
administration's solution was to continue to rely solely on the 
Service's ability to detect an abusive tax shelter from within the 
minutiae of a taxpayer's tax return. If the Service was fortunate to 
uncover a tax shelter, it could then initiate steps to shut it down. 
This is a difficult and time-consuming process for the IRS to 
undertake.
  While disclosure of these schemes by taxpayers and promoters can be 
useful in combating the proliferation of tax shelters, the IRS also 
needs some additional tools. This is why the bill includes a statutory 
requirement that transactions utilized by taxpayers have an economic 
rationale beyond the creation of tax benefits, commonly referred to as 
the ``economic substance doctrine''. The bill backs up this new 
requirement with stiff penalties for taxpayers who engage in such 
transactions.
  It is a simple requirement. You don't even need to be a tax attorney 
to understand it. Simply put, it would require that transactions 
conducted by taxpayers have a business purpose. What does that mean? 
The proposal requires that a taxpayer have a reason other than the 
creation of tax benefits for engaging in a transaction.
  A cursory review of the recent Joint Committee on Taxation report on 
the tax returns of Enron Corporation highlights the dire need for this 
legislative change. The Joint Committee on Taxation found that Enron 
paid total federal income taxes for the period 1996 through 2001 of $63 
million. During this same period Enron reported to investors that it 
had profits of nearly $6 billion. How was Enron able to paint such 
obviously contrasting pictures?
  According to the Joint Committee on Taxation's report, Enron 
transformed its tax department from an administrative function to a 
profit center. Enron spent millions of dollars on tax attorneys and 
shelter promoters who helped it cook up transactions that had no 
purpose other than to artificially reduce its tax liability.
  According to the JCT Report, these transactions:

       demonstrate the need for strong anti-avoidance rules to 
     combat tax-motivated transactions that might satisfy the 
     technical requirements of the tax statutes and administrative 
     rules, but that serve little or no purpose other than to 
     generate income tax or financial statement benefits.

  This bill provides those strong anti-avoidance rules, and I hope they 
will become law sooner rather than later.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, first of all, I thank Senator Baucus for 
the compliments he gave me. More importantly, it emphasizes, as I have 
tried to indicate, the great cooperation I have had from him. 
Legislation such as this has some controversial provisions in it, and 
you don't get a piece of legislation such as this to the floor without 
the bipartisan cooperation that has been exhibited. I thank him for 
that.


                           Amendment No. 526

              (Purpose: To provide a Managers' amendment)

  Mr. President, I send an amendment to the desk and ask for its 
immediate consideration. This is what is referred to as the managers' 
amendment.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Iowa [Mr. Grassley], for himself and Mr. 
     Baucus, proposes an amendment numbered 526.

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')

[[Page 8696]]


  Mr. GRASSLEY. Mr. President, I ask unanimous consent that all time be 
yielded back on the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I further ask unanimous consent that the 
amendment be agreed to and the motion to reconsider be laid upon the 
table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 526) was agreed to.
  Mr. GRASSLEY. Mr. President, I have already complimented Senator 
Santorum and Senator Lieberman for their joint work on most of the 
provisions of this legislation. I am happy to have Senator Santorum, 
who is also a member of the Senate Finance Committee, manage a bill 
that he has been central to getting those provisions into law.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SANTORUM. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SANTORUM. Mr. President, I thank the Senator from Iowa, the 
chairman of the Finance Committee, for his kind words and his 
cooperation. I thank the ranking member of the committee for his 
cooperation.
  There are some things in this legislation that he is not particularly 
enamored with, but he was most cooperative and helpful in moving the 
legislation forward. We are now at a point where we are within 24 hours 
of passing the legislation. Most of all, I thank my colleague from 
Connecticut, Senator Lieberman, who has been a faithful partner--to use 
a play on words--a faithful partner in putting this initiative 
together.
  We have worked together closely with the President, who has been 
truly the motivating force to try to provide some ammunition to the 
armies of compassion out there on the front lines every day, fighting 
for hope and opportunity for the millions of Americans who have yet to 
realize their dreams in dealing with the problems that confront them.
  The President has, through his faith-based initiative, been very 
clear in the role of charitable organizations, particularly people of 
faith within those organizations, to heal many of the ills that 
confront society. We are a society that, while very prosperous by any 
measure, even at a time of economic downturn that we are experiencing 
right now, we are still the wealthiest country in the history of the 
world. With that great wealth comes responsibility. So many people have 
taken up that responsibility, trying to meet and serve those who in a 
society of great wealth have experienced a multitude of problems in 
trying to achieve, both from the economic perspective but again, as I 
said before, pursuing their dreams.
  This piece of legislation, while it is not everything the President 
requested--it is not all of his faith-based initiative--certainly gets 
at one of the most important components which is the one funding 
organizations which do charitable purposes or have charitable purposes.
  No. 2, there is a provision called the Compassionate Capital Fund 
which is grants to small organizations with less than six employees or 
less than $\1/2\ million in funding, to go out and be able to, for the 
first time, compete for Federal funds.
  A lot of these small organizations, most of which are faith based in 
nature, have not been successful in applying for government grants 
principally because they don't have the resources or the expertise to 
do so. When you are running a food pantry with one or two people, most 
of whom are part-time employees and many volunteers, you don't have the 
expertise to apply for Federal grant dollars or any other kind of grant 
dollars. You try to do what you can to make ends meet. This provides 
the kind of technical assistance necessary for a lot of smaller, mostly 
inner-city organizations that right now do not take advantage of the 
money available through the Federal Government, again, whether they are 
faith based or not.
  Most of these organizations are faith based in nature so there is a 
faith component to this. As I will show later, many of the provisions 
in the act will have a disproportionate benefit to charitable 
organizations which are faith based.
  It doesn't accomplish a couple of the things the President set out to 
do. The issue Senator Durbin spoke of earlier having to do with equal 
treatment, even though it is not in this legislation, let me address it 
very briefly and then maybe in more detail later on.
  The whole concept of equal treatment is to allow those who have some 
element of faith within their organization--and there is a whole range 
across the charitable organization horizon. There is a whole range of 
faith, how much faith is integrated into those organizations--some are, 
to use the term, ``saturated'' or completely faith based in nature and 
expressively faith based in their programs, to the whole range of the 
other side which are those that are exclusively secular and even to 
some degree hostile to faith. In between there are gradations.
  What the President has tried to do is instead of, as we do right now, 
as we did prior to the 1996 welfare reform, which allowed for 
charitable choice, in other words, for some government programs to go, 
these dollars to go to faith organizations, we sort of eliminated all 
these people of faith and all these organizations that have faith as a 
component of their mission or their vision or their program and left it 
to a very rather narrow category.
  We, in 1996, on the Senate floor, with President Clinton signing it, 
said we would stop that discrimination against people of faith who 
wanted to act based on their faith to help their fellow man, as long as 
they didn't do certain things such as use it for faith worship or 
proselytizing, things that are not delivery of service.
  We expanded greatly the range of faith organizations and nonfaith 
organizations. We expanded greatly those who can participate in 
government funds. When you do that, you run into some problems, some 
questions.
  We have seen tremendous success and very few cases where problems 
have arisen, but in the areas where they have, there have been 
questions as to what government statutes apply, what provisions or 
regulations apply to faith organizations as opposed to nonfaith 
organizations.
  One of the principal questions has to do with people's religious 
liberties and their ability to practice their faith bumping up against 
other rights. The one that the House of Representatives dealt with and 
the Senator from Illinois referred to had to do with the issue of 
employment and whether religious organizations which are provided with 
government funds can say that someone cannot work for that organization 
or they can refuse to hire someone who works for that organization who 
doesn't share that organization's values with respect to tenets and 
teaching of the faith which is expressed through their program.
  One of the things I believe is essential to a lot of faith 
organizations, one of the reasons that faith organizations should be 
and need to be included in providing social services, is that a lot of 
these faith-based organizations don't just treat the symptom. They 
don't just treat the hunger, if it is someone who comes in for food 
assistance, or they don't just treat the dependency on drugs or 
alcohol, if someone comes in for addiction treatment. It doesn't just 
treat the problem of a lack of a GED or education, if someone comes in 
for education and training. What they do, because of their mission, 
they treat the mind. They treat the spirit and they treat the emotional 
well-being of this person. They treat the whole person. That is one of 
the keys to success in trying to truly turn people's lives around in a 
way that brings them back into productive life in America.
  The key to these faith organizations is having people who have this 
mission they share out there teaching and bringing people in based on a 
certain

[[Page 8697]]

core value structure. My argument is, we should not discriminate 
against people who have programs that are value laden--those values may 
be based on Scripture, the Old or New Testament or some other book--as 
opposed to saying we are going to discriminate against you because the 
values you have are based upon a religious belief, as opposed to an 
organization that is secular and its values are not based on a 
religious belief. I don't understand the reason for the discrimination. 
I don't believe it should exist.
  I have had this discussion in brief, and we can talk more about it. I 
am sure we will. But having said all that, none of that is in this 
bill. We decided not to have this issue before us today because the 
need of getting resources out to the charitable organizations meeting 
human service and educational and other needs is, frankly, too urgent.
  While we will debate this--and I am sure others will want to debate 
this issue--the true debate will wait for another day. That will be 
when the welfare reauthorization comes up. That is where this whole 
conversation of charitable choice and allowing faith-based providers to 
participate in government grants came about, back in 1996. And it is 
where we should continue that debate. I pledge to you that whether we 
get that bill or have that amendment in committee, or whether we bring 
it to the floor, this will be a topic of discussion and one I encourage 
all Members to think about and participate in.
  But the charitable crisis is real, and that is why I agreed--and my 
colleagues in the House have been more than cooperative in putting 
together, hopefully, a compromise we can quickly get to the President's 
desk. We understand the crisis is real. Adjusted for inflation, 
charitable giving 2 years ago, in 2001, was 2.3 percent lower than in 
2000. You have to remember at the end of 2001, unfortunately, we had to 
deal with the aftermath of 9/11, where there was a tremendous 
outpouring of giving. Even with that outpouring of giving, because of 
the sluggish economy, charitable giving fell again last year. Corporate 
giving fell again between 2000 and 2001 by 14.5 percent.
  Again, we don't have the final numbers for 2002, but it was supposed 
to be off again last year. We saw the American Red Cross--I'll give a 
couple of examples. Their contributions declined anywhere from 20 to 60 
percent; Salvation Army, off 5 to 10 percent; United Way, off 4 to 5 
percent. We can go on and on. Colleges and universities saw a decline 
in the amount of charitable giving to their organizations, too.
  So what we are doing is trying to respond in a comprehensive way. 
When I say that, I mean if you look at this bill, it is carefully 
crafted to provide incentives for all different types of givers--
corporate, foundations, and individuals who don't itemize on their tax 
forms. By the way, if those with IRA rollovers want to give money to 
charitable organizations, they can do so without having to pay taxes 
under this legislation. So whether it is the small giver to, hopefully, 
the retiree, or someone who has a large IRA, or corporations who may 
want to give more money--all the way down the line to food donations, 
which is another area where the Senator from Indiana, Senator Lugar, 
has a provision in this legislation that I think is very important, we 
have a provision that will encourage literally billions of dollars of 
additional food donations over the next several years by providing a 
tax incentive for corporations; but for the first time, partnerships, 
individual proprietors, and S corporations will be able to take the 
fair market value of their donation as a deduction--it is up to twice 
the cost of the basis of that food item--as a deduction for giving to 
charitable purposes.
  We have about a billion pounds of food donated right now to people in 
America to help feed the hungry in America. It feeds about 26 million 
people. There are 96 billion pounds of food wasted in America. That is 
just an enormous amount. It is almost incomprehensible that we are 
talking about that amount. When you consider the fact that roughly 1 
billion pounds of food donated helps feed 26 million, can you imagine, 
if we just increase it by a very small percentage, the amount of 
donated food there could be and how many people we could feed in 
America?
  Senator Lugar's legislation is included. We believe it will make a 
dramatic impact on hunger in America. There are a lot of other 
provisions.
  I see my colleague from Indiana, Mr. Bayh. I will be on the floor for 
a while. I want to give him the opportunity to share with us some of 
the things he has been active with. He has a provision in the 
legislation he has shepherded through the process. I will have him talk 
about that. He has also been a champion and strong supporter of this 
legislation and the entire package from day one. I thank him for his 
support, and I appreciate him coming to the floor to talk about this 
issue.
  I yield the floor.
  Mr. SANTORUM. Mr. President, I see the Senator from Indiana. I yield 
to him as much time as he may consume.
  Mr. BAYH. Mr. President, I thank my colleague from Montana for his 
leadership, his friendship, and his devotion to this issue. I have 
listened with interest to his comments about the importance of ensuring 
that the incentives in the bill actually increase the charitable 
giving, as intended, and that we not inadvertently run a risk of lack 
of compliance. I concur with those sentiments and the need for a study 
to make sure we accomplish what it is we intend to accomplish.
  I also want to begin by thanking our colleague from the State of 
Pennsylvania. It is fair to say we would not be here today without 
Senator Santorum's leadership. He has been persistent and willing to 
strike principled compromises. It has not always been easy, but it is 
to his credit in choosing to make progress rather than just having an 
issue. I thank him. Thanks to him, we are on the cusp of a significant 
breakthrough with regard to doing some things that will, in fact, lead 
to better care for the American people.
  To our other colleagues involved in the effort, including Senators 
Lieberman, Nelson, Grassley, and my colleague from Indiana, Senator 
Lugar, I salute them. I observe that at a time and in our body that is 
too often driven by politics and partisanship, this has truly been a 
bipartisan undertaking.
  As I have observed before, just as faith can move mountains, perhaps 
it can also bring together Members of the Senate and span the political 
divide that too often separates those of us on one side of the aisle 
from the other. That is a good thing that the debate has brought to the 
Chamber--a greater sense of comity and devotion to progress and 
bipartisanship.
  I reflect today, as our military men and women are in harm's way in 
Iraq, on the fact that our country's greatest military strength lies 
not in our weapons systems, not in the planes, the tanks, and the 
missiles, as important as they are but, rather, in the character, the 
bravery, and the courage those men and women honor us by demonstrating 
in the defense of our national security interests--just so our greatest 
strength domestically is not the financial markets we enjoy, not the 
technology or the factories, as important as they are to our 
prosperity. Instead, it is the innate goodness and spirit of the 
American people. That is what we celebrate today, Mr. President. That 
is what we advance with this legislation, and that is why I am such a 
strong supporter of the CARE Act. Through its provisions, we will 
enlist literally tens of millions of our fellow citizens in the urgent 
cause of making this country an even better place.
  As my colleague mentioned, about 70 percent of American taxpayers 
currently do not itemize. The provisions of this legislation that will 
allow their charitable contributions to be tax deductible will enlist 
literally tens of millions of our fellow citizens in philanthropy, 
charity, good civic works, community level to address the urgent needs 
of our time: Homelessness, hunger, medical needs, fighting drug and 
alcohol abuse and addiction, teen and juvenile violence--these sorts of 
things--helping to mend the social fabric that is in too great a risk 
these days.

[[Page 8698]]

  Very often, as my colleagues know, we get consumed in this Chamber in 
debates not about whether these urgent tasks are being performed, but 
instead about who is performing them. Mr. President, my strong sense of 
where the American people stand today, and my strong sense of where the 
Senate needs to stand today, is on the side of those who are getting 
these works done, effectively addressing the needs of the American 
people.
  When it comes to housing the homeless, feeding the hungry, caring for 
the sick and afflicted, it is more important these tasks are being 
accomplished in the most effective way rather than getting bogged down 
into who is accomplishing it and exactly how.
  We will enlist thousands of additional organizations, empower them, 
and increase their efforts--church groups, civic groups, other groups 
dedicated to doing good deeds, who enlist our citizens in the cause of 
not only doing well but also accomplishing good, and that is vitally 
important for the future well-being of our great society.
  There are two additional points I think should be remarked upon. 
Senator Santorum alluded to the first. It is the individual development 
account provisions of this legislation. It involves a bringing together 
of the best thinking on both the left and the right. This provision 
would empower those who are less fortunate in our society to get a 
stake in the American dream, a stake toward owning a first home, 
starting a small business, going to college--the kinds of activities 
that will lead to greater prosperity and progress for individuals who 
currently do not have much in the way of hope for either. It gives them 
a property interest and a stake in the marketplace in which 
traditionally those on the ideological right would have a greater 
interest, but it focuses the property interest and the competitiveness 
in the marketplace on those who are less fortunate, giving them all an 
opportunity to make the most of their God-given talents, something that 
those on the ideological left speak to with great fervor.
  This is a provision that brings the best of thinking across the 
ideological spectrum, regardless of ideology, to do what is right for 
the American people. That is why it is a sensible and important step 
that is included in this legislation.
  There is something else in this legislation that is near and dear to 
my heart. We have an outstanding example in my home State of Indiana. I 
know my colleague from Pennsylvania has spent a great deal of time 
thinking about how to break the cycle of poverty. He has worked 
extensively in the area of welfare reform. As a matter of fact, to set 
an example for his colleagues of actually reaching out to individuals 
who have been in the welfare system and not only moving them from 
welfare to work, but moving them into jobs in his own office. I salute 
him for that success. Again, it is an example we would all do well to 
emulate.
  As the Senator from Pennsylvania knows well, we spend hundreds of 
billions of dollars in this country dealing with the manifestations of 
what really are deeper underlying causes. If one looks at the causes of 
welfare dependency, at the causes of juvenile violence, teen pregnancy, 
alcohol and drug abuse, educational and economic underperformance, all 
too often one will find the root causes of these manifestations and all 
the expense we go to in how we treat our children.
  There is an important provision in this legislation in this regard. 
It deals with maternity homes. We have an outstanding example: Saint 
Elizabeth's in Jeffersonville, IN, in Clark County. It is an 
outstanding example of how this money can be leveraged not only in 
helping the teen mothers but in helping the children and, in so doing, 
helping taxpayers and the rest of society.
  Their experience indicates that 90 percent of these young women who 
are expectant mothers who have the benefits of the services of Saint 
Elizabeth's go on to finish their high school education, to get a 
diploma, to accomplish that first educational step on the ladder toward 
a more successful life.
  It is about the same percentage for their children. New babies are 
born healthy rather than with serious health problems. And about the 
same percentage of those new mothers do not go on to have additional 
children out of wedlock. So it is good for the mothers because they 
finish their education, it is good for the children because they are 
born healthy, and it is good for society because we deal with some of 
the root causes of poverty, homelessness, teen violence, drug and 
alcohol addiction, and education underperformance, and in so doing, 
help society as a whole and the taxpayers in addressing these problems 
at the root cause, rather than waiting to address the symptoms, the 
manifestations at a later stage.
  I am pleased to join with my colleague. This legislation, frankly, 
has been too long in coming, but here we are on the cusp of a great 
step forward to make our Nation not only more prosperous, not only more 
secure, but more decent, more compassionate, more just. That, at the 
end of the day, is the test of a great society and a great nation, 
measured not only by the strength of our arms as being demonstrated 
abroad as we speak, not only in the size of our gross domestic product, 
as important as that is, but in the opportunity and the decency we 
demonstrate to our fellow citizens in the course of their daily lives 
and in our own.
  For all those reasons, Mr. President, I count myself a strong 
supporter of this legislation. I again thank the Senator from 
Pennsylvania. Without his efforts, we would not be here. I thank those 
on our side of the aisle who worked so hard on this legislation. I am 
hopeful that in short order we not only can pass this bill and send it 
to the President for signature, but, in so doing, help millions of our 
fellow citizens. I thank my colleagues for their time.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SANTORUM. Mr. President, I thank the Senator from Indiana for his 
overly kind words with respect to my participation in this legislation. 
The Senator from Indiana has been truly one of the people out front and 
has been very supportive. I cannot count the number of press 
conferences I have asked the Senator from Indiana to be at trying to 
keep this ball rolling, and at times with a very busy schedule. He has 
always found time to associate himself with this cause and to continue 
to make sure it was on track in a bipartisan way.
  That is how we get things done around here. I am very happy to have 
him as one of the prime cosponsors of this legislation. I again 
appreciate very much his kind words, but even more so appreciate his 
tremendous effort on making this legislation a reality.
  I see the Senator from Rhode Island. If he is on a time schedule, I 
will be happy to yield the floor to provide him an opportunity to 
speak.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. REED. Mr. President, I commend Senators Grassley and Baucus for 
bringing this important legislation to the floor, but I particularly 
commend and thank Senators Santorum and Lieberman for their principled 
and tireless efforts to bring this legislation to the floor and for 
recognizing that original versions of this legislation contained 
elements that were, to say the least, controversial.
  Senator Santorum particularly recognized the need to provide 
additional resources to faith-based organizations and other charitable 
organizations through new incentives in the tax code to encourage 
people to contribute to charities. All of these issues compelled him to 
make a very difficult choice, a very important choice, and I think a 
very statesmanlike choice to send to the floor today a version of the 
bill that I assume will get the unanimous approval of this Senate.
  It recognizes our shared belief that the more resources we can direct 
to organizations that are committed to helping people, the better off 
we will be. The increase in the social service block grant is a 
tremendous step forward and is something I know I am

[[Page 8699]]

proud of, but certainly the Senator from Pennsylvania has to be very 
proud of because he is the principal architect of this effort, and the 
new tax advantages also are very important.
  Indeed, Senator Santorum and Senator Lieberman worked very hard to 
improve legislation that in the other body was submitted as the 
Community Solutions Act of 2001, known as H.R. 7 in the 107th Congress. 
That legislation contained a number of controversial and potentially 
unconstitutional provisions, but they worked very diligently, very 
carefully, very thoughtfully to eliminate those provisions from their 
bill and ultimately today to bring this legislation to the floor, which 
I think and believe will get, as I said, unanimous approval by this 
body. Certainly I approve of it.
  The CARE Act is going to provide increased resources for needed 
social services, and it is going to do so without including at this 
juncture troubling provisions that were in the original House bill. I 
know the Senator from Pennsylvania reserves his right to engage again 
on this issue--in fact, I believe he will exercise his right in all 
forums, and that is the glory of this body, and we shall engage in more 
extended debate, I think, in the future. But this afternoon is an 
opportunity to commend him, thank him, and recognize his wise and 
statesmanlike conduct. I again thank Senator Santorum.
  The debate about church and state in this land precedes, indeed, the 
Constitution of the United States. It has been ongoing since the early 
days of the American experience. Religion has been an important part of 
our national life throughout our history. Indeed, European immigration 
in large part was motivated by the search for an environment conducive 
to freedom of conscience and religious exercise unhampered by State 
involvement.
  Today, in the year 2003, religion remains a vital force in our 
national life and religiously affiliated institutions play a critical 
role in the provision of social services. For example, in 1996, 
Federal, State, and local governments granted $1.3 billion to Catholic 
Charities USA, comprising 64 percent of its budget. In 1999, 53 percent 
of Catholic Charities' budget came from State and local governments, 
and an additional 9 percent came from the Federal Government.
  In 2001, United Jewish Communities received a Federal grant of $59.8 
million. If indirect payments were included--for example, Medicaid, 
Medicare, vouchers, or food stamps--the amount flowing through 
religious organizations would be significantly higher.
  Both of these mission-driven, faith-based groups are independently or 
separately incorporated as nonprofits and both are able to distinguish 
their religious activities from their secular social services 
activities.
  So an initial point we must recognize in the debate about faith-based 
initiatives is that it is not whether religious groups will or should 
play a role in the spiritual and temporal lives of Americans--they do, 
and they will continue to do so--nor is the question about whether the 
government discriminates against faith-based charitable groups. The 
question is how the important roles faith-based organizations play can 
continue to meet the constitutional requirement of separation between 
church and state, both as a matter of law and as wise public policy.
  This constitutional standard has strengthened religion in America 
compared to other countries around the world. We can see on the nightly 
newscasts the effects of intolerance across the globe, of established 
religions battling other beliefs. In America, we have been spared much 
of that. I believe it is directly attributable to the wise condition 
included in the First Amendment.
  My awareness and sensitivity to these issues might spring in large 
part from my roots growing up in Rhode Island. As a child, I learned 
the history of Roger Williams and the founding of the colony of Rhode 
Island and Providence Plantation. Upon leaving the enforced orthodoxy 
of the Massachusetts Bay Colony, Roger Williams started a settlement 
that ultimately became Rhode Island. This settlement was founded on his 
belief, in his words: ``that no man should be molested for his 
conscience.''
  The spirit of Roger Williams was captured by his contemporary, John 
Clarke, in the petition for a new royal charter by the people of Rhode 
Island in 1663. In his words, the people of Narragansett Bay:

       have it much in their hearts, if they may be permitted, to 
     hold forth a lively experiment, that a flourishing and civil 
     state may stand, yea, and best be maintained . . . with a 
     full liberty in religious commitments.

  As a result of this religious liberty, Rhode Island became a refuge 
for people persecuted for their religious beliefs elsewhere. And 
Anabaptists, Quakers, and Jews settled in Rhode Island because of its 
commitment to religious liberty and tolerance.
  This lively experiment became a model for the Founding Fathers and 
helped lead to the drafting of the First Amendment: ``Congress shall 
make no law respecting an establishment of religion, or prohibiting the 
free exercise thereof.''
  In explaining what the First Amendment meant to the Danbury Baptist 
Association in 1802, Thomas Jefferson wrote that the combined effect of 
the establishment and free exercise clauses of the Constitution was a 
``wall of separation between church and state.''
  Jefferson's comments were not unique to him. Senator Durbin has 
already made a reference to President James Madison. President Madison 
what was meant by this separation of church and state extremely clear 
in several messages he delivered on Government funding of religious 
endeavors. In 1811, he vetoed a congressional bill granting the use of 
some Federal land to a church in the Mississippi territory. President 
Madison stated:

       Because the bill in reserving a certain parcel of land in 
     the United States for the use of said Baptist Church 
     comprises a principle and precedent for the appropriation of 
     funds to the United States for the use and support of 
     religious societies, contrary to the article of the 
     Constitution which declares that ``Congress shall make no law 
     respecting a religious establishment''. . . Resolved. That 
     the said bill does not pass.

  Indeed, I find it interesting that conservatives would so cavalierly 
dismiss so much of the history of this country and disregard so many of 
the fundamental principles of the Founding Fathers. President Bush and 
his conservative followers want to transform the relationship between 
church and state by directly funding pervasively sectarian 
organizations. He has done this by regulation and by Executive order, 
since he has largely been unsuccessful in accomplishing these tasks 
through the legislative process.
  Just consider some of the changes that he has advanced thus far. In a 
June 2001 Department of Justice memorandum, the Department of Justice 
took the legal position that faith-based organizations that are given 
Federal taxpayer dollars to run governmental programs should be able to 
engage in employment discrimination on the basis of religion. 
Subsequent to this memorandum, the President by Executive order 
overrode a rule first enunciated by President Franklin Roosevelt that 
the Federal Government should not give contracts to employers who 
engage in discrimination on the basis of religion. Thus, it is now the 
position of the White House that government contractors can 
discriminate.
  The President believes the government should fund faith-based 
organizations who use proselytization and prayer to cure drug addiction 
and other social programs. In his State of the Union Address, President 
Bush cited one such program in Louisiana that expressly combats drug 
abuse with faith. The head of another often-cited religious program, 
Teen Challenge, boasted to Congress that he was not only able to get 
kids to stop using drugs, he converted Jews into Christians in the 
process.
  In newly proposed HUD regulations, the Administration says that 
Federal funds can be used to construct a religious building used for 
religious activities if the building also can be used for a public 
purpose such as counseling or a food pantry. At least that is the 
proposal.
  With these and other initiatives, the President is attempting to 
breach the

[[Page 8700]]

wall the Founding Fathers set up between church and state. These 
initiatives are clearly designed to fund proselytization and to promote 
certain types of religion.
  There are legal challenges being raised to many of these proposals. 
But the long and short of it is, we have an opportunity to debate and 
to decide these issues through the legislative process, and we have an 
obligation to do so. And when there is a more robust, more extensive 
attempt to legislatively condone or sanction these faith-based 
initiatives, I believe there are going to be three major areas we will 
need to address.
  One area is effective restraints on proselytization with taxpayer 
funds. The second is compliance with local regulatory standards in the 
delivery of public programs. And the third is prohibiting the use of 
public funds in employment discrimination.
  First, with respect to proselytization. If the separation of church 
and state means anything, then in my mind, it must mean that no 
American should be compelled to pass a sectarian test or participate in 
sectarian exercises to receive a public benefit. This principle should 
be included in legislation and not left to the more shifting sands of 
regulatory pronouncements.
  Second, many advocates of faith-based initiatives argue that they 
simply want a level playing field. Let's take them at their word. If 
State licensing arrangements are appropriate and necessary to protect 
children in publicly funded programs, why should religious providers be 
exempt from such licensing requirements? If we consider this issue, we 
will need to look for the even application of local and state laws, 
particularly laws with respect to the protection of children and public 
health. This is what we will need to do in order to truly create an 
even playing field.
  Finally, we must address the issue of employment discrimination. 
Title VII provides an exemption for religious groups in certain 
situations. In the Amos case, the Supreme Court held that a religious 
group using its own funds may claim the Title VII exemption. In the 
words of the Court, the purpose of the exemption was to alleviate 
``significant governmental interference with the ability of religious 
organizations to define and carry out their religious missions.''
  Today, with respect to the Administration's proposal, we must 
recognize that rather than seeking autonomy from governmental 
interference, religious groups are seeking taxpayer funds to carry out 
governmental responsibilities. Indeed, in the one unreported case that 
has ruled on the use of public funds in this way, the court, in this 
labor case, concluded that the title VII exception does not apply.
  As James Madison said in 1785, in his ``Memorial and Remonstrance 
Against Religious Assessments,'' in opposition to a proposal by Patrick 
Henry that all Virginians be taxed to support teachers of the Christian 
religion:

       If ``all men are by nature equally free and independent,'' 
     . . . above all are they to be considered as retaining an 
     ``equal title to the free exercise of Religion according to 
     the dictates of conscience.'' Whilst we assert for ourselves 
     a freedom to embrace, to profess and to observe the Religion 
     which we believe to be of divine origin, we cannot deny an 
     equal freedom to those whose minds have not yet yielded to 
     the evidence which has convinced us. If this freedom be 
     abused, it is an offense against God, not against man: To 
     God, therefore, not to man, must an account be rendered.

  All of this leads me to my final point. In the words of the New 
England poet, Robert Frost, ``Good fences make good neighbors.'' What 
might be permissible under the law does not always guarantee the wisest 
policy.
  We need to remember that as we debate the President's faith-based 
initiative, religion has thrived in America because few people confuse 
religion with government. Religion has been a citadel of conscience and 
a check on government because it draws its strength and its support 
from its adherents, not from bureaucratic patrons.
  The religious communities of America that have been unequivocally 
supporting the President's attempts to allow discrimination with 
Federal dollars might be mindful of the old saying: Be careful of what 
you pray for.
  As the House of Representatives has made clear, we are going to be 
discussing this issue in the upcoming months on welfare, SAMSHA, 
National Service, and other programs. It is my hope the Senate will 
undertake a more careful look at how the charitable choice provisions 
in these bills inhibit the free exercise of religion, rather than 
encourage it.
  Again, I thank the sponsors and the chairman and ranking member of 
the Finance Committee for bringing this bill to the floor. This is 
something we will all support, and we will do so with the notion and 
the idea and the commitment to provide resources for people who want to 
help other people, and do so consistent with the spirit and the letter 
of the Constitution.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Crapo). The Senator from Pennsylvania.
  Mr. SANTORUM. Mr. President, I thank the Senator from Rhode Island 
for his kind remarks with respect to the compromise that Senator 
Lieberman and I have engaged in to move this legislation forward. I 
appreciate his support of this legislation, as I do that of all of my 
colleagues.
  As he stated, and he is correct, I do take issue with his perspective 
on the issue of charitable choice and the funding--allowing of 
government funds to be used by organizations that have some element of 
faith within their structure, whether it has been the guiding 
principles of the organization or with the programs that they 
administer.
  I do not believe it violates the ``separation of church and state.'' 
I do believe organizations of faith should not be discriminated 
against. We should not be in the business of just funding a set of 
organizations that have no faith component in them at the expense of 
those that do--for a lot of reasons, not the least of which is there is 
a lot of evidence out there, most of which is anecdotal I understand, 
but a growing body of evidence that organizations of faith are much 
more effective in dealing with problems, particularly the more systemic 
problems that we have.
  But I object to the underlying premise of this argument that somehow 
or another we are violating the Founding Fathers' understanding of the 
separation of church and state.
  I talk at a lot of schools. I ask kids: What words are in the 
Constitution, ``the free exercise of religion'' or ``separation of 
church and state''? Usually about 75 to 80 percent of the kids say, 
``separation of church and state'' is in the Constitution, which of 
course it is not.
  The Senator from Rhode Island talked about the genesis of that in 
referring to one of the Founding Fathers, referring to the 
establishment clause as erecting a wall of separation between church 
and state. But what were they talking about? They were talking about 
certainly the country from which they came, which was England, which 
had an established church. The Government funded the church, as many 
European countries did historically, for long periods of time. 
Certainly prior to the Reformation, the Catholic Church was intertwined 
very much so with the state. After the Reformation, each reform church 
had its own country and was funded in many cases.
  People came to this country for religious freedom. They did not want 
an established religion. But even at the time in America there were 
certain colonies that had affinities for different religions. Maryland, 
for example--neighboring Maryland was considered more of a Catholic 
colony. Pennsylvania was home to the Quakers--on down the line.
  There was a concern that that could come over here to this country, 
so they put in this clause that we should not have an established 
religion.
  The difference is between the constitutional provisions that allow 
for the free exercise of religion and the prohibition against the 
establishment of religion. But this is really about freedom of 
religion; in other words, to practice whatever religious tenets you 
want and for the government not to get in your way in doing so.

[[Page 8701]]

  What some are really arguing is freedom from religion, which I can 
tell you is completely antithetical to what our Founding Fathers 
believed.
  We will have this debate. I am looking forward to it because I think 
it is important for the Senate, arguably the greatest deliberative body 
in the world, to talk about these important issues.
  The role of faith in our society is central. It is central to the 
success of America. One of the reasons we are a successful country is 
because we are a faith-filled country. One of the reasons we are a 
faith-filled country is because we have a tremendous marketplace of 
ideas, whether it is the street-corner preacher or the old church down 
the street that has been there for centuries.
  We have a marketplace of ideas of faith and that is what makes us: 
People out preaching the Word, talking about the values that faith 
imparts and the messages that faith imparts and its relevance to 
people's lives.
  Here is a statistic I just marvel over. There are more people who go 
to church in America over a weekend, church and synagogue and temple, 
than to all the sporting events throughout the entire year in America. 
On one weekend, more people go to their places of worship than to all 
the sporting events that are held in America over the course of a year. 
That is remarkable. It is a great thing about America. It is what makes 
us unique. It is because we have not established religion. But it is 
not because we are saying people need to be free from religion. I think 
that is one of the concerns I have with the tack that the Senator from 
Rhode Island was taking.
  Let me mention a couple of issues. Again, this is the beginning of a 
debate that is not about this bill. I repeat, we have taken everything 
having to do with the concept of equal treatment out of this 
legislation. We will save that debate for another day. But there are 
some things in this legislation I would like to address very briefly.
  I see the Senator from New Jersey. I will not keep him long.
  One of the items I am most excited about in this legislation is a 
provision called individual development accounts. Senator Lieberman and 
I and Senator Feinstein and many others, who have been advocates of 
this legislation for quite some time, are very excited about it being 
part of this initiative. Individual development accounts are a matched 
savings account for low-income and low- to moderate-income individuals 
who will have an opportunity to put up to $500 a year into a savings 
account and have that matched, dollar for dollar, up to $500. So it 
will be $1,000 total.
  It is an exciting opportunity for these individuals to be able to put 
money aside. For what? So they can put it aside for three reasons: to 
buy a home, to get education, higher education, or, in some cases, 
technical training, vocational training, as well as start a small 
business, start a business. So it is a way for people to save for 
events in their lives that can transform their future economically: 
better education; a home, a place where they can save, invest, and 
build equity.
  As everybody knows in this Chamber, the place where most people have 
the bulk of their savings is in their home, in the equity they have in 
their home. So the opportunity for home ownership, and having that 
money for a downpayment, is so important. And IDAs create that 
opportunity.
  And finally, for starting that small business, being that 
entrepreneur--that spirit really drives America and really is the 
ladder of success so many people in America have access to--we want to 
create a nest egg for people to be able to buy that first piece of 
equipment. If you want to start a landscaping service, you can buy that 
lawn mower, you can buy the other tools you need to do that job, or a 
variety of other interests people get engaged in as their first 
business.
  So we, Senator Lieberman and I, are very excited about this 
opportunity. We think it builds not just the opportunity for access to 
the home or to the education or to that small business, but it builds 
the virtue of deferred gratification. That is a virtue we sometimes do 
not practice very much in America, but it is a virtue of delaying the 
expenditure of that dollar, to put it aside, to save it for something 
that is more important than what you immediately have before you. And 
when I am talking about gratification, I am not talking about luxuries. 
I am talking about maybe simple things, maybe very minor things in the 
lives of people who are low to moderate income. But deferring that to 
something that may be transformational in their lives is really 
something we should create incentives to do because, again, it helps 
people move up that ladder of success in America.
  I see a couple of my colleagues are in the Chamber. I am happy to 
yield the floor for their input.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. I thank my colleague from Pennsylvania.
  Mr. DORGAN. Will the Senator from New Jersey yield for a consent 
request?
  I ask unanimous consent that I be recognized for 10 minutes, 
following the Senator from New Jersey, to speak on the bill.
  Mr. SANTORUM. Reserving the right to object, I may have a Senator on 
the way down to the Chamber who is trying to fit in here. How long is 
the Senator from New Jersey going to speak?
  Mr. LAUTENBERG. Less than 10 minutes.
  Mr. SANTORUM. I have no objection.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from New Jersey.
  Mr. LAUTENBERG. Once again, I thank my colleague from Pennsylvania. 
And I assure my friend from North Dakota, although it is not my time to 
give, I am happy he is going to be recognized.
  Mr. President, I want to take just a few minutes to talk about the 
legislation before us, the CARE Act, and note its timeliness, because I 
think fundamental to a lot of good ideas is the fact that it is time to 
encourage participation in the spirit of harmony and unity within our 
country.
  I have been struck by the fact I have not heard a call for either 
participation or voluntary--call it sacrifice, if you will, although 
compared to what our young men and women are doing in Iraq, nothing we 
are going to do here looks like that much of a sacrifice--but it does 
show good intent. To me, that is important.
  So I am pleased the sponsors of this bill, Senators Lieberman and 
Santorum, have agreed to make this more palatable by removing 
controversial language that raised some constitutional and civil rights 
concerns.
  The bill contains several very good provisions, including changes to 
the Tax Code we all hope will increase charitable giving and certainly 
encourage the spirit of charitable giving, as well as being an 
incentive.
  In addition, the bill increases funding for the social services block 
grant by over $1 billion. That will restore some of the cuts that have 
been made in the program over the years. This increase in the social 
services block grant funding will benefit thousands of Americans who 
are suffering in this economy, who truly need help.
  If the President's faith-based initiative means anything, then, 
obviously, this dedication of funding for charitable work by religious 
and secular charities confirms that is an appropriate thing to do; that 
is, to look to our charitable interests to firm up the fact we do feel 
some commitment to commemorate the sacrifice that is being made by so 
many.
  If this funding disappears in conference, I think it would be tragic 
because it would say, OK, if it passes the Senate--and I certainly hope 
and believe it will--and then suddenly this mystery hole opens up 
between here and the House of Representatives--and these things often 
fall in it--then it is left to people who have a curiosity about what 
happened, as they say, on the way to the other forum, when things just 
disappear. But it is a convenient sleight of hand for those who really 
don't want to support it but don't want to be identified with 
withdrawing their support.
  So even though this bill is silent on civil rights issues, the 
President's overall faith-based initiative contains some

[[Page 8702]]

disturbing civil rights problems. The President has announced several 
policies that I think should trouble Americans who care deeply about 
civil justice and equality.
  The President has issued an Executive order that authorizes 
organizations that receive Federal funding to discriminate in 
employment--it is based on religion--for Government-funded positions. 
That is not fair, it is not appropriate, and I certainly don't think it 
is appropriate for faith-based organizations.
  A policy that says ``Catholics need not apply'' should never, ever be 
funded by the Federal Government. If a religious group wants to 
restrict employment with their own money, that is their business, but 
they should not be able to discriminate in staffing up Government 
programs paid for with public dollars, tax dollars.
  The American people agree. A poll by the Pew Forum on Religion and 
Public Life found that 78 percent of Americans oppose allowing 
religious groups that receive Federal funding to discriminate in 
employment.
  And it is not merely a hypothetical problem. It is a real-life 
problem.
  In Georgia, a man named Alan Yorker sent his resume to a Government-
funded faith-based program for troubled youths. The position he sought 
was paid for with taxpayer dollars. The faith-based group said they 
were impressed with his resume and called him in for an interview. When 
Mr. Yorker arrived, he was asked to fill out an application form. The 
form asked for the name of his church. He wrote in the name of his 
synagogue. It also asked for the name of his pastor, and he filled in 
his rabbi's name.
  When he sat down for the interview, he was told, straight out, they 
don't hire Jews. A former employee of the organization later told Mr. 
Yorker they usually throw resumes with ``Jewish-sounding names'' in the 
trash, but they did not recognize his last name as Jewish.
  This was a taxpayer-funded job to perform social service work 
pursuant to a Government program. And President Bush thinks maybe it is 
OK to deny someone employment because they are of a different 
persuasion.
  The administration thinks it is fine for a Government-funded program 
to tell a Catholic or a Mormon they can't get a taxpayer-funded job 
simply because of their religion. Well, I disagree. I think it is 
wrong. And I am going to join my colleagues, Senators Reed and Durbin, 
in fighting it during this session of Congress.
  Again, I commend the sponsors of this legislation. The Senator from 
Pennsylvania did a very good job, I believe, in developing this 
legislation, for removing the controversial provisions from the bill 
before us.
  I hope the bill will further the good work that faith-based and 
secular charities do every day. While this bill moves in the right 
direction, the administration is on, I believe, the wrong track 
regarding civil rights. I hope the President will reverse that course.
  Mr. President, our faith should bring us together, not divide us.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Murkowski). The Senator from North Dakota.
  Mr. DORGAN. Madam President, this is a good piece of legislation. I 
am pleased to rise in support and pleased particularly that it is 
bipartisan legislation that advances very important interests.
  A wise old fellow from my small hometown once asked me if I had ever 
seen a U-Haul hooked up to a hearse. I said: No. He said: Well, it goes 
to show you, you can't take it with you.
  He is right. You can't take it with you. The question is, What do you 
do with the resources you develop over a lifetime? It seems to me you 
find ways to help other people.
  There is an old saying that we make a living by what we get but we 
make a life by what we give. The issue of charitable giving and 
providing nourishment and incentives to the notion of charitable giving 
is a very important impulse. This legislation advances that in a 
significant way.
  Two years ago I introduced S. 1375, and then, in this Congress, S. 
283. I am pleased that these provisions were included in this 
legislation by the Senate Finance Committee. Let me describe what they 
are and why they are so important.
  The provisions in the CARE Act that relate to the legislation I have 
introduced, with some of my colleagues, allow individuals to make tax-
free outright gifts to charities from their IRAs at age 70\1/2\ and 
charitable life-income gifts at age 59\1/2\. The reason that is 
important--to be able to make tax-free gifts from IRAs to charities--is 
they won't face adverse tax consequences when they rollover that money 
from their IRAs. The detrimental tax consequences have persuaded some 
that they can't roll these assets over into a charity.
  I heard from a good many charities, when I introduced this 
legislation 2 years ago, that people frequently ask them about being 
able to give to a charity by using their IRAs to make the donation 
itself. But many donors decide not to make a gift from their IRA after 
they are told about the potential tax consequences. Tax-free charitable 
IRA rollovers will eliminate this concern completely.
  In his fiscal year 2004 budget, President Bush proposed allowing 
individuals to make tax-free outright charitable IRA rollover 
distributions after age 65. That proposal has a lot of merit. But the 
approach taken in the Public Good IRA Rollover Act, S. 283, and that's 
included in CARE Act, is superior because it will not only allow direct 
charitable IRA rollovers, but it will allow tax-free life-income gifts 
from the IRA at age 59\1/2\. That means the assets can be donated to 
the charities, but the donor retains an income stream from those 
assets. This approach would stimulate more charitable giving, while 
comporting with the federal government's policy of encouraging 
individuals to provide for and safeguard adequate resources after 
retirement. This is a very important provision that could put billions 
of dollars of additional dollars from a new source to work for the 
public good.
  I'm told that a senior Salvation Army official once said that 
``providing for IRA charitable rollovers would be the single most 
important piece of legislation in the history of public charitable 
support in this country.''
  I don't think he necessarily understates the proposition. Charitable 
giving is critically important. The mechanisms by which we incentivize 
and nurture charitable giving are in this legislation and will advance 
the interests of charitable giving across the country.
  Let me make another point. This legislation contains more than just 
that provision. I single that provision out simply because I have been 
working on it a couple of years.
  I ask unanimous consent to print in the Record a list of principally 
North Dakota organizations, 18 of them, that have been working with me 
on this proposition.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

    North Dakota & Fargo-Moorhead Charities That Have Endorsed the 
                        Charitable IRA Rollover

       1. North Dakota State University Foundation, Fargo, ND; 2. 
     University of North Dakota Foundation, Grand Forks, ND; 3. 
     Bethany Homes, Inc., Foundation, Fargo, ND; 4. Red River 
     Zoological Society, Fargo, ND; 5. Fargo Catholic Schools, 
     Fargo, ND; 6. Oak Grove Lutheran School, Fargo, ND; 7. 
     Meritcare Health System, Fargo, ND; 8. Evangelical Lutheran 
     Church in America, Eastern North Dakota Synod, Fargo, ND; 9. 
     Red River Human Services Foundation, Fargo, ND; 10. Eventide 
     Homes, Moorhead, MN; 11. Fargo-Moorhead Community Theatre, 
     Fargo, ND; 12. Plains Art Museum, Fargo, ND; 13. Fargo-
     Moorhead Symphony, Fargo, ND; 14. Village Family Service 
     Center, Fargo, ND; 15. Fargo-Moorhead Area Foundation, Fargo, 
     ND; 16. Foundation of Grand Forks, East Grand Forks & Region, 
     Grand Forks, ND; 17. United Way of Fargo-Moorhead, Fargo, ND; 
     and 18. Prairie Public Broadcasting, Fargo, ND.
       As of Monday, May 13, 2002.

  Mr. DORGAN. The provision in the CARE that deals with charitable 
deductions for non-itemizers is also very important. All of this coming 
together is legislation I am proud to support. It is a significant step 
for good.
  Let me say one additional point. In order to pay for these 
proposals--and

[[Page 8703]]

these proposals are paid for with a revenue portion of the bill--there 
are additional curbs on tax shelters. I strongly support that as a 
matter of good tax policy. Last year, former IRS Commissioner Rossetti 
told Congress:

       Nothing undermines confidence in the tax system more than 
     the impression that the average honest taxpayer has to pay 
     his or her taxes while more wealthy or unscrupulous taxpayers 
     are allowed to get away with not paying.

  He is correct. What we have seen, with front-page stories in journals 
and technical publications, as well as major daily newspapers, is the 
growth of abusive tax shelters. Shutting those down makes a lot of 
sense. I don't believe that there is a provision in this bill that 
deals with the issue of moving corporate headquarters overseas and 
renouncing your U.S. citizenship in order to save on taxes. But that is 
another piece we ought to do as well.
  I simply make the point that the other piece of this bill that is 
important is we pay for this, and we pay for it with good tax policy by 
curbing tax shelters.
  There are a lot of things in this country that are done that make 
people feel good. One of those is the charitable giving that Americans 
do. Americans do a great deal of charitable giving. They do it because 
they know there is a need, and they know people who need help can count 
on others who will offer it. With respect to the provision I have been 
working on, there is an impediment that has prevented people from 
saying, I would like to roll over my IRA assets to a charity and 
provide that charity with resources it needs. To do that under present 
law significantly penalizes them through the Tax Code. This legislation 
responds to that.
  Allen Huffman on my staff and others have worked together for a long 
while on this particular provision of the bill. There are other 
provisions that have merit as well.
  I thank the manager of the bill and the ranking member of the 
committee who bring it to the floor. When we pass this--and we will--it 
will represent a significant positive step toward good public policy. I 
am pleased to support it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Madam President, I congratulate Senators Santorum and 
Lieberman and everybody else who has had a voice and hand in shaping 
and crafting the CARE legislation before us. It makes a significant 
contribution to the strength of volunteer organizations and charitable 
organizations. It is a very significant contribution to that wonderful 
cause and to this wonderful land of ours. I commend them.
  I would like to take a moment here to highlight a provision in the 
managers' amendment to strengthen the ability of the Securities and 
Exchange Commission to detect, investigate, and punish violations of 
Federal securities law. This provision has been added to the CARE Act, 
because we have had the support and we have been able to utilize the 
efforts of the managers of this bill, Senators Grassley and Baucus, and 
of the chairman and ranking member of the Banking Committee, Senators 
Shelby and Sarbanes. This is an effort that Senator Bill Nelson and I 
and others have been involved in for some time. Now it will come to 
fruition, at least in the Senate, tomorrow when we adopt this 
legislation, including the managers' amendment.
  I also thank the Securities and Exchange Commission for its 
assistance in crafting this legislation and for the agency's support of 
our efforts to enact it into law. Senator Bill Nelson and I and others 
have been working on this addition to the SEC enforcement powers for a 
long time. We are very grateful to all those who have worked with us, 
including Senators Corzine and Biden who cosponsored the SEC Civil 
Enforcement Act, S. 183, which we introduced earlier this year--in 
January--which is identical to the language which is in the managers' 
amendment.
  The SEC Chairman, Bill Donaldson, is very supportive of our SEC 
enforcement legislation. I ask unanimous consent that a letter from the 
SEC Chairman supporting this provision and describing it as one that 
will ``significantly supplement and strengthen the Commission's ongoing 
enforcement efforts'' be printed in the Record at this time.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                   U.S. Securities


                                      and Exchange Commission,

                                    Washington, DC, April 2, 2003.
     Hon. Carl Levin,
     Ranking Minority Member, Permanent Subcommittee on 
         Investigations, U.S. Senate, Russell Senate Office 
         Building, Washington, DC.
       Dear Senator Levin: I want to express my thanks for your 
     recent introduction of S. 183, your proposal to enhance the 
     Commission's authority to seek civil penalties for violations 
     of the Federal securities laws, increase the penalties the 
     Commission may seek, and eliminate a procedural requirement 
     that may slow the Commission's efforts to trace and recover 
     misappropriated investor funds.
       I support this proposal, which was previously reflected in 
     a bill you introduced in the 107th Congress, to significantly 
     supplement and strengthen the Commission's ongoing 
     enforcement efforts. I very much appreciate your steadfast 
     dedication to supporting the work of the Commission in 
     protecting investors.
       Please do not hesitate to contact me or Stephen Cutler, 
     Director of the Division of Enforcement, at (202) 942-4500 if 
     we can be of any assistance in this regard.
           Sincerely,
                                             William H. Donaldson,
                                                         Chairman.
  Mr. LEVIN. Madam President, here is a description of what the Levin-
Nelson provision would do.
  First, the provision will grant the SEC administrative authority to 
impose civil monetary fines on any person who violates Federal 
securities laws. Under current law, only broker-dealers, investment 
advisers, and certain other persons are now subject to administrative 
fines by the SEC. Our legislation will allow the SEC to impose 
administrative fines on anyone who violates Federal securities law, 
including, for example, corporate officers, directors, auditors, 
lawyers, or publicly traded companies, none of whom are now subject to 
being fined by the SEC in administrative proceedings. These fines, of 
course, would be subject to judicial review, as are all SEC 
administrative determinations.
  Last year, the Permanent Subcommittee on Investigations, which I then 
chaired, conducted an extensive investigation into the collapse of 
Enron. As a result of that investigation, the Subcommittee determined 
that Enron's board of directors and officers and certain major 
financial institutions assisted Enron in carrying out deceptive 
accounting transactions and other abuses that misled investors and 
analysts about the company's finances.
  The Subcommittee's last Enron hearing in December also highlighted 
the fact that the SEC is in need of additional tools to deal with the 
individuals and entities that participated in Enron's deceptive 
accounting or tax strategies. Our legislation would give to the SEC new 
authority to impose an administrative fine on anyone who violates the 
Federal security laws--not just broker-dealers or investment advisers, 
but also corporate directors or officers, employees, bankers, lawyers, 
auditors, law firms, accounting firms, corporations, financial 
institutions, partnerships, and trusts.
  Second, the provision will significantly increase the maximum civil 
administrative fine that the SEC is able to impose on persons who 
violate Federal securities laws. The civil administrative fines that 
the SEC is currently authorized to impose have statutory maximums that, 
depending upon the nature of the securities law violation, range from a 
maximum of $6,500 to a maximum of $600,000 per violation. Again, the 
particular amount depends upon the nature of the violation. In a day 
and age when some CEOs make $100 million in a single year, and a 
company like Enron can report gross revenues of $100 billion in a 
single year, a civil fine with a maximum of $6,500 is laughable. Here 
is what one SEC staff stated about the current maximums in a document 
dated June 2002, and this explains why the agency is supporting our 
legislation:

       The current maximum penalty amounts may not have the 
     desired deterrent effect on

[[Page 8704]]

     an individual or corporate violator. For example, an 
     individual who commits a negligent act is subject to a 
     maximum penalty of $6,500 per violation. This amount is so 
     trivial it cannot possibly have a deterrent effect on the 
     violator.

  Our provision would increase the civil fine maximums from a range of 
a maximum of $6,500 to a maximum of $600,000 per violation, depending 
on the nature of the securities law violation, to a range that goes 
from a maximum of $100,000 to a maximum of $2 million per violation. At 
a time when we are seeing corporate restatements and misconduct 
involving billions of dollars, these larger fines are critical if the 
fines are to have an effective deterrent or punitive impact on 
wrongdoers.
  Third, the Levin-Nelson provision would grant the SEC new 
administrative authority, when the SEC has opened an official SEC 
investigation, to subpoena financial records from a financial 
institution without having to notify the subject that such a records 
request has been made, thereby bringing the SEC's subpoena authority 
into alignment with the subpoena authority of Federal banking agencies 
like the Federal Reserve and the Office of the Comptroller of the 
Currency. This authority would allow the SEC to trace funds, evaluate 
financial transactions, and analyze financial relationships without 
having to alert the subject of an investigation to the SEC's inquiry. 
Under current law, the SEC either has to give the subject advance 
notice of the subpoena or spend precious time seeking to obtain a court 
order to delay notification.
  Cases we are seeing today involve allegations of persons using 
offshore accounts to move millions of dollars or engage in complex 
transactions that materially affect the financial statements and tax 
returns of publicly traded companies in the United States. The SEC must 
be able to look at financial records quickly without giving the subject 
of the inquiry an opportunity to move funds, change accounts, or 
further muddy the investigative waters.
  This authority is particularly important in light of the PATRIOT Act 
of 2001, which for the first time requires securities firms to detect 
and report possible money laundering through U.S. securities accounts. 
The SEC cannot be expected to effectively monitor these anti-money 
laundering efforts or act quickly to trace possible terrorist financing 
or other suspicious financial conduct if, as is the case now, the SEC 
must provide advance notice to investigative subjects or obtain court 
orders granting delayed notification. No Federal banking agency 
operates under these types of constraints in its anti-money laundering 
efforts, and there is no reason why the SEC should. Our provision would 
modernize the SEC's oversight authority and bring it into alignment 
with the Federal banking agencies.
  Last year, the Sarbanes-Oxley law strengthened law enforcement and 
stiffened penalties for Federal securities crimes. By enacting the 
Levin-Nelson provision this year, Congress would help put some teeth 
into SEC enforcement on the civil side. We originally offered this 
legislation as an amendment to the Senate bill that resulted in the 
Sarbanes-Oxley Act, but were unable to obtain a vote before time ran 
out. That is why we are back.
  Investor confidence in U.S. capital markets has not been fully 
restored, and Congress needs to provide strong leadership to assure 
U.S. investors that their interests are protected. A vigorous SEC that 
can act quickly to impose civil fines on those who violate Federal 
securities laws can help restore investor confidence in the 
effectiveness of U.S. securities laws and capital markets. In addition, 
since many securities violations warrant civil rather than criminal 
treatment, strengthening the SEC's civil enforcement authority would 
help streamline the available civil enforcement options and give the 
SEC better tools to fashion appropriate civil penalties.
  Again, I thank my colleagues for supporting this provision.
  Madam President, I ask unanimous consent that a letter from the 
former Chairman of the SEC, Harvey Pitt, dated August 30, 2002, also 
endorsing this legislation be printed in the Record at this time.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                               U.S. Securities and


                                          Exchange Commission,

                                  Washington, DC, August 30, 2002.
     Hon. Carl Levin,
     Chairman, Permanent Subcommittee on Investigations, U.S. 
         Senate, Russell Senate Office Building, Washington, DC.
       Dear Chairman Levin: This letter responds to your letter of 
     August 9th, seeking my views on your proposal to enhance the 
     Commissions' authority to seek civil penalties for violations 
     of the federal securities laws, increase the penalties the 
     Commission may seek, and eliminate a procedural requirement 
     that may slow the Commission's efforts to trace and recover 
     misappropriated investor funds.
       The three additional enforcement tools you contemplate 
     reflect recommendations we have made previously in an effort 
     to facilitate our goal of achieving ``real-time 
     enforcement.'' Especially in light of recent events, I 
     believe these proposals would enhance our efforts and the 
     interest of investors. As you know, during this Congressional 
     session, with the bipartisan support of Congress and the 
     Administration, the Commission already has been given, and 
     has begun to implement, greater authority to pursue and 
     punish corporate wrongdoers and enhance corporate 
     accountability. The additional authority about which you 
     inquire would be a welcome addition to our enforcement 
     arsenal, if the proposals achieve bipartisan support.
       Again, thank you for your interest in strengthening 
     penalties for securities fraud violations. Please do not 
     hesitate to contact me or Stephen Cutler, Director of the 
     Division of Enforcement, at (202) 942-4500 if we can be of 
     further assistance.
           Yours truly,
                                                   Harvey L. Pitt.

  Mr. LEVIN. Madam President, I thank the managers and all the other 
persons who worked with us to get this legislation included in the 
managers' amendment and, hopefully, passed tomorrow.
  Mr. SARBANES. Madam President, I rise in support of the Levin-Nelson 
provision included in the managers' amendment to the CARE Act of 2003. 
This provision, the SEC Civil Enforcement Act, will strengthen the 
Securities and Exchange Commission's authority to prosecute securities 
fraud violations and augment investor protection. Senator Levin is to 
be commended for his unwavering advocacy on behalf of investors and his 
role in ensuring that our capital markets retain their reputation as 
being the fairest, most efficient, and most transparent in the world.
  The Levin-Nelson provision has the full support of the SEC Chairman, 
William Donaldson, and it has been supported by the full Commission and 
by former SEC Chairman, Harvey Pitt, who remarked that this provision 
would promote the SEC's goal of achieving ``real-time enforcement.'' 
The legislation has been sought by the SEC's Enforcement Division 
because it will eliminate inefficiency, provide the SEC with additional 
flexibility, and strengthen the Commission's ability to hold securities 
law violators accountable for their actions.
  The SEC Civil Enforcement Act effectively complements the statutory 
framework created by the Public Company Accounting Reform and Investor 
Protection Act of 2002--the ``Sarbanes-Oxley Act.'' Against the 
backdrop of a series of corporate scandals and a severe drop in 
investor confidence last year, the Sarbanes-Oxley Act sought to take 
steps to ensure investors that corporate executives and financial 
reports are trustworthy, accountants and analysts independent, and that 
the SEC has adequate resources and enforcement authority to fulfill its 
mandate.
  In its continuing, ``real-time'' investigation into accounting 
irregularities at HealthSouth Corp., the Commission has put these new 
powers to work. As The Wall Street Journal of April 4 noted, ``the 
HealthSouth inquiry has already netted eight criminal convictions, 
accomplishing in just weeks what might have stretched across months or 
even years in the past.''
  The Levin-Nelson provision will significantly buttress the SEC's 
enforcement efforts in this area. I urge enactment of the provision to 
further protect securities investors and help assure the U.S. capital 
markets remain the envy of the world.
  The PRESIDING OFFICER. Who yields time?

[[Page 8705]]


  Mr. SANTORUM. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. NELSON of Florida Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Fitzgerald). Without objection, it is so 
ordered.
  Mr. NELSON of Florida. Mr. President, I wish to talk about the CARE 
Act. I rise to speak in favor of the Charity Aid Recovery and 
Empowerment Act, or the CARE Act.
  As the Senate is considering this legislation, it is important to 
remember both Republicans and Democrats have cosponsored the CARE Act. 
This reflects the bipartisan spirit of this legislation which out of 
this legislative caldron was created by compromise, and we had last 
year as the goal of increasing charitable giving and helping the needy.
  In light of the uncertain economy, charities across the Nation are 
serving the needs of more people with fewer resources. This particular 
legislation is an opportunity to encourage Americans to help their 
neighbors, community, and their country by giving. By extending the 
charitable contribution deduction for 86 million Americans who do not 
itemize their tax returns, and allowing people to make charitable 
contributions from their individual development accounts, IDAs, this 
legislation creates incentives for giving to charity.
  This legislation also provides an enhanced charitable deduction for 
restaurants and businesses that make donations of food to charitable 
organizations. For some two decades, my wife Grace and I have been 
working with organizations to distribute food to the hungry. One such 
organization is back in our State of Florida. It is actually a part of 
our State Department of Agriculture. Its name is Farm Share. What it 
operates on is the original concept of gleaning, which was a biblical 
concept. In biblical times it was their social security system. When 
the farmers would go in and harvest the field, they would leave the 
rest of the crop so that then the poor people could come into the field 
and harvest the remaining crop, called gleaning; that was their way to 
support those least fortunate in the society of the day.
  When you take that ancient concept and bring it forward to today, 
look at all the crops that are wasted. So this concept of Farm Share, a 
part of our State Department of Agriculture, although not going 
directly into the field, what we find is enormous amounts of edible 
food wasted in the distribution process--in the collection, in the 
actual harvesting, then at the packinghouse and the rest of the 
distribution process.
  So what Farm Share does is go to the packinghouse where tomatoes, for 
example, a winter crop in south Florida, might have a blemish on them. 
They are completely edible, but they might not be marketable for that 
particular company buying those tomatoes. Or a company that uses a lot 
of tomatoes, such as McDonald's Corporation, wants a tomato of a 
certain size. So the tomatoes that are not that size are discarded. But 
it is good food that is going to waste. It is a form of gleaning, to 
save that, to have it packaged, and then ready for distribution.
  When my wife and I announce a distribution and we reach out to all 
the soup kitchens and reach out to the churches that are so effective 
throughout the communities in distributing food to the poor, when we 
send word out that the next morning there is going to be a distribution 
of food, and you arrive the next morning, there is a lump in your 
throat to suddenly see the lines of hundreds of hungry people in 
America; that they are so grateful, so orderly, so polite, and so 
thankful for the food that is going to be distributed.
  It is not unusual I would come as a cosponsor of this act and be very 
thankful that the Senate is considering it. It looks as if we have our 
differences worked out, and we are going to be able to pass it. This 
new legislation is more than just tax provisions. Individual 
development accounts are also expanded in this legislation. These IDAs 
are special savings accounts that offer matching contributions from 
participating banks or community organizations. This innovative program 
encourages low-income families to build assets and proposes reduced 
costs for banks and community organizations that offer the IDAs.
  This legislation also increases the funding for the social services 
block grant. That supplies States with resources to support a variety 
of social services. These funds can be used to assist the elderly and 
disabled so they do not need to enter institutions. Those funds can 
also be used to prevent child and elder abuse and to prevent things 
that go on that we read about in the newspaper that we shudder at in 
regard to the care of our elderly. These funds can be used to provide 
child care, to promote and support adoption, and many other purposes.
  By creating tax incentives for charitable contributions we can help 
support and give incentives to the natural instincts of the American 
people, which are to be generous, to give. When they do, faith-based 
and community organizations can pass on the gains to a community.
  We know that faith-based groups are doing good work all over the 
country, and their work is already being funded by Federal dollars 
because they are running programs that work to better people's lives. 
These faith-based groups operate soup kitchens, they run homeless 
shelters, and they rehabilitate drug users. Our Nation already funds 
many of these programs. I have seen these programs all over Florida. I 
have seen them here in Washington, DC. Anyone would be amazed just a 
stone's throw from where we are in the U.S. Capitol at the kinds of 
programs going on in the inner city to feed the poor and minister to 
the least privileged in society.
  Lives have been changed. I have seen cities, particularly the inner 
cities, being transformed from neglect to respect.
  This legislation is all about grassroots change, change from the 
ground up, by people who are close to the problems and who care enough 
to take up the challenge.
  I have cosponsored this legislation before. I am going to continue to 
work with our colleagues to try to find ways to help those who help 
others.
  This is one way. As we have been considering this emergency funding 
bill that we just passed and that is now in the conference committee, I 
thank the Senate for increasing the food aid. Back earlier when we were 
considering legislation, the task fell to me to increase the 
appropriation with regard to food aid, particularly destined for 
Africa, where they are experiencing another enormous drought which has 
caused a great deal of famine and death. The United States is a 
generous country. So, too, from our generosity, when we see a problem 
such as that, we want to try to take care of it.
  We passed a level of increased food aid here at $500 million. It was 
watered down in conference to $250 million. A lot of that money was 
squirreled away from Africa to meet the food needs there will be in 
Iraq. Because of that, a few nights ago on this floor we agreed to an 
amendment to the emergency supplemental appropriations bill that would 
have an additional $600 million to go for emergency food assistance. 
That will then be able to get to Africa with all of its famine that is 
ravaging the land.
  It is my hope, as the Appropriations Committees are meeting in 
conference right now on the emergency supplemental to determine the 
final outcome, that they will honor all those images they have seen on 
television of starving children and they will not reduce that $600 
million very much.
  It is with this spirit of thanks, of humility, and thanksgiving that 
I come to speak on behalf of this legislation and to thank the Senate 
and the many participants here who have worked out all the kinks in 
this legislation so we could pass it in a unanimous fashion.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.

[[Page 8706]]



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