[Congressional Record (Bound Edition), Volume 150 (2004), Part 1]
[Senate]
[Pages 381-397]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   PENSION FUNDING EQUITY ACT OF 2003

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of H.R. 3108, which the clerk will 
report.
  The legislative clerk read as follows:

       A bill (H.R. 3108) to amend the Employee Retirement Income 
     Security Act of 1974 and the Internal Revenue Code of 1986 to 
     temporarily replace the 30-year Treasury rate with a rate 
     based on long-term corporate bonds for certain pension plan 
     funding requirements and other provisions, and for other 
     purposes.

  Pending:

       Grassley amendment No. 2233, of a perfecting nature.
       Kyl amendment No. 2234 (to amend No. 2233) to limit the 
     liability of the Pension Benefit Guaranty Corporation with 
     respect to a plan for which a reduced deficit contribution is 
     elected.

  The ACTING PRESIDENT pro tempore. The Senator from Massachusetts is 
recognized.
  Mr. KENNEDY. Madam President, during the last 3 years, we have seen 
too many good jobs leave this country, and Americans are ending up with 
lower pay for part-time jobs. Not only do these jobs pay much less, 
they are also much less likely to offer pension benefits. In fact, 3.3 
million Americans have lost their pension coverage since 2000. In 2002, 
only 53.5 percent of our Nation's workers were participating in 
retirement plans, the lowest level in over a decade.
  This means the degradation of jobs not only hurts Americans today, it 
will continue to hurt them for the rest of their lives and into their 
retirement and old age. Instead of adopting an every-worker-for-himself 
retirement policy, we should be encouraging the growth of secure 
pension plans for all workers. Fewer American workers than ever have a 
secure, defined benefit pension plan.
  Only one in five workers today has a defined benefit plan compared 
with nearly 40 percent of workers in 1980. We must help low-wage 
workers and employees of small businesses, less than 10 percent of whom 
have pension coverage today.
  Strengthening and expanding our pension system is our long-term goal. 
But first we must take the initial step of stabilizing the pension 
plans that exist today, which have been battered by the perfect storm 
of economic conditions over the last 3 years.
  The amendment that Chairman Grassley, ranking Finance Committee 
member Senator Baucus, as well as the HELP Committee chairman, Senator 
Gregg, and I have offered is a moderate bipartisan measure to address 
these short-term problems. This amendment does not weaken existing 
pension funding rules. These are only temporary measures designed to 
give companies and workers some breathing room, to take steps to 
further protect these pension plans.
  An editorial in today's Washington Post expressed concern about our 
amendment and its effect on the PBGC and the American taxpayers. It is 
very important to respond to these concerns because they stem from some 
misconceptions about how our pension funding system works.
  First, additional obligations of the PBGC will not put taxpaying 
Americans at risk. The Pension Benefit Guaranty Corporation, which 
ensures defined benefit plans, is a self-funded agency. It is not 
supported by taxpayer dollars; it is funded by premiums from employers 
and holds billions of dollars in assets.
  Second, the PBGC's funding deficit, while serious, does not mean the 
agency cannot fulfill its mission. The PBGC has been in deficit before. 
The PBGC single employer program operated at a deficit for the first 16 
years of its existence. The PBGC still holds billions of dollars in 
assets, and the agency reports that it has sufficient cash flow to 
cover benefit payments and other operating expenses and other 
liabilities for a number of years.
  Also, the PBGC can and has operated at a surplus. During the Clinton 
economy, the PBGC not only shed its deficits, it gained a $10 billion 
surplus. What is more, the PBGC's multiemployer program operated at a 
surplus for over 20 years--until this year. When our economy improves, 
the financial outlook of the PBGC will improve as well.
  We were also concerned about overburdening the PBGC. That is why we 
limited the DRC relief to companies with healthy pension plans in 2000. 
These are companies that have been hit by terrible economic 
circumstances, from which we believe they will recover. Companies that 
receive the DRC relief will still be responsible for their regular 
pension contributions, and they will be restricted from increasing 
benefits, thus making pension promises they cannot keep. They will also 
be required to keep up with the costs of current benefits so they won't 
fall further behind in their funding levels.
  Finally, not passing this pension legislation will subject the PBGC 
to much greater risk than it faces today. Without the crucial three 
pieces that our legislation includes--temporary replacement of the 30-
year Treasury bond rate, targeted deficit reduction contribution 
relief, and funding relief to multiemployer plans--far more pension 
plans would terminate, which would place additional burdens on the 
PBGC.
  We want to improve our pension funding rules to ensure that companies 
adequately fund pension plans. We want to encourage companies to put 
more money into their pension plans when times are good, instead of 
only penalizing them with increased contributions when times are bad. 
However, we must first address the perfect storm that is battering our 
pension plans today. Once we have adopted this short-term solution, I 
look forward to working with my colleagues to improve and strengthen 
pensions for all America.
  I thought I would take a few moments to talk about this perfect storm 
that has adversely impacted the pension system, and also the challenges 
it presents to our economy generally.
  Madam President, 3.3 million Americans have lost their pension 
coverage since 2000. Only 53 percent of our Nation's workers are 
participating in a retirement plan, the lowest level in over a decade.
  As I mentioned before, the three parts of the stool for the American 
workers, after they have lived a life of productivity and worked hard 
in the workplace, are: One, Social Security; two, their savings; and 
three, their pension programs. We have seen a decline in the number of 
Americans who are now covered.
  The declining quality of jobs in our country also means declining 
benefits for American workers. Part-time and low-wage workers are far 
less likely to have a pension than full-time workers.
  That is why we are concerned and why this legislation, as I pointed 
out previously, addresses the needs of nearly 35 million Americans who 
are covered by single-employer defined benefit pension plans and the 
9.7 million Americans who are covered by multiemployer defined benefit 
plans, such as those who work in the construction industry who move 
from site to site over a year. That program was developed to make sure 
those workers will also have a defined benefit pension plan to provide 
a secure monthly benefit backed by the Pension Benefit Guaranty 
Corporation. That is a great advantage of the defined benefit program.
  What I am talking about in terms of the perfect storm is the economic 
factors which have been hurting defined pension plans: The prolonged 
downturn of the stock market during the Bush administration, the 
longest since the Great Depression; the extremely low

[[Page 382]]

30-year Treasury bond interest rates--it may be good for some 
industries, if you are purchasing a car or a house, but in terms of its 
impact on pension plans, it has been extremely adverse--and the 
generally weak economic conditions, which means that companies cannot 
afford to make additional payments and pay the excise taxes imposed by 
our pension laws.
  Smaller companies, medium-size companies, and even larger companies 
are hard pressed at this time because of the economic exigencies we are 
facing today. They believe they are under all of this pressure and they 
are unable to meet those responsibilities.
  I point this out not only to explain the challenge we are facing with 
regard to pensions but how inconsistent this is with the remarks of our 
President in his State of the Union Address when he commented that this 
economy is strong and growing stronger and also pointed out that the 
pace of economic growth in the third quarter of 2003 was the fastest in 
nearly 20 years.
  As some of us have pointed out, this has been very good for Wall 
Street but really has not been so good for Main Street.
  This chart shows what has happened, going back to 1949, when the U.S. 
economy recovered from a recession. This is a comparison of first 
quarter recovery.
  Looking at the history, using identical figures--and this is done by 
EPI Analysis based upon BEA data--first of all, we see, going back to 
1949, that wages increased in the first quarter by 16 percent; 10 
percent in 1954; in 1958 by 10 percent; 7 percent in 1961; 6.8 percent 
in 1970; 7.8 percent in 1975; 9.21 percent in 1982; in 1991, 6.1 
percent; and look at the year 2001, 1.5 percent. It is a pretty 
interesting indicator as to what is happening in the job market in 
terms of economic recovery, of which we heard so much during the State 
of the Union Address.
  This chart is a comparison since 1949 of what has happened to wages 
for workers in the quarter the recession ended. What we see is that 
this 1.5 percent is so dramatically different from every other quarter 
that it is difficult for many of us to be enthusiastic about this as an 
economic indicator.
  It is very interesting to look at where the resources have gone in 
the recovery. In the Bush economy, corporate profits ballooned compared 
to workers' wages. Look at this: In the early nineties, we saw workers' 
wages, as a percent of the economic recovery, were 60 percent; 
corporate profits, 39 percent. Workers' wages, 60 percent; corporate 
profits, 39 percent.
  Now look what it is this year. In today's recovery, we find workers' 
wages represent 13 percent of the total recovery and profits 86 
percent--profits 86 percent. When many of us talk about the recovery 
being good for Wall Street, this is it; bad for Main Street, this is 
it.
  Where are the resources going? They are going to the profits of the 
corporation. They are not being returned to the workers. We see what 
has happened.
  At the end of last week, I noted, when I got home, a very interesting 
CNN report on overwhelmed Americans. This is what they pointed out in 
their study and review:

       Wages are stagnant, productivity is soaring, which means 
     many Americans are effectively working more for less. And 
     making matters even worse, millions of American workers now 
     find themselves competing with cheaper foreign labor just to 
     hold on to their jobs.

  Then it quotes Kate Bronfenbrenner, a professor from Cornell 
University, talking about American workers:

       They are frightened because they wake up each morning and 
     they don't know whether their job is going to be outsourced, 
     downsized, contracted out or eliminated. They are overwhelmed 
     because they feel like forces way beyond their control are 
     making the decisions that affect their lives. And they are 
     exhausted because they are working harder and longer and 
     faster just to stand still.

  I showed those other charts that say American workers are working 
longer and harder than any other industrial society in the world. Not 
only are workers working longer and harder, but it's all hands on deck 
both men and women, moms and dads are working longer and harder just to 
try to stay even.
  The report goes on:

       In growing numbers, workers are feeling overworked, 
     underappreciated, and burned out. That's according to a 
     recent study of 1,100 workers that concluded ``Emotion about 
     the current work experience is extremely negative.''

  In the Wall Street Journal on Friday, January 23, we saw a lead 
story.
  ``The Gap in Wages Is Growing Again for U.S. Workers.
  ``Inequality Is Seen as a Result of the Jobless Recovery; Potential 
Election Theme.''

       Wage inequality--the gap between America's highest and 
     lowest earners--has started widening again, a situation with 
     election-year ramifications.
       The trend is a reflection of the job market's exceptionally 
     weak response to the current economic recovery.

  This is the Wall Street Journal. This is not just an article by some 
Democratic study group. This is the Wall Street Journal, their studies. 
It says:

       The trend is a reflection of the job market's exceptionally 
     weak response to the current economic recovery, as well as 
     long-term technological and economic changes that have eroded 
     the bargaining power of America's lowest-paid workers. The 
     data show that young workers--who currently have fewer job 
     prospects than a few years ago--and men, in particular are 
     bearing the brunt . . .
       The numbers continue a movement to greater wage inequality 
     that began around the time President Bush succeeded President 
     Clinton and the economy slid into recession three years ago. 
     The trend represents a reversal from the late 1990s, when the 
     lowest unemployment rates in a generation had enabled the 
     lowest-paid workers to keep pace with those at the top.

  This is the real state of the Union. I am reminded of the study that 
just came out at the end of last week from the Economic Policy 
Institute, a January 21st study.
  I will explain this chart. Basically it says the jobs that are being 
created, the few jobs that are being created--the estimate by the 
administration is it is going to be 300,000. They created 1,000 jobs 
this last month. The jobs that are being created are not as good as the 
jobs lost under this administration.
  This chart shows that in 48 of the 50 States, jobs in higher paying 
industries have given way to jobs in lower paying industries since the 
recession ended in November 2001. Nationwide, industries that are 
gaining jobs relative to industries that are losing jobs pay 21 percent 
less annually. For the States that have lost jobs since the recession 
purportedly ended, this is the other shoe dropping. Not only have jobs 
been lost, but in 29 of them the losses have been concentrated in 
higher paying sectors. For 19 of the 20 States that have seen some 
small gain in jobs since the end of the recession, the jobs gained have 
been disproportionately in the lower paying sector.
  They mentioned several States. One is the State of New Hampshire. 
Overall, 15,700 New Hampshire jobs have been lost since this President 
took office, and New Hampshire's unemployment rate has increased 54-
percent under President Bush. The unemployment rate in New Hampshire 
was 4.3 percent in November 2003, up from 2.8 percent in January 2001. 
This change represents a 54-percent increase since President Bush took 
office.
  According to the most recent State estimate, 6.1 percent of New 
Hampshire residents live in poverty, up from 5.5 percent in 2001. New 
Hampshire had lost a fifth of its manufacturing jobs since April of 
2001. Under President Bush, the low-paying jobs are replacing the high-
paying jobs in New Hampshire. The New England Economic Project recently 
estimated the sectors that lost the jobs between 2001 and 2002 in New 
Hampshire have an annual average wage of about $44,000. These sectors 
adding jobs in the State have an average wage of $38,000.
  Over a third of the jobless people in New Hampshire used up their 
unemployment benefits before finding a new job. Madam President, here 
26 percent of the people on unemployment in New Hampshire used up their 
benefit before finding new jobs. However, in September of 2003 nearly 
one-third were unable to find work by the time their benefits ended.
  These are hard-working Americans who have paid into the unemployment

[[Page 383]]

fund, which has about $20 billion surplus at this time. There are 
90,000 workers a week who are losing their unemployment insurance. That 
is happening up there in New Hampshire. We have tried more than a dozen 
times to get a temporary extension of 13 weeks. It costs about $7 
billion. It has been objected to by the Republicans.
  Real people are hurting. The unemployment filings in New Hampshire 
are the highest since 1992. From 2001 to 2003, the number of 
unemployment filings in New Hampshire was the highest it has been since 
1992.
  Of 240,000 New Hampshire taxpayers, 40 percent--and I mention this 
because in the State of the Union Address, the President talked about 
how we have doubled the child tax credit, reduced the marriage penalty, 
begun to phase out the debt, reduced taxes on capital gains, dividends, 
cut taxes on small businesses, have lowered taxes for every American 
who pays income tax.
  Listen to this. In New Hampshire, 241,000 New Hampshire taxpayers, 
which is 40 percent of the New Hampshire taxpayers, will receive less 
than $100 from the Bush tax plan in 2004. The top 1 percent of New 
Hampshire taxpayers receive 28 percent of the benefits in 2004 and get 
an average tax cut of over $67,000.
  Some people have asked why some of us were somewhat disappointed in 
the State of the Union Address and didn't jump up and applaud these 
figures. We take the State of the Union seriously. When you have that 
kind of result, in terms of the President's tax bill, one which I voted 
against for these very kinds of reasons, you begin to understand what 
is happening on Main Street of America.
  Not only are we talking about the question of pensions, and we talk 
about jobs, let's think about what has been happening to the average 
workers with regard to their health care costs and their health care 
coverage. We have one in five workers who are uninsured and, when they 
are offered insurance, decline coverage because of the limitations of 
their wages and because of the costs of health insurance, which I will 
come back to. Sixty-five percent of the employers increased the amount 
workers pay for their health insurance and 47 percent of the employers 
increased the amount workers pay for prescription drugs and 34 percent 
of employers increased the cost share employees pay for office visits.
  These are the pressures workers are under. That is why we have some 
44 million Americans who do not have health insurance--members 
representing not only workers but family members of the workers. About 
80 percent of all those who do not have health insurance are either 
workers or members of workers' families. That is why I believe if it is 
worker related in terms of trying to get coverage, we can make a major 
step in reducing the total number of those who are uncovered.
  Look at what is happening to the costs, the premium costs versus the 
Consumer Price Index--the average cost of products. Look at what is 
happening. This is a comparison of costs for workers. In 1999, the 
Consumer Price Index was 2.7 percent but 5.3 percent for health care. 
The next year, 2000, 3.4, 8.2; 2001, 1.6, 10.9. The next year, 2002, 
2.4, for the Consumer Price Index, 12.9. In 2001, 1.8, 13.9 percent 
increase in the cost of health insurance.
  We wonder why workers cannot afford it and workers can't afford it. 
That is the real state of the Union. That is the real state of the 
Union.
  To offer a refundable tax credit of $1,000 is laughable. I say it is 
like throwing a 5-foot rope to somebody who is in a boat 10 feet away 
and is about to go over Niagara Falls. It is virtually useless. These 
are costs that are impacting, affecting the costs of health care 
insurance and why workers cannot afford it.
  What do we hear from the administration? What is their solution? 
Should someone tell us? Do I hear it? I looked hard in the President's 
State of the Union Address to find it. Do you know what it was? It was 
medical malpractice. That is their answer to all of the problems we are 
talking about, and the increase in costs. We will have a chance to get 
into that at some time. That is going to be the answer.
  It isn't only the cost of health insurance. Look at what is happening 
to the families. These are family responsibilities. Workers have 
responsibilities. Parents don't want to be a burden. They worked hard. 
We guaranteed to the families in 1965 when we passed Medicare that we 
would attend to their health care needs. We didn't know prescription 
drugs would be so important. Every day that we fail to provide a 
comprehensive prescription drug program, we fail in our pledge to our 
seniors.
  Look at what has happened to the prescription drug costs with respect 
to the Consumer Price Index: In 2000, 3.4 percent, and the average 
cost-of-living increase was 16 percent; in 2001, 1.67, and 15 percent; 
2002, 2.4 percent, and 14 percent. We allegedly passed a prescription 
drug program. What did we say in that bill that would get a handle on 
costs? Virtually nothing. We prohibited the Secretary of HHS from being 
able to negotiate for lower prices. That is not true with VA; they can 
reduce prices down some 47 percent, but not with regard to Medicare 
because we were prohibited from that. I pay respect to my Democratic 
leader, Senator Daschle, and Congresswoman Pelosi for offering 
amendments which we will have a chance to address here very soon to 
change that.
  We have to do something on the coverage, we have to do something on 
the costs, or we are not really looking after what is happening out on 
Main Street. We talk about jobs. We talk about health. Let us take a 
look at another issue families are very much concerned about; that is, 
the cost of education.
  This is the Bush education record: Failure to provide tuition relief 
as college costs increase. On this chart, you find what 4-year costs 
for a college education are. This includes not only the tuition but it 
is room and board and the routine expenses with which students are 
faced. Look over here. In 2002, on help and assistance, these are for 
young people who come from families with limited means but have 
scholarships and are academically gifted, or are able to meet the 
academic standards and gain admission to these excellent schools all 
over the country. Look at what we see: Significant increase in the 
cost. Look at what help and assistance: Basically flat over the period 
of time.
  These are family issues for working families concerned about the cost 
of prescription drugs that are being paid by their parents. These are 
family issues for working families who are concerned about the cost of 
having their children go to the fine schools across this country. We 
have left them high and dry.
  If we look at the Bush economic record, the median household income 
is down effectively $1,500 across the country according to the Bureau 
of Census in the Department of Commerce; $1,500 for the year 2002, and 
a further decline beyond to 2004. That is what is happening out on Main 
Street. People are working harder, as these reports point out, and they 
are barely able to keep up. Millions are working and competing as well. 
As productivity goes up, they are working more for less. We see that 
allocations of profits versus the wages.
  We see the failure to respond to the needs of working families with 
regard to their health care costs or their children's education. These 
are all the issues which have been left behind. What has been the 
response to those urgent needs? It has been disappointing, at best.
  First of all, there are 13 million children who are hungry. We have 8 
million Americans who are unemployed. We have 8 million workers who 
lose overtime under the Bush proposal. We have 7 million low-wage 
workers who have been waiting 7 years for an increase in the minimum 
wage. We have 3 million more Americans in poverty since President Bush 
took office, and 90,000 workers a week are losing their unemployment 
benefits every week. We have tried and tried to get a temporary 
extension for these workers.
  The decline in the economy is not the result of workers not working 
hard and producing. It is because of general overall economic 
mismanagement.

[[Page 384]]

  This country has always recognized that those workers pay into the 
unemployment compensation, and when there is a slide in the economy, 
they ought to be able to withdraw some of that. But there has been 
objection time in and time out by our Republican friends and virtually 
no leadership on this issue from the President.
  More than three in four--77 percent--of the unemployed Americans say 
the level of stress in their family has increased. How do we measure 
that? We listened the other night to how our GNP is going up, with all 
of the favorable economic indicators. How do you measure the fact that 
in 77 percent of the unemployed families the level of stress in their 
family has increased? Two-thirds of those with children have cut back 
on spending for their children. Where is that indicated in any of these 
economic indicators we heard about in the State of the Union?
  Twenty-six percent say another family member has had to start a job 
or increase their work hours in order to keep the family together, and 
23 percent have had to interrupt their education or that of a family 
member. They had to drop out of school for a year, go back to work, and 
then come back and try to complete their education. That is what is 
happening out there.
  We didn't hear about what is happening for average working families. 
If we had been able to extend the unemployment insurance, we could have 
avoided many of these indicators. But no, we were unable to do so.
  What has been the impact by this administration saying no to 
extending unemployment compensation? No, we can't do that. What about 
those workers who worked hard for 40 hours a week and 52 weeks of the 
year? It has been 7 years since the last increase in the minimum wage. 
Now, at the end of this year, it will be at an all-time low.
  A majority of the Members of this body would vote for an increase in 
the minimum wage, and we are not able to get it because of the 
Republican filibuster. That is the reason. Make no mistake about it.
  Who are these people? These are men and women of great dignity. These 
people work hard. They take pride in what they do. They work cleaning 
out the great buildings that are the offices of American industry. Many 
of them are teacher's aides, or they work in child care. Many of them 
work in nursing homes to help look after a generation who brought this 
country out of the Depression and sacrificed for their children. They 
fought in the wars. Those are minimum wage workers. They are men and 
women of dignity. Most of them are women. This is a women's issue. Most 
of the women have children. So it is a children's issue. It is a family 
issue. Many of them are members of minorities. It is a civil rights 
issue.
  Beyond all of that, Americans understand that if you work 40 hours a 
week for 52 weeks of the year, you should not have to live in poverty. 
You should not have to live in poverty. That is our belief. That is our 
standard.
  We are going to take this issue to our Republican friends time in and 
time out all of this year. We welcome those listening to communicate to 
our Republican friends their views on this issue. Talk about a family 
issue. Talk about family values. How you care for your child, how much 
time you are able to spend with your child, talk about family values, 
this is it. And we have opposition from the Bush administration on 
this.
  Finally, I mention again what is happening in terms of the overtime, 
opposition to extending unemployment compensation, opposition to an 
increase in the minimum wage, and then the rule and regulation that was 
debated in the Senate with Republicans and Democrats alike. Rejected. 
It went to the House of Representatives. Rejected. And then it was 
tucked into the omnibus bill behind closed doors in the dead of night 
and passed, although many Members strongly opposed it.
  Who are the 8 million Americans who would lose their overtime? It is 
extraordinary with this economy for the administration to say that one 
of the principal problems with our economy today is the fact that these 
workers are being paid too much. They are saying these workers are 
being paid too much. Who are these workers? Police officers will lose 
their overtime under the definition of the administration. Police 
officers, nurses, and firefighters will lose their overtime.
  Do we hear about homeland security? Who is on the front line of 
defense? It is the nurses, the firefighters, and the policemen. We are 
asking them to risk their lives in terms of homeland security yet on 
the other hand we will make them ineligible for overtime. Give me a 
break.
  It is very interesting that so many are professions that involve 
women. Women will be very adversely affected. That is why 
organizations, including Nine-to-Five and all of the various women 
organizations, are so strongly opposed to the administration's 
proposal.
  Not only did they do this but they added something new regarding who 
is made ineligible. That was to say if individuals had gone into the 
Armed Forces and they took training programs and then they come out and 
they have special skills--that is just what our military has today--
that because they got these training programs, because they have 
special skills, they will by definition be ineligible for overtime.
  Can anyone believe that, to say to those fighting overseas in Iraq, 
Afghanistan, scattered around the world, when they come on back, they 
are in the National Guard and Reserve and they come on back in, if they 
have the special skills, they will not be eligible for overtime--for 
the first time in the history of this country.
  Obviously, one of the great reasons we have the best military in the 
world is because it is the best trained, best led, and has the best 
technology. It should always be that way. When we are talking about the 
training, the training they receive saves other soldiers' lives and 
carries forward the interests of the United States.
  I have my differences with the administration in terms of the Iraqi 
policy, but I am going to make sure these soldiers are well trained, 
well led, and have that kind of help and assistance. For those in the 
Armed Forces who have gone through the various training programs, quite 
frankly, it was a very important inducement for recruitment. I don't 
know what conversations the Secretary of Labor had with the Secretary 
of Defense. I would love to see the exchange of notes, and love to know 
if they ever had a conversation; obviously, it has a very important 
impact on recruitment.
  With the failed economy, so many young people, see going into the 
military as a way to get the kind of training that will put them on the 
road to some kind of hope and opportunity in the future. Now we are 
saying: No, no, no; that is not going to be the way it is. You get the 
training, you come back, and you will not be able to get paid.
  This is the final insult that the Bush administration would take away 
from the veterans, as I mentioned, the overtime pay. That would reduce 
the standard of living and quality of life of veterans in scientific, 
engineering, medical, and technical operations. Under the Bush 
administration, veterans who have received the training in the 
military, equivalent to a specialized 4-year degree, could be 
classified as exempt ``professional employees'' and would lose their 
overtime protection. This is a breach of faith with the American 
veterans, another reason it should be defeated. It was not.
  Then, one of the most extraordinary publications that any agency has 
ever produced in the time I have been in the Senate was the Department 
of Labor issuing guidelines of how to avoid paying overtime. They said: 
The reason for having this change in the overtime is we are bringing 
more workers up, raising their wages. It will have a favorable impact 
on a certain number of workers. It will really not disadvantage all 
these estimated.
  Then we find out what the real issue was: the publication by the 
Department of Labor about how to avoid paying any overtime, giving 
every business in this country the pathway to avoid paying any 
overtime. If they could not

[[Page 385]]

figure it out, all they had to do was read the Department of Labor 
recommendation and avoid it. Why? To shortchange American workers. 
State of the union of American workers, what is happening to their 
jobs, their wages, their health care, their education, and now we find 
out their overtime. That is ``How to Avoid Paying Your Employees 
Overtime,'' courtesy of the Bush Department of Labor.
  I will take a moment to read a letter from a veteran and a Boeing 
employee worried about losing his overtime.

       My name is Randy Fleming. I live in Haysville, Kansas--
     outside Wichita--and I work as an Engineering Technician in 
     Boeing's Metrology Lab.
       I'm also proud to say that I'm a military veteran. I served 
     in the U.S. Air Force from August 1973 until February 1979.
       I've worked for Boeing for 23 years. During that time I've 
     been able to build a good, solid life for my family and I've 
     raised a son who now has a good career and children of his 
     own. There are two things that helped make that possible.
       First, the training I received in the Air Force made me 
     qualified for a good civilian job. That was one of the main 
     attractions when I enlisted as a young man back in Iowa. I 
     think it's still one of the main reasons young people today 
     decide to enlist. Military training opens up better job 
     opportunities--and if you don't believe me, just look at the 
     recruiting ads on TV.
       The second thing is overtime pay. That's how I was able to 
     give my son the college education that has opened doors for 
     him. Some years, when the company was busy and I had those 
     college bills to pay, overtime pay was probably 10% or more 
     of my income. My daughter is next. Danielle is only 8, but 
     we'll be counting on my overtime to help her get her college 
     degree, too, when that time comes. For my family overtime pay 
     has made all the difference.
       That's where I'm coming from. Why did I come to Washington? 
     I came to talk about an issue that is very important back 
     home and to me personally as a working man, a family man, and 
     a veteran. That issue is overtime rights.
       The changes that this administration is trying to make in 
     the overtime regulations would break the government's bargain 
     with the men and women in the military and would close down 
     opportunities that working vets and their families thought 
     they could count on.
       When I signed up back in 1973, the Air Force and I made a 
     deal that I thought was fair. They got a chunk of my time and 
     I got training to help me build the rest of my life. There 
     was no part of that deal that said I would have to give up my 
     right to overtime pay. You've heard of the marriage penalty? 
     Well I think that what these new rules do is to create a 
     military penalty. If you got your training in the military, 
     no matter what your white collar profession is, your employer 
     can make you work as many hours as they want and not pay you 
     a dime extra.
       If that's not bait and switch, I don't know what is.
       And I don't have any doubt that employers will take 
     advantage of this new opportunity to cut our overtime pay. 
     They'll tell us they have to in order compete. They'll say if 
     they can't take our overtime pay, they'll have to eliminate 
     our jobs.
       It won't be just the bad employers, either--because these 
     rules will make it very hard for companies to do the right 
     thing. If they can get as many overtime hours as they want 
     for free instead of paying us time-and-a-half, they'll say 
     they owe it to the stockholders. And the veterans and other 
     working people will be stuck with less time, less money, and 
     a broken deal.
       I'm luckier than some other veterans because I have a union 
     contract that will protect my rights for a while anyway. But 
     we know the pressure will be on, because my employer is one 
     that pushed for these new rules and they've been trying hard 
     to get rid of our union.
       And for all those who want to let these military penalty 
     rules go through, I have a deal I'd like to propose. If you 
     think it's okay for the government to renege on its deals, I 
     think it should be your job to tell our military men and 
     women in Iraq that when they come home, their service of 
     their country will be used as a way to cut their overtime 
     pay.

  That says it all. This Senate rejected the administration's proposal. 
The House of Representatives rejected it. But the Bush administration 
insists they are going to implement it. And they insisted in taking the 
Senate passed, House approved language protecting workers' overtime pay 
out of the Omnibus.
  We are going to do everything we can, with every opportunity we have, 
to make sure that provision is overturned. We will do that every time 
we get a chance as long as we are in Congress this session.
  I will just take a minute to show what happens when people do not 
have the overtime protection.
  It is probably pretty understandable, workers without overtime 
protection are more than twice as likely to work longer hours. This 
chart shows that for those workers working a scheduled 40-hour 
workweek, without the overtime protection, 44 percent of them work 
overtime. If they have overtime protection, in terms of time and a 
half, only 19 percent of them work overtime. If there is no overtime 
protection for workers if they work over 50 hours a week, still, you 
get 15 percent of the workers who work more than 50 hours in a week; 
but with overtime protection, only 5 percent work overtime. It is very 
clear what is going to happen to workers without overtime protection: 
They are going to work harder--a lot harder--and make a good deal less 
money.
  Is overtime protection what is wrong with our economy? Absolutely 
not. I think this administration and this Congress ought to get it: 
People are hurting. And they are trying to find out who is on their 
side. We are going to address each and every one of these issues in the 
course of this Congress because that is required if we are going to be 
a fair and decent country.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Thomas). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. CONRAD. 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. CONRAD. Mr. President, I rise today to speak about the latest 
numbers from the Congressional Budget Office that reveal the 
seriousness of the explosion in deficit and debt that is occurring in 
this country.
  Before I do that, when I came to the floor I heard the senior Senator 
from Massachusetts, Mr. Kennedy, speaking about the change in overtime 
rules in this country and discussing the unfairness of what has 
happened.
  Just days ago, one of the people who works in this Capitol, who works 
with us every day, talked to me about how this change in overtime would 
affect him and his family. This man is one of the camera technicians 
for one of the networks that covers much of what we do in this body.
  He took me aside the other day and said: Senator, this change in 
overtime fundamentally threatens me and my family. If those changes go 
forward, if they are not stopped, I probably won't be able to keep my 
house, where I live with my wife and my two kids.
  He said: In our business, an awful lot of our income is overtime pay 
because we don't work an 8-hour day. Sometimes we are here 16 hours. 
Very frequently we are here, and part of our pay is overtime pay. It is 
that overtime pay that allows me and my family to own the home we are 
in and to have bought a new car last year and to have made improvements 
to the house. If these overtime changes go forward, it is going to 
dramatically change my life. I wonder what they are thinking of in 
terms of fueling the economy. I think my family and I have done a 
pretty good job of fueling the economy. We bought a home, furnished the 
home, bought a car--all because there was overtime pay. Now, if they 
take that away, my family and tens of thousands of other families like 
mine are going to be in a much weakened situation.
  I hope people are listening. I hope we have a chance to revisit these 
changes in overtime that were permitted by the Omnibus appropriations 
bill that recently passed. There were lots of things in that omnibus 
bill that should be revisited. It is one of the unfortunate examples of 
what happens when a few people go in a back room someplace and come out 
with a product that has had too little scrutiny, too little involvement 
and, frankly, too little fairness.


                        CBO Report on the Budget

  Mr. President, I rise to talk about the Congressional Budget Office 
report on the budget condition of the United States. They have 
indicated that the deficit for this year will be $477 billion. That is 
$100 billion more than the biggest deficit we ever had. That was last

[[Page 386]]

year's deficit. Now it is $100 billion more for 2004. Now the record of 
the President on the question of fiscal responsibility is becoming more 
and more clear.
  In the last year of the Clinton administration, we had a $236 billion 
budget surplus. Now in the third year of this President, we have a $477 
billion budget deficit, the biggest by far, a record.
  This chart shows the long-term relationship of the deficit. We can 
see the $477 billion; last year it was $374 billion--both of those much 
bigger than the previous record deficit of $290 billion back in 1992 
when the President's father was President, Bush 1, as they term it.
  The President and some of his aides have said: Well, yes, in billion-
dollar terms, they are record deficits, but as a percentage of gross 
domestic product, it is not so big.
  If we exclude Social Security instead of lumping it in with 
everything else, what we see is, even as a percentage of gross domestic 
product, this deficit is the biggest since World War II, with the one 
exception of 1983. In 1983, there was virtually no Social Security 
surplus.
  This year, not only is the deficit off the charts at $477 billion, 
that understates how much is being taken because under this President's 
plan he is also taking every penny of the Social Security surplus, over 
$150 billion. So on an operating basis, the deficit is over $620 
billion, on a budget of about $2.2 trillion, approaching $2.3 trillion.
  Some say it is not that big. What are they talking about? An 
operating deficit of over $600 billion on a budget of $2.2 trillion, 
and that is not big? What would convince them it is big? It is the 
biggest ever in dollar terms and one of the biggest ever, even if you 
look at it as a percentage of gross domestic product.
  But the biggest worry is not the deficit this year. The biggest worry 
is where this is all headed. If you add to what the Congressional 
Budget Office has told us, the President's recommendations for 
additional tax cuts and the looming crisis in the alternative minimum 
tax, which will hit 40 million people in this country by 2013 if we 
fail to act, if we put just those two things in, no other additional 
spending, no more supplementals by the President, if we just take what 
the Congressional Budget Office has told us plus the tax cuts the 
President is recommending, plus fixing the alternative minimum tax, we 
can see there is no end to the red ink. In fact, it explodes as the 
baby boom generation starts to retire, and a deficit on an operating 
basis of more than $600 billion for this year will climb to $861 
billion by the end of this forecast period.
  This is a record of fiscal irresponsibility that is utterly reckless. 
That is the course the President has us on.
  I hear the President say it is spending; spending is all the problem. 
Let us look at where the increases in spending have occurred. Ninety-
two percent of the increase in discretionary spending has occurred in 
defense, homeland security, and a third category that is rebuilding New 
York, the airline bailout after September 11, and the increase in 
international affairs, a dramatic increase there, again, as a result of 
the attack of September 11. As you can see, the vast majority of the 
increase, 69 percent, is in defense alone. But 92 percent of the 
increase in discretionary spending is in just these three categories.
  Interestingly enough, the President says he is now going to restrain 
growth in what he calls discretionary spending. But if you look at what 
has happened to the categories of discretionary spending, domestic 
spending has not been growing. Domestic spending is not the problem. 
Non-defense domestic spending, as the Administration defines it, 
excluding international affairs and homeland security, has grown in 
real terms in the last 2 years by just three-tenths of 1 percent. Now 
he is going to restrain the growth by 1 percent in this category.
  Again, remember, he has a special definition of the discretionary 
spending that he is constraining. Most of us think of defense and 
homeland security as a part of discretionary spending that is growing. 
Indeed, that is where spending has grown. But on the discretionary 
spending that he has identified, excluding homeland security, excluding 
international affairs, excluding defense, there has been almost no real 
growth in spending in the last 2 years, three-tenths of 1 percent. Now 
he says he is only going to allow it to grow 1 percent this year. That 
is not going to do much. That is a very small part of Federal spending. 
In fact, that is only 17 percent of the Federal spending he is talking 
about restraining.
  So he is going to do very little to cope with these mushrooming 
deficits. That is a fact. That is reality. If you look at the revenue 
side, it is very interesting. That is where the deficit has exploded. 
It is largely on the revenue side.
  This year, according to CBO, revenue will be at 15.8 percent of gross 
domestic product. That is the lowest revenue as a percentage of gross 
domestic product since 1950. Remember, when we had high revenue as a 
percentage of GDP, the President said the answer was tax cuts. Now that 
we have revenue at the lowest it has been since 1950, the President's 
answer is more tax cuts. Dig the hole deeper. Make the deficits bigger.
  The President's plan doesn't add up. It doesn't come close to adding 
up. It fundamentally threatens our economic security long-term. We can 
go back and check the President's record on what he has told us and 
what happened. In 2001, he told us:

       We can proceed with tax relief without fear of budget 
     deficits.

  He was wrong.
  In 2002, he told us:

       Our budget will run a deficit that will be small and short-
     term.

  He was wrong.
  In 2003, he told us:

       Our current deficit is not large by historical standards 
     and is manageable.

  It is hard to top a record. Not large by historical standards? It is 
the biggest it has ever been by a huge margin--$100 billion bigger than 
last year, and last year was a record. He was wrong again.
  He said:

       The deficit will be cut in half over the next 5 years.

  Will he be wrong again? His track record is pretty clear; he has been 
wrong consistently. Does it matter?
  There is a story in the Washington Post this morning about the dollar 
and how the dollar has gone down dramatically. What they said in this 
article was:

       Currency traders who are fretting over that dependency--

  They are referring to the need to borrow money from abroad for our 
trade deficit, borrow money from abroad for our budget deficit, and 
also borrow money internally for our budget deficit.

       Currency traders who are fretting over that dependency have 
     been selling dollars fast and buying euros furiously. The 
     fear is that foreigners will tire of financing America's 
     appetites. Foreign investors will dump U.S. assets, 
     especially stocks and bonds, sending financial markets 
     plummeting. Interest rates will shoot up to entice them back. 
     Heavily indebted Americans will not be able to keep up with 
     rising interest payments. Inflation, bankruptcies, and 
     economic malaise will follow.

  Mr. President, that is the risk this President is running by 
conducting a fiscal policy that is absolutely irresponsible. I want to 
make clear that I am less concerned about the deficit this year than I 
am about the long-term implications of this fiscal policy. That is what 
these economists are warning us about. But it is not just them. We have 
the Comptroller General of the United States, a Republican, warning us 
that we are on an unsustainable course. We have the International 
Monetary Fund warning us that the buildup of deficits and debt in this 
country doesn't just threaten our own economic security, it 
fundamentally threatens the economic security of the globe.
  We have already seen the effect on the dollar from these policies. 
The dollar has plummeted. It is down nearly 30 percent against the euro 
in just 2 years. In the short term, that can be helpful to U.S. 
manufacturers. But in the longer term, it is fundamentally threatening 
to our economic security.
  If you think about it, if you were holding dollar-denominated 
investments, and you are a foreign investor,

[[Page 387]]

how would you feel if the underlying value of that currency plummeted? 
Does that make sense to continue holding dollar-denominated 
investments? Warren Buffet, one of the most successful investors in 
America, is quoted in the article as indicating he started to diversify 
his investments away from dollar-denominated investments. He is not 
alone.
  It is time for us to think carefully and clearly about our response 
to this growing fiscal crisis. Record budget deficits--some say they 
don't matter. I think any sober person knows that deficits do matter. 
Deficits of this magnitude are simply stunning.
  We are running deficits under this President this year of $900,000 a 
minute--$900,000 a minute. Every minute that goes by, under this 
President's budget plan, we are spending $900,000 more than we take in. 
That is a course that is not sustainable. It must be changed. The 
President says he has a plan--it appears to be a secret plan at this 
point--to cut the deficit in half over the next 5 years. But that 
avoids the much larger issue because we know from all of the work that 
has been done that the deficit will recede from these record levels. 
Cutting it in half is not much of an accomplishment when you are 
running an operating deficit of over $600 billion a year. And what is 
of deepest concern is that the President's budget plan, which, if he is 
good to his word, will reduce the deficit somewhat over the next few 
years, puts us on course for the deficit absolutely to explode as his 
tax cuts become permanent and as the baby boomers retire. That is the 
much greater threat to the economic security of this country.
  When the Federal Government runs massive deficits, that puts upward 
pressure on interest rates. When interest rates go up, that slows 
economic growth and economic activity. That is a reality. This is a 
reckless course the President has taken us on, and not just in the 
short term. In the short term, we can afford deficits to give lift to 
the economy. The President is proposing massive deficits even at a time 
when he projects strong economic growth. CBO is telling us the economy 
will grow at 3\1/2\ percent a year over the next 5 years. Well, 3\1/2\ 
percent growth is considered relatively strong in an advanced economy. 
Yet we see no end to the budget deficits under the President's plan. In 
fact, once we get past this 5-year period and the baby boomers start to 
retire, the deficits absolutely explode. That is a reality.
  It is time for the President and this Congress to address that very 
deep challenge to America's economic future.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FITZGERALD. 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. FITZGERALD. Mr. President, I would like to address for a few 
moments the bill that is now on the floor, H.R. 3108, dealing with 
pension funding for defined benefit pension plans. The House passed 
this bill. In the House version of the bill, what it does is it mainly 
changes the interest rate assumptions that plans are required to use 
when figuring their actuarial liability for their pension plans and for 
their annuitants in their plans.
  The House bill mainly addresses the situation that has arisen by 
virtue of the 30-year Government bond being done away with. A few years 
ago, the Treasury Department made the decision that it would no longer 
issue 30-year Treasury bonds and the interest rate for 30-year Treasury 
bonds had historically been what was used in calculating the 
liabilities for defined benefit pension plans. Now that there are fewer 
and fewer 30-year Government bonds in circulation, the interest rates 
for those bonds have gone down, and, of course, interest rates have 
been very low in general for the last couple of years.
  So industries in sectors where defined benefit pension plans are 
common have come to Washington, asking for some relief in the way they 
calculate their unfunded liabilities, or their liabilities, and they 
have asked for the replacement of the 30-year Treasury bond with a 
benchmark that is, instead, made up of the yield of high-grade 
corporate bonds. By going to that different reference point, plans 
ultimately will have to put less money in their pension plans because 
they can assume a higher rate of return if they are using 30-year 
corporate debt or high-grade corporate debt as opposed to 30-year 
Treasury bonds.
  In fact, right now companies in America, absent any legislation, 
would have to put about $170 billion into their defined benefit pension 
plans next year. If the interest rate relief alone in H.R. 3108 is 
passed, that will cut about 25 percent off the required payments that 
all companies with defined benefit pension plans will be required to 
make into their plans over the next 2 years. So the relief in this bill 
as it passed the House--and the only relief in the House bill is the 
interest rate relief--if that relief passes, it would cut about $40 
billion per year off the amount that companies have to put into their 
defined benefit pension plans. Over 2 years, the life of the bill, it 
would cut $80 billion off of the required payments.
  What has happened in the Senate is somewhat disappointing, to me. I 
could see the public policy rationale for changing the interest rate 
benchmark that companies use, now that we have done away with the 30-
year Treasury bond. I can see the argument for coming up with a 
different reference. I can see the argument for changing the 
assumptions that would allow plans to put less money into their pension 
plans. But the Senate is going way beyond that. In addition to giving 
the interest rate relief that the House passed, the Senate now is on 
the verge of passing amendments that would provide special relief for 
airlines and steel companies.
  The airlines and the steel companies would get further reductions in 
the amounts they have to pay into their pension plans. This is very 
troubling because airlines and steel companies, as we all know, tend to 
have the most woefully underfunded pensions of all industry in America. 
Obviously, they are asking for permission to dig their hole even 
deeper.
  In addition, the Senate amendment that will be offered this week has 
a sweetheart provision for Greyhound Bus Company. I don't know why 
Greyhound Bus Company is singled out for this special treatment of all 
the companies in America, but it certainly must have some powerful 
friends here on Capitol Hill.
  Also getting a sweetheart deal is CNF Trucking, which apparently gets 
some sort of relief in this bill and some limitation on liability that 
it might have to a former subsidiary that it spun off a couple of years 
ago.
  So there are a couple of sweetheart deals, not just for some chosen 
industries, the airlines and steel companies, but also some rifle shots 
that would be put in here for two special companies, Greyhound and CNF 
Trucking.
  In addition, and perhaps most discouraging, is that the Senate 
amendment will, in effect, go way beyond just the steel and the airline 
industries and allow all companies that have underfunded pension plans 
to go through a political process in applying for a waiver from their 
required contributions to their pension plans. All companies would be 
able to go to the Treasury Department and request a waiver.
  If this provision becomes law, you can just imagine right before the 
election all the industrial companies in the Upper Midwest, in 
Michigan, Pennsylvania, Illinois, Wisconsin, and so forth, all those 
industrial companies in States that are critical for the upcoming 
election, they will all be going to the administration, asking for this 
special waiver from the Treasury Department. They will be making 
political threats at the same time, that if the administration doesn't 
give them this relief, they may just support someone else for 
President. It sets a very bad precedent because now there is a waiver 
process. But it is an apolitical one, and one for which you have to 
apply

[[Page 388]]

with the Internal Revenue Service and also with the Pension Benefit 
Guaranty Corporation.
  As I said, if it were merely adopting the interest rate relief, we 
would be granting a 25-percent reduction in the required contribution 
of all companies in toto in America to their defined benefit pension 
plans. We are going way beyond that. In the Senate amendment, we are 
threatening to grant them an additional about $17 billion a year, at 
least in reductions in required amounts going into pension funds.
  There is also a provision in the Senate amendment in the managers' 
package that will allow all multiemployer pension plans--those are 
union-run plans which span employers--from having to make their full 
contributions.
  All of these reductions in required contributions into the pension 
plans wouldn't be so troublesome but for one fact: In allowing these 
companies to dig the hole deeper for themselves, it is more likely that 
they will ultimately default on their pension obligations and turn 
those obligations over to the Pension Benefit Guaranty Corporation to 
take advantage of the Government guarantee. It wouldn't be so offensive 
if it were freezing the Government guarantees. But we are not.
  There is a no hold harmless provision in this legislation. There are 
no reforms of pension funding trying to get tough on the companies that 
have considerably underfunded their pension plans. We are just allowing 
them to skip required payments into their pension plans. We are 
allowing the government guarantees to stay in place.
  What is more, we are allowing the companies with underfunded plans to 
continue sweetening the benefits for their workers and raising their 
own pension liabilities while those pension liabilities are all 
guaranteed by the Federal Government.
  I know pension funding is something that perhaps makes the eyes of 
the press glaze over. Not many members of the public understand the 
importance of this. This is a very roundabout way of transferring 
liabilities to taxpayers. It is not easy for people to understand. But 
if I were to make an analogy that the average American could understand 
about what we are doing here, imagine that you have someone who is 
behind in their credit card payments. Imagine that you said to that 
person, you are behind in making your payments on the credit card. You 
are only making the minimum payment. You are trying to make a minimum 
payment due each month. You have this huge balance. It is going to take 
years and years to pay off this deficit of what you owe the credit card 
company or the bank. Imagine if this person were to have their minimum 
payments lowered. Imagine that when they are already just barely making 
the minimum payments, you say: OK, we will even lower your minimum 
payment.
  We are doing that here. But in addition, we are going beyond that. We 
are telling the credit card holder while you are lowering your minimum 
payments and digging the hole deeper so that you are likely never to 
get out of debt, we are going to go out and allow you to continue 
spending and add more to your credit card. Can you imagine a credit 
card company telling anybody that? That wouldn't be a way to advise a 
distressed consumer to try to get out of debt.
  We are doing that and more here today in the Senate. We are not only 
allowing these companies to quit making their required payments into 
their pension plans, but we are allowing them to continue spending. We 
are allowing them, specifically if they are 60-percent funded, to keep 
sweetening the pension benefits for their employees and digging the 
hole deeper. That would be not only allowing the credit card holder to 
keep spending but encouraging the credit card holder to go out while 
they are behind in the payments on this one credit card and get some 
more credit cards and run up balances on those credit cards.
  Obviously, if we pass this legislation we are going to make it 
hopeless for some companies ever to recover and to fulfill the promises 
they have made to their pension participants.
  Right now, the Pension Benefit Guaranty Corporation--the Government 
corporation that guarantees pension benefits of people in defined 
pension plans--is in the worst financial condition of its entire 
history. It has at least a $11.2 billion deficit. Pension plans in 
America are now thought to be underfunded by at least $350 billion. 
This legislation would allow that collective underfunding in defined 
benefit pension plans in America to grow considerably.
  The House was much more responsible. It only passed the change in 
interest rate assumptions. It passed the separate version of the bill 
that had the interest rate change, plus some relief for airlines. The 
Senate is poised to go much further. I am troubled by that. The 
administration has issued a threat to veto the legislation.
  I refer to a letter. This is a Statement of Administration Policy 
that was issued on January 22. I ask unanimous consent that Statement 
of Administration Policy on H.R. 3108 be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                              Office of Management and Budget,

                                 Washington, DC, January 22, 2004.

                   Statement of Administration Policy


                 h.r. 3108--pension funding equity act

       The Administration supports prompt Senate passage of H.R. 
     3108, the Pension Funding Equity Act. The Administration 
     supports the interest rate provisions in the bill, which are 
     consistent with the transitional portion of the 
     Administration proposal for more accurate discounting of 
     pension liabilities. The Administration also supports the 
     provision in H.R. 3108 that calls for comprehensive funding 
     reform to protect the benefits American workers have earned.
       H.R. 3108 passed the House with overwhelming bipartisan 
     support. Since that time, the temporary adjustment to the 
     statutory rate for discounting pension liabilities has 
     expired, which means that employers are denied important 
     short-term funding relief unless and until legislative action 
     is taken.
       Recent data from the Pension Benefit Guaranty Corporation 
     (PBGC) highlight the importance of passing this legislation 
     free of additional provisions that would worsen underfunding 
     in America's pension plans. The PBGC reports a record single-
     employer program deficit of $11.2 billion, which is three 
     times larger than any previously recorded deficit, and the 
     first multiemployer program deficit in two decades, as of the 
     end of fiscal year 2003. In addition, the PBGC remains 
     exposed to $85 billion in pension underfunding in plans 
     sponsored by financially weak employers.
       Consequently, the Administration will strongly oppose any 
     amendment that would substantially weaken funding 
     requirements for single-employer or multiemployer pension 
     plans.
       The Administration is developing comprehensive reform 
     proposals to strengthen America's defined benefit pensions, 
     and has consistently taken the position that any provisions 
     to alter the DRC rules should be reviewed in that context. 
     The DRC is part of a flawed system of funding rules that 
     should be reviewed and reformed. A well-structured system of 
     funding rules would lead to less volatility in employer 
     contribution requirements, while producing stronger pension 
     funding over time.

                         Pay-As-You-Go Scoring

       The Budget Enforcement Act's pay-as-you-go requirements and 
     discretionary spending caps expired on September 30, 2002. 
     The Administration supports the extension of these budget 
     enforcement mechanisms in a manner that ensures fiscal 
     discipline and is consistent with the President's budget. 
     OMB's cost estimate of this bill currently is under 
     development.

  Mr. FITZGERALD. Mr. President, a couple of days ago, Elaine Chao, 
Secretary of the Department of Labor; John Snow, Secretary of the 
Treasury; and Don Evans, the Secretary of the Department of Commerce, 
the three board members of the Pension Benefit Guaranty Corporation, 
wrote a letter to our majority leader, Bill Frist, which asks that the 
Senate not go beyond amending the interest rate changes that were 
passed by the House. They said they would oppose it and recommend that 
the President veto any legislation that would further exacerbate the 
systemic underfunding of defined benefit pension plans in America.
  I ask unanimous consent that this letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


[[Page 389]]


                                          Pension Benefit Guaranty


                                                  Corporation,

                                 Washington, DC, January 22, 2004.
     Hon. Bill Frist,
     Majority Leader, U.S. Senate,
     Washington, DC.
       Dear Mr. Leader: As you are aware, the Senate has entered 
     into a unanimous consent agreement for the consideration of 
     H.R. 3108, the Pension Funding Equity Act. We appreciate the 
     Senate's timely action on this issue of great importance to 
     America's workers and pension plan sponsors. We are writing 
     to you in our role as the board of the Pension Benefit 
     Guaranty Corporation (PBGC).
       At the end of 2003, the temporary adjustment to the 
     statutory rate for discounting pension liabilities expired. 
     This has denied pension plan sponsors the certainty they need 
     to plan their pension funding for 2004. The Administration 
     has expressed its support for the provision in H.R. 3108 that 
     would discount pension liabilities for the next two years 
     using a blend of long-term corporate bond rates.
       The PBGC reported a record single-employer program deficit 
     of $11.2 billion through the end of 2003, three times larger 
     than any previously recorded deficit. Last year, the General 
     Accounting Office added the PBGC's single-employer pension 
     program to its ``high risk'' federal program list. In 
     addition, the PBGC remains exposed to $85 billion in pension 
     underfunding in single-employer plans sponsored by 
     financially weak employers. The PBGC also reported the first 
     multi-employer program deficit in two decades.
       Pension underfunding threatens workers and retirees, who 
     depend on the defined benefit pension system to be 
     predictable and reliable. If the Congress encourages firms to 
     underfund their pensions by substantially weakening pension 
     funding requirements, retirees could face pension cuts when a 
     firm terminates its defined benefit pension plan.
       We believe that H.R. 3108 would best protect pensions and 
     pensioners if passed free of any provisions to alter the 
     Deficit Reduction Contribution (DRC) rules. Specifically, it 
     would be irresponsible to amend the interest rate bill with 
     any additional provisions that would significantly further 
     exacerbate systemic pension plan underfunding. If H.R. 3108 
     were amended to do so, we as the PBGC board would recommend 
     that the President veto the legislation.
       The Administration is developing comprehensive proposals to 
     strengthen America's defined benefit pensions, and any 
     provisions to alter the DRC rules should be reviewed in the 
     context of reforms to strengthen pension funding over time. 
     We look forward to working with you in the future to 
     strengthen the protection of the pension benefits that 
     America's workers have earned.
       The Office of Management and Budget has advised that this 
     letter is consistent with the Administration's program.
           Sincerely,
     Elaine L. Chao,
       Chairman, Board of Directors.
     John W. Snow,
       Director.
     Donald L. Evans,
       Director.

  Mr. FITZGERALD. Mr. President, I think the Washington Post editorial 
page had a very good editorial on this issue this morning. They dealt 
with the irresponsibility of allowing companies with underfunded 
pension plans to dig the hole deeper. They also talked about how it is 
troubling that in Washington there are always incentives for Members of 
the House and Senate to do what is wrong, to cater to the special 
interests--in this case, the airlines, the steel companies. This is a 
situation in which the airlines and the steel companies and their 
managers have conspired with their union members to come to Congress 
and allow dispensation which allows the companies to put less money 
into their pension plans. And no one in those companies cares because 
the pension plans are guaranteed by the taxpayers. So you have the 
labor unions and you have the managers coming here to Washington 
lobbying for this relief.
  We have gone far beyond just the airline and steel companies. 
Apparently, in the Senate bill every company in America would be 
eligible to ask the Secretary of Treasury for a waiver from its pension 
contributions.
  Allow me to read this editorial from this morning's Washington Post. 
It is called ``Pension Perniciousness.''
  Monday, January 26, 2004, by the Washington Post:

       Not for the first time, Congress has muscled up to an 
     important problem, taken a good long look at it and resolved 
     to make it worse. The problem is the vast hole in the 
     nation's corporate pension schemes, and the perverse rules 
     that helped create them. Congress's solution, championed in 
     the Senate by an alliance of Sens. Charles E. Grassley (R-
     Iowa), Judd Gregg (R-N.H.), Max Baucus (D-Mont.) and Edward 
     M. Kennedy (D-Mass.), is to reward the hole-diggers with what 
     amounts to a $16 billion loan from taxpayers.
       About one in five private-sector workers has a ``defined-
     benefit'' pension, the sort in which an employer guarantees a 
     certain pension to its workers when they retire. To pay for 
     these future benefits, employers are supposed to put 
     sufficient money into a pension fund; the problem is they 
     often don't. The gap between money put aside and money needed 
     in the underfunded pension plans comes to an enormous $350 
     billion. When companies go bust, the Pension Benefit Guaranty 
     Corp., the government-backed entity that insures pensions, 
     gets saddled with plans that are in deficit. As a result, the 
     PBGC itself has a deficit of $11.2 billion, which taxpayers 
     may have to plug eventually. As more companies go bust, more 
     of the $350 billion problem out there in the private sector 
     will land on taxpayers' shoulders.
       Why do companies run these pension deficits? Because 
     regulations perversely encourage them to do so. If a firm 
     gives workers a pay raise, it will have to pay for that 
     immediately; if it gives them an increase in their pension, 
     accounting rules allow it to defer the cost into the future. 
     This deferral is especially tempting for cash-strapped 
     companies--which often means ones with a strong chance of 
     going bust. Bethlehem Steel, for example, upped its pension 
     promises and declared bankruptcy three years later. Wobbly 
     companies that underfund their pensions would pay extra 
     insurance premiums if the insurer were a private company. But 
     the PBGC's rules do not allow it to price risk properly, 
     adding a further incentive for shaky companies to hitch a 
     free ride with the others.
       There is, as Congress is demonstrating, no political 
     constituency for fixing this problem. Weak companies with 
     underfunded pensions lobby lawmakers for permission to 
     continue their imprudence; labor leaders from those same 
     firms lobby lawmakers in the same direction; nobody is on the 
     other side. In the deal currently being cooked up, a group of 
     hard-pressed companies led by the steel industry and the 
     airlines will be given a special break for two years; if any 
     of these firms goes bust in the meantime, the public will end 
     up shouldering the deficits, which is why the congressional 
     measure amounts to a taxpayer loan.
       Yet taxpayer support for people in defined-benefit pension 
     plans is a perverse notion. Fully one in two private-sector 
     workers has no company pension plan whatever. Why should the 
     less fortunate bail out the lucky ones?

  That was the editorial from this morning's Washington Post. It 
accurately summed up the imprudence of the bill that the Senate will be 
considering this week. Ideally, it would be great if the Senate did not 
pass such an irresponsible bill. Obviously, as the Washington Post 
points out, when you have labor leaders and CEOs of airlines and steel 
companies lobbying together, conspiring together to stick a liability 
of theirs off on the taxpayers, I fear they are probably going to win.
  My hope, however, is that the House, which has been more responsible 
on this issue, and the White House, which is opposed to the vast 
expansion of underfunded liabilities that would be engendered by this 
legislation--my hope is that the White House and the House will prevail 
upon the conference committee to pass something more responsible than 
the legislation currently before the Senate.
  One final point. The Washington Post editorial referred to this case 
of Bethlehem Steel and the editorial talked about how Bethlehem Steel 
was sweetening its pension benefits for the 3 years prior to its going 
into bankruptcy; then it just handed the pension plan and all its 
liabilities off on the Pension Benefit Guaranty Corporation and, by 
extension, the taxpayers.
  That brings up another issue. Some people think the pension funding 
rules are too severe for companies in America and that we ask too much 
of companies in the ERISA law where we require them to fund their 
pension plans as well as possible. But it turns out that--I held a 
hearing on this issue over the summer and what I found was very 
troubling--the current rules are exceedingly lax. The law, ERISA, which 
was passed in 1974, requires defined benefit plans to be 90 percent 
funded. If they are not 90 percent funded, they have to make extra 
catchup payments. But that 90 percent funding level is referred to in 
ERISA as ``current liability.'' It turns out that the definition of 
current liability is not an actuarial definition. It is not the 
definition of how much would actually be owed to pay the benefits that 
have

[[Page 390]]

been promised. It turns out that the definition of current liability is 
actually a political definition.
  To illustrate this, the Bethlehem Steel case probably is the best 
example of how woefully inadequate the current pension funding rules 
are. In its last filing with the Pension Benefit Guaranty Corporation, 
Bethlehem Steel claimed it was 84 percent funded on a current liability 
basis. That was Bethlehem Steel's last filing. Then they filed for 
bankruptcy and handed their pension plan over to the PBGC. It turns out 
that Bethlehem Steel's pension plan was not 84 percent funded; it was 
only 45 percent funded as a percentage of how much the PBGC actually 
had to pay, to pay the benefits that had been promised.
  That example shows how the pension funding laws of this country are 
already woefully lax. We are allowing companies to make promises to 
employees that they have no hope of ever fulfilling, promises which 
risk that the taxpayers will ultimately have to pay these pensions. 
This legislation the Senate is considering this week will make this lax 
funding of pensions in this country far more lax. It will do a lot of 
long-term damage.
  I hope my colleagues in the Senate will think carefully about this 
notwithstanding the political pressures they will have from airline 
executives and from labor union leaders.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Burns). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 2236 to Amendment No. 2233

  Mr. KYL. Mr. President, I have an amendment No. 2236 at the desk.
  The PRESIDING OFFICER. The pending amendment is set aside.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Arizona (Mr. Kyl) proposes an amendment 
     numbered 2236 to amendment No. 2233.

  Mr. KYL. 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 as follows:

 (Purpose: To restrict an employer that elected an alternative deficit 
       reduction contribution from applying for a funding waiver)

       At the end of section 3, insert:
       (__) Restrictions on Application for Funding Waiver for 
     Employers Electing Alternative Deficit Reduction 
     Contribution.--An employer who makes an election under 
     section 412(l)(12) of the Internal Revenue Code of 1986 or 
     section 302(d)(12) of the Employee Retirement Income Security 
     Act of 1974 (as added by this section) with respect to a plan 
     for 2 plan years may not receive a funding waiver under 
     section 412(d) of such Code for any plan year beginning after 
     December 27, 2005, and before December 28, 2007.

  Mr. KYL. Mr. President, I will describe the amendment briefly, the 
reason for the amendment, and set the stage here. Of course, the 
pending business is H.R. 3108, a bill the House passed, dealing with 
the requirements for businesses to pay into the pension fund to ensure 
that all of the promises they have made to their employees about 
pension benefits being there will in fact exist when the time comes.
  What has happened is some Senators have offered an amendment to that 
bill which would provide what we call deficit reduction contribution 
relief. Deficit reductions are the amounts of money the companies are 
supposed to pay into the fund to ensure the fund will be able to 
compensate any employees on the pension that has been promised to them. 
We have had a deficit in that pension over the last few years because 
of the way the amounts due were calculated. That is being fixed. But in 
the meantime there has to be some kind of makeup payment to account for 
the deficit that has been created. This deficit reduction contribution 
will do that.
  The problem is some specific industries are seeking relief from that 
so they don't have to pay in as much money. They are asking in effect 
for a waiver of the requirement that they pay this money into the 
pension fund so their employees will be able to collect when the time 
comes. Their argument is they don't have enough money. That should be 
our first clue that there is a problem. If they don't have enough money 
to pay their employees what they are due, we probably should not dig 
the hole any deeper by allowing them to continue to make promises and 
not pay into the fund what is necessary for them eventually to pay to 
their employees.
  Some of the Senators have decided what we are going to do is grant a 
2-year partial waiver just to certain airlines and two steel companies. 
One of the airlines, it is said, cannot afford to pay the premium that 
would be required, or the bond payment that would be required, if they 
sought a general waiver from the Treasury Department, which you can do. 
If you are having trouble making your payments, you can go to the 
Secretary of the Treasury and meet certain requirements and say I would 
like to have a general waiver. That could be granted. This company 
apparently doesn't even have the money to pay for the bond that would 
be required in order to seek that relief. But they are asking us to 
believe if we will just bail them out for 2 years, everything will be 
fine; they will have enough money, and the Government won't have to 
make up any of the difference.
  The concern I and others have expressed is this partial waiver is 
going to result in the Government letting these companies off the hook, 
paying less money into the fund than is necessary, and a couple years 
from now, if they don't make it financially, it is the taxpayers who 
will be on the hook for that difference because we have not had them 
pay the full amount. In fact, they are only going to have to pay 20 
percent of their obligation next year and only 40 percent the year 
after that. So it is a 2-year waiver of almost the entire amount.
  I would say this ought to be of concern to us. I don't think it is a 
good idea to grant this waiver, and the three key people in the Bush 
administration who sit on the board that oversees this have said they 
would recommend a veto to the President if this deficit reduction 
contribution amendment causes any greater strain on the board to make 
payments.
  What I have done is offer one amendment, and this is the second 
amendment, both of which will reduce that strain just a little bit, 
hopefully enough so the Bush administration will not veto this 
legislation, should it end up passing.
  I urge colleagues, those who agree with me that this whole deficit 
reduction contribution waiver is not a good idea and those who think it 
is a good idea but might be a little bit concerned the administration 
might veto the bill over that provision, to support my amendments 
because they are designed to close the loophole a little bit so that at 
least the companies that are taking advantage of this 2-year waiver 
cannot take unfair or undue advantage of it.
  Let me describe what the amendment specifically does. The amendment, 
which I have just offered, provides that a company which seeks to take 
advantage of this special waiver, where you would only have to pay 20 
percent next year and 40 percent the year later, then would not, at the 
end of the 2-year period, also then be able to go to the Secretary of 
the Treasury and say: Now we want a general waiver. The law currently 
provides for a general waiver, and if you want a general waiver, you 
can apply for it.
  This special waiver that is being granted is designed to be a 
substitute for the general waiver, not where you would add one on top 
of the other. I think it is a perfectly reasonable request.
  I would ask, if anybody is against this, why? Is it because, after 
the 2-year special waiver, they then want to seek a general waiver? The 
question then would be, if that is the case, why don't you seek a 
general waiver right now?
  I think it is a perfectly legitimate amendment. It obviously doesn't 
upset the whole process. The deficit reduction contribution amendment 
that has

[[Page 391]]

been offered will still be permitted to go forward, but what I would 
call a little bit of a loophole would be closed so the company that 
gets this 2-year holiday date from making their full DRC payments would 
not then afterward also be able to apply for a general waiver under the 
provisions of law that already permits that to be done. It is very 
simple.
  By the way, just a word about the general waiver. You can apply to 
the Treasury Department for any or all of the normal required 
contributions to the pension fund, and the only part of the 
contribution Treasury cannot waive is an amortization payment of a 
previous funding waiver, which makes sense. To receive a waiver, a 
company must show there is substantial business hardship, which these 
companies all allege; that it is temporary, and they make that point: 
We are going to be healthy in 2 years, they say. Good. And it is 
reasonable to expect the plan cannot continue unless the waiver is 
granted. In other words, if they can't continue to pay into the pension 
fund unless a waiver is granted, as I say, a bond can be required of 
the Secretary to show their good faith.
  I think it is a perfectly sound amendment. Those people who don't 
like the DRC waiver, like myself, and those who do should support the 
amendment. For those who do like the waiver, it doesn't hurt the 
companies they are seeking to help, and it might actually prevent the 
bill from being vetoed by the President.
  Let me tell you what I have in this regard. I understand my colleague 
from Illinois, Senator Fitzgerald, has already submitted into the 
Record this letter, so I will not do it, but I would like to make 
reference to the letter, dated January 22, 2004. It is on the 
letterhead of the Pension Benefit Guaranty Corporation, which is the 
Federal entity that guarantees Federal pensions. It is to Leader Bill 
Frist, and it is signed by Elaine Chao, the Chairman of the Board of 
Directors, John Snow, director, and Don Evans, director. You might also 
recall that Elaine Chao is Secretary of the Department of Labor; John 
Snow is Secretary of the Treasury; and Don Evans, of course, is 
Secretary of Commerce. These three important members of the Cabinet are 
the three board members of the PBGC or the Pension Benefit Guaranty 
Corporation.
  What they said in their letter to Senator Frist, among other things, 
is this:

       The PBGC reported a record single-employer program deficit 
     of $11.2 billion through the end of 2003--

  One of my colleagues earlier said there was a $20 billion surplus in 
their fund. This letter from the directors notes an $11.2 billion 
deficit. They point out:

     three times larger than any previously recorded deficit. Last 
     year, the General Accounting Office added the PBGC's single-
     employer pension program to its ``high risk'' federal program 
     list. In addition, the PBGC remains exposed to $85 billion in 
     pension underfunding in single-employee plans sponsored by 
     financially weak employers. The PBGC also reported the first 
     multi-employer program deficit in two decades.

  What this means is that the PBGC, which is the guarantor of 
employers' pensions, is in very bad financial condition--a $11.2 
billion deficit. It is in the high-risk category of Federal programs. 
That means that if we add to the risk by reducing the amount that 
employers pay into the fund, then we are increasing the risk that 
taxpayers will have to bail these companies out because the fund will 
not have enough money to make the payments.
  It is a little surprising to me that people who ordinarily like to 
present themselves as on the side of employees would be taking the 
sides of the employers here saying: Let's let them off the hook so they 
don't have to pay as much into this fund for the pensions of their 
employees.
  The fund exists for the employees, and I would like to be sure there 
is enough money in those funds to ensure the employees are paid. But 
when we relieve the companies of paying their full obligation, we are 
creating a risk that the employees are not going to be paid.
  The answer of the bill sponsors is: We will have the Government pick 
up that risk. After all, that is the job of the Pension Benefit 
Guaranty Corporation. The directors of the Corporation are saying: We 
are in financial trouble. We don't have enough money to do this. So 
guess who is going to have to make up the difference. You guessed it: 
our constituents, the taxpayers.
  Haven't we heard a great deal recently about the fact the Federal 
Government is spending too much taxpayer money and we have to start 
reining in how much we spend? Right now we are committing to spend a 
whole lot more because the board that backs up the pension funds is in 
a deficit situation. The companies that are seeking relief say they 
don't have enough money to cover the obligations to which they have 
committed. That leaves only one party to make up the difference: the 
taxpayer. And that means either they pay for it in taxes that we 
collect or we have to go out and borrow it. Nobody likes the size of 
the deficit.
  Mr. President, I say to my colleagues, those of you who are 
supporting this bill and this amendment--not my amendment but the 
underlying amendment--are guaranteeing that we are going to have a 
bigger deficit, more taxpayer funding of an obligation that 
corporations took on because the corporations don't have the money to 
do it themselves.
  This amendment is asking that we relieve them of the full 100 percent 
of what they are supposed to pay in; that for 1 year, they only pay in 
20 percent, and for the other year they only pay 40 percent of this 
makeup payment, this deficit reduction payment that is required to make 
up the full amount. We are doing it because they are pleading that they 
don't have enough money.
  My observation is, when you are in a hole, the first thing you do to 
get out of it is to stop digging.
  Today's edition of the Washington Post makes the same point. I 
understand Senator Fitzgerald also put this in the Record. But let me 
quote a couple lines from this editorial called ``Pension 
Perniciousness'' from the Washington Post today. They point out:

       Not for the first time, Congress has muscled up to an 
     important problem, taken a good long look at it and resolved 
     to make it worse. The problem is the vast hole in the 
     nation's corporate pension schemes, and the perverse rules 
     that helped create them.

  Then it talks about the bill that has been introduced by our 
colleagues ``to reward the hole diggers with what amounts to a $16 
billion loan from taxpayers.'' That is why I say we are already in a 
hole. This old rancher friend of mine from Apache County said, if you 
are in a hole, the first thing to do to get out is to stop digging. We 
are digging the hole even deeper because instead of the companies 
trying to fill this hole, we are going to have a deeper hole with 
greater taxpayer exposure as a result.
  They point out in the Washington Post editorial:

       To pay for these future benefits--

  That are promised to employees--

     employers are supposed to put sufficient money into a pension 
     fund; the problem is they often don't. The gap between money 
     put aside and money needed in the underfunded pension plans 
     comes to an enormous $350 billion. When companies go bust, 
     the Pension Benefit Guaranty Corp., the Government-backed 
     entity that insures pensions, gets saddled with plans that 
     are in deficit. As a result, the PBGC itself has a deficit of 
     $11.2 billion, which taxpayers may have to plug eventually.

  And then, down toward the end of the editorial, they say this:

       There is, as Congress is demonstrating, no political 
     constituency for fixing this problem. Weak companies with 
     underfunded pensions lobby lawmakers for permission to 
     continue their imprudence; labor leaders from those same 
     firms lobby lawmakers in the same direction; nobody is on the 
     other side. In the deal currently being cooked up, a group of 
     hard-pressed companies led by the steel industry and the 
     airlines will be given a special break for two years; if any 
     of these firms goes bust in the meantime, the public will end 
     up shouldering the deficits, which is why the congressional 
     measure amounts to a taxpayer loan.

  In the letter to leader Frist from the Pension Benefit Guaranty 
Corporation directors, the three Secretaries I mentioned earlier, are 
these two points. I quote now:


[[Page 392]]

       Pension underfunding threatens workers and retirees, who 
     depend on the defined benefit pension system to be 
     predictable and reliable. If the Congress urges firms to 
     underfund their pensions by substantially weakening funding 
     requirements, retirees could face pension cuts when a firm 
     terminates its defined benefit pension plan.
       We believe that H.R. 3108 would best protect pensions and 
     pensioners if passed free of any provisions to alter the 
     Deficit Reduction Contribution rules--DRC rules. 
     Specifically, it would be irresponsible to amend the interest 
     rate bill with any additional provisions that would 
     significantly further exacerbate systemic pension plan 
     underfunding. If H.R. 3108 were amended to do so, we as the 
     PBGC board would recommend that the President veto the 
     legislation.

  By the way, they note that the Office of Management and Budget has 
advised that this letter is consistent with the administration's 
program.
  What you have here is a pretty firm warning from the key Secretaries 
in the Bush administration, the people who sit as directors on the 
board here of the Pension Benefit Guaranty Corporation, that if the 
underlying amendment that is proposed here passes, and it significantly 
``further exacerbates the systemic pension plan underfunding''--which I 
think it is hard to argue would not occur--they would recommend a veto 
of this legislation.
  The two amendments I have offered--the one I offered Friday which 
would hold the PBGC harmless for obligations incurred after this, that 
would be incurred during the time of and for 2 years after this DRC 
waiver plan, and the amendment I offered today which simply provides 
that a company that takes advantage of this DRC waiver not be able to 
apply also for a general waiver--these two amendments should make the 
DRC amendment slightly less onerous. It may be enough for the 
administration, then, to decide to allow the amendment to go forward 
and not recommend a veto.
  But I am afraid if my two amendments--both of which I think one could 
argue are not harmful to the companies but they might be just enough 
for the administration to conclude that it is willing to allow these to 
go to the President without a recommended veto--don't pass, one of two 
things will happen: Either the President will veto the legislation or, 
if he doesn't, the taxpayers are going to be required to make up a 
fairly large amount of money when these companies decide they can't 
make it in the long run.
  I hope my colleagues will give consideration to this. It is my 
understanding that perhaps, after the lunches tomorrow, somewhere in 
the 2:45 timeframe, we may have a vote on these two amendments. We will 
have about a half-hour to discuss the two amendments, so anybody who 
has missed the discussion, the robust debate we are engaged in here, 
will have an opportunity to at least hear both sides of the argument 
and then we will vote on these at 2:45 tomorrow.
  Again, I reiterate, I can argue that the DRC waiver that is being 
proposed here by the Senator from Iowa, the Senator from Montana, the 
Senator from New Hampshire, and the Senator from Massachusetts greatly 
jeopardizes the financial stability of the PBGC; the granting of a 2-
year waiver of most of the payment obligations into the fund is a bad 
idea. I think a lot of our colleagues agree to that.
  What I am saying is, even if you don't agree with that, if you 
support the two steel companies or the two airlines--I think there are 
two or three airlines that want to take advantage of this--if those are 
your constituents and you need to support them here, you need to try to 
give them some relief so they don't have to pay as much money in over 
the next 2 years--I understand why you would have to do that. But I 
would argue, A, don't saddle everybody else with that and, B, if you 
really want it to go into law, it would be important to make sure the 
President doesn't veto this legislation. Three Secretaries have already 
given you a pretty good idea this is what they are going to recommend 
if this DRC waiver is actually adopted by the Senate tomorrow.
  What I am suggesting is that you can ameliorate the effect of that 
just a little bit by adopting these two amendments. One would ensure 
that, as I said about the amendment today, there are not going to be 
any additional waivers granted. The waiver you get for 2 years is it; 
You don't add a general waiver behind that. I think that is consistent 
with the intent of the authors here. I certainly hope they will be 
willing to support that. And, second, the Pension Benefit Guaranty 
Board would be held harmless for obligations that were incurred once a 
company began to take advantage of the special waiver provisions. That 
is only fair.
  I hope my colleagues will support both of these amendments. Take a 
look at the Washington Post editorial of today. Certainly take a look 
at the letter from Secretaries Chao, Evans, and Snow, and consider 
whether a very slight amendment to the underlying amendment would not 
be appropriate in order to preserve the intention of what they are 
trying to achieve.
  I appreciate the earlier comments from my colleague from Illinois, 
Senator Fitzgerald. I think he hit the nail right on the head. I note 
one of the airlines seeking to take advantage of this has reported a 
huge amount of cash on hand, over a couple of billion dollars of cash 
on hand. Yet it is saying it doesn't have enough money to make these 
modest payments into this fund. It seems to me either that corporation 
could apply for a general waiver, which it could get today, or it can 
afford to make the payments into the fund. It should not be up to the 
taxpayers of this country to be bailing out a company in that kind of 
position.
  I urge my colleagues to think very carefully. We have just been home 
talking to our constituents, talking about their concerns about 
deficits, about the role the taxpayers are going to have to pay funding 
new spending of the Congress. Yet the very first thing we do this year 
out of the box is take on an additional liability that will, in fact, 
add to the debt if we have to make up the payments to the Pension 
Benefit Guaranty Corporation because companies that took advantage of 
this special waiver decided they could no longer remain in existence or 
went bankrupt.
  I hope my colleagues will support these two amendments. I will 
discuss them again tomorrow right after the lunches.
  At this time I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Chafee). Without objection, it is so 
ordered.
  Mr. DORGAN. I ask consent to speak in morning business for as much 
time as I consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              THE DEFICIT

  Mr. DORGAN. Mr. President, today the Congressional Budget Office 
released its summary of what to expect in fiscal policy in this 
country. I know several of my colleagues have spoken about that today. 
But they predict that in the coming fiscal year, the budget deficit for 
this country will be $477 billion--nearly a $500 billion deficit--
easily and by far outdistancing any previous budget deficit.
  Last week I listened to the State of the Union in the Chamber of the 
House.
  The President described the state of the Union as he saw it. There 
was no discussion about the nearly $.5 trillion budget deficit this 
coming year. It was as if everything is just fine; don't worry about 
it; be happy.
  Days later, the Congressional Budget Office released their January 
review. Here is what they show. They show that in January 2001, 3 years 
ago, they expected us to have a surplus of $5.6 trillion during the 10-
year period. As a result of that expected budget surplus, we had people 
scurrying around here like folks who just had not enough to do and they 
wanted to find some way to deal with their $5.6 trillion surplus. Some 
of us said this surplus doesn't yet exist. It is just a prediction; 
maybe we ought to be a little bit conservative, a little bit careful 
about how we deal with this. No. The President said don't worry about 
that, and those who supported him in Congress said don't

[[Page 393]]

worry about that; be happy; we are going to have a big, long-term, 10-
year surplus, and let's have very large tax cuts which, by the way, are 
token for the highest income earners in this country. If you earn $1 
million a year--and not many do--this Congress passed tax cuts that 
said we believe you ought to have a tax cut of nearly $100,000. I 
didn't support it. We got busy in this Congress giving that money back 
not to working families but the wealthiest people who benefited most 
from those tax cuts.
  In January of 2003, 2 years later, the expectation was that most of 
those surpluses had vanished. A number of things had happened, but most 
of those surpluses had vanished. Now, 1 year later, we find out there 
are no surpluses at all. In fact, we face 10 years of deficits equaling 
somewhere around $2.6 trillion. In a period of 3 years, the 
Congressional Budget Office expected us to have a $5.6 trillion 
surplus, and then 3 years later a $2.6 trillion deficit.
  I didn't go to fancy math classes in my small school, but that adds 
up to an $8 trillion difference in just 3 years. What happened? As I 
indicated, the smell of $5.6 trillion in surplus was just too much for 
some: we have to get rid of this surplus--despite the fact it didn't 
exist. How shall we do it? Let us give the upper-income Americans a 
very generous tax cut; and they got it through the Congress. Some of us 
cautioned, saying maybe something is going to happen. What if something 
interferes? What if there is an economic downturn? What if we don't 
have these surpluses? Never mind, we were told; it doesn't matter. 
Don't worry about it; be happy; we are going to have a long-term 
surplus and we are going to get about the business of giving it back.
  In just a matter of months after that debate began, we discovered the 
country entered into a recession. I know my colleagues are fond of 
saying President Bush inherited a recession. He did not. That is not 
true. The recession started in March of 2001. This President didn't 
inherit a recession. In March of 2001, the recession started. It lasted 
until about November 2001. So we ran into a recession in March.
  On September 11, 2001, we had this tragic event in which terrorists 
murdered innocent Americans by flying airplanes into buildings. 
Thousands of Americans lost their lives that day. That had a dramatic 
impact on the economy. There is no question about that.
  Then we began a war against terrorism, which was expensive; then 
homeland security, which is expensive; and then an increase in defense 
spending, which is expensive.
  Think about it: A $5.6 trillion surplus expected in 10 years, and the 
fiscal policy coming from the White House was to say, Let's have very 
big tax cuts for upper income Americans.
  Then we ran into a recession; September 11, 2001, a terrorist attack; 
a war on terrorism; homeland security spending; and defense spending 
up, up, way up. Now we discover that not only is there not a surplus, 
but we have the largest Federal budget deficit in the history of this 
country.
  The President in his State of the Union Address did not mention it. 
Why would the President neglect to mention this? Is it because there is 
no fiscal policy coming from this administration that remedies it? Is 
it because the medicine here is not easy to take?
  I just finished reading a book that was written by a man named 
Suskind about former Treasury Secretary O'Neill who was the Treasury 
Secretary for the first 2 years of this administration during the time 
this fiscal policy was constructed. That book ought to be read by every 
American because it says again from the Treasury Secretary of this 
administration that this fiscal policy is folly. It doesn't result from 
the best minds sitting around thinking about what is the best policy to 
advance this country's economic interests. It was nothing of the sort. 
It was all about politics, all about the easy lifting, saying let us 
give tax cuts and let us give tax cuts especially to those who 
supported the administration.
  I was, frankly, very surprised to read that book. I was very 
disappointed as well to read that book. The book needed to be written, 
and it is controversial. I am sure Mr. O'Neill, former Secretary 
O'Neill, will pay dearly for having been candid. But what he described 
was the development of a fiscal policy that had nothing at all to do 
with thoughtful analysis by people who would know. It had everything to 
do with people in the basement constructing political strategy and how 
that political strategy should find its way into the fiscal policy of 
this country and should actually run that fiscal policy.
  Here we are 3 years later. Instead of a $5.6 trillion budget surplus, 
we have the prospect of a $2.6 trillion deficit that we will decide our 
children should pay. Here we are with an administration that has no 
plan except to say deficits don't matter--an administration that gives 
us a State of the Union that conveniently forgets we have now the 
largest Federal budget deficit in human history.
  I mentioned I went to a very small school with a high school senior 
class of nine. They didn't teach advanced math. But 1 and 1 equals 2, 
and 2 and 2 always equals 4. You cannot have a fiscal policy for our 
country that increases defense spending, increases homeland security 
spending, and cuts taxes again and again, and have it add up. It just 
does not, especially in circumstances when we hit a rough patch in the 
economy and are fighting a continuing war on terror. It simply does not 
add up. We require--this country demands--leadership on these issues. 
All of us here in the Congress need to get serious about spending 
initiatives and tax initiatives.
  Not too many weeks ago, we had a debate on the floor of the Senate. I 
offered an amendment and I lost. It had to do with the expenditure of 
$20.3 billion for the reconstruction of the country of Iraq. I said we 
ought not spend $20.3 billion to reconstruct the country of Iraq. We 
did not bomb Iraq in a manner that destroyed their infrastructure. We 
didn't target their roads. We didn't target their electric grids, nor 
their dams. We did not target the infrastructure of Iraq, and we did 
not destroy their infrastructure. It is not the obligation or the 
burden of the American taxpayers to rebuild it. The country of Iraq has 
the second largest reserves of oil in the entire world next only to 
Saudi Arabia.
  My proposition was very simple: that Iraq would be pumping 3 million 
barrels of oil a day, according to Ambassador Bremer, by July 1 of this 
year, and the sale value of that which is available for export will be 
$16 billion a year. That is $160 billion over 10 years. That could 
easily be securitized, and the money from a few years of Iraq oil could 
easily reconstruct all that is necessary to be reconstructed in Iraq. 
It is the burden, it seems to me, of Iraq oil, the resource that 
belongs to Iraq, to reconstruct Iraq. It is not the burden of the 
American taxpayer.
  I have felt strongly--and I did when we debated this issue--that Iraq 
oil owned by the Iraqi people ought to be used to reconstruct the 
country of Iraq, not the American taxpayer. I lost that vote. That vote 
was $20 billion.
  Those who decided, no, it is the American taxpayers' burden, decided 
we want to spend that money. That is part of Federal spending. We want 
to borrow the money, which is what we are now doing in order to 
reconstruct the infrastructure of Iraq.
  The next time I hear someone come to this floor to say the problem is 
the big spenders, it is important to take a look at how Members voted 
on the $20 billion to reconstruct Iraq. Talk about big spending, that 
is the big daddy of spending, one big chunk, $20.3 billion, not paid 
for. We borrowed the money, added it to the Federal debt, and said 
let's send it to Iraq.
  Now we read in the newspapers that a Halliburton subsidiary has 
decided to give money back because there were kickbacks, because there 
was fraud. There are investigations. We discover the price charged to 
the American taxpayer to haul gasoline into Iraq is probably $1 more 
per gallon than it should be.
  Are you surprised? I am not. When we throw money at these issues, 
which is what happened to the issue of reconstructing Iraq, we find 
dramatic

[[Page 394]]

amounts of waste. That is what is happening.
  We need a fiscal policy that works. Part of it is beginning to cut 
back on spending in some of these areas. This would have been a good 
candidate and would still be a good candidate. We do not have to spend 
all of the $20 billion. There is still time to take some back and 
reduce the runup of Federal deficits.
  Second, we ought to collect some taxes from those who are not paying 
it, some of the largest corporations in the country, some whose names 
you would recognize instantly because they advertise all the time. They 
do a lot of business in this country and are household names. They have 
decided they want to run their business out of a mailbox in the Bahamas 
or the Grand Caymans. Why do they want to make a mailbox their 
corporate headquarters? To avoid paying U.S. taxes. It is time for us 
to shut that down. The American people pay taxes. They earn a wage; 
they pay a tax. They do not have flexibility to get out of it. So, too, 
should the large corporations that do business and earn profits here.
  Deciding either they want to renounce their citizenship, which is 
called an inversion, or deciding they want to create all these special 
enterprises, special subsidiaries, and run them through a mailbox in 
the Bahamas or Grand Caymans or the Dutch Antilles is not something 
this country should allow happen.
  That means tax reform. It is not just the obligation of working 
families to pay taxes, it is the obligation of all Americans who earn 
in this country. That includes those at the top. That includes some of 
the largest enterprises, some of the largest corporations that now have 
decided they want all the benefits of American citizenship except the 
requirement to pay taxes for our common defense and for the other 
things that invest in this country and its future.
  We have a lot to do. If all Americans will read the Suskind book 
called ``The Price of Loyalty,'' about former Secretary O'Neill, the 
first 2 years of this administration, and the construction of a fiscal 
policy, a reader will shut that book and wonder how on Earth this could 
have happened. Are there not people involved of good character who want 
to do the right thing for this country's future? Is it all about 
politics? Read the book. Then make a judgment. Then ask yourself 
whether it is not necessary for all, Republicans and Democrats, 
conservative and liberals, to create a different resolve, beginning 
now. That resolve is to no longer ignore and pretend, as this 
administration does, that we have the largest budget deficit in 
history.
  I did not mention that in addition to the largest fiscal policy 
budget deficit in history, predicted today by the Congressional Budget 
Office of $477 billion, we also have the largest trade deficit in 
history. Together, these two deficits are very serious for the long-
term outlook of this economy. There is no magic.
  I know the administration says, look, this is not an issue. We will 
just grow out of it. There is no thoughtful economist I am aware of who 
believes you grow out of these deficits. You do not. I mentioned an $8 
trillion turnaround. The President, in his State of the Union Address, 
despite not mentioning the Federal budget deficits or a fiscal policy 
dangerously out of control, in my judgment, did mention he wants to 
make all of the tax cuts permanent, which will add another $2 trillion 
to those deficits in the next 10 years.
  We have a lot at stake. I believe it is incumbent upon both political 
parties. If the President will not, it is incumbent upon both parties 
that do work in the Senate to recognize this is a dangerous fiscal 
policy and we must change it. Men and women of good will serving in 
this body know that our job is to try to enhance the future of this 
country. We want to leave things better than we found it. We want our 
children to live in a better world. We want our children to live in a 
country that is stronger, whose economy is expanding and producing jobs 
and opportunities for our children. But that will not happen if we 
burden our children with a reckless fiscal policy that has the largest 
deficits in the history of this country.
  I call on this President to recognize this issue, work with us to 
solve this problem, and put this country back on track with a fiscal 
policy that promotes economic growth, that gets rid of these budget 
deficits, and provides for a responsible fiscal policy, a balanced 
budget, one that will promote growth in this country.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                        Campaign Finance Reform

  Mr. REID. Mr. President, on December 10 I was in Las Vegas when my 
staff stepped into a meeting and said the Supreme Court had upheld the 
McCain-Feingold Campaign Reform bill. I couldn't believe it. All of the 
political prognosticators said this very conservative Supreme Court 
would not uphold that law. They not only upheld the law but they 
completely repudiated what the intermediate court of appeals had done. 
They went past them and upheld the law.
  I was so happy that after I got out of my meeting, when the press 
called me, I said that if Sandra Day O'Connor were available I would 
give her a big hug because the decision she wrote was tremendous. She 
broke from the pack to do what no one thought she would do. I have 
tremendous respect and admiration for her courage in doing that. I 
wrote her a letter and told her what I said publicly. What she did was 
tremendous.
  Why did she do it? A lot of it is not only based upon her academic 
prowess but the fact that she served as an elected State legislator in 
Arizona. I am sure she remembers what fundraising is all about.
  The bipartisan campaign finance reform law--I call it bipartisan 
because John McCain was one of the main sponsors, even though it was 
passed primarily by Democrats in the House and the Senate--and the 
December 10 ruling were the culmination of a remarkable 8-year effort 
by two outstanding public servants.
  They first introduced this bill in September of 1995. Both of these 
men realized that since our campaign laws were revamped many years ago, 
those who wanted to get around the intent of the law had discovered 
some gaping holes and exploited them beyond what anybody could have 
imagined.
  In the late 19th century and early part of the 20th century, 
corporate America basically owned Congress. As a result of that, in the 
early 20th century, Congress passed a law saying there could be no 
corporate funds used in Federal elections. That is the way it was 
during almost all of this past century. Slowly but surely that changed 
because the courts ruled that even though you could not give corporate 
or soft money directly to a Federal candidate, that candidate could go 
out and, in any way they wanted, raise money for the State party.
  As we know, during the last 15 years or so, the largest amount of 
money spent in Federal elections was soft money, corporate money, 
because corporations would give huge amounts of money to the two State 
parties and they would run these mostly negative ads. The negative 
advertising taking place in America in recent years has come generally 
from soft money--so-called corporate money.
  Mr. President, the same was developing in recent years that was in 
effect before 1900 and shortly after 1900 when corporate America was 
giving these huge amounts of money to Congress. Maybe Congress, prior 
to December 10, 2003, was not compromised. Maybe they were not 
corrupted. I am confident that is true, but what was going on was 
corrupting. It would only have been a matter of time until this got way 
out of hand, more so than it should have been.
  So I appreciate very much the law having been drafted. I appreciate 
very much the fact that now we have a campaign practice in America 
which says if

[[Page 395]]

somebody is running for office, they can go ask an individual for money 
and individuals are the only ones who can give money. An individual 
Senator or Congressman cannot ask for corporate money in any fashion or 
form. That is the way it should be. There is nothing wrong with asking 
for campaign money. There is nothing wrong with giving campaign money, 
as long as there is full disclosure and it comes from individuals, not 
corporations.
  The law that passed and was upheld by the Supreme Court is not a 
perfect law. I am sure people will manage to find ways around it. But 
public confidence had been eroding and now the political parties are 
not being allowed to accept large contributions, at least directed at 
individual Senators, who won't have as much money, and there is 
certainly nothing wrong with that. I am sure we won't see all the 
negative ads that we have seen in the past.
  These unlimited contributions damaged out political system by raising 
the stakes for those who wrote big checks. I am a strong supporter of 
business. Businesses create jobs and provide health insurance for many 
Americans. They generate the products and services we all enjoy. Most 
businesses play by the rules and play fair. They realize their short-
term pursuit of profit is not the only thing that matters. They 
understand in the long run, America prospers best when we all share in 
the prosperity.
  The influence of big money in politics created an environment in 
which special interests threatened to overwhelm the common good. 
Instead of seeking common ground and compromise, business and interest 
groups began to think in terms of a winner-take-all strategy, with the 
ability to influence the process going to the highest bidder.
  This poisonous climate actually widened the gap between the interests 
of big business--which could contribute large sums of soft money--and 
the interests of ordinary Americans. Unfortunately, in most cases, 
ordinary Americans found themselves on the outside, looking in on a 
process that was dominated by big money.
  I am not pointing fingers at anyone because it was happening on both 
sides. Senators Feingold and McCain realized that something was wrong, 
and they set out 8 years ago to make it right. It wasn't easy. It took 
years to get to a conclusive vote on the bill. I offered an amendment 
identical to their proposal, but a cloture vote failed and it died.
  Finally, in 2002, the Senate passed the Campaign Finance Reform Act. 
A week later, it was signed by President Bush into law. A little over a 
month ago, that law was upheld by the highest court in the land. The 
saga of campaign finance reform is a useful lesson to those who study 
government. It illustrates the importance of tenacity and conviction.
  I have no doubt that the great majority of Americans supported 
campaign finance reform from the very beginning. As indicated by the 
vote, the people in this body and in the House knew that people favored 
this. There may have been some individuals who didn't want to vote for 
the bill in their hearts, but they did so because they recognized that 
the overwhelming number of people in America supported it. Despite this 
support of the American people, the bill would never have become law if 
Senators McCain and Feingold had not kept pushing it because there were 
a lot of people who may have been outwardly supportive of this in 
Congress but simply weren't willing to push very hard to make sure it 
came to be.
  Time and time again, Senators Feingold and McCain encountered all 
kinds of setbacks. Time and time again, they refused to give up. I 
don't know how many cloture votes failed in this matter--I would 
estimate at least 25 over the years. These two men kept fighting 
because they believed in their hearts that this was an issue of 
fundamental importance to our democracy.
  Senators McCain and Feingold stayed the course because they were 
fighting not just for a piece of legislation, they were fighting to 
save our political system. The tenacity might have surprised their 
opponents, but those of us who followed their careers should not have 
been surprised. Is McCain-Feingold perfect? Of course not. Will people 
try to get around it? Of course they will. We will have to look at ways 
to plug those holes. But it is so much better that we don't have these 
large amounts of soft money coming into elections.
  Just to be illustrative, in the State of Nevada, when I ran 6 years 
ago, Senator John Ensign and I spent, between us, $20 million. The vast 
majority of that was soft money that went through political parties. 
There were negative ads against me and negative ads against Senator 
Ensign. The system would have been better without that money. You can 
multiply this all over the country because it was the same. So what has 
happened here and what happened with the Supreme Court is good for the 
system. I have great respect and admiration for Senator Russ Feingold.
  To show you what a man of conviction he is, 6 years ago when he was 
involved in his first reelection effort, he was behind in the polls. We 
knew that and we said to Russ Feingold: Let us give some money to the 
State party to help you. He said: Do not give money to the State party. 
In fact, if I recall correctly, money was given and he made us take it 
back. Even though he was behind at the time, losing the election was 
more acceptable to him than violating a principle--that is, corporate 
money being involved in his election. He wound up winning. I think one 
reason for that is that people know he is a man of conviction and that 
proved it.
  He comes from the State of Wisconsin, which has a rich tradition of 
progressive reform. There is a statue in this Capitol of ``Fightin''' 
Bob LaFollette, a leader of the progressive movement in that State. 
Senator Feingold's father was involved in that movement, and he passed 
along his strong values to his son.
  Russ Feingold graduated from the University of Wisconsin at Madison. 
He is a Rhodes scholar. Then he went and graduated with honors from 
Harvard School of Law. He then served 8 years in the Wisconsin State 
Senate before coming to this body.
  His trip to the Senate is a story in itself. Twelve years ago, the 
Senate race in Wisconsin was a race involving money. There were people 
there who had raised a lot of money and were spending a lot of money. 
Russ Feingold had almost no money. He was a State senator, but he had 
been walking door to door all over the State of Wisconsin.
  Maybe a month before the election, a number of newspapers in 
Wisconsin said: We have had enough of this negative campaigning going 
on in this race, and we are going to support this young State senator 
from Wisconsin. We want people to focus on Russ Feingold, which was a 
name few people had heard of. Russ Feingold came from nowhere within a 
matter of weeks to win that election.
  Here in the Senate he fights to help working people and farmers by 
improving health care, education, and creating jobs. I know Russ 
Feingold is a man who stands for good government, not only what he did 
on campaign finance reform, but also as a watchdog against wasteful 
spending.
  Russ Feingold is a man who practices what he preaches. When he 
launched his effort to ban unregulated soft money, the naysayers said 
it couldn't be done. They said the political process had become so 
expensive that nobody could get elected without corporate money. Russ 
Feingold proved them wrong. He stuck to his principles, kept his 
promises to limit spending and reject the use of soft money in his own 
race, and he was reelected.
  He is a man of strong principles, and he shows strong principles and 
successful politics are not mutually exclusive.
  I have gotten to know Russ Feingold very well. I have gotten to know 
his lovely wife Mary, who is a friend of mine. I try to call her once 
in a while just to see how she is doing. She is perky and astute--a 
wonderful woman. I want the record to be spread with my admiration for 
Russ Feingold and his

[[Page 396]]

wife Mary, for the team they are, and I am certain the encouragement 
she gave him to stay the course.
  Mr. President, the other member of this duo that was responsible for 
this legislation is John McCain. John McCain is an interesting person, 
to say the least. He is a true American hero. He has lived through 
things that most of us cannot comprehend.
  More than 20 years ago, I went to a congressional prayer breakfast. 
John McCain and I served together in the House of Representatives. We 
were elected at the same time. The prayer breakfast in the House, as I 
recall, was every Thursday morning. I can't remember the exact day, but 
it was held in the morning. I wanted to go because John McCain--this 
person with whom I was elected in the same class--was going to make a 
presentation at the prayer breakfast. It was one of the most memorable 
45 minutes I have ever spent.
  John McCain recounted to us--there was no press around; it was a 
private meeting--what he had gone through in the state of being a 
prisoner of war in Vietnam. He is a graduate of the U.S. Naval Academy. 
His father was an outstanding military officer, as was his grandfather.
  In October of 1967, John McCain was flying a mission over Vietnam 
when his plane was struck, and he was forced to eject from that jet 
airplane. He parachuted and landed in a lake, a short ways from the 
prison where he was going to be placed. He broke both of his arms, 
broke a leg, and sustained many other injuries. Not only that, but a 
mob dragged him out of the lake to the shore and then proceeded to beat 
on him, even though he was badly injured. He was taken a short distance 
to the famous Hanoi Hilton where he was tortured and held in solitary 
confinement.
  He spent 6 years in prison, much of that in solitary confinement. 
Because his father was head of the Seventh Fleet--I think that's the 
proper designation; he took care of the theater of war in Vietnam--the 
Vietnamese said because your father is a military leader in this area, 
you can go home. John McCain said: No, I am not going home unless my 
fellow prisoners go with me. So they proceeded to break his shoulders 
again and cause him all kinds of physical pain, discomfort, anxiety, 
and emotional stress. It was brutal what they did to him.
  He recounted this in some detail at the prayer breakfast. But a lot 
of it had to be put together because he is certainly not a boastful man 
and doesn't talk about his military experience very much and, I repeat, 
this was in a very private, prayerful meeting. I can remember his 
explaining the first time all these prisoners were able to get together 
for Christmas and how they found a way to sing Christmas songs.
  It was, as I said, a remarkable experience to listen to John McCain. 
He is a man of integrity. To show his humility, if you look at his 
biography on his Web site, it is four very short paragraphs. He doesn't 
talk about most of the things he has accomplished in life. You have to 
read on, not on his Web site, because he is a man of some humility.
  McCain and Feingold are a lot alike. They both have tenacity, 
perseverance. They both cause the Senate and myself, someone who is 
trying to move legislation along, a bit of heartburn on occasion. I 
have sometimes asked myself about these two guys--oh, why are they 
doing this? They are doing what they do, even though there is some 
short-term pain for me and others who are trying to move legislation on 
the floor, because they feel strongly about different issues.
  There are times when I am anxious and concerned about the issue they 
raise, but I never ever question why they do it. I know why they do it. 
I work as much as I can to understand that these two watchdogs work 
together on a number of issues, and they also work separately. They 
have different interests in life.
  I couldn't let any more time go by without talking about how 
important it is for the body politic to have passed McCain-Feingold and 
how important it is to the country that the Supreme Court of the United 
States upheld that law nearly as we had written it. It has changed our 
lives, but I think for the better. Even though some people are upset it 
passed, I am very glad, and it would never have happened but for the 
perseverance of these two men. It will renew the vitality of our 
political system and restore our faith in Government. It could not have 
happened but for these two fine Senators about whom the States of 
Wisconsin and Arizona should feel proud.
  Mr. 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. SPECTER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Cornyn). Without objection, it is so 
ordered.


                           Amendment No. 2260

  Mr. SPECTER. Mr. President, I have sought recognition to discuss 
amendment No. 2260, which has been filed. At a later point in my 
presentation, I will ask unanimous consent that the pending amendment 
be set aside. But I first want to talk about the amendment and about 
the plight of US Airways, a very important constituent for a 
Pennsylvania Senator, and a very important airline for the United 
States on domestic and foreign travel.
  There is a long history of the problems which US Airways has faced, 
arising really out of the problems of 9/11, when the airline industry 
generally has been subjected to great problems because of the reduction 
of airline passengers.
  US Airways has been in the throes of reorganization, in bankruptcy 
proceedings. They have had difficulties obtaining a loan going back to 
December of 2002, when there was a critical point.
  At the request of US Airlines, requests were made by me to Labor 
Secretary Chao, then-Treasury Secretary O'Neill, and Commerce Secretary 
Evans to strongly encourage the Pension Benefit Guaranty Corporation to 
accept US Airways' pilot pension plan proposal. Ultimately, the PBGC 
declined to do so.
  Then on January 9, 2003, Senator Santorum and I introduced S. 119 on 
behalf of the Air Line Pilots Association with the aim to protect their 
pension by allowing US Airways to terminate and then restore their 
pension plans. The resolution of the pension liability situation is to 
the completion of US Airway's plan of reorganization by the Air 
Transportation Safety Board.
  Then on January 14, I chaired a hearing of the Labor, Health and 
Human Services, and Education Subcommittee on the pension plans 
regarding US Airways because it dealt with the labor issue. What we 
have sought to do here is to have a longer period of time than the 5 
years which US Airways had to fund the program. We have asked for 
flexibility of up to 30 years--not necessarily 30 years but up to 30 
years.
  Had the 2-year relief or deficit reduction been in effect when US 
Airways faced the issues relating to its pension plan, there was the 
distinct possibility, perhaps likelihood, that US Airways would not 
have been in the throes which it is in today. US Airways has since 
added to the pilots' defined contribution plan, and the pilots would be 
very pleased to see the funding there offset the obligation which US 
Airways would have if amendment No. 2260 were to be adopted. That is a 
brief statement as to the status of the matter.
  There was a unanimous consent agreement entered into on December 9 of 
last year which limits the first-degree amendments which are available. 
It was only last week that the US Airways pilots came to my office, to 
me, to ask that we introduce this amendment. Procedurally, the only way 
at this stage that it can be done is as a second-degree amendment.
  I have inquired of the Parliamentarian as to whether 2260 would be 
germane as a second-degree amendment, and I have been advised that that 
is under consideration now and no final decision has been made. I 
thought it useful this afternoon to take the floor and go through the 
explanation, which I have.

[[Page 397]]

  I thank the assistant majority leader for the Democrats, the Senator 
from Nevada, for coming to the floor so that he would be present to 
hear what I have had to say.
  I now ask unanimous consent that the pending second-degree amendment 
be set aside so that this second-degree amendment may be considered.
  The PRESIDING OFFICER. The assistant minority leader.
  Mr. REID. Reserving the right to object, the Parliamentarians have 
not had an opportunity to study this in detail. Therefore, they are not 
at this time ready to rule on whether or not this amendment is in 
order. A number of people have called our cloakroom, recognizing that 
as soon as the Parliamentarian makes a decision, that will answer the 
question itself. Based upon that, on behalf of a number of other 
Senators, I object to setting this amendment aside.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I understand the situation as stated by 
the Senator from Nevada. I understand there are other Senators who 
represent States which have other airlines, and it is a tough 
competitive line out there. So having made the explanation, I shall 
await the judgment of the Parliamentarian. When the current second-
degree amendment is disposed of, I will then be in a position to offer 
this second-degree amendment.
  I thank the Chair. I yield the floor and suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________