[Congressional Record (Bound Edition), Volume 153 (2007), Part 2]
[Senate]
[Pages 1791-1822]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     FAIR MINIMUM WAGE ACT OF 2007

  The PRESIDING OFFICER. Under the previous order, the hour of 2 p.m. 
having arrived, the Senate will proceed to the consideration of H.R. 2, 
which the clerk will report by title.
  The assistant legislative clerk read as follows:

       A bill (H.R. 2) to amend the Fair Labor Standards Act of 
     1938 to provide for an increase in the Federal minimum wage.

  The PRESIDING OFFICER. The majority leader is recognized.


                           Amendment No. 100

                (Purpose: In the nature of a substitute)

  Mr. REID. Mr. President, I send a substitute to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. Reid], for Mr. Baucus, 
     proposes an amendment numbered 100.

  Mr. REID. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  Mr. REID. Mr. President, that amendment is on behalf of Senator 
Baucus. I failed to mention that.
  The PRESIDING OFFICER. The Republican leader is recognized.


                 Amendment No. 101 To Amendment No. 100

  (Purpose: To provide Congress a second look at wasteful spending by 
establishing enhanced rescission authority under fast-track procedures)

  Mr. McCONNELL. Mr. President, I believe there is an amendment of 
Senator Gregg's at the desk. I call it up for its immediate 
consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       :The Senator from Kentucky [Mr. McConnell], for Mr. Gregg, 
     for himself, Mr. DeMint, Mr. McConnell, Mr. Lott, Mr. Kyl, 
     Mrs. Hutchison, Mr. Cornyn, Mr. Allard, Mr. Crapo, Mr. 
     Bunning, Mr. Vitter, Mr. Brownback, Mrs. Dole, Mr. Alexander, 
     Mr. Thomas, Mr. Craig, Mr. Burr, Mr. McCain, Mr. Sununu, Mr. 
     Enzi, Mr. Martinez, Mr. Chambliss, Mr. Sessions, Mr. Coleman, 
     Mr. Graham, Mr. Voinovich, Mr. Isakson, Mr. Coburn, Mr. 
     Ensign, and Mr. Thune, proposes an amendment numbered 101 to 
     amendment No. 100.

  (The amendment is printed in today's Record under ``Text of 
Amendments.'')
  The PRESIDING OFFICER. The majority leader.


                             Cloture Motion

  Mr. REID. Mr. President, I send to the desk a motion to invoke 
cloture.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on the pending 
     Gregg amendment No. 101 to the substitute amendment to H.R. 
     2, a bill to amend the Fair Labor Standards Act of 1938 to 
     provide for an increase in the Federal minimum wage.
         Harry Reid, Mitch McConnell, Judd Gregg, Craig Thomas, 
           John E. Sununu, James Inhofe, Jon Kyl, Johnny Isakson, 
           Tom Coburn, Mike Crapo, Wayne Allard, Lamar Alexander, 
           John Cornyn, Jim Bunning, John Ensign, David Vitter, 
           Bob Corker.

  Mr. REID. Mr. President, let me say briefly, we are now at the point 
where we said we would be last week. Again, I have said on a number of 
occasions that I appreciate the courtesy of the Senator from New 
Hampshire. This is an issue which he believes in very strongly. I just 
finished a conversation with Senator Byrd in his office a short time 
ago, and he does not believe in it. This is what legislation is all 
about, and we look forward to voting on this amendment. We will vote on 
it Wednesday, or we will, as I said, meet with the distinguished 
Republican leader later today and we will decide if we need to vote on 
it more quickly or we need to take all that time--whatever the rules 
call for, unless we are able to work with Senator Gregg and Senator 
McConnell to move that more quickly.
  The PRESIDING OFFICER. The Republican leader.
  Mr. McCONNELL. Yes. Let me indicate my admiration for Senator Gregg 
in persisting in offering this very important amendment.
  I thank the majority leader for working with us to get consideration 
of this extremely important measure, and we look forward to beginning 
the debate.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mr. GREGG. Mr. President, if the leaders have completed their 
statements, I would ask for recognition.
  Mr. President, first, let me begin by thanking the majority leader 
and the Republican leader for their efforts here in allowing me to 
bring forward this amendment at this time. As we know, 2 weeks ago I 
offered this amendment. At the time, I offered it because I felt it was 
appropriate to the lobbying reform vehicle, as the lobbying reform 
vehicle had been greatly involved in the issue of what is known as 
earmarks. Earmarks are where certain Senators put specific language 
into a bill which allows spending to occur for a specific item.
  I am not inherently opposed to earmarks. Many are very genuinely of 
good purpose. And I have used it in cases to benefit programs which I 
thought were appropriate. In fact, I think the legislative branch has a 
right to direct spending. If you do not direct spending as a 
legislative branch, then

[[Page 1792]]

the executive branch has the authority to direct spending, and the 
practical effect of that is the legislative branch is giving up one of 
its key powers, which is the power over spending.
  However, there have, over the years, been abuses of the earmark 
process. We all know that. We have seen it. And there have actually 
been abuses which have been unethical. We have seen that in recent 
times. So the key, I believe, to earmark reform is transparency and 
allowing the Congress and the people we represent to see what is being 
earmarked, and allow the Congress to actually have to vote on it.
  The idea of the enhanced rescission proposal, which I have here--and 
I call it a second-look-at-waste proposal--is to allow the President to 
send back to the Congress items which he or she feels were 
inappropriately put in some other bill and which did not receive an up-
or-down vote.
  Now, how could that happen, people might ask? It happens very simply. 
A lot of vehicles we pass here, a lot of laws we pass here, a lot of 
spending proposals we pass here involve literally tens of billions, 
sometimes hundreds of billions of dollars in spending. What will happen 
is these bills, which have these huge conglomerates of spending 
activity in them--which are known as omnibus bills--sometimes we find 
embedded in them little items, smaller items of spending which were put 
in there for the purposes of accomplishing specific activity by Members 
of the Congress, sometimes at the specific request of people who have 
been asking for those programs.
  The President, of course, does not have the choice of going in and 
saying: Well, that is a bad program or that is an inappropriate 
program. He or she must sign the entire bill, the whole bill--a $10 
billion bill, $100 billion bill, $300 billion bill. That bill must be 
signed in its entirety. Pieces of it cannot be separated out.
  So what this second-look-at-waste amendment does is allow the 
President, on four different occasions, to send back to the Congress a 
group of what would be earmarks in most instances for the Congress to 
vote on again, and essentially say to the Congress: Well, those items 
which were buried in this great big bill--those specific little items--
should be reviewed and Congress should have to vote them up or down.
  Congress then, by a majority vote, must vote on whether it approves 
those specific spending items. That is called enhanced rescission. It 
is not a line-item veto. A line-item veto is where the President can go 
in and line-item out a specific item and then send it back to the 
Congress, and the Congress by a two-thirds vote must vote to override 
the President's proposal to eliminate the spending. In this instance, 
the Congress retains the right to spend this money if a majority of the 
Congress decides to spend the money in either House--in either House.
  So as a practical matter, it is a much weaker--dramatically weaker--
proposal than what is known as the line-item veto, which passed here in 
the early 1990s and was ruled unconstitutional. In fact, this amendment 
has been drafted so it will be constitutional. And, in fact, it has 
been drafted in a way that basically tracks rather precisely and very 
closely the language that was offered by Senator Daschle and Senator 
Byrd back in 1995 and was then called enhanced rescission.
  We made one major change in the initiative which we proposed last 
week to make it even closer to the language of Senator Daschle and 
Senator Byrd in that we have included in this proposal, which has been 
filed here today, enhanced rescission which includes the right to 
strike. What does that mean? That means the Senate will have the right 
to look at the package of rescissions sent up by the President, which 
might be two, it might be three, it might be 10, and the Senate does 
not have to vote up or down the entire package; the Senate can actually 
go in and vote up or down specific items within that. So it even gives 
the Senate, and the House for that matter, significantly more authority 
over this process.
  The proposal we are putting forward is what we call second look at 
waste, what was called, back in 1995 when it was offered by Senator 
Daschle and Senator Byrd, fast-track rescission. It is not a line-item 
veto.
  I want to reinforce this point because what is shown on this chart 
references the Daschle language of 1995 and the amendment which we have 
offered today. You can see that the two agree on almost all the key 
elements.
  The Daschle language established a fast-track process for 
consideration of Presidential rescissions. We do the same thing. The 
Daschle language required congressional affirmation of the rescissions. 
We do the same thing. The Daschle language allowed the President to 
suspend funds for a maximum of 45 days. We do the same thing.
  On the left side of the chart are Senator Daschle's proposals, 
supported by Senator Byrd and 20 other Members on that side of the 
aisle. It did not permit the President to resubmit a submitted 
rescission request. We do the same thing.
  It allowed for the rescission of discretionary funding and targeted 
tax benefits. We do the same thing--only allowed motions to strike, no 
amendments. So you can move to strike, the same thing as the Daschle 
amendment. It required rescinded savings to go to the deficit so it 
could not be respent. That also we do.
  Now, the two big changes we have from Senator Daschle's proposal: We 
allow rescissions of new mandatory programs, not existing mandatory 
programs. You cannot go in and rescind a farm program that already 
exists or a VA program that exists. No. A new mandatory program. And we 
do not allow the rescissions to occur as often, or the President to 
send up as many rescissions as he could have under Senator Daschle's 
and Senator Byrd's amendment. We only allow the President to send up 
four rescission requests. Under Senator Daschle's and Senator Byrd's 
amendment, you could arguably send up 13 rescission requests. So we 
have significantly limited the ability of the President to sort of game 
the system and also tie up the Congress.
  It is important to understand this change we have made actually 
significantly increases congressional authority over the rescission 
process, as does this one. This other change gives the President 
additional activity on congressional mandatory spending. Why did we put 
that in there? Well, because today 60 percent of Federal spending is 
mandatory spending. The simple fact is that if you do not address 
mandatory spending in new mandatory programs, then you are taking out 
the ability to address the budget in a significant way.
  Now, I noticed Senator Conrad, in one of his very well-stated 
statements in regard to this enhanced rescission, second-look-at-waste 
program, said: Well, this puts a gaping hole in any agreement that 
would be reached between the Senate and the President on how to handle 
even entitlements. I do not believe that. I do not believe that. I 
think if the Senate and the President reach an agreement on how to 
handle entitlements, part of that agreement is going to be that the 
enhanced rescission program that is proposed here is not going to 
apply. That is logical, reasonable, and the way it is going to work.
  Obviously, the Congress is not going to give up that much authority 
if we are going to reach that type of agreement, and I do hope we reach 
such agreement. That would be good for us as a Nation.
  Again, I emphasize we have put in this new amendment, as it has been 
sent up, the motion to strike. This was an issue of considerable 
disagreement on the floor. A lot of Members believed that by not giving 
us a motion to strike, we were giving too much power to the executive 
on the issue of enhanced rescission. Senator Daschle and Senator Byrd, 
in their amendment in 1995, had that language. The administration is 
not happy with that language. I can argue it both ways. But I think in 
order to have consistency between both and because it is a significant 
right to retain with the legislative branch, we have put it back in.

[[Page 1793]]

  I also think it is important to note that any savings go to deficit 
reduction. Deficit reduction should be our goal. If the President sends 
up something he thinks is wasteful and we agree, let's rescind it and 
send it to reduce the deficit rather than rescinding it and sending it 
on to be spent. That makes a lot of sense.
  To show you how different this is than the line-item veto, back in 
1995, when we had the line-item veto--and remember, when we passed it, 
11 members of the other party who are presently serving in the Senate 
voted for the line-item veto: Senators Baucus, Biden, Dorgan, Feingold, 
Feinstein, Harkin, Kennedy, Kerry, Kohl, Lieberman, and Wyden; I voted 
for the line-item veto--that was ruled unconstitutional. That was 
dramatically more power given to the executive. This basically gives no 
power to the executive other than to ask the Congress to take another 
look and vote again. So one would presume that the folks who voted for 
the line-item veto back in 1995, unless they have changed their view, 
would be supportive of a much more weaker fast-track rescission 
approach in 2007.
  In addition, the Daschle amendment, which was supported by Senator 
Byrd and others, had 20 Democratic cosponsors--and it was essentially 
the same amendment we are offering today--Senators Akaka, Baucus, 
Biden, Bingaman, Boxer, Byrd, Conrad, Dodd, Dorgan, Feingold, Harkin, 
Inouye, Kohl, Lautenberg, Leahy, Levin, Mikulski, Murray, Reid, and 
Rockefeller. All supported the Daschle rescission language, which is 
essentially the language we have offered today, especially now that we 
put in language relative to a motion to strike.
  To read a couple quotes that I believe are informative and accurate, 
back in 1995, Senator Feinstein said about the proposal:

       Really, what a line-item veto is all about is deterrence, 
     and that deterrence is aimed at pork barrel [spending]. I 
     sincerely believe that a line-item veto will work.

  Senator Feingold said:

       The line-item veto is about getting rid of those items 
     after the President has them on his desk. I think this will 
     prove to be a useful tool in eliminating some of the things 
     that have happened in the Congress that have been held up 
     really to public ridicule.

  That is the line-item veto they were talking about, a much stronger 
language than this enhanced rescission language.
  Senator Byrd on the Daschle language said:

       The Daschle substitute does not result in any shift of 
     power from the legislative branch to the executive. It is 
     clear cut. It gives the President the opportunity to get a 
     vote . . . So I am 100 percent behind the substitute by Mr. 
     Daschle.

  Senator Dodd said:

       I support the substitute offered by Senator Daschle. I 
     believe it is a reasonable line-item veto alternative. It 
     requires both houses of Congress to vote on the President's 
     rescission list and sets up a fast-track procedure to ensure 
     that a vote occurs in a prompt and timely manner.

  That is an accurate statement as to what it does.
  Then, Senator Levin, in March 1996--all these quotes are from 1995-
96--

       I, for instance, very much favor the version which the 
     Senator from West Virginia has offered, which will be voted 
     upon later this afternoon. That so-called expedited 
     rescission process, it seems to me, is constitutional and is 
     something which we can in good conscience, at least I can in 
     good conscience, support.

  Senator Levin is one of our true constitutional scholars in this 
institution.
  And Senator Biden, in 1996, said:

       Mr. President, I have long supported an experiment with a 
     line-item veto power for the President.

  So he supported the line-item veto. Again, I note that this is 
nowhere near the line-item veto language.
  In fact, this language has been vetted, vetted aggressively, not only 
by Senator Daschle when he offered it back in 1995 but since then with 
a variety of individuals who are constitutional scholars, to make sure 
it settles the issue and does not, in any way, take from the Congress 
the power of the purse, which is the issue that, of course, was raised 
against the line-item veto in Clinton v. The City of New York, which 
struck down the line-item veto on the grounds that it did go too far in 
violating the presentment clause. This language does not do that 
because it retains to the Senate and to the House absolute authority 
over spending. It simply asks them, through the Executive, to take a 
second look at an item that might otherwise--and, in fact, for all 
practical purposes--never get a clear vote. It was something that was 
buried in some larger bill. Because we have retained the right to 
strike, we have even gone further by saying that the entire package 
which the President sends up, assuming he sent up more than one item to 
rescind, would be subject to a right to strike.
  So the Congress has the ability to pick and choose in its second-look 
process as to what it thinks makes sense and what it doesn't think 
makes sense. There is probably going to be a lot of stuff sent up that 
the Congress agrees with, because some things happen in these major 
bills where items get in that people don't notice, and certainly a 
majority of the Congress feels, if they took another look at it, they 
would not be inclined to support.
  Equally important is the restriction on the President, which is 
different from the Daschle-Byrd amendment, which is that we only allow 
him to do this four times. That is important. I am willing to go back 
from four and maybe take it back further. Senator Lott came to the 
floor and said he didn't like the idea of four. If we get this thing 
moving along, I am willing to take a look at less rescission packages. 
But the President, under the original Daschle amendment in 1995, had 13 
shots at the apple because he could do it on each appropriations bill. 
At that time, we had 13 appropriations bills; now we have 12. But 
today, under this amendment, he will only have four chances to package 
ideas, initiatives he thinks were inappropriately buried in some bill, 
send them back up and say: Take another look at this. I have to get 51 
votes to support taking out this item.
  What is the purpose of all this? That is the technical purpose in 
describing it, but what is the real purpose of all this? The real 
purpose is to get to the issue of managing the Federal purse. Congress 
has the right to the Federal purse. That is the most important power 
Congress has. I have listened to the explanation of the Senator from 
West Virginia on this for many years, and he says it more eloquently 
than anyone else. Everyone has to agree with his position. The power of 
the purse is the power of the legislative branch. But this is about 
managing that power. This is about when a bill comes roaring through 
that has $300 or $400, $500 billion of initiative in it, called an 
omnibus bill usually, and you have to pass it because the Government 
closes if you don't. This is about saying: All right, there is going to 
be a process where we can take another look at some specific items in 
that bill without giving up to the Executive power which the Executive 
should not have, which is the capacity to line item something and force 
us into a supermajority.
  That is what this is about. That is why I presume Senator Daschle 
offered it back in 1995, and that is why I offer it today. In the end, 
it is going to give us better discipline over our own fiscal house. It 
is going to make us better stewards of the taxpayers' dollars. We will 
be able to say to the taxpayer: Yes, that bill may have been a $500 
billion bill. Maybe there were some things in there that we shouldn't 
have done. We are going take a second look at it to make sure those 
things were not wasteful. We are going to pass the bill because we need 
to pass the bill to keep the Government going, but we will have a 
chance to take a second look. It is just good management, without 
giving up the authority of the legislative branch, in my humble 
opinion.
  I hope that Members who take a look at this will consider it 
carefully. I know it has been caught up in the dialog of politics. I 
regret that. I regret that last week it got caught up and was 
represented by some as being an attempt to poison the lobbying bill.
  That was never my intention. I didn't even think of that, quite 
honestly, when I offered this amendment. I didn't know it was going to 
be so controversial. I thought I would just get a vote.

[[Page 1794]]

That was not my intention, and I don't think it was anybody's intention 
on our side. It got caught up in the broader fight of what we do 
sometimes around here. We let process overwhelm substance. It got 
characterized by the talking head community out there as both a 
legislative attempt to kill the lobbying bill and a legislative attempt 
to show the power of the minority. It wasn't any of that. It was simply 
an attempt by me to bring forward what I thought was good legislation 
which would be constructive to our process of fiscal discipline, which 
happens to be one of my high priorities.
  Now it is on the minimum wage bill. I greatly appreciate the Senator 
from Nevada and especially the Senator from Massachusetts and the 
Senator from Wyoming, who have to manage this bill, being courteous 
enough to allow their bill to already have an amendment on it that 
maybe isn't immediately related to their bill. This, however, was not 
my choice. I would have preferred to have it on the lobbying bill, 
which it was immediately related to. That was an earmark bill. That had 
a lot to do with earmarks. This has a lot to do with earmarks. But 
nobody can argue that this is the wrong vehicle because I didn't choose 
this vehicle. This vehicle was chosen for me. That is why we are doing 
it here.
  When we get to the motion on cloture, I hope people will vote for it 
on its merits and will not vote for it on some procedural argument, 
such as this is the wrong vehicle. Because I think people are sort of 
estopped, to use one of our legal phrases--I remember that phrase from 
law school--from claiming that this is the wrong vehicle. Because as a 
practical matter, I was told to put it on this vehicle. I didn't choose 
it. I was told. I am trying to be helpful. So that is why it is here.
  That is the presentation in brief. There will be more discussion as 
we move down the road. I look forward to hearing from everyone. I hope 
people will take a hard look at the actual substance of the amendment. 
Substantively, it is not a line-item veto. It is essentially the 
``daughter of Daschle,'' for lack of a better term. I would hope that 
we would consider it on its merits as such. It will give us a chance to 
govern better and to handle the purse, which we are charged with by our 
constituents, more frugally and efficiently.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. BYRD. I thank the Chair.
  Mr. President, may I ask the Chair, there is no time limitation on 
speeches at this point, is there?
  The PRESIDING OFFICER. There is no time limit in effect.
  Mr. BYRD. Mr. President, the very able and distinguished Senator from 
Kansas wants to speak for 5 minutes or more. I ask unanimous consent 
that I may yield to the distinguished Senator for 5 minutes or 6 or 7 
minutes or whatever he wants at this time, without losing my right to 
the floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BYRD. Mr. President, how much time does the Senator want?
  Mr. ROBERTS. Mr. President, I believe I can get my remarks done in 5 
or 6 minutes.
  Mr. BYRD. The Senator doesn't have to be in a great hurry. I know the 
Senator is reasonable and he will take such time as he may desire and 
it is not going to be too much. I yield to the Senator for that purpose 
without losing my right to the floor.
  The PRESIDING OFFICER. The Senator from Kansas is recognized.


                       Western Kansas Snowstorms

  Mr. ROBERTS. Mr. President, I am going to address a decision that has 
just been announced by FEMA regarding emergency assistance to the 
citizens of my State of Kansas.
  I rise today to thank all those who have aided thousands and 
thousands of Kansans stranded by snow and ice over the course of the 
past few weeks. I want to give them some much needed good news.
  First, let us remember the situation. Late last month, a large winter 
storm spread over 30 inches of very heavy snow and up to 3 inches of 
ice on top of that over much of my State. Fifteen-foot drifts were very 
common in western Kansas. At the time, 65,000 Kansans were without 
power. Snow blocked all major roadways, and many impacted Kansans, many 
people in small communities, were able to survive only because their 
friends and neighbors pitched in to help each other.
  I came to the Chamber in the aftermath of the storm with charts 
showing the damage--11,000 utility poles down, transmission lines 
down--and some very pertinent charts in regard to stranded livestock. I 
was worried about the state of assistance in our country out on the 
High Plains. Many financial and economic livelihoods were in danger. In 
Kansas, farmers remained unable to reach their herds of cattle and keep 
them fed and watered.
  Quite frankly, I was a little worried about the Federal response. I 
know when we have disasters, FEMA responds as best they possibly can. 
We have heard a lot about Katrina and forest fires and floods and other 
situations, but here we had a record disaster in regard to a blizzard 
and ice in communities that were isolated. I was a little concerned 
about it. In the midst of this record destruction, let me say that the 
National Guard, the Department of Transportation, local emergency 
responders, nonprofit organizations, and regional FEMA representatives 
really stepped to the plate. Frankly, the swift and selfless response 
of so many has been almost overwhelming.
  Almost immediately, in the wake of this storm, our Governor, Kathleen 
Sebelius, declared a state of emergency, and we all got to work. The 
National Guard, at the direction of GEN Tod Bunting, sprung to action, 
and they delivered bales of hay and generators to those with stranded 
cattle and also aided in emergency services with helicopters and any 
other equipment that would work under the circumstances.
  The Red Cross, the Salvation Army, and the Association of General 
Contractors from the private sector also proved vital in providing 
Kansans simply a place to stay warm. I must particularly thank the 
State's emergency management officials, working with the regional FEMA 
office, for the countless hours they worked to expedite the requests 
for public assistance.
  FEMA workers get a lot of brickbat when things get very tough and 
complicated and difficult. This time, they certainly deserve a great 
deal of credit. Over the course of the past few weeks, local 
governments and certain nonprofits serving Kansans needed their Federal 
Government desperately, and the cry for help was answered. But the best 
news came a few moments ago when I received a call from the FEMA office 
here in Washington. I received notice that all remaining categories of 
public assistance have been approved for the State of Kansas. This is 
the news we have been waiting for. This gives the State reimbursement 
for a large portion of the $360 million in damage that has been 
documented to date. It includes such vital assistance for public 
buildings and utility and road repair.
  Mr. President, we believe in self-help in Kansas, and most of the 
time we can handle our own problems. But in working through this 
disaster, we desperately needed Federal help. Federal help came, and 
Federal help came in record time, and it came because of the 
cooperation of local and State and national organizations--primarily 
FEMA--and it was a situation where everybody worked together and got 
the job done.
  On this particular occasion, let me say thank you to all of those 
people who worked so hard and all of the people in Kansas whom I am so 
proud to represent. I look forward to the receipt of this assistance 
and the continued support that our communities in Kansas have seen from 
all levels of government.
  I yield the floor, and I yield my time back to the Senator from West 
Virginia. I thank him for allowing me to make this statement.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that at the 
conclusion of the remarks of the Senator

[[Page 1795]]

from West Virginia, the Senator from North Dakota, Mr. Conrad, be 
recognized for 15 minutes, and then after Senator Conrad, I be 
recognized, and after I am recognized, the Senator from Wyoming be 
recognized.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from West Virginia is recognized.
  Mr. BYRD. Mr. President, I very much admire the able Senator from New 
Hampshire. I like him. As Shakespeare said, ``He's a man after my own 
kidney.'' That about says it all, I guess. That is the way I feel about 
the Senator from New Hampshire. He and I served together in the last 
Congress as chairman and ranking member, respectively, of the Senate 
Appropriations Homeland Security Subcommittee. I also have the pleasure 
of serving with him on the Senate Budget Committee, where he has been 
chairman--and I mean chairman--and is now the ranking member.
  The Senator from New Hampshire is one of the finest, one of the 
brightest, one of the most illustrious Senators serving today. I want 
Senators to know--and, of course, the Congressional Record will 
reflect--that as much as I oppose the line-item veto--and that is 
saying a mouthful--I very much respect the Senator from New Hampshire 
who has attached his name to it.
  In his remarks last week on his line-item veto amendment, the very 
able Senator from New Hampshire, Mr. Gregg, noted that this is not a 
new issue before the Senate. He correctly noted that the Senate passed 
a line-item veto measure in 1996, which was later nullified by the U.S. 
Supreme Court--the highest court of the land--in 1998.
  It is appropriate, very appropriate, that Senators know something 
about the history of this issue, particularly those Senators who were 
not here when the Senate last considered this piece of garbage called 
the line-item veto. I can say plenty about this line-item veto. I call 
it garbage. I can call it worst things than that, but I won't right 
now.
  Senators will recall, I believe, that the House of Representatives in 
the early 1990s passed a series of legislative line-item vetoes, or 
expedited rescissions, like the one now before this body. Because of 
constitutional concerns and a lack of support, none of those bills ever 
passed the Senate.
  Senators will recall that in the summer of 1993, I delivered 14 
speeches--I mean, they were cracker jacks, and, man, that is not the 
end of the line, either--later published as ``The Senate of the Roman 
Republic.'' They were addresses on the history of Roman 
constitutionalism on this very topic. Senators will recall that when 
the 104th Congress passed the Line-Item Veto Act of 1996, I was one of 
the most outspoken opponents.
  I argued against giving any President--any President, any President, 
even a Democratic President; that makes no difference, even a 
Democratic President--a line-item veto or a or so-called enhanced 
rescission authority.
  Senators will recall that after President Clinton signed into law the 
Line-Item Veto Act of 1996 I, Robert C. Byrd, a Senator from the State 
of West Virginia, joined with Senator Carl Levin and the late, God 
bless his name, Daniel Patrick Moynihan--oh, were he here today--in 
bringing suit--get that--in bringing suit in Federal court against the 
Director of the Office of Management and Budget, then Franklin Raines, 
arguing that the act unconstitutionally authorized the President to 
cancel certain spending and revenue measures without observing the 
procedures outlined in the presentment clause of article I, section 7.
  That suit, Raines v. Byrd, was dismissed by the U.S. Supreme Court 
for lack of standing, but the arguments, I say, but the arguments were 
later validated in 1998, when the Court nullified the Line-Item Veto 
Act in Clinton v. City of New York.
  Now, I am no stranger to this issue. I am no stranger to this issue. 
I have served with the eight Democratic and Republican Presidents since 
Harry Truman who have asked for line-item veto authority. And I have 
watched, as the Senate has said ``no,'' n-o, no--the hardest word in 
the English language to say--I watched as the Senate has said ``no'' to 
all but one. And where the Senate erred in yielding to a President's 
request for such power, I was there when the Supreme Court nullified 
the Senate's actions. I was there.
  The first question ever asked was asked of Adam. The first question 
ever asked--I hope the Chair is listening closely, my friend in the 
chair--in all of the centuries of the human race, the first question 
ever asked was: Adam, where art thou? I won't go into the time and 
place where that was asked. Everybody ought to know it. Adam, where art 
thou?
  Well, where was Robert C. Byrd when the Supreme Court nullified the 
Senate's actions? I was there when the Supreme Court nullified the 
Senate's actions.
  I do not speak lightly about this subject--hear me now, if you want 
to take me on, on this question--and to refer Shakespeare:

       And damned be him that first cries, ``Hold, enough!''

  I do not say it is a proposal that stands in stark defiance of the 
Constitution without many decades of congressional experience and a 
deep, deep reverence for the Constitution of the United States, and 
when I speak about line-item veto today, and in the coming days, if 
necessary, I speak to all Senators of both parties about the oaths we 
swear and particularly the one we take upon entry into this office.
  We take an oath before God and man to support and defend the 
Constitution of the United States of America.
  I speak today on a subject that broaches the most serious of 
constitutional questions. Now pending before the Senate is a 
legislative line-item veto proposal offered as an amendment by Senator 
Gregg and others to the minimum wage bill. The amendment would alter by 
statute the constitutional role of the President of the United States 
in the legislative process. The President does have a role in the 
legislative process. The amendment would alter by statute the 
constitutional role of the President in the legislative process. It 
would allow the President to sign a spending bill into law and then to 
strip from that bill any spending items he dislikes. Let me say that 
again.
  I have already said that the amendment would alter by statute the 
constitutional role of the President in the legislative process. It 
would allow the President, one man, to sign a spending bill into law 
and then--get this--strip from that bill any spending items he 
dislikes.
  Through a process known as expedited rescission, the President could 
force an additional vote by the Congress on spending items that do not 
mimic his budget request and impound the funding that he, the President 
of the United States, does not like until the Congress votes again.
  Such a proposal is a lethal, aggrandizement of the Chief Executive's 
role in the legislative process. Lethal, deadly. Such a proposal is a 
lethal aggrandizement of the Chief Executive's role in the legislative 
process. It is a gross, colossal distortion of the congressional power 
of the purse. It is a dangerous, dangerous proposition, a wolf in 
sheep's clothing of fiscal responsibility. Wolf, wolf, wolf, that's 
what it is.
  The Constitution, I say to Senators--hear me out there, my friends in 
West Virginia and throughout the land--the Constitution is explicit and 
precise about the role of the President in the legislative process. The 
President has a role in the legislative process. Read the Constitution, 
article I, section 7. Here is what it says:

       Every Bill which shall have passed the House of 
     Representatives and the Senate, shall, before it become a 
     Law, be presented to the President of the United States; if 
     he approve he shall sign it, but if not he shall return it, 
     with his Objections. . . .

  The President must act within 10 days, Sundays excepted. And once he, 
the President, has decided to forgo a veto, it is his constitutional 
responsibility under article II to ``take care that the laws be 
faithfully executed.''

[[Page 1796]]

  President George Washington interpreted his responsibility this way, 
and I quote the immortal first President of this land, the Father of 
our Country, the Commander in Chief at Valley Forge, George Washington. 
President George Washington interpreted his responsibility this way: 
``I''--meaning George Washington, the President of the United States--
``must approve all the parts of a bill or reject it in toto''--totally. 
No other way. Take it or leave it.

       I must approve all the parts of a bill, or reject it in 
     toto.

  The Father of our Country was right. It isn't Robert Byrd talking. 
That was George Washington. Now come to Robert Byrd. I continue:
  A legislative line-item veto effectively creates a third option for 
the President of the United States--a third option, talking about the 
line-item veto. It adds a new dimension to executive power, one that is 
not found in the Constitution. Instead of vetoing and returning a whole 
bill to the Congress before it becomes law, under the Gregg amendment, 
under the amendment by my distinguished friend Senator Gregg, the 
President can resubmit only those provisions he opposes, and he can do 
so after a bill becomes law. Did you get that? Instead of vetoing and 
returning a whole bill to the Congress before it becomes law, under the 
Gregg amendment--and I speak with great respect--the President can 
submit only those provisions he opposes and do so after a bill becomes 
law.
  What are we doing here? The President can sign a bill into law and 
then strip it of the provisions that he doesn't like. Let me say that 
again. Are you hearing me? What am I doing? What am I saying here? I 
can't believe it. The President can sign a bill into law and then, 
after he has signed the bill into law, he can strip it of the 
provisions he does not like.
  Have you ever heard of anything so radical? Instead of the President 
weighing in before a bill becomes law, he can ignore the pros and cons 
of debate and wait until well after it has become law. Am I in my 
senses when I read this? Can you believe it? He can literally ignore 
both public opinion and congressional debate and deliberation. He can 
pull out anything he does not like from legislation passed by both 
Houses of Congress--get that, now. This is one man downtown. He may be 
a Republican, he may be a Democrat, he may be a Socialist or whatever--
whatever the people elect down there at the White House in the future. 
He can pull out anything he doesn't like from legislation that has been 
passed by both Houses of Congress and insist on a second run through 
the legislative process.
  The Gregg amendment allows the President to decide what is in a bill 
considered by the Senate or not in a bill after it has become law. It 
would allow the President to decide when the Senate considers a 
spending or revenue item and under what political conditions the Senate 
considers these measures. Such a proposal is a dangerous departure from 
the separation of powers doctrine, which aims to prevent any one branch 
of the Government from seizing both the power to make and to execute a 
law. The separation of powers dividing inherently legislative and 
executive functions between two separate and equal branches is a 
fundamental defense against overzealous and unwise acts by either the 
President of the United States or the Congress of the United States.
  In Federalist No. 51 James Madison writes--this is not Robert C. Byrd 
who wrote it. In Federalist No. 51, James Madison writes:

       But the great security against a gradual concentration of 
     the several powers in the same department consists in giving 
     to those who administer each department the necessary 
     constitutional means and personal motives to resist 
     encroachments of the others . . . Ambition must be made to 
     counteract ambition. . . .

  So by empowering the President to craft legislation, the Congress 
would be ceding the constitutional means of the people to resist 
executive encroachments.
  Let me say that again. By empowering the President of the United 
States to craft legislation, the Congress would be ceding the 
constitutional means of the people to resist executive encroachments. 
For up to 1 year after every bill is passed and signed into law--get 
this--the President could use this power to manipulate Senators--how 
about that--or advance his political agenda. Any President. I am not 
just referring to Mr. Bush. I am starting with him, but I am talking 
about any President, Republican or Democrat. The President could use 
this power that Mr. Gregg's amendment would give to the President--
remember, this isn't the last President, Mr. Bush. There will be 
others. The President could use this power to manipulate Senators or 
advance his political agenda. Under the Gregg amendment, a President 
could punish or reward recalcitrant Members of Congress by targeting or 
sparing their interests under the expedited rescission process.
  Every debate between the Congress and the White House could be 
swayed, influenced, by this new power of the President of the United 
States to influence Senators: You, Mr. Conrad; you, Mr. Byrd; you, Mr. 
and Mrs. or Miss Senator--he can use this power over Senators to 
influence them. What kind of power are we talking about? It would 
subject every Member and the interests of their constituents and States 
to the political capricious and unchecked whims of a Chief Executive.
  You better think about this. You better think about it. The Gregg 
amendment provides the President, any President--Democratic, Republican 
or otherwise--with a mechanism to rewrite legislation after it has 
passed the Congress. Where are we going? Instead of 10 days to act on a 
bill, the Gregg amendment would provide the President with up to 365 
days. Hear me, friends, Romans, countrymen. Friends, Americans, 
countrymen, lend me your ears. Instead of 10 days to act on a bill, the 
Gregg amendment would provide the President with up to 365 days to act 
on a bill. This is a provision that is unconstitutional on its face. I 
don't believe that Senator over there sitting in the chair, in the 
chair to my left, would go along with that. That is Senator Conrad, for 
the record.
  Within 10 days of the Congress submitting a bill to the President, we 
know if it has become the law of the land. Under the Gregg measure, 
nobody--except the President--for up to 1 year after an act is signed 
into law, will know if all of the provisions of a bill will be carried 
into effect. One can imagine the confusion of not knowing, for up to 1 
year, whether all of the provisions of a single bill will become law. 
Imagine what happens if the Congress passes a major legislative package 
such as a Social Security and Medicare reform package, which affects 
the retirement and health care benefits of many millions of people and 
the payroll taxes of many millions more. Imagine the President 
dismantling that package, listen now. Imagine the President dismantling 
that package months after it has been passed by the Congress. Are you 
listening? Hear me. How wise and practical will this line-item veto 
seem then? This line-item veto is an anathema to the Framers' careful 
balancing of powers within the legislative process because it allows 
the President, any President, to aggressively--listen to me, my friends 
on the other side of the aisle; I am not just talking about Mr. Bush or 
Mr. Republican President--allows a President to aggressively impose his 
will on the legislative branch in regard to budgetary matters. I will 
say that once again. This line-item veto is an anathema to the Framers' 
careful balancing of powers within the legislative process because it 
allows a President, any President, to aggressively--and I mean 
aggressively--impose his, the President's, will, be he Republican or 
Democratic, on the legislative branch in regard to budgetary matters.
  This line-item veto amendment goes far--and I mean far--beyond the 
President simply making recommendations to the Congress. It makes the 
President, any President, a lawmaker. It is a complete reversal of the 
legislative process. We do not need to rewrite the Constitution in 
order to legislate. We do not need to defer extraordinary and 
unconstitutional powers to the President, any President, in order to 
ensure

[[Page 1797]]

that Congress uses its power of the purse in an ethical and rational 
and wise manner.
  We should remember that the President has not exercised his existing 
constitutional authorities. The President--this President--has only 
vetoed one authorization bill, and he has never, never vetoed a 
spending or revenue bill. The President has not submitted a single 
rescission proposal as currently allowed under the Budget Act. Rather 
than dealing with the President's failed budget choices, the suggestion 
here today is that enlarging the President's power in the budget 
process will somehow magically--somehow magically--reduce these 
foreboding and menacing deficits. It will not. The suggestion here 
today is that handing the power to make laws to the President will 
somehow improve the quality of congressional budget decisions. This 
suggestion is without foundation. This nefarious line-item veto will 
only further politicize and degrade a process which is already too much 
of a political football.
  Senators--Senator Byrd being one--take an oath--yes, an oath before 
God. The ancient Romans felt that an oath was sacred. They would give 
their lives--I won't go into Roman history at this point--they would 
give their lives to preserve an oath. Senators take an oath to preserve 
and protect the Constitution. A lack of understanding about the reasons 
for entrusting the purse strings to the hands of the Congress, and the 
unwise tax and spending decisions of this administration, must never, 
never be allowed to propel such an unconstitutional and dangerous as 
the legislative line-item veto.
  I tell you, ladies and gentlemen, I will stand here until my bones 
crumble under me, until I have no further breath, if necessary, to let 
such a proposal become law. Why would we ever want to hand more power 
to a President who has already grabbed far too much power--any 
President? Why would we ever want to bargain away our most important 
tool for protecting the liberties of the people or for derailing a 
disastrous war? Why would we ever want to fall for this legislative 
pig-in-a-poke that could cripple this body, the Congress of the United 
States?
  So I urge Senators to listen. This isn't the last word by any means 
that I could have, let alone many other Senators here. Resist this 
assault on the Constitution and the Congress. I urge Senators--yes, I 
urge Senators--Senators--there is no greater name under the 
Constitution. Who was that great Roman Emperor who said, when he was 
about to become the Emperor ``I still revere the name of Senator.'' 
That is 476, I believe, A.D. It was Majorian, I believe, who said, ``I 
still revere the name of Senator.'' Senator. Did you hear that?
  I urge Senators to resist this assault. I am talking about a line-
item veto now. You ain't heard nothing yet. I urge Senators to resist 
this assault on the Congress and on the Constitution of the United 
States and on the people, the people of the United States.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. Mr. President, I hope colleagues have been listening to 
the Senator from West Virginia, Mr. Byrd. He is a wise man. He is an 
experienced man. And what he has been warning this body about this 
amendment is the truth. This is a dangerous amendment. It is offered by 
somebody with whom I work closely. Senator Gregg is the former chairman 
of the Budget Committee. As the incoming chairman of the Budget 
Committee, we work together virtually every day. I respect him. I like 
him. But I believe this amendment is profoundly dangerous.
  It is suggested that this amendment will help deal with our budget 
shortfall. It will not. Virtually everyone who has examined it will say 
it makes virtually no difference with respect to our deficits and debt. 
What it will do, without question, is transfer power to the President 
of the United States. Senator Byrd has made it clear that it is not a 
question of this President; it is a question of any President. Make no 
mistake, I believe this measure and any measure like it is 
unconstitutional.
  The Founding Fathers had great wisdom. They did not want to repeat 
the abuses of the King, so they wanted the spending to be in the hands 
of the bodies closest to the people--the House of Representatives and 
the U.S. Senate. They did not want any individual, any President, to 
have the power of the purse because they recognized the inherent 
dangers in concentrating power in the hands of one person.
  Anybody who has any doubt about how this would be used--perhaps by 
this President but certainly by some President--only needs to reflect 
on what has happened in the past when people had this kind of unchecked 
power. I was told by a colleague of ours who served in a State 
legislature about a situation where the Governor had this kind of 
power. She got legislation passed that was very important to her. She 
was called to the Governor's office, and the Governor had her 
legislation on one side of his desk and a bill he wanted on the other 
side of his desk. He told her: You know, I am probably going to have to 
line-item veto your legislation. But I have this bill which is 
important to me, and if you could see your way clear on that, I might 
be able to help you on your legislation.
  Anyone who doubts this President or a future President would use that 
power on Members of this body ought to think again.
  The problems with this line-item veto proposal--and we know line-item 
veto proposals in the past have been declared unconstitutional by the 
Supreme Court. I believe this measure would be declared 
unconstitutional, but we shouldn't abdicate our responsibility. We 
shouldn't wait for the Supreme Court to make a judgment. We should make 
this judgment. This line-item veto proposal represents an abdication of 
congressional responsibility. It shifts too much power to the executive 
branch, and with very little impact on the deficit. It provides a 
President up to 1 year to submit rescission requests. It requires 
Congress to vote within 10 days. It provides no opportunity to 
filibuster proposed rescissions. And it allows a President to cancel 
new mandatory spending proposals passed by Congress, such as those 
dealing with Social Security, Medicare, veterans, and agriculture. 
Colleagues, that is an extraordinary grant of power to any President. 
Just with this final piece on mandatory spending, we know we have big 
problems in the future with Medicare and Social Security. We might 
labor for months to come to an agreement with the President on the 
future of those programs, and then under this amendment, after the 
difficult compromises had been reached, this President or a future 
President could go back and cherry-pick the provisions he or she did 
not like. I hope colleagues are listening. That is truly an 
extraordinary grant of power to this President or any President.
  Here is what USA Today said last year in reference to line-item veto. 
They called it a convenient distraction.

       The vast bulk of the deficit is not the result of self-
     aggrandizing line items, infuriating as they are. The deficit 
     is primarily caused by unwillingness to make hard choices on 
     benefit programs or to levy the taxes to pay for the true 
     cost of government.

  A convenient distraction.
  This is what the Roanoke Times said last year with respect to this or 
a similar proposal:

       The President already has the only tool he needs: the veto. 
     That Bush has declined to challenge Congress in five-plus 
     years is his choice. The White House no doubt sees reviving 
     this debate as a means of distracting people from the 
     missteps, miscalculations, mistruths, and mistakes that have 
     dogged Bush and sent his approval rating south.
       The current problems are not systemic; they are 
     ideological. A [line-item] veto will not magically grant 
     lawmakers and the President fiscal discipline and economic 
     sense.

  Here is what the former Acting CBO Director, Mr. Marron, said in 
testimony before the House last year about line-item veto:

       Such tools, however, cannot establish fiscal discipline 
     unless there is a political consensus to do so . . . In the 
     absence of that consensus, the proposed changes to the 
     rescission process . . . are unlikely to greatly affect the 
     budget's bottom line.

  The proponent of this amendment said this last year:


[[Page 1798]]

       Passage of the [line-item veto] legislation would be a 
     ``political victory'' that would not address long-term 
     problems posed by growing entitlement programs.

  This is the statement of the author of this amendment last year.
  He went on to say further:

       It would have ``very little impact'' on the budget deficit.

  He was telling the truth.
  Here is what a conservative columnist said about the line-item veto 
proposal, George Will.

       It would aggravate an imbalance in our constitutional 
     system that has been growing for seven decades: The expansion 
     of executive power at the expense of the legislature.

  I hope colleagues are listening. I truly believe this is a dangerous 
amendment.
  A scholar at the American Enterprise Institute went even further and 
called the proposal ``shameful.'' This is what he said:

       The larger reality is that this [line-item] veto proposal 
     gives the President a great additional mischief-making 
     capability, to pluck out items to punish lawmakers he doesn't 
     like, or to threaten individual lawmakers to get votes on 
     other things, without having any noticeable impact on budget 
     growth or restraint.

  I hope colleagues are listening. We are going to have a change in 
President in 2 years. This amendment might live forever and 
fundamentally erode the basic concept of a House and a Senate and the 
division of powers between the legislative branch and the executive 
branch.
  Mr. Ornstein, from the American Enterprise Institute, went on to say:

       More broadly, it simply shows the lack of institutional 
     integrity and patriotism by the majority in Congress. They 
     have lots of ways to put the responsibility of budget 
     restraint where it belongs--on themselves. Instead, they 
     willingly, even eagerly, try to turn their most basic power 
     over to the President. Shameful, just shameful.

  That was last year.
  Senator Gregg has indicated his proposal closely tracks the proposal 
of our colleague, Senator Daschle, from 1995. It does not. There are 
significant differences.
  Can the President propose to rescind a few mandatory items, such as 
Social Security and Medicare reforms? The Gregg proposal, yes; Senator 
Daschle, no. That is a profound difference. Mandatory proposals would 
be subject to the President's line-item veto under the Gregg amendment, 
not under the Daschle amendment. That proposal alone is enough to lead 
anyone who supported the Daschle proposal to oppose this one.
  Second, can the President propose rescissions from multiple bills in 
one rescissions package? Under the Gregg measure, yes; under the 
Daschle proposal, no.
  What difference does that make? Let me give an example. Remember the 
bridge to nowhere? That was something that people responded to, 
depending on its merits. A lot of people thought it was a waste of 
money. The President could couple that measure, which many would have 
supported in terms of elimination, with something that was less well-
known that really had merit. Under the Gregg proposal, you could 
jackpot unpopular things with popular things and get them eliminated, 
giving the President an extraordinary power to leverage individual 
Members of Congress to get votes from them on completely unrelated 
matters.
  For example, maybe the President puts up a controversial judge and 
then uses this power to leverage a Senator to vote for a judge that he 
might not otherwise support in exchange for allowing that Senator's 
spending proposal to go forward. That is a dangerous power.
  Finally, how long does the President have to propose rescissions? 
Under the Daschle proposal, 20 days, or in the next budget; under the 
Gregg proposal, 1 year.
  I truly believe this is an extraordinarily dangerous amendment. It is 
dangerous to the balance of powers between the executive branch and the 
legislative branch of Government. It is an extraordinary granting of 
power to a President. Remember, the next President might be of a 
different party. I would make this same speech if a Democrat were 
advancing it. I would make this same speech if a Democrat were the 
President of the United States.
  This is a dangerous amendment. It will do virtually nothing about our 
deficit, but it will transfer power to a President who already has too 
much power.
  I hope my colleagues pay very close attention to this debate. I hope 
they reject the Gregg amendment.
  I thank the chairman and ranking member for their extraordinary 
courtesy today to allow this discussion to go forward before they have 
even given their opening remarks. That is truly extraordinary in terms 
of their graciousness. And we appreciate Senator Kennedy and Senator 
Enzi.
  Mr. BYRD. Will the Senator yield?
  Mr. CONRAD. Yes.
  Mr. BYRD. Let me thank him for this magnificent speech. Let me thank 
Senator Kennedy and Senator Enzi for their remarkable patience and 
their consideration always. I thank the distinguished Senator for this 
magnificent speech.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, what is the business now before the 
Senate?
  The PRESIDING OFFICER. Amendment No. 101, the McConnell for Gregg 
amendment to the Reid substitute to H.R. 2.
  Mr. KENNEDY. The Reid substitute effectively is the increase in the 
minimum wage; am I correct?
  The PRESIDING OFFICER (Mr. Durbin). That is correct.
  Mr. KENNEDY. Mr. President, I say to the Senator from West Virginia 
and to the Senator from North Dakota as well as the Senator from New 
Hampshire, this has been an enormously important 2 hours in terms of 
the discussion and debate about the proposal of the Senator from New 
Hampshire. Over this period of time I am very hopeful our colleagues 
paid close attention to this debate because it is an extremely 
important issue that stretches the whole question of constitutional 
powers, the relationship between the Executive and the Congress.
  We have had these individuals speak to this issue. They are 
knowledgeable, thoughtful colleagues who have spent a good deal of time 
on this matter.
  It is of enormous consequence, the outcome of this proposal. I am 
enormously appreciative particularly of Senator Byrd and Senator Conrad 
for the excellence of their presentation and for the extremely 
convincing arguments they have made. The power of their arguments I 
find enormously compelling, and I hope our colleagues will consider it 
favorably as they make up their minds when we vote on this issue on 
Wednesday, the day after tomorrow.
  This has been an extremely important debate. I am grateful to those 
who have participated in it. I thank, in particular, again, the Senator 
from West Virginia who is constant in his commitment and protection of 
the Constitution and the protection of the Senate as our Founding 
Fathers saw it and believed in it and chartered it in the Constitution. 
We are extremely grateful for this debate and discussion. I personally 
thank the Senator from West Virginia for bringing such clarity and 
recall of historical importance to this debate and discussion over the 
period of the last 2 hours. We are very grateful to him as we always 
are when he talks about the role of the Senate and also about the 
division of powers under the Constitution. We thank the Senator.
  Mr. BYRD. Will the Senator yield?
  Mr. KENNEDY. I am happy to yield.
  Mr. BYRD. Mr. President, I thank the very able and highly respected 
Senator from Massachusetts, my favorite Senator of this age, for what 
he has said.
  I thank the distinguished Senator from North Dakota for his 
remarkable statement. It will be in the Record for 1,000 years. There 
is nothing I could say to embellish it, to add to it, to subtract from 
it, or to comment on except to say it is one of the great speeches I 
have heard in this Senate. And I have heard a lot. I have been here a 
long time. Next year will be my 50th year. The Senator from North 
Dakota is a leader among men, a leader among Senators. I commend him. I 
thank him.

[[Page 1799]]

  I thank all Senators, and I thank the Chair.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, we now bring the focus and attention of 
the Senate on an issue of enormous importance and consequence to 
working families in this country. Americans understand the issues of 
fairness. They understand the importance of work. Americans have 
believed, for a long period of time, if you work hard and play by the 
rules, you should not have to live in poverty in the United States of 
America. They have supported, Republicans and Democrats alike, a fair 
minimum wage over the period of the last 70 years. Republicans and 
Democrats alike have supported that concept, which is basic and 
fundamental in terms of a free society and a free economy. That is the 
issue we are going to address today because over the period of these 
last 10 years, we have had intense opposition from Republican 
leadership over an increase in the minimum wage.
  Now, with the change of leadership in the House of Representatives 
and the Senate of the United States, our Democratic colleagues, with 
Speaker Pelosi, and now with Senator Reid, have put this issue of 
fairness before the Senate as a priority issue.
  We welcome the opportunity to address it. It is one that is easily 
comprehensible, and it should not take a long time to debate. There are 
still those in this body who oppose it, and we expect to have 
amendments to try to undermine this very simple and fundamental concept 
of saying to those individuals who are at the bottom rung of the 
economic ladder: If you work hard and play by the rules 40 hours a week 
in the United States of America, you ought to at least be able to have 
a wage so you are not going to continue to live in poverty. We are also 
trying to say, if you have a minimum wage job, that should not condemn 
you to a life in poverty.
  Now, let me go back over what this minimum wage is all about and give 
some sense about who is affected by the minimum wage and what has 
happened to it in recent times.
  This chart reflects where the minimum wage has been in terms of its 
purchasing power from 1960 to 2005. If you look at where we are, as of 
2005, you see a steady decrease in the purchasing power of the minimum 
wage worker, who today earns $5.15 an hour. If you look back, again, in 
terms of the purchasing power of the minimum wage worker in the 1960s, 
it was about $7 an hour. It was close to $9 in 1967, 1968. And then it 
went along, and still the purchasing power was about $7 an hour. Then 
we saw the gradual decline through the 1980s. In spite of our efforts 
to get President Reagan to increase the minimum wage, we were unable to 
do so.
  Then, we had two times where we got a very modest increase in the 
minimum wage, in 1991 and then again in 1997. But we have not seen an 
increase in the minimum wage in the last 10 years, and we have seen the 
purchasing power of the minimum wage worker reach perhaps its all-time 
low at the present time.
  This red line on the chart indicates, with the passage of the 
increase in the minimum wage over a 2-year period, bringing it to 
$7.25, it would still be below the purchasing power of the 20 years 
between 1960 and 1980, but at least it would give increasing hope to 
millions of Americans who are working at the minimum wage.
  This issue of the minimum wage is a women's issue because so many of 
those who receive the minimum wage are women. So it is a women's issue. 
So many of those women have children, so it is a children's issue and a 
women's issue. It is a family issue because how that family is going to 
live, depending upon where the minimum wage is, how that child is going 
to be brought up, is going to depend on what that parent is able to 
provide for that child.
  So it is a women's issue. It is a children's issue. It is a civil 
rights issue because so many of those who enter the job market, who 
enter it at the minimum wage, are men and women of color. So it is a 
civil rights issue, a children's issue, a women's issue, and, most of 
all, a fairness issue. That is something the American people can 
understand.
  This chart shows what has happened to productivity in the United 
States. Generally speaking, if you look back over the years of 1960, 
1965, 1970, 1975, we see that the minimum wage related to the increase 
in productivity. As workers became more productive, an important part 
of that increased productivity was passed on to the workers themselves, 
as it should be in a fair society.
  But what we see at the present time is that the productivity has 
increased 165 percent over the period of the last 45 years, and the 
minimum wage, in terms of the total purchasing power over that period 
of time, has actually gone down. The minimum wage has not only not kept 
up with productivity, it has even fallen further behind. Productivity 
was always the issue to be judged when we had debates on the minimum 
wage years ago that asked: What has happened to the increase in 
productivity? We can justify an increase in the minimum wage in terms 
of wages if they produce more. We have seen a dramatic increase in 
productivity but virtually no increase and a decline in the purchasing 
power of minimum wage workers.
  Here we see the real minimum wage decline: Twenty percent in the 10 
years of Republican opposition. The value of it in 1997, $13,448; in 
2007, $10,700--$6,000 below the poverty level for a family of three.
  And this chart shows the Federal poverty level in this country in 
1960, 1965, 1970, 1975, all the way through 1980. For 20 years, this 
country said: OK, we will have a minimum wage, and we will keep it at 
least at the poverty level so individuals will not fall behind. If they 
work hard and play by the rules, they at least will not have to live in 
poverty. As this chart shows, we see now it is $6,000 below the poverty 
level for a family of three who is earning the minimum wage.
  Since 1980, we have only had two increases in the minimum wage. Now, 
in the last 10 years, we have had none. That is the issue. Having to 
take the time to try to go through this and explain why we need an 
increase in the minimum wage, and why we are going to hear from the 
other side, those who are in opposition to it, is extraordinary to me 
with these figures.
  Look what has happened. If we try to measure poverty in the Bush 
economy between 2000 and 2005, there are 5.4 million more people living 
in poverty today than in the year 2000, largely because of the failure 
of the Congress to increase the minimum wage. These are the figures. 
These are the statistics. They do not talk about real lives, how these 
people struggle. They do not tell about the lost dreams of these 
families. They do not talk about the shattered conditions of the 
children who are in these kinds of conditions.
  There are 5\1/2\ million new people who have gone into poverty in the 
United States of America, the strongest economy in the world, basically 
as a result of the failure to increase the minimum wage.
  Look what has happened to children. There are 1.3 million more 
children in poverty today than we had 5 years ago--1.3 million more 
children in poverty today--primarily because of the failure to increase 
the minimum wage.
  Well, we have to ask ourselves: Where are we as a country and a 
nation in terms of child poverty? Look at this chart. Of all the 
industrialized nations of the world, the United States has the highest 
child poverty rate--the highest poverty rate for children in the 
industrialized world. There are the figures. There are the statistics. 
It is not even close, and it is going up.
  While we are having the extraordinary profits on Wall Street, what is 
happening on Main Street? What is happening in the small communities, 
small farms, small towns, and in the major urban areas of this country? 
What is happening to the children of this Nation? There is not a person 
in this Chamber who, in the last 5 days, has not made a speech about 
how our future is about our children. Everyone goes out and talks about 
the importance of our children in our democracy

[[Page 1800]]

and our country. Look what is happening. They talk about it and refuse 
to do something that can make a big difference. That is child poverty.
  When you look at child poverty and look over the figures and 
statistics, there is nothing terribly surprising about this, with a 
national average of 17.6 percent. We see who takes the major burdens, 
the Latinos and African Americans, those women and children of color. 
We are trying to talk about one country and one society, one history, 
and, nonetheless, we see the growing disparity in the increased number 
of families in poverty, the disparity with the increased number of 
children in poverty, and the disparity between the various communities 
in our Nation.
  Is this what this country wants? We are not saying that the total 
answer is the increase in the minimum wage, but it makes a major 
difference. And we can show you, and will show you, why that is so.
  We see the figures now in terms of what has happened in terms of 
statistics. But what does this mean on some of the issues that relate 
to the conditions of our fellow citizens? Let's take the issue of 
hunger. Not many people are talking about the challenges and the 
problems of hunger in our society. This is from the USDA, household 
food security in the United States, pointing out the increasing number 
of families who are on the verge of hunger in our economy has increased 
by 2 million. In the industrialized world, we are No. 1 in child 
poverty, and we see an increasing number of our fellow citizens in 
terms of hunger.
  How does that impact in terms of children? Mr. President, 12.4 
million children are hungry now every single day in the United States 
of America, and that number is growing. We can look at the number of 
children who go to bed hungry at night. This quote is from Lisa Hamler-
Fugitt, who is the executive director of the Ohio Association of Second 
Harvest Foodbanks:

       Thirty-five percent of the people that we serve are 
     children.

  Thirty-five percent are children.

       I see these children, and I think what are we teaching 
     them? That in America, you can work 40 hours a week and still 
     not earn enough to buy food?

  That is what is happening. That is what is happening in the United 
States of America now, today. And we have to spend hours in this body, 
after we have had the adequate pay increases of $30,000 for Members of 
Congress in the last 10 years, and try to convince people to go to a 
$7.25 minimum wage? And we are going to hear opposition to this? This 
is what is happening out across this country.
  So we know what is out there in terms of hunger, how this reflects 
itself, the fact that they are not getting the adequate income, how it 
impacts particular children in our society.
  This reflects, at no surprise to anyone--this is the National Low 
Income Housing Coalition--about how many hours you have to work at the 
minimum wage to be able to afford a two-bedroom apartment. This is for 
an average family of three. These are the hours you have to work in 1 
week. You would have to work 229 hours a week in my State of 
Massachusetts at the minimum wage to be able to afford it; 140 hours a 
week down in Louisiana. Across the country, out in the Southwest, we 
are looking at New Mexico; Arizona, 149 hours a week; Missouri, 119 
hours a week; even Wyoming, 112 hours a week.
  This illustrates pressures on these families, their difficulty to be 
able to provide food for their children, let alone providing for their 
housing.
  The increase, this is how it reflects itself. We propose an increase 
in the minimum wage to $7.25. This is what it means. It means 2 years 
of childcare for a minimum wage family. It means full tuition at a 
community college. This is what it could mean to a family. It means a 
year and a half of heat and electricity. We have seen the reductions in 
the fuel assistance programs in the recent times, which has been 
devastating in my part of the country. It means more than a year of 
groceries. It means more than 8 months of rent.
  This might not make a big deal of difference to a lot of people, but 
it makes an enormous amount of difference to these families who are 
earning the minimum wage. This is how it reflects itself: a year of 
groceries, 8 months of rent, a year and a half of heat and electricity, 
tuition at a community college--an opportunity for hope for some of 
these individuals--and also 2 years of childcare, to help with the 
problems in terms of childcare, the difficulty that these families have 
in trying to work for the minimum wage and have someone who is going to 
care and look out for their children. There are heartrending stories to 
that effect.
  This chart reiterates the fact that the great majority, 60, 61 
percent, of those working are women, so it is primarily a women's 
issue. Great numbers of those women have children, so this is a special 
issue for women.
  Here we show that about 1.4 million single parents, most of whom are 
women, would benefit from an increase in the minimum wage. Some will 
say, on the one hand, it doesn't affect all that many people. Then why 
not have an increase in the minimum wage? It doesn't, in terms of the 
percentage increase in the total payroll of this country, it is 
infinitesimal, an increase in the minimum wage. I will come to that in 
a minute. But don't tell me it doesn't make a great deal of difference 
to the over 1 million single parents, most of whom are women, who would 
benefit from an increase in the minimum wage.
  This tells the story of Diana, a single mother of three from Buffalo, 
who works for a childcare center, making the minimum wage. She has to 
rely on food stamps and Medicaid to provide for her family. Increasing 
the minimum wage will allow her to ``decrease her reliance on 
government subsidies and . . . pursue her dream of self-sufficiency and 
a better life for herself and her family.''
  It is interesting, the fact that if we do not increase the minimum 
wage, we are effectively subsidizing many businesses. Because these 
families are eligible for food stamps or maybe some could get some fuel 
assistance, other kinds of support services, who do you think is paying 
for those programs? Working families. So you get a decent minimum wage 
out there, and it reduces the pressure on those programs. That means 
less pressure on our working families who are going to have to pay in.
  The increase in the minimum wage will benefit more than 6 million 
children whose parents will receive a raise. Six million children in 
this country will benefit because of the increase in the minimum wage. 
It is a children's issue, a women's issue. This is what this is about.
  What happens when children are living a better quality life? Look at 
this chart: Better attendance, concentration and performance at school, 
higher test scores and graduation rates. We are going to be debating No 
Child Left Behind. We are going to be wondering how we can make a 
difference in terms of children in our schools. There are a number of 
things that can make a difference to the children: a qualified teacher, 
classrooms where children can learn, supplementary services, parental 
involvement. A number of things can make a difference to the children. 
But one thing we know for sure: If the children can't see the 
blackboard, if they need glasses, or they can't hear a teacher because 
they need some kind of help, we tried to do this with the CHIP program 
to help them. In the CHIP program, it is not required, but a lot of 
States do provide those. But if the child is going to be hungry, the 
child is not going to pay attention. We have all kinds of examples for 
that. We will mention that at another time.
  But 6.4 million children will benefit from an increase in the minimum 
wage: better concentration, performance at school, higher test scores, 
higher graduation rates, stronger immune systems, better health, fewer 
expensive hospital visits, fewer run-ins in the juvenile justice 
system--investing in the children. Again, 6.4 million will benefit from 
an increase in the minimum wage, and this will be part of the benefits 
that will come from those increases.

[[Page 1801]]

  We have seen a higher minimum wage improves children's futures. For 
families living in poverty, a $400 increase in family income will 
dramatically increase children's test scores. This is from the 
Institute of Research on Poverty, on reading and math. This shows the 
difference in terms of the test scores. Children who are going to be 
fed, children who are going to have the kind of support do better in 
schools.
  We mentioned earlier the problems of poverty falling 
disproportionately on those individuals of color. This chart shows that 
individuals of color benefit from the higher minimum wage. People of 
color make up 36 percent of all minimum wage workers. If we are able to 
get an increase in that, it will obviously benefit them.
  We talked about children for a time and the impact it has on 
children. I will spend a few minutes talking about the number of 
elderly struggling with the problems of poverty. The number of elderly 
struggling will increase dramatically over the next several years. The 
best estimate--and this is by the Nation's poor, near-poor older 
population; it is a very important and significant study--shows the 
number of elderly who are going to live in poverty, increasing some 41 
percent over the period of the next years. And we can understand that 
because we see the decline in wages according to age. This chart shows 
declining wages for men as well as women, all set in motion, again, by 
the issue about where they are going to start off on the minimum wage. 
So we are going to have significant increases.
  This is the RAND study in terms of our seniors who are going to be 
living in poverty. They will certainly benefit from this.
  Here is an elderly worker, Peggy Fraley, a 60-year-old grandmother 
from Wichita, KS, who works as a receptionist for $5.15 an hour. She 
lives with her daughter, who also earns the minimum wage, and her five 
grandchildren. She says: We can barely make it, but we have each other. 
That is richer sometimes.
  This has a real impact. We have been talking a lot about statistics, 
but it affects people in the most basic and fundamental ways.
  Over the period of these recent years where the Senate has failed to 
act, a number of States have moved ahead. You will see on this chart 
the red States are the States where they have a minimum wage which is 
higher than the Federal. These are red States as well as the blue 
States, with the minimum wage at or below the Federal level. This is 
what has happened in the country over the period of the last 10 years.
  Now let's see, we have pointed out what has been happening in terms 
of children, people living in poverty, children in poverty. High 
minimum wage States, meaning those we have just mentioned here that 
have had some increase in the minimum wage, have lower poverty rates. 
That should not be surprising. It is all true. You can take it right 
across the line. The States that have increased their minimum wage are 
all below the national average in terms of the poverty rate, 12.7 
percent. So this has a real impact. And look at what it has with regard 
to child poverty rates. Remember, I mentioned we are the No. 1 
industrial society with the number of children living in poverty. Look 
what happens in the States where we have actually increased the minimum 
wage. Just about every one of those is below the national average on 
child poverty. Increasing the minimum wage has a real impact in terms 
of child poverty in this country.
  I will show what has happened in some other countries. I will show 
what has happened in other States. Let's see what happened in other 
countries. We always hear, well, if we do this, it is going to be a 
disaster to the economy and, therefore, we can't afford to have that 
because we are going to lose jobs or we will slow down the economy. We 
are going to throw those people out of work we are trying to help. We 
are going to hurt their community and we will hurt their families. 
Right? Wrong.
  Let's look at the two countries which have raised their minimum wage 
the most over the last 5 years. That is Great Britain and Ireland. What 
are the two countries in Europe that have the best economies? Britain 
and Ireland. What are their minimum wages? Great Britain is now $10.57 
an hour. Ireland is $10.80 an hour. And what has been the result? They 
have the strongest economies and the second strongest economy, and 
Britain has brought 2 million children out of poverty. Ireland has 
reduced its number of children who are in poverty by 40 percent. Look 
at this: Child poverty, dramatic increase in the minimum wage. They 
have a strong economy and a dramatic reduction in child poverty. And 
here we have an increase in child poverty, keeping the minimum wage.
  Look at what has happened in terms of Great Britain. They have taken 
2 million children out of poverty, and we have seen 1.4 million 
children go into poverty. Five years ago, Great Britain had the highest 
number of children in poverty of any of the European countries. And 
Tony Blair, to his credit, said: We are going to do something about it, 
and we are going to effectively eliminate child poverty in this decade. 
They are well on the way to doing so, demonstrating what we have said. 
That is, you can make a difference with regard to children. You can 
make a difference in terms of the issues of poverty by increasing the 
minimum wage.
  Now let me take the States. What has happened to the States? You can 
say that is interesting, what has happened in those countries. But 
let's take a look at the States that have had an increase in the 
minimum wage. States with higher minimum wages create more jobs. This 
is from the Fiscal Policy Institute, March 30, 2006, overall employment 
growth from January 1998 to January 2006. In the 11 States with a 
minimum wage higher than $5.15, it has been 9.7 percent. In States with 
the minimum wage at $5.15, it is 7.5 percent. I thought if you raised 
the minimum wage, it was supposed to go down. You weren't supposed to 
grow as fast. And you weren't supposed to have increasing employment. 
But quite clearly, this isn't the fact.
  Let's take the States where they are creating businesses. People say, 
if you raise the minimum wage, we are going to put a lot of businesses 
out of work. Is that right? No, that is wrong, too. Here are the 10 
States with a minimum wage higher than $5.15. States with higher 
minimum wages create more small businesses. Overall growth in the 
number of small businesses, 1998 to 2003, 5.4 percent where you get a 
minimum wage higher than $5.15, and 4.2 percent where they have had 
$5.15--more employment, more growth of businesses. This is the result, 
if you look in other areas as well.
  This is States with higher minimum wages on retail jobs. In States 
with a minimum wage higher than $5.15 an hour, the employment growth is 
10 percent in retail jobs; 3.7 percent where the minimum wage is $5.15.
  We don't expect the NFIB to support this proposal. But what we do 
find is that many employers and small businesses do. Malcolm Davis 
supports raising the minimum wage. This was in the News Observer, a 
newspaper. He is a small business owner, is proud to say:

       My lowest paid employee makes $8 per hour. With only 11 
     employees, things are tight, to say the least. If I can find 
     a way to be fair with my employees in rural eastern North 
     Carolina, why can't our government? Try driving to work and 
     raising a family on the minimum wage.
  This is more typical than not, Mr. President. Look at this. This is a 
Gallup Poll of May 9, 2006. Eighty-six percent of small business owners 
say the minimum wage doesn't affect their businesses. Question: How 
does the minimum wage affect your business? Eighty-six percent say no 
effect. Gallup Poll, 2006. Positive effect, 5; negative effect, 8 
percent.
  Let's look at what has been happening in our country over the period 
of the recent years in terms of the tax incentives. I think we ought to 
have an increase. I am going to vote to increase the minimum wage 
without providing additional kinds of tax incentives. All this proposal 
does basically is recover the purchasing power we had 10 years ago. 
There is no reason--we have seen countries that have raised the minimum 
wage doing very well--why we

[[Page 1802]]

should add more tax breaks and increase the deficit. Businesses receive 
billions of dollars while minimum wage workers receive nothing.
  This chart is from Citizens for Tax Justice. That is over the last 10 
years. There has been $276 billion in tax incentives for corporations--
small businesses, $36 billion--and we have had no raise for the minimum 
wage workers. We are still being asked now to do more when we have seen 
these kinds of tax breaks for corporations and businesses. I don't 
think it is necessary that we provide the additional tax breaks. Here 
we have seen productivity and profits skyrocket while the minimum wage 
plummets.
  This comes from the Bureau of Labor Statistics. Profits are up over 
45 percent; productivity, total 29 percent; and the minimum wage and 
output per hours are down 20 percent. So it gives you an idea about 
what has been happening out in the economy just generally.
  Mr. President, I think this is, above all, a moral issue. The members 
of our great faiths have all spoken clearly about this issue. Here is 
the quote from Justice Roll, January 2007:

       More than 1,000 Christian, Jewish, and Muslim faith leaders 
     say minimum wage workers deserve a prompt, clean minimum wage 
     increase with no strings attached.

  They make an excellent statement, and it is a convincing one.
  Mr. President, these give you at least some idea of what is at issue. 
We have tried over the few minutes that we have had to point out where 
the trend lines are, to show the statistics that show that an increase 
in the minimum wage is morally correct. It will strengthen our economy, 
and it will make a difference to children and to women and make a 
difference to men and women of color. It is basically a fairness issue. 
It will strengthen our economy. It is the right thing to do. It is long 
overdue.
  I thank our Democratic leaders, Speaker Pelosi and Senator Reid, for 
giving it the high priority it deserves. We ought to get about the 
business of getting this legislation enacted, and enacted speedily, for 
those individuals who are out there day in and day out, men and women 
of dignity and men and women of pride, who take a sense of pride in the 
job they do, even though the jobs are very menial. Maybe it is a 
teacher's aide or someone looking out after the elderly in elderly 
homes or someone cleaning out the buildings of American commerce. They 
are men and women of dignity, and they take pride in the jobs that they 
do.
  America has said it values work, and America says it values 
individuals who want to work hard and play by the rules. We are calling 
upon this Senate now to say these working families have waited long 
enough. Those individuals who work 40 hours a week, 52 weeks of the 
year in this Nation of ours should not have to be condemned to living a 
life in poverty.
  That is the issue. Does work pay? Do we recognize our fellow citizens 
and say that we are going to respect them and we want to be one country 
with one history and one destiny, one Nation? Let's pass the increase 
in the minimum wage.
  Mr. President, I thank my friend and colleague, Senator Enzi, for all 
of his good work. There are a great many issues on which we agree; 
there are some on which we differ. I always value his insight on any of 
these issues and, needless to say, we enjoy working together. I thank 
him for all of his cooperation on this issue, as on many other issues. 
We give assurance to our friends in the Senate that we are going to get 
a lot of good work done for the people of this country in this session.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. ENZI. Mr. President, I thank the Chairman for his kind words. I 
admire him for the passion he puts into every issue he works on, and 
people will notice that he works on a lot of issues. He and I have had 
this debate three times over the last 2 years. We have varied a little 
bit on the amount of the increase, and I have always tried to get 
something in there for small businesses to take care of the increase, 
or to offset the increase a little so that these small businesses can 
continue to function and provide employment opportunities.
  I come from a small business background. But not from small business 
as defined by the Federal government. The Federal definition is a 
business with less than 500 employees. Any business that we had in our 
State that was that large--and I am not sure we have any headquartered 
in our State--would be considered big business. I am talking about the 
mom-and-pop shops where the person who does the accounting also sweeps 
the sidewalks and cleans the toilets and waits on customers--definitely 
not in that order. This is a significant segment of small business 
across this country. They generate 60 to 80 percent of the net new jobs 
annually over the last decade. Raising the minimum wage will affect 
them more substantially than businesses with as many as 500 or more 
employees.
  In the context of a minimum wage increase, I have always asked that 
actions be taken to offset the impact of an increase for small 
businesses. I want to thank Senator Baucus and Senator Grassley for 
their work in the Finance Committee to come up with such a package. 
That package is now contained in the Reid amendment that has been 
submitted. I think this package makes a substantial difference and 
makes a raise in the minimum wage possible. I think had we worked 
toward this kind of a situation earlier, the minimum wage might have 
happened earlier. Unfortunately, the times that the minimum wage issue 
arose in the past 2 years were situations where it was unamendable. It 
had to be a take-it-or-leave-it--my proposal or Senator Kennedy's 
proposal, and we left them both.
  Any proposal on which the two of us have been able to reach agreement 
has been very successful in making it through the Senate and the House 
and getting signed by the President. It is not an easy task to pass a 
bill. I don't have to tell the Senator from Massachusetts that. He has 
been around here practicing the art of legislating a long time. I am 
one of the newcomers; I have only been here 10 years. I have noticed, 
however, that legislating means either finding a compromise, or finding 
a third way.
  On this particular bill, we may find that third way. There will no 
doubt be additional amendments to this bill. I like situations where 
bills can be amended. I have been in situations where they could not. I 
have been on the side with the majority of votes in those situations 
and have not always felt comfortable. So I thank Majority Leader Reid 
for having a situation where there can be amendments.
  I ask my side of the aisle not to make amendments that are onerous or 
wide-ranging but that stick to the subject and see what the best 
possible package is that we can come up with.
  I will speak first to the underlying substitute that has been laid 
down on this bill. There hasn't been any comment on that yet, even 
though we have had 2 hours 40 minutes worth of debate. Of course, we 
started first with Senator Gregg's amendment. I want to mention that 
this first amendment was an agreement to keep the ethics bill from 
having a different approach. I appreciate the effort of both parties to 
allow that to come up. While that will be voted on as a part of the 
minimum wage, it is not a part of the minimum wage. It allows a vote on 
that as an up-or-down vote. I am pleased there was some compromise on 
that and some ability to do that.
  I listened to the hour and a half of debate on that amendment and the 
concern over whether trading votes would happen. Something this body 
ought to consider, perhaps, is a law that we have in Wyoming that 
prohibits the trading of votes on any issue and makes it a felony that 
has to be reported by both sides if an offer is made. It makes each 
issue stand on its own.
  So I will speak first to the underlying substitute that was laid down 
on this bill because it provides the tax relief we have been talking 
about for a long time, and this is tax relief that has been agreed upon 
in a very bipartisan way. Senator Grassley and Senator Baucus often 
work together, and

[[Page 1803]]

that is why the Finance Committee is so successful in moving things 
along. They have come up with tax relief for very small businesses that 
will aid them in meeting their burden of a minimum wage increase. I 
have long advocated that we must provide a measure of tax and 
regulatory relief to businesses that will face these higher mandated 
costs.
  The substitute amendment consists of the following provisions: First, 
it would increase current section 179 expensing by extending the 
increased expensing of qualified business property allowed for small 
businesses until 2011. Without an extension, the amount which may be 
expensed will drop by more than 75 percent. If we pass this extension, 
we will allow small business owners who are making investments in the 
future of their business to retain more of their earnings, and these 
additional funds can be used to retain and hire new employees, thereby 
balancing out the effect of the minimum wage increase.
  Now, we have talked about families and children, and I want to tell 
you the small businesses that we are talking about are the small 
businesses that are run by families that, in most instances, have 
children. Quite often, the small businesses are run by young people. In 
my own case, I got married, and a week later we started a shoe store. 
We had kids, and the kids got to learn a little about the retail trade 
by having to work and help us out. So I have some personal background 
and experience in running a small business.
  Second, the amendment would provide a 15-year recovery period for 
leasehold improvements and certain restaurant buildings and related 
improvements. This provision improves current law by including new 
restaurants, retail space, and improvements by extending the broadened 
provision. Restaurants and retail employ a very large percentage of 
minimum wage workers and are most impacted by mandated increases in the 
Federal wage. This portion of the amendment extends relief to these 
businesses and seeks to avoid dislocation and decreased employment 
opportunities for restaurant and other workers.
  Third, the amendment would allow noncorporate taxpayers with annual 
gross receipts of less than $10 million to use the cash method of 
accounting for purchases and sales of merchandise.
  Under current law, those small business taxpayers are generally 
required to use the accrual method for such purchases and sales, even 
though they may use the cash accounting method for overall accounting. 
This simplification and clarification of accounting methods would 
assist small businesses by reducing their administrative costs, which 
would free up more resources to maintain employment levels.
  I realize most people in America may not know the difference between 
cash accounting and accrual accounting. I can tell them, accrual 
accounting is a lot more complicated because one has to guess on the 
percentages of expenditures and then later make corrections for actual 
amount, whereas under cash accounting, one takes the actual money 
coming in and the actual money that goes out. It is a much simpler 
accounting system. We want to make sure those small businesses have 
that opportunity.
  Fourth, the amendment expands work opportunity tax incentives. This 
allows employers credit against wages for targeted individuals, 
including those on welfare, qualified veterans, and high-risk youth. 
These populations, again, are most likely to lose jobs in an 
environment where employers are forced to bear increased salary costs. 
This program would be extended for 5 years.
  Fifth, the substitute also creates a voluntary certification program 
for professional employer organizations that meet the standards of 
solvency and responsibility and that maintain ongoing certification by 
the IRS.
  Lastly, the amendment provides for a series of clarifications and 
modifications to the tax and accounting provisions that govern 
subchapter S corporations. Many small businesses are organized under 
the provisions of subchapter S of the Internal Revenue Code. 
Incidentally, the ones that are organized under subchapter S pay taxes 
on the earnings each and every year as opposed to a corporation that 
only pays some corporate taxes and then on distribution has to pay the 
rest of the taxes.
  I can't leave this topic of small businesses without commenting 
briefly on a matter of great concern to these businesses, the 
employees, and the families that depend on them. I am speaking, of 
course, about the rise in cost of small business health insurance.
  Although cost growth has begun to slow a bit, premiums for small 
businesses have been rising unsustainably at near double-digit rates 
for more than half a decade, which is more than double the rate of 
inflation of wage growth. For much of the last Congress, my colleagues 
and I engaged in an aggressive and bipartisan effort to tackle this 
problem. Indeed, the small business health plan legislation I authored 
with Senator Ben Nelson came within just a few votes of overcoming a 
filibuster last May. Our legislation would enable small businesses to 
pool their negotiating across State borders to have a big enough pool 
to effectively negotiate against the big insurance companies and thus 
hold down costs and widen access to coverage while preserving the 
strong role for State oversight and consumer protection.
  Progress on this critical issue is moving forward. I have had 
interesting discussions with people from both sides of the aisle. I 
think the discussions have been promising. There is a long way to go, 
but I think we have built a solid foundation, and that foundation 
continues to grow as we move into a new year and a new Congress.
  Small business health insurance reform is vitally important, and I 
realize there may be some sentiment that the issue should be resolved 
in the context of the minimum wage debate. However, I firmly believe 
that offering a version of last year's small business health plan as an 
amendment to the pending minimum wage legislation would be premature 
and would not help us move forward toward securing meaningful small 
group health insurance relief in this Congress or minimum wage or help 
for small businesses. Rather, the best way to achieve real small 
business health care reform is to proceed forcefully to build on the 
significant progress we made last year.
  Development of small business health legislation is a process that is 
well along, and I believe success is in sight. We are on a promising 
track, and we should stick with it. That promising track, of course, is 
having bipartisan discussions about what needs to be done in health to 
keep the insurance rates down, to provide better access to people.
  Senator Kennedy and I have been having some discussions on 
principles. That is the way we have been attacking the pieces of 
legislation we do around here. We set down principles and then meet 
with stakeholders and talk about what difficulties those principles 
provide for them. Then we come up with a bill that will hopefully find 
a way through the maze. It is extremely difficult, but the increase in 
interest in health insurance has risen so greatly that I think this 
will be a prime topic for people in the next year and hopefully a 
solution within the next year.
  I would also be remiss if I didn't mention, as I have many times in 
the past, that while an increase in the minimum wage will be a kick-
start for some workers, it doesn't address the fundamental issue of 
chronic low wage earners. Regardless of how we increase the minimum 
wage today, those who earn it will still be the lowest paid tomorrow. 
The minimum wage needs to be for all workers what it is for most--a 
starting point. Our policy should be directed at giving all workers the 
opportunity to move up the wage ladder, not merely moving the ladder's 
lowest rung up.
  As a former small business owner, I know these entry-level jobs are a 
gateway into the workforce for people without skills and without 
experience. Minimum wage usually goes to those with minimum skills. 
These skills-based wage jobs can open the door to better jobs and 
better lives for low-skilled workers if we give them the tools they

[[Page 1804]]

need to succeed. My colleagues know that I strongly believe we must do 
more in this department. For the past two Congresses, one of my major 
priorities has been reauthorizing and improving the Nation's job-
training system that was created by the Workforce Investment Act. This 
law will help to provide American workers with the skills they need to 
compete in the global economy. Education and the acquisition of job 
skills represent the surest path to economic opportunity and security 
in the global job market. Increasing skills increases jobs, increases 
wages, and lifts the lowest boat into a bigger boat.
  Over the past few years, this bill has received unanimous support in 
both the HELP Committee, which has reported it out twice, and the full 
Senate, which has passed it twice. But I have to say that election-year 
politics and political positioning have prevented this important bill 
from becoming law.
  We tried to preconference a lot of the bills that came out of the 
HELP Committee last Congress. We were successful on many. That means 
the House agreed with the Senate position with some changes prior even 
to the time the Senate passed a bill, and then the House would pass the 
same bill, and as a result, the Health, Education, Labor, and Pensions 
Committee got 27 bills through the legislative process and signed by 
the President. That is quite a contrast to what happens with most 
committees.
  The Workforce Investment Act was not able to be preconferenced. I 
hope it can be now. I believe there is a little better understanding of 
some of the objections and also some of the benefits. I believe this 
bill will make it through the process and will start an estimated 
900,000 people a year on a better career path. It can only happen if it 
is not a casualty of Congress's inability to overcome its worst 
partisan instincts. That would be inexcusable.
  Outside the glare of election-year politics, I hope we can quickly 
pass this job-training bill that will truly improve the wages and lives 
of workers in this country. The Senate has passed it twice. We have 
spent 4 years working on it.
  The potential skills gap facing American workers only deepens when we 
are compared to our competitors around the world. As chairman of the 
committee, I was able to travel to some of the foreign countries which 
are among some of our toughest competitors in the world market. I came 
home believing strongly that we must focus more seriously on the 
acquisition and improvement of job and job-related skills. While many 
of us feel good about what we are doing today when we raise the minimum 
wage, I intend to make sure we do not neglect to address the far more 
pressing concerns for American workers: the increasing skills gap and 
the availability of health insurance. I anticipate we will get to work 
on these issues at a separate time.


                 Amendment No. 103 to Amendment No. 100

  Mr. ENZI. Mr. President, at this point, I have permission to lay down 
an amendment on behalf of Senator Snowe. I send an amendment to the 
desk.
  The PRESIDING OFFICER. Without objection, the pending amendment is 
set aside. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Wyoming [Mr. Enzi], for Ms. Snowe, for 
     herself, Mr. Enzi, and Ms. Landrieu, proposes an amendment 
     numbered 103 to amendment No. 100.

  The amendment is as follows:

    (Purpose: To enhance compliance assistance for small businesses)

       At the appropriate place, insert the following:

     SEC. __. ENHANCED COMPLIANCE ASSISTANCE FOR SMALL BUSINESSES.

       (a) In General.--Section 212 of the Small Business 
     Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 601 
     note) is amended by striking subsection (a) and inserting the 
     following:
       ``(a) Compliance Guide.--
       ``(1) In general.--For each rule or group of related rules 
     for which an agency is required to prepare a final regulatory 
     flexibility analysis under section 605(b) of title 5, United 
     States Code, the agency shall publish 1 or more guides to 
     assist small entities in complying with the rule and shall 
     entitle such publications `small entity compliance guides'.
       ``(2) Publication of guides.--The publication of each guide 
     under this subsection shall include--
       ``(A) the posting of the guide in an easily identified 
     location on the website of the agency; and
       ``(B) distribution of the guide to known industry contacts, 
     such as small entities, associations, or industry leaders 
     affected by the rule.
       ``(3) Publication date.--An agency shall publish each guide 
     (including the posting and distribution of the guide as 
     described under paragraph (2))--
       ``(A) on the same date as the date of publication of the 
     final rule (or as soon as possible after that date); and
       ``(B) not later than the date on which the requirements of 
     that rule become effective.
       ``(4) Compliance actions.--
       ``(A) In general.--Each guide shall explain the actions a 
     small entity is required to take to comply with a rule.
       ``(B) Explanation.--The explanation under subparagraph 
     (A)--
       ``(i) shall include a description of actions needed to meet 
     the requirements of a rule, to enable a small entity to know 
     when such requirements are met; and
       ``(ii) if determined appropriate by the agency, may include 
     a description of possible procedures, such as conducting 
     tests, that may assist a small entity in meeting such 
     requirements.
       ``(C) Procedures.--Procedures described under subparagraph 
     (B)(ii)--
       ``(i) shall be suggestions to assist small entities; and
       ``(ii) shall not be additional requirements relating to the 
     rule.
       ``(5) Agency preparation of guides.--The agency shall, in 
     its sole discretion, taking into account the subject matter 
     of the rule and the language of relevant statutes, ensure 
     that the guide is written using sufficiently plain language 
     likely to be understood by affected small entities. Agencies 
     may prepare separate guides covering groups or classes of 
     similarly affected small entities and may cooperate with 
     associations of small entities to develop and distribute such 
     guides. An agency may prepare guides and apply this section 
     with respect to a rule or a group of related rules.
       ``(6) Reporting.--Not later than 1 year after the date of 
     enactment of the Small Business Compliance Assistance 
     Enhancement Act of 2007, and annually thereafter, the head of 
     each agency shall submit a report to the Committee on Small 
     Business and Entrepreneurship of the Senate and the Committee 
     on Small Business of the House of Representatives describing 
     the status of the agency's compliance with paragraphs (1) 
     through (5).''.
       (b) Technical and Conforming Amendment.--Section 211(3) of 
     the Small Business Regulatory Enforcement Fairness Act of 
     1996 (5 U.S.C. 601 note) is amended by inserting ``and 
     entitled'' after ``designated''.

  Mr. ENZI. Mr. President, I rise today in support of the amendment 
offered by Senator Snowe. This amendment would provide some measure of 
relief to those small businesses which bear the economic burden of 
nearly 41 percent of the increase in the Federal minimum wage. Small 
businesses not only employ the bulk of the minimum wage workers, they 
have also been the engine for economic growth.
  Small business has been responsible for the majority of new job 
creation, generating between 60 and 80 percent of the net new jobs 
annually over the last decade, and it is small businesses which have 
traditionally provided the only entry port for new workers into the job 
market.
  I congratulate Senator Snowe for her persistence on this amendment. 
She has worked on it a number of times and revised it to the present 
situation. I suspect if there are any objections, we would be willing 
to work on it additionally.
  But we must recognize that raising the Federal minimum wage, whatever 
else effects there may be, significantly increases the costs for many 
of these businesses. I mentioned that an increase of 41 percent in 
labor costs has to be accounted for somehow. Curtailing services, 
reducing employee complements, and forgoing expansions are some of the 
many options considered by these businesses in the face of increased 
costs. The inescapable fact is that increased labor costs heighten the 
risk of both employment dislocation and decreased job opportunity for 
the very individuals an increase in the minimum wage is designed to 
benefit. Unless we are prudent and balance such mandated cost increases 
for some measure of relief for affected small businesses, we risk 
serious unintended consequences. Simply put, an increase

[[Page 1805]]

in the minimum wage is of no value at all to a worker who does not have 
a job or a job seeker who has no prospects of employment.
  As a Senator from a rural, low-population State, I would like to 
point out another reality. In many cases, heavily populated areas with 
high costs of living have already, in fact, adjusted their minimum wage 
levels either by law or by market forces, which actually work.
  The town I am from is a boomtown, it is an energy center. If one 
drives by the Arby's restaurant, the lit-up moving marque sign says: 
Now hiring, $9.50 an hour plus benefits; you name the hours. If you go 
in and apply, they will tell you that if they can pick the hours, it is 
$10.50 an hour.
  In many areas, market forces are working. There are construction 
companies that go from one site to another hiring people away from 
other construction companies. We have a shortage of people to work in 
Wyoming. Of course, that requires relocating to the frontier, which is 
what a lot of people consider Wyoming. Horace Greeley said: Go west, 
young man. I would say: Go west, young man and young woman. There are 
coal operations out there, primarily surface mines. They need people to 
drive coal, or haul trucks. These trucks are 28 feet long, 28 feet 
wide, and 28 feet tall. They haul a lot of coal. We move 1 million tons 
of coal a day out of our county. How can we do that? We have a coal 
seam that is 50- to 90-feet thick, and it is only under 60 to 90 feet 
of dirt.
  When I was mayor and Senator Rockefeller was Governor, he came out to 
see our mines. Taking him back out to the airport, I always remember 
what he said: You folks don't mine coal here.
  I said: What do you mean?
  He said: You just back up trains and you load them.
  We have coal which is low in sulfur and other chemicals, which makes 
it useful across the United States. Some of the States also known as 
coal States take our coal and mix it with their coal, and they can help 
meet the clean air standards that way. We are low in Btu, so they 
increase the Btu by using their coal. If someone has a clean drug 
record and no experience and can drive anything, they can be trained to 
drive one of these coal haul trucks and make $60,000 to $80,000 a year, 
and even more with overtime. It is a very flexible market. So there are 
job opportunities out there. But they may be nontraditional jobs, and 
they may require moving to another part of the country.
  One will find Wyoming can use a little bit more population. We are 
trying to reach a population of half a million people. We are 350 miles 
a side on our State, so we are bigger than most of the States.
  At any rate, there are areas which would be most dramatically 
affected by the minimum wage increase and those are lower cost of 
living areas. They are often rural and sparsely populated. In those 
areas, employers will feel the most pressure on their bottom lines. In 
those areas, employees will have the fewest opportunities to find other 
employment if they are let go. So a reasonable approach to the minimum 
wage issue must take those realities into account. If we are going to 
dramatically increase the costs for some businesses by a wage mandate, 
we should provide some measure of relief to those same businesses. If 
we do not, we harm not only those small businesses, we ultimately harm 
the individuals they employ.
  The sound and well-reasoned amendment that is offered by Senator 
Snowe accomplishes these ends through reasonable and targeted 
regulatory relief for those small businesses that are most negatively 
impacted by a wage increase mandate. I am pleased to be a cosponsor of 
the amendment along with Senator Landrieu. The Snowe amendment provides 
some regulatory relief by requiring that the Federal agencies which 
issue new rules and regulations which impact small businesses also 
provide those employers with plainly written and readily available 
guidance that explains what employers must do to be in compliance with 
these rules and regulations.
  All employers incur costs keeping up with the obligations Government 
imposes on them and determining how to meet those obligations. Small 
businesses regularly incur administrative costs in monitoring Federal 
regulatory changes and developing compliance programs. There is no 
question that the burden of Federal regulations falls more heavily on 
small business. This chart shows the cost of complying with Federal 
regulations. The per-employee compliance cost for firms with 20 or 
fewer employees is $7,647. The per-employee compliance cost for firms 
with 500 or more employees is only $5,282.
  So the per-employee compliance costs are 45 percent more for our 
smallest employers than they are for our largest. Congress has 
previously recognized the necessity of providing small businesses 
relief from those compliance and monitoring costs, yet a GAO study has 
shown the goal of providing small businesses relief from high 
compliance monitoring costs is far from fully met. The regulatory 
provision in this amendment seeks to ensure that goal is finally 
realized. The need for this type of compliance assistance was 
recognized by my colleague from Maine, Senator Snowe, the author of 
this amendment and proponent of this proposal in this Congress as well 
as the last two Congresses. I am pleased to again cosponsor the bill 
authored by Senator Snowe. The bill continues to enjoy broad bipartisan 
support from our colleagues, including Senators Kerry and Landrieu. 
This regulatory amendment will not only have the benefit of decreasing 
administrative costs for small employers, it also has the further 
benefit of increasing compliance levels by ensuring that all employers 
know the rules of the road and the means to comply with them.
  Through the Banking Committee, on which I also serve, we have been 
able to suggest and get several advisory committees started. Those 
advisory committees have small businesspeople on them who advise how 
different statutes as well as rules and regulations affect them, and 
their input has had considerable impact. This amendment is one of the 
type things those groups would suggest.
  When we write Federal regulation, we often make it very complicated 
and it is in a very legalistic form. I helped Senator Sarbanes on the 
Sarbanes-Oxley bill. I brought an accounting perspective to that. I was 
pleased he listened to it. But one of the factors we missed in that 
legislation, or you cannot cover in that broad of a bill, is the impact 
of small business versus big business.
  Again, the advisory committees have said what is needed is a better 
explanation for small business that they can understand. They do not 
have the specialists big business has. They can't afford them. 
Consequently, they do not have easy accessible advice on how these 
legalistic terms actually work. It is the significant difference in 
cost that we are concerned about here.
  It is a relatively simple amendment, but one that could make a 
significant difference. The substitute amendment to the underlying 
bill, as I mentioned, went through the Finance Committee. It did not go 
through the Health, Education, Labor and Pensions Committee, and it did 
not go through the Banking Committee, so there was no opportunity to 
suggest this kind of amendment at either of those points. But it is 
something the Small Business Committee has worked on a number of times. 
Senator Snowe has been the chairman and is now the ranking member of 
the Small Business Committee. I hope we will recognize her effort as 
well as the bipartisan effort coming out of that committee to provide 
this kind of a change.
  I think when the week is done, or maybe even less time than that, we 
will be at a point where there will be both a minimum wage increase and 
some help for small businesses that will offset the impact and keep the 
economy moving.
  I yield the floor.
  Mr. SESSIONS. Madam President, is there an order of business?
  The PRESIDING OFFICER (Ms. Stabenow). There is no order at this time.
  Mr. SESSIONS. I yield to the Senator from Maryland to discuss this

[[Page 1806]]

order of business. I wish to discuss that a little bit.
  Mr. CARDIN. If the Senator will yield, I am prepared to make a 
unanimous consent request that after I complete my comments, Senator 
Bingaman will be recognized for 10 minutes, and then the Senator will 
be recognized for up to 15 minutes, and then Senator Menendez for up to 
15 minutes.
  Mr. SESSIONS. How long does the Senator expect to be?
  Mr. CARDIN. No more than 5 to 7 minutes.
  Mr. SESSIONS. That is fine from my perspective.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from Maryland is recognized.
  Mr. CARDIN. Madam President, I take this time in support of the 
increase of the minimum wage to $7.25. I compliment Senator Kennedy for 
his leadership on this issue. I agree with Senator Enzi that this needs 
to be done in a bipartisan manner, and I am pleased by the way we are 
proceeding in the consideration of the increase in the minimum wage.
  I would first make the point that increasing the minimum wage will 
have a positive impact on small business. I agree with the comments 
that have been made that small business is the economic engine of our 
Nation and we need to do everything we can to make it healthier for 
small businesses in this country, but increasing the minimum wage will 
have a positive effect. I say that because when you look at the total 
impact on payrolls in this country, by increasing the minimum wage to 
$7.25 per hour, it represents about one-fifth of 1 percent of the 
entire payroll of our Nation. It is not going to have a dramatic impact 
on the cost of labor. What it does is try to help wage earners in this 
country who are suffering.
  I believe in a liveable wage. I believe we need to do much better 
than a minimum wage, but you need to increase the minimum wage if we 
are going to be able to get to a liveable wage in this country. We need 
to do something about the disparities among the incomes of wage earners 
of America.
  We had a hearing in the Budget Committee not long ago. The Chairman 
of the Federal Reserve System talked about the fact that this Nation 
among the industrial nations in the world has the largest disparity 
among wealth in wage earners. We need to do something about that. 
Increasing the minimum wage will have a positive impact on those 
issues.
  The fiscal policy group looked at the effect of minimum wage 
increases of States that have gone above the Federal minimum wage. I 
represent one of those States. Maryland has increased its minimum wage 
to $6.15 per hour. The growth rates in the States that have increased 
the minimum wage are actually higher than those that have the Federal 
minimum wage, a growth rate of 9.4 percent versus a growth rate of 6.6 
percent.
  Every time Congress has increased the minimum wage in prior 
Congresses, it has had a positive impact on the overall growth of our 
economy. When you look at the minimum wage increases, if wage earners 
at the minimum wage had received the same increase in the minimum wage 
that the CEOs have received over the last 15 years, the minimum wage 
earners in fast food restaurants today would be making over $23 an 
hour.
  This is an issue that needs to be addressed. Who is affected by it? 
There are 6.6 million Americans who make the minimum wage. It 
disproportionately affects women. Although women represent 48 percent 
of the workforce of America, they represent 61 percent of those who are 
at the minimum wage. Over 70 percent of the people receiving minimum 
wage are over 20 years of age, and over one-third are parents--760,000 
are single moms.
  I mention that because today, if you work 52 weeks a year, 40 hours a 
week, and you are a family of 2, you live below the poverty rate. You 
are doing everything right, working 40 hours a week, don't take a day 
off for the entire year, yet you are still below the Federal poverty 
rate.
  That should not be in America. We can do better than that. Since the 
last time we increased the minimum wage, the per capita cost of health 
care has risen by 60 percent, college costs have increased by 51 
percent for public schools, debts for students graduated from college 
have more than doubled, credit debt has increased by 46 percent, and we 
have the lowest effective minimum wage in 50 years. The last time we 
increased the minimum wage was 10 years ago. I was proud to have voted 
for that when I was in the other body. It is now time that we follow or 
pass what the other body has done and increase the minimum wage to 
$7.25 an hour over a three-stage process. It is the right thing to do.
  It is not only right for our economy, it is not only the right thing 
to do as far as how it affects the individual wage earner in trying to 
bring about some fairness, but it is the right thing to do in regard to 
what is correct for our country on civil rights.
  Let me quote a famous American who said:

       We know of no more critical civil rights issue facing 
     Congress today than the need to increase the Federal minimum 
     wage and extend its coverage.

  That was stated by Dr. Martin Luther King, Jr., March 18, 1966, when 
the minimum wage was comparable in purchasing power to what it is today 
when Congress finally increased the minimum wage. We should have 
increased the minimum wage before now. We have the opportunity to do 
this in this Congress. Now is the time for us to act. Now is the time 
for us to work in a bipartisan manner as we have on previous increases 
in the minimum wage. I hope my colleagues will work on this bill and 
get it done this week. It is the right thing to do. It will help our 
economy, and it is long overdue.
  I yield the floor.
  The PRESIDING OFFICER. The distinguished Senator from New Mexico.
  Mr. BINGAMAN. Madam President, I ask unanimous consent that I be 
allowed to speak as in morning business for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             Global Warming

  Mr. BINGAMAN. Madam President, the issue of global warming is more 
and more on the minds of Americans. There is good reason why it is. I 
think we are familiar now with the litany of adverse consequences that 
is associated with unlimited release of greenhouse gases into the 
atmosphere. The scientific reports are warning us about rising sea 
levels, about dangerous heat waves, about increasingly devastating 
hurricanes and other weather events. There are always uncertainties 
about understanding the Earth's climate, but one thing is clear: 
Uncontrolled release of greenhouse gases into the atmosphere with no 
real strategy to reduce those gases is irresponsible and dangerous at 
this point in our history. It is a great challenge that we face to 
reduce these emissions in this country and countries around the world. 
Even individual States within the United States, and regions of this 
country, are leading the way in dealing with this issue.
  The truth is, unless the United States as a whole and the developing 
countries that have rapidly growing economies find a way to reduce 
emissions, we are likely to see this entire planet covered with a 
blanket of gases that will take centuries to dissipate.
  In 2005 the Senate passed a resolution setting forth an approach to 
tackling the challenges of climate change. That resolution called for 
adoption of a mandatory, economy-wide program that will slow, stop, and 
then reverse greenhouse gas emissions without harming the economy and 
that will encourage action by developing nations. Meeting those various 
tests set out in that resolution will require a bipartisan commitment 
to understand the impact of any legislative approach.
  Today I am joining with my colleague, Senator Specter from 
Pennsylvania, in circulating a bipartisan discussion draft on global 
warming legislation. The choice to release this discussion draft 
reflects our desire to modify or approve that legislation in

[[Page 1807]]

the coming months before it is introduced. This is our commitment to 
create a bipartisan process that will focus discussion in a 
constructive direction.
  I see three main challenges that we face in this process. First, we 
need to persuade our colleagues on the program that we have chosen; 
that is, a cap and trade proposal that incorporates market-based 
mechanisms and funding for technology development. In 2005 over 53 
Members of the Senate went on record in support of such a proposal by 
defending that sense-of-the-Senate resolution and voting for it. We 
need to continue to expand that number. We need to engage the 
administration, which has refused to support such measures for reducing 
greenhouse gases.
  To begin to meet this first challenge, I would like to call the 
attention of my colleagues to two documents. The first is an analysis 
by the Department of Energy's Energy Information Administration, or 
EIA. This was in September of last year. I joined with five other 
Senators in submitting a request, a discussion draft to the Energy 
Information Administration asking them to analyze it. Earlier this 
month, they returned with very favorable results, showing that it is 
possible to implement a cap-and-trade proposal that begins to reduce 
the growth of greenhouse gas emissions without harming the economy. The 
Energy Information Administration of this administration showed that 
the program has only minor impacts on gross domestic product--a quarter 
of 1 percent by 2030. That is equal to slowing the rate of economic 
growth by roughly 1 month over the next 20-plus years.
  I ask unanimous consent to have printed in the Record the executive 
summary of this EIA analysis following the completion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. BINGAMAN. The second document to which I wish to call attention 
is a study by the nonpartisan Congressional Budget Office. In October 
of 2005, Senator Jeffords and I asked CBO to address a debate that has 
been occurring in the Senate. Most experts agree that significant cuts 
in fossil fuel use is required if we are to reduce greenhouse gas 
emissions. But there has been a debate about whether the appropriate 
strategy was to exclusively fund technology development through tax 
incentives and through Federal programs or, on the contrary, to put a 
price on carbon by implementing a cap-and-trade proposal. CBO's 
analysis demonstrated that the most effective policy was a combination 
of these two.
  I ask unanimous consent to have printed in the Record the summary of 
that CBO report following the completion of my remarks as well.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. BINGAMAN. Madam President, the second challenge we face in this 
debate is to figure out the appropriate way to structure a cap-and-
trade program. Putting targets and timetables aside for a moment and 
determining the appropriate structure of a cap-and-trade system in 
order that it functions properly will require an enormous amount of 
focus and attention. For over a year, I have worked in a bipartisan 
manner with my colleague from New Mexico, Senator Domenici, to explore 
many of these issues. In February of last year we released a white 
paper from the Energy Committee entitled, ``Design Elements of a 
Mandatory Market-Based Greenhouse Gas Regulatory System.'' That white 
paper laid out four basic questions about the design of the cap-and-
trade proposal. I was very encouraged that we received detailed and 
constructive comments from over 150 major companies, NGOs, and 
individuals.
  On April 4, 2006, we hosted a day-long workshop with 29 of these 
respondents talking about their reaction to the white paper. This was 
the first such discussion in Congress to have taken place. My 
colleagues can find a transcript of this conference on the U.S. 
Government Printing Office Web site. I also ask unanimous consent to 
have printed in the Record a joint statement from my colleague, Senator 
Domenici, and myself that summarized the conference.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 3.)
  Mr. BINGAMAN. Madam President, the third challenge we face in making 
progress on this issue is getting political consensus on the right 
levels of control. Here I am talking about the level of stringency and 
the aggressiveness of the program. There have already been a number of 
bills introduced this year. I commend all my colleagues who dedicated 
their time and effort to addressing this issue. First and foremost, of 
course, Senators Lieberman and McCain have reintroduced their 
legislation. These two Senators have been leaders on the issue from the 
beginning. Also, Senators Sanders and Boxer have reintroduced 
legislation that Senator Jeffords drafted last year, and I commend them 
for their leadership and their bold vision. As chairs of the two 
committees engage in the debate on global warming issues, I plan to 
work very closely with Senator Boxer to ensure that everything we do 
will keep momentum on global warming legislation moving forward.
  I also commend Senators Feinstein and Carper for working together to 
introduce legislation last week. Senator Feinstein was on our Energy 
Committee. She is not on that committee in this Congress, and she will 
be missed. But her leadership in this area is very important.
  I also would like to acknowledge and congratulate the efforts of the 
U.S. Climate Action Partnership. This is a unique and diverse group of 
industry and NGOs that have come together to offer principles on global 
warming legislation and recommendations for that legislation.
  With all these bills and strategies for reducing greenhouse gases on 
the table, it is vital that we work together to craft sensible policy 
that can be enacted sooner rather than later. The science tells us that 
action is needed immediately and that the longer we delay the more 
difficult the problem will be. I believe the modest impacts that are 
identified from our proposal, the one Senator Specter and I are 
circulating, as shown by the Energy Information Administration 
analysis, will provide a basis to explore somewhat more aggressive 
reduction targets. It is for this reason that we do not want to 
introduce our bill without first giving great deliberation to different 
targets and approaches that could gain political consensus in passing 
legislation.
  One thing is clear: We cannot delay. For this reason, I hope to 
promote a legislative approach that will reflect a constructive center 
in this often polarized debate.
  In circulating this discussion draft, Senator Specter and I are 
setting forth a process. The first step of the process is to invite 
Senate offices to a series of workshops with experts on the issue to 
educate and understand the impacts of the legislation. These sessions 
will be open to Senate staff. We also, of course, want to invite 
participation or observation by representatives from the 
administration. The first of the workshops will be February 2 in the 
afternoon.
  We also need to hear from the public and interested stakeholders. In 
the coming weeks, Senator Specter and I will be outlining a process to 
meet with stakeholders from industry, labor, environmental groups, and 
others. We plan to solicit their comments on the legislative text. A 
copy of the discussion draft and supporting documents will be posted on 
the Energy Committee Web site--energy.senate.gov. I encourage 
interested parties to look at that draft and to monitor the Web site 
for further developments.
  Madam President, following all of the other items that I have 
mentioned to be printed in the Record, I ask unanimous consent that the 
discussion draft that Senator Specter and I are circulating also be 
printed in the Record following the other documents.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 4.)

[[Page 1808]]



                               Exhibit 1

 Energy Market and Economic Impacts of a Proposal To Reduce Greenhouse 
        Gas Intensity With a Cap and Trade System, January 2007

 (Energy Information Administration, Office of Integrated Analysis and 
        Forecasting, U.S. Department of Energy, Washington, DC)

                           Executive Summary


                               Background

       This report responds to a request from Senators Bingaman, 
     Landrieu, Murkowski, Specter, Salazar, and Lugar for an 
     analysis of a proposal that would regulate emissions of 
     greenhouse gases (GHGs) through a national allowance cap-and-
     trade system. Under this proposal, suppliers of fossil fuel 
     and other covered sources of GHGs would be required to submit 
     government-issued allowances based on the emissions of their 
     respective products. The gases covered in this analysis of 
     the proposal include energy-related carbon dioxide, methane 
     from coal mining, nitrous oxide from nitric acid and adipic 
     acid production, hydrofluorocarbons, perfluorocarbons, and 
     sulfur hexafluoride.
       The program would establish annual emissions caps based on 
     targeted reductions in greenhouse gas intensity, defined as 
     emissions per dollar of Gross Domestic Product (GDP). The 
     targeted reduction in GHG intensity would be 2.6 percent 
     annually between 2012 and 2021, then increase to 3.0 percent 
     per year beginning in 2022. To limit its potential cost, the 
     program includes a ``safety-valve'' provision that allows 
     regulated entities to pay a pre-established emissions fee in 
     lieu of submitting an allowance. The safety-valve price is 
     initially set at $7 (in nominal dollars) per metric ton of 
     carbon dioxide equivalent (MMTCO2e) in 2012 and 
     increases each year by 5 percent over the projected rate of 
     inflation, as measured by the projected increase in the 
     implicit GDP price deflator. In 2004 dollars, the safety 
     valve rises from $5.89 in 2012 to $14.18 in 2030.
       The proposal calls for initially allocating 90 percent of 
     the allowances for free to various affected groups, but the 
     proportion of allowances to be auctioned grows from 10 
     percent in 2012 to 38 percent in 2030. The revenue from the 
     auctions and any safety-valve payments are accumulated into a 
     ``Climate Change Trust Fund,'' capped at $50 billion, to 
     provide incentives and pay for research, development, and 
     deployment of technologies to reduce greenhouse gas 
     emissions. The U.S. Treasury would retain any revenue 
     collected in excess of the $50-billion limit.
       As specified in the request for the analysis, EIA 
     considered both a Phased Auction case, which allocates 
     allowances as specified in the proposal, and a Full Auction 
     case, in which all allowances are assumed to be auctioned 
     beginning in 2012. Because they share the same emissions 
     targets and safety valve prices, the energy sector impacts in 
     the Phased and Full Auction cases are very similar. The only 
     areas where the impacts in the two cases differ are for 
     electricity prices and the economic impacts associated with 
     collection and use of revenue from the sale of allowances. 
     Several additional sensitivity cases examine the impacts of 
     higher and lower safety valves and limiting the use of 
     emission reduction credits, or offsets, from noncovered 
     entities. The proposal and its variants were modeled using 
     the National Energy Modeling System and compared to the 
     reference case projections from the Annual Energy Outlook 
     2006 (AEO2006).
       The analysis presented in this report builds on previous 
     EIA analyses addressing GHG limitation, including earlier EIA 
     reports requested by Senator Bingaman, Senator Salazar, and 
     Senators Inhofe, McCain, and Lieberman. All of the analysis 
     cases incorporate the economic and technology assumptions 
     used in the AEO2006 reference case. While increased 
     expenditures for research and development (R&D) resulting 
     from the creation of the Climate Change Trust Fund are 
     expected to lead to some technology improvements, a 
     statistically reliable relationship between the level of R&D 
     spending for specific technologies and the impacts of those 
     expenditures has not been developed. Furthermore, the impact 
     of Federal R&D is also difficult to assess, because the 
     levels of private sector R&D expenditures usually are unknown 
     and often far exceed R&D spending by the Federal Government.
       However, the recent reports for Senators Bingaman and 
     Salazar include additional sensitivity analyses on the 
     assumptions made regarding the availability of GHG emissions 
     reductions outside the energy sector and the pace of advances 
     in technology used to produce and consume energy. The report 
     for Senators Inhofe, McCain, and Lieberman also examines the 
     economic implications of possible alternative approaches to 
     recycling revenues collected by government under a cap-and-
     trade program in which significant amounts of government 
     revenue is collected from allowance auctions. Alternative 
     assumptions in these areas can have a major impact on the 
     results obtained, and the insights from those prior 
     sensitivity cases would also be applicable to the proposal 
     analyzed this report. Readers interested in how the results 
     reported below might be affected by different assumptions in 
     these areas are encouraged to review the earlier reports.
       The modeled impacts of the proposal are summarized below. 
     Reported results apply for the $7 Phased Auction case, unless 
     otherwise stated. Energy and allowance prices are reported in 
     2004 dollars for compatibility with AEO2006. Macroeconomic 
     time series such as GDP and consumption expenditures are 
     reported in 2000 chain-weighted dollars to maintain 
     consistency with standard reports of U.S. economic 
     statistics. Projections of the aggregate value of allowances 
     and auction revenues and fiscal impacts on the budget surplus 
     are reported in nominal dollars, as are deposits relating to 
     the Climate Change Trust Fund.


                                Results

     Emissions and Allowance Prices
       The proposal leads to lower GHG emissions than in the 
     reference case, but the intensity reduction targets are not 
     fully achieved after 2025. Some regulated entities would opt 
     to make safety-valve payments beginning in 2026, the year in 
     which the market value of allowances is projected to reach 
     the safety-valve level (Table ES1). With the higher safety-
     valve prices in the $9 Phased Auction sensitivity case, the 
     intensity targets are attained through 2029.
       Relative to the reference case, covered GHG emissions less 
     offsets are 562 MMTCO2e (7.4 percent) lower in 
     2020 and 1,259 MMTCO2e (14.4 percent) lower in 
     2030 in the Phased Auction case. Covered GHG emissions grow 
     by 24 percent between 2004 and 2030, about half the increase 
     in the reference case.
       In the early years of the program, when allowance prices 
     are relatively low, reductions in GHG emissions outside the 
     energy sector are the predominant source of emissions 
     reductions. In 2020, reductions of GHGs other than energy-
     related CO2, estimated based on information 
     provided by the Environmental Protection Agency, account for 
     nearly 66 percent of the total reductions. By 2030, however, 
     the higher allowance prices lead to a significant shift in 
     energy decisions, particularly in the electricity sector, and 
     the reduction in energy-related CO2 emissions 
     account for almost 58 percent of total GHG emissions 
     reductions.
       An allowance allocation incentive for carbon sequestration, 
     available only in the Phased Auction case, is projected to 
     result in an additional emissions impact of 296 
     MMTCO2e in 2020 and 311 MMTCO2e in 
     2030, or about 4 percent of covered emissions.
       In 2004 dollars, the allowance prices rise from just over 
     $3.70 per metric tons CO2 equivalent in 2012 to 
     the safety valve price of $14.18 metric tons CO2 
     equivalent in 2030.
     Energy Markets
       The cost of GHG allowances is passed through to consumers, 
     raising the price of fossil fuels charged and providing an 
     incentive to lower energy use and shift away from fossil 
     fuels, particularly in the electric power sector.
       When allowance costs are included, the average delivered 
     price of coal to power plants in 2020 increases from $1.39 
     per million Btu in the reference case to $2.06, an increase 
     of 48 percent. By 2030 the change grows from $1.51 per 
     million Btu in the reference case to $2.73 per million Btu, 
     an increase of 81 percent.
       Electricity prices are somewhat lower in the Phased Auction 
     case than in the Full Auction case because the Phased Auction 
     provides a portion of the allowances to the electric power 
     sector for free, a benefit that is passed on to ratepayers 
     where the recipients are subject to cost-of-service 
     regulation. Electricity prices in 2020 are 3.6 and 5.6 
     percent higher than in the reference case in the Phased and 
     Full Auction cases, respectively. In 2030, electricity prices 
     are 11 and 13 percent above the reference case level. 
     Electricity price impacts are likely to vary across states 
     and regions due to differences in State regulatory regimes 
     and in the fuel mix used for generation in each area.
       Relative to the reference case, annual per household energy 
     expenditures in 2020 are 2.6 percent ($41) higher in the 
     Phased Auction case and 3.6 percent ($58) higher in the Full 
     Auction case. By 2030, projected annual per household energy 
     expenditures range from 7.0 percent to 8.1 percent ($118 to 
     $136) higher in the two cases. The difference primarily 
     reflects the lower electricity prices in the Phased Auction 
     case.
       Coal use is projected to continue to grow, but at a much 
     slower rate than in the reference case. Total energy from 
     coal increases by 23 percent between 2004 and 2030, less than 
     half the 53-percent increase projected in the reference case 
     over the same time period.
       The proposal significantly boosts nuclear capacity 
     additions and generation. The projected 47-gigawatt increase 
     in nuclear capacity between 2004 and 2030 allows nuclear to 
     continue to provide about 20 percent of the Nation's 
     electricity in 2030. In the reference case, nuclear capacity 
     increases by only 9 gigawatts between 2005 and 2030.
       The proposal also adds significantly to renewable 
     generation. In the reference case, renewable generation is 
     projected to increase from 358 billion kilowatt hours in 2004 
     to 559 billion kilowatt hours in 2030. In the Phased Auction 
     case, renewable generation increases to 572 billion kilowatt 
     hours by 2020 and 823 billion kilowatt hours by 2030. Most of 
     the increase in renewable generation is expected to be from 
     non-hydroelectric renewable generators, mainly biomass and 
     wind.

[[Page 1809]]

       Retail gasoline prices in 2030 are $0.11 per gallon higher 
     in 2030 compared to the AE02006 reference case, leading to 
     modest changes in vehicle purchase and travel decisions. The 
     transportation sector provides only a small amount of 
     emissions reduction.
     Economy
       While the Phased Auction and Full Auction cases have 
     similar energy market impacts, the macroeconomic impacts of 
     the two cases differ because of differences in the revenue 
     flows associated with emission allowances.
       In the Phased Auction case, the $50-billion cap (nominal 
     dollars) on the maximum cumulative deposits to the Climate 
     Change Trust Fund is reached in 2017, and all subsequent 
     revenues from allowance sales or safety valve payments go to 
     the U.S. Treasury. This leads to a $59-billion reduction in 
     the Federal deficit by 2030. However, in the Full Auction 
     case, the revenues flowing to the government are much larger, 
     resulting in a $200-billion reduction in the Federal deficit 
     in 2030.
       In the Phased Auction case, wholesale energy prices rise 
     steadily and, by 2030, are approximately 12 percent above the 
     reference case levels (after inflation). This translates into 
     8-percent higher energy prices at the consumer level by 2030 
     and a 1-percent increase in the All-Urban Consumer Price 
     Index (CPI) above the reference case level.
       In the Phased Auction case, discounted total GDP (in 2000 
     dollars) over the 2009-2030 time period is $232 billion (0.10 
     percent) lower than in the reference case, while discounted 
     real consumer spending is $236 billion (0.14 percent) lower. 
     In 2030, in the Phased Auction case, real GDP is projected to 
     be $59 billion (0.26 percent) lower than in the reference 
     case, while aggregate consumption expenditures, which relate 
     more directly to impacts on consumers, are $55 billion (0.36 
     percent) lower. The reductions in GDP and consumption reflect 
     the rise in energy prices and the resulting decline in 
     personal disposable income.
       While higher energy costs and lower consumption 
     expenditures tend to discourage investment, many provisions 
     of the bill help to support investment activity. The value of 
     allowances allocated to States is substantial, and some 
     portion of the allowance revenue would likely result in 
     increased investment. In addition, the portion of the 
     allowance allocated to the private sector generates funds 
     which would help spur private investment in energy saving 
     technologies.

             TABLE ES1.--SUMMARY ENERGY MARKET RESULTS FOR THE REFERENCE AND $7 PHASED AUCTION CASES
----------------------------------------------------------------------------------------------------------------
                                                                        2020                      2030
                                                             ---------------------------------------------------
                   Projection                        2004       AE02006       Phased      AE02006       Phased
                                                               reference     auction     reference     auction
----------------------------------------------------------------------------------------------------------------
Emissions of Greenhouse Gases (million metric
 tons CO2 equivalent)
 
    Energy-Related Carbon Dioxide..............        5,900        7,119        6,926        8,114        7,387
    Other Covered Emissions....................          259          452          195          627          235
                                                ----------------------------------------------------------------
      Total Covered emissions..................        6,159        7,571        7,121        8,742        7,622
                                                ----------------------------------------------------------------
    Total Greenhouse Gases.....................        7,122        8,649        8,087        9,930        8,671
 
Emissions Reduction from Reference Case
 (million metric tons CO2 equivalent
 
    Energy-Related Carbon Dioxide..............           --           --          193           --          727
    Other Covered Emissions....................           --           --          258           --          392
    Nonenergy Offset Credits...................           --           --          111           --          140
    Carbon Sequestration.......................           --           --          296           --          311
                                                ----------------------------------------------------------------
      Total Emission Reductions................           --           --          562           --        1,259
                                                ----------------------------------------------------------------
        Total (including sequestration)........           --           --          858           --        1,570
    Allowance Price (2004 Dollars per metric              --           --         7.15           --        14.18
     ton CO2 equivalent).......................
 
Delivered Energy Prices (2004 dollars per unit
 indicated) (includes allowance costs)
 
    Motor Gasoline (per gallon)................         1.90         2.08         2.14         2.19         2.30
    Jet Fuel (per gallon)......................         1.22         1.42         1.50         1.56         1.69
    Distillate (per gallon)....................         1.74         1.93         2.04         2.06         2.25
    Natural Gas (per thousand cubic feet)......         7.74         7.14         7.55         8.22         9.10
      Residential..............................        10.72        10.48        10.87        11.67        12.59
      Electric Power...........................         6.07         5.53         5.99         6.41         7.39
    Coal, Electric Power (per million Btu).....         1.39         1.39         2.06         1.51         2.73
    Electricity (cents per kilowatthour).......         7.57         7.25         7.51         7.51         8.31
 
Fossil Energy Consumption quadrillion Btu)
 
    Petroleum..................................         40.1         48.1         47.2         53.6         52.0
    Natural Gas................................         23.1         27.7         27.4         27.7         27.9
    Coal.......................................         22.5         27.6         26.4         34.5         27.7
 
Electricity Generation (billion kilowatthours)
 
    Petroleum..................................          120          107           49          115           49
    Natural Gas................................          702        1,103        1,184          993        1,190
    Coal.......................................        1,977        2,505        2,370        3,381        2,530
    Nuclear....................................          789          871          871          871        1,168
    Renewable..................................          358          515          572          559          823
                                                ----------------------------------------------------------------
      Total....................................        3,955        5,108        5,055        5,926       5,768
----------------------------------------------------------------------------------------------------------------
Source: National Energy Modeling System runs AE02006.Dlll905A and BL_PHASED7.D112006B.

       GDP and consumption impacts in the Full Auction case are 
     substantially larger than those in the Phased Auction case. 
     Relative to the reference case, discounted total GDP (in 2000 
     dollars) over the 2009-2030 time period in the Full Auction 
     case is $462 billion (0.19 percent lower), while discounted 
     real consumer spending is $483 billion (0.29 percent) lower. 
     In 2030, projected real GDP in the Full Auction case is $94 
     billion (0.41 percent) lower than in the reference case, 
     while aggregate consumption is $106 billion (0.69 percent) 
     lower, almost twice the estimated consumption loss in the 
     Phased Auction case. These results reflect the substantially 
     higher level of auction revenues under the Full Auction case, 
     which, by assumption, are not re-circulated into the economy 
     beyond the $50 billion in expenditures from the Climate 
     Change Trust Fund. Because these estimated impacts could 
     change significantly under alternative revenue recycling 
     assumptions, these results do not imply a general conclusion 
     that a Phased Auction will necessarily result in lesser 
     impacts on GDP and consumption than a Full Auction.
                                  ____


                               Exhibit 2

 A CBO Paper, September 2006: Evaluating the Role of Prices and R&D in 
                   Reducing Carbon Dioxide Emissions


                        Summary and Introduction

       Several important human activities--most notably the 
     worldwide burning of coal, oil, and natural gas--are 
     gradually increasing the concentrations of carbon dioxide and 
     other greenhouse gases in the atmosphere and, in the view of 
     many climate scientists, are gradually warming the global 
     climate. That warming, and any long-term damage that might 
     result from it, could be reduced by restraining the growth of 
     greenhouse gas emissions and ultimately limiting them to a 
     level that stabilized atmospheric concentrations.
       The magnitude of warming and the damages that might result 
     are highly uncertain, in part because they depend on the 
     amount of emissions that will occur both now and in the 
     future, how the global climate system will respond to rising 
     concentrations of greenhouse gases in the atmosphere, and how 
     changes in climate will affect the health of human and 
     natural systems. The costs of restraining emissions are also 
     highly uncertain, in part because they will depend on the 
     development of new technologies. From an economic point of 
     view, the challenge to policymakers is to implement policies 
     that balance the uncertain costs of restraining emissions 
     against the benefits of avoiding uncertain damages from 
     global warming or that minimize the cost of achieving a 
     target level of concentrations or level of annual emissions.
       Researchers have studied the relative efficacy--as well as 
     the appropriate timing--of

[[Page 1810]]

     various policies that might discourage emissions of carbon 
     dioxide (referred to as carbon emissions in the rest of this 
     paper), which makes up the vast majority of greenhouse gases, 
     and restrain the growth of its atmospheric concentration. 
     This paper presents qualitative findings from that research, 
     which are largely dependent of any particular estimate of the 
     costs or benefits of reducing emissions. The paper's 
     conclusions are summarized below.
     Policies for reducing carbon emissions
       The possibility of climate change involves two distinct 
     ``market failures'' that prevent unregulated markets from 
     achieving the appropriate balance between fossil fuel use and 
     changes in the climate. One market failure involves the 
     external effects of emissions from the combustion of fossil 
     fuels--that is, the costs that are imposed on society by the 
     use of fossil fuels but that are not reflected in the prices 
     paid for them. The other market failure is a general 
     underinvestment in research and development (R&D) that occurs 
     because investments in innovation may yield ``spillover'' 
     benefits to society that do not translate into profits for 
     the innovating firm. The first market failure yields 
     inefficiently high use of fossil fuels; the second yields 
     inefficiently low R&D.
       Because there are two separate market failures, an 
     efficient response is likely to involve two separate types of 
     policies:
       One type of policy would reduce carbon emissions by 
     increasing the costs of emitting carbon, both in the near 
     term and in the future, to reflect the damages that those 
     emissions are expected to cause.
       The other type of policy would increase federal support for 
     R&D on various technologies that could help restrain the 
     growth of carbon emissions and would create spillover 
     benefits.
       Policymakers could increase the cost of emitting carbon by 
     setting a price on those emissions. That could be 
     accomplished by taxing fossil fuels in proportion to their 
     carbon content (which is released when the fuels are burned) 
     or by establishing a ``cap-and-trade'' program under which 
     policymakers would set an overall cap on emissions but allow 
     fossil fuel suppliers to trade rights (called allowances) to 
     those limited emissions. Either a tax or a cap-and-trade 
     program would cause the prices of goods and services to rise 
     to reflect the amount of carbon emitted as a result of their 
     consumption. To the extent that a carbon tax or allowance 
     price reflected the present value of expected damages, such 
     policies would encourage users of fossil fuels to account for 
     the costs they impose on others through their emissions of 
     greenhouse gases.
       Researchers generally conclude that the appropriate price 
     for carbon would be relatively low in the near term but would 
     rise substantially over time, resulting in relatively modest 
     reductions in emissions in the near term followed by larger 
     reductions in the future. Phasing in price increases would 
     allow firms to gradually replace their stock of physical 
     capital associated with energy use and to gain experience in 
     using new technologies that emit less carbon. Firms would 
     have an incentive to invest in developing new technologies on 
     the basis of their expectations about future prices for 
     emissions.
       Federal support could be provided for the research and 
     development of technologies that would lead to lower 
     emissions. Such technologies could include improvements in 
     energy efficiency; advances in low- or zero emissions 
     technologies (such as nuclear, wind, or solar power); and 
     development of sequestration technologies, which capture and 
     store carbon for long periods. Federal support would probably 
     be most cost-effective if it went toward basic research on 
     technologies that are in the early stages of development. 
     Such research is more likely to be underfunded in the absence 
     of government support because it is more likely to create 
     knowledge that is beneficial to other firms but that does not 
     generate profits for the firm conducting the research.
     The interaction and timing of policies
       Pricing and R&D policies are neither mutually exclusive nor 
     entirely independent--both could be implemented 
     simultaneously, and each would tend to enhance the other. 
     Pricing policies would tend to encourage the use of existing 
     carbon-reducing technologies as well as provide incentives 
     for firms to develop new ones; federal funding of R&D would 
     augment private efforts; and successful R&D investments would 
     reduce the price required to achieve a given level of 
     reductions in emissions.
       Neither policy alone is likely to be as effective as a 
     strategy involving both policies. Relying exclusively on R&D 
     funding in the near term, for example, does not appear likely 
     to be consistent with the goal of balancing costs and 
     benefits or the goal of minimizing the costs of meeting an 
     emissions reduction target. At any point in time, there is a 
     cost continuum for emissions reductions, ranging from low-
     cost to high-cost opportunities. Unless R&D efforts virtually 
     eliminated the value of near-term reductions in emissions (an 
     outcome that appears unlikely given reasonable assumptions 
     about the payoff of R&D efforts), waiting to begin initial 
     pricing (to encourage low-cost reductions) would increase the 
     overall cost of reducing emissions in the long run.
       Near-term reductions in emissions achieved with existing 
     technologies could be valuable even if fundamentally new 
     energy technologies would be needed to prevent the buildup of 
     greenhouse gases in the atmosphere from reaching a point that 
     triggered a rapid increase in damages. Near-term reductions 
     could take advantage of low-cost opportunities to avoid 
     adding to the stock of gases in the atmosphere and could 
     allow additional time for new technologies to be developed 
     and put in place. That additional time could prove quite 
     valuable, given that R&D efforts are highly uncertain and 
     that the process of putting new energy systems in place could 
     be slow and costly.
       Determining the appropriate mix of policies to address 
     climate change is complicated by the fact that future 
     policies would be layered on a complex mix of current and 
     past policies, all of which affect today's use of fossil 
     fuels and their alternatives as well as the amount of R&D. 
     The analyses reviewed in this paper typically do not account 
     for existing policies or for the administrative costs of 
     implementing a carbon-pricing program or of initiating a 
     larger (and perhaps redesigned) R&D program for carbon-
     reducing technologies. However, the qualitative conclusion 
     reached in those analyses--that costs would be minimized by a 
     combination of gradually increasing emissions prices coupled 
     with subsidies for R&D--is not likely to be affected by such 
     considerations.
     A global concern
       The causes and consequences of climate change are global, 
     and reductions in U.S. emissions alone would be unlikely to 
     have a significant impact. Cost-effective mitigation policies 
     would require coordinated international efforts and would 
     involve overcoming institutional barriers to the diffusion of 
     new technologies in developing countries, such as India and 
     China. If a domestic carbon-pricing program significantly 
     increased the prices of U.S.produced goods--and was not 
     matched by efforts to reduce emissions in other countries--it 
     could cause carbon-intensive industries to relocate to 
     countries without similar restrictions, diminishing the 
     environmental benefits of a domestic program.
       However, successful domestic R&D efforts, whether funded by 
     the public or private sector, could lower the costs of 
     reducing carbon emissions in other countries as well as 
     within the United States. Some new technologies, such as 
     those that yielded improvements in energy efficiency, might 
     be deployed without additional incentives. Other innovations, 
     such as sequestration technologies or alternative energy 
     technologies that reduce carbon emissions but cost more than 
     their fossil-fuel-based alternatives, would be unlikely to be 
     deployed without financial incentives to reduce carbon 
     emission.
                                  ____


                               Exhibit 3


    chairman and ranking member statement: climate change conference

       On April 4, 2006, the Senate Committee on Energy and 
     Natural Resources held a conference to discuss critical 
     issues involved in the design of a mandatory greenhouse gas 
     (GHG) program. More than 300 people attended the event and 
     over 160 organizations and individuals submitted detailed 
     written comments.
       Although the issue of climate change continues to elicit a 
     diverse array of opinions, we are encouraged that a number of 
     general themes are emerging that could form the basis of 
     eventual solutions to reducing greenhouse gas emissions.
       The following discussion reflects our perception of key 
     areas where there appears to be a narrowing of disagreement 
     and in some cases an emerging consensus. Of course it is not 
     our intent to imply that there is now or will ever be an 
     absolute unanimity of opinion on issues related to climate 
     change, especially on a greenhouse gas regulatory mechanism. 
     Nevertheless, we remain committed to exploring the 
     development of solutions consistent with the requirements set 
     forth in the June 22, 2005, Sense of the Senate Resolution. 
     We continue to work together with our colleagues on the 
     Committee on Energy and Natural Resources and throughout the 
     Senate to fashion reasonable policy solutions to the key 
     issues identified at the April 4, 2006, Workshop and look 
     forward to ongoing input and engagement from interested 
     stakeholders.


       conceptual direction for reducing greenhouse gas emissions

       In both the written submissions and comments at the 
     workshop, many participants and respondents expressed the 
     view that the risks associated with a changing climate 
     justified the adoption of mandatory limits on greenhouse gas 
     emissions. While opinions varied on the stringency of initial 
     limits, there was support for the notion that a program 
     should begin modestly and strengthen gradually over time. 
     Consistent with the success of the acid rain program and 
     other market-based approaches, most participants supported a 
     market-based approach that would set a ``forward price'' on 
     greenhouse gas emissions in order to provide both the

[[Page 1811]]

     flexibility and incentive needed to accelerate technology 
     development and deployment.
       Most participants recognized that if the price signal 
     initially imposed under a domestic regime is modest, it is 
     unlikely to be strong enough to motivate the development and 
     deployment of the key technologies that will ultimately be 
     needed to eventually eliminate GHG emissions. In order to 
     speed technology deployment, there was general agreement that 
     some portion of the proceeds of a permit auction should be 
     used to enhance current technology incentives. Again there 
     was disagreement about the appropriate size of a permit 
     auction and the means of directing these resources toward 
     technology innovation. Ultimately, we perceive agreement that 
     a GHG policy should provide a combination of a market signal 
     and increased incentives for technology innovation.
       In addition to general support for the overall goals of the 
     Sense of the Senate Resolution, we are encouraged by the 
     similarity of views with respect to several of the key 
     questions raised in the White Paper:
       Economy-wide approach: A threshold decision in designing a 
     mandatory GHG emission reduction program is whether the 
     program should address GHG's on an economy-wide basis or 
     whether the program should focus on the GHG emissions of just 
     one or more sectors of the economy. In general, there was 
     agreement on the need for economy-wide action to address the 
     wide diversity of sources of GHG's. Many participants argued 
     that an economy-wide program is the most equitable and 
     efficient approach.
       Upstream or hybrid point of regulation: Most participants 
     supported either an entirely upstream or a hybrid approach 
     for point of regulation. In an ``upstream'' regulatory 
     approach, the point of regulation is placed closer to energy 
     producers and suppliers than to end-use consumers. 
     Specifically, a requirement to acquire permits or allowances 
     for emissions associated with fossil fuel use might apply to 
     coal mining companies, petroleum refiners, and natural gas 
     shippers, processors or pipelines rather than to the 
     ``smokestack'' entities (e.g., electric utilities, large 
     industrial plants). Under a ``hybrid'' approach, major 
     stationary sources that burn coal would be regulated at the 
     point of combustion, while natural gas and petroleum related 
     emissions would be addressed upstream (at refineries for 
     petroleum and at either shippers, processors, or pipelines 
     for natural gas). Regulating the carbon content of fuels at 
     the point in which energy enters the economy was described by 
     many as providing the most complete coverage through the most 
     manageable regulatory approach. However, several participants 
     noted that the efficiency of an upstream program would not be 
     diminished if only major stationary sources were carved out 
     for regulation at the source of combustion. They note that 
     these sources are limited in number and already have the 
     monitoring and knowledge in place necessary to implement such 
     requirements due to participation in the acid rain program.
       Offsets and set-asides: There was general agreement about 
     the benefits of emission reduction projects at sources 
     outside of a cap on GHG emissions. However, there was some 
     disagreement about how to ensure the environmental integrity 
     of these types of projects. Some panelists argued that 
     offsets could provide low-cost emission reductions and could 
     create incentives for new technologies and approaches. In 
     particular, a few panelists specifically mentioned the 
     potential for offset opportunities in the agricultural 
     sector. Others noted that offsets could dilute the 
     environmental benefit of a mandatory program unless they are 
     accompanied by rigorous and standardized baseline and 
     measurement protocols. An additional option would be to 
     dedicate a percentage of allowances from within a program's 
     overall allowance allocation for offset activities that are 
     less easily verified.
       Links to other trading programs: Ultimately, GHG emissions 
     cannot be reduced absent an effort that includes meaningful 
     participation from all nations with significant GHG 
     emissions. An emission reduction program in the U.S. could be 
     designed to leave open the possibility of trading with GHG 
     systems in other countries. Most panelists at the conference 
     agreed that linking to other domestic emissions trading 
     programs is theoretically more efficient. However, a few 
     panelists also noted that differences in the design of 
     domestic trading programs (e.g., different target levels, 
     different monitoring and verification systems) may complicate 
     linking programs and make it politically difficult in the 
     near-term.
       Developing country action: Many participants agreed that an 
     important component of a U.S. GHG program should encourage 
     major trading partners and large emitters of GHG's to take 
     actions that are comparable to those taken by the U.S. 
     Panelists noted that ultimately, action by major developing 
     countries like China and India is critical to address climate 
     change. There was also discussion of the competitive 
     implications if the U.S. takes action to address climate 
     change and other major trading partners do not. Not all, but 
     many panelists said that the U.S. should not wait for 
     developing countries to act. Rather, the U.S. should take a 
     cautious first step toward mandatory action with additional 
     action conditioned on an evaluation of the efforts of major 
     developing country emitters. There was debate about how to 
     measure progress when different countries have different 
     national circumstances. There was also discussion about the 
     best process for evaluating the actions of developing 
     countries and about how much discretion there should be in 
     this process.
       Allowance distribution: Multiple views were expressed at 
     the conference on the best approach to allowance 
     distribution. However, a significant number of panelists 
     emphasized that not all allowances need be distributed for 
     free at the point of regulation. For example, several 
     panelists endorsed the concept of using cost burden as a 
     principle for allocation. In other words, even if a sector is 
     not at the point of regulation, it still might receive some 
     allowances to mitigate the cost impacts of a mandatory 
     program. In addition, some panelists argued for the benefits 
     of allowance auctions. According to this view, auctions can 
     level the playing field for new facilities, and can create an 
     incentive for lower-carbon technology. Auctions may also 
     avoid the need for complex allocation rules that might result 
     in unintended competitive advantages, including windfall 
     profits, for certain market participants. On the other hand, 
     some panelists noted the political difficulties of an auction 
     approach and suggested a gradual transition to an auction. 
     Finally, the discussion on allowance distribution highlighted 
     the diverse economic, regulatory, social, and political 
     considerations associated with this issue. There were a 
     number of creative suggestions at the conference on how to 
     accommodate these different considerations.
       Based on the discussion at the conference, we believe the 
     following principles for allocation are emerging;
       Allowances should be allocated in a manner that recognizes 
     and roughly addresses the disparate costs imposed by the 
     program.
       Allowances should not be allocated solely to regulated 
     entities because such entities do not solely bear the costs 
     of the emissions trading program.
       A portion of the allowances should be auctioned (or used 
     for ``set-aside'' programs), with revenues used to advance 
     climate-related policy goals and other public purposes.
       Over time, an allowance distribution approach should 
     transition from approaches that attempt to fairly compensate 
     sectors for past investments in carbon intensive technologies 
     to approaches that create incentives for energy efficiency 
     and lower carbon technologies. In practice, this means a 
     gradual transition over an extended period of time from a 
     largely free allocation of allowances to the use of an 
     auction as the predominant method for distribution of 
     allowances.


                               Next Steps

       The Committee intends to continue soliciting comments on 
     the major points that have been summarized from the 
     conference and on the emerging allowance allocation 
     principles that have been described. The Committee recognizes 
     that any proposals for a mandatory GHG program will deserve 
     further input from affected stakeholders and Members of 
     Congress. We encourage stakeholders and congressional offices 
     to provide the Committee with ideas and suggestions for 
     expanding general findings to the next level of specificity. 
     Please contact John Peschke or Jonathan Black if you have 
     further thoughts or input.
                                  ____


                               Exhibit 4

                                 S. __

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``__________ Act of ____''.

     SEC. 2. ACTIONS TO ADDRESS GLOBAL CLIMATE.

       Title XVI of the Energy Policy Act of 1992 (42 U.S.C. 13381 
     et seq.) is amended--
       (1) by inserting after the title designation and heading 
     the following:

                  ``Subtitle A--General Provisions'';

     and
       (2) by adding at the end the following:

         ``Subtitle B--Actions to Address Global Climate Change

     ``SEC. 1611. PURPOSE.

       ``The purpose of this subtitle is to reduce greenhouse gas 
     emissions intensity in the United States, beginning in 
     calendar year 2012, through an emissions trading system 
     designed to achieve emissions reductions at the lowest 
     practicable cost to the United States.

     ``SEC. 1612. DEFINITIONS.

       ``In this subtitle:
       ``(1) Carbon dioxide equivalent.--The term `carbon dioxide 
     equivalent' means--
       ``(A) for each covered fuel, the quantity of carbon dioxide 
     that would be emitted into the atmosphere as a result of 
     complete combustion of a unit of the covered fuel, to be 
     determined for the type of covered fuel by the Secretary; and
       ``(B) for each greenhouse gas (other than carbon dioxide) 
     the quantity of carbon dioxide that would have an effect on 
     global warming equal to the effect of a unit of the 
     greenhouse gas, as determined by the Secretary, taking into 
     consideration global warming potentials.

[[Page 1812]]

       ``(2) Covered fuel.--The term `covered fuel' means--
       ``(A) coal;
       ``(B) petroleum products;
       ``(C) natural gas;
       ``(D) natural gas liquids; and
       ``(E) any other fuel derived from fossil hydrocarbons 
     (including bitumen and kerogen).
       ``(3) Covered greenhouse gas emissions.--
       ``(A) In general.--The term `covered greenhouse gas 
     emissions' means--
       ``(i) the carbon dioxide emissions from combustion of 
     covered fuel carried out in the United States; and
       ``(ii) nonfuel-related greenhouse gas emissions in the 
     United States, determined in accordance with section 
     1615(b)(2).
       ``(B) Units.--Quantities of covered greenhouse gas 
     emissions shall be measured and expressed in units of metric 
     tons of carbon dioxide equivalent.
       ``(4) Emissions intensity.--The term `emissions intensity' 
     means, for any calendar year, the quotient obtained by 
     dividing--
       ``(A) covered greenhouse gas emissions; by
       ``(B) the forecasted GDP for that calendar year.
       ``(5) Forecasted gdp.--The term `forecasted GDP' means the 
     predicted amount of the gross domestic product of the United 
     States, based on the most current projection used by the 
     Energy Information Administration of the Department of Energy 
     on the date on which the prediction is made.
       ``(6) Forecasted gdp implicit price deflator.--The term 
     `forecasted GDP implicit price deflator' means [TO BE 
     SUPPLIED].
       ``(7) Greenhouse gas.--The term `greenhouse gas' means--
       ``(A) carbon dioxide;
       ``(B) methane;
       ``(C) nitrous oxide;
       ``(D) hydrofluorocarbons;
       ``(E) perfluorocarbons; and
       ``(F) sulfur hexafluoride.
       ``(8) Initial allocation period.--The term `initial 
     allocation period' means the period beginning January 1, 
     2012, and ending December 31, 2021.
       [``(9) Natural gas processing plant.--The term `natural gas 
     processing plant' means a facility designed to separate 
     natural gas liquids from natural gas.]
       ``(10) Nonfuel regulated entity.--The term `nonfuel 
     regulated entity' means--
       ``(A) the owner or operator of a facility that manufactures 
     hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or 
     nitrous oxide;
       ``(B) an importer of hydrofluorocarbons, perfluorocarbons, 
     sulfur hexafluoride, or nitrous oxide;
       ``(C) the owner or operator of a facility that emits 
     nitrous oxide associated with the manufacture of adipic acid 
     or nitric acid;
       ``(D) the owner or operator of an aluminum smelter;
       ``(E) the owner or operator of an underground coal mine 
     that emitted more than 35,000,000 cubic feet of methane 
     during 2004 or any subsequent calendar year; and
       ``(F) the owner or operator of facility that emits 
     hydrofluorocarbon-23 as a byproduct of 
     hydrochlorofluorocarbon-22 production.
       ``(11) Offset project.--The term `offset project' means any 
     project to--
       ``(A) reduce greenhouse gas emissions; or
       ``(B) sequester a greenhouse gas.
       ``(12) Petroleum product.--The term `petroleum product' 
     means--
       ``(A) a refined petroleum product;
       ``(B) residual fuel oil;
       ``(C) petroleum coke; or
       ``(D) a liquefied petroleum gas.
       ``(13) Regulated entity.--The term `regulated entity' 
     means--
       ``(A) a regulated fuel distributor; or
       ``(B) a nonfuel regulated entity.
       ``(14) Regulated fuel distributor.--The term `regulated 
     fuel distributor' means--
       ``(A) the owner or operator of--
       ``(i) a petroleum refinery;
       ``(ii) a coal mine that produces more than 10,000 short 
     tons during 2004 or any subsequent calendar year; or
       ``(iii) a natural gas processing plant [size threshold];
       ``(B) an importer of--
       ``(i) petroleum products;
       ``(ii) coal;
       ``(iii) coke; or
       ``(iv) natural gas liquids; or
       ``(C) any other entity the Secretary determines under 
     section 1615(b)(3)(A)(ii) to be subject to section 1615.
       ``(15) Safety valve price.--The term `safety valve price' 
     means--
       ``(A) for 2012, $7 per metric ton of carbon dioxide 
     equivalent; and
       ``(B) for each subsequent calendar year, an amount equal to 
     the product obtained by multiplying--
       ``(i) the safety valve price established for the preceding 
     calendar year increased by 5 percent, unless a different rate 
     of increase is established for the calendar year under 
     section 1622; and
       ``(ii) the ratio that--
       ``(I) the forecasted GDP implicit price deflator for the 
     calendar year; bears to
       ``(II) the forecasted GDP implicit price deflator for the 
     preceding calendar year.
       ``(16) Secretary.--The term `Secretary' means the Secretary 
     of Energy, unless the President designates another officer of 
     the Executive Branch to carry out a function under this 
     subtitle.
       ``(17) Subsequent allocation period.--The term `subsequent 
     allocation period' means--
       ``(A) the 5-year period beginning January 1, 2022, and 
     ending December 31, 2026; and
       ``(B) each subsequent 5-year period.

     ``SEC. 1613. QUANTITY OF ANNUAL GREENHOUSE GAS ALLOWANCES.

       ``(a) Initial Allocation Period.--
       ``(1) In general.--Not later than December 31, 2008, the 
     Secretary shall--
       ``(A) make a projection with respect to emissions intensity 
     for 2011, using--
       ``(i) the Energy Information Administration's most current 
     projections of covered greenhouse gas emissions for 2011; and
       ``(ii) the forecasted GDP for 2011;
       ``(B) determine the emissions intensity target for 2012 by 
     calculating a 2.6 percent reduction from the projected 
     emissions intensity for 2011;
       ``(C) in accordance with paragraph (2), determine the 
     emissions intensity target for each calendar year of the 
     initial allocation period after 2012; and
       ``(D) in accordance with paragraph (3), determine the total 
     number of allowances to be allocated for each calendar year 
     during the initial allocation period.
       ``(2) Emissions intensity targets after 2012.--For each 
     calendar year during the initial allocation period after 
     2012, the emissions intensity target shall be the emissions 
     intensity target established for the preceding calendar year 
     reduced by 2.6 percent.
       ``(3) Total allowances.--For each calendar year during the 
     initial allocation period, the quantity of allowances to be 
     issued shall be equal to the product obtained by 
     multiplying--
       ``(A) the emissions intensity target established for the 
     calendar year; and
       ``(B) the forecasted GDP for the calendar year.
       ``(b) Subsequent Allocation Periods.--
       ``(1) In general.--Not later than the date that is 4 years 
     before the beginning of each subsequent allocation period, 
     the Secretary shall--
       ``(A) except as directed under section 1622, determine the 
     emissions intensity target for each calendar year during that 
     subsequent allocation period, in accordance with paragraph 
     (2); and
       ``(B) issue the total number of allowances for each 
     calendar year of the subsequent allocation period, in 
     accordance with paragraph (3).
       ``(2) Emissions intensity targets.--For each calendar year 
     during a subsequent allocation period, the emissions 
     intensity target shall be the emissions intensity target 
     established for the preceding calendar year reduced by 3.0 
     percent.
       ``(3) Total allowances.--For each calendar year during a 
     subsequent allocation period, the quantity of allowances to 
     be issued shall be equal to the product obtained by 
     multiplying--
       ``(A) the emissions intensity target established for the 
     calendar year; and
       ``(B) the forecasted GDP for the calendar year.
       ``(c) Administrative Requirements.--
       ``(1) Denomination.--Allowances issued by the Secretary 
     under this section shall be denominated in units of metric 
     tons of carbon dioxide equivalent.
       ``(2) Period of use.--An allowance issued by the Secretary 
     under this section may be used during--
       ``(A) the calendar year for which the allowance is issued; 
     or
       ``(B) any subsequent calendar year.
       ``(3) Serial numbers.--The Secretary shall--
       ``(A) assign a unique serial number to each allowance 
     issued under this subtitle; and
       ``(B) retire the serial number of an allowance on the date 
     on which the allowance is submitted under section 1615.

     ``SEC. 1614. ALLOCATION AND AUCTION OF GREENHOUSE GAS 
                   ALLOWANCES.

       ``(a) Allocation of Allowances.--
       ``(1) Definition of state.--In this subsection, the term 
     `State' means--
       ``(A) each of the several States of the United States;
       ``(B) the District of Columbia;
       ``(C) the Commonwealth of Puerto Rico;
       ``(D) Guam;
       ``(E) American Samoa;
       ``(F) the Commonwealth of the Northern Mariana Islands;
       ``(G) the Federated States of Micronesia;
       ``(H) the Republic of the Marshall Islands;
       ``(I) the Republic of Palau; and
       ``(J) the United States Virgin Islands.
       ``(2) Allocations.--Not later than the date that is 2 years 
     before the beginning of the initial allocation period, and 
     each subsequent allocation period, the Secretary shall 
     allocate for each calendar year during the allocation period 
     a quantity of allowances in accordance with this subsection.
       ``(3) Quantity.--The total quantity of allowances available 
     to be allocated to industry and States [OR: to industry and 
     by the President] for each calendar year of an allocation 
     period shall be the product obtained by multiplying--
       ``(A) the total quantity of allowances issued for the 
     calendar year under subsection (a)(3) or (b)(3) of section 
     1613; and
       ``(B) the allocation percentage for the calendar year under 
     subsection (c).

[[Page 1813]]

       ``(4) Allowance allocation rulemaking.--Not later than 18 
     months after the date of enactment of this subtitle, the 
     Secretary shall establish, by rule, procedures for allocating 
     allowances in accordance with the criteria established under 
     this subsection, including requirements (including forms and 
     schedules for submission) for the reporting of information 
     necessary for the allocation of allowances under this 
     section.
       ``(5) Distribution of allowances to industry.--The 
     allowances available for allocation to industry under 
     paragraph (3) shall be distributed as follows:
       ``(A) Coal mines.--
       ``(i) Definition of eligible coal mine.--In this 
     subparagraph, the term `eligible coal mine' means a coal mine 
     located in the United States that is a regulated fuel 
     distributor.
       ``(ii) Total allocation.--For each year, eligible coal 
     mines shall be allocated \7/55\ of the total quantity of 
     allowances available for allocation to industry under 
     paragraph (3).
       ``(iii) Individual allocations.--For any year, the quantity 
     of allowances allocated to an eligible coal mine shall be the 
     quantity equal to the product obtained by multiplying--
       ``(I) the total allocation to eligible coal mines under 
     clause (ii); and
       ``(II) the ratio that--
       ``(aa) the carbon content of coal produced at the eligible 
     coal mine during the 3-year period beginning on January 1, 
     2004; bears to
       ``(bb) the carbon content of coal produced at all eligible 
     coal mines in the United States during that period.
       ``(B) Petroleum refiners.--
       ``(i) Total allocation.--For each year, the petroleum 
     refining sector shall be allocated \4/55\ of the total 
     quantity of allowances available for allocation to industry 
     under paragraph (3).
       ``(ii) Individual allocations.--For any year, the quantity 
     of allowances allocated to a petroleum refinery located in 
     the United States shall be the quantity equal to the product 
     obtained by multiplying--
       ``(I) the total allocation to the petroleum refining sector 
     under clause (i); and
       ``(II) the ratio that--
       ``(aa) the carbon content of petroleum products produced at 
     the refinery during the 3-year period beginning on January 1, 
     2004; bears to
       ``(bb) the carbon content of petroleum products produced at 
     all refineries in the United States during that period.
       ``(C) Natural gas processors.--
       ``(i) Definition of eligible natural gas processor.--In 
     this subparagraph, the term `eligible natural gas processor' 
     means a natural gas processor located in the United States 
     that is a regulated fuel distributor.
       ``(ii) Total allocation.--For each year, eligible natural 
     gas processors shall be allocated \2/55\ of the total 
     quantity of allowances available for allocation to industry 
     under paragraph (3).
       ``(iii) Individual allocations.--For any year, the quantity 
     of allowances allocated to an eligible natural gas processor 
     shall be the quantity equal to the product obtained by 
     multiplying--
       ``(I) the total allocation to eligible natural gas 
     processors under clause (ii); and
       ``(II) the ratio that--
       ``(aa) the sum of, for the 3-year period beginning on 
     January 1, 2004--
       ``(AA) the carbon content of natural gas liquids produced 
     by the eligible natural gas processor; and
       ``(BB) the carbon content of the natural gas delivered into 
     commerce by the eligible natural gas processor; bears to
       ``(bb) the sum of, for that period--
       ``(AA) the carbon content of natural gas liquids produced 
     by all eligible natural gas processors; and
       ``(BB) the carbon content of the natural gas delivered into 
     commerce by all eligible natural gas processors.
       ``(D) Electricity generators.--
       ``(i) Definition of eligible electricity generator.--In 
     this subparagraph, the term `eligible electricity generator' 
     means an electricity generator located in the United States 
     that is a fossil fuel-fired electricity generator.
       ``(ii) Total allocation.--For each year, eligible 
     electricity generators shall be allocated \30/55\ of the 
     total quantity of allowances available for allocation to 
     industry under paragraph (3).
       ``(iii) Individual allocations.--For any year, the quantity 
     of allowances allocated to an eligible electricity generator 
     shall be the quantity equal to the product obtained by 
     multiplying--
       ``(I) the total allocation to eligible electricity 
     generators under clause (ii); and
       ``(II) the ratio that--
       ``(aa) the carbon content of the fossil fuel input of the 
     eligible electricity generator during the 3-year period 
     beginning on January 1, 2004; bears to
       ``(bb) the total carbon content of fossil fuel input of 
     eligible electricity generators in the United States during 
     that period.
       ``(E) Carbon-intensive manufacturing sectors.--
       ``(i) Definition of eligible manufacturer.--In this 
     subparagraph, the term `eligible manufacturer' means a 
     carbon-intensive manufacturer located in the United States 
     that [used more than _____ during ____; need to define/
     specify; need to exclude fossil fuel-fired electricity 
     generation].
       ``(ii) Total allocation.--For each year, eligible 
     manufacturers shall be allocated \10/55\ of the total 
     quantity of allowances available for allocation to industry 
     under paragraph (3).
       ``(iii) Individual allocations.--For any year, the quantity 
     of allowances allocated to an eligible manufacturer shall be 
     the quantity equal to the product obtained by multiplying--
       ``(I) the total allocation to eligible manufacturers under 
     clause (ii); and
       ``(II) the ratio that--
       ``(aa) the carbon content of fossil fuel combusted at the 
     eligible manufacturer during the 3-year period beginning on 
     January 1, 2004; bears to
       ``(bb) the total carbon content of fossil fuel combusted at 
     all eligible manufacturers in the United States during that 
     period.
       ``(F) Nonfuel regulated entities.--
       ``(i) Total allocation.--For each year, nonfuel regulated 
     entities shall be allocated \2/55\ of the total quantity of 
     allowances available for allocation to industry under 
     paragraph (3).
       ``(ii) Individual allocations.--For any year, the quantity 
     of allowances allocated to a nonfuel regulated entity shall 
     be the quantity equal to the product obtained by 
     multiplying--
       ``(I) the total allocation to nonfuel regulated entities 
     under clause (i); and
       ``(II) the ratio that--
       ``(aa) the carbon dioxide equivalent of the nonfuel-related 
     greenhouse gas produced or emitted by the nonfuel regulated 
     entity at facilities in the United States during the 3-year 
     period beginning on January 1, 2004; bears to
       ``(bb) the carbon dioxide equivalent of the nonfuel-related 
     greenhouse gases produced or emitted by all nonfuel regulated 
     entities at facilities in the United States during that 
     period.
       ``(6) Allowances to states.--
       ``(A) Distribution.--The allowances available for 
     allocation to States under paragraph (3) shall be distributed 
     as follows:
       ``(i) For each year, \1/2\ of the quantity of allowances 
     available for allocation to States under paragraph (3) shall 
     be allocated among the States based on the ratio that--
       ``(I) the greenhouse gas emissions of the State during the 
     3-year period beginning on January 1, 2004; bears to
       ``(II) the greenhouse gas emissions of all States for that 
     period.
       ``(ii) For each year, \1/2\ of the quantity of allowances 
     available for allocation to States under paragraph (3) shall 
     be allocated among the States based on the ratio that--
       ``(I) the population of the State, as determined by the 
     2000 decennial census; bears to
       ``(II) the population of all States as determined by that 
     census.
       ``(B) Use.--
       ``(i) In general.--During any year, a State shall use not 
     less than 90 percent of the allowances allocated to the State 
     for that year--
       ``(I) to mitigate impacts on low-income energy consumers;
       ``(II) to promote energy efficiency;
       ``(III) to promote investment in nonemitting electricity 
     generation technology;
       ``(IV) to encourage advances in energy technology that 
     reduce or sequester greenhouse gas emissions;
       ``(V) to avoid distortions in competitive electricity 
     markets;
       ``(VI) to mitigate obstacles to investment by new entrants 
     in electricity generation markets;
       ``(VII) to address local or regional impacts of climate 
     change policy, including providing assistance to displaced 
     workers;
       ``(VIII) to mitigate impacts on energy-intensive industries 
     in internationally-competitive markets; or
       ``(IX) to enhance energy security.
       ``(ii) Deadline.--A State shall allocate allowances for use 
     in accordance with clause (i) by not later than 1 year before 
     the beginning of each allowance allocation period.
       [``(6) [POSSIBLE substitute for (6)] distribution of 
     allowances by president.--]
       [``(A) In general.--The President shall distribute the 
     allowances available for allocation by the President under 
     paragraph (3) in a manner designed to mitigate the undue 
     impacts of the program under this subtitle.]
       [``(B) Use.--During any year, the President shall use not 
     less than 90 percent of the allowances available for 
     allocation by the President for that year--]
       [``(i) to mitigate impacts on low-income energy consumers;]
       [``(ii) to promote energy efficiency;]
       [``(iii) to promote investment in nonemitting electricity 
     generation technology;]
       [``(iv) to support advances in energy technology that 
     reduce or sequester greenhouse gas emissions;]
       [``(v) to avoid distortions in competitive electricity 
     markets;]
       [``(vi) to mitigate obstacles to investment by new entrants 
     in electricity generation markets;]
       [``(vii) to address local or regional impacts of climate 
     change policy, including providing assistance to displaced 
     workers;]
       [``(viii) to mitigate impacts on energy-intensive 
     industries in internationally-competitive markets; and]
       [``(ix) to enhance energy security.]

[[Page 1814]]

       [``(C) Deadline.--The President shall allocate allowances 
     for use in accordance with subparagraph (B) by not later than 
     1 year before the beginning of each allowance allocation 
     period. [Corresponding changes needed elsewhere if this 
     paragraph is selected.]]
       ``(7) Cost of allowances.--The Secretary shall distribute 
     allowances under this subsection at no cost to the recipient 
     of the allowance.
       ``(b) Auction of Allowances.--
       ``(1) In general.--The Secretary shall establish, by rule, 
     a procedure for the auction of a quantity of allowances 
     during each calendar year in accordance with paragraph (2).
       ``(2) Base quantity.--The base quantity of allowances to be 
     auctioned during a calendar year shall be the product 
     obtained by multiplying--
       ``(A) the total number of allowances for the calendar year 
     under subsection (a)(3) or (b)(3) of section 1613; and
       ``(B) the auction percentage for the calendar year under 
     subsection (c).
       ``(3) Schedule.--The auction of allowances shall be held on 
     the following schedule:
       ``(A) In 2009, the Secretary shall auction--
       ``(i) \1/2\ of the allowances available for auction for 
     2012; and
       ``(ii) \1/2\ of the allowances available for auction for 
     2013.
       ``(B) In 2010, the Secretary shall auction \1/2\ of the 
     allowances available for auction for 2014.
       ``(C) In 2011, the Secretary shall auction \1/2\ of the 
     allowances available for auction for 2015.
       ``(D) In 2012 and each subsequent calendar year, the 
     Secretary shall auction--
       ``(i) \1/2\ of the allowances available for auction for 
     that calendar year; and
       ``(ii) \1/2\ of the allowances available for auction for 
     the calendar year that is 4 years after that calendar year.
       ``(4) Undistributed allowances.--In an auction held during 
     any calendar year, the Secretary shall auction any allowance 
     that was--
       ``(A) available for allocation by the Secretary under 
     subsection (a) for the calendar year, but not distributed;
       ``(B) available during the preceding calendar year for an 
     agricultural sequestration or early reduction activity under 
     section 1620 or 1621, but not distributed during that 
     calendar year; or
       ``(C) available for distribution by a State under 
     subsection (a)(6), but not distributed by the date that is 1 
     year before the beginning of the applicable allocation 
     period.
       ``(c) Available Percentages.--Except as directed under 
     section 1622, the percentage of the total quantity of 
     allowances for each calendar year to be available for 
     allocation, agricultural sequestration and early reduction 
     projects, and auction shall be determined in accordance with 
     the following table:


------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Percentage Allocated to       Percentage Allocated to      Percentage Available for      Percentage Available for
                   Year                               Industry                       States              Agricultural Sequestration    Early Reduction Allowances       Percentage Auctioned
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2012......................................                            55                            29                             5                             1                            10
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2013......................................                            55                            29                             5                             1                            10
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2014......................................                            55                            29                             5                             1                            10
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2015......................................                            55                            29                             5                             1                            10
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2016......................................                            55                            29                             5                             1                            10
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2017......................................                            53                            29                             5                             1                            12
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2018......................................                            51                            29                             5                             1                            14
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2019......................................                            49                            29                             5                             1                            16
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2020......................................                            47                            29                             5                             1                            18
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2021......................................                            45                            29                             5                             1                            20
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2022 and thereafter.......................      2 less than allocated to                            30                             5                             0     2 more than available for
                                             industry in the prior year,                                                                                              auction in the prior year,
                                                     but not less than 0                                                                                                    but not more than 65
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

     ``SEC. 1615. SUBMISSION OF ALLOWANCES.

       ``(a) Requirements.--
       ``(1) Regulated fuel distributors.--For calendar year 2012 
     and each calendar year thereafter, each regulated fuel 
     distributor shall submit to the Secretary a number of 
     allowances equal to the carbon dioxide equivalent of the 
     quantity of covered fuel, determined in accordance with 
     subsection (b)(1), for the regulated fuel distributor.
       ``(2) Nonfuel regulated entities.--For 2012 and each 
     calendar year thereafter, each nonfuel regulated entity shall 
     submit to the Secretary a number of allowances equal to the 
     carbon dioxide equivalent of the quantity of nonfuel-related 
     greenhouse gas, determined in accordance with subsection 
     (b)(2), for the nonfuel regulated entity.
       ``(b) Regulated Quantities.--
       ``(1) Covered fuels.--For purposes of subsection (a)(1), 
     the quantity of covered fuel shall be equal to--
       ``(A) for a petroleum refinery located in the United 
     States, the quantity of petroleum products refined, produced, 
     or consumed at the refinery;
       ``(B) for a natural gas processing plant located in the 
     United States, a quantity equal to the sum of--
       ``(i) the quantity of natural gas liquids produced or 
     consumed at the plant; and
       ``(ii) the quantity of natural gas delivered into commerce 
     from, or consumed at, the plant;
       ``(C) for a coal mine located in the United States, the 
     quantity of coal produced or consumed at the mine; and
       ``(D) for an importer of coal, petroleum products, or 
     natural gas liquids into the United States, the quantity of 
     coal, petroleum products, or natural gas liquids imported 
     into the United States.
       ``(2) Nonfuel-related greenhouse gases.--For purposes of 
     subsection (a)(2), the quantity of nonfuel-related greenhouse 
     gas shall be equal to--
       ``(A) for a manufacturer or importer of hydrofluorocarbons, 
     perfluorocarbons, sulfur hexafluoride, or nitrous oxide, the 
     quantity of hydrofluorocarbons, perfluorocarbons, sulfur 
     hexafluoride, or nitrous oxide produced or imported by the 
     manufacturer or importer;
       ``(B) for an underground coal mine, the quantity of methane 
     emitted by the coal mine;
       ``(C) for a facility that manufactures adipic acid or 
     nitric acid, the quantity of nitrous oxide emitted by the 
     facility;
       ``(D) for an aluminum smelter, the quantity of 
     perfluorocarbons emitted by the smelter; and
       ``(E) for a facility that produces hydrochlorofluorocarbon-
     22, the quantity of hydrofluorocarbon-23 emitted by the 
     facility.
       ``(3) Adjustments.--
       ``(A) Regulated fuel distributors.--
       ``(i) Modification.--The Secretary may modify, by rule, a 
     quantity of covered fuels under paragraph (1) if the 
     Secretary determines that the modification is necessary to 
     ensure that--
       ``(I) allowances are submitted for all units of covered 
     fuel; and
       ``(II) allowances are not submitted for the same quantity 
     of covered fuel by more than 1 regulated fuel distributor.
       ``(ii) Extension.--The Secretary may extend, by rule, the 
     requirement to submit allowances under subsection (a)(1) to 
     an entity that is not a regulated fuel distributor if the 
     Secretary determines that the extension is necessary to 
     ensure that allowances are submitted for all covered fuels.
       ``(B) Nonfuel regulated entities.--The Secretary may 
     modify, by rule, a quantity of nonfuel-related greenhouse 
     gases under paragraph (2) if the Secretary determines the

[[Page 1815]]

     modification is necessary to ensure that allowances are not 
     submitted for the same volume of nonfuel-related greenhouse 
     gas by more than 1 regulated entity.
       ``(c) Deadline for Submission.--Any entity required to 
     submit an allowance to the Secretary under this section shall 
     submit the allowance not later than March 31 of the calendar 
     year following the calendar year for which the allowance is 
     required to be submitted.
       ``(d) Regulations.--The Secretary shall promulgate such 
     regulations as the Secretary determines to be necessary or 
     appropriate to--
       ``(1) identify and register each regulated entity that is 
     required to submit an allowance under this section; and
       ``(2) require the submission of reports and otherwise 
     obtain any information the Secretary determines to be 
     necessary to calculate or verify the compliance of a 
     regulated entity with any requirement under this section.
       ``(e) Exemption Authority for Non-Fuel Regulated 
     Entities.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary may exempt from the requirements of this subtitle 
     an entity that emits, manufactures, or imports nonfuel-
     related greenhouse gases for any period during which the 
     Secretary determines, after providing an opportunity for 
     public comment, that measuring or estimating the quantity of 
     greenhouse gases emitted, manufactured, or imported by the 
     entity is not feasible.
       ``(2) Exclusion.--The Secretary may not exempt a regulated 
     fuel distributor from the requirements of this subtitle under 
     paragraph (1).
       ``(f) Retirement of Allowances.--
       ``(1) In general.--Any person or entity that is not subject 
     to this subtitle may submit to the Secretary an allowance for 
     retirement at any time.
       ``(2) Action by secretary.--On receipt of an allowance 
     under paragraph (1), the Secretary--
       ``(A) shall accept the allowance; and
       ``(B) shall not allocate, auction, or otherwise reissue the 
     allowance.
       ``(g) Submission of Credits.--A regulated entity may submit 
     a credit distributed by the Secretary pursuant to section 
     1618, 1619, or 1622(e) in lieu of an allowance.
       ``(h) Clean Development Mechanism Certified Emission 
     Reductions.--
       ``(1) In general.--The Secretary shall establish, by 
     regulation, procedures under which a regulated entity may 
     submit a clean development mechanism certified emission 
     reduction in lieu of an allowance under this section.
       ``(2) Clear title and prevention of double-counting.--
     Procedures established by the Secretary under this subsection 
     shall include such provisions as the Secretary considers to 
     be appropriate to ensure that--
       ``(A) a regulated entity that submits a clean development 
     mechanism certified emission reduction in lieu of an 
     allowance has clear title to that certified emission 
     reduction; and
       ``(B) a clean development mechanism certified emission 
     reduction submitted in lieu of an allowance has not been and 
     cannot be used in the future for compliance purposes under 
     any foreign greenhouse gas regulatory program.
       ``(i) Study on Process Emissions.--
       ``(1) In general.--Not later than [_________], the 
     Secretary shall--
       ``(A) carry out a study of the feasibility of requiring the 
     submission of allowances for process emissions not otherwise 
     covered by this subtitle; and
       ``(B) submit to Congress a report that describes the 
     results of the study (including recommendations of the 
     Secretary based on those results).

     ``SEC. 1616. SAFETY VALVE.

       ``The Secretary shall accept from a regulated entity a 
     payment of the applicable safety valve price for a calendar 
     year in lieu of submission of an allowance under section 1615 
     for that calendar year.

     ``SEC. 1617. ALLOWANCE TRADING SYSTEM.

       ``(a) In General.--The Secretary shall--
       ``(1) establish, by rule, a trading system under which 
     allowances and credits may be sold, exchanged, purchased, or 
     transferred by any person or entity, including a registry for 
     issuing, recording, and tracking allowances and credits; and
       ``(2) specify all procedures and requirements required for 
     orderly functioning of the trading system.
       ``(b) Transparency.--
       ``(1) In general.--The trading system under subsection (a) 
     shall include such provisions as the Secretary considers to 
     be appropriate to--
       ``(A) facilitate price transparency and participation in 
     the market for allowances and credits; and
       ``(B) protect buyers and sellers of allowances and credits, 
     and the public, from the adverse effects of collusion and 
     other anticompetitive behaviors.
       ``(2) Authority to obtain information.--The Secretary may 
     obtain any information the Secretary considers to be 
     necessary to carry out this section from any person or entity 
     that buys, sells, exchanges, or otherwise transfers an 
     allowance or credit.
       ``(c) Banking.--Any allowance or credit may be submitted 
     for compliance during any year following the year for which 
     the allowance or credit was issued.

     ``SEC. 1618. CREDITS FOR FEEDSTOCKS AND EXPORTS.

       ``(a) In General.--The Secretary shall establish, by rule, 
     a program under which the Secretary distributes credits to 
     entities in accordance with this section.
       ``(b) Use of Fuels as Feedstocks.--If the Secretary 
     determines that an entity has used a covered fuel as a 
     feedstock so that the carbon dioxide associated with the 
     covered fuel will not be emitted, the Secretary shall 
     distribute to that entity, for 2012 and each subsequent 
     calendar year, a quantity of credits equal to the quantity of 
     covered fuel used as feedstock by the entity during that 
     year, measured in carbon dioxide equivalents.
       ``(c) Exporters of Covered Fuel.--If the Secretary 
     determines that an entity has exported covered fuel, the 
     Secretary shall distribute to that entity, for 2012 and each 
     subsequent calendar year, a quantity of credits equal to the 
     quantity of covered fuel exported by the entity during that 
     year, measured in carbon dioxide equivalents.
       ``(d) Other Exporters.--If the Secretary determines that an 
     entity has exported hydrofluorocarbons, perfluorocarbons, 
     sulfur hexafluoride, or nitrous oxide, the Secretary shall 
     distribute to that entity, for 2012 and each subsequent 
     calendar year, a quantity of credits equal to the volume of 
     hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or 
     nitrous oxide exported by the entity during that year, 
     measured in carbon dioxide equivalents.

     ``SEC. 1619. CREDITS FOR OFFSET PROJECTS.

       ``(a) Establishment.--The Secretary shall establish, by 
     regulation, a program under which the Secretary shall 
     distribute credits to entities that carry out offset projects 
     in the United States that--
       ``(1)(A) reduce any greenhouse gas emissions that are not 
     covered greenhouse gas emissions; or
       ``(B) sequester a greenhouse gas;
       ``(2) meet the requirements of section 1623(c); and
       ``(3) are consistent with maintaining the environmental 
     integrity of the program under this subtitle.
       ``(b) Categories of Offset Projects Eligible for 
     Streamlined Procedures.--
       ``(1) In general.--The program established under this 
     section shall include the use of streamlined procedures for 
     distributing credits to categories of projects for which the 
     Secretary determines there are broadly-accepted standards or 
     methodologies for quantifying and verifying the greenhouse 
     gas emission mitigation benefits of the projects.
       ``(2) Categories of projects.--The streamlined procedures 
     described in paragraph (1) shall apply to--
       ``(A) geologic sequestration projects not involving 
     enhanced oil recovery;
       ``(B) landfill methane use projects;
       ``(C) animal waste or municipal wastewater methane use 
     projects;
       ``(D) projects to reduce sulfur hexafluoride emissions from 
     transformers;
       ``(E) projects to destroy hydrofluorocarbons; and
       ``(F) such other categories of projects as the Secretary 
     may specify by regulation.
       ``(c) Other Projects.--With respect to an offset project 
     that is eligible to be carried out under this section but 
     that is not classified within any project category described 
     in subsection (b), the Secretary may distribute credits on a 
     basis of less than 1-credit-for-1-ton.
       ``(d) Ineligible Offset Projects.--An offset project shall 
     not be eligible to receive a credit under this section if the 
     offset project is eligible to receive credits or allowances 
     under section 1618, 1620, 1621, or 1622(e).

     ``SEC. 1620. EARLY REDUCTION ALLOWANCES.

       ``(a) Establishment.--The Secretary shall establish, by 
     rule, a program under which the Secretary distributes to any 
     entity that carries out a project to reduce or sequester 
     greenhouse gas emissions before the initial allocation period 
     a quantity of allowances that reflects the actual emissions 
     reductions or net sequestration of the project, as determined 
     by the Secretary.
       ``(b) Available Allowances.--The total quantity of 
     allowances distributed under subsection (a) may not exceed 
     the product obtained by multiplying--
       ``(1) the total number of allowances issued for the 
     calendar year under subsection (a)(3) of section 1613; and
       ``(2) the percentage available for early reduction 
     allowances for the calendar year under section 1614(c).
       ``(c) Eligibility.--The Secretary may distribute allowances 
     for early reduction projects only to an entity that has 
     reported the reduced or sequestered greenhouse gas emissions 
     under--
       ``(1) the Voluntary Reporting of Greenhouse Gases Program 
     of the Energy Information Administration under section 
     1605(b) of the Energy Policy Act of 1992 (42 U.S.C. 
     13385(b));
       ``(2) the Climate Leaders Program of the Environmental 
     Protection Agency; or
       ``(3) a State-administered or privately-administered 
     registry that includes early reduction actions not covered 
     under the programs described in paragraphs (1) and (2).

[[Page 1816]]



     ``SEC. 1621. AGRICULTURAL SEQUESTRATION PROJECTS.

       ``(a) Establishment.--The Secretary of Agriculture shall 
     establish, by rule, a program under which agricultural 
     sequestration allowances are distributed to entities that 
     carry out soil carbon sequestration projects [and other 
     projects?] that--
       ``(1) meet the requirements of section 1623(c); and
       ``(2) achieve sequestration results that are--
       ``(A) greater than sequestration results achieved pursuant 
     to standard agricultural practices; and
       [``(B) long-term.]
       ``(b) Quantity.--During a calendar year, the Secretary of 
     Agriculture shall distribute agricultural sequestration 
     allowances in a quantity not greater than the product 
     obtained by multiplying--
       ``(1) the total number of allowances issued for the 
     calendar year under section 1613; and
       ``(2) the percentage of allowances available for 
     agricultural sequestration under section 1614(c).
       ``(c) Oversubscription.--If, during a calendar year, the 
     qualifying agricultural sequestration exceeds the quantity of 
     agricultural sequestration allowances available for 
     distribution under subsection (b), the Secretary of 
     Agriculture may distribute allowances on a basis of less than 
     1-allowance-for-1-ton.

     ``SEC. 1622. CONGRESSIONAL REVIEW.

       ``(a) Interagency Review.--
       ``(1) In general.--Not later than January 15, 2016, and 
     every 5 years thereafter, the President shall establish an 
     interagency group to review and make recommendations relating 
     to--
       ``(A) each program under this subtitle; and
       ``(B) any similar program of a foreign country described in 
     paragraph (2).
       ``(2) Countries to be reviewed.--An interagency group 
     established under paragraph (1) shall review actions and 
     programs relating to greenhouse gas emissions of--
       ``(A) each member country (other than the United States) of 
     the Organisation for Economic Co-operation and Development;
       ``(B) China;
       ``(C) India;
       ``(D) Brazil;
       ``(E) Mexico;
       ``(F) Russia; and
       ``(G) Ukraine.
       ``(3) Inclusions.--A review under paragraph (1) shall--
       ``(A) for the countries described in paragraph (2), analyze 
     whether the countries that are the highest emitting countries 
     and, collectively, contribute at least 75 percent of the 
     total greenhouse gas emissions of those countries have taken 
     action that--
       ``(i) in the case of member countries of the Organisation 
     for Economic Co-Operation and Development, is comparable to 
     that of the United States; and
       ``(ii) in the case of China, India, Brazil, Mexico, Russia, 
     and Ukraine, is significant, contemporaneous, and equitable 
     compared to action taken by the United States;
       ``(B) analyze whether each of the 5 largest trading 
     partners of the United States, as of the date on which the 
     review is conducted, has taken action with respect to 
     greenhouse gas emissions that is comparable to action taken 
     by the United States;
       ``(C) analyze whether the programs established under this 
     subtitle have contributed to an increase in electricity 
     imports from Canada or Mexico; and
       ``(D) make recommendations with respect to whether--
       ``(i) the rate of reduction of emissions intensity under 
     subsection (a)(2) or (b)(2) of section 1613 should be 
     modified; and
       ``(ii) the rate of increase of the safety valve price 
     should be modified.
       ``(4) Supplementary review elements.--A review under 
     paragraph (1) may include an analysis of--
       ``(A) the feasibility of regulating owners or operators of 
     entities that--
       ``(i) emit nonfuel-related greenhouse gases; and
       ``(ii) that are not subject to this subtitle;
       ``(B) whether the percentage of allowances for any calendar 
     year that are auctioned under section 1614(c) should be 
     modified;
       ``(C) whether regulated entities should be allowed to 
     submit credits issued under foreign greenhouse gas regulatory 
     programs in lieu of allowances under section 1615;
       ``(D) whether the Secretary should distribute credits for 
     offset projects carried out outside the United States that do 
     not receive credit under a foreign greenhouse gas program; 
     and
       ``(E) whether and how the value of allowances or credits 
     banked for use during a future year should be discounted if 
     an acceleration in the rate of increase of the safety valve 
     price is recommended under paragraph (3)(D)(ii).
       ``(5) National research council reports.--The President may 
     request such reports from the National Research Council as 
     the President determines to be necessary and appropriate to 
     support the interagency review process under this subsection.
       ``(b) Report.--
       ``(1) In general.--Not later than January 15, 2017, and 
     every 5 years thereafter, the President shall submit to the 
     House of Representatives and the Senate a report describing 
     any recommendation of the President with respect to changes 
     in the programs under this subtitle.
       ``(2) Recommendations.--A recommendation under paragraph 
     (1) shall take into consideration the results of the most 
     recent interagency review under subsection (a).
       ``(c) Congressional Action.--
       ``(1) Consideration.--Not later than September 30 of any 
     calendar year during which a report is to be submitted under 
     subsection (b), the House of Representatives and the Senate 
     may consider a joint resolution, in accordance with paragraph 
     (2), that--
       ``(A) amends subsection (a)(2) or (b)(2) of section 1613;
       ``(B) modifies the safety valve price; or
       ``(C) modifies the percentage of allowances to be allocated 
     under section 1614(c).
       ``(2) Requirements.--A joint resolution considered under 
     paragraph (1) shall--
       ``(A) be introduced during the 45-day period beginning on 
     the date on which a report is required to be submitted under 
     subsection (b); and
       ``(B) after the resolving clause and `That', contain only 1 
     or more of the following:
       ``(i) `, effective beginning January 1, 2017, section 
     1613(a)(2) of the Energy Policy Act of 1992 is amended by 
     striking ``2.6'' and inserting ``_____''.'.
       ``(ii) `, effective beginning _____, section 1613(b)(2) of 
     the Energy Policy Act of 1992 is amended by striking ``3.0'' 
     and inserting ``_____''.'.
       ``(iii) `, effective beginning _____, section 1612(13)(B) 
     of the Energy Policy Act of 1992 is amended by striking ``5 
     percent'' and inserting ``___ percent''.'.
       ``(iv) `the table under section 1614(c) of the Energy 
     Policy Act of 1992 is amended by striking the line relating 
     to calendar year 2022 and thereafter and inserting the 
     following:


------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Percentage Allocated to       Percentage Allocated to      Percentage Available for      Percentage Available for
                   Year                               Industry                       States              Agricultural Sequestration    Early Reduction Allowances       Percentage Auctioned
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2022 and thereafter.......................                          ____                          ____                          ____                          ____                          ____
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

       ``(3) Applicable law.--Subsections (b) through (g) of 
     section 802 of title 5, United States Code, shall apply to 
     any joint resolution under this subsection.
       ``(d) Foreign Credits.--
       ``(1) Regulations.--After taking into consideration the 
     initial interagency review under section (a), the Secretary 
     may promulgate regulations that authorize regulated entities 
     to submit credits issued under foreign greenhouse gas 
     regulatory programs in lieu of allowances under section 1615.
       ``(2) Comparable programs and prevention of double-
     counting.--Regulations promulgated by the Secretary under 
     paragraph (1) shall ensure that foreign credits submitted in 
     lieu of allowances are--
       ``(A) from foreign greenhouse gas regulatory programs that 
     the Secretary determines to have a level of environmental 
     integrity that is not less than the level of environmental 
     integrity of the programs under this subtitle; and
       ``(B) not also submitted for use in achieving compliance 
     under any foreign greenhouse gas regulatory program.
       ``(e) International Offsets Projects.--
       ``(1) Action by the secretary.--After taking into 
     consideration the results of the initial interagency review 
     under section (a), the Secretary may promulgate regulations 
     establishing a program under which the Secretary distributes 
     credits to entities that--
       ``(A) carry out offset projects outside the United States 
     that meet the requirements of section 1623(c);
       ``(B) maintain the environment integrity of the program 
     under this subtitle; and
       ``(C) do not receive credits issued under a foreign 
     greenhouse gas regulatory program.
       ``(2) Streamlined procedures and prevention of double-
     counting.--Regulations promulgated by the Secretary under the 
     paragraph (1) shall--
       ``(A) have streamlined procedures for distributing credits 
     to projects for which the Secretary determines there are 
     broadly-accepted standards or methodologies for quantifying 
     and verifying the greenhouse gas

[[Page 1817]]

     emission mitigation benefits of the projects; and
       ``(B) ensure that offset project reductions credited under 
     the program are not also credited under foreign programs.

     ``SEC. 1623. MONITORING AND REPORTING.

       ``(a) In General.--The Secretary shall require, by rule, 
     that a regulated entity shall perform such monitoring and 
     submit such reports as the Secretary determines to be 
     necessary to carry out this subtitle.
       ``(b) Submission of Information.--The Secretary shall 
     establish, by rule, any procedure the Secretary determines to 
     be necessary to ensure the completeness, consistency, 
     transparency, and accuracy of reports under subsection (a), 
     including--
       ``(1) accounting and reporting standards for covered 
     greenhouse gas emissions;
       ``(2) standardized methods of calculating covered 
     greenhouse gas emissions in specific industries from other 
     information the Secretary determines to be available and 
     reliable, such as energy consumption data, materials 
     consumption data, production data, or other relevant activity 
     data;
       ``(3) if the Secretary determines that a method described 
     in paragraph (2) is not feasible for a regulated entity, a 
     standardized method of estimating covered greenhouse gas 
     emissions of the regulated entity;
       ``(4) a method of avoiding double counting of covered 
     greenhouse gas emissions;
       ``(5) a procedure to prevent a regulated entity from 
     avoiding the requirements of this subtitle by--
       ``(A) reorganization into multiple entities; or
       ``(B) outsourcing the operations or activities of the 
     regulated entity with respect to covered greenhouse gas 
     emissions; and
       ``(6) a procedure for the verification of data relating to 
     covered greenhouse gas emissions by--
       ``(A) regulated entities; and
       ``(B) independent verification organizations.
       ``(c) Determining Eligibility for Credits, Agricultural 
     Sequestration Allowances, and Early Reduction Allowances.--
       ``(1) In general.--An entity shall provide the Secretary 
     with the information described in paragraph (2) in connection 
     with any application to receive--
       ``(A) a credit under section 1618, 1619, or 1622(e);
       ``(B) an early reduction allowance under section 1620 
     (unless, and to the extent that, the Secretary determines 
     that providing the information would not be feasible for the 
     entity); or
       ``(C) an agricultural sequestration allowance under section 
     1621.
       ``(2) Required information.--
       ``(A) Greenhouse gas emissions reduction.--In the case of a 
     greenhouse gas emissions reduction, the entity shall provide 
     the Secretary with information verifying that, as determined 
     by the Secretary--
       ``(i) the entity has achieved an actual reduction in 
     greenhouse gas emissions--
       ``(I) relative to historic emissions levels of the entity; 
     and
       ``(II) taking into consideration any increase in other 
     greenhouse gas emissions of the entity; and
       ``(ii) if the reduction exceeds the net reduction of direct 
     greenhouse gas emissions of the entity, the entity reported a 
     reduction that was adjusted so as not to exceed the net 
     reduction.
       ``(B) Greenhouse gas sequestration.--In the case of a 
     greenhouse gas sequestration, the entity shall provide the 
     Secretary with information verifying that, as determined by 
     the Secretary, the entity has achieved actual increases in 
     net sequestration, taking into account the total use of 
     materials and energy by the entity in carrying out the 
     sequestration.

     ``SEC. 1624. ENFORCEMENT.

       ``(a) Failure to Submit Allowances.--
       ``(1) Payment to secretary.--A regulated entity that fails 
     to submit an allowance (or the safety valve price in lieu of 
     an allowance) for a calendar year not later than March 31 of 
     the following calendar year shall pay to the Secretary, for 
     each allowance the regulated entity failed to submit, an 
     amount equal to the product obtained by multiplying--
       ``(A) the safety valve price for that calendar year; and
       ``(B) 3.
       ``(2) Failure to pay.--A regulated entity that fails to 
     make a payment to the Secretary under paragraph (1) by 
     December 31 of the calendar year following the calendar year 
     for which the payment is due shall be subject to subsection 
     (b) or (c), or both.
       ``(b) Civil Enforcement.--
       ``(1) Penalty.--A person that the Secretary determines to 
     be in violation of this subtitle shall be subject to a civil 
     penalty of not more than $25,000 for each day during which 
     the entity is in violation, in addition to any amount 
     required under subsection (a)(1).
       ``(2) Injunction.--The Secretary may bring a civil action 
     for a temporary or permanent injunction against any person 
     described in paragraph (1).
       ``(c) Criminal Penalties.--A person that willfully fails to 
     comply with this subtitle shall be subject to a fine under 
     title 18, United States Code, or imprisonment for not to 
     exceed 5 years, or both.

     ``SEC. 1625. JUDICIAL REVIEW.

       ``(a) In General.--Except as provided in subsection (b), 
     section 336(b) of the Energy Policy and Conservation Act (42 
     U.S.C. 6306(b)) shall apply to a review of any rule issued 
     under this subtitle in the same manner, and to the same 
     extent, that section applies to a rule issued under sections 
     323, 324, and 325 of that Act (42 U.S.C. 6293, 6294, 6295).
       ``(b) Exception.--A petition for review of a rule under 
     this subtitle shall be filed in the United States Court of 
     Appeals for the District of Columbia.

     ``SEC. 1626. ADMINISTRATIVE PROVISIONS.

       ``(a) Rules and Orders.--The Secretary may issue such rules 
     and orders as the Secretary determines to be necessary or 
     appropriate to carry out this subtitle.
       ``(b) Data.--
       ``(1) In general.--In carrying out this subtitle, the 
     Secretary may use any authority provided under section 11 of 
     the Energy Supply and Environmental Coordination Act of 1974 
     (15 U.S.C. 796).
       ``(2) Definition of energy information.--For the purposes 
     of carrying out this subtitle, the definition of the term 
     `energy information' under section 11 of the Energy Supply 
     and Environmental Coordination Act of 1974 (15 U.S.C. 796) 
     shall be considered to include any information the Secretary 
     determines to be necessary or appropriate to carry out this 
     subtitle.

     ``SEC. 1627. EARLY TECHNOLOGY DEPLOYMENT.

       ``(a) Trust Fund.--
       ``(1) Establishment.--There is established in the Treasury 
     a trust fund, to be known as the `Climate Change Trust Fund' 
     (referred to in this section as the `Trust Fund').
       ``(2) Deposits.--The Secretary shall deposit into the Trust 
     Fund any funds received by the Secretary under section 
     1614(b) or 1616.
       ``(3) Maximum cumulative amount.--Not more than 
     $50,000,000,000 may be deposited into the Trust Fund.
       ``(b) Distribution.--Beginning in fiscal year 2010, the 
     Secretary shall transfer any funds deposited into the Trust 
     Fund during the previous fiscal year as follows:
       ``(1) Zero- or low-carbon energy technologies.--50 percent 
     of the funds shall be transferred to the Secretary to carry 
     out the zero- or low-carbon energy technologies program under 
     subsection (c).
       ``(2) Advanced energy technologies incentive program.--35 
     percent of the funds shall be transferred as follows:
       ``(A) Advanced coal technologies.--28 percent shall be 
     transferred to the Secretary to carry out the advanced coal 
     and sequestration technologies program under subsection (d).
       ``(B) Cellulosic biomass.--7 percent shall be transferred 
     to the Secretary to carry out--
       ``(i) the cellulosic biomass ethanol and municipal solid 
     waste loan guarantee program under section 212(b) of the 
     Clean Air Act (42 U.S.C. 7546(b));
       ``(ii) the cellulosic biomass ethanol conversion assistance 
     program under section 212(e) of that Act (42 U.S.C. 7546(e)); 
     and
       ``(iii) the fuel from cellulosic biomass program under 
     subsection (e).
       ``(3) Advanced technology vehicles.--15 percent shall be 
     transferred to the Secretary to carry out the advanced 
     technology vehicles manufacturing incentive program under 
     subsection (f).
       ``(c) Zero- or Low-Carbon Energy Technologies Deployment.--
       ``(1) Definitions.--In this subsection:
       ``(A) Energy savings.--The term `energy savings' means 
     megawatt-hours of electricity or million British thermal 
     units of natural gas saved by a product, in comparison to 
     projected energy consumption under the energy efficiency 
     standard applicable to the product.
       ``(B) High-efficiency consumer product.--The term `high-
     efficiency consumer product' means a covered product to which 
     an energy conservation standard applies under section 325 of 
     the Energy Policy and Conservation Act (42 U.S.C. 6295), if 
     the energy efficiency of the product exceeds the energy 
     efficiency required under the standard.
       ``(C) Zero- or low-carbon generation.--The term `zero- or 
     low-carbon generation' means generation of electricity by an 
     electric generation unit that--
       ``(i) emits no carbon dioxide into the atmosphere, or is 
     fossil-fuel fired and emits into the atmosphere not more than 
     250 pounds of carbon dioxide per megawatt-hour (after 
     adjustment for any carbon dioxide from the unit that is 
     geologically sequestered); and
       ``(ii) was placed into commercial service after the date of 
     enactment of this Act.
       ``(2) Financial incentives program.--During each fiscal 
     year beginning on or after October 1, 2008, the Secretary 
     shall competitively award financial incentives under this 
     subsection in the following technology categories:
       ``(A) Production of electricity from new zero- or low-
     carbon generation.
       ``(B) Manufacture of high-efficiency consumer products.
       ``(3) Requirements.--
       ``(A) In general.--The Secretary shall make awards under 
     this subsection to producers of new zero- or low-carbon 
     generation

[[Page 1818]]

     and to manufacturers of high-efficiency consumer products--
       ``(i) in the case of producers of new zero- or low-carbon 
     generation, based on the bid of each producer in terms of 
     dollars per megawatt-hour of electricity generated; and
       ``(ii) in the case of manufacturers of high-efficiency 
     consumer products, based on the bid of each manufacturer in 
     terms of dollars per megawatt-hour or million British thermal 
     units saved.
       ``(B) Acceptance of bids.--
       ``(i) In general.--In making awards under this subsection, 
     the Secretary shall--
       ``(I) solicit bids for reverse auction from appropriate 
     producers and manufacturers, as determined by the Secretary; 
     and
       ``(II) award financial incentives to the producers and 
     manufacturers that submit the lowest bids that meet the 
     requirements established by the Secretary.
       ``(ii) Factors for conversion.--
       ``(I) In general.--For the purpose of assessing bids under 
     clause (i), the Secretary shall specify a factor for 
     converting megawatt-hours of electricity and million British 
     thermal units of natural gas to common units.
       ``(II) Requirement.--The conversion factor shall be based 
     on the relative greenhouse gas emission benefits of 
     electricity and natural gas conservation.
       ``(C) Ineligible units.--A new unit for the generation of 
     electricity that uses renewable energy resources shall not be 
     eligible to receive an award under this subsection if the 
     unit receives renewable energy credits under a Federal 
     renewable portfolio standard.
       ``(4) Forms of awards.--
       ``(A) Zero- and low-carbon generators.--An award for zero- 
     or low-carbon generation under this subsection shall be in 
     the form of a contract to provide a production payment for 
     each year during the first 10 years of commercial service of 
     the generation unit in an amount equal to the product 
     obtained by multiplying--
       ``(i) the amount bid by the producer of the zero- or low-
     carbon generation; and
       ``(ii) the megawatt-hours estimated to be generated by the 
     zero- or low-carbon generation unit each year.
       ``(B) High-efficiency consumer products.--An award for a 
     high-efficiency consumer product under this subsection shall 
     be in the form of a lump sum payment in an amount equal to 
     the product obtained by multiplying--
       ``(i) the amount bid by the manufacturer of the high-
     efficiency consumer product; and
       ``(ii) the energy savings during the projected useful life 
     of the high-efficiency consumer product, not to exceed 10 
     years, as determined under rules issued by the Secretary.
       ``(d) Advanced Coal and Sequestration Technologies 
     Program.--
       ``(1) Advanced coal technologies.--
       ``(A) Definition of advanced coal generation technology.--
     In this paragraph, the term `advanced coal generation 
     technology' means integrated gasification combined cycle or 
     other advanced coal-fueled power plant technologies that--
       ``(i) have a minimum of 50 percent coal heat input on an 
     annual basis;
       ``(ii) provide a technical pathway for carbon capture and 
     storage; and
       ``(iii) provide a technical pathway for co-production of a 
     hydrogen slip-stream.
       ``(B) Deployment incentives.--
       ``(i) In general.--The Secretary shall use \1/2\ of the 
     funds provided to carry out this subsection during each 
     fiscal year to provide Federal financial incentives to 
     facilitate the deployment of not more than 20 gigawatts of 
     advanced coal generation technologies.
       ``(ii) Administration.--In providing incentives under 
     clause (i), the Secretary shall--
       ``(I) provide appropriate incentives for regulated 
     investor-owned utilities, municipal utilities, electric 
     cooperatives, and independent power producers, as determined 
     by the Secretary; and
       ``(II) ensure that a range of the domestic coal types is 
     employed in the facilities that receive incentives under this 
     subparagraph.
       ``(C) Funding priorities.--
       ``(i) Projects using certain coals.--In providing 
     incentives under this paragraph, the Secretary shall set 
     aside not less than 25 percent of any funds made available to 
     carry out this paragraph for projects using lower rank coals, 
     such as subbituminous coal and lignite.
       ``(ii) Sequestration activities.--After the Secretary has 
     made awards for 2000 megawatts of capacity under this 
     paragraph, the Secretary shall give priority to projects that 
     will capture and sequester emissions of carbon dioxide, as 
     determined by the Secretary.
       ``(D) Distribution of funds.--A project that receives an 
     award under this paragraph may elect 1 of the following 
     Federal financial incentives:
       ``(i) A loan guarantee under section 1403(b).
       ``(ii) A cost-sharing grant for not more than 50 percent of 
     the cost of the project.
       ``(iii) Production payments of not more than 1.5 cents per 
     kilowatt-hour of electric output during the first 10 years of 
     commercial service of the project.
       ``(E) Limitation.--A project may not receive an award under 
     this subsection if the project receives an award under 
     subsection (c).
       ``(2) Sequestration.--
       ``(A) In general.--The Secretary shall use \1/2\ of the 
     funds provided to carry out this subsection during each 
     fiscal year for large-scale geologic carbon storage 
     demonstration projects that use carbon dioxide captured from 
     facilities for the generation of electricity using coal 
     gasification or other advanced coal combustion processes, 
     including facilities that receive assistance under paragraph 
     (1).
       ``(B) Project capital and operating costs.--The Secretary 
     shall provide assistance under this paragraph to reimburse 
     the project owner for a percentage of the incremental project 
     capital and operating costs of the project that are 
     attributable to carbon capture and sequestration, as the 
     Secretary determines to be appropriate.
       ``(e) Fuel From Cellulosic Biomass.--
       ``(1) In general.--The Secretary shall provide deployment 
     incentives under this subsection to encourage a variety of 
     projects to produce transportation fuels from cellulosic 
     biomass, relying on different feedstocks in different regions 
     of the United States.
       ``(2) Project eligibility.--Incentives under this paragraph 
     shall be provided on a competitive basis to projects that 
     produce fuels that--
       ``(A) meet United States fuel and emissions specifications;
       ``(B) help diversify domestic transportation energy 
     supplies; and
       ``(C) improve or maintain air, water, soil, and habitat 
     quality.
       ``(3) Incentives.--Incentives under this subsection may 
     consist of--
       ``(A) additional loan guarantees under section 1403(b) for 
     the construction of production facilities and supporting 
     infrastructure; or
       ``(B) production payments through a reverse auction in 
     accordance with paragraph (4).
       ``(4) Reverse auction.--
       ``(A) In general.--In providing incentives under this 
     subsection, the Secretary shall--
       ``(i) prescribe rules under which producers of fuel from 
     cellulosic biomass may bid for production payments under 
     paragraph (3)(B); and
       ``(ii) solicit bids from producers of different classes of 
     transportation fuel, as the Secretary determines to be 
     appropriate.
       ``(B) Requirement.--The rules under subparagraph (A) shall 
     require that incentives shall be provided to the producers 
     that submit the lowest bid (in terms of cents per gallon) for 
     each class of transportation fuel from which the Secretary 
     solicits a bid.
       ``(f) Advanced Technology Vehicles Manufacturing Incentive 
     Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Advanced lean burn technology motor vehicle.--The 
     term `advanced lean burn technology motor vehicle' means a 
     passenger automobile or a light truck with an internal 
     combustion engine that--
       ``(i) is designed to operate primarily using more air than 
     is necessary for complete combustion of the fuel;
       ``(ii) incorporates direct injection; and
       ``(iii) achieves at least 125 percent of the 2002 model 
     year city fuel economy of vehicles in the same size class as 
     the vehicle.
       ``(B) Advanced technology vehicle.--The term `advanced 
     technology vehicle' means a light duty motor vehicle that--
       ``(i) is a hybrid motor vehicle or an advanced lean burn 
     technology motor vehicle; and
       ``(ii) meets the following performance criteria:
       ``(I) Except as provided in paragraph (3)(A)(ii), the Tier 
     II Bin 5 emission standard established in regulations 
     prescribed by the Administrator of the Environmental 
     Protection Agency under section 202(i) of the Clean Air Act 
     (42 U.S.C. 7521(i)), or a lower numbered bin.
       ``(II) At least 125 percent of the base year city fuel 
     economy for the weight class of the vehicle.
       ``(C) Engineering integration costs.--The term `engineering 
     integration costs' includes the cost of engineering tasks 
     relating to--
       ``(i) incorporating qualifying components into the design 
     of advanced technology vehicles; and
       ``(ii) designing new tooling and equipment for production 
     facilities that produce qualifying components or advanced 
     technology vehicles.
       ``(D) Hybrid motor vehicle.--The term `hybrid motor 
     vehicle' means a motor vehicle that draws propulsion energy 
     from onboard sources of stored energy that are--
       ``(i) an internal combustion or heat engine using 
     combustible fuel; and
       ``(ii) a rechargeable energy storage system.
       ``(E) Qualifying components.--The term `qualifying 
     components' means components that the Secretary determines to 
     be--
       ``(i) specially designed for advanced technology vehicles; 
     and
       ``(ii) installed for the purpose of meeting the performance 
     requirements of advanced technology vehicles.
       ``(2) Manufacturer facility conversion awards.--The 
     Secretary shall provide facility conversion funding awards 
     under this subsection to automobile manufacturers and 
     component suppliers to pay 30 percent of the cost of--
       ``(A) re-equipping or expanding an existing manufacturing 
     facility to produce--

[[Page 1819]]

       ``(i) qualifying advanced technology vehicles; or
       ``(ii) qualifying components; and
       ``(B) engineering integration of qualifying vehicles and 
     qualifying components.
       ``(3) Period of availability.--
       ``(A) Phase i.--
       ``(i) In general.--An award under paragraph (2) shall apply 
     to--
       ``(I) facilities and equipment placed in service before 
     January 1, 2016; and
       ``(II) engineering integration costs incurred during the 
     period beginning on the date of enactment of this Act and 
     ending on December 31, 2015.
       ``(ii) Transition standard for light duty diesel-powered 
     vehicles.--For purposes of making an award under clause (i), 
     the term `advanced technology vehicle' includes a diesel-
     powered or diesel-hybrid light duty vehicle that--
       ``(I) has a weight greater than 6,000 pounds; and
       ``(II) meets the Tier II Bin 8 emission standard 
     established in regulations prescribed by the Administrator of 
     the Environmental Protection Agency under section 202(i) of 
     the Clean Air Act (42 U.S.C. 7521(i)), or a lower numbered 
     bin.
       ``(B) Phase ii.--If the Secretary determines under 
     paragraph (4) that the program under this subsection has 
     resulted in a substantial improvement in the ability of 
     automobile manufacturers to produce light duty vehicles with 
     improved fuel economy, the Secretary shall continue to make 
     awards under paragraph (2) that shall apply to--
       ``(i) facilities and equipment placed in service before 
     January 1, 2021; and
       ``(ii) engineering integration costs incurred during the 
     period beginning on January 1, 2016, and ending on December 
     31, 2020.
       ``(4) Determination of improvement.--
       ``(A) In general.--Not later than January 1, 2015, the 
     Secretary shall determine, after providing notice and an 
     opportunity for public comment, whether the program under 
     this subsection has resulted in a substantial improvement in 
     the ability of automobile manufacturers to produce light duty 
     vehicles with improved fuel economy.
       ``(B) Effect on manufacturers.--In preparing the 
     determination under subparagraph (A), the Secretary shall 
     enter into an agreement with the National Academy of Sciences 
     to analyze the effect of the program under this subsection on 
     automobile manufacturers.

     ``SEC. 1628. EFFECT OF SUBTITLE.

       ``Nothing in this subtitle affects the authority of 
     Congress to limit, terminate, or change the value of an 
     allowance or credit issued under this subtitle.''.

  Mr. BINGAMAN. Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.


               Amendments Nos. 106, 107, and 108 En Bloc

  Mr. SESSIONS. Madam President, I would like to share a few thoughts 
in the form of an overview of our wage situation in the United States 
and to discuss some things that I think we can do to improve that 
situation. I would agree that wages are too low for middle-class and 
lower income workers. They have not kept pace with business profits or 
with CEO salaries, for example. They have fallen behind. They have 
fallen behind the profits and bonuses and things of that nature. I 
believe it is a serious problem. I know the experts tell us--and there 
is some truth to the fact--that salary increases tend to lag behind 
business growth and profits. As the profits go up, the first year the 
bonuses and the salaries don't keep up with it, but they argue that as 
time goes by, they do make a rise, and we should, therefore, remember 
that.
  There is some historical truth to that argument, there is no doubt 
about it. But, frankly, it doesn't satisfy me at this point of the 
issue. It is particularly so to me because the unemployment in our 
country has been falling and is still so low. I think it is 4.5 percent 
nationally. It was recently 3.2 percent in my home State of Alabama--
the lowest we have ever had. I am excited about that. Why aren't wages, 
then, for our lower skilled people, our poorer people, our young 
people, our minority workers--why aren't those wages beginning to 
increase in a noticeable way? Why aren't they keeping pace, and what 
can we do about it?
  Senator Kennedy's theory and his argument is pretty clear and simple, 
as his normally are--and direct. He argues that we should have the 
Government fix it. Just have the Government set the wage. That is an 
easy answer. Have wage and price controls. Well, at least wage 
controls. Set it. Just have the Government order this, dictate it, and 
we will just make it go that way.
  I will admit that we have had minimum wage laws for quite some time, 
and although in pure theory they are outside the free market agenda 
that I usually follow, I have voted for minimum wage increases a number 
of times. That is just a part of the way we do things here, and the way 
we have done them for quite a number of years. I would hope maybe to 
vote for this bill.
  But let's talk about it more seriously. What we want is higher wages 
for all Americans. I think a better approach to achieving that in the 
long run is to examine our policies to see why market forces are not 
driving up wages. What is the problem? Are there some political, 
governmental structures at work that are causing wages not to increase 
sufficiently? There is one issue that is suppressing wages that I am 
absolutely confident is unfair, and I believe undisputed and 
undeniable. No, it is not that some free market purists don't want 
wages to go up. That is not my problem. I think the problem is this: 
The problem is an excessive flow of low-skilled immigrant workers into 
our country in such large numbers that it has stultified and eliminated 
the growth that would have occurred for low-skilled American workers. I 
wish that weren't so, but I believe the numbers are quite clear on it. 
In any number of different ways we can see that this has occurred.
  So I will be offering an amendment as part of this bill, one that 
deals with workplace enforcement and what we can do to make the 
workplace such that American workers are not competing with low-
skilled, illegal immigrants in the workforce. We are receiving 1 
million immigrants legally in our country today and more than half that 
many coming in illegally every year. So the competition American 
workers face from illegal laborers is a serious problem that affects 
their wages.
  If you bring in a huge amount of wheat, you bring a huge amount of 
cotton, you bring in a huge amount of corn, you can expect those prices 
to fall. If you bring in exceedingly large amounts of low-skilled 
labor, you can expect the wages of low-skilled Americans to follow. I 
don't know where our free marketeers are on that, but I can tell you 
that is a fact. It is working against the interests of American 
workers.
  Professor Borjas at Harvard, who has written perhaps the most 
authoritative book on immigration--himself an immigrant--has concluded 
that he believes the wages of the lowest-skilled American workers, high 
school dropouts, have been impacted negatively by 8 percent as a result 
of our current immigration policies.
  I will share with our colleagues an article from the Wall Street 
Journal, this journal of free market economics, which I venerate and 
respect so much. I will not go into the detail today, but I will share 
briefly the gist of that front-page article from the last week or 10 
days.
  The article featured a chicken plant in Georgia. A large number of 
those workers were found to be illegal. They lost their jobs. According 
to the Wall Street Journal, the businesses got together and started 
running ads in the paper offering better than a $1-an-hour increase 
over the wages they had been paid. They offered transportation from 
nearby towns for people who would take the jobs. They said people could 
live onsite in dormitories and work there. What does that say? That was 
$1 an hour-plus per worker wage increase without governmental 
intervention. In fact, it was governmental action to enforce the 
established laws of our country with regard to immigration.
  I suggest ending illegal immigration, creating workplace enforcement 
that actually works, limiting the number of people who come to our 
country illegally, emphasizing higher skilled workers. Frankly, if it 
is impacting adversely our low-skilled workers' salaries, maybe we are 
bringing in too many low-skilled workers.
  Education is a factor for immigration, whether a person would speak 
English and basically follow the Canadian model of a system which 
focuses on what is in Canada's best interests. Likewise, we should do 
that in the United States. We should also consider what the Labor 
Department says is needed in our country.

[[Page 1820]]

  I have another proposal that I will shock my colleagues with. We 
could give the average low-to-middle income worker, a family man or 
woman, almost a $1-an-hour raise without any increase in taxes. How 
would we do that? In the way we administer the earned-income tax 
credit. The earned-income tax credit was passed many years ago. 
President Nixon was involved in it, Milton Friedman supported it. It 
was supposed to be an incentive to Americans to work and not be on 
welfare; to go out and work and to give benefits to people who were 
working as opposed to people who were not working. It made a lot of 
sense. It was supposed to incentivize work.
  I am not sure how well it works. It has been criticized. But it has 
no possibility of achieving its primary goal, which was to incentivize 
work, the way it is presently being administered. The way it is 
administered now, a worker who falls in the category of earned-income 
tax credit, files his income tax return next April, May or March, 
whenever he gets his papers together, and gets an average of a $1,700 
tax credit from the U.S. Treasury. I submit that worker does not 
understand or have any real comprehension of the fact that the tax 
credit incentivizes work. It is not connected to his work.
  We ought to reconnect the earned-income tax credit to the workplace. 
The way we do that is the way it is now authorized under law--it can be 
done this way, but it is not being done this way--and that is to put it 
on the paycheck. And $1,700 per year is a $1-an-hour increase in the 
take-home pay of low-wage workers in America. They could take that 
money home every week with their paycheck, they could appreciate their 
jobs much better and they could be more prideful of that paycheck they 
take home and have more incentive to continue to work.
  To me, that is something we should have done a long time ago. I have 
talked about it for quite a number years. We have not made a serious 
advancement toward accomplishing it. Some think it could cause more 
fraud, but I don't think it would. Some think it would cause more 
people to take advantage of the earned income tax credit because some 
people probably don't ask for it on the tax returns, but I don't think 
that is particularly a noble thing to say, that a person who is 
entitled to it, you hope they don't apply and get it because it would 
cost the Treasury some dollars. We would be better off to put that in 
the paycheck. I would like to see us do that. We need to move in that 
direction.
  Finally, one of the great tragedies we are facing as a nation is that 
we are not saving enough. We need to do a better job of increasing 
savings in America. I prepared legislation, creating Plus Accounts, 
that would be a lifetime universal savings plan for every American 
worker, similar to the Federal Thrift Savings Plan for Federal 
employees.
  On top of Social Security--not taking money from Social Security but 
on top of it as an individual plan--an account that individual 
Americans would own. It would be within their grasp.
  Half of the American workers work at a company that does not have a 
savings plan. Of the half that do, 17 million choose not to 
participate. One more startling statistic, very startling in light of 
today's volatile labor market. By the age of 35, the average American 
worker has held nine jobs.
  I sat by a gentleman on the plane yesterday. He was 37. He now has a 
job with the U.S. Civil Service. He is so happy about signing up for 
the Thrift Plan. I asked him about his previous savings. He had two 
children, 37 years old. He said, I didn't save much. He had had nine 
jobs himself. A lot of companies do not have a savings plan. For those 
that do, maybe you have to work 2 years or a year before you can 
participate. If you did participate and you change jobs, maybe it is 
only $500; maybe it is $1,000 or $1,500. And when you change jobs, they 
cash it in and pay the penalty, figuring it will not amount to much.
  But if every American at every paycheck could know that a small 
percentage of that money was going into an account with their name on 
it, they would be subject to the magical powers of compound interest 
and that at age 65 they could have a very substantial nest egg to 
supplement their Social Security, they would feel better about their 
work. My plan would say you are given a number at birth. The Government 
would open the account with a deposit at birth for every child. And 
every job a person takes, the employee would put in 1 percent, the 
employer would put in 1 percent at a low-fee managed fund that would 
allow for conservative investments. If you put in $1,000 at birth, if 
you went to work and your employer put in 1 percent and you put in 3 
percent at median income in America, $46,000 a year for a family, that 
person would retire with half a million in the bank. We have to create 
a system so it is easy for working Americans, low-income people who are 
changing jobs regularly, who find themselves with two or three kids at 
age 35 with nothing saved. That is an American tragedy when they could, 
literally, easily retire with half a million in their own name, in 
their own account.
  These are some things we ought to talk about. Yes, I look forward to 
a bill that Senator Enzi approves--if he approves it, I probably will. 
If he approves this bill, I will vote for it. But fundamentally we have 
more to do for low-income workers in America who are not keeping pace, 
in my view, at the rate we would like to see.
  We should create an immigration system that does not subject them to 
floods of imports. Let's create a savings system they can be proud of 
and adjust our earned-income tax credit so they can get a $1-an-hour 
pay raise. If we do some of those things, we will be touching a lot of 
people in a very special way.
  I ask unanimous consent for the purposes of offering my amendments, 
the pending amendment be set aside and I be allowed to offer three 
amendments, en bloc.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Alabama [Mr. Sessions] proposes amendments 
     numbered 106, 107 and 108 en bloc.

  The amendments (No. 106, 107 and 108) are as follows:


                           amendment no. 106

 (Purpose: To express the sense of the Senate that increasing personal 
 savings is a necessary step toward ensuring the economic security of 
          all the people of the United States upon retirement)

       At the appropriate place, insert the following:

     SEC. __. SENSE OF THE SENATE CONCERNING PERSONAL SAVINGS.

       (a) Findings.--The Senate finds that--
       (1) the personal saving rate in the United States is at its 
     lowest point since the Great Depression, with the rate having 
     fallen into negative territory;
       (2) the United States ranks at the bottom of the Group of 
     Twenty (G-20) nations in terms of net national saving rate;
       (3) approximately half of all the working people of the 
     United States work for an employer that does not offer any 
     kind of retirement plan;
       (4) existing savings policies enacted by Congress provide 
     limited incentives to save for low- and moderate-income 
     families; and
       (5) the critically-important Social Security program was 
     never intended by Congress to be the sole source of 
     retirement income.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) there is a need for simple, easily-accessible and 
     productive savings vehicles for all the people of the United 
     States;
       (2) it is important to begin retirement saving as early as 
     possible to take full advantage of the power of compound 
     interest;
       (3) regularly contributing money to a financially-sound 
     investment account is effective in achieving one's retirement 
     goals; and
       (4) Congress should actively develop policies to enhance 
     personal savings for retirement.


                           amendment no. 107

 (Purpose: To impose additional requirements to ensure greater use of 
  the advance payment of the earned income credit and to extend such 
       advance payment to all taxpayers eligible for the credit)

       At the appropriate place insert the following:

     SEC. __. ADDITIONAL REQUIREMENTS TO ENSURE GREATER USE OF 
                   ADVANCE PAYMENT OF EARNED INCOME CREDIT.

       Not later than January 1, 2010, the Secretary of the 
     Treasury by regulation shall require--
       (1) each employer of an employee who the employer 
     determines receives wages in an

[[Page 1821]]

     amount which indicates that such employee would be eligible 
     for the earned income credit under section 32 of the Internal 
     Revenue Code of 1986 to provide such employee with a 
     simplified application for an earned income eligibility 
     certificate, and
       (2) require each employee wishing to receive the earned 
     income tax credit to complete and return the application to 
     the employer within 30 days of receipt.

     Such regulations shall require an employer to provide such an 
     application within 30 days of the hiring date of an employee 
     and at least annually thereafter. Such regulations shall 
     further provide that, upon receipt of a completed form, an 
     employer shall provide for the advance payment of the earned 
     income credit as provided under section 3507 of the Internal 
     Revenue Code of 1986.

     SEC. __. EXTENSION OF ADVANCE PAYMENT OF EARNED INCOME CREDIT 
                   TO ALL ELIGIBLE TAXPAYERS.

       (a) In General.--Section 3507(b) of the Internal Revenue 
     Code of 1986 (relating to earned income eligibility 
     certificate) is amended by striking paragraph (2) and by 
     redesignating paragraphs (3) and (4) as paragraphs (2) and 
     (3), respectively.
       (b) Conforming Amendments.--
       (1) Section 3507(c)(2)(B) of the Internal Revenue Code of 
     1986 is amended by inserting ``has 1 or more qualifying 
     children and'' before ``is not married,''.
       (2) Section 3507(c)(2)(C) of such Code is amended by 
     striking ``the employee'' and inserting ``an employee with 1 
     or more qualifying children''.
       (3) Section 3507(f) of such Code is amended by striking 
     ``who have 1 or more qualifying children and''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.


                           amendment no. 108

(Purpose: To authorize the Secretary of the Treasury to study the costs 
  and barriers to businesses if the advance earned income tax credit 
                 program included all EITC recipients)

       At the appropriate place insert the following:

     SEC. __. STUDY OF UNIVERSAL USE OF ADVANCE PAYMENT OF EARNED 
                   INCOME CREDIT.

       Not later than 180 days after the date of the enactment of 
     this Act, the Secretary of the Treasury shall report to 
     Congress on a study of the costs and barriers to businesses 
     (with a special emphasis on small businesses) if the advance 
     earned income tax credit program (under section 3507 of the 
     Internal Revenue Code of 1986) included all recipients of the 
     earned income tax credit (under section 32 of such Code) and 
     what steps would be necessary to implement such inclusion.

  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. MENENDEZ. Madam President, I am proud to join my colleagues in 
calling for something that is long overdue for millions of workers 
across this Nation, an increase in the minimum wage. Today is not our 
first day to make this call, but it is time, finally, to answer the 
voices that have cried out for change for too long. Nearly a decade 
after the last increase in the Federal minimum wage, this Senate has a 
chance to right the injustice that millions of workers and their 
families have endured.
  America's minimum wage workers are often not in the forefront of our 
workforce. They may be in the stockrooms, the kitchens or on the night 
cleaning crew. By increasing the Federal minimum wage, we will be 
saying that working in the shadows does not mean a life sentence to 
poverty.
  For far too long, we have allowed a subpar minimum wage to exist that 
leaves a minimum wage worker supporting a family of three at $6,000 
below the poverty level. You get up every day, you work hard, you work 
40 hours a week, some of the toughest jobs in America and, at the end, 
you are still below the poverty level. We are supposed to reward work 
as a value, not suppress it. We say we want work, not welfare. Yet we 
have people who get up every day, work some of the toughest jobs and 
still find themselves below the poverty level.
  Those earning minimum wage do some of the toughest jobs our Nation 
has, and they perform some of the key services we cannot do without, 
from food preparers, to health care, support staff, to security 
officers, to cashiers. These occupations are the backbone of businesses 
and industries that keep our economy running. While we depend on these 
services they provide every day, many of these workers are earning a 
wage that is now at its lowest point ever, compared to average hourly 
wages.
  A higher wage is much more than about putting a few more dollars in 
your pocket each week. A better wage is about fairness, about providing 
a decent standard of living, and giving workers what they deserve, and 
ensuring that everyone--everyone--can share in the American dream, not 
just the top wage earners.
  When a minimum wage earner is more likely to be a woman or a 
minority, we cannot deny that increasing the minimum wage is also about 
greater equality and justice to nearly 7 million women, who are well 
over half of the minimum wage workers, or to the 4 million Hispanics 
and African Americans earning less than $7.25 an hour.
  So we can look at the chart and see that as the progression goes 
down, all of those women's wages lag behind men. And then, when we look 
at African-American women, Hispanic women, they lag even lower. This is 
about creating equity, equality. It is about justice.
  Our Nation has always been a place where people willing to work hard 
and play by the rules can earn a better life for themselves and their 
families. My parents, who came to this country in search of freedom, 
were willing to do whatever work was necessary for a little piece of 
the American dream. Whether it was long hours bent over a sewing 
machine in a factory or working in a cramped carpentry shop, they did 
whatever they could to provide me the opportunities they never had.
  That chance to build a better life through one's labor and 
determination is something no one in this country should be denied. 
Yet, for nearly a decade, workers earning the minimum wage have been 
struggling to get by, struggling to provide what their families need, 
and struggling to realize the dream our country promises.
  It is our duty to ensure everyone in this country can share in that 
dream. When we as a nation turn a blind eye, when we ignore the fact 
that millions of workers are earning wages that have been frozen for 
nearly a decade--how much else of our economy has been frozen for 
nearly a decade--we are failing those seeking out this dream. And 
because most minimum-wage workers have children and families to 
support, it is not just the workers who are struggling to make ends 
meet or fulfill their dreams, but behind them are families who cannot 
afford health insurance, or children who are growing up in poverty--
children growing up in poverty to parents who are working hard, in the 
toughest jobs in America, 40 hours a week, making the minimum wage, 
below the poverty level. So lifting up the wages of these workers is as 
much about improving the lives of their family members and providing a 
brighter future for their children.
  This week we have a chance to change the course, not just for the 
workers still earning $5.15 an hour and their family members, but for 
the country. We will say it is no longer acceptable to leave behind 
those who may be at the bottom, that they should be as much a priority 
as any other worker who contributes to our Nation's economy.
  I am extremely proud that New Jersey has not waited for Congress to 
do what is right. Instead, it has taken upon itself to increase the 
State minimum wage far above the Federal wage. And New Jersey is not 
alone. Twenty-nine other States have raised their minimum wages above 
the Federal minimum wage. Now at $7.15 an hour, New Jersey's minimum 
wage has given over a quarter million workers the chance to build a 
better life.
  It is past time for Congress to act and give millions of other 
minimum wage workers across the country that chance. It is time to 
provide them what they have been waiting almost 10 long years for--the 
chance to earn a wage they deserve and to live with greater dignity. It 
is time to let them know Washington will no longer turn a deaf ear to 
their struggles.
  I listen to some of our colleagues sometimes, and it is amazing. 
Congress has raised its salary more than $31,000 over the same time 
period in which many Members have voted against raising the minimum 
wage. It is interesting; we can vote to increase the wages of Members 
of Congress and the minimum wage workers get nothing. I

[[Page 1822]]

am sure there are Members who would say it was well worth it, of 
course. But what about minimum wage workers? Nothing for nearly a 
decade. Congress raises its salary $31,000.
  Now, interestingly enough, no one said: Well, we need to give a tax 
break in order to give the Members of Congress a raise. No one said, 
certainly, while they were voting for these increases, they did not 
deserve it. Yet families across this country are struggling in some of 
the toughest jobs in America. They could not get the same type of 
support for their struggles. It is simply wrong.
  Now is our chance to correct that injustice, but I hope it is only 
the first step. We can never, ever again allow the hardest workers in 
our country to see their wages eroded by 10 years of inflation while 
those at the top of the pile make more and more but give less and less 
back.
  I hope the Senate will pass this overdue increase in the minimum 
wage. I hope we do not have to give away the store in order to be able 
to get some of those who are working at some of the toughest jobs, 
finding themselves below the poverty level--struggling to have families 
be nurtured to achieve their dreams and hopes and aspirations--I hope 
we do not have to give away the store. I hope we do not see another 
increase in Congress before we see an increase in the minimum wage. 
Therefore, when we pass this overdue increase in the minimum wage, I 
hope it will work in the future to make sure this increase stands the 
test of time.
  Madam President, 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. NELSON of Nebraska. Madam President, I ask unanimous consent that 
the order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            Iraq Resolution

  Mr. NELSON of Nebraska. Madam President, I am here speaking a little 
bit early. Senator Warner will appear on the scene shortly. But as you 
know, Madam President, I will be presiding, so this gives me the 
opportunity to speak now.
  Senators Warner and Collins and I have worked to develop a bipartisan 
resolution dealing with Iraq. I thank them for working to forge this 
bipartisan resolution. I would clarify that the goal of this resolution 
is to broaden the resolution's appeal. It is important to send a strong 
message to the White House and Iraq. And the more support the 
resolution receives in the Senate, the stronger our message will be.
  This may not be an either/or situation. We are bringing forth a new 
set of ideas, something more broadly worded for Senators to consider. 
Some can vote for this resolution, and the other, without feeling any 
contradiction.
  The content of this resolution is more inclusive of the Iraq Study 
Group's recommendations and steers clear of partisan or Presidential 
rhetoric.
  I urge our colleagues--some of whom I have spoken with today, and 
some of whom I have spoken with over the weekend, and others in recent 
days, some tomorrow--to read this resolution carefully. I believe they 
will find the resolution to be thoughtful, forceful, and meaningful.
  If a Senator is not comfortable with the wording of the previously 
announced resolution, if a Senator was concerned that the resolution 
did not include the recommendations of the Iraq Study Group, if a 
Senator was concerned about the infringement on executive powers, I 
think that Senator will find our resolution more appealing.
  In the end, we all have a responsibility to lead. We are accountable 
to our constituents--the American people, as is the President. When we 
see a policy development that we feel is not in the best interests of 
the United States and the U.S. military, we must speak out, we must 
act, and we must communicate with the President that we disagree with 
his plan.
  Simply put, that is what we are trying to do--to express our concern, 
our opposition, or disagreement with deploying troops in the heart of a 
civil war in Iraq.
  The goal is maximum bipartisan support to send the strongest message 
possible from the Senate to the President, to the American people, and 
to Iraq about our concern about this plan.
  Thank you, Madam President. 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. REID. I ask unanimous consent that the order for the quorum call 
be rescinded.
  The PRESIDING OFFICER (Mr. Nelson of Nebraska). Without objection, it 
is so ordered.


                             Cloture Motion

  Mr. REID. Mr. President, I send a cloture motion to the desk.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the clerk will read the motion.
  The legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close the debate on Calendar No. 
     5, H.R. 2, providing for an increase in the Federal minimum 
     wage.
         Ted Kennedy, Barbara A. Mikulski, Daniel Inouye, Byron L. 
           Dorgan, Jeff Bingaman, Frank R. Lautenberg, Jack Reed, 
           Barbara Boxer, Daniel K. Akaka, Max Baucus, Patty 
           Murray, Maria Cantwell, Tom Harkin, Debbie Stabenow, 
           Robert Menendez, Tom Carper, Harry Reid, Charles 
           Schumer, Richard Durbin.

  Mr. REID. I ask unanimous consent that reading of the names of the 
Senators be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________