[Congressional Record (Bound Edition), Volume 157 (2011), Part 7]
[Senate]
[Pages 10237-10251]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           EXECUTIVE SESSION

                                 ______
                                 

     NOMINATION OF DAVID H. PETRAEUS TO BE DIRECTOR OF THE CENTRAL 
                          INTELLIGENCE AGENCY

  The PRESIDING OFFICER. Under the previous order, the Senate will 
proceed to executive session to consider the following nomination, 
which the clerk will report.
  The assistant legislative clerk read the nomination of David H. 
Petraeus, of New Hampshire, to be Director of the Central Intelligence 
Agency.
  The PRESIDING OFFICER. Under the previous order, there will be 2 
hours of debate equally divided and controlled in the usual form.
  The Senator from California.
  Mrs. FEINSTEIN. Thank you very much, Madam President.
  I come to the floor as the chairman of the Select Committee on 
Intelligence to speak about the nomination of GEN David Petraeus to 
become the Director of the CIA. I wish to thank the majority leader for 
bringing this nomination to the floor in such a quick fashion because 
the committee, only earlier this week, on Tuesday, unanimously approved 
the nomination of General Petraeus.
  I think there is no doubt but that General Petraeus is among the 
finest military officers and strategic thinkers of his generation. We 
are very lucky to have his service. He wrote the Army's 
counterinsurgency strategy and then applied it in Iraq, securing a 
military victory from what had appeared to be a descent into chaos and 
violence.
  One year ago to this day, the Senate confirmed General Petraeus to 
replace

[[Page 10238]]

GEN Stanley McChrystal as the leader of American and International 
Security Assistance Forces in Afghanistan. Since then he has shifted 
the strategy, implemented the troop surge, kept our coalition together, 
and today our military and intelligence analysts point to gains in the 
security situation and in the Afghan military and ability of the police 
to secure their nation.
  General Petraeus's willingness to take on the Afghanistan mission 
also demonstrates his extraordinary commitment to public service. At 
the time, he was serving in Tampa, FL, as the Combatant Commander for 
Central Command, no longer directly in charge of a war zone but with 
the responsibility for not just Afghanistan but for 19 other countries 
as well. He agreed to what was a step down in the military ``org 
chart'' to take on the hardest military challenge in the world and to 
deploy from Tampa to Kabul. The Nation certainly owes General Petraeus 
a debt of gratitude for 37 years in uniform.
  When he is confirmed, General Petraeus will be taking off the uniform 
to become Director Petraeus. He has clearly considered the differences 
in culture and mission between the CIA and the military, and now he 
will shift his style to lead intelligence collectors and analysts 
rather than officers and enlisted troops.
  As a matter of fact, in our hearing in Hart 216, there was a bit of 
levity when General Petraeus was asked the question about how he would 
transition from a four-star general to a civilian role as Director of 
the CIA. He said: You can be sure that when I arrive at the CIA, I will 
arrive without an escort and just simply get out of my automobile and 
walk into the building. Well, as we looked out in the audience at his 
confirmation hearing and we saw a phalanx of officers accompanying the 
general, it became very clear that it was, indeed, going to be quite a 
transition.
  I believe--and I think this is the importance of this nominee--that 
General Petraeus understands the difference and is prepared to move 
into a civilian organization at a difficult time. Of our 16 different 
intelligence agencies, one is generally--and hopefully but generally--
led by a civilian, although there have been seven military commanders 
in our history who have led the CIA. Of course, Leon Panetta is, in 
fact, a civilian.
  I think we have to consider the timing of this: the winddown of two 
wars, Iraq and Afghanistan; the operation in Libya; a restive Middle 
East where the changes in an Arab spring are not fully known; an 
Israeli-Palestinian situation that has to it crisis dimensions; the 
North Korean situation with respect to the nuclear weaponry of that 
country; Iran, a very dangerous country with the potential of becoming 
a nuclear country; and, above all things, the fact that this September 
is the tenth anniversary of 9/11, and where there is nonspecific 
intelligence that this country may well have a revenge attack against 
it. Therefore, I think General Petraeus's military service will come in 
handy. I think his analytical skills and ability will come in very 
handy. I believe he is the right man for the job at this time.
  Through the confirmation process, the Intelligence Committee has 
sought to understand General Petraeus's vision for the CIA and how he 
will lead it through the challenges I have just mentioned. I believe he 
has answered these questions and has laid out his views.
  General Petraeus has testified that he had discussed this possible 
move to the CIA with Secretary Gates as far back as last year. He even 
demonstrated that he knows the CIA culture and the lingo, saying that 
right after being sworn in he will call an ``all-hands'' meeting for 
all CIA employees and ``will tell them up front right there that you 
all should know that I'm here to recruit you and I know that you're 
here to recruit me.''
  He has met with just about every CIA former Director and received 
their advice on running the agency, and he plans to put that advice 
into practice.
  General Petraeus has written and testified he fully appreciates the 
mission of the CIA is to provide unvarnished intelligence assessments 
to policymakers, whether they like it or not. That is a fundamental 
point. The intelligence must stand on its own. It must be good 
intelligence, it must be streamlined intelligence, and it must be 
intelligence which has been subject to the best of analysis and red-
teaming.
  This was one of the questions raised during his confirmation: Would 
General Petraeus put aside his military commander's assessments and 
carry forth the agency's analytic view? He answered the question head 
on, pointing out that he has experience in the analytical field and in 
debating assessments to reach the best judgment possible.
  General Petraeus specifically pointed to his academic background as 
well as his military command experience. He, in fact, has earned--and I 
don't think many people know this--a master's of public administration 
and a Ph.D. in international relations from Princeton University's 
Woodrow Wilson School of Public and International Affairs. He has 
served as an assistant professor of international relations at the U.S. 
Military Academy at West Point, from which he graduated, and as a 
fellow at Georgetown University.
  So the culture and debate in the CIA's Directorate of Intelligence 
will not be new to General Petraeus, and he understands the importance 
of presenting clear analytic views.
  While all Members are familiar with General Petraeus's recent 
positions in Iraq and Afghanistan, let me touch on some of his prior 
experience. Prior to command in Iraq, he served at Fort Leavenworth, 
KS, during which time he oversaw the development of the Army and the 
Marine Corps Counterinsurgency Manual. The importance of that manual is 
that it has stood the test of time since then.
  Earlier in his career, General Petraeus served in Bosnia, where he 
was the Assistant Chief of Staff for Operations of the NATO 
Stabilization Force and the Deputy Commander of the United States 
Counterterrorism Task Force-Bosnia.
  Prior to his tour in Bosnia, he spent 2 years at Fort Bragg, NC, 
serving as the Assistant Division Commander for Operations of the 82nd 
Airborne Division, and then as Chief of Staff of the Airborne Corps.
  In addition, he has served in a number of staff assignments, 
including aide to the Chief of Staff of the Army; Military Assistant to 
the Supreme Allied Command-Europe; Chief of Operations of the United 
Nations Force in Haiti; and Executive Assistant to the Chairman of the 
Joint Chiefs of Staff.
  Not only is this a man who has great experience, this is a man who 
has commanded, who understands the military, and who has produced for 
the United States of America.
  From my meeting and discussions with him, his responses before, 
during, and after our confirmation hearing, and based on his remarkable 
background, I am absolutely confident General Petraeus will make an 
excellent Director of the Central Intelligence Agency. I hope his 
confirmation vote will be unanimous. That makes it a real mandate.
  While we are here to consider the nomination of David Petraeus, I 
also wish to note and recognize some other people. First and foremost, 
Defense Secretary Bob Gates, a former Director of Central Intelligence 
and the Secretary of Defense whose term ends today.
  Secretary Gates has been a tremendously dedicated public servant 
throughout his career but never more needed and appreciated than his 
last 4\1/2\ years as Secretary of Defense. He has presided over the 
wars in Iraq and Afghanistan. He has managed the largest organization 
in the world at the Pentagon. He has earned the complete trust and 
respect of both President Bush and President Obama and of every single 
Member of this body. That almost makes him an endangered species.
  Secretary Gates is the model of the professional government official, 
and his leadership and his character is truly an example to us all. I 
wish him well as he goes back to the State of Washington. Candidly, on 
a personal

[[Page 10239]]

level, I will never forget his service to our country.
  Next, today is Leon Panetta's last day as Director of the CIA. I was 
very proud to be able to introduce Director Panetta as a native 
Californian at his confirmation hearing to be Secretary of Defense 
earlier this month. I can't say enough about the job he has done and my 
appreciation for the relationship we have had over the past 2 years. I 
think it is well known that when it first cropped up that he might be 
considered for CIA Director, I thought the service could be best served 
by someone with CIA experience. I can say here I couldn't have been 
more wrong. Director Panetta has stepped in when the Senate has had a 
hard time finding agreement and put together a note of confidence in 
this body that is unsurpassed, and I believe that is true at the agency 
as well. He has raised morale. He understands the priorities. He has 
set the priorities. And he was eminently prepared to be the commanding 
officer in the takedown of Osama bin Laden. Mr. Panetta's service as 
CIA Director was both unique and very special. And it is worth noting 
that, in a time when the Senate has a hard time finding agreement, Leon 
Panetta received 100 votes on his confirmation to be the next Secretary 
of Defense.
  I hope and expect the vote on General Petraeus will be overwhelming 
as well. It speaks of the President's choices of such qualified and 
respected nominees and of their willingness to continue service.
  Quickly, I would also like to recognize a person who will be, as of 
tomorrow, the Acting Director of the CIA, Michael Morell.
  I notice that the vice chairman of our committee, the distinguished 
Saxby Chambliss, is on the floor. I believe both of us think that Mike 
Morell has given our Intelligence Committee nothing but the unvarnished 
truth. He has come in to meet with us; he has been prepared to answer 
questions; he has presented the facts. He is an articulate, strong 
briefer. He knows the Agency. I believe he is going to lead the Agency 
well until the beginning of September, as General Petraeus will 
complete his tour in Kabul in July, and then there will be a transition 
period as he returns home and resigns his commission. In the interim, 
Mike Morell will be in charge at the CIA. I think we both believe the 
Agency will be well served by his service as Acting Director.
  Finally, I want to thank Mrs. Holly Petraeus, the wife of David 
Petraeus and the Assistant Director of the Consumer Financial 
Protection Bureau, responsible for the Office of Servicemember Affairs.
  General Petraeus mentioned at his hearing that Holly has been with 
him for 37 years and 23 moves, and we thank her for continuing to share 
her husband with our country.
  Madam President, you and I both know how difficult it is when we have 
a spouse somewhere else, let alone having a spouse somewhere in great 
jeopardy in wartime far from America, in countries at which we are 
waging war, year after year after year. She, indeed, is a very special 
woman, and I think the general is very lucky to have her as his spouse.
  In the position of Director of the CIA, he will carry out one of the 
most important posts in our government. The Director is a senior member 
of the President's national security team and provides candid and 
objective analysis on every single national security issue this Nation 
faces. But the Director is also in charge of clandestine and covert 
operations around the globe. It is one of the reasons our oversight 
responsibility is so important in these areas: to see that the law is 
followed and to see that missions are carried out with the full 
oversight of our committee. The CIA Director is responsible for the 
security of the people of his Agency and for making sure their efforts 
are in keeping, as I said, with the Nation's laws and ethics. It is a 
unique and difficult combination of management, of intellect, and, most 
importantly, of character because things can go awry and one might 
elect not to follow the law. I believe that will not be the case with 
General Petraeus. I believe he will follow the law and he will do an 
excellent job. So I fully, 100 percent, absolutely support his 
confirmation.
  I am very pleased to yield the floor to the distinguished vice 
chairman of the committee, the Senator from Georgia.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. CHAMBLISS. Madam President, first of all, let me thank and 
commend the chairman of the Select Committee on Intelligence for her 
great work not only on this issue but on every other issue we have had 
the opportunity to work on together over the past 6 months. She has, 
No. 1, reached out to me and my staff every day to make sure we are 
doing the intelligence work in the way we both agree it ought to be 
done. She has done a magnificent job of leading the committee.
  The nomination of David Petraeus is a classic example of how she has 
led our committee; that is, we need a very smooth transition, a very 
quick transition when it comes to the leadership of the intelligence 
community. What Chairman Feinstein did was, as soon as the announcement 
was made on Director Panetta's move to be the nominee for Secretary of 
Defense and David Petraeus was going to be the nominee for CIA 
Director, she made sure all the background was done immediately so we 
could go ahead and schedule a hearing well in advance of the movement 
by Director Panetta to the office of Secretary of Defense, preparing 
for the confirmation of General Petraeus to be the next Director of the 
CIA. That is not always easy, but she made sure it got done.
  I wish to commend, too, the majority staff director, David Grannis, 
as well as the minority staff director, Martha Scott Poindexter, for 
their work in doing the background that was needed to be done to allow 
this nomination to move very quickly.
  It is a pleasure to work with Chairman Feinstein. She certainly has 
the best interests of America and Americans at heart from an 
intelligence standpoint, and she is doing a terrific job. It is a 
pleasure to work with her.
  Mrs. FEINSTEIN. I thank the Senator.
  Mr. CHAMBLISS. I also rise to speak in favor of the nomination of 
David Petraeus to be the next Director of the Central Intelligence 
Agency. General Petraeus has had an exemplary military career, and I 
look forward to his confirmation as the Agency's 22nd Director.
  Before I talk about him, I, too, would like to acknowledge his wife 
Holly for her service and support. In addition to supporting a military 
family during a number of long and unprecedented deployments and 23 
moves, Holly Petraeus has also worked to protect military families from 
predatory lending practices. I appreciate her longstanding commitment 
and support of our men and women in uniform and want to thank her for 
joining her husband in answering our Nation's call of duty.
  The strain on a military family cannot be overstated, and Holly 
Petraeus is certainly an individual who exemplifies everything that is 
good about how a military family needs to support the military member. 
I truly commend her for her great service to our country in that 
respect.
  The nomination of David Petraeus comes at a pivotal moment in our 
history as we face threats from across the globe. As a warfighter, he 
brings a unique perspective, having seen firsthand the tactical value 
of accurate and timely intelligence. This experience, in an era of 
unparalleled cooperation between the Central Intelligence Agency and 
the Department of Defense, will not only benefit the military and the 
intelligence community but also the American people.
  General Petraeus graduated from West Point in 1974, but he has spent 
the better part of the last decade on the battlefields of Iraq and 
Afghanistan. No matter what the task, David Petraeus has always 
answered this country's call. Most recently, after turning around the 
war in Iraq and putting us on a path to success, he left his position 
as commander of U.S. Central Command when he was again called upon for 
an unexpected deployment to Afghanistan. General Petraeus understood 
the importance of the mission

[[Page 10240]]

and accepted the assignment with vigor.
  After leading the surge in Afghanistan, many expected him to retire 
from the military and public service, but not David Petraeus. He has 
decided to accept one of the most challenging positions in the U.S. 
Government. As Director of the CIA, General Petraeus will face a number 
of critical challenges, many of which cannot be anticipated. However, 
without a doubt, the threat from terrorism will remain the focal point 
for the CIA and for the new Director.
  The successful strike on bin Laden removed al-Qaida's leader but not 
the threat from terrorism. The al-Qaida core has been weakened, but 
their extremism and violence continues to spread through affiliates 
such as AQAP in Yemen and other like-minded radicals. General Petraeus 
understands these threats, and I look forward to working with him to 
make sure the Nation remains vigilant through these very uncertain 
times.
  I recall very vividly my first encounter with David Petraeus. It was 
in Iraq when he was in charge of the training of the Iraqi security 
police and the military personnel. I remember standing on a rooftop 
outside of Baghdad and observing an operation, a training mission that 
was going on where Iraqi security police and military personnel were 
interacting and carrying out this training mission with U.S. military 
personnel. Just being around David Petraeus that first day, you could 
sense there was something special and something different about this 
great leader. The respect he commanded from all of his subordinates and 
the respect he showed to his superior officers was evident, and it was 
pretty obvious there was something very unique about David Petraeus.
  Obviously, he has gone on to provide the right kind of leadership 
that America has grown to expect from our great military leaders, and 
certainly David Petraeus has exemplified the very best the U.S. 
military has to offer.
  It is also important that we note, as Chairman Feinstein stated, that 
there are some other folks who are moving to different positions or 
leaving public service who have been so valuable to the intelligence 
community.
  I have had the privilege of working with Secretary Bob Gates as a 
member of the Armed Services Committee on a fairly regular basis. 
Secretary Gates will be the first one to tell you, he and I have not 
always agreed on everything. That is part of what makes this 
institution work so well and what makes our country such a great 
country. But what a professional individual he is. He has provided the 
exact kind of service as Secretary of Defense that has been needed 
during his years at the Pentagon, which have not been easy years. These 
have been very difficult years to move through the Iraq situation, the 
surge into Afghanistan, as well as to deal with all the other myriad of 
issues--from personnel, to health care, to weapons systems--the 
Secretary of Defense has to deal with on a daily basis.
  I admire and respect Bob Gates so much, and obviously we certainly 
wish him the best in the private sector.
  Leon Panetta moving from the CIA to the office of Secretary of 
Defense is a natural. As I have stated on this floor previously, I will 
miss him as the Director because I think he has done such an exemplary 
job. He came in without a lot of the experience from an intel 
standpoint that some folks thought the Director should have. But having 
worked with Leon Panetta when he was Chief of Staff to President 
Clinton, having worked with him as Director of OMB under President 
Clinton, I knew what kind of man he is. I knew Leon would adapt very 
quickly, and that is exactly what has happened.
  He rolled his sleeves up and went to work. He has traveled around the 
world meeting not only with leaders of other nations, but he always 
makes sure he goes down and visits not just the station chief in the 
countries where he is visiting but the personnel who really are out 
there putting their lives on the line every day to try to protect 
America and Americans.
  He has certainly gained the respect of every individual at the CIA, 
as well as Members of this body. Not only has he gained respect, but 
the morale at the CIA today is probably the highest it has been since I 
have ever been involved over the last decade with the CIA. I think he 
has done a magnificent job, and he is going to do likewise as the 
Secretary of Defense.
  The chairman is right--Mike Morell stepping in for the next couple 
months will allow us to have a very seamless transition during the 
interim because Mike is such a gifted professional. He appears before 
the committee on a regular basis, and he does provide the direct, 
unfiltered, raw kind of information we need to hear. He is a great 
individual. He has been a great leader as the No. 2 person at the CIA, 
where he will continue to serve. During the interim, he is going to 
continue that kind of leadership we again have grown to expect from the 
Director of the Central Intelligence Agency. So I am very pleased Mike 
Morell is in the position he is at this point in time so we will 
continue to have the right kind of leadership at the Agency.
  Let me say, we had a unanimous vote in the committee on reporting out 
the nomination of David Petraeus. I, like the chairman, hope we have a 
very outstanding, unanimous vote today for General Petraeus to be 
confirmed as the next Director of the CIA.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. FEINSTEIN. Madam President, I thank the vice chairman for his 
remarks. I would like to thank him also for his willingness to work as 
a bipartisan team, which, as he said, we have done. I think the 
dividends have been great for our committee in that we have been able 
to get an authorization bill passed, we have been able to effect some 
changes. We have been able to work together. Our staffs work together. 
In particular, I would like to thank Majority Staff Director David 
Grannis, and I would like to thank Minority Staff Director Martha Scott 
Poindexter for her work in this regard.
  I think it is extraordinarily important that Americans know there is 
in the Senate of the United States a team of oversight that is, in 
fact, working together on a true bipartisan basis.
  So I say to the Senator, Mr. Vice Chairman, thank you so much for 
that--it has been wonderful for me--and particularly for your 
friendship as well.
  I yield the floor.
  Mr. INHOFE. Madam President, I rise today to applaud the military 
service of GEN David Petraeus and voice my support as he transitions 
from leading our Nation's troops in Afghanistan to leading our Nation's 
intelligence professionals at the Central Intelligence Agency. He is a 
man of outstanding moral integrity who has had a distinguished career 
in the U.S. Army.
  Four years ago, General Petraeus was called ``General Betray Us'' by 
Moveon.org and other leftist groups. While I have always supported 
General Petraeus, others in this body have not. The general's rise, 
since 2007, to national prominence that supersedes party and ideology 
is indicative of the incredible nature of his service to our country.
  When analysts discuss success of the Iraq surge in 2007 and 2008, 
credit is given to counterinsurgency tactics or to counterterrorism 
tactics. The ``awakening'' of the Sunni leadership has often been 
touted as the decisive factor as has the marginalization of the Shia 
extremist militias. But I would submit to the Senate that the success 
of the surge had a singular root in the leadership of General Petraeus.
  After successfully leading U.S. and coalition forces in Iraq, our 
Nation once again called upon General Petraeus to lead combat 
operations in Afghanistan. As in Iraq, he developed and executed a 
strategy that took the momentum away from the enemy and began the 
process of providing a lasting stability in Afghanistan. General 
Petraeus has acknowledged that we have only begun to ``get the inputs 
right'' in that war-torn country. His leadership, rapport with the 
troops, interaction with our coalition partners, and efforts with the 
Afghan government have been decisive to the successes we have had in 
Afghanistan to date.

[[Page 10241]]

  General Petraeus now moves on to a new challenge. He will lead the 
Central Intelligence Agency, which is now rightfully riding high in the 
wake of killing Osama bin Laden. His nomination to this position is an 
inspired choice that I am very happy to support. In General Petraeus, 
we have a leader whom we can trust as our Nation continues to prosecute 
the global war on terrorism.
  Our Nation and its people owe General Petraeus and his family a debt 
of gratitude for their selfless service. They are an inspiration to 
this Nation, young and old, to spend their lives in service and support 
of our Nation--in the military where possible or in government service 
or private endeavors. There will be many speeches and many accolades 
for this inspiring leader, and rightly so. But let us give General 
Petraeus the tribute that any leader really craves--to look behind him, 
and see followers.
  Mr. LIEBERMAN. Madam President, it is my great honor to speak today 
in support of President Obama's nominee to be the next Director of the 
Central Intelligence Agency, GEN David Petraeus.
  I want to take a few moments to describe what, I believe, Dave 
Petraeus has meant to our country and why he will be a great CIA 
Director.
  GEN David Petraeus is the most distinguished general officer of the 
U.S. Armed Forces of his generation--and his generation has many 
impressive general officers. He is a true American hero who has twice 
been called upon by our commander-in-chief to assume leadership of a 
faltering war effort. And twice he has not only answered that call, but 
led our forces out of the jaws of defeat and onto the path of victory. 
To my knowledge, no one else in American history shares that record 
with Dave Petraeus.
  At a moment when cynicism too often infuses our national politics, 
and partisanship too often affects our national security, General 
Petraeus has won the confidence, gratitude, and respect of the American 
people--Democrats, Republicans, and yes, Independents. While commanding 
our extraordinary military in wars that have divided our country, 
General Petraeus has inspired and united our American family.
  At a moment when too many of our fellow citizens fear our best days 
are behind us, General Petraeus' life and leadership have been a 
reminder that America is still a land of heroes--and that Americans are 
still very capable of achieving greatness.
  This special debt of national gratitude extends beyond Dave Petraeus 
to his family, beginning with his remarkable wife, Holly. Holly 
Petraeus shares her husband's strength of character, intelligence, and 
devotion to the cause of public service. As many of you know, she is 
currently leading a noble mission of her own--protecting our military 
families from exploitative and manipulative lending practices.
  By my rough calculations, General Petraeus has spent more than twice 
as many months deployed in Iraq or Afghanistan over the last 8 years as 
he has back home in the United States. Throughout all that time, Holly 
has been supportive of her husband's service and taken care of their 
gifted children. So today I know we all want to say: Thank you, Holly 
Petraeus.
  General Petraeus' background and accomplishments would make him a 
superb candidate for any of the top national security positions in the 
U.S. Government. But there are a special set of reasons why I believe 
he will make a truly superb Director of the CIA in this time of war.
  First, GEN David Petraeus is someone whose very name inspires the 
trust and confidence of America's friends, and the fear and anxiety of 
America's enemies. As our commander in Iraq, at U.S. Central Command, 
and now in Afghanistan, he has stood at the epicenter of some of our 
toughest, most intensive, and most effective counterterrorism 
operations. David Petraeus knows our enemies.
  At the same time, General Petraeus has also built close personal 
relationships with our key partners and allies in the Middle East, 
South Asia, the Euro-Atlantic community, and around the world. Dave has 
also proven himself to be a capable leader of large organizations, 
larger even than the CIA. And because he is a scholar as well as a 
soldier, he is well-suited to oversee and improve the critically 
important analysis done by so many who work at the CIA.
  After all he has done, General Petraeus would be well-justified in 
seeking a quiet, personal retirement now. But fortunately for the rest 
of us, service to a cause larger than himself is General Petraeus' 
creed and destiny. The brave and skillful men and women of the Central 
Intelligence Agency will be in very good hands when he is given the 
opportunity to become their leader, and all Americans will be fortunate 
indeed, and safer, when General Petraeus is at the helm there.
  And that is why I feel so personally honored to vote today for the 
confirmation of GEN David Petraeus to serve as the next Director of the 
Central Intelligence Agency.
  Ms. MURKOWSKI. Madam President, I am pleased to support GEN David 
Petraeus to be Director of the Central Intelligence Agency. For the 
second time in as many weeks, this body endorsed an exceptional nominee 
for a critical post. General Petraeus brings to his new position an 
incredible resume of warfighting knowledge and experience, strengthened 
by meaningful excursions into academia. After leading our troops in 
combat operations overseas for nearly a decade, I think he is well 
qualified to lead our foremost Intelligence institution to serve the 
needs of our Armed Forces and the Nation at large.
  One of the most respected military thinkers of his generation, 
General Petraeus literally rewrote the manual on counterinsurgency 
operations. Understanding that the ability to think is as critical as 
knowing how to fight, he translated difficult and sometimes 
counterintuitive principles into a winning formula for a flagging Iraq 
campaign. In his latest post, his leadership has inspired hope for a 
positive outcome to our endeavors in Afghanistan.
  Threats to our national security are ubiquitous, with those who plot 
against us living in all corners of the world and in the elusive halls 
of cyberspace. To defend our liberty and way of life, we rely on an 
intelligence service that is agile and proactive to swiftly defeat 
threats before they can harm us. General Petraeus has the rare 
combination of professional acumen and keen intellect to lead the 
Central Intelligence Agency in a way that anticipates the moves of our 
adversaries and keeps them off balance.
  General Petraeus and his wife Holly will again unselfishly answer the 
call of public service at a time when our Nation demands great leaders. 
After 37 years, they continue to serve with vigor and distinction and I 
look forward to following their continued success.
  Ms. SNOWE. Madam President, I rise today in ardent support of the 
nomination of GEN David Petraeus to be the 20th Director of the Central 
Intelligence Agency, CIA.
  First and foremost, General Petraeus deserves our Nation's unending 
gratitude for his unwavering commitment to this country over the nearly 
four decades that he has served in uniform. Since graduating from the 
U.S. Military Academy in 1974, General Petraeus has accumulated 
exceptional knowledge, acumen, and experience worthy of the legendary 
military giants who have matriculated at West Point. Throughout his 
long and distinguished career, he has demonstrated the highest levels 
of integrity and performance, exceeding our Nation's expectations time 
and time again.
  His numerous awards, distinctions, and decorations reflect the fact 
that General Petraeus is one of the superior military leaders of this 
or any generation, as he is the recipient of the Bronze Star Medal for 
valor and two awards of the Distinguished Service Medal. His 
accomplishments extend beyond our own beloved shores around the world, 
as he has also received the Gold Award of the Iraqi Order of the Date 
Palm, the French Legion d'Honneur, the Polish Order of Merit,

[[Page 10242]]

the Order of Australia, and the National Defense Cross of the Czech 
Republic. Such accolades are a testament to the extraordinary 
leadership of General Petraeus and speak to an individual whose name is 
synonymous with excellence and respect.
  One of the finest officers our Nation has produced, General Petraeus 
also possesses a brilliance that is only matched by his bravery. 
Consider just a few of the military milestones that have occurred under 
General Petraeus. He has directed operations that have halted and 
reversed the momentum in such Taliban strongholds as Kandahar and he 
positioned the United States to secure victory in Iraq when defeat 
often seemed inevitable. His tactical and strategic faculties are 
universally admired and are second to none. And as the commander 
leading U.S. and Coalition forces in both Afghanistan and Iraq, he 
clearly understands the absolute necessity of coordination between 
military special ops and intelligence covert actions--an imperative 
that was underscored with the remarkable May 1, 2011, take down of 
Osama bin Laden.
  And I would be abjectly remiss if I did not recognize General 
Petraeus's wife Holly, their son Stephen, who has followed in General 
Petraeus's footsteps by serving in the Army, including a recent tour in 
Afghanistan, and his daughter Anne. His assignments since September 11, 
2001, have taken him away from his family, far too often and for far 
too long. In fact, it is my understanding that General Petraeus has 
been deployed for more than 6\1/2\ years over the past decade, and I am 
sure that there have been many missed birthdays, holidays, and other 
family moments along the way. And so I would like to take an 
opportunity to acknowledge the family that has endured ``23 moves'' and 
state that all of you deserve recognition for your sacrifices and 
dedication to the Nation. Indisputably, our phenomenal military 
families at every level and in every branch of our Armed Forces are 
nothing short of indispensable to America's ultimate success in our 
missions. Our servicemen and women could not perform their duties as 
effectively without you nor could our Nation. Your sacrifices are your 
service and we cannot thank you enough.
  Today, the U.S. Senate considers General Petraeus to lead the CIA at 
a time when daunting challenges to our national security threaten 
America's unique position and stature in the world, when the threat of 
retaliatory strikes in a post-bin Laden landscape are alarmingly high, 
when uprisings across the Middle East and northern Africa continue to 
spread, when Iran continues to flaunt its nuclear ambitions, when the 
makeup of the Libyan opposition is still unclear, when the threat of 
cyber intrusion and attack is distressingly persistent, and when 
Islamic extremists continue to control large swaths of territory in 
such locations as Yemen.
  Former Director--and now Defense Secretary--Leon Panetta has left the 
CIA on firm footing, having successfully rebuilt the agency's 
relationship with Congress, implemented efficiencies, and defended the 
best assets of the agency. General Petraeus will undoubtedly continue 
on this path, while striving to close such key intelligence gaps and 
others, as our security may depend on such efforts.
  General Petraeus also will be tasked with leading the agency during a 
time of national austerity. As Senator Feinstein, the chairman of the 
Senate Intelligence Committee, stated during General Petraeus's 
nomination hearing, ``the nation's economic and financial struggles are 
requiring a new level of fiscal discipline, which means that the major 
increases of intelligence resources since 2001--and the CIA budget has 
virtually doubled in that time--will likely end and the intelligence 
community will have to do more with less.'' The arduous calibration 
between seeking efficiencies to reduce costs without diminishing in any 
way the agency's pivotal role in the national security apparatus 
requires the discerning vision and deft judgment that have been 
hallmarks of General Petraeus's illustrious tenure in service to our 
country.
  General Petraeus must at the same time strengthen the bridges between 
our military commanders on the ground and the analysts in Washington. 
Intelligence assessments, which are so critical to the creation of 
sound policy, must accurately depict the situation on the ground and 
take into account the most recent tactical and strategic developments--
fortunately, General Petraeus is supremely positioned to understand the 
needs of those commanders and to ensure that our intelligence meets 
their needs. As he stated during his nomination hearing, General 
Petraeus intends to ``strive to represent the Agency position'' and 
``convey the most forthright and accurate picture possible.''
  Like my colleagues in this Chamber, I applaud General Petraeus, who 
upon assuming the directorship, has pledged to retire from the military 
to which has given every fiber of his being. He recognizes and 
understands the necessity for independence. General Petraeus stated 
that he has ``no plans to bring my military braintrust with me to the 
Agency'' and that he would ``in short, get out of [his] vehicle alone 
on the day that [he] report[s] to Langley'' underscoring that 
understanding and avoiding the mistakes of some of his predecessors.
  General Petraeus has described the professionals of the CIA as, ``the 
ultimate selfless servants of our Nation, individuals with 
extraordinary expertise, initiative, integrity, and courage in the face 
of adversity and physical danger.'' I could not concur with this 
assessment more, and frankly, we would be hard-pressed to find a 
nominee with stronger credentials than General Petraeus to lead this 
key national security organization.
  The trust and the confidence that are lynchpins of General Petraeus's 
sterling reputation among all who have served under him extend to the 
U.S. Congress and the President. There is no doubt whatsoever that the 
general will arrive at Langley with an unprecedented combination of 
intellect and courage, and without reservation of any kind, I could not 
be more pleased to vote to confirm General Petraeus as Director of the 
Central Intelligence Agency.
  The PRESIDING OFFICER. The Senator from Arizona
  Mr. KYL. First, let me acknowledge that two of the great leaders of 
the Senate have just made very ringing endorsements of General Petraeus 
to head the CIA, which we will be voting on in about an hour and a 
half. I associate myself fully with their remarks because they are in 
such a good position to know, as chairman and ranking member, 
respectively, of the Intelligence Committee.
  I think my colleagues will defer to their judgment about this. But 
more than that, most of us have gotten to know General Petraeus because 
he has been so involved in so many of the important policy decisions of 
this country, that we have all been able to form our own judgments and 
reach the same conclusion that the chairwoman and ranking member of the 
committee have articulated so well just now. I am glad to associate 
myself with their remarks.
  Noting that no one else is on the Senate floor to speak further about 
this nomination, I would ask unanimous consent to speak as in morning 
business for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                              Higher Taxes

  Mr. KYL. Madam President, we are going to be foregoing a July 4 break 
to go back home to visit with our constituents in order to stay here, 
ostensibly, to work on the problem of the accumulating budget deficit 
and huge debt that the United States has taken on and the need to do 
something about that, in conjunction with the President's request that 
we raise the national debt ceiling.
  What I would like to briefly address today is what seems to me to be 
an obsession on the part of the President to raise taxes. In fact, he 
is so fixed on this, it is so important to him to raise taxes, that he 
is willing to risk an economic crisis knowing that Congress will not 
raise taxes as part of this debt ceiling increase. And we should not.

[[Page 10243]]

Not because we are trying to protect somebody but because higher taxes 
on an already weak economy would just make things worse.
  Now, we can point to a lot of what the President has done since he 
took office that has made things worse, but I do not know of a single 
economist who believes that American businesses will be more likely to 
hire people, will be more likely to create jobs, if they are faced with 
paying higher taxes.
  They will not. Everyone knows that. So when the President talks about 
raising taxes, he is talking about killing jobs, and I would like to 
speak about the three specific taxes that he has talked about. I know 
because I was the Senate Republican delegate in the meetings with the 
Vice President at which this was discussed.
  I am not going to break the commitment that we all made to each other 
to not discuss things that the President has not already made public. 
So I will not discuss the many things the Democrats took off the table. 
They talk about Republicans taking things off the table, I think they 
have already made it clear that, for example, they took any changes in 
ObamaCare off the table. I will not get into that. I will not discuss 
other things that were a part of our conversations.
  But since yesterday the administration's spokesman and the President 
specifically identified three of the things they did put on the table 
and wanted to discuss with us, I believe I might as well explain to you 
why we are not willing to raise these kinds of taxes. They are all job-
killing taxes. They would all inhibit growth, which is exactly the 
opposite of what we should be doing.
  What are these job-killing tax increases on small businesses and 
American families and other businesses? It is not, first of all, just 
on millionaires and billionaires and corporate jets. President Obama 
and our colleagues on the other side of the aisle are obviously using 
poll-tested rhetoric about only raising taxes on millionaires and 
billionaires and corporate jets. That sounds good. They want ordinary 
Americans to believe they will not be affected by the President's tax 
increase proposals. But the truth is, the provisions they put forward 
during the debt limit meetings with Vice President Biden would target 
small businesses and other job creators and many Americans who are far 
from being millionaires or billionaires.
  I should mention right off the top that they never discussed with us 
in these meetings anything having to do with corporate jets. So I have 
not gone to look to see how many American workers are employed in the 
general aviation business.
  I note that it was on a list that they gave us, but they never 
checked--I suspect that is more in the realm of political rhetoric 
since it does not, even under their proposal I have seen, raise very 
much money. But in any event, what have they actually discussed with 
us?
  Well, the first thing they discussed was repealing something called 
LIFO. LIFO is a term--last in, first out--that is used by accountants 
as one of the methods of inventory accounting. For years there has been 
a question--and more than one-third of American businesses use this 
particular method of accounting. It is perfectly appropriate and legal 
and so on. But there has been some talk: Well, should we have everybody 
use the same standardized method of accounting? There have been 
proposals to do that in the past.
  The problem is, what the Obama administration wants to do is not just 
to conform everyone to the same type of accounting but to actually go 
back and retroactively tax the businesses that have been using this 
accounting practice, which is perfectly legal, totally recognized by 
the IRS, and nothing is wrong with it. But they are going to go back 
and say: Because we are interested in rasing revenue, we are going to 
put a retroactive tax on all of you who have been using this method of 
accounting.
  They are more interested in getting money than in tax fairness, and 
that is why we are opposed to this. It would represent a retroactive 
tax increase on the 36 percent of American businesses that use this 
perfectly legal method of accounting.
  Now, who uses it? Mostly it is people in retail businesses and 
manufacturers, many of whom are small businesses, I might add. To show 
what the impact of this would be--by the way, we first talk about 
creating jobs in the retail sector where consumers come in and buy 
things and in the manufacturing sector where they are made. These are 
the very folks who use this method of accounting.
  Here is the effect that it would have on small businesses. In 
September 2009, the Small Business Administration's Office of 
Advocacy--which is under the Obama administration--wrote to the Tax 
Reform Subcommittee of the President's own Economic Recovery Advisory 
Board that repealing LIFO ``would result in a tax increase for small 
businesses that could ultimately force many small businesses to 
close.''
  Why on Earth would we impose a tax retroactively on folks who 
probably--at least according to the President's own Small Business 
Administration--would ultimately have to close their business as a 
result of the imposition of this tax? Why would we do that? Should that 
not at least be taken into account before you propose something such as 
this or are you so obsessed with finding somebody to raise taxes on or 
getting revenue that it does not matter?
  With unemployment at 9.1 percent, we should not raise taxes on 
America's job creators.
  Here is the second one they discussed: capping itemized deductions. 
They proposed capping itemized deductions for upper income taxpayers 
either at the 28 or 35 percent level. Obviously, this reduces the 
ability of taxpayers to buy homes, to make gifts to charity, to pay 
medical expenses, all of the things for which deductions are taken.
  As the Wall Street Journal editorialized on June 29:
  The political point of this exercise is to raise marginal tax rates 
without appearing to do so.
  That is exactly what would happen. That editorial points out that 
President George H.W. Bush agreed to a similar proposal as part of his 
1990 budget agreement that broke his ``read my lips'' promise not to 
raise taxes. But the fact is, half of all small business income falls 
into the top two brackets. So the ability of small businesses to grow 
and create jobs would obviously be harmed by this proposal.
  The fact is, most high-income taxpayers--individual taxpayers--
already lose the benefit of tax deductions and credits at their income 
level because of what is called the alternative minimum tax. Each year 
we eliminate the effect of the alternative minimum tax except on those 
making, I believe it is above $250,000. So the very people who would be 
capped are already capped under the AMT. Who would get hurt?
  Well, we know 50 percent of the taxes paid by small businesses are 
paid by these two upper brackets because they pay individually. It is 
those folks who cannot take this that would get hit by this because 
they have to take the deductions as part of their businesses. They 
would end up having their deductions capped and be unable, therefore, 
to invest that in hiring more people. Moreover, the tax increase would 
hit a much larger segment of American families than just millionaires 
and billionaires.
  According to the IRS, in 2008, the last year for which we have 
numbers, only 319,000 tax returns showed income of $1 million or more. 
But in that same year, the number of returns falling in the 33- and 35-
percent brackets, which are the brackets most affected by this 
proposal, numbered more than 3.6 million. In other words, more than 10 
times the number of filers would be hit if only millionaires and 
billionaires were affected.
  So while the President likes to claim he only wants to tax 
millionaires and billionaires, the fact is his proposal would hit small 
businesses and millions of Americans who are not millionaires. But as I 
said, most importantly, it affects job creation because the people who 
would be hit by this are the people who are small business 
entrepreneurs,

[[Page 10244]]

who pay their taxes under these provisions, and would no longer be able 
to deduct their business job expenses.
  Why, with economic growth at just 1.9 percent in the last quarter, 
would Congress want to raise taxes on small businesses and on American 
families? It just does not make sense.
  Finally, oil and gas. It is always popular to talk about attacking 
Big Oil. Of course, millions of Americans and retired Americans own 
stock in oil companies, and raising taxes would have the effect of both 
reducing what they get in their pensions and so on, as well as 
undoubtedly result in higher gasoline prices because most of these 
kinds of taxes are passed right on through to the consumer.
  So they want to raise taxes on U.S.-based oil and gas companies--not 
foreign-owned companies--U.S.-based oil and gas companies. Obviously, 
this tax could result in higher gas prices which contradicts the reason 
for releasing oil from the Strategic Oil Reserve. Why do that if it is 
going to get canceled out by imposing a new tax?
  It could, obviously, hurt job creation because this industry supports 
over 9.2 million American jobs. It does not just target oil companies 
because they get some kind of special benefit. What these provisions do 
is eliminate a tax provision applicable to all businesses--any 
manufacturing business, for example, has the benefit of these 
particular three tax provisions.
  So why single out one particular group of taxpayers, only about five 
in number, who would no longer be able to take advantage of provisions 
that every other American business can take advantage of? They are 
broadly available to American businesses in one form or another. They 
are three specific things: First, the so-called section 199 deduction 
available to all manufacturers. Second, the U.S.-based businesses are 
generally able to prevent double taxation. When they have to pay taxes 
abroad, those taxes are then credited against their American tax 
burden. Third, most businesses can expense their research and 
development costs.
  These are the three things that would be taken away just from oil 
companies, the folks who find American oil so that we can drive our 
cars and conduct our businesses. So raising the cost of producing 
American oil would help our foreign competitors and make us more 
dependent on them, ship high-paying jobs offshore, increase our 
dependance on foreign oil, cause gas prices to rise, and hurt American 
families already suffering with high food and energy costs.
  Why would we want to do this except to demagogue a political issue? 
Because it sounds good to punish success. America has never been about 
punishing success. America has been all about creating opportunities, 
and this President's ideas of raising taxes as the sine qua non of an 
agreement to achieve an increase in the debt ceiling, as he has 
proposed, would be absolutely contrary to what we are all trying to do 
right now--which is to help our economy get healthy so that it can 
create more jobs, so we can reduce this tremendously high unemployment 
rate that we have right now, put Americans back to work, and help our 
families ironically, by getting healthier economically, making more 
money, and producing more revenue for the Federal Government to tax 
under our existing taxes. So if we want economic growth, improvement in 
the economy, the last thing we should be doing when our economy is 
ailing now is imposing a higher tax burden on it.
  Why the President is so obsessed with this, I do not know. But I will 
tell you one thing: Republicans will resist these job-killing tax 
increases, not because we are trying to protect somebody--except the 
American people--but because we know that it is bad for our economy, 
for our families, for our businesses, and for job creation.
  I ask unanimous consent that the Wall Street Journal editorial to 
which I referred be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, June 29, 2011]

    A Stealth Tax Hike--The Return of the Deduction Phase-Out Gambit
       The White House wants Republicans to agree to tax increases 
     that no one wants to call tax increases, and for an insight 
     into this political method let's focus on one proposal in 
     particular--the phase-out of itemized deductions for upper-
     income taxpayers. We hope the tea party is paying attention, 
     because this kind of maneuver is why people hate Washington.
       The idea is that once taxpayers earn a certain amount of 
     money (say, $200,000), they would begin to lose the value of 
     the various deductions they're entitled to under the law. 
     These include such IRS Form 1040 line items as the personal 
     exemption, the deductions for state taxes and charitable 
     contributions, even those for spouses and children. Earn 
     enough money and soon the value of those deductions goes to 
     zero.
       The political point of this exercise is to raise marginal 
     tax rates without appearing to do so. The top statutory 
     individual rate would remain at 35%, so the politicians could 
     claim they hadn't raised rates. But for those losing their 
     deductions, the marginal rate would increase by between one 
     and two percentage points until the phase-outs were complete.
       We raise the alarm now because this sneaky bit of political 
     fiddling last became law during a previous bipartisan budget 
     summit--in 1990. Democrats proposed it then, too, and 
     President George H.W. Bush and his budget chief Dick Darman 
     agreed to it so they could appear to be raising tax rates 
     less than they really were.
       Those deduction phase-outs continued to be part of the tax 
     code until the 2003 tax law finally phased out the phase-
     outs. They are scheduled to return when the George W. Bush 
     tax rates expire at the end of 2012. While the statutory top 
     rate will then rise to 39.6%, millions of taxpayers will pay 
     a top rate closer to 41% as they lose their deductions. This 
     is in addition to the 3.8% payroll tax increase on investment 
     income that will hit millions of these same taxpayers when 
     ObamaCare gears up in 2013.
       Only six months ago, President Obama endorsed the extension 
     of the Bush rates (and the end of the phase-outs) for two 
     more years, but now his negotiators want to renege on that 
     deal. They want to reintroduce the phase-outs as part of a 
     debt-ceiling deal, apparently so they can claim they got 
     Republicans to agree to some ``revenue increases'' in return 
     for spending cuts. Some Republicans might be tempted to go 
     along claiming they didn't raise tax rates.
       They'll deserve only scorn if they do. Republicans will be 
     signing on to a tax increase, and one of the more dishonest 
     varieties at that. The phase-out gambit is an attempt to 
     shoe-horn more progressively into the tax code without 
     admitting it, and to do so in such a way that only tax 
     experts will know what's going on.
       One goal of the tax reform that Republicans and Mr. Obama 
     keep talking about is to simplify the tax code, but deduction 
     phase-outs make the code far more complicated. Phase-outs 
     make it impossible for taxpayers to add up their income, look 
     at the tax tables, and know what they owe. The IRS taxpayer 
     advocate service and even the head of the American Bar 
     Association's tax section urged their repeal in the 1990s.
       Democrats keep telling us Americans support raising taxes. 
     If that's true, the least they can do is try to raise them 
     honestly.

  Mr. KYL. I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. BROWN of Massachusetts. Madam President, I thank Senator Kyl for 
his eloquent speech on the issues of the day that are obviously very 
serious for the American people.
  Madam President, I am here to speak on a couple of issues--first and 
foremost, regarding the Asset Forfeiture Responsibility Act of 2011, an 
act that I have filed and will speak on in a moment.
  I ask unanimous consent to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWN of Massachusetts. Madam President, I want to comment on 
Secretary Gates' last day over at the Pentagon. I was over there doing 
some work, and I noted that he was being honored today. I thank him for 
his dedication and service to our country. He leaves behind an 
incredible record of service.
  Our military and families, while strained, have never been more 
prepared to fight and win in today's conflicts. From my interaction 
with him, I have gained an enormous level of respect for his tireless 
leadership and committed resolve on behalf of our men and women in 
uniform and their families.
  Mr. Secretary, thank you for your incredible service to this Nation. 
You have made us all proud.
  Madam President, today, one of our Nation's finest officers, GEN 
David

[[Page 10245]]

Petraeus, leaves behind a distinguished record of military service and 
moves on to a new job. The wealth of experience he brings to this 
critical post will be invaluable as he and the other dedicated public 
servants at the Agency work to keep our Nation safe from harm. I have 
the utmost faith in his leadership and look forward to the 
contributions he will make to the Agency and to our country.
  (The remarks of Mr. Brown pertaining to the introduction of S. 1312 
are printed in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.)
  Mr. BROWN of Massachusetts. On a side note, I am hopeful that we will 
continue to work together and try to get through a lot of these fiscal 
challenges we have. I, for one, along with many others, look forward to 
finding common solutions to move our country forward and step back from 
the financial precipice we are approaching.
  I ask unanimous consent that the time during quorum calls be divided 
equally to both sides, and I yield the floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Maryland is recognized.
  Mr. CARDIN. Madam President, I ask unanimous consent that I be able 
to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                               The Budget

  Mr. CARDIN. Madam President, I take this time to talk about the 
budget issues and the debt ceiling vote that is approaching. It is a 
serious issue that we need to deal with.
  First, I think it is important to know how we got here. I say that 
because we don't want to repeat the mistakes we made in the past. It 
was just 10 years ago when we had not only a balanced budget, we had a 
budget that looked like we were going to pay off all of our privately 
held debt. I was part of the Congress that moved us toward that 
balanced budget and surplus. It was the Democrats who were prepared to 
do what was necessary to balance the Federal budget in the 1990s, and 
we got there. We didn't have a single vote from Republicans, but we 
balanced the budget in the 1990s. It was the right thing to do for our 
economy. As a result, our economy picked up and did extremely well.
  We also know that the previous administration cut taxes twice, in 
2001 and 2003. We also went to war in Iraq--a war that was one of 
choice--and we went to war in Afghanistan, and we didn't pay for either 
one of those wars. It was these unpaid-for wars and tax policies that 
led us from a surplus to a deficit. Our economy then turned, and we now 
have these large deficits. I say that because we need to pay attention 
to how we got here to make sure we have a credible plan to get us out 
of this deficit.
  I think it is very important that this country move toward a 
manageable debt. It is very important for our economy, and for job 
growth, that we manage our deficit and bring it down.
  Let me give you what I think needs to be done in any plan that is 
presented to us for consideration. I hope we all agree that we need to 
raise the debt ceiling. That is after the fact. We have already spent 
the money. Now we have to pay the bill. We also would like to see a 
plan to bring our deficit under control. To do that, we have to have a 
credible plan, one that really does bring us within the realm of a 
manageable deficit.
  Secondly, it has to be fair. I notice that my Republican friends ask 
our children to give up some of their help for a college education. 
They want to cut the Head Start Program, and they want seniors to pay 
more for health care. How about the well off? Should they not be part 
of the plan? I think we need to have a fair plan in order to accomplish 
our goal.
  Third, we need to allow our Nation to move forward with economic 
growth. Jobs are critically important to deal with the deficit. As we 
create more jobs, we help our economy grow, it brings our budget into 
balance.
  I am for a credible plan. To me, a credible plan needs to get the job 
done. Managing our deficit needs to be fair, including all elements of 
government spending, and it includes tax expenditures. It has to allow 
for economic growth. If we are going to get the job done, we have to 
bring down spending--we all acknowledge that--on the domestic side and 
the national security side. We can do better in bringing our troops 
home from Afghanistan and save military dollars.
  There are things we can do, and we need to do that. But we also have 
to deal with the revenue side. Quite frankly, we can't get the job done 
without dealing with the tax loopholes and shelters that we have in the 
Tax Code. I am concerned that the Republican leader said we could not 
consider any revenue. Well, I have heard from a lot of my Republican 
colleagues who disagree with that. We need to include revenues in a 
credible plan or it can't get done. We cannot manage the deficit 
without closing those loopholes and eliminating those shelters.
  Yesterday, I talked about one of those--the ethanol subsidy. We have 
nearly $3 billion that we can save there. The ethanol subsidies are not 
needed. The market is there. More damaging, it is hurting our economy. 
I have the honor of representing the people of Maryland and the 
Delmarva Peninsula. The poultry industry is suffering because of the 
ethanol subsidies. It is costing more to produce poultry, making the 
industry less competitive. We can save and create jobs by eliminating 
the ethanol subsidy, which will help us in balancing the budget.
  Today, I want to talk about another tax shelter and loophole that we 
can deal with, and that is the section 199 manufacturing tax break used 
by the oil and gas industry. It is very interesting. We have seen 
gasoline prices rise, and we have seen the negative impact of that on 
our economy. But guess who is benefitting from the increase in the 
gasoline prices? You are right; it is the oil and gas industry. Their 
profits are up, while our economy has been suffering.
  In the first 3 months of this year, the gas and oil industry, the 
five largest companies, had record profits of $35.8 billion. Big Oil 
benefits from a variety of subsidies, including section 199, that 
amount to some $4 billion annually. So we are subsidizing the Big Five, 
who are on course to make a projected $140 billion profit in 2011, with 
$4 billion in taxpayer contributions. It is not needed. These funds 
could be used to help reduce our deficit instead.
  The worst part is that section 199 came about as a result of our 
Foreign Sales Act. What was that about? We wanted to put American 
manufacturers and producers on a level playing field for international 
competition. We tried to do that with a direct subsidy to help 
exporters, but the World Trade Organization held that to be illegal. So 
then we came back with this general manufacturers' credit, section 199, 
to try to help our exporters.
  The gas and oil industry are not manufacturers exporting a product. 
They should never have qualified for this taxpayer-funded subsidy. I 
asked that question in the Senate Finance Committee when we had the Big 
Five oil companies' chief executive officers (CEOs) before us. Not one 
of the CEOs could justify the fairness of this subsidy going to the oil 
and gas industry. Their only answer was: Well, everyone else is getting 
it.
  We need to reduce unnecessary government spending, whether it is on 
the appropriations side or the tax expenditure side. With regard to the 
oil and gas industry, repealing section 199 and the rest of the $4 
billion or so in subsidies these companies receive each year could help 
us balance the budget.
  But the minority leader says we can't even consider that. He says we 
can't consider any of the revenues. To me, it is not a fair proposal, 
not a credible proposal, unless we tell the most wealthy and those 
companies that don't need the subsidies that they are going to be part 
of the plan to bring our budget into balance.
  There are many more provisions in the Tax Code we can look at where 
we can get the savings. I have just mentioned two. If we are going to 
have a credible plan that will allow for economic growth and allow us 
to create

[[Page 10246]]

jobs--and the best way to deal with the deficit is to create more 
jobs--then we have to have a fair approach. So I urge my colleagues to 
get together on this.
  Look, I understand it is not going to be the budget the Democrats 
want, but I will tell you this: it will not be the budget the House 
Republicans want either. We have to work together, Democrats and 
Republicans. I think we can find common ground. Earlier this year, I 
think 62 Senators signed a letter saying, let's use the framework of 
the debt commission. So I think there was that willingness. Let's get 
back to that.
  Let's get the Democrats and Republicans working together in true 
compromise. We don't have to compromise our principles. We can get the 
job done, and that job means let's get our debt into a manageable 
state, let's do it in a way that is fair, so the well off also are part 
of a solution that includes revenues, and let's do it in a way that 
allows America to do what President Obama said we can do--out-educate, 
out-innovate, and out-build our competitors so we can create the jobs 
that won't just help us balance our budget but will keep America 
prosperous, too.
  That is our charge. That is what we need to do. Let's get on with the 
work.
  With that, I yield floor.
  The PRESIDING OFFICER (Mr. Blumenthal). The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, before I start my remarks, I would 
like to say that in about an hour we will start voting on the 
nomination of General Petraeus to lead the CIA, and I am going to 
enthusiastically support that nomination because I do think General 
Petraeus has shown the kind of military leadership that makes our 
country proud. He has come in at some of the hardest times in both Iraq 
and Afghanistan. I have met with him in Iraq to see exactly what he was 
doing, how he was implementing his counterinsurgency proposals, and I 
think he is a gifted leader.
  I also believe in this war we are in--the war against terrorists--the 
CIA and the military have such a necessary link, and in many ways they 
are codependent on the information and the capabilities that each 
uniquely has. So I think he will do the same great job he has done in 
public service in this kind of arena that has become much more closely 
linked to the military, for sure. So I will support his nomination.


                              Debt Ceiling

  Mr. President, today, so many people have been talking about this 
debt ceiling issue, which should be what we are talking about because 
we have perhaps only as long as 1 month--we are not exactly clear--when 
we will reach that over $14 trillion debt ceiling. This is the most 
serious issue facing Congress and the President today, and we shouldn't 
be doing anything else except talking about how we are going to bridge 
this gap that would allow us to go forward with significant reforms.
  I will not vote to raise the debt ceiling unless there are not 
significant reforms that assure we will not have to do it again; that 
we will begin to bring down the deficit that is causing this huge debt 
to accumulate. So I am looking for the leaders who are meeting in the 
different meetings--some I am privy to--to essentially come to an 
agreement so we can send that message.
  People have talked about the message that would be sent to the world 
if the debt ceiling isn't lifted. I am concerned about the message that 
would be sent if we lift the debt ceiling without reforms. I wish to 
send the message to the global marketplace that we are going to deal 
with our financial situation, and we are going to deal with it 
responsibly; that we are going to cut the spending that has caused this 
debt to accumulate to such alarming levels. The message I wish to send 
to the world is, we are going to take this problem and we are going to 
solve it together; that we are not going to just do another pro forma 
lifting of the debt ceiling as if it were business as usual. Because 
business as usual it is not. We don't have a tax problem in this 
country, we have a spending problem, and we must attack it if we are 
going to have credibility.
  That brings me to a bill I have introduced because I think it is 
important, as we are looking at this looming deadline, to have a plan 
B. If, in fact, we are not going to be able to come to an agreement--
both Houses of Congress and the President--that would cut the spending 
levels sufficiently enough that many of us would be comfortable with in 
order to pass a bill raising the debt limit ceiling--if we don't meet 
that test--we should have a responsible plan B. This would be a plan 
that would say: If, in fact, we can't agree on what it will take to 
lift that debt ceiling, this is how we are going to treat the money 
that will be coming in. Because at that point our government will be 
limited in its expenditures by the revenue that is coming in.
  We can allocate that revenue, and that is where I think we must have 
a plan B. We must make sure certain things are done. The No. 1 thing we 
all know that is going to be paid is the interest on the debt. That is 
our No. 1 responsibility because that will keep us from going into 
default, which none of us wants to do. The second thing is to pay our 
military--the people who are deployed overseas, in Iraq, Afghanistan, 
and the places that are supportive of those efforts. We must assure we 
are paying those people on time so their families, who are thousands of 
miles away in other parts of our country, will know they can pay their 
rent and are not going to go into extremist positions.


                              Military Pay

  I wish to talk about a bill I have introduced that has 80 cosponsors.
  Mr. President, I ask unanimous consent to add Senator Heller of 
Nevada to be a cosponsor of S. 724.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. HUTCHISON. I thank the Chair.
  S. 724 is the Ensuring Pay for Our Military Act of 2011. There are 80 
cosponsors of this legislation. It is very simple and straightforward. 
It ensures that in the event of a government shutdown, our Nation's men 
and women in uniform would continue to receive their military pay and 
allowances. That is what it does. This legislation will protect all 
Active-Duty men and women, including those in the Coast Guard and 
Reserve components.
  I introduced this bill earlier this year because we were in the 
process of having a meltdown with our appropriations. We need to have a 
law that assures if there is a shutdown, whether it is on an 
appropriations issue or on a budget issue or on a debt ceiling issue, 
we know where the money will go--where the protections will be. I think 
our military should be front and center. I also think Social Security 
recipients should be front and center, but this bill is for the 
military because they are in harm's way as we speak in many places 
around the globe and we don't want to disrupt their families or have 
them worry for 1 minute about their families while they are doing their 
duty.
  These military families have faced stress from repeated deployments 
since 9/11. The last thing they should worry about is not receiving 
their paycheck on time because Congress and the President have not been 
able to do the job they need to do.
  Immediately after introducing this bill, I was contacted by a 
military spouse. Her husband was on his 10th deployment in support of 
operations in the Middle East. The spouse was at home raising their 1-
year-old son. She was very concerned about whether she was going to be 
able to pay her bills. Multiply that story by many thousands and one 
can imagine the stress of these families across our Nation who have 
loved ones in harm's way. This should not be compounded by adding an 
unnecessary financial stress that is the fault of a Congress unable to 
pass an appropriations bill or a Congress and President unable to reach 
an agreement to cut our deficit so the debt ceiling will not have to be 
raised again.
  At a time when our Nation has 100,000 troops in Afghanistan and 
45,000 in Iraq, it would be unconscionable to ask our troops to serve 
on the front lines without ontime pay. From my home State of Texas, 
there are more than 28,000 soldiers, sailors, airmen, and marines 
currently deployed. This is second only to California in the highest 
number of deployed troops from one State.

[[Page 10247]]

  I would like to especially recognize the soldiers from the 36th 
Infantry Division of the Texas National Guard. They are currently 
serving in the southern region of Iraq and are doing a great job. These 
brave Texans are working long hours in the extreme heat, facing a 
dangerous enemy. But the most remarkable aspect of their service is 
they all raised their hands to volunteer to do it. The very least we 
can do is pay them on time. It would be tremendously damaging for 
morale to tell our troops to go on long deployments, maybe multiple 
deployments, away from their families, and then not pay them at the 
normal time.
  I know if there is one thing this Congress can agree on, it is our 
tremendous pride and support for the brave men and women in uniform. I 
think Congress has shown that time and time again. We all learned a 
lesson after what happened during the Vietnam war and after the Vietnam 
war, when the disagreement about the policies of the war were actually 
imputed to those who were following orders to implement that war. We 
will never let that happen again. It hasn't happened since, and it will 
not happen. There is not one Member of Congress who doesn't respect our 
military and the service they are giving--even if they disagree with 
the policies, which many often do. So I wasn't surprised when I 
introduced this bill to get 80 cosponsors immediately.
  It is becoming clear that negotiations on a long-term deficit 
reduction plan may go down to the wire. The President said yesterday he 
will insist on tax increases to pay for a continued Federal spending 
spree. Republicans are clear: We must lower government spending to 
affordable levels, and there must be fundamental changes in how 
Washington spends the American taxpayer dollars. Now is the time for 
Congress to vote to assure that our troops will not miss a paycheck due 
to gridlock in Washington, not at midnight on August 2 or whenever we 
are adjourning, hopefully, for a recess so Members can get home and 
work in their districts.
  If the Senate cancels its July 4 holiday recess--which is now on the 
books--it is time for us to spend that time on nothing else but this 
issue--long-term deficit reduction. We should start our work by making 
sure we have a plan B that our troops and their families will not be 
political pawns in the struggle between raising taxes and cutting 
spending. If we are here, it should be for one purpose and one purpose 
only; that is, debt reduction and the preparation for what happens if 
that deadline passes and there is not an agreement.
  I can't think of a better way to say we are preparing for the worst 
while we are hoping for the best, and that is that we make sure certain 
essentials are done.
  Obviously, interest on the debt is our first obligation. The second 
one is to pay our military personnel who are overseas, who are 
deployed, and to make sure they are not worrying about their families 
at home having the money to pay the mortgage and the bills that must be 
paid on top.
  So I hope the Senate will take up this bill, and I am going to ask 
that we consider the Ensuring Pay for Our Military Act of 2011 is on 
the agenda if we are in session next week. That seems to be what is in 
the works right now. If that is the case, let's do something 
productive. I can't think of something more productive and more 
reassuring to our military than to pass S. 724, with 80 cosponsors. If 
it comes to the floor, it is going to pass. It will go to the House, 
and I assure you it will pass.
  So let's start that process. If we are going to be here next week and 
a lot of plans are going to be disrupted, we are willing to do that. 
But let's make it worthwhile by passing significant legislation, such 
as ensuring that our military is paid on time if for any reason we are 
looking at a government shutdown.
  Mr. President, I yield the floor.


                       Thanking Senator Hutchison

  The PRESIDING OFFICER. The Senator from Florida.
  Mr. NELSON of Florida. Mr. President, while the Senator from Texas is 
still on the floor, I just want to say how, personally, this Senator is 
going to miss her after the calendar year 2012, since she is retiring 
from the Senate. I say that with the utmost respect and affection for 
the Senator from Texas because what a great partner she has been in 
setting policy for this Nation's space program.
  Had it not been for the Senator from Texas, we would not have that 
policy etched into law in the NASA bill that we passed last year and 
which now is the skeletal structure that we hang all the appropriations 
on going forward, giving a clear path, a clear direction, a clear 
roadmap for our Nation's space program. So I just wanted to thank the 
Senator from Texas in front of the Senate.
  Mrs. HUTCHISON. Mr. President, I appreciate so much the words of the 
Senator from Florida because, of course, he is not mentioning the great 
leadership he has portrayed.
  He is today the only Member of the Senate who has actually gone into 
space as an astronaut, and his love for and zeal for our space 
exploration is unsurpassed, and I appreciated working with him.
  It was our joint bill that passed last year that assures a way 
forward for NASA; that assures that there will be manned space 
exploration; that we will use the space station, in which we have 
invested hundreds of millions of taxpayer dollars, for not only health 
benefits for our country but also learning about dark energy. The dark 
energy and antimatter research that is being done right now, I 
witnessed myself last week when I visited the NASA facility at the 
Johnson Space Center in Houston, TX. We are now getting information on 
the cosmic rays that are coming into the spectrometer that has just 
been put on the space station by CDR Mark Kelly and his crew during the 
most recent shuttle mission, and we are going to possibly learn the 
genesis of the universe by this facility that was put aboard the space 
station and the research that is going to be done on dark matter and 
what happens when it meets matter. It is really exciting, and I believe 
that the way forward that Senator Nelson and I have put NASA on, I 
believe, is going to assure that we have private sector involvement; 
that there will eventually be a transition to the private sector, but 
in an orderly way so that we don't lose the expertise in which we have 
invested so much.
  I hope later, before I leave, we will get a chance to talk about 
that. I am looking forward to going to the last launch of the space 
shuttle that America will put up. The systems that we have had will end 
after this last space launch that will happen in early July, and then 
we will be in the process of building the new vehicle which we have put 
in place in the law to begin to shorten the gap between the time that 
we can put Americans in space with our own vehicle. We are going to try 
to make that a shorter timeframe by the law that we passed.
  So, Mr. President, I thank the Senator from Florida and look forward 
to having more opportunities to talk about the importance of space 
exploration and America's preeminence in that field.
  I yield the floor.
  Mr. NELSON of Florida. Mr. President, I want to thank the Senator 
again. We stood shoulder to shoulder and we were able to get these two 
additional flights, which the Senator from Texas just chronicled, that 
no sooner had Mark Kelly and his crew put the alpha magnetic 
spectrometer up on the space station that it started collecting these 
cosmic rays.
  These are subatomic particles that are flying around in space that we 
try to duplicate down here on Earth by smacking atoms together in 
accelerators to understand subatomic particles, and we have them out 
there being collected right now on the space station in the AMS. It was 
on the station one day after they put it there. It is collecting this. 
It is going to help us learn all the way back to the origin of the 
universe.
  Mrs. HUTCHISON. If the Senator would yield.
  Mr. NELSON of Florida. Of course.
  Mrs. HUTCHISON. When I was there last week, Dr. Samuel Ting, who is 
the

[[Page 10248]]

Nobel laureate from MIT who built the spectrometer and talked about and 
convinced us of the importance of putting it on the space station, he 
was there with Mark Kelly and myself, and he said they had 1 billion 
hits now of those cosmic rays and he was on a cloud, literally, about 
what they are learning already. Mark Kelly said, in a press conference 
that we had, that it was the most significant achievement that he has 
ever made in his entire career as an astronaut. I believe he will be 
proven right, and I think Dr. Samuel Ting will be eligible for another 
Nobel Prize in physics if we can really find the genesis of matter and 
antimatter in space, which he said we would; that you cannot duplicate 
on Earth except by trying to put these atom smashers and electron 
smashers on Earth but at much bigger expense than being able to do it 
in space where it just happens. Billions already, he said.
  So thank you. I leave the floor. I know we digress, but it is very 
exciting.
  Mr. NELSON of Florida. Well, Mr. President, as the Senator is 
leaving, I just want to say that she and I did have to stand shoulder 
to shoulder, and we had some fights. Of course, in the process we had 
some critics too. Now some of my critics wish that when I went into 
space it would have been a one-way ticket. But the fact is, it was a 
two-way, and we stood another day. The proof is in the pudding of what 
is happening up there.
  I will have something later to say, Mr. President, about the winddown 
of the space shuttle program. But while the Senator from Texas was 
here, I just wanted her to know my profound gratitude for her 
collegiality, her friendship, her expertise, and working in the way 
this Senate ought to work, which is in a bipartisan way. I thank her 
profoundly for that example that she set for the Senate and for this 
country.
  Mr. President, we are here about General Petraeus. I am a member of 
the Senate Intelligence Committee. I have had a chance to visit with 
him on a number of occasions in his capacity as general, as well as now 
the nominee, soon to be the new CIA Director.
  I would simply say that I don't think for our national security's 
sake we could have two better nominees now: the former CIA Director, 
who has been confirmed by this Senate as the new Secretary of Defense, 
taking over from an extremely good and competent Secretary of Defense, 
Secretary Gates--and, of course, that is Leon Panetta--and then for his 
shoes, as the leader of the CIA, to be filled by General Petraeus. And 
what is happening today is illustrated by the modus operandi of the 
takedown of bin Laden. It is a marriage between the intelligence 
community and the military community.
  Of course, the takedown of bin Laden was exactly that: painstaking 
years of effort to get the intelligence, since bin Laden went dark 
after he slipped through our fingers in Tora Bora, and we knew he was 
communicating by a courier. So the question was, How did we find the 
courier? Once we identified who it was, where was he? Find him and 
follow him. That, of course, led us to the compound, and when married 
up with all of that intelligence on what was going on at that compound, 
then in came the U.S. military.
  Although it was a CIA operation, as reported by the newspapers, led 
by Leon Panetta, in fact, it was a three-star admiral, a Navy SEAL, who 
conducted the actual raid from his headquarters. Of course, the SEALs 
took care of business and did it in such a proficient, effective, and 
magnificent way, and sequestered all of those women and children, save 
for the one woman, as reported in the newspaper, who got caught in the 
crossfire when the SEALs were fired at.
  So it was an absolutely 100 percent operation, and it is illustrative 
of why this appointment of General Petraeus is so important and why the 
appointment of Leon Panetta as Secretary of Defense was so important. 
These two are going to be just like that, as we are protecting the 
national security for years to come.
  That is what I want to say about General Petraeus.
  Mr. President, I would like to speak on another subject--the budget--
so I ask consent that I speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                               The Budget

  Mr. NELSON of Florida. Mr. President, the negotiation over this 
deficit reduction and the debt ceiling package has hit the critical 
stage. It is beginning to come into the consciousness of the country 
and most of the people around here. Those people have in some cases 
wanted to push it off, in other cases have said: Oh, the debt ceiling? 
That is not such a big deal.
  It is baffling that people would say that. The economic chaos that 
would reign in this country and the world financial markets if the 
Federal Government was not able to pay all of its bills would be 
catastrophic. How can any person in a responsible position say that?
  But it is also baffling that there are so many people--and you know 
who they are--who have decided to draw a line in the sand on any 
deficit reduction and say: It is going to be my way or no way. That is 
part of the problem of what is going on in this country right now. This 
is a big, broad, diverse, complicated country. The very principle of a 
body such as this is that you respect the other fellow's point of view. 
When you have differences of opinion, you try, as the Good Book says, 
to say, ``Come, let us reason together'' and to hammer out a workable 
solution. Yet you hear the rhetoric--it is going to be their way or no 
way, so no matter whether you talk about closing corporate tax 
loopholes--no. That has to do with tax revenue. It sure does, but 
certain people are not paying their taxes due to loopholes.
  Two weeks ago, we acted on one of those tax loopholes overwhelmingly. 
This Senate voted to get rid of one of those tax loopholes. It was for 
corn ethanol, the big subsidy. It was multibillions of dollars per year 
that was a tax credit--in other words, lost tax revenue. The Senate 
finally realized that was not worthwhile.
  Why are we saying we should not put that in as a part of the package 
on deficit reduction? A dollar of deficit reduction is a dollar of 
deficit reduction regardless of where it comes from, whether it comes 
from actually whacking Federal spending or whether it is cutting some 
of the special tax breaks for some of this country's most profitable 
multinational corporations. The objective is to bring down the deficit.
  What is a deficit? You have income coming in the form of tax revenue, 
you have outflow going out in the form of expenditures, and when the 
two are equal, that is a balanced budget. When I came into the Senate 
11 years ago, we had 4 years of this. Tax revenue was above annual 
expenditures, and for 4 years, we had a surplus. But this is what has 
happened: The expenditures are up here and the tax revenue is down 
here.
  If you are going to get the budget eventually in balance over the 
course of a decade, you have to do this. That doesn't mean just tax 
increases. It can be done by eliminating tax expenditures. Over the 
next 10 years, tax expenditures in the existing Tax Code are $14 
trillion. You don't have to get rid of all of them. Some of them we 
don't want to get rid of because they are good tax policy, they are 
good public policy. But you can sure get rid of some of them.
  But we have the other side over there who will not even talk about 
some of these tax loopholes we ought to be cutting. They say that is 
increasing taxes. Now, the truth be known, it is because most of them, 
whether they like it or not, on that side of the aisle have taken a 
pledge to a fellow named Grover Norquist and said they will not vote 
for any new taxes, and it is being interpreted that tax expenditures--
in other words, tax deductions, tax credits, or tax exclusions--that if 
you close those tax loopholes, that is going to be new taxes. Well, 
that is tax revenue that is not coming into the U.S. Treasury because 
some special interest is getting preferential treatment that we ought 
to question. A good example of this is what we just voted on in the 
removal of the tax subsidy for corn ethanol.

[[Page 10249]]

  At the end of the day, for Americans, this debate is going to matter 
hugely. If we have to do something by just cutting expenditures and not 
remove the tax loopholes, then in order to address the deficit--
remember, this is the deficit, this is expenditures, and this is tax 
revenue, and if we have to bring that into balance by only moving down 
the expenditures, we are going to have to take it out of the hide of 
retirees, out of the hide of hospitals, schools, what Senator Hutchison 
and I were just talking about, the space program, the coastal 
preservation programs, our national parks, and the Federal prisons. Are 
we going to put an end to the narrow tax breaks for the well-connected 
or are we just going to whack all of those programs?
  The view of this Senator is that if you really want to get a package 
that is going to be serious and that is real money, that is not smoke 
and mirrors and budgetary sleight-of-hand, then you are going to have 
to get a package of about $4 trillion in 10 years of deficit reduction.
  There is no reason, if you are going to be serious about budget 
reduction, that special benefits for oil companies, for pharmaceutical 
companies, hedge funds, and other special interests should be a sacred 
cow and not to be touched. What message does it send to the everyday 
American about their government and whom that government represents if 
we just take it out of the hides of people such as those I just 
mentioned, like retirees?
  Basically, I suggest you take a page from one of our illustrious 
former President, President Reagan. In 1984, the Federal Government was 
confronted by deficits as far as the eye could see. I was a young 
Congressman at the time. President Reagan understood that it was 
appropriate to close those tax loopholes as part of the deficit 
reduction process, and the Deficit Reduction Act of 1984 included more 
than 60 provisions aimed at shutting down tax shelters and ending 
abusive special interest tax breaks. That 1984 bill targeted foreign 
investors who sought to use the offshore havens to dodge U.S. taxes, 
and it targeted Wall Street's use of financial derivatives to evade 
U.S. income tax, and it included a provision targeting the windfall 
profits for oil companies.
  That brings me to an example I want to discuss in some detail. For 
decades, oil companies have been enjoying the generous tax subsidies of 
the American taxpayer by using their ample resources to get tax 
benefits very generously given from the Federal Government. Oil and gas 
companies are experts at figuring out the narrow tax break, and it 
benefits their interest, and it does so particularly with regard to 
offshore drillers.
  The largest of all the dedicated oil and gas tax breaks is the 
ability of the oil companies to immediately expense intangible drilling 
costs. These costs include drilling and development work completed 
before a well begins production. Oil companies are able to deduct--in 
other words, to write off as an expense--those costs and do so 
immediately.
  The tax break for intangible drilling expenses is going to cost the 
American taxpayer $12.4 billion over the next decade if it is not 
repealed. The President has proposed its repeal. Several of us in the 
Senate have proposed the repeal and have filed a bill to do it. The 
repeal of this tax break on intangible costs for oil companies ought to 
be included in a deficit reduction package. Remember, it is a choice: 
Are we going to cut people like retirees and the space program and 
educational expenses and the environment and the Federal prisons or are 
we going to get tax revenue from special tax breaks like these?
  For several years, oil companies working offshore have been devoting 
significant resources toward complex tax schemes to avoid paying taxes 
to Uncle Sam. Let's take a closer look.
  Transocean, that is a name that ought to ring familiar. They were the 
ones, remember, who operated the defective blowout preventer, the one 
that did not work, that was supposed to jam the two cylinders together 
and cut off the oil flow when there was an explosion on the Deepwater 
Horizon oil rig.
  Let's look at the record. In 1999, Transocean moved its place of 
incorporation from Delaware to the Cayman Islands. In 2008, it moved 
from the Cayman Islands to Switzerland. This tax-avoidance operation, 
referred to as ``corporate inversion,'' had no real effect on where 
Transocean does business. Even after it moved to the Cayman Islands, it 
continued to be, in fact, managed and controlled from Houston, TX. It 
continues to have substantial drilling activities in American waters. 
And by changing its legal domicile from Delaware to a tax haven in the 
Caribbean, Transocean was able to cut its tax bill nearly in half. 
Martin Sullivan, a former economist at the Joint Commission on 
Taxation, estimates that Transocean's offshore tax scheme saved the 
company $1.9 billion from 2002 to 2009. That is an example of one of 
these tax subsidies that ought to be eliminated. Congress shut down 
those corporate inversions in 2004 but only on a going-forward basis. 
Until Congress gets serious about taxing U.S.-managed companies that 
deceptively claim to be foreign corporations, Transocean and others 
will continue to benefit. Transocean is not alone. We know of at least 
five oil companies involved in offshore drilling that moved their legal 
domicile to a tax haven in the Caribbean in order to avoid paying U.S. 
income tax.
  I will conclude by saying, unlike Transocean, BP has never been an 
American corporation. But it has no problem in reaping the benefits of 
our porous Tax Code. We learned soon after the $20 billion claims 
facility was announced that BP would be writing off the entire expense 
for tax purposes, writing off all of that expense for the oil that was 
spilled that hurt so many of our residents in Florida and all up and 
down the gulf coast. They are going to write that off as a tax 
deduction, and, therefore, pay less taxes. We estimate this will reduce 
the tax burden by nearly $9 billion for BP. Several of us have 
introduced legislation to shut down this abusive tax break as well, and 
it is another that we ought to put in this deficit reduction package.
  I conclude by saying these corporate tax loopholes for oil companies 
should be part of any deficit reduction package, and this Senator is 
going to continue to stand up and fight to ensure they are a part of 
that deficit reduction package.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. What is the pending business before the Senate?
  The PRESIDING OFFICER. The Petraeus nomination. The Senator from 
Arizona is recognized.
  Mr. McCAIN. Mr. President, I ask unanimous consent to engage in a 
colloquy with the Senator from South Carolina.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. In a few minutes we will be casting, I am sure, a 100-0 
vote to confirm General David Petraeus as the new Director of the 
Central Intelligence Agency, and obviously his nomination is supported 
by all Members of the Senate, and I am sure all Americans, especially 
those, such as the Senator from South Carolina and myself, who have had 
the great privilege and honor of knowing General Petraeus for many 
years and watching him lead the men and women serving in our military 
in a fashion that I have never seen surpassed. The Senator from South 
Carolina has had the unique privilege and responsibility to serve under 
General Petraeus in uniform, because, as most of our colleagues know, 
the Senator from South Carolina also serves as a colonel in the South 
Carolina National Guard and in the legal corps as a JAG officer.
  The Senator from South Carolina has worked with General Petraeus both 
in Iraq and Afghanistan on many of the important issues concerning 
detainees as well as other issues. Before I ask the Senator from South 
Carolina for his comments, I wish to repeat what I said before. I don't 
believe that in my life, which has been blessed to know many 
outstanding military leaders of all branches of the service, I have 
ever quite encountered a military leader or civilian leader, for that 
matter, with

[[Page 10250]]

the combination of charisma and intellect General Petraeus possesses. 
The Senator from South Carolina, the Senator from Connecticut, Senator 
Lieberman, and I had the unique opportunity, among many visits we made 
to Iraq and Afghanistan, one Fourth of July in 2007 to be present at a 
reenlistment ceremony that took place in the palace in Baghdad. There 
were a couple of thousand spectators and there were well over 200 young 
men and women who had agreed to reenlist, to continue to serve in Iraq 
when they could have fulfilled their commitment they made to serve in 
the military and gone home to their families and a grateful nation. 
Instead, they chose to reenlist, to stay, and continue the fight. Part 
of that ceremony was to administer the oath of citizenship to over 75 
people who were not born in the United States of America, who were not 
citizens, who were green card holders, who were legally in the United 
States as green card holders but had joined the military in order to 
serve and to achieve an accelerated path to citizenship.
  What struck me at that ceremony was that in the front row there were 
three empty seats with boots on them of individuals who were green card 
holders who were scheduled to take the oath of citizenship and who had 
been killed in the previous few days in action, serving their country 
in Iraq.
  I was privileged to speak. The Senator from South Carolina spoke. The 
Senator from Connecticut spoke. But when General David Petraeus spoke 
to those assembled men and women who are serving their country, it was 
very obvious of the not only respect but admiration every one of those 
young Americans felt for the inspirational leadership General Petraeus 
had provided them. I might point out it was a time when most experts 
and many politicians and Members of this body predicted the surge would 
fail. Well, I think what they didn't take into account was the 
incredible leadership and implementation of a strategy that was 
embodied by GEN David Petraeus and the young men and women who are 
serving.
  So I am confident as we continue the fight against al-Qaida and the 
radical Islamic extremists who want to attack and destroy our country, 
that now General Petraeus, soon to be Director of the CIA, will provide 
our Nation with the very best strategy, tactics, thought, and action to 
keep our Nation safe.
  I don't very often come and talk about nominees and spend the 
Senate's time, but I know I express the appreciation and affection of 
all those men and women, both serving now and in the past, who had the 
great honor and privilege of serving under General Petraeus and to wish 
him a well done and smooth sailing and following winds as he assumes 
his new responsibilities which will continue to keep America safe.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. GRAHAM. I think our American military will be studying the 
Petraeus tactics and strategy that he implemented in Iraq and 
Afghanistan for generations to come. In January of 2007 when the surge 
was announced, I had had the pleasure of being over in Iraq in April, 
but I remember a letter issued by General Petraeus to all those under 
his command and it was basically entitled ``Hard is not Hopeless.'' He 
explained in great detail in the letter how we would move forward as a 
nation, that it would be difficult, it would be hard, but not hopeless. 
I have seen the inspiration he provides to our men and women in 
uniform, and I cannot tell you how much this country owes General 
Petraeus and his family. He has been deployed almost continuously since 
2001, but what he was able to accomplish in Iraq with the help of those 
under his command, he will be the first to say, they deserve the 
credit.
  And now Afghanistan. He came into Afghanistan under very difficult 
circumstances, losing a commander in the field. The progress in the 
last year has been stunning. The Taliban in the south has been knocked 
down hard. There is a 90,000 increase in the Afghan national security 
forces. We have a new training program to train Afghan security forces, 
and I think it will pay great dividends.
  To the President, you have chosen wisely in picking David Petraeus to 
be the Director of the CIA.
  I am confident Director Petraeus will do as good a job for the 
country as General Petraeus, and that is saying a lot. Following Leon 
Panetta, who did a great job, we are in good hands as a nation. I don't 
believe any single person understands the threats America faces better 
than General Petraeus. At the CIA he will have a chance to take the 
fight to the enemy in a different way. We will not have available 
forever 100,000 troops to be used in theaters of battle.
  We are going to bring our troops home from Iraq and Afghanistan. I 
hope we do it smartly based on conditions. But this fight is morphing 
into other countries, Yemen, Somalia, the Horn of Africa, and the 
Nation is playing a more crucial role in our Nation's defense than at 
any time in the history of the CIA. We will be blessed to have David 
Petraeus to be Director of the CIA. He understands the threats. I think 
he will be able to marshal the resources of the CIA to keep the enemies 
on their heels and to reinforce to our allies that we are a reliable 
partner and to our enemies there is no place you can hide. There is no 
passage of time that will keep you safe from American justice.
  I hope the Congress--I know Senator Chambliss will, the Senate in 
particular--will listen to General Petraeus, who will soon be Director 
Petraeus, about how to make sure the CIA is equipped and funded to take 
on the enemy. In this war on terror, we are fighting an idea. There is 
no capital to conquer, there is no air force to down, there is no navy 
to sink. We are battling an idea. And the way we ultimately become safe 
is to empower those who have the will to fight the terrorists in their 
backyard to provide them with the capacity to let the terrorists 
organizations know we will follow you to the gates of hell, that we 
will never relent. The CIA and the brave men and women who serve in 
that organization are becoming the tip of the spear in this battle. 
What happened in Somalia yesterday, what is going to happen in the 
future in Yemen and Somalia is a direct result of good intelligence and 
national will.
  To Senator McCain and those who have gotten to know General Petraeus, 
I can assure you that President Obama chose wisely. This is the perfect 
job for David Petraeus to take up for the Nation. He has the 
understanding of the threats we face and the CIA is the platform we 
will be using against the enemy more effectively than any other 
platform I know.
  With that, I look forward to casting my vote for Director of the CIA 
David Petraeus, and I hope everybody in this body will provide a vote 
of confidence to General Petraeus. He has earned this. America is in 
good hands with David Petraeus being the CIA Director.
  I yield. I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Under the previous order, the question is on the Petraeus nomination.
  Mr. GRASSLEY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is, Will the Senate advise and consent to the nomination 
of David H. Petraeus, of New Hampshire, to be Director of the Central 
Intelligence Agency?
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from California (Mrs. Boxer), 
the Senator from Vermont (Mr. Leahy), and the Senator from New Mexico 
(Mr. Udall) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Vermont (Mr. Leahy) and the Senator from New

[[Page 10251]]

Mexico (Mr. Udall) would each vote ``yea.''
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from North Carolina (Mr. Burr), the Senator from Oklahoma (Mr. Inhofe), 
and the Senator from Kansas (Mr. Moran).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 94, nays 0, as follows:

                      [Rollcall Vote No. 104 Ex.]

                                YEAS--94

     Akaka
     Alexander
     Ayotte
     Barrasso
     Baucus
     Begich
     Bennet
     Bingaman
     Blumenthal
     Blunt
     Boozman
     Brown (MA)
     Brown (OH)
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Coats
     Coburn
     Cochran
     Collins
     Conrad
     Coons
     Corker
     Cornyn
     Crapo
     DeMint
     Durbin
     Enzi
     Feinstein
     Franken
     Gillibrand
     Graham
     Grassley
     Hagan
     Harkin
     Hatch
     Heller
     Hoeven
     Hutchison
     Inouye
     Isakson
     Johanns
     Johnson (SD)
     Johnson (WI)
     Kerry
     Kirk
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Lee
     Levin
     Lieberman
     Lugar
     Manchin
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Mikulski
     Murkowski
     Murray
     Nelson (NE)
     Nelson (FL)
     Paul
     Portman
     Pryor
     Reed
     Reid
     Risch
     Roberts
     Rockefeller
     Rubio
     Sanders
     Schumer
     Sessions
     Shaheen
     Shelby
     Snowe
     Stabenow
     Tester
     Thune
     Toomey
     Udall (CO)
     Vitter
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                             NOT VOTING--6

     Boxer
     Burr
     Inhofe
     Leahy
     Moran
     Udall (NM)
  The nomination was confirmed.
  The PRESIDING OFFICER (Mr. Sanders). Under the previous order, the 
motion to reconsider is considered made and laid upon the table. The 
President will be immediately notified of the Senate's action.
  (At the request of Mr. Reid, the following statement was ordered to 
be printed in the Record.)
 Mrs. BOXER. Mr. President, I was absent for the rollcall vote 
on the nomination of GEN David Petraeus to be the Director of the 
Central Intelligence Agency. Had I been present, I would have voted 
``yea.''
 Mr. MORAN. Mr. President, today, I was unavoidably absent for 
vote No. 104. Had I been present, I would have voted ``yea'' on the 
nomination of GEN David H. Petraeus to be Director of the Central 
Intelligence Agency.

                          ____________________