[Congressional Record (Bound Edition), Volume 158 (2012), Part 6]
[Senate]
[Pages 7598-7619]
[From the U.S. Government Publishing Office, www.gpo.gov]




   FOOD AND DRUG ADMINISTRATION SAFETY AND INNOVATION ACT--MOTION TO 
                           PROCEED--Continued

  Mr. REID. Mr. President, I ask unanimous consent that the Senate 
remain on the motion to proceed to S. 3187 until 4 p.m. today and that 
all other provisions under the previous order remain in effect at that 
time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I thank the majority leader for 
bringing up this bill. He and the Republican leader have put on the 
floor a piece of legislation that affects nearly every American family. 
This will not have the fireworks some things we do have, because we 
have a lot of agreement on it, which is one reason it is on the floor. 
It has gone through the committee. Senator Harkin and Senator Enzi have 
worked carefully with all of the Republicans, all of the Democrats on 
the committee, and many other people on a complex piece of legislation 
for a year, to bring to the floor the Food and Drug Administration 
Safety and Innovation Act--a bill that is likely to succeed.
  We take our medicines for granted. During the Civil War, the Capitol 
was used as a hospital--this Capitol. Two thousand cots were set up in 
the House and Senate Chambers and the Rotunda. The first group of 
wounded arrived from the Second Battle of Bull Run and later from 
Antietam in September of 1862. Those soldiers did not have the benefit 
of antibiotics or other modern medicines that we take for granted 
today, and that contributed to a horrible number of deaths in the Civil 
War.
  Still, as the 20th century dawned, disease cast a long shadow over 
the United States of America. A child born in 1900 could expect to live 
an average of 47 years. Infectious diseases took many children before 
they reached their teens. In 1900 pneumonia and influenza were the 
leading causes of death, followed by tuberculosis and diarrhea.
  Physicians had few weapons to fight diseases. The medicines at the 
time included such things as mercury for syphilis and ringworm; 
digitalis and amyl nitrate for the heart; quinine for malaria; and 
plant-based purgatives. For most of human history, diabetes meant 
death, but insulin was introduced in 1923 commercially, and within a 
few years enough insulin was being produced to meet the needs of 
diabetes patients around the world.
  It is hard to remember this, but vaccines began to be commercially 
produced only during the time of World War I. It was not until the time 
of World War II that we saw the introduction of widespread and 
effective antimicrobial therapies with the development and mass 
production of penicillin. Since then, the sky has seemed to be the 
limit.
  Half of Americans take at least one prescription drug every day. One 
in six takes three or more. Many take over-the-counter medicines. It is 
a real miracle what has happened in terms of our lives with the 
introduction of medicines, and we rely upon the Food and Drug 
Administration to keep those medicines safe and effective, which is 
what this legislation is about.
  I would like to renew my compliments to Senator Harkin and Senator 
Enzi for bringing this bill to the floor in a condition where they have 
already worked out most of the issues. This bill is complex. It is 
long. It has 11 titles. It will help safe and effective drugs, medical 
devices, and biosimilar products get to the market and, more 
importantly, get them to the market more quickly so people who need 
help can use these medicines and devices.
  We are reauthorizing two user fees. These things have absurd names. 
The Prescription Drug User Fee Act is called PDUFA, and the Medical 
Device User Fee Modernization Act is called MDUFMA. There are two new 
ones, which are GDUFA and BSUFA. It is really absurd. I promise to 
never again use those phrases for these user fee programs. But they are 
critically important programs that give the Food and Drug 
Administration needed resources to review new medically necessary 
products.
  For example, there is the Better Pharmaceuticals for Children Act. It 
is a part of what we are doing this week. I cosponsored it with 
Senators Reed of Rhode Island, Murray, and Roberts. I thank them for 
the ability to work with them.
  This makes permanent the Best Pharmaceuticals for Children Act and 
the Pediatric Research Equity Act. One is an incentive, and one 
requires pharmaceutical companies under certain

[[Page 7599]]

circumstances, when they develop new drugs for adults, to figure out 
the effect that those drugs will have on children. Too often, we do not 
know the answer to that, and the drugs are either ineffective or can 
have bad results. It also reauthorizes the Pediatric Medical Device and 
Safety and Improvements Act to promote pediatric medical device 
development.
  Another critical part of the bill has to do with the medical device 
approval process. The United States is a world leader in medical 
devices. In Tennessee we have lots of them, especially in Memphis. We 
need to improve the regulatory process. There are many who believe the 
FDA is over-regulating medical devices. That has a negative effect on 
the industry's ability to raise capital and create jobs. It does not 
make those devices any safer in the United States than they are in 
Europe. This will help address those problems. For example, it will 
allow customization of medical devices for small populations--that 
means five people or fewer--without going through a very burdensome 
approval process, and it changes the humanitarian device exemption to 
encourage and incent the development of devices to treat patients with 
rare diseases--that would be groups of patients of fewer than 4,000 
people.
  There is another problem that is addressed in this legislation. It is 
the generation of antibiotics dealing with antibiotic resistance. We 
know there is a growing problem with antibiotic resistance as bacteria 
continuously mutate and evolve in their resistance to the drugs and the 
medicines we develop. While efforts have been made to preserve existing 
antibiotics, drug development has not kept up with the pace. These 
changes will provide meaningful market incentives and reduce regulatory 
burdens.
  In addition, I am very pleased with the results of our work in 
dealing with drug shortages. That is a part of this bill. It will give 
the FDA additional tools to help prevent drug shortages and require FDA 
to look internally at regulations to see if the FDA is making the 
problem worse.
  Senator Casey and I worked together on a review of Federal 
initiatives to combat prescription drug abuse and to issue a report on 
those. Tennessee, my State, ranks second in the Nation for prescription 
drug use. Our Governor, Bill Haslam, and our legislature took action 
this year to deal with that. We intend to help them.
  In closing, I would like to commend Senators Harkin and Enzi. I see 
the Senator from Washington on the floor. I do not want to take much 
more time because I know she is about to speak. She has been integrally 
involved in the development of this legislation over the last year, 
especially the Better Pharmaceuticals and Devices for Children Act. I 
mentioned that a little earlier. It incentivizes drug manufacturers to 
study their products and how they affect children, and in return, they 
get to keep the exclusive use of those products for a little while 
longer. That means they do not go to generic quite as quickly. That has 
been tried in this legislation since it was first authorized and 
reauthorized and reauthorized. It has worked. It has been a very good 
example of an innovation in legislation that has achieved the desired 
result.
  The Pediatric Research Equity Act gives the FDA authority to require 
pediatric studies in some cases and the Pediatric Medical Device Safety 
and Improvement Act promotes the development of pediatric medical 
devices.
  So the importance of the legislation is it takes a big step forward 
in making it clear what drugs that are created for adults will do when 
offered or provided to children. Currently, just under half of the 
drugs prescribed to children have been studied and labeled for 
children, but that is a significant improvement over where we were when 
these programs started fifteen years ago. Children's bodies react very 
differently to medicines. Children are not just small adults. Sometimes 
side effects are different. Physicians have to guess what dosages are 
appropriate, whether a therapy that might be effective for an adult is 
also effective for a child. Sometimes there are examples of overdosing 
or previously unknown side effects. In one case in Tennessee in 1999, 
seven babies were prescribed an antibiotic to treat whooping cough. 
They became so seriously ill, they needed stomach surgery. The CDC--
Centers for Disease Control--later linked their illness to the 
antibiotic, which had never been tested in young children. Children 
differ widely in sizes and growth rates, so for medical devices doctors 
must either `jerry-rig' devices or be forced to use a more invasive 
treatment.
  Prior to the passage of these laws that we are working on today, and 
reauthorizing, 80 percent of drugs used for children were used off-
label; that is, we did not really know how they affected children. Now 
we can use those drugs--half of our drugs today--safely and effectively 
because we do know that. The Best Pharmaceuticals for Children Act is 
the carrot that FDA uses to encourage pediatric studies, while the 
Pediatric Research Equity Act is the stick to mandate studies. Together 
these two laws have been a success. According to the Institute of 
Medicine, as of October 2010, the FDA has approved 425 labeling changes 
as a result of studies or analyses done under these laws. In 1975, only 
about 20 percent of drugs prescribed to children had been studied and 
labeled for children, in 2007 that number had risen to about one-third, 
and today it is roughly half.
  The Pediatric Medical Device Safety and Improvement Act was enacted 
in 2007 to encourage manufacturers to bring more pediatric devices to 
the market and strengthen FDA post-market surveillance of devices used 
in children. This law allows manufacturers to profit under the 
humanitarian device exemption for devices specifically designed to meet 
a pediatric need affecting fewer than 4,000 children per year. In 
addition to three humanitarian device exemption pediatric products, GAO 
reports that 15 new devices have been approved for children since 2007.
  I am happy to come here today to join with Senator Murray, Senator 
Harkin, Senator Enzi, Senator Reed of Rhode Island, and Senator Roberts 
to offer what I believe is a piece of legislation that affects nearly 
every American family. It takes one more step in the dramatic story of 
how we have gone from a country with almost no medicines to a country 
in which almost everyone takes some medicine and a situation where the 
lifetime of the average American has increased from 47 years of age to 
78 years--its present level today.
  I see the Senator from Washington on the floor. I wish to recognize 
and thank her for her leadership on the legislation.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Washington.
  Mrs. MURRAY. Mr. President, I too wish to thank the Senator from 
Tennessee, as he referred to how we are working together on a 
bipartisan basis on the Better Pharmaceuticals and Devices for Children 
Act--a very critical piece of this legislation that I will talk about 
in just a few minutes as well. But I would like to thank him for 
working with us, and really I want to thank all of the Senators who 
worked very hard on this piece of legislation, working with 
stakeholders and advocates for over a year on the bill that will be on 
the floor later this afternoon. I commend Chairman Harkin as well as 
Ranking Member Enzi for working together in a bipartisan fashion to get 
this to the floor today.
  I hope all of our colleagues really understand the critical 
importance of moving forward with this bill as efficiently as possible 
because, as many people know, if we do not make this legislation a 
priority, by the end of September over 2,000 employees at the Food and 
Drug Administration are going to be sent packing with pink slips. But 
what is just as important, if not more important, is that failure to 
pass this legislation will put drug and medical device approval at a 
standstill. That will not only halt innovation but it will put the 
lives of many Americans at risk while they wait for potentially 
lifesaving medicine.
  No one knows the importance of that more than Seattle Genetics, a 
company in my home State of Washington. In August of last year, Seattle 
Genetics received FDA accelerated approval of a

[[Page 7600]]

drug intended to treat Hodgkin's lymphoma, the first of its kind 
approved by the FDA in more than 30 years.
  As a biotech company, Seattle Genetics' relationship with the FDA was 
really vital to the work they were doing to bring this drug to patients 
who were in need. Ultimately, Seattle Genetics received FDA approval 11 
days earlier than expected, and that meant they were able to anticipate 
the timing of its approval, organize their sales teams, and ship the 
first business day following approval for a patient already waiting for 
that critical drug. That kind of collaboration would not have been 
possible had the FDA lacked the resources necessary to make it a 
reality.
  I believe that Clay Siegall, who is the president and CEO of Seattle 
Genetics, was truly able to underscore the issue of what we are 
discussing here today. I want to tell you what he said.

       It is only through working with an FDA--that has the 
     resources and dedication to achieve thorough and timely 
     reviews--that we are able to fulfill our promise to improve 
     the lives of people through innovation. Passage of this bill 
     helps to provide both the resources and incentives for FDA to 
     rapidly review and approve important therapeutic 
     breakthroughs for patients in need.

  That highlights the importance of this legislation.
  I also wish to highlight another part of this bill that I have been 
very focused on, as the Senator from Tennessee just talked about, and 
that is the need to make sure drugs and medical devices are 
specifically tested and labeled and proven to be safe and effective for 
our children. This is so important for families and doctors across 
America.
  I really want to thank Chairman Harkin as well as Ranking Member Enzi 
for including my bill, the Better Pharmaceuticals and Devices for 
Children Act, in the broader legislation we are considering here today.
  I was very proud to work with Senator Alexander, along with Senators 
Reed and Roberts, to put together this commonsense legislation. This 
bipartisan language will make sure our children are prioritized in the 
drug development process and that drug labels provide clear, detailed 
information about the proper use and dosage of medications for 
children. It will give parents and doctors more information, and it 
will make sure the key programs we count on to protect our children do 
not expire. It will push to make sure children are never just an 
afterthought when it comes to the safety and effectiveness of our 
Nation's drugs and medical devices.
  Mr. President, as you have heard today, this is a bill that has 
received bipartisan support. I commend all of the Senators who have 
worked on it in a bipartisan way. We don't get credit for that enough 
in this country. But this is certainly one where everybody came 
together and worked together in committee. This bill holds the 
livelihood of so many Americans in its balance.
  I urge the Senate to move forward quickly and support the legislation 
and get it passed.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             the dream act

  Mr. DURBIN. Mr. President, 11 years ago, I introduced the DREAM Act, 
which is legislation that would allow a select group of immigrant 
students with great potential to contribute more fully to America.
  The DREAM Act is not an amnesty bill. It would give students a chance 
to earn legal status in America, and there are standards they would 
have to live up to: No. 1, they came to the United States as children; 
No. 2, they have been long-term U.S. residents; No. 3, they have good 
moral character; No. 4, they have graduated from high school; No. 5, 
they either serve in America's military or complete 2 years of college.
  The DREAM Act also includes important restrictions to prevent abuse. 
Under the DREAM Act, no one would be eligible for Pell grants or any 
other Federal grants when they go to school. Individuals who commit 
fraud under the DREAM Act, who lie, misrepresent their status, would be 
subject to tough fines and criminal penalties, including a prison 
sentence of up to 2 years. It is serious. No one would be eligible for 
the DREAM Act unless they arrived in the United States at least 5 years 
before the bill becomes a law. There is no exception and no waiver for 
this requirement.
  My colleague from Florida, Senator Marco Rubio, on the Republican 
side of the aisle, said in a recent speech that the DREAM Act is not an 
immigration issue, it is a humanitarian issue. I might add that I think 
it is an issue of justice.
  Thousands of immigrant students in the United States were brought 
here as children. They didn't make a decision at the age of 2 to come 
to America. It was not their decision to come here, but they grew up 
here, went to school here, and they stood in classrooms across America 
pledging allegiance to the only flag they ever knew. They sang ``The 
Star-Spangled Banner'' before baseball and football games, believing 
they were part of America.
  The fundamental premise of the DREAM Act is that we should not punish 
children for their parents' actions. It is not the American way. 
Instead, the DREAM Act says to these students that we are going to give 
them a chance. These Dreamers, as I have come to know them, don't want 
a free pass. They just want a chance to earn their place in America. 
That is what the DREAM Act would give them.
  The DREAM Act isn't just the right thing to do, it would make America 
a stronger country by giving these talented young people the chance to 
serve in our military and contribute to our future. Tens of thousands 
of highly qualified, well-educated young people would enlist in the 
Armed Forces. That is why we end up with the support of people such as 
General Colin Powell, who has given his life to the military and the 
security of America. He says the DREAM Act is the right thing to do for 
the future of America.
  Studies have found that DREAM Act participants would contribute 
literally trillions of dollars to the U.S. economy during their working 
lives.
  One might wonder how an idea like that ends up becoming a bill and 
being debated not only on the floor of the Senate and the House but 
becoming a subject of debate in the Presidential contest now going on. 
It started with a phone call to my office about 11 years ago from a 
woman named Duffy Adelson. Duffy is the director of the Merit music 
program in Chicago. The Merit music program is an amazing program which 
offers to children in the public schools of Chicago an opportunity to 
learn to play a musical instrument. That program goes to the poorest 
schools and asks children if they are interested, if they would like to 
have an instrument and a chance to learn. Children sign up and amazing 
things happen. These kids--100 percent of them--end up in college. That 
is what that one life experience of learning to play music can do.
  She called me about a young girl. She was a Korean who had been 
brought to America at the age of 2. Her mother and father became 
citizens. Her two siblings, a brother and a sister, were born here and 
were automatically citizens, but she was not. She joined the Merit 
music program and turned out to be an accomplished pianist, to the 
point where, when she was graduating high school, she was being offered 
scholarships to the best music academies in the United States.
  When her mom sat down with her to fill out the application, there was 
a little box that said ``citizenship.'' She turned to her mom and said: 
So what do I put there? Her mom said: I brought you here at the age of 
2 on a visitor's visa, and since you were a little baby, I didn't file 
any more papers.

[[Page 7601]]

I don't know what you should put there. The girl said, What are we 
going to do? Her mom said: We are going to call Durbin.
  So they called me and my office checked the law and the law turned 
out to be pretty harsh. The law said this 18-year-old girl--who had 
never lived, to her knowledge, in any other place but America--had to 
leave America for 10 years and then apply to come back. That didn't 
seem right. She came here at the age of 2. She had done nothing wrong. 
So I introduced the DREAM Act.
  Well, here is the rest of the story about this young lady, whose name 
is Teresa Lee. Teresa Lee did go to the Manhattan School of Music, and 
when she went there she turned out to be as good as the Merit music 
program thought she would be. She progressed to the point where she 
literally played in Carnegie Hall. She found a young man, fell in love, 
got married, and she became a citizen by virtue of that marriage. She 
is now working toward her PhD in music. She is a brilliant young woman.
  There was a talent that would have been lost to us and lost to the 
future if we had followed the strict standards of the law at that 
moment. But we didn't. We gave her a chance and she proved herself. She 
proved she is a quality individual.
  When I introduced the DREAM Act, it was a bipartisan bill. There were 
Republican Senators who actually debated as to who was going to be the 
lead sponsor of the bill because they thought it was such a good idea. 
The DREAM Act has had a history of broad bipartisan support. When I 
introduced it with Senator Orrin Hatch of Utah, he was chairman of the 
Judiciary Committee and was the lead Republican sponsor. When the 
Republicans controlled the Senate, the DREAM Act was reported by the 
Judiciary Committee on a 16-to-3 bipartisan vote. And on May 25, 2006, 
6 years ago this week, the DREAM Act passed the Republican-controlled 
Senate on a 62-to-36 vote as part of comprehensive immigration reform.
  That bill, unfortunately, did not pass, and, unfortunately, the 
Republican support for the DREAM Act has diminished over the years. The 
last time the DREAM Act was considered on the floor of the Senate in 
2010, the bill had already passed the House and received a strong 
majority vote there, but only eight Republicans supported it in the 
House and only three Republicans in the Senate. A bill which had been 
so bipartisan and so popular was now becoming, each time we called it 
up for a vote, more partisan. The bill hasn't changed, but politics had 
changed.
  The vast majority of Democrats in the House and Senate continue to 
support the DREAM Act. But the reality is we cannot pass the bill 
without substantial support from my colleagues on the other side of the 
aisle. That is why I have always said I am open to working with 
anyone--Republican or Democrat--who is interested in working in good 
faith to solve this problem. I will never close the door on the 
possibility of providing assistance to these DREAM Act students.
  I have come to the floor almost every week for the last several years 
to tell the story of another young person who would qualify under the 
DREAM Act. Today I want to tell you the story of Sahid Limon. Sahid was 
brought to the United States from Bangladesh in 1991 at the age of 9. 
He grew up in Durham, NC. His dream was to become a doctor. He attended 
Southern High School--a prestigious magnet school for young people 
interested in health care. He was a member of the National Honor 
Society and won his high school's Diamond in the Rough Scholarship 
award. One of Sahid's teachers said:

       In the classroom, he was kind, very respectful, and 
     responsible. He showed great interest in a career in 
     medicine. In the medical community, through shadowing 
     experiences, he was professional, highly motivated, and 
     caring with patients.

  Sahid didn't learn about his immigration status until his senior year 
in high school. He went on to graduate from East Carolina University 
with a bachelor's of science in biology, with a concentration in 
microbiology. And understand, he didn't qualify for any Federal loans 
or any Federal grants. It wasn't easy to get through college under 
those circumstances.
  During college, Sahid volunteered at underserved rural areas in North 
Carolina and it made a big impression on him. In his application for 
medical school, he wrote:

       I was surprised to see that so many people would line up 
     during a cold winter morning, just to know if they were 
     healthy or not. Seeing their dedication and patience 
     influences me every day to work my hardest in order to meet 
     my personal goal of becoming an exceptional physician.

  That was 7 years ago--2005. Today, Sahid is 30 years old. He has been 
unable to attend medical school because of his immigration status. 
Since he graduated from college, he has volunteered with a health 
clinic in Raleigh that serves low-income patients, he has tutored 
elementary school students to help develop their interests in science, 
but his personal dream of becoming a doctor has not become a reality.
  Some of my colleagues have criticized the DREAM Act because people 
under the age of 35 are eligible. They say only children should be 
eligible for the DREAM Act. But this ignores the obvious. Every year we 
wait, those children grow a year older. In order to qualify for the 
DREAM Act, an individual must have come to the United States as a 
child, as Sahid did. Today he is 30. That doesn't change the fact he 
was brought here when he was 9 years old. It doesn't change the fact he 
has lived in the United States virtually all his life. And it doesn't 
change the fact he should not be punished for the choices his parents 
made. Sahid was 19 years old when the DREAM Act was first introduced. 
Why should he be penalized because I can't pass the bill? I keep 
trying, but Congress doesn't get it done. Does that mean his life 
should be wasted?
  Last year, Sahid was arrested by immigration agents and placed in 
deportation proceedings, despite the fact he has lived in the United 
States for 21 years, since he was 9 years old. He was held in a county 
jail with violent criminals. Sahid has never committed a crime in his 
life. Sahid sent me a letter, and here is what he said about the 
experience of being in jail and facing deportation:

       I lived my life by the law, did everything by the books, 
     never committed any crime, and somehow ended up in jail for 
     something I had no control over as a child. What would I do 
     if I was sent back [to Bangladesh]? I barely speak the 
     language, and I don't know how to read or write. How am I 
     supposed to start my life from scratch in such a place 
     without the knowledge of the language or the culture?

  Well, my office learned about Sahid's case. We contacted Immigration 
and Customs Enforcement and asked them to consider his request that his 
deportation be placed on hold. The Obama administration placed a stay 
on his deportation proceedings. However, it is only temporary. It 
doesn't give him permanent legal status, and he is still at risk of 
being deported sometime in the future. The only way for Sahid to be 
permitted to stay in the United States permanently is for us to do 
something to pass the DREAM Act--to change the law.
  In his letter to me, Sahid explained what the DREAM Act meant to him:

       The DREAM Act means being able to be home. Regardless of 
     where we go . . . we all yearn to come back to our home. To 
     me, North Carolina is that home . . . I watched live on C-
     SPAN [in 2010] as the bill passed the House, but failed to 
     pass the Senate. To most of the Senators, it's just another 
     bill that was rejected. However, to someone like me, whose 
     life not only depends on something so crucial, but my future 
     literally hangs in line, it's absolutely devastating to 
     witness such a rejection. I hope this is the year that 
     politics is set aside, and all of the representatives can 
     work together for a solution.

  Sahid is right. Those of us who are fortunate enough to serve in 
Congress have an obligation to set politics and party aside and do the 
right thing. This isn't a Democratic issue or a Republican issue. We 
are going to be a stronger and better country if we give Sahid a chance 
to earn his way to American citizenship.
  This is not just one example, one person. There are literally 
thousands like him waiting for their chance. The

[[Page 7602]]

DREAM Act would give Sahid and other bright, accomplished, and 
ambitious young people like him the opportunity to become tomorrow's 
doctors and engineers, teachers and soldiers. Today I ask my colleagues 
again, as I have so many times before, to support the DREAM Act. Let's 
give Sahid and so many other young people like him the chance to 
contribute more fully to the country they call home. It is the right 
thing to do, and it will make America a stronger Nation.


                    Financial Regulation and Reform

  Mr. DURBIN. Mr. President, 2 weeks ago, we were given a cautionary 
lesson about the need to ensure that our Nation's banks are carefully 
regulated. We are still learning the details about the $2 billion bad 
bet made by banking giant JP Morgan Chase. But what we have learned is 
disturbing. Apparently, the London office of this Wall Street giant 
crafted a credit derivative trading strategy that spun out of control 
over the course of 6 weeks. At the center of the strategy was one 
single trader who was nicknamed ``the London whale.'' One trader, 6 
weeks, $2 billion gone.
  It is not clear how widely the repercussions of this trading loss 
will extend, but this incident clearly is an important reminder to all 
of us that we cannot afford to take a hands-off regulatory approach to 
the giant financial institutions on Wall Street. These institutions 
drove this Nation to the brink of economic disaster just a few years 
ago. If they are simply left to their own devices, it could easily 
happen again.
  We need reasonable financial regulation that will ensure 
transparency, competition, and choice. We need to prevent Wall Street 
banks from fixing the rules and setting up rigged schemes that line 
their own pockets and hang Main Street America out to dry.
  Two years ago, Congress passed, and the President signed, the Dodd-
Frank Wall Street Reform and Consumer Protection Act. This legislation 
took on the challenge of placing a reasonable regulatory framework on 
Wall Street. It is a tough challenge. Wall Street and the banking 
industry have enormous resources and enormous power, and they are not 
afraid to use it--not only on Wall Street but on Capitol Hill.
  In the days to come, we are going to see important regulatory efforts 
proceed on issues such as the Volcker rule, which deals with the big 
banks' ability to make bets with their customers' money. It is 
important we pursue this regulatory effort diligently. We cannot let 
the big banks use their threats and scare tactics to water down reform 
and to preserve business as usual. There is too much at stake.
  I want to talk today about another part of the Wall Street reform 
that passed 2 years ago, a provision that the big banks hate as much as 
any other. I am talking about the provision I wrote dealing with 
interchange fees, or swipe fees. The swipe fee is a fee that a bank 
receives from a merchant, like a restaurant or a retailer, when the 
merchant accepts a credit or debit card issued by the bank. That fee is 
taken out of the transaction amount. If your bill is $50 at the 
restaurant, that includes the fee the restaurant is paying to the bank 
and credit card company called the swipe fee--the interchange fee.
  The vast majority of bank fees are very transparent and competitive. 
Chase, Bank of America, Wells Fargo, and the rest set their own fee 
rates and compete for business based on the fees they charge. But that 
is not the case with these swipe fees--the interchange fees--that 
affect credit and debit cards. The big banks know competition and 
transparency help keep fees at a reasonable level, and make it harder 
to make big money off of fees. That is why they set up the swipe 
system--the interchange system--to avoid competition and transparency.
  The big banks decided, rather than each of them setting their own 
swipe fees, they would designate two giant card companies--Visa and 
MasterCard--to set the fees for all of them. That way, each bank could 
get the same high fee on a card transaction. No competition. Then the 
banks buried this swipe fee under layers of complexity within debit and 
credit transactions. Most consumers, and even most merchants, still 
have no idea how much they are being charged on a swipe fee.
  This system helped the card-issuing banks do very well over the last 
20 years. U.S. swipe fee rates became the highest in the world, and 
they kept going up even as the cost of processing transactions went 
down. Debit swipe fees alone--just debit cards--brought the banks over 
$16 billion in the year 2009. That is the interchange fee paid by the 
merchants--and ultimately by the consumer--to the banks and credit card 
companies when people use a debit card.
  Of course, banks don't need all this debit swipe fee money to conduct 
debit transactions. The actual cost of a transaction is very low, a few 
cents. But the banks, looking for more revenue, exploited the swipe fee 
system to charge far more than they could ever justify. It doesn't have 
to be this way. Many other countries--Canada, European countries, and 
others--have vibrant debit card systems with swipe fees strictly 
regulated or prohibited altogether. In the United States, debit swipe 
fees used to be tiny, until Visa took over the debit card market in the 
mid 1990s using tactics that I think bordered on violations of 
antitrust.
  By 2010, the U.S. swipe fee system was growing out of control, with 
no end in sight. There were no market forces serving to keep fees at a 
reasonable level. Merchants and their customers were being forced to 
subsidize billions in windfalls to the big banks. That is when I 
introduced an amendment to the Wall Street reform bill that, for the 
first time, placed reasonable regulation on swipe fees on debit cards.
  The reason I picked debit cards is--some of us are old enough to 
remember something called a checking account. Those checking accounts 
are still around, but checks are becoming rare. Most people do their 
checking transactions with a piece of plastic called a debit card. The 
money comes directly out of their bank accounts just as the check 
removed money directly from their bank accounts. That is why the debit 
card is a different transaction than the credit card.
  My amendment said if the Nation's biggest banks are going to let Visa 
and MasterCard fix swipe fees for them, then the rates must be 
reasonable and proportional to the cost of processing the transaction. 
There would be no more unreasonably high debit swipe fees for big 
banks.
  My amendment also included a nonexclusivity provision which aimed to 
stop Visa from taking over the debit card market entirely. This 
provision says there needs to be a real choice of card networks--real 
competition.
  The regulatory steps my amendment proposed were modest. Most other 
countries have gone a lot further in regulating their credit and debit 
systems. But if you have listened to the banking industry and card 
companies, you would have thought my amendment would be the end of the 
world as we know it. They made outrageous claims, that regulation and 
swipe fees could kill the debit card system, devastate small and 
community banks, and particularly be an end to credit unions and cause 
banks to raise their fees on customers.
  My amendment passed the Senate with 64 votes and was signed into law, 
and it has been 8 months since the swipe fee reform took effect. It 
turns out all the scary scenarios threatened by the banks have not come 
to pass.
  First, the banks claimed it was impossible for Visa and MasterCard to 
establish a new tier of regulated swipe fee rates. As it turned out, 
creating this two-tier system was easy. There were already hundreds of 
rate tiers, so adding another one wasn't difficult.
  The banks then claimed that small banks and credit unions would be 
hurt by reform--even though all institutions with assets of less than 
$10 billion were exempt. As it turned out, small banks, community 
banks, and credit unions have actually thrived since this reform took 
effect. Why? Because under my amendment, small banks and credit unions 
can continue to receive high interchange fees from Visa and 
MasterCard--higher than the big banks

[[Page 7603]]

that control about 60 percent of the issuer market. And, those big 
banks have been so heavy-handed in their response to swipe reform that 
they have driven their customers--many of them--straight into the arms 
of the community banks and credit unions.
  Credit unions in particular are flourishing after the passage of 
swipe fee reform--a reform which they actively opposed. Last year, 1.3 
million Americans opened new credit union accounts. That was up from 
600,000 the year before. More than twice as many people as before 
opened credit union accounts, and credit unions now have a record 
number of members across the Nation--almost 92 million overall. So much 
for the prophecy by the credit unions that this change in the law would 
be the end of them. It has turned out to be the best thing that has 
ever happened to them.
  I know the Washington lobbyists for the small banks and credit unions 
still like to complain about this reform. These lobbyists have spent so 
much time fighting reform they are just not going to change their 
positions. But the facts are clear--if they will just be honest enough 
to admit it. Small institutions have thrived since this reform took 
effect.
  How about consumers? The big banks tried last year to recoup their 
reduced swipe fees by charging $5 monthly debit fees on their 
cardholders. Do you remember that? Do you remember when Bank of America 
said it was going to go up to $5? Do you remember what they said all 
across the nation? Bye-bye, Bank of America. We will go somewhere else. 
Within a matter of a month or two Bank of America backed off of it.
  Finally, consumers were coming alive. They were awakened to the 
reality that they could shop too. This is a free market--underline the 
word ``free.'' If you don't like the way your bank or any institution 
is treating you, go shopping. That is part of America. The banks had 
never run into that before. People just waited, unfortunately, for the 
latest fee increase. People don't wait around anymore. They pick up and 
move.
  Unlike swipe fees, the big banks' $5 debit fees were transparent and 
customers had a range of competitors to choose from. So they moved. 
Transparency and competition worked.
  Consumers are also benefitting from savings passed along by 
merchants. After swipe fee reform took effect in October, we saw a 
massive level of retailer discounting that extended beyond the usual 
holiday season discounts. According to USA Today--an article from May 
11--a number of individual merchants are offering debit card discounts 
for items such as gas, furniture, and clothing.
  USA Today also pointed out that despite the banks' threats, free 
checking accounts for consumers have not disappeared. USA Today 
reported that in the second half of 2011, 39 percent of banks offered 
checking accounts with no monthly maintenance fee, up from 35 percent 
for the first half of the year. Also, of those banks that charge 
checking maintenance fees, the average fee fell in the second half.
  This is what is known as competition. What is wrong with that? That 
American families and consumers go shopping for the best bank deal. It 
is happening because swipe fee reform has created new competition. I 
think competition is a good thing.
  It is important to note that the savings of swipe fee reform to 
merchants and consumers actually should be even greater than it is. 
When the Federal Reserve was writing its rule to implement my 
amendment, the banks lobbied them to set a swipe fee cap at a level 
significantly higher than the 12 cents that the Fed established in its 
draft rulemaking. Predictably, Visa, MasterCard, and the big banks took 
advantage of this watered-down regulation they had lobbied for. Visa 
and MasterCard promptly jacked up their swipe fees to the 24-cent 
ceiling set by the Fed.
  Here is what has happened. Swipe fees have traditionally been charged 
as a percentage of the transaction amount plus a small flat fee. This 
meant the small dollar transactions used to incur fees of much less 
than 24 cents. Now, with Visa and MasterCard's rate increases, 
businesses that primarily deal with smaller transactions--coffee shops, 
fast-food restaurants--are paying far more in swipe fees than they did 
before.
  This is not a flaw in the law we passed, which wisely required 
reasonable and proportional fees. Rather, it shows the danger of 
watering down the regulations to implement the law. The banks and card 
companies lobbied the Federal Reserve for a loophole which they 
immediately raced through. This is something we need to fix going 
forward. It can be fixed.
  I am pleased the modest swipe fee reform we enacted in 2010 is off to 
a good solid start: more competition, customers and families moving 
across America for the best treatment they can receive from their bank 
or their credit union. But already the big banks and card companies are 
plotting to undo all these reforms and get that money back, the 
billions of dollars which they were taking in under the unregulated 
swipe fee regime. Visa, in particular, has crafted new fee schemes in 
its continuing effort to monopolize the debit card market. In fact, 
Visa recently disclosed that the U.S. Justice Department has opened a 
new antitrust investigation into anti-competitive aspects of Visa's 
newest fees.
  I continue to be concerned that the giant card companies--
particularly Visa--are becoming too big and too powerful. These 
companies have gained an enormous amount of control over the way 
Americans can use their money. They set up the fee systems, they 
dictate the security standards, and they make a fortune by taking a cut 
out of every transaction they handle, far beyond the cost of 
processing. There is no regulatory agency that directly supervises the 
actions of these card companies, and we can't afford to simply trust 
these companies to do what is in our Nation's best interest or to watch 
out for consumers.
  That, again, is why the Consumer Financial Protection Bureau created 
by the Dodd-Frank law is such a critically important agency. It is 
virtually the only agency at the highest levels of our government that 
is solely devoted to consumer protection when it comes to financial 
products.
  In the weeks and months to come, I will continue to work to ensure 
that the debit and credit card systems have competition, transparency, 
and choice, and that there is a framework for reasonable regulation. I 
know the big banks and card companies are going to continue to fight 
it. They have a lot of money on the table. But I believe reasonable 
regulation is the right way to move forward, and I will continue to 
work for it. Our economy, our small banks, our credit unions, our 
merchants, and our consumers are benefitting from this important change 
in the law.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. (Mr. Franken). The Senator from Alabama.
  Mr. SESSIONS. Mr. President, I am on the floor this afternoon to 
discuss a discovery--really, a stunning discovery for me--and that is 
important for all of us.
  As many people know, Congress and the President struck a deal last 
summer to raise the debt ceiling. That deal set in place discretionary 
spending caps--not nearly enough to balance our budget over 10 years 
but a step in the right direction. That legislation said we will raise 
the debt ceiling $2.1 trillion but we will cut spending $2.1 trillion 
over 10 years--a promise to cut spending over 10 years.
  That legislation also required the chairman of the Senate Budget 
Committee--of which I am the ranking member--by April 15 of this year 
to file aggregate spending levels--spending limits--based on the 
Congressional Budget Office's March 2012 financial baseline and to 
allocate the funds that could be spent under that Budget Control Act 
legislation to each of the Senate Appropriations Committees. In other 
words, these levels as submitted tell the appropriators how much they 
can spend, and the budget chairman has that responsibility and duty to 
do that. He takes the level agreement that was agreed to and sends that 
over.

[[Page 7604]]

  These are real dollars that each appropriating committee is therefore 
allowed to spend. Yet we have learned something that is disappointing--
really astounding to me. The numbers filed by Chairman Conrad, my good 
friend who is a fair and able chairman, are not, in fact, the spending 
levels from the CBO baseline as the statute sets forward. Instead, the 
discretionary outlay total submitted by the chairman to the committees 
for fiscal year 2013 is derived from the President's budget, not from 
the CBO baseline.
  The discretionary spending allocation for the Senate is therefore 
inflated by about $14 billion more than what was agreed to just last 
August when we told the American people we would raise the debt 
ceiling, continue to borrow money, but we were going to reduce 
spending.
  So let me repeat that. These allocation levels have been inflated by 
$14 billion to match the President's budget--not the CBO base line that 
the BCA Committee was working from. It raises outlay levels over that 
August agreement. That, I submit, was a solemn agreement between the 
Members of Congress, both the Senate and the House, the American 
people, and the President himself who signed that agreement.
  So I have sent a letter to Chairman Conrad urging my chairman to 
correct and refile numbers that are proper--numbers that comply with 
the law.
  I ask unanimous consent to have printed in the Record a letter that I 
have written Senator Conrad today.

                                                      U.S. Senate,


                                      Committee on the Budget,

                                     Washington, DC, May 22, 2012.
     Hon. Kent Conrad,
     Chairman, U.S. Senate Committee on the Budget, Dirksen Senate 
         Office Building, Washington, DC.
       Dear Chairman Conrad: Section 106 of the Budget Control Act 
     (BCA) requires the Chairman of the Senate Committee on the 
     Budget to file allocations and aggregate spending levels that 
     are consistent with the Congressional Budget Office's (CBO's) 
     March 2012 baseline. On March 20, 2012, you filed such levels 
     in the Senate to be printed in the Congressional Record (at 
     pages S1832-S1833).
       I was therefore surprised to find that the filed outlay 
     aggregate for fiscal year 2013 is not consistent with CBO's 
     baseline but, instead, appears to reflect the higher outlay 
     level for discretionary spending in the President's budget 
     request (as estimated by CBO). The President's blueprint was 
     voted down unanimously by the Senate.
       Specifically, the filed outlay aggregate for fiscal year 
     2013 is approximately $14 billion higher than CBO's baseline 
     figure. The aggregate on-budget outlay level filed with the 
     Senate is $2,944,872 million, but the CBO baseline for on-
     budget outlays is only $2,931,228 million. The filed figure, 
     therefore, does not satisfy section 106 of the BCA.
       Furthermore, section 106(b)(2)(B) of the BCA requires that 
     the mandatory spending allocations to Senate authorizing 
     committees be consistent with the CBO baseline. The CBO March 
     2012 baseline amount for the Committee on Finance for fiscal 
     year 2013 is $1,328,395 million. But the allocation filed on 
     March 20 ($1,328,474 million) is $79 million higher than the 
     CBO baseline figure.
       Before the Senate takes up appropriation bills for fiscal 
     year 2013, I request that you review your allocations and re-
     file the enforceable levels and related committee allocations 
     at amounts that are consistent with CBO's March 2012 
     baseline, as required by the BCA.
           Very truly yours,
                                                    Jeff Sessions,
                                                   Ranking Member.

  Mr. SESSIONS. It is unthinkable that we would not only spend more 
than Congress agreed to but would institute instead the numbers derived 
from President Obama's budget--which, in this Chamber, when I brought 
it up a few days ago, was rejected unanimously. This is another 
example, I am afraid I have to say, of the sleight-of-hand tactics that 
have been utilized in this Congress for too long that say we have an 
agreement and we are going to do better and we are going to spend less. 
But as soon as the ink is dry--before the ink is dry, really, on the 
agreements, people start manipulating ways around it trying to spend 
more than the allowed. It seems to me, since I have been in the Senate 
for 15, 16 years, we have Members of Congress who take it as a personal 
challenge to see how they can defeat, get around, and spend more money 
than they are allocated.
  The American people are being misled in this attempt. We are not 
following the Budget Control Act, and it is not a partisan matter. It 
is about honest accounting. It is about safeguarding the American 
treasury. It is about restoring faith in the Senate Chamber. The 
American people are right to be angry with us and to not trust us 
because we haven't honored their trust. We haven't managed their money 
well. Political elites remain totally disconnected from the financial 
reality that our country faces.
  Game the system, spend more. The alarming discovery that the 
discretionary allocations filed for the Senate are a total of $14 
billion higher than we agreed to and the latest in a long line of 
episodes, this is the latest in a long line of episodes that 
underscores the financial chaos that is the American Government.
  These episodes include the GSA scandal in Las Vegas, with hot tubs 
and skits and magicians; the Solyndra loan, $500 million to cronies for 
an ideological vision that did not work; the IRS checks I talked about 
earlier this morning, with Senator Vitter, given to illegal aliens who 
claim dependents living abroad. These are people here illegally 
claiming dependents abroad while the U.S. Government is sending them 
checks based on children who are not in the country. The inspector 
general from the IRS says this is costing the taxpayers $4 billion a 
year.
  It also includes the revelation that the Ninth Circuit Court of 
Appeals will spend $1 million or more of taxpayer money for a decadent 
getaway to a beachfront resort and spa in the Hawaiian tropics. And, of 
course, it includes a 3-year refusal of the Senate majority to produce 
a budget plan--3 years without a budget.
  We are badly in need of strong Executive leadership to put our 
finances in order. We need a President, Cabinet heads, sub-Cabinet 
heads who understand from the top to the bottom that they are there 
every day to look for ways to save money. This immigration tax scam 
costs the American taxpayers $10 million a day. Divide that out, $4 
billion over 365 days. The House has passed legislation that would 
close that gaping loophole. Meanwhile, the Senate is not acting.
  This chaos cannot continue. Accountability and discipline must be 
achieved, and the first step to right the ship ought to be actually 
correcting these allocations. I call on my Senate leadership friends to 
do that. We need an honest accounting. We need to spend what we agreed 
to, what was passed by both Houses of Congress and signed by the 
President. These dollars do not belong to us, they belong to the 
American people. They must be protected. Each one of them is precious. 
Each one of them was extracted from some hard-working American and sent 
to Washington on the hope and the prayer that it would be wisely spent. 
And we do not have enough of them. We do not have enough money.
  To stealthily increase discretionary outlays by $14 billion in one 
fell swoop is unacceptable. It must be corrected. I call on my 
colleagues to do so, else we will continue to lose the confidence of 
the American people.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. PRYOR. Mr. President, I would like to speak as in morning 
business for 15 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                    National Flood Insurance Program

  Mr. PRYOR. Mr. President, today I rise to discuss the National Flood 
Insurance Program, which is a program we are now trying to reauthorize 
in the Senate. Senators Johnson and Shelby have shepherded this bill 
through the Banking Committee. I have a ton of respect for both of 
those Senators and the work of the Banking Committee because they 
worked very hard to get it to the floor, to get it ready. In fact, it 
expires on May 31. If for some reason we cannot work out something here 
in the next couple of days, I sincerely hope we will extend this on at 
least a short-term basis--for another, say, 30 days--to give us time to 
work this out. The National Flood Insurance Program is too important to 
mortgages and commercial real estate, et cetera, to let it lapse. If we 
cannot work it out, I

[[Page 7605]]

hope we can get a 30-day extension. I support that effort.
  We need to reauthorize this legislation, this program, but we need to 
do it in the right way. Several Senators over the course of the last 
few months have stated objections to S. 1940. Here are mine. I have 
listed some of mine in a letter we sent to the chairman and ranking 
member last month or so--November 15, 2011. We listed several 
objections and concerns we had with the bill. There were 13 Senators 
from 9 States who signed this letter going to Senators Johnson and 
Shelby. Again, we appreciate their efforts, but we have to do this the 
right way.
  Let me run through three or four or five of my concerns about this 
legislation and tell my colleagues why I cannot support it in its 
current form and why I do support an extension but why, in the end, if 
the bill stays the way it is now, I cannot support it. I hope many of 
my colleagues will join me in the effort of not supporting this 
legislation as it is currently drafted.
  Let me start with the bill itself, S. 1940. The primary objection I 
have is in section 107 of the legislation. It is titled ``Mandatory 
Coverage Areas.'' Basically what it does is it redefines ``special 
flood hazard areas.'' This may not sound very exciting or very fun to 
people, but this is critically important.
  I am showing a map here on the floor today. All of these counties in 
the dark green--there are 881 counties total that have levees in their 
counties. To my understanding, well over 50 percent of the U.S. 
population lives somewhere near a levee. They may not realize it 
because the levees work and they don't have floods, but if you see this 
map, you can see the levees all over the country. If you are a Senator 
representing one of those States, I strongly encourage you and your 
staff to look at section 107 of the legislation.
  Here is part of it, 107(b):

       Residual Risk Areas--The regulations required by subsection 
     (a) shall require the expansion of areas of special flood 
     hazards to include areas of residual risk that are located 
     behind levees or near dams or other flood control structures, 
     as determined by the Administrator.

  Subsection (c) says:

       Mandatory Participation in National Flood Insurance 
     Program--
       (c)(1) In General--Any area described in subsection (b) 
     [the one I just read] shall be subject to the mandatory 
     purchase requirements. . . .

  Then go down to (c)(3):

       In carrying out the mandatory purchase requirement under 
     paragraph (1), the Administrator shall ensure that the price 
     of flood insurance policies in areas of residual risk 
     accurately reflects the level of flood protection provided by 
     any levee, dam, or other flood control structure in such 
     area, regardless of the certification status of the flood 
     control structure.

  So regardless of whether these levees and dams are certified--in many 
cases by the Corps of Engineers, in other cases by private engineering 
firms--regardless of whether they are certified, the people behind 
those levees are going to be required to purchase flood insurance.
  Let me read that one more time:

       The regulations required by subsection (a) shall require 
     [there is no wiggle room there] the expansion of areas of 
     special flood hazards to include [these] areas. . . .

  This is a great expansion of this program. I want to talk about the 
expansion in just a moment, but let me say that the folks in these 
areas--I know it is certainly true in my State of Arkansas--the people 
in these areas currently pay for flood protection. In most cases, what 
they do is, through some sort of local levy or local tax--it is 
different in different places, but somehow, someway, they pay to build 
and maintain these levees. They are paying out of their pockets right 
now to make sure they do not get flooded. What this bill does and what 
FEMA would do under this bill--they would be required to do it, 
wouldn't have any wiggle room--what they would be required to do is 
make them pay again; not only have to pay for their own levee, they 
have to pay for flood insurance for floods that will never happen in 
their areas because these levees are certified. Again, this is 881 
counties, 50 percent of the U.S. population.
  Over half the counties in Arkansas have levees. There are over 1,200 
dams in our State. I don't have the number of dams for everybody all 
over the country, but it is over 1,200 in my State, so you can multiply 
that over how many dams you might think there are in the United States. 
It is a huge number, and it will affect over half the people in the 
United States.
  I mentioned that these folks are already paying for their own flood 
protection through local levies. Now, also, according to this law, they 
are going to have to pay for insurance. In addition to that, to rub 
salt in the wounds, what they are going to have to do is their local 
counties are going to have to pass an ordinance that FEMA has written 
and it is going to restrict the land use. In many cases, that ordinance 
will diminish the property values, diminish the ability for them to do 
economic development in their communities.
  If we can just take one example of something that happened last year, 
last year we had terrible flooding in the midsection of the country. 
Many of you remember that. The Corps of Engineers ended up having to 
blow the levee at Bird's Point. That is part of the Corps of Engineers' 
Mississippi River and tributary system.
  By the way, we have to thank the Corps of Engineers and praise them 
for the engineering they have done on the river. I know there have been 
a few problems over the years. Some obviously happened in Katrina. But 
overall the Corps of Engineers designed things that work. Certainly 
when you look at last year, the 2011 flood of last year, in the 
Mississippi River, one of the longest rivers in the world, certainly 
the longest in North America, there was more water that flowed through 
the gauging stations from Cairo, IL, to Natchez, MS, than in any flood 
in recorded history. The flow at Cairo, IL--the confluence of the 
Mississippi and the Ohio--was over 2 million cubic feet per second. 
That was running through the Mississippi River right there. At Helena, 
AR, it was running at 2.3 million cubic feet per second.
  In some locations--the Corps of Engineers is in the process of 
determining this; they are not ready to say it yet--in some locations 
up and down the Mississippi River system, they are considering whether 
this actually was not a 100-year flood or 250-year flood, this was 
actually a 500-year flood, the largest flood in history.
  All of this Mississippi River--MR&T, we call it, Mississippi River 
and tributary system--all that has cost our taxpayers $32 billion since 
its inception, but just in the flood last year, it saved taxpayers $110 
billion in damages. That is a great return on investment. We need to 
honor that return on investment. We need to not charge people 
additional flood insurance for areas that do not flood. They maybe had 
the 500-year flood up and down the Mississippi or maybe in certain 
parts of it, and there was not 1 acre of ground that went underwater. 
It was a new flood of record. Ten million acres of land were protected, 
1 million structures were protected, and, again, it prevented $110 
billion of property damage. There were no lives lost, and not 1 acre 
was flooded. The system worked exactly according to plan.
  Now this bill comes in and says: Well, even though we just had the 
250-year or the 500-year flood, still we want to make all these people 
up and down the Mississippi in all these counties--not all the people 
but in certain parts of these counties, depending on what the flood 
maps say--we want to require them to pay for flood insurance when it is 
never going to flood there.
  I want my colleagues to know that this provision, section 107 in the 
Senate bill, is not in the House bill. I think the reason it is not--I 
can't speak for the House, of course, but I think the reason it is not 
is for the reasons I am saying right here. We know it is not going to 
flood in these areas. This is the Corps of Engineers. This is the best 
levee system in the world, and it is keeping these folks safe and dry 
when the floods come.
  Also, I wanted to say the House does not have section 107 in their 
bill. It never did. There is a House amendment offered by Congressman 
Cardoza who took out a requirement to show these areas are on their 
maps, and that vote

[[Page 7606]]

passed 261 to 163. So not only can we get consistent with the House 
because we can get rid of section 107, but we can also get rid of other 
specific parts of this legislation that will be more consistent with 
the House.
  Here is a map of the Mississippi River, the area I am talking about. 
We can see the States of Louisiana, Mississippi, Arkansas, Tennessee, 
Missouri, and a little bit of Kentucky and Illinois is in there as 
well. But this large blue area is what they call the historic 
floodplain. Before man came, before people started building levees, 
before they started draining swamps and trying to manage the land, this 
is the area that would flood.
  One thing important to know about this is that a lot of this area in 
light blue has some of the richest farmland in the world. The reason it 
is so rich is that for centuries or eons or however long it was, this 
river would flood periodically and put this very rich soil out there. 
That is one reason why in this part of the country they can grow almost 
anything. That soil is great.
  This is a huge industry for the area, and it is important we keep it 
going. It is also critically important for U.S. trade and the U.S. 
economy. This is the breadbasket, so to speak, of the United States 
right here. We have that area growing food and fiber for everyone. It 
is critical we keep that going.
  Once the Corps of Engineers gets control of the Mississippi River--
this is what it looks like now when it floods. This is now the 
floodplain. If you go back to last year when it flooded so badly, this 
is what it looked like, with one exception; they blew out this one 
little area in Birds Point to give a little bit of relief. Again, that 
was by design and that worked.
  The first problem I have with the bill is section 107. Another 
problem is the general expansion of what this bill does to the National 
Flood Insurance Program. One of the things buried in the bill that a 
lot of people may not see is in section 118. Section 118 talks about 
how the Administrator needs to establish an ongoing program under which 
they review and update and maintain National Flood Insurance Program 
rate maps in accordance with this section, et cetera, et cetera. Then 
they go down their criteria of what they need to look at.
  It says here ``all populated areas and areas of possible population 
growth located not within''--not the 100-year floodplain. The current 
law is the 100-year floodplain. What this plan says is the 500-year 
floodplain. We don't have a map of that because the Corps of Engineers 
has not finished mapping and FEMA has not accepted all the maps yet. We 
don't know exactly what that is going to look like, but I am going to 
say it is going to look something like this here. It is a good bet that 
a lot of people in this light blue area are going to have flood 
insurance.
  Based on the flood we had last year, they are never going to get 
flooded, not in 100 years, and certainly not in 500 years. They are not 
going to get flooded, but this says they must purchase flood insurance. 
This is a huge expansion of the program. It has a big impact not just 
on homeowners, which is obviously very important. They are not going to 
be able to get a mortgage if they are in a floodplain.
  What this law says in the committee report is that notice will be 
provided to property owners in the 500-year floodplain to inform them 
of their flood risks, which may lead to more owners protecting their 
property through flood insurance.
  The PRESIDING OFFICER. The Senator has used his 15 minutes.
  Mr. PRYOR. Mr. President, I would ask to have 5 more minutes to wrap 
up.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRYOR. Mr. President, what this says in the committee report is 
that the 500-year flood notation should be sent out to everyone so 
everyone knows this property is in a 500-year floodplain. The problem 
is folks are not going to be able to get mortgage insurance, they are 
not going to be able to do real estate development; commercial real 
estate is going to hurt from that. They are not going to be able to 
have economic development projects in these areas because of the 
floodplain notation.
  Also on page 8 of the committee report it talks about how they are 
going to spend about $400 million annually in doing this mapping. Well, 
if they are going to map out the 500-year floodplain, that is a lot 
more map than the 100-year floodplain. They can save quite a bit of 
money by doing that.
  The bottom line is these levees are designed correctly, they are 
built correctly, they are maintained correctly, and they are certified 
that they are safe. What is the point of people having to get flood 
insurance in that area when it is not required right now?
  I also think this legislation requires a huge conflict of interest 
for FEMA. It is not FEMA's fault; they are not asking for this. It is 
what the Congress is trying to do. Basically under this law FEMA would 
write the regs, they will draw the lines, they will control the timing, 
they will set the standards, they will update the maps, they will 
maintain the maps. If there is an appeal, they would have to go to 
FEMA. They also set the rates, they collect the money, and they spend 
the money. Everything is done by FEMA.
  Obviously FEMA is going to have an interest to make sure this program 
is adequately solvent and funded, and obviously they should. They have 
control of every aspect of this, with no checks and balances in the 
system. There are going to be millions of people who will pay in to 
make this solvent, I guess, but it will never need flood insurance.
  With that, I wish to say I hope my colleagues who represent these 
States, when they look at section 107, will see what I see and we can 
all work together to either take out section 107 completely or get the 
30-day extension so we can have time to take it out in the next few 
days.


                           Order Of Procedure

  Mr. PRYOR. Mr. President, I ask unanimous consent that the majority 
leader be recognized at 4 p.m.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PRYOR. Thank you, Mr. President.
  I yield the floor.
  Mr. HATCH. Mr. President, I ask unanimous consent that my remarks be 
placed in the appropriate place in the Record and that I be permitted 
to finish my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             Fiscal Policy

  Mr. HATCH. Mr. President, we find ourselves in the midst of a 
Presidential election. In years past it might be expected that during a 
Presidential election, politics would take precedent over policy. That 
is not right then and it is certainly not right now. Our Nation faces 
serious problems--immediate problems--and we cannot wait to tackle them 
until after the election.
  We are over $15.7 trillion in debt, and before the end of the year it 
will be over $16 trillion. We have a Tax Code that is unmanageable and 
a burden on conscientious taxpayers. If the Congress and the President 
fail to act, we have a tax increase coming next year that will dwarf 
any in our Nation's history. We cannot afford to wait another 7 months 
to get our fiscal house in order, and we need to act now.
  President Obama at least claims to understand that we cannot wait to 
address this fiscal crisis. He remarked recently that the fact this is 
an election year is not an excuse for inaction. Unfortunately, other 
than talk, the President and his liberal allies have done nothing to 
address either our rising debt or the fiscal cliff we are quickly 
approaching, both of which are significantly hindering our economic 
recovery and job growth.
  Last week President Obama's budget received zero votes in the Senate. 
For the second year in a row every Republican and every Democrat who 
voted on the President's budget voted against it. Remarkably, not one 
Democrat voted for the serious Republican budgets offered by my friend 
Chairman Paul Ryan, and my friends and colleagues Senators Toomey, 
Paul, and Lee.
  While he talks a big game, President Obama has shown little interest 
in lighting a meaningful path toward balancing the budget, reforming 
the Tax Code, and reducing the tax burden on working families and small 
businesses.

[[Page 7607]]

  Instead, President Obama seems to have a single-minded focus on his 
reelection. While he attempts to scare up votes in swing States, 
Americans across the country are suffering due to President Obama's 
failed economic policies. The people of Utah and the people across the 
country are naturally growing restless. They look to Europe and see the 
consequences of out-of-control spending and taxes. Yet even with the 
example of Europe, the President and his friends resist meaningful 
spending cuts at every turn, and his liberal allies have done 
everything they can to mislead the public about the responsible 
intentions of Republicans to reduce wasteful government spending.
  Just as critical for our economy is the President's failure to do 
anything to address the tax relief that will expire at the end of this 
year. If the President allows current tax relief to expire, the result 
will be at least a $4 trillion tax increase on the American people. We 
can call this a fiscal cliff; we can call it ``taxmageddon,'' as others 
have done. Whatever you call it, it will be a disaster for the middle 
class. It will be a disaster for small businesses that will be the 
engine of our economic recovery. One thing we hear time and time again 
from businesses is that uncertainty holds them back from investing, 
expanding, and hiring. A robust recovery will require permanent 
progrowth tax policy.
  Given the continued jobs recession and weak economic growth, we need 
those policies now. Economic growth slowed to 2.2 percent last quarter. 
For 39 consecutive months the unemployment rate has remained above 8 
percent, but that only tells part of the story. There are 12.5 million 
Americans unemployed, and of those more than 5.1 million workers have 
been looking for work for 27 weeks or more. There are 7.9 million 
Americans who are working part time for economic reasons, and another 
2.4 million have only a marginal attachment to the labor force. Close 
to 2 million college graduates are unemployed.
  Growth slowed to a tepid 2.2-percent rate in the first quarter, and 
we already saw business cut back investment as business investment 
spending declined 2.1 percent in the quarter. Yet the President and his 
Democratic allies seem content even in this environment to sit on the 
sidelines as ``taxmageddon'' approaches and threatens even greater harm 
to our economy.
  The coming tax increases will be, without any exaggeration, the 
largest tax increases in American history, and the possibility of these 
tax increases is creating enormous uncertainty. The so-called business 
tax extenders expired at the end of 2011. Will there be an R&D tax 
credit in 2012? Will there be an exception from subpart F for active 
financing income after 2011? Families and businesses do not know if the 
2001 and 2003 tax relief will be extended beyond 2012. That creates 
tremendous uncertainty for anyone planning on buying a home, saving for 
college, investing in a new business, or hiring a new worker. Will 
passthrough organizations be taxed at 35 percent or 39.6 percent? Will 
dividends be taxed at 15 percent or will dividends be taxed at 39.6 
percent, as President Obama has proposed? Will there be a death tax 
that hits family businesses and farms with a maximum rate of 55 
percent, or of 35 percent, or something else? What will happen to the 
alternative minimum tax? Will it be patched? Will it be reformed? Will 
it be repealed? Will it be replaced with higher taxes somewhere else?
  The President and the Senate Democratic leadership have shown no 
willingness to answer these questions and provide the certainty our 
economy craves. The adverse impact of these tax increases on economic 
growth is unquestioned. But don't take my word for it. It has been 
reported that Federal Reserve Chairman Ben Bernanke recently discussed 
with Senate Democrats the significance of ``taxmageddon.''
  In short, the coming tax increases will be so large that Chairman 
Bernanke apparently warned that monetary policy would not be capable of 
offsetting the resulting decline in economic growth.
  Last month the Fed's policy-setting committee repeatedly warned in 
minutes of their meeting that fiscal uncertainty has negative effects 
on consumer and business sentiment, on household spending, durable 
goods, business capital expenditures, and on hiring.
  The former Director of President Obama's Office of Management and 
Budget concluded that what he estimates to be a $500 billion tax 
increase would be so large that ``the economy could be thrown back into 
a recession.''
  According to Barclay's Capital, this fiscal cliff could reduce our 
GDP by 3 percent.
  In addition to these looming tax hikes, budget cuts from the 
sequester that followed from the administration's failure to arrive at 
a budget are set to hit as well. According to the magazine ``The 
Economist,'' the Congressional Budget Office has found that the 
combined effects of the sequester and the expiring tax relief would add 
up to 3.6 percent of GDP in fiscal year 2013. Federal Reserve Governor 
Duke has reportedly indicated that the combined impact of the expiring 
fiscal policies at the end of the year could amount to around 4 percent 
of the Nation's economy.
  No economy can sustain such a hit without being hurled into 
recession. Yet instead of addressing this fiscal cliff--tax increases 
that will harm all of America's families--the President seems content 
to pursue misguided micropolicies that target the so-called rich in the 
name of so-called fairness.
  I wish to make two points about the President's obsession with 
redistribution of wealth. First, the American people do not care. The 
American people do not want government bureaucrats in Washington 
figuring out who gets what. They don't want politicians spreading the 
wealth around. They don't want self-anointed arbiters of how much 
income is fair. What they want is the opportunity that comes with 
economic growth. They don't want a handout. They don't want their 
industries vilified for engaging in free enterprise. They want a job. 
And nothing is more fair than giving every American the chance to make 
something of himself or herself. That requires Washington getting out 
of the way, not getting more involved.
  Second, the American people seem to understand that the President's 
promise that he will only tax the rich is a sucker's bet. With his 
health care law, he already repeatedly broke his campaign promise not 
to raise taxes on families making less than $250,000 a year. The people 
of Utah, my home State, and the rest of the other States know that the 
Democrats' thirst for more spending will require much more than taxes 
on the wealthy. If President Obama and his Democratic allies get their 
way, all taxpayers are going to be looking at bigger tax bills.
  President Clinton was honest on this point recently. He rejected 
President Obama's politically convenient claim that he would only tax 
the rich, and called for across-the-board tax increases: This is just 
me now; I'm not speaking for the White House. I think you could tax me 
at 100 percent and you wouldn't balance the budget. We are all going to 
have to contribute to this, and if middle-class people's wages were 
going up again, and we had some growth in the economy, I don't think 
they would object to going back to tax rates from when I was President.
  There we have it. Tax increases on everybody. President Clinton can 
claim that he does not speak for the White House, but the American 
people are not fooled. They see where the President's policies are 
leading. Our debt and deficits are unsustainable, but the President has 
shown no inclination to address them through spending reductions.
  There is only one other option available to President Obama and it is 
one that he and his party have shown to be their preferred policy for 
decades: higher taxes to pay for more spending. Utahns and Americans 
all over the country know that the failure to address ``taxmageddon'' 
is a very real threat. We cannot put this discussion off any longer. It 
is time for our President to lead.

[[Page 7608]]

  To that end, last week I, along with 40 of my Republican colleagues, 
sent a letter to our colleague and friend from Nevada, the Democratic 
leader, asking for him to address this fiscal cliff in short order. 
Today we received a response. I have to say I am disappointed. While 
there is a great deal of political posturing about evil millionaires 
and big corporations as well as repeated attacks on the tea party and 
the citizens who support its goals of smaller constitutional 
government, there is no acknowledgment of the fiscal cliff we are fast 
approaching. This response seems to confirm what we already know: 
President Obama and his liberal allies would prefer to put off the 
discussion of this fiscal cliff. They do not want to address 
``taxmageddon.'' I am fairly certain their preference would be to get 
to the other side of the election and then have tax hikes set in not 
only for their caricatured evil corporations and individuals but for 
the middle class as well.
  But I am confident that the markets and the American people are not 
going to allow this to happen. We cannot afford to delay action that 
will prevent ``taxmageddon'' and steer us away from the coming fiscal 
cliff.
  The likelihood of ``taxmageddon'' and the uncertainty it creates is 
an anchor around our economy. Americans young and old, unemployed and 
underemployed, want this anchor thrown off now. We cannot wait until 
next year or even a lameduck session. The economy is slowing, job 
growth is lagging, and businesses are cutting back investments. The 
uncertainty caused by ``taxmageddon'' is contributing to the lackluster 
economic recovery. American families and businesses are not going to 
invest in the future if the future holds a $310 billion tax increase 
next year alone. The best thing we can do to jumpstart our economy is 
to turn the wheel away from the fiscal cliff sooner rather than later.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. REED. I note the majority leader has appeared on the floor and I 
believe he has a procedural motion. I yield to him.


                           Order of Procedure

  Mr. REID. Mr. President, if my friend would complete his remarks.
  Mr. REED. I would be happy to.
  Mr. REID. Following the remarks of the Senator from Rhode Island, we 
will go into a quorum call.
  I ask unanimous consent that immediately following the statement of 
my friend, the Senator from Rhode Island, a quorum call will be 
initiated, and then I will be recognized for such time as we decide to 
come out of the quorum call.
  I see people shaking their heads. Here is the deal. Senator Reed is 
going to talk and put us into a quorum call, and when we come out of 
that, I will be recognized. I ask unanimous consent to that effect.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Rhode Island.
  Mr. REED. Mr. President, I rise today in support of the Food and Drug 
Administration Safety and Innovation Act, which is pending before the 
Senate this week.
  This legislation will give the FDA, through five agreements made 
between the agency and industry, the resources to approve additional 
drugs and devices every year for their safe and effective use. Without 
these agreements, the FDA, starting in October, would lack these 
resources which are necessary to approve new drugs and devices, and 
they would also lack resources to monitor the safety and efficacy of 
those drugs already on the market. This would result in a reversal of 
decades of work modernizing our drug and device approval and safety 
programs.
  I am particularly pleased that for the first time, the generic 
pharmaceutical industry will provide the agency with $1.5 billion over 
5 years for faster product reviews. In fact, the essence of the 
legislation is that the industry is actually providing resources for 
the monitoring and for the approval of drugs. Getting generic drugs 
onto the market sooner will help lower costs for individuals and 
families as well as for the Federal and State governments.
  This measure would also significantly improve FDA's regulatory 
authority, including its ability to help prevent drug shortages and to 
partner with the private sector to develop new medications to treat 
life-threatening diseases that have become resistant to antibiotics, 
which is a very important measure included within this legislation.
  I wish to recognize especially Chairman Harkin and Senator Enzi for 
their very thoughtful, very deliberative, and extremely important work. 
They have represented through their committee work the model of what we 
should be doing here collaboratively and on a bipartisan basis to 
advance important measures for the American people. Both of them 
deserve great accolades for their work today. I hope we can follow 
through and bring their work to conclusion.
  I wish to particularly thank both of them, Chairman Harkin and 
Senator Enzi, for including provisions pertaining to pediatric drugs 
and devices that I authored along with my colleagues Senator Alexander, 
Senator Murray, and Senator Roberts, another bipartisan effort to 
improve the health of children throughout this country.
  Until 1997--15 years ago--80 percent of drugs were used off-label to 
treat children. Doctors were treating children without fully 
understanding the appropriate dosage requirements or the potential for 
any dangerous side effects. This frustrated pediatricians and angered 
many families, but those sentiments were largely ignored by the 
industry until Congress stepped in.
  With the passage of the Best Pharmaceuticals for Children Act in 1997 
and the Pediatric Research Equity Act in 2003, 427 drugs have been 
relabeled with important pediatric information. Now 46 percent, rather 
than 80 percent, of drugs are being used off-label in children, but 
that number is still too high. The legislation before the Senate makes 
critical improvements to these laws so we can further lower this 
percentage. It would make these two acts--BPCA and PREA--permanent, 
like the laws that govern the approval of drugs for adults. It would 
also provide the certainty that the pharmaceutical companies believe is 
necessary to continue to wisely invest in the appropriate use of drugs 
in children.
  The legislation will also help ensure pediatric studies are planned 
earlier in the drug development process and completed sooner. 
Currently, a disappointing 78 percent of studies that were scheduled to 
be completed by September 2007 are either late or were submitted late. 
While Congress, the FDA, advocates, and the industry agree that a 
pediatric study should not hold up the approval for a drug for use in 
adults, drug companies should not be allowed to get away with 
submitting unrealistic study plans to the FDA for approval or failing 
to complete a required study once they are profiting from these drugs 
on the market.
  The legislation that is before us would also require pharmaceutical 
companies to work with the FDA early in the process of developing these 
drugs to create a reasonable and sensible plan for studying the 
products in children. It would also, for the first time, provide FDA 
with an enforcement tool that will deter companies from neglecting 
their obligation to complete these studies on time.
  Our bill also responds to the need for pediatric medical devices--not 
just pharmaceuticals, but devices--in children, which can lag 5 to 10 
years behind those manufactured for adults. The pediatric profit 
allowance for Humanitarian Use Devices has proven to be a very 
effective incentive. Three new devices have been approved for their use 
in children in the last 3 years. This is an incredible increase as a 
result of this incentive.
  This policy has shown much promise and I am pleased to see it 
continue in this bill, along with the Pediatric Device Consortia Grant 
Program, which has assisted the development of 135 proposed pediatric 
medical devices in just over 2 years.
  The Food and Drug Administration Safety and Innovation Act would also 
extend this Humanitarian Use Device

[[Page 7609]]

incentive to manufacturers of devices for use in adults with rare 
conditions. While it is my hope this policy is equally effective in 
spurring developmental devices for use in adults as it is for children, 
I am concerned that it could impact the development and the marketing 
of devices for use in children. I plan to monitor this policy closely 
should it become law, but I have full expectations that both noble 
objectives can be achieved.
  There are some children, however, who do not receive the full 
benefits of BPCA and PREA.
  I am pleased the Senate bill begins to address this problem for 
pediatric cancer patients and children with other rare diseases. It 
calls on the FDA to hold a public meeting to discuss ways to encourage 
the development of new treatments for this population. Indeed, for some 
pediatric cancers, the treatment has not changed in many decades. For 
other rare diseases, an effective treatment has yet to be found. I look 
forward to receiving a recommendation that might stem from this 
important meeting, as well as working with my colleagues to respond to 
their needs with reasonable and sensible policy.
  I am truly pleased these pediatric provisions have drawn the support 
of 24 organizations, including the American Academy of Pediatrics, also 
including the Pharmaceutical Researchers and Manufacturers of America. 
I think this stakeholder support is very important not only to the 
ultimate passage of the legislation, but for its effective 
implementation.
  There is another provision I would like to talk about; that is, this 
bill contains provisions which would require the FDA to decide whether 
to update the labeling requirements for tanning beds.
  Every day 2 million Americans visit a tanning salon. Seventy percent 
of these are women. According to the World Health Organization, the 
risk of deadly melanoma increases by 75 percent when the use of tanning 
devices begins before the age of 30.
  So this is a particular concern with young women beginning to use--
and younger men--beginning to use these tanning devices. Yet the 
warning labels on tanning beds have not been updated in over three 
decades and are often placed far from view.
  In 2007 my colleague, Senator Isakson of Georgia, joined me in 
requiring the FDA to study the labeling standards for tanning beds and 
make recommendations about how these standards could be improved. In 
its report, the FDA found that tanning bed labels could be clarified 
and located in a more prominent location. But the agency has yet to 
act. It is my hope the FDA will heed its own advice and update the 
labeling requirements for tanning beds.
  Similar to the outdated labeling requirements for tanning beds, 
sunscreen testing and labeling standards have also been over three 
decades in the making--three decades. Last year I was pleased when the 
FDA finally took action. However, just last week the agency announced 
it would be extending the implementation of these new standards by 6 
months, until December. Consumers will have to go another summer 
without knowing whether they are truly protected from the Sun's harmful 
UVA and UVB rays.
  I have filed an amendment to make sure there are no future delays. I 
look forward to working with my colleagues to see that this amendment 
is accepted as part of the final FDA legislation which I hope is passed 
very quickly by the Senate.
  I again want to thank Chairman Harkin and Senator Enzi for their 
extraordinarily effective and collaborative work on the Better 
Pharmaceuticals and Devices for Children Act, which is included in this 
bill.


                      Student Loan Interest Rates

  Mr. REED. Just for a moment, let me raise another pending issue which 
is of critical importance. In 40 days, as I think many of us recognize, 
student borrowing rates for college will double unless we act. We have 
seen both sides of the aisle--colleagues from both sides--come down and 
say we cannot let this happen. Well, we cannot let it happen. That 
means we have to take action to prevent the doubling of interest rates 
on Stafford loans.
  Unfortunately, last week we had a series of budget votes, which most 
of my Republican colleagues supported, which would have, if they had 
passed, mandated the doubling of the student loan interest rate. So I 
think we have to move away from this debate and actually pass 
legislation which would prevent the doubling of student loans by July 
1. I hope we can do it promptly, certainly before July 1.
  Also, I hope we find an effective offset. What the Republicans have 
suggested is using the Prevention Fund. The President made it clear he 
would veto the legislation if it included that offset. Also, what 
should be clear that using resources to prevent disease is not only 
helpful to the American public, but it is also probably one of the most 
practical ways we are going to be able to begin to bend that very 
important cost curve going forward.
  This Prevention Fund is going to help everyone, but it is going to 
particularly help middle-income families who are struggling with 
medical bills, who are struggling to find insurance, the same families 
who are struggling to pay the cost of college for their children. It 
makes no sense to me to take from one program that will largely benefit 
working families to pay for another program that will benefit working 
families.
  We have an offset which is an egregious tax loophole that allows 
lobbyists, financiers, et cetera, to create subchapter S corporations 
to essentially avoid their payroll and Medicare taxes. I think that is 
an appropriate way to pay for this support for students' education. If 
there are other ways beyond the prevention fund, I certainly am happy 
to listen to them. If there are other principled ways to avoid doubling 
the interest rate for student loans, let's talk about them. Let's get 
them on the Senate floor and let's debate them.
  I yield the floor
  The ACTING PRESIDENT pro tempore. The majority leader.
  Mr. REID. Madam President, I ask unanimous consent that execution of 
the previous order with respect to S. 3187 occur at 11 a.m. on 
Wednesday, May 24, and that all other provisions under the previous 
order remain in effect at that time.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. REID. Madam President, as I sit here this afternoon, I hope I am 
not disappointed, and I hope the Senate is not disappointed in not 
being able to finish this FDA bill. We are on the bill. I hope we can 
work out some finite list of amendments. That would be the best thing 
to do for this bill.
  So I just say to everyone, I hope we can do that. I do not want to 
have to come here tomorrow and file cloture on the bill. But that is 
the choice I will have. Or I can do this: Maybe what I might do is move 
to reconsider the student loan legislation. I have the ability to do 
that at any time. So I might do that. We need to get this done.
  Today is Tuesday. I just think it is unfortunate. There is an event 
tomorrow night that we cannot get out of. It has been longstanding for 
the Senate and their spouses. So we do not have a lot of time.
  So tomorrow morning, if we do not have something worked out, I think 
we will have to do some other things and recognize that all the happy 
talk on this bill may not come to be.
  The ACTING PRESIDENT pro tempore. The Senator from New Mexico.
  Mr. BINGAMAN. Madam President, I wanted to speak about an amendment 
which I intend to offer once we do get on this Food and Drug 
Administration Safety and Innovation Act. This is an important 
amendment. I want to advise my colleagues and all who are listening 
about it so they can, hopefully, look into it and wind up supporting 
it.
  This is an amendment that Senator Vitter has worked with me on, as 
well as Senators Franken, Shaheen, Kohl, Tom Udall, Tim Johnson, 
Klobuchar, Merkley, Sanders, and Sherrod Brown. The amendment has the 
strong support of many organizations that are focused on the cost of 
prescription drugs.
  Here is a list: AARP, AFL-CIO, Walmart, Families USA, Consumer

[[Page 7610]]

Federation of America, U.S. PIRG, Consumers Union, Center for Medicare 
Advocacy, AFSME, National Legislative Association on Prescription Drug 
Prices, the Alliance for Retired Americans, various other companies and 
organizations--the New Mexico Pharmacy Association strongly supports 
this legislation.
  This amendment addresses the root cause of anticompetitive, 
anticonsumer settlements that are entered into between brand-name and 
generic pharmaceutical manufacturing companies. The effect of these 
settlements they enter into is to delay timely access that consumers 
would have to generic drugs. This practice is commonly referred to as 
pay for delay. It costs American consumers and it costs the Federal 
Government billions of dollars each year in higher drug costs.
  According to the Federal Trade Commission, in 2010, pay-for-delay 
agreements, limiting access to affordable generic drugs, protected $20 
billion in sales from brand-name pharmaceutical companies. That was at 
the expense of consumers who would have been able to pay much less for 
those same drugs.
  Ensuring access to affordable medication is an essential aspect of 
addressing the growth in health care spending. Prices for brand-name 
prescription drugs have continued to outpace inflation, and overall 
spending on prescription drugs has also increased sharply. These 
statistics are amazing to me. The Kaiser Family Foundation found that 
in 2008, spending in the United States for prescription drugs was 
$234.1 billion. That is nearly six times what it was in 1990.
  Since generic drugs are, on average, one-fourth of the price of their 
brand-name alternatives, they can be an important source of affordable 
prescription drugs for many Americans. But to actually achieve the 
savings for consumers, those generics have to reach market in a timely 
manner.
  In 1984, Congress passed the bipartisan Hatch-Waxman Act to create 
market-based incentives for generic pharmaceutical companies to bring 
their drugs to market as quickly as possible. The express purpose of 
that law was to incentivize early generic drug competition while 
preserving incentives for pioneer companies to develop innovative new 
medicines. Instead, the pay-for-delay settlements that our amendment 
tries to address--these pay-for-delay settlements between brand-name 
and generic pharmaceutical manufacturers have become commonplace.
  These settlements stifle competition. They delay access to generic 
drugs at significant costs to consumers and to the Federal Government. 
In these settlements, the first filer generic drug company agrees to 
delay market entry in exchange for monetary or other rewards. This has 
the effect of blocking all subsequent generic filers in coming to 
market.
  This is a complicated issue. I would like to take a few minutes to 
explain how these agreements work under existing law and also how our 
amendment would solve this problem as we see it.
  Under current law, first-to-file generic drug applicants are rewarded 
with 180 days of market exclusivity. Exclusivity is awarded only to 
generic companies that are the first to file. It is not available to 
subsequent filers even if they successfully invalidate a patent and are 
ready to come to market immediately. So subsequent generic filers can 
only enter the market after the first generic filer has enjoyed its 180 
days of market exclusivity.
  So under the pay-for-delay settlements, the first filer generic 
company essentially parks its exclusivity; that is, it blocks all other 
generic manufacturers from coming to market until 6 months after the 
market entry date. This is true regardless of the strength of the 
patent or the readiness of subsequent generic filers to come to market.
  So this means under pay-for-delay settlements, first filer generic 
companies receive a reward from brand-name companies for delaying 
market entry, usually a cash reward, a very substantial amount. They 
also get a reward from the current statute, this 180-day exclusivity 
period, and brand-name companies get to extend their monopolies beyond 
what was originally intended under the Hatch-Waxman legislation.
  Consumers are left footing the bill and left with no option but to 
buy the more expensive drugs and to keep buying it, even after the 
generic should have come to market.
  ``Pay for delay'' settlements also typically include an agreement 
that the first-filer generic company can accelerate its entry into the 
market in the event that a subsequent filer invalidates the patent in 
question. In such cases, the subsequent filer triggers the first 
filer's exclusivity. Put simply, there is no incentive for subsequent 
generic filers to fight to invalidate weak patents and come to market 
as soon as possible, even when they believe strongly that they would 
win their case in court. In other words, whereas the original intent of 
Hatch-Waxman was to reward companies that were the first to file and 
actually bring their drugs to market, currently the reward goes to the 
first company to submit the necessary paperwork. Bringing the generic 
drug to market immediately has become an option that can be negotiated 
away.
  To fix the ``pay for delay'' problem, the law needs to be changed so 
that first filers who enter into ``pay for delay'' settlements can no 
longer block generic subsequent filers who successfully challenge 
patents from entering the market and bringing affordable drugs to 
consumers. The amendment we are offering provides this solution or this 
fix in the following three ways:
  First of all, the amendment grants the right to share exclusivity to 
any generic filer who wins a patent challenge in the district court. 
This means that if a subsequent filer successfully challenges a patent, 
even after a first filer has entered into a ``pay for delay'' 
settlement with a brand-name company, that subsequent filer has a right 
to share exclusivity with the first filer. This provision provides an 
incentive for subsequent filers to challenge patents and stimulates 
competition.
  Second, the amendment we are offering maximizes the incentive for all 
generic challengers to bring products to market at the earliest 
possible time by holding generic settlers to the deferred entry date 
agreed to in the settlements they have signed.
  Third, our amendment creates more clarity regarding litigation risks 
by requiring brand-name companies to make a decision to litigate a 
patent challenge within the 45-day window provided for in the Hatch-
Waxman Act. This ``use it or lose it'' provision enhances market 
certainty by eliminating the option for brand names to litigate patent 
challenges well after a generic has come to market.
  Finally, I think it is important to point out that the amendment we 
are offering does not interfere with the rights of the parties to 
settle their patent litigation if they choose to do so.
  There have been numerous antitrust experts and consumer groups that 
have identified the Hatch-Waxman Act's structural flaw--the one I have 
been describing here--as the source of the ``pay for delay'' problem 
and have called for a legislative solution. In addition, in 2003 
Senator Hatch himself expressed concern that the flaw remained despite 
an attempt to fix it by including a ``use it or lose it'' provision in 
the Medicaid Modernization Act of 2003. Senator Hatch emphasized that 
the law should be changed to reward, and not penalize, generic 
companies that successfully invalidate a patent and are ready to come 
to market.
  Let me further underscore the need for this amendment with some 
concrete examples.
  I have a chart here that I think will make the point I am trying to 
make. This table shows three drugs included in ``pay for delay'' 
settlements. And this is just three; there are many of these 
settlements entered into each year. The delay to market in years for 
each of the three drugs--the three drugs are Altace, Lipitor, and 
Provigil--the delay period the settlements called for in one case is 2 
years; in another case 1\1/2\ years; and in the other 6 years. The 
estimated lost savings to consumers is here.

[[Page 7611]]

  Let me describe each of these a little bit. The first drug is King 
Pharmaceutical's Altace. A generic version of Altace was delayed for 2 
years at an estimated cost of $637 million to consumers under a ``pay 
for delay'' settlement. In 2007, Lupin invalidated a patent covering 
Altace. Lupin could not launch, or bring their generic to market, 
despite being the party responsible for invalidating the patent and 
opening the market early. Instead, the first filer, Cobalt, accelerated 
its entry into the market and benefited from 180 days of exclusivity. 
Lupin was left with no reward despite the fact that they had been the 
one that succeeded in the litigation to invalidate the patent.
  The second is a cholesterol-lowering drug familiar to most of us. It 
is the best-selling pharmaceutical drug in the history of the world, 
Lipitor. According to a 2008 New York Times report, Pfizer and generic 
manufacturer Randbaxy Laboratories agreed to a settlement delaying 
generic entry into the market by 20 months. The same report stated that 
the generic version of the drug was estimated to sell for less than 
one-third of the cost of the brand-name Lipitor, which had earned $12.7 
billion in sales the year before. A letter sent to FDA Director Hamburg 
last year by some of my colleagues in the Senate indicated that the 
Federal Government was spending $2.4 billion a year on Lipitor and that 
a generic version was expected to generate $3.97 billion to $6.7 
billion in savings annually.
  The final example on the chart here is Provigil, which is a sleep-
disorder drug, a generic version of which could have come to market as 
early as December of 2006. However, due to ``pay for delay'' 
settlements, a generic version of Provigil just entered the market this 
year instead of in 2006.
  In addition, in October 2011, a subsequent generic filer, Apotex, 
invalidated a patent covering Provigil. Because the first filers in 
this case settled their patent litigation with the brand company 6 
years prior, Apotex could not begin selling generic Provigil despite 
its court victory. Even the CEO of Cephalon, which is the brand-name 
manufacturer of Provigil, is quoted as saying--this is the CEO of the 
brand-name company--this:

       We were able to get six more years of patent protection. 
     That's $4 billion in sales that no one expected.

  In other words, the Provigil case represents 6 years and tens of 
millions of dollars in lost savings to consumers. One of the largest of 
those consumers is the U.S. military. As this chart illustrates, this 
is an estimate of the effect of this settlement--the so-called ``pay 
for delay'' settlement--related to Provigil on the Department of 
Defense. Assuming that a generic version of Provigil would have been 
released in 2006 with expiration of exclusivity, the DOD would have 
saved $159 million for this drug accessed by almost half a million 
soldiers between the years 2006 and 2011. Had our amendment, the Fair 
Generics Act, been the law--and we have introduced it as a stand-alone 
bill--had the Fair Generics Act been the law, generic versions of 
Provigil would very likely have been available 6 years ago. The first 
filers, knowing that the patent was weak and that subsequent filers 
could invalidate it and come to market themselves, would have fully 
prosecuted the patent fight instead of just settling it as they did.
  As these examples illustrate, by granting shared exclusivity rights 
to any generic challenger that wins its patent case or is not sued by 
the brand company, our amendment will end the ``pay for delay'' problem 
and move us closer to the original intent of Hatch-Waxman. That 
original intent was more competition, greater access to affordable 
drugs, and substantial savings to the U.S. Government and American 
consumers.
  I hope that when we get the opportunity to offer this amendment and 
consider it on the Senate floor and have a vote on it, my colleagues 
will support this amendment. It will be a substantial step forward for 
American consumers and will help us greatly in our effort to reduce the 
cost of prescription drugs for Americans.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Massachusetts is 
recognized.
  Mr. BROWN of Massachusetts. Madam President, I am pleased that the 
Senate is moving this week to consider the FDA Safety and Innovation 
Act, which is a very important piece of legislation that will help 
ensure Americans have access to save, innovative medical treatments by 
giving the FDA the resources it needs to review new products as safely 
and quickly as possible, while also giving the industry that certainty 
it needs to continue investing in new research. As I travel around 
Massachusetts, the No. 1 issue I find is that lack of regulatory 
certainty and sometimes tax certainty. This is a step in the right 
direction.
  I am pleased that this legislation takes many steps to strengthen the 
medical innovation industry in the United States. I have championed one 
such provision with Senators McCain and Casey that will smooth the 
regulatory path that I referenced earlier for new, moderate-risk 
medical devices.
  The underlying bill before us needs to be passed as quickly as 
possible to guarantee regulatory certainty at the FDA for the industry 
and its stakeholders.
  However, I am disappointed the Senate has not yet taken time to 
address a key area of concern related to this bill; that is, the new 
medical device excise tax. The new 2.3 percent tax on medical device 
sales that was imposed in the Federal health care law will cost our 
economy thousands of jobs and limit Americans' access to the most 
groundbreaking, state-of-the-art medical devices which people need.
  For the past 18 months, I have been pushing for the Senate to 
consider a medical device tax repeal bill that I introduced in February 
of 2011--one of the first bills I introduced. Today I, along with 
others, will be introducing an amendment to repeal this job-killing 
tax--a tax that will, in fact, drive up the cost of health care for 
patients and make our workers and our companies less competitive.
  I can tell you that in Massachusetts we have over 400 medical device 
companies. We are an innovative State. We have the ability to have 
companies like these in Massachusetts, and they are employing nearly 
25,000 workers and contributing over $4 billion to our economy. That is 
obviously a substantial industry in Massachusetts. And it affects every 
person throughout this country indirectly. If it goes into effect next 
year, this harmful tax will put American workers at a competitive 
disadvantage and chase jobs overseas. There are already companies, over 
the last year and a half, that have been looking overseas and already 
shifting their strategy.
  Where is that 2.3 percent tax coming from? It represents, in some 
instances, the entire net profit for some young companies in 
Massachusetts and throughout the country. It will potentially cost 
43,000 jobs across the country, with a loss of $3.5 billion in wages. I 
am not quite sure how that makes sense in anybody's book. Massachusetts 
alone is expected to lose over 2,600 jobs as a direct result of this 
tax, and up to about 10 percent of our entire medical device 
manufacturing workforce will be affected. The bottom line is that we 
cannot have this kind of job loss in any sector of our economy when we 
are still struggling. In Massachusetts, we have over 400 medical device 
companies. We do generate a tremendous amount of revenue--in the 
billions of dollars. So where is this tax going to come from? Is it 
from R&D, from growth and expansion, hiring, firing? Where? Nobody 
seems to know.
  I can tell you that the Massachusetts companies and companies 
throughout the United States are deeply concerned about this. I find it 
surprising and disappointing that there is not a consensus to repeal 
the medical device excise tax which will affect States across this 
country. Whether it is on another bill or a stand-alone bill, we need 
to get it done the way we did, in a truly bipartisan, bicameral manner, 
on the 3-percent withholding, the 1099 fix, the hire a veteran bill or 
the insider trading bill. We have worked together in a bipartisan 
manner to get things done.

[[Page 7612]]

It matters a great deal to Massachusetts, and it should concern every 
Member of this body.
  Madam President, I yield the floor, and I suggest the absence of a 
quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DURBIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. DURBIN. Madam President, dietary supplements have become a common 
health aid in medicine cabinets all across America. More than half of 
us in America use dietary supplements, including this Senator, who, for 
a variety of reasons, takes a multivitamin tablet every morning. In 
spite of their popularity, many people would be surprised to learn the 
Food and Drug Administration doesn't know how many dietary supplements 
are actually being sold in the United States. Most people don't know if 
a dietary supplement ingredient presented serious health concerns, the 
Food and Drug Administration doesn't have the information to track down 
products containing the harmful ingredient. We assume if it is for sale 
in America, some government agency has taken a close look to make sure 
that product is safe and that we know what is inside it and that it 
wouldn't harm an innocent customer. It turns out that may be true when 
it comes to prescription drugs and over-the-counter drugs, but the 
dietary supplement world is a much different world, with minimal 
regulation.
  I have an amendment which I will be offering to ensure the Food and 
Drug Administration has the information it needs to respond quickly and 
efficiently when safety concerns arise concerning dietary supplements. 
This amendment would require dietary supplement manufacturers to give 
the Food and Drug Administration the name of each supplement they 
produce, along with a description, a list of ingredients, and a copy of 
the label. It is not an onerous requirement, but for the first time the 
Food and Drug Administration would literally have a catalogue of all 
the dietary supplements being sold to Americans all across the Nation. 
With this information, the FDA would be better equipped to protect 
consumers' health and to work with manufacturers to address any 
problems should they arise.
  A 2009 report by the Government Accountability Office found the Food 
and Drug Administration is limited in its ability to respond to safety 
concerns because dietary supplement manufacturers don't always provide 
basic information, such as product names or lists of ingredients. This 
commonsense amendment I am offering is supported by the Consumers 
Union, and it would provide the Food and Drug Administration the basic 
information it needs to protect the public.
  Trust me. It will be opposed by certain interest groups. But I heard 
opposition almost 10 years ago when I introduced a bill to require 
dietary supplement manufacturers to report serious adverse events, such 
as hospitalizations or deaths, to the FDA. The need for mandatory 
reporting of adverse events was demonstrated by injuries and deaths 
across the country caused by the popular and dangerous dietary 
ingredient ephedra before it was banned in the United States in 2004. 
One of the victims was 16-year-old Sean Riggins from Lincoln, IL--30 
miles from where I live in downstate Illinois. He died in September 
2002. Sean was a high school student, and he died from a heart attack 
after he took something called Yellow Jackets. It was supposed to be an 
energy boost, and he was headed off to play football. It contained 
ephedra and it killed him.
  Shortly before his death, Metabolife--the largest manufacturer of 
supplements containing ephedra--claimed to the public they had no 
ephedra-related adverse event reports, period. However, a lawsuit was 
filed, and they were required under that lawsuit to disclose their 
records.
  In October of 2002, under pressure, Metabolife gave FDA over 13,000 
ephedra-related adverse event reports. People had taken their 
substances with ephedra and had gotten sick or worse.
  In 2006 I worked with Senator Orrin Hatch of Utah and Tom Harkin of 
Iowa to pass the Dietary Supplement and Nonprescription Drug Consumer 
Protection Act, which mandates reporting of adverse events to the Food 
and Drug Administration. It stands to reason if there is a drug for 
sale in the United States--a dietary supplement in this case--that 
causes a problem, we should know about it. If it is causing a problem 
in a lot of different places, the Food and Drug Administration, through 
these reports, will discover it.
  Since the law took effect in 2007, dietary supplement adverse event 
reports submitted to the FDA have increased sevenfold, from 368 in 2007 
to 2,473 in 2011. The FDA is using these reports as part of a 
surveillance system to signal potential safety issues and, in some 
cases, to take regulatory action. Mandatory reporting of adverse events 
was an important step to help protect consumer safety, but we need to 
do more to ensure the FDA and consumers have the information they need.
  Madam President, the sad reality of this amendment and this issue is 
that it takes a tragedy to catch our attention. Someone has to be 
seriously hurt or worse before Members of Congress and others will take 
notice and do something.
  I recently learned about the tragic death of this beautiful young 14-
year-old girl. Her name was Anais Fournier from Maryland. Anais was an 
honor student. She liked to read vampire novels. She watched chick 
flicks with her mom, and she had a passion for writing. Last December 
her life was cut short when she went into cardiac arrest. What caused 
it? Caffeine toxicity. She drank two 24-ounce Monster Energy Drinks in 
less than 24 hours, and it took her life.
  The American Academy of Pediatrics recommends that adolescents, such 
as 14-year-old Anais, consume no more than 100 milligrams of caffeine 
every day. But in less than 24 hours, Anais had consumed 480 milligrams 
of caffeine. That is the equivalent of 14 12-ounce sodas with ordinary 
caffeine content. Of course, she did it with two drinks--Monster Energy 
Drinks.
  A recent report by SAMHSA shows energy drinks pose potentially 
serious health risks. I might just say that in the Senate today, as I 
am speaking, are members of Anais' family. We want to join them in 
mourning her loss and hope that her life will at least give us notice 
there are things we can do to spare other families the grief their 
family has gone through. Wendy Crossland is her mom, her sister Jade is 
here, her grandfather Dick and grandmother Faith. They have come here 
today because they are hoping the Senate will hear about this amendment 
and that we can take it up and pass it.
  Anais' case is not the only one. Emergency room visits due to energy 
drinks have increased tenfold between 2005 and 2009 from 1,128 in 2005 
to 13,114 ER visits in 2009. Energy drinks target kids with flashy ads 
and names like Monster and Rockstar and Five Hour Energy Drink, but 
there are serious concerns about the high level of caffeine in these 
beverages and the herbal ingredients that act as stimulants and contain 
additional caffeine.
  But here is an interesting thing. If you walk in--as I have--to an 
ordinary gas station--whether it is in New Hampshire or in Illinois--
and you see the cooler with the drinks in it, and then you see others 
on counters, you might assume, well, they are all subject to the same 
level of regulation. But that is not true. If we are talking about 
ordinary beverages--sodas--they are characterized as food, and they are 
subject to certain limits by the FDA. However, if you look at the fine 
print--and you better look closely, because it is very tiny--you may 
find this is being characterized and described as a dietary supplement.
  By putting those two words on the label, the product escapes 
regulation. So we limit the caffeine in an ordinary soda pop, for 
example--a cola--but when it comes to the dietary supplement side of 
the story, there are no limitations. That is why this poor young girl 
was a victim because of the

[[Page 7613]]

huge amount of caffeine that was consumed in the name of a dietary 
supplement.
  The FDA has the authority to regulate caffeine levels in beverages 
and to require beverage manufacturers to prove the additives they put 
inside that can or bottle are safe. But most energy drinks avoid FDA 
oversight by calling their products dietary supplements.
  I defy anyone to walk into a store and look at all the things they 
can buy and pick out the ones that are regulated by the FDA and those 
that are not. They are going to have to study long and hard and look 
closely at the labels to figure it out.
  Is that fair to consumers? Is it fair to families and parents that we 
don't have even basic oversight and regulation of products that can 
literally harm or take the life of a beautiful young girl? The 
amendment I am offering would ensure the FDA knows about all of the 
energy drinks being sold in the United States and can provide 
information about ingredients that could help the agency address 
potential safety concerns.
  Most dietary supplements available today for sale are safe, and they 
are used by millions of Americans as part of a healthy lifestyle. Some 
ingredients may be safe for the general population but may be risky for 
kids, pregnant women, or people with a heart condition or who are 
taking certain prescription drugs.
  Furthermore, in spite of the many responsible dietary supplement 
companies, sadly, there is a murky market space out there where some 
bad actors are selling potentially dangerous products--some of them 
imported into the United States--which literally do not even disclose 
their ingredients in an accurate way. This amendment will take an 
important step in protecting public health by requiring dietary 
supplement manufacturers to submit basic information to the FDA that 
would help the agency identify safety issues and respond more quickly.
  No one wants to hear of the death of another 16-year-old who loved to 
play football or a young girl such as this wonderful young 14-year-old 
girl who loved watching movies with her mom. We can help prevent these 
tragedies by requiring that better information is reported to the FDA 
when these dietary supplements go on the market.
  Madam President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Georgia.
  Mr. ISAKSON. Madam President, as a member of the Health, Education, 
Labor and Pension Committee, I rise for a brief speech. But I want to 
begin that speech by thanking Chairman Harkin, Ranking Member Enzi, and 
the entire staff of the HELP Committee, and my staff--Francie Pastor--
who have helped so much on this legislation which is so important to 
the American people. There is a chance where we have a bipartisan 
effort in the Senate to do something constructive and meaningful, and I 
commend both Senators on their work.
  There are component parts of this legislation I want to illuminate 
for a few seconds because I had a lot to do with them, and they are 
very important. One deals with third-party logistics providers. As the 
Chair is aware, and as the Senate is aware, we have a placeholder in 
the managers' amendment for a third-party provider and logistical 
providers with track and trace.
  Track and trace is the mechanism of tracking the drug from its origin 
and tracing it all through the system to the individual using the drug 
to ensure we have safety and security. But there are third-party 
logistics carriers who deliver an awful lot of content in the United 
States, such as FedEx and UPS, that operate in all 50 States, and we 
ought to have a 50-State seamless standard in terms of third-party 
delivery rather than 50 individual States all having regulatory 
authority.
  So my first message today is to the conferees, that when the 
conference committee is ultimately reporting, it should take this 
placeholder on these third-party logistics providers and make sure in 
the track-and-trace legislation we provide a seamless national policy 
for the delivery of pharmaceuticals. That is very important to our 
country and very important to the pharmaceutical industry, but mostly 
it is very important to those who consume those pharmaceuticals.
  Secondly, there is another provision called the Medical Gas Safety 
Act, which was included in this legislation, and I am very grateful the 
managers of the legislation agreed to put it in the bill because it is 
equally important for the people of this country. I want to make sure 
one thing is underlined. Medical gases are critically important to 
sustain life, gases such as oxygen. A gas such as nitrous oxide, which 
is sometimes called laughing gas by some, is sometimes used to sedate 
individuals. I want to make sure as we go through this process we have 
a system under which medical gases--that have stood the test of time--
remain available through medical use and that brand new medical 
products that have never been through the testing of time go through an 
appropriate FDA review, which is what the original act--the Medical Gas 
Safety Act--included and which we want to be included in this 
legislation.
  Madam President, I also wish to further speak for a moment about an 
important section of this legislation--the Medical Gas Safety Act. I 
want to thank the Chairman and the Ranking Member, and Senator 
Blumenthal, for working with me to include this in the bill. The 
Medical Gas Safety Act has a number of important benefits for patients, 
health care providers, FDA and medical gas providers, it will ensure a 
continued supply of quality medical gases that patients can depend on, 
and it will provide regulatory certainty for FDA and providers.
  The intent of the Medical Gas Safety Act is to create a process for 
those medical gases and medical gas mixtures that have a history of 
safe and effective use to become approved drugs. This will ensure that 
medical gases that have a long history of use, like oxygen, become 
approved drugs. The legislation provides FDA with the authority to 
ensure that any mixture of medical gases be ``medically appropriate.'' 
Congress urges FDA to work with industry to develop a guidance over the 
next year to better define the term ``medically appropriate'' so that 
those mixtures that have been on the market for a long period of time 
can continue to be available to the patients that need them.
  I think we have a finished product that everyone can support--it is a 
matter of fine tuning at this point, which can be accomplished through 
FDA guidance. We need to have a system under which medical gases that 
have stood the test of time remain available for medical use; and brand 
new medical gas products that have never been tested go through an 
appropriate FDA review--which is what the original bill envisioned.
  I once again thank the chairman and ranking member for all of the 
hard work they have done to move this entire bill forward in such a 
bipartisan manner. The way the Committee has approached this important 
legislation has resulted in a good bill that deserves everyone's 
support. I also want to express my appreciation for the inclusion of 
the Medical Gas Safety Act in this bill. Senator Blumenthal deserves 
credit for the work he has done in this area.
  Madam President, I applaud my colleagues, Senators Bennet and Burr, 
for their efforts to enhance the safety of America's pharmaceutical 
supply chain. While we are fortunate in America not to have a 
widespread problem with counterfeit drugs, the potential that they 
could pose a serious health risk to consumers is significant.
  Supply chain compliance and safety is currently a patchwork of 
inconsistent State requirements and licensing which potentially 
jeopardizes the safety and welfare of millions of Americans. Unless a 
uniform Federal policy covering all pharmaceutical supply chain 
stakeholders is enacted, the United States will fail to provide the 
best tools needed for regulators and law enforcement to do a more 
effective job. Additionally, the U.S. would be missing an opportunity 
to leverage technology that will provide superior, cost effective 
consumer protection.

[[Page 7614]]

  Third Party Logistics Providers, or 3PLs, are playing a growing and 
important role in making sure medicines reach their destination safely 
and securely. The term ``third party logistics provider'' refers to an 
entity that provides or coordinates warehousing, distribution, or other 
services on behalf of a manufacturer, wholesaler, or dispenser, but 
does not buy, sell, or direct the sales of those products.
  Currently, Federal law does not recognize the role of a 3PL. Only one 
State even offers a license for 3PLs. Other States require a 3PL to 
apply for a wholesale distributor license, even though 3PLs do not buy 
or sell drugs. The varying patchwork of inconsistent State requirements 
makes law enforcement more difficult and there is added cost without a 
safety benefit.
  Failure to include and define 3PLs in Federal language is simply 
wrong. Recognizing the role of 3PLs is a strong first step towards the 
development of uniform Federal standards for a 3PL license. Ensuring 
that all entities are properly licensed within the pharmaceutical 
supply chain not only makes sense, but it is one of the most effective 
deterrents to dangerous counterfeit drugs entering the supply chain.
  I thank my colleagues Senators Bennet and Burr, and their staff, for 
their leadership to enhance supply chain safety by working with all 
industry stakeholders. I also express my gratitude to Ranking Member 
Enzi, Chairman Harkin and Senate leadership for their support.
  Through a constructive conference process, I am confident we can 
enhance supply chain safety in a reasonable and cost effective manner. 
By properly defining 3PLs, and ensuring that properly licensed entities 
handle our medicines, we can help to ensure they safely and securely 
reach patients in need. My constituents in Georgia expect nothing less.
  Once again, Madam President, I commend the chairman and ranking 
member on their service and their fine work on the FDA bill.
  I yield the floor, and I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Casey). Without objection, it is so 
ordered.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the statement 
I am about to give appear as in morning business and not connected to 
the motion at hand.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                       Remembering Katie Beckett

  Mr. HARKIN. Mr. President, last week our Nation lost one of its most 
determined and courageous advocates for the rights of people with 
disabilities, Katie Beckett.
  I am proud to say that Katie was a native Iowan. She was born in 
March of 1978 and 5 months later contracted viral encephalitis. She 
subsequently had a seizure and went into a coma for 10 days. This 
illness caused nerve damage to her brain and left her paralyzed and 
unable to breathe on her own. She received a tracheotomy, was placed on 
a ventilator, and was fed using a tube.
  Initially, after coming out of the coma, she could not move at all. 
Slowly, much of the paralysis receded, but she was not able to breathe 
on her own until she was 2 years of age. During that time, she lived in 
a pediatric intensive care unit. Naturally her family wanted her out of 
the hospital and home where they could care, support, and love her.
  By her third birthday, Katie's private insurance reached its $1 
million cap, and she began to receive Medicaid for her health care. 
Doctors determined that she could leave the hospital with proper 
supports at home. However--and here is the catch--Medicaid refused to 
pay for such care even though it would cost one-sixth as much as 
hospital care. Medicaid would pay for institutional care but not for 
care in her own home. She could only receive care in a hospital or 
nursing home in order to be covered.
  Katie's predicament began to receive attention thanks to the 
intervention of many people, including then-Congressman Tom Tauke, who 
was Katie's Congressman at the time. He began to speak out about this 
and brought it to the attention of then-President Ronald Reagan and 
many in Congress. Because of that, President Reagan spoke out about 
this and a new home- and community-based waiver was created to allow 
children in Katie's situation to receive their care at home rather than 
in hospitals. This new program is called the Katie Beckett Waiver. At 
the time, it was thought the program would benefit only a few hundred 
children. However, since 1982 over half a million children have 
benefited from the Katie Beckett Waiver, including 11,000 in Iowa. 
Katie and her family were true pioneers in changing the institutional 
bias in Medicaid and permitting children with significant disabilities 
to receive their support and services in their own homes rather than in 
a hospital, nursing home, or other institutional setting.
  Under the new program, Katie went home almost 3 full years after she 
was admitted. At that time she was able to be off her ventilator for 6 
hours a day. What happened after her discharge? Well, she attended 
school. While her fellow students considered her different because of 
her medical condition, she never needed special education services. At 
an early age she became a passionate advocate for home- and community-
based care.
  While in middle and high school, she testified before Congress, met 
with Governors, and, as I said, even met with the President of the 
United States. She served as an intern at Exceptional Parent magazine 
while living in Boston. That summer between her junior and senior year 
of high school, Katie learned to manage her own medical care, directing 
nurses who provided her treatment and managed her ventilator.
  Katie considered advocacy to be her vocation and chosen path--in 
particular, to raise the consciousness of other young people about 
disability issues. Even though she found this work rewarding, she 
sometimes felt uncomfortable in those pre-ADA days--the pre-Americans 
with Disabilities Act days--and being singled out because of her 
disability. All she really wanted, as she put it, was ``to fit in and 
just be normal.''
  Katie's first job was at a music store in a local mall. She got the 
job, as any young person would, by virtue of her knowledge and interest 
in music. Katie said, ``Advocacy is in my blood and in my soul,'' so 
she looked for work that would allow her to help other people. She 
volunteered at the local YWCA in the secondhand shop that supported the 
only homeless shelter for women and children in eastern Iowa and was 
then hired as the receptionist at the Y. The job title ``receptionist'' 
did not begin to describe her true job responsibilities. Katie was the 
first responder to sexual assault and domestic violence victims. She 
helped with the neutral exchange program, where divorced or separated 
parents could drop off their children without having to encounter each 
other. She learned to quickly assess the needs of others and to help 
connect them to appropriate services and supports. She also helped with 
the supervised visitation program and was soon promoted to be the 
assistant to the supervisor of that program.
  Later, Katie worked with her mother, Julie Beckett, to help establish 
the Kids As Self-Advocates Network, a group designed to help children 
and youth with significant medical needs to speak up for their own care 
and support. Working through Family Voices, another organization 
spearheaded by Julie Beckett, Katie helped to teach hundreds of young 
people how to advocate for their own health care. In addition, she 
served as a Senate appointee on the Ticket to Work and the Work 
Incentives Advisory Panel, which provided advice to the Social Security 
Administration, the President, and Congress on work incentives, 
employment, and other issues facing people with disabilities.
  Katie Beckett graduated from Mount Mercy College in Cedar Rapids, IA, 
in 2001. She later took writing courses at

[[Page 7615]]

nearby Kirkwood Community College. She was close to completing a novel. 
A series of illnesses obliged her to put off returning to college to 
take the classes necessary to become a teacher.
  Katie treasured the freedom to engage in the kinds of activities that 
so many of us take for granted, including eating at Red Lobster, going 
to the shopping mall, and recently moving into her own apartment.
  Katie will be greatly missed by so many people all across America. 
She will be remembered for her determined advocacy and that of her 
family, which has changed countless families forever. She inspired a 
host of young people with disabilities by showing that an ordinary 
person can accomplish extraordinary goals through great spirit, 
determination, and persistence.
  Dr. Martin Luther King, Jr., once said, ``Life's most urgent and 
persistent question is: What are you doing for others?'' During her 
memorable but very short lifetime, Katie answered that question in 
powerful ways as an agent for change and as a determined advocate. Her 
living legacy is the program that bears her name, the Katie Beckett 
Waiver, which will continue to improve the lives of children and young 
people with disabilities far into the future.
  I see my colleague from Iowa, who has also been a friend of the 
Becketts and has been very supportive of Katie and all of her work and 
of Julie Beckett. This has truly been bipartisan, bicameral support for 
this wonderful family.
  Katie's funeral is this Friday. We are all going to miss her. As I 
said, when you met Katie Beckett, you were inspired to do more than you 
thought you could do. She was a wonderful person, and it is tragic that 
her life came to such a short close, just last week. She is going to be 
remembered. As I said, she changed so many lives in this country for 
the better.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I thank my colleague from Iowa for his 
very nice remarks about Katie Beckett. I come to the floor for the same 
reason--to celebrate the life of Katie Beckett.
  Never has the word ``inspiration'' been used more appropriately in 
describing somebody, and today I am grateful to be able to recognize 
the inspirational life of Katie Beckett.
  Mary Katherine Beckett--nicknamed ``Katie''--was born in Cedar 
Rapids, IA, on March 9, 1978. Five months after she was born, Katie 
contracted viral encephalitis, followed by grand mal seizures. The 
encephalitis caused damage to her central nervous system, her 
respiratory system, and she was attached to a ventilator. She would be 
almost 2 years old before she could breathe on her own.
  As Senator Harkin said, under Medicaid law at the time, Katie could 
only receive care through Medicaid if she remained in the hospital even 
though she was able to receive the care at home.
  Iowa Congressman Tom Tauke heard of Katie's situation and realized 
that it made no sense to keep a child in the hospital who could be at 
home with her family living a better quality of life as well as saving 
the taxpayers money. Congressman Tauke worked to convince the 
administration that the system should be changed to allow States to 
provide Medicaid to children receiving care in their homes.
  Ultimately, President Reagan took up Katie's cause, intervening so 
that Katie could receive treatment at home and still be covered under 
Medicaid. This change in policy became known as the Katie Beckett 
Waiver, and to date more than half a million disabled children have 
been able to receive care in their homes with their families rather 
than being forced into hospitals and institutions.
  But Katie's story doesn't end there. As Katie grew up, as she battled 
to establish her own place in society as a young American with 
disabilities, she realized she had an opportunity to serve others who 
faced similar challenges.
  In her own words--and this is from a piece Katie wrote in the year 
2002 entitled: ``Whatever Happened to Katie Beckett?''

       I started my advocacy career at age ten. It was not my 
     choice, but rather a path chosen for me. It was not until I 
     was twelve or thirteen that I realized the important work I 
     was able to do because I was who I was and how much this work 
     helped other kids.

  Katie graduated with a degree in English from Mount Mercy College in 
Cedar rapids. She lived in the community. She wanted to be a teacher 
and write novels for young people. She was fiercely independent, 
sometimes to the consternation of her mother Julie. She was quick-
witted and funny and loved a good cup of coffee. She lived her life as 
a tireless advocate for the disabled. She testified before Congress 
several times and was a contributing voice on numerous groups dedicated 
to disability policy.
  When we took up policy proposals such as the Family Opportunity Act 
and Money Follows the Person, we wanted Katie's perspective and we 
depended upon her advocacy in the community to get those laws passed. 
Katie was the living embodiment of a person with disabilities 
participating and contributing in society.
  On Friday, May 18, Katie went home to be with the Lord. She leaves 
behind thousands of lives touched by her presence. A light may go out, 
but a light lives on in those of us fortunate enough to have known 
Katie Beckett.
  We remain inspired to work every day to create opportunities for the 
disabled to participate and contribute and live the life of service and 
dedication that Katie did. So, obviously, even though not alive today, 
Katie will remain that inspiration for many people for a long time to 
come.
  Thank you very much. I yield the floor.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. BURR. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BURR. Mr. President, I think I can say I was blessed to be here 
right before the tribute to Katie that our colleagues from Iowa gave. 
What an inspiring life of a young lady. Although cut short, her impact 
is felt by many.


                    VISN Reorganization Act of 2012

  I rise today to speak on a bill that I introduced last week, S. 3084, 
the Veterans Integrated Service Network Reorganization Act of 2012. 
This legislation would significantly reorganize the structure of the 
Department of Veterans Affairs, or VA, Veterans Integrated Service 
Networks, or VISNs, to make these networks more efficient and to allow 
resources to be moved to direct patient care.
  The veterans' health care system in our country was originally 
established to treat combat-related injuries and to assist in the 
recovery of veterans with service-connected disabilities. Since its 
start, the scope of the Veterans Health Administration, or VHA, has 
expanded and now treats all veterans enrolled in the health care system 
through hundreds of medical facilities located around the country. 
Prior to 1995, VHA was organized into four regional offices. These 
regional offices simply channeled information between the medical 
centers and the VA's Washington, DC, headquarters office. Since the 
regional offices' duties were to pass on information to the facilities, 
they had little ability to exercise independence in implementing 
policies based on the needs of the veterans in their region.
  In March 1995, based upon the recommendations of former Under 
Secretary of Health, Dr. Kenneth Kizer, VHA underwent a significant 
reorganization of its Washington, DC, and regional offices. Basically, 
the VHA health care system was divided up into 22 geographic areas--now 
21--with each region having its own headquarters with a limited 
management structure to support the medical facilities in that region. 
The goal of the reorganization was to improve access to, quality and 
the efficiency of care to veterans through a patients-first focus. This 
structure would improve care by empowering VISNs with the independence 
to decide how to best provide for the veterans in their region. This 
change also would have made the most of

[[Page 7616]]

spending for patient care by suggesting that VISN management be located 
on a VA medical center campus.
  The aim was to provide a better organized system that would have 
oversight management responsibilities of the medical facilities through 
a new structure called the Veterans Integrated Service Network. This 
new system intended to offer a clearer picture of what the duties were 
of both the VHA central office in Washington, DC, and the VISN 
headquarters offices. Going forward, VHA central office's 
responsibilities included changes to VA policies and medical procedures 
and monitoring the facilities' performance in providing care. Each VISN 
headquarters' primary function was to be the basic budgetary management 
and planning unit for its network of medical facilities. Because the 
scope of their tasks was limited, it was expected that a VISN 
headquarters could be operated with 7 to 10 full-time employees, for a 
total of 220 staff for all VISN headquarters nationally. Any additional 
expertise needed was to be called up from the medical centers on an 
informal basis.
  I believe VHA has significantly strayed from the initial concept 
behind the 1995 reorganization. While some growth and an increase in 
VISN management staff over 17 years is expected, the growth and 
duplication of duties we have seen at VISN headquarters offices and 
medical facilities quite simply is troubling. Examples of such 
duplication are coordinators for homeless veterans, OIF-OEF-OND 
veterans, women veterans who are present at both the medical facilities 
and the VISN headquarters.
  This duplication has not only redirected spending away from medical 
centers, it has caused a bloating of the numbers of staff across the 21 
VISN headquarters. VISN headquarters have grown well beyond the 220 
staff proposed by the 1995 reorganization to a total of 1,340 staff for 
the 21 VISNs headquarters today--an increase from 220 to 1,340 
employees today. These staff are performing functions that have little 
to do with budget, management, and oversight, let alone direct health 
care for our veterans. It appears that VHA has allowed VISN 
headquarters staff to increase without the necessary oversight or an 
assessment of the impact on the original purpose for VISN. Also left 
unchecked are the changes in the veterans' population and how veterans 
have moved between States to determine if there is a need to adjust the 
VISN boundaries to best serve the veterans seeking care.
  This bill--my bill--would bring about a much-needed change to the 
VISN structure. It would, No. 1, consolidate the boundaries of 9 VISNs; 
No. 2, move some jobs back to the VHA central office; No. 3, reduce the 
number of employees to 65 per VISN headquarters; and No. 4, require VHA 
to review the VISN staff and structure every 3 years. What a novel 
suggestion, that we would actually review the progress we make.
  My colleagues may find it a bit odd that we could reduce the staff of 
VISN headquarters while also increasing the size of the veterans' 
population and facilities from some VISN headquarters, but because we 
are reducing the tasks that the VISN headquarters perform while 
transferring several jobs to new Regional Support Centers--or RSCs--
VISN headquarters staff would be more productive in carrying out the 
simple budget, management, and planning duties that they were 
originally tasked with in the 1995 original reorganization.
  While the consolidation of VISNs would result in the closure of nine 
VISN headquarters, no staff would lose their job as a result of this 
legislation. Staff whose jobs would be eliminated because of the 
consolidation would have a chance to be transferred to other positions 
within the VA. Staff who perform the oversight functions that would be 
moved to the newly created RSCs would be given the opportunity to 
continue that work at the RSC. This legislation also returns the idea 
that VISN headquarters should be located on VA campuses by directing 
that VISN headquarters, if possible, be located on a VA medical center 
campus. Relocating to vacant space on the VA medical center campus 
hopefully would reduce the cost to the VA in the long run but, more 
importantly, it would bring the headquarters staff closer to the 
facilities they oversee.
  I realize this would be an enormous change in the way VHA does 
business, and yet I believe this can be accomplished without any 
changes to how VA provides treatment and care to our Nation's veterans. 
In fact, I believe it will improve how VA cares for veterans by 
increasing the resources directly available for patient care.
  It is important that VA not lose sight of its primary mission, as 
stated by Abraham Lincoln: `` . . . to care for him who shall have 
borne the battle'' and, to that end, VA should redirect spending away 
from bureaucrats and back to the direct care of veterans.
  I believe the VISN Reorganization Act of 2012 would provide a more 
efficient and effective health care system to our veterans, and I hope 
my colleagues will see it in that light and support this effort at 
reorganization that is way past due.
  I thank the Chair, and I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BENNET. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BENNET. Mr. President, I came to the floor tonight to talk about 
the FDA reauthorization bill that is before the Senate. I was sorry we 
could not get it to a vote today. I am hopeful that tomorrow we will be 
able to because from my perspective, as someone who has only been here 
for a few years, the process, the committee process that led to the 
creation of this bill, is a model for how this town ought to be 
working.
  The conversation we have had for so many months and even years has 
felt decoupled from the conversations I have been having in my townhall 
meetings and across the country about the challenges we need to 
address. This gap has been miles apart. But in this piece of 
legislation, I think we have actually found something responsive to 
patients, responsive to consumers, and responsive to the bioscience 
industry that is so important to my State and so many States across the 
country.
  Chairman Harkin and Ranking Member Enzi deserve enormous credit for 
running an excellent process that has enabled this Senator and others 
on the committee to be responsive to what our constituents say they 
want, which is a modern FDA with improved patient safety and 
innovation. We have also had committee members who were interested in 
rolling up their sleeves and doing hard work together irrespective of 
which party they were in. We have been able to work through a markup 
with virtually no partisanship.
  This has been a uniquely fine process, which is why we have had such 
great momentum toward a full extension in what I call the Land of 
Flickering Lights. The standard of success around here has become: Keep 
the government running for 1 more month, keep this extension in place 
for 2 more months. We actually have on the Senate floor a rational and 
responsible bill that is a 5-year extension of the Food and Drug 
Administration authority.
  Tonight I only want to talk about two aspects of the bill. There are 
a number we worked on, but tonight I spare you with the rest. In 2010 I 
introduced a bill called the Drug Safety and Accountability Act. 
Chairman Harkin and Ranking Member Enzi took notice, and we were able 
to form a working group to address serious problems in the FDA's 
statutory authority.
  FDA laws that are supposed to protect our domestic drug supply were 
created in 1938 and desperately needed to be updated for the 21st 
century. Back then the lines of commerce were based on 48 States. Now 
we live in an era where over 80 percent of the active ingredients in 
our pharmaceuticals and our drug supply are being manufactured abroad. 
Couple that with the FDA laws that force them to inspect American 
facilities every 2 years but

[[Page 7617]]

they have no mandates on how often they inspect facilities overseas. 
The GAO has found that FDA can only keep pace with inspecting the most 
high-risk overseas facilities, the places where our moms and dads are 
getting their pharmaceuticals for our children, once every 9 years.
  So patients taking their pills have no idea whether the ingredients 
in their drugs were made in China or India or if they were ever 
inspected. Our American manufacturers are operating on an uneven 
playing field. They have to expect a surprise FDA inspection every 2 
years on average here and make sure they are following all of their 
good manufacturing practices, when their foreign counterparts do not 
have to worry about FDA visiting them for a decade, if ever, because 
they can delay or refuse FDA inspection because they are overseas.
  Patient groups and the industry came together to try to change that, 
and this bill does change all of that. It would implement a risk-based 
inspection schedule for both foreign and domestic manufacturing sites. 
It would make sure that drug manufacturers know who is in their supply 
chain every step of the way. And for the first time, if you are abroad 
and you refuse or delay inspection without a fair reason, the FDA can 
refuse to let your product into this country.
  These are all the steps American families already think we have in 
place to protect them. I cannot tell you how many townhalls I have had 
where people have been shocked to learn that the products they have in 
their medicine cabinets have never been inspected by anyone. This will 
change that. It is a thoughtful, commonsense approach I think all of 
the constituents to this debate support.
  So we need to make sure that happens. I also want to talk about 
something called track and trace. American families also want to know 
what happens to their pills, pills that can mean the difference between 
life and death, once they leave the manufacturer, enter the country and 
change hands several times. Right now we can know a lot more from a bar 
code on a gallon of milk than from a bar code on medication. That seems 
absurd to people at home.
  I take a moment again to thank the Chair and ranking member for their 
commitment to working together to meet the challenge of developing a 
uniform traceability system. This is something that has been worked on 
for over a decade in this town, and we are finally this close to making 
it the law of the land.
  I thank, in particular, my colleague, Richard Burr, a Republican from 
North Carolina, for being such a great partner in this work. FDA, the 
HELP Committee staff, Pew, and other stakeholders across the supply 
chain have been meeting for weeks with my staff and with Senator Burr's 
staff, all in good faith. Our goal is to finalize a plan after we wrap 
up this Senate bill.
  Let me talk about another very exciting part of this bill. If we pass 
this bill, for the first time the FDA is going to be able to apply 
21st-century science to the approval of drugs, particularly drugs that 
are breakthrough medications, drugs that we know will work in one 
subset of populations even if they might not work so well in another.
  This is very important to cancer patients all across the United 
States who are looking to access these breakthrough therapies. So from 
the standpoint of driving an industry in this country that in my own 
State has a median salary of roughly $74,000, and from the point of 
view of patient health and protecting our supply chain, this FDA 
reauthorization is a must pass.
  I thank the members of the committee and especially the chairman and 
the ranking member for establishing a model for how this Senate should 
operate.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Bennet.) The Senator from New Hampshire.
  Mrs. SHAHEEN. I applaud my colleague from Colorado, Senator Bennet, 
for the work he has done on the FDA legislation--as he pointed out, the 
good work that has been done by our colleagues on both sides of the 
aisle to get to this bill, to move it forward and to have a responsible 
and reasonable amendment process. So I hope we can move it forward this 
week and actually see its passage on the floor because it is so 
important to so many people who are dependent on what the Food and Drug 
Administration does in this country.
  (The remarks of Mrs. Shaheen pertaining to the introduction of S. 
3218 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  Mrs. SHAHEEN. I yield the floor.


                           AMENDMENT NO. 2149

  Mr. KOHL. Mr. President, the inappropriate overuse of 
antipsychotics--which are associated with a higher risk of death in 
frail elders--is a well-recognized problem that warrants new policy to 
ensure that these drugs are targeted to people suffering from serious 
mental illness, and not to curb behavioral symptoms of Alzheimer's or 
other dementias.
  Addressing these concerns requires additional transparency and 
accountability on how antipsychotics are being used today in older 
adults with dementia. I am pleased to be joined by Senators Grassley 
and Blumenthal in filing an amendment to S. 3187, the Food and Drug 
Administration Safety and Innovation Act S. 3187, which would require 
the HHS Secretary to develop standardized protocols for obtaining 
informed consent, or authorization, before administering an 
antipsychotic for a use not approved by the Food and Drug 
Administration. Authorizations would be provided by patients or, as 
appropriate, their designated health care agents or legal 
representatives. These informed consent protocols would provide 
valuable information to patients and their families, including possible 
risks and known side effects associated with the antipsychotic, as well 
as alternative treatment options that may be available.
  This bipartisan amendment also calls for a new prescriber education 
program to promote high-quality, evidence-based treatments, including 
non-pharmacological interventions. The prescriber education programs 
would be funded through settlements, penalties and damages recovered in 
cases related to off-label marketing of prescription drugs.
  While the Food and Drug Administration--FDA--has approved 
antipsychotic drugs to treat an array of psychiatric conditions, 
numerous studies conducted during the last decade have concluded that 
these medications can be harmful when used by frail elders with 
dementia who do not have a diagnosis of serious mental illness. In 
fact, the FDA issued two ``black box'' warnings citing increased risk 
of death when these drugs are used to treat elderly patients with 
dementia.
  Last year, the Health and Human Services Office of the Inspector 
General--HHS OIG--issued a report showing that over a 6-month period, 
305,000, or 14 percent, of the Nation's 2.1 million elderly nursing 
home residents had at least one Medicare or Medicaid claim for atypical 
antipsychotics.
  The HHS OIG also found that 83 percent of Medicare claims for 
atypical antipsychotic drugs for elderly nursing home residents were 
associated with off-label conditions and that 88 percent were 
associated with a condition specified in the FDA box warning. Further, 
it showed that more than half of the 1.4 million claims for atypical 
antipsychotic drugs, totaling $116.5 million, failed to comply with 
Medicare reimbursement criteria.
  I hope this policy will send a strong signal that Congress is 
committed to improving the quality of treatment provided to millions of 
our most vulnerable Americans--older adults with dementia and the 
families who support them.
  Ms. COLLINS. Mr. President, I rise in support of the Food and Drug 
Administration Safety and Innovation Act, which will help speed safe 
and effective drugs and medical devices to the patients who need them. 
This bipartisan, consensus bill was developed through a long and 
collaborative process involving the FDA, stakeholders, and Senators 
from both sides of the aisle. I

[[Page 7618]]

commend the chair and ranking member of the HELP Committee for their 
tremendous leadership and hard work on this very important bill.
  The legislation we are considering today reauthorizes existing user 
fee programs for prescription drugs and medical devices and creates new 
user fee programs for generic drugs and biosimilar biological products. 
In addition, the bill reauthorizes programs that have helped make 
medicines safer for children, upgrades the FDA's tools to police the 
global supply chain, increases incentives for the development of new 
antibiotics, and expedites the development and review of certain drugs 
for the treatment of serious or life-threatening diseases and 
conditions.
  I particularly want to commend my colleagues for including provisions 
based on legislation I sponsored with Senator Klobuchar to address the 
shortages of drugs that are causing significant disruptions in care and 
putting patients at risk.
  I continue to hear from doctors, emergency medical personnel, and 
other medical professionals in Maine who are extremely concerned about 
this issue. Many of the drugs in short supply are vital, used in 
hospitals and cancer centers for anesthesia, chemotherapy, and 
treatment of infections. There are also continuing shortages of drugs 
used in emergency rooms and intensive-care units.
  These shortages are causing serious problems around the country, 
including forcing some medical centers to ration drugs or postpone 
elective surgeries. Oncologists have told me of situations where they 
were forced to change a patient's chemotherapy regime midcourse because 
they suddenly encountered a shortage of a particular drug. Moreover, 
for some drugs, there are no effective substitutes.
  This crisis is widespread, with more than 80 percent of hospitals 
reporting that they have had to delay treatment due to shortages. That 
is why I joined my colleague from Minnesota in sponsoring the 
Preserving Access to Life Saving Medications Act to give the FDA tools 
to better manage, and hopefully prevent, shortages of life-saving 
medications, including requiring manufacturers to provide an ``early 
warning'' when a drug will not be available.
  Providing early warning when a drug will not be available will help 
both doctors and patients. It builds on the successful model of the 
FDA's Drug Shortage Program which encourages manufacturers to report 
potential or existing shortages so that problems can be addressed or 
other manufacturers can ramp up production. Through this voluntary 
approach, the FDA was able to avert almost 200 shortages last year.
  The legislation we are considering today will give the FDA the 
information and tools it needs to help address and prevent drug 
shortages. It will also promote innovation, improve safety, and 
increase access to the drugs and devices that are critical to our 
health. Again, I commend Senators Harkin and Enzi for their leadership 
and encourage all of my colleagues to join me in supporting this 
important legislation.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent to address 
the Senate as in morning business for no more than 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                             Manufacturing

  Mr. BROWN of Ohio. Mr. President, last week the Vice President was in 
my State in the Mahoning Valley, in the Youngstown area, northeast 
Ohio. He saw what I have been seeing in my State for the last several 
months, and he heard what I have been hearing from so many Ohioans in 
the last several months. He went to the Lordstown auto assembly plant, 
which assembles the Chevy Cruze. He saw what we have been seeing in my 
State, where manufacturing finally is coming back.
  From early 2000 to January 2010, about a 10-year period, the 
manufacturing sector in this country lost a huge number of jobs--more 
than 5 million jobs. In the 35 years before that, manufacturing jobs in 
this country were pretty constant, up and down. In 1997 or 1998, we had 
about the same number of manufacturing jobs in America that we had in 
1965--a smaller percentage of the workforce, or smaller percentage of 
GDP, perhaps, but roughly the same number of jobs. From January of 2000 
to January of 2010, some estimates were as high as one-third of our 
manufacturing jobs. We know there were at least 5 million jobs and some 
60,000 plant closings in that 10-year period, from 2000 to 2010. It is 
almost impossible not to ascribe at least part of that to trade policy 
and tax policy--a tax policy that far too often has given manufacturing 
companies an incentive to shut down and move overseas. If you shut down 
a plant in Warren, OH, or Mansfield, OH, or Springfield, OH, and move 
to Wuhan or Zihan or Shanghai, you can deduct the moving expenses and 
save on your Federal taxes. It is hard to do anything but to ascribe at 
least a part of that to some of the trade agreements we have signed, 
such as NAFTA, which the President pushed through Congress. And it was 
both parties. I was just as critical of President Clinton for NAFTA as 
I was President Bush on CAFTA.
  We know what the Central American Free Trade Agreement and the North 
American Free Trade Agreement have meant, and we know what PNTR with 
China did, where we went from not much more than a $10 billion trade 
deficit in 2000 to trade deficits that were, I believe, $10 billion to 
$15 billion a month with China later in the decade. And we know from 
the policy of tax cuts that went overwhelmingly to the wealthiest 
Americans that passed in 2001 and 2003, going into two wars and not 
paying for those, a Medicare drug law that in the name of privatization 
basically gave away huge incentives to the drug and insurance 
companies--all that played into an economic policy that didn't work for 
the American people. We lost more than 5 million manufacturing jobs, 
with 60,000 plant closings between 2000 and 2010.
  What happened in 2009 and 2010 to finally turn that around? The House 
and Senate and the President of the United States rescued the auto 
industry. We know the kind of job loss we were seeing and now look at 
what we have. It is not great yet. We are not seeing a huge growth in 
manufacturing, but almost every single month since early 2010, in Ohio 
and across the country, we are seeing job growth in manufacturing. So 
far, since early 2010, after that 5 million jobs lost in 
manufacturing--from early 2000 to early 2010--we have seen a 400,000-
plus net job increase in these 2-plus years. Again, that is too 
anemic--it is not enough--but it is the direction we need to go.
  Let me give a couple of examples as to why this auto rescue meant so 
much to my State and the rest of America. The Jeep Wrangler and the 
Jeep Liberty are assembled in Toledo, OH. Prior to the auto rescue, 
these workers assembled the Wrangler and the Liberty with only 50 
percent American-made components. After the auto rescue--today--about 
75 percent of the components that go into the Wrangler and the Jeep 
Liberty--assembled in Toledo, OH--come from components made in the 
United States.
  Look at what has happened in Lordstown, OH. The engine is made in 
Defiance, OH, the bumper comes from Northwood, OH, the transmission 
comes from Toledo, the speaker system comes from Springboro, OH, the 
steel comes from Cleveland and Middletown, OH, the aluminum comes from 
Cleveland, OH, the stamping is done in Parma, OH, and this is put 
together--all these parts come together in Lordstown, OH, near 
Youngstown, assembled by 5,000 workers on three shifts. Almost none of 
that would have happened without the auto rescue.
  Do you know what else the auto rescue was all about? It didn't just 
help Chrysler and GM, which had, in fact, gone into bankruptcy. The 
auto rescue

[[Page 7619]]

was also supported by Ford and Honda in my State. We have huge Ford and 
Honda investments in my State. Why would they have supported the auto 
rescue when the support from the government--the loans from the 
government, if you will--went to Chrysler and GM, not to Ford and 
Honda? Because they knew the importance of the supply chain. Because 
the supply chain for Chrysler and GM had collapsed, as it would have if 
those two companies had gone into bankruptcy and not been restructured 
and financed so they could come out of bankruptcy. If that had 
happened, the supply chain for Ford and Honda also would have partially 
collapsed. We see evidence of that in what happened with the tsunami in 
Japan, where Honda and others had to shut down for a period of time 
because they couldn't get the supply components they needed--some of 
them--from Japan.
  So the point is that we stepped in with the auto rescue not just for 
Chrysler and GM, not just for Honda and Ford in my State--where 800,000 
jobs, it is officially estimated, are affiliated with the auto 
industry--but also because it was important for these jobs at our tier 
1 suppliers. Some of these tier 1 suppliers were about to collapse. So 
the rescue of the auto industry also directly helped to rescue some of 
those tier 1 suppliers. I have seen those tier 1 suppliers--Magnum in a 
suburb of Toledo. I have been there; Johnson Controls, which makes 
seats in Warren, OH--they make seats for the Chevy Cruze. I left that 
one out. All those tier 1 suppliers were in trouble.
  We also knew the tier 2, 3, and 4 suppliers for the auto industry--
making components you might not know what they were for or recognize 
them if you held them in your hands but that go into the Chrysler and 
the Ford and the GM and the Honda--were not able to get financing many 
times, and so we helped them through that with the auto rescue.
  So the point is that what Vice President Biden saw in Youngstown and 
in Lordstown, OH, and what I hear in Dayton and Columbus and Mansfield 
and in Toledo and Rossford and Parma and all over my State is these 
workers saying they understand this auto rescue, where the government 
invested because nobody else would have--these companies are paying 
these investments, and that rescue saved all these jobs. It is why 
manufacturing is beginning to turn around.
  There are other factors, of course, and one of them is the President 
of the United States enforcing trade law. We see a new steel mill in 
Youngstown in part because the President stood up to the Chinese and 
enforced trade law when the Chinese were gaming the system on something 
called oil country tubular steel, used in drilling for oil and for 
natural gas. All of that has mattered to this manufacturing job growth.
  We are not there yet. We need the administration to step up on a real 
policy for manufacturing, a real strategy. I think they are starting to 
do that on better tax law, better trade law, and better enforcement of 
trade laws. We want to assist manufacturing when we can partner with 
them--not picking winners and losers but understanding that to create 
wealth, you either grow it, you mine it, or you make it. My State does 
all three and does it very well and will continue to do so with this 
kind of partnership as we move forward.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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