Daniel Akaka

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to honor the service of Master Sergeant Dennis Takeshita, a member of the Hawaii Air National Guard. After 37 years of exemplary commitment and dedicated service in defense of our great Nation and 30 years in the Air National Guard, Master Sergeant Takeshita retired on October 3, 2003. Master Sergeant Takeshita's career experiences have been extensive. He received a commission into the Air Force Reserves in 1966 and served on active duty until 1972. Soon after his honorable discharge from the United States Air Force, Master Sergeant Takeshita joined the Hawaii Air National Guard. He is a decorated soldier who has received numerous citations and awards for his outstanding service and professionalism. A graduate of St. Louis High School in Honolulu and the University of Hawaii, Master Sergeant Takeshita's career has been one of dedication, service and sacrifice. He served a combat tour of duty during the Vietnam conflict from 1968 to 1969, as well as Operations Allied Force, Noble Eagle, and Enduring Freedom. Master Sergeant Takeshita is to be commended for his long tenure, unwavering patriotism, courageous service, unselfish leadership, and individual contributions to the defense of the United States. I applaud the distinguished career of Master Sergeant Dennis Takeshita and express my best wishes for a well-deserved and enjoyable retirement.

Mr. AKAKA

Mr. AKAKA. Mr. President, I am pleased to introduce the Financial Literacy in Higher Education Act with Senator Enzi and original cosponsors of S. 1800, the College LIFE, Literacy in Finance and Economics Act, Senators Sarbanes and Corzine. This is truly a bipartisan compromise on the provisions of S. 1800, the College LIFE Act, and I appreciate Senator Enzi's willingness to collaborate on this matter. As in S. 1800, the Financial Literacy in Higher Education Act proposes a pilot program for five higher education institutions to encourage students to take a personal finance course and participate in preventive annual credit counseling, working in conjunction with State or local public, private, and nonprofit entities selected by the local education agency or the school, and measuring the effectiveness of efforts in any behavioral changes that may result. The bill emphasizes the importance of personal finance and economic education and counseling by authorizing these activities as allowable uses in existing Higher Education Act programs, such as TRIO, GEAR UP, and title III and title V Serving Institutions. These are programs that have been successful in expanding higher education access to populations with unique needs and, therefore, are ideal avenues through which we can further the important components of financial and economic literacy, such as wise budgeting, saving, debt management, tax preparation, and avoiding predatory or abusive practices. The bill promotes greater collaboration with and support from Federal agencies in the higher education arena with respect to economic and financial literacy, including coordination with the Financial Literacy and Education Commission, which was created by title V of H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003. The conference report of H.R. 2622 was adopted recently by this Chamber and the other body. For those who may not be familiar with the Commission, the new entity will work to improve financial literacy and education in the United States through the development of a national strategy. I urge my colleagues to support this bipartisan effort to increase the financial and economic literacy of our college students. I will also work with my colleagues on advancing the grant programs in S. 1800 that are not in our compromise package, because I feel that those, too, are important parts of our overall effort. Students in higher education are some of our Nation's best and brightest, and we must work to give them the tools that will help them succeed. Not the least among these is literacy in personal finance and economics.

Mr. AKAKA

Mr. AKAKA. Mr. President, I am pleased to introduce the Financial Literacy in Higher Education Act with Senator Enzi and original cosponsors of S. 1800, the College LIFE, Literacy in Finance and Economics Act, Senators Sarbanes and Corzine. This is truly a bipartisan compromise on the provisions of S. 1800, the College LIFE Act, and I appreciate Senator Enzi's willingness to collaborate on this matter. As in S. 1800, the Financial Literacy in Higher Education Act proposes a pilot program for five higher education institutions to encourage students to take a personal finance course and participate in preventive annual credit counseling, working in conjunction with State or local public, private, and nonprofit entities selected by the local education agency or the school, and measuring the effectiveness of efforts in any behavioral changes that may result. The bill emphasizes the importance of personal finance and economic education and counseling by authorizing these activities as allowable uses in existing Higher Education Act programs, such as TRIO, GEAR UP, and title III and title V Serving Institutions. These are programs that have been successful in expanding higher education access to populations with unique needs and, therefore, are ideal avenues through which we can further the important components of financial and economic literacy, such as wise budgeting, saving, debt management, tax preparation, and avoiding predatory or abusive practices. The bill promotes greater collaboration with and support from Federal agencies in the higher education arena with respect to economic and financial literacy, including coordination with the Financial Literacy and Education Commission, which was created by title V of H.R. 2622, the Fair and Accurate Credit Transactions Act of 2003. The conference report of H.R. 2622 was adopted recently by this Chamber and the other body. For those who may not be familiar with the Commission, the new entity will work to improve financial literacy and education in the United States through the development of a national strategy. I urge my colleagues to support this bipartisan effort to increase the financial and economic literacy of our college students. I will also work with my colleagues on advancing the grant programs in S. 1800 that are not in our compromise package, because I feel that those, too, are important parts of our overall effort. Students in higher education are some of our Nation's best and brightest, and we must work to give them the tools that will help them succeed. Not the least among these is literacy in personal finance and economics.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to discuss how to prepare our Nation against a terrorist attack on our agriculture. Senator Collins, chairman of the Governmental Affairs Committee, is to be commended for holding a hearing last week on a critical issue which has received little congressional attention. I am deeply concerned about our agricultural security. In July and October 2001, I held two hearings on the Nation's preparedness for a bioterror attack. The threat to our agricultural industry by potential terrorists is not imagined; it is very real. One expert likened the American agricultural industry to a large bulls-eye stamped across the United States. Dr. Peter Chalk, a RAND policy analyst, testified that an attack on American livestock could be extremely attractive to a terrorist for the following four reasons: (1) a low level of technology is needed to do considerable damage, (2) at least 15 pathogens have the capability of severely harming the agriculture industry, (3) a terrorist would not need to be at great personal risk in order to carry out a successful attack, and (4) a disease could spread quickly throughout a city, state, or even the country. In Afghanistan, hundreds of pages of U.S. agricultural documents were discovered in al-Qaeda's possession. A recent unclassified CIA report confirmed that the September 11th hijackers were attempting to gain knowledge and access to crop-dusting aircraft which could be used to easily contaminate America's food supply. An agroterrorisk attack would have severe economic costs to agricultural producers, State and Federal Governments, and exporters of U.S. food products. The widespread contamination of American produce or livestock could cause mass panic and long-lasting fear of American produced food products. Dr. Chalk cited a study conducted in California that concluded that ``each day of delay in instituting effective eradication and control measures would cost the state $1 billion in trade sanctions.'' The economic repercussions are almost unimaginable. Yet within the Federal Government, no agency has the clear responsibility for preventing and containing an agroterrorist attack. Over 30 Federal agencies have jurisdiction over some part of the response process. This bifurcation of jurisdiction contributes to confusion among local and State officials as to where to turn for assistance and advice. According to a recent General Accounting Office, GAO, report Federal agencies are confused about the chain of command. The report states that neither the Food and Drug Administration, FDA, nor the Department of Agriculture, USDA, believe that they have the authority to enforce security at U.S. food processing plants. GAO states that ``both FDA and USDA have instructed their field inspection personnel to refrain from enforcing any aspects of the security guidelines because the agencies generally believe that they lack such authority.'' When questioned at the Governmental Affairs Committee hearing last week, Dr. Penrose Albright, Assistant Secretary for Science and Technology in the Department of Homeland Security, DHS, indicated that the responsibility of leadership would likely fall to DHS in the event of an intentional attack on the Nation's agriculture and stated that DHS ``takes these responsibilities seriously,'' but stopped short of asserting that the new department had overall responsibility. I have asked DHS for clarification on this issue. Dr. Albright also said that an unintentional contamination of American agriculture would not involve DHS. His response demonstrates a serious deficiency in the Federal Government's crisis response procedure. If there were an incident, who would lead the response in the hours or days before the cause of an outbreak was known? One agency must shoulder the responsibility for coordinating an immediate response regardless of the cause. To address these concerns, I introduced two bills, S. 427, the Agriculture Security Assistance Act, and S. 430, the Agriculture Security Preparedness Act, to increase the coordination in confronting the threat to America's agriculture industry and provide the needed resources. My legislation provides for better funding and a better coordinated response and defense to an agroterrorist attack. The Agriculture Security Assistance Act would assist States and communities in responding to threats to the agriculture industry. The measure authorizes funds for communities and states to increase their ability to handle a crisis. It also encourages animal health professionals to participate in community emergency planning activities to assist farmers in strengthening their defenses against a terrorist threat. The Agriculture Security Preparedness Act would enable better interagency coordination within the Federal Government. The legislation establishes senior level liaisons in the Departments of Homeland Security and Health and Human Services to coordinate with USDA on agricultural disease emergency management and response. The bill also requires DHS and USDA to work with the Department of Transportation to address the risks associated with transporting Animals, plants, and people between and around farms. No doubt a terrorist attack on American agriculture could have a devastating effect on the United States. Our Nation's capability to counter such an attack is increasing, but more needs to be done. My two bills would help our Nation act now so that a future agroterrorist attack can be avoided or quickly responded to before the damage in lives or livestock is too great. I urge my colleagues to support this overdue legislation.

Mr. AKAKA

Mr. AKAKA. Mr. President, I yield my time to Senator Reid.

Mr. AKAKA. Mr. President, I rise today to express my opposition to the conference report for H.R. 1, the Medicare Prescription Drug and Modernization Act of 2003. For far too long Medicare has lacked a prescription drug benefit. The lack of this benefit has been the gaping hole in the Medicare safety net. I have consistently supported efforts to establish a meaningful Medicare prescription drug benefit. I supported S. 1, the Prescription Drug and Medicare Improvement Act of 2003, because it would have been an important step forward in meeting the prescription drug needs of seniors. I am extremely disappointed that instead of making improvements in the Senate-passed bill, the conference report is now a false promise to our seniors. Mr. President, the conference report contains too many flaws to warrant passage. The conference report lacks appropriate prescription drug coverage for seniors. Indeed, many seniors will be worse off under this proposal. The conference report also weakens the existing Medicare entitlement program. The prescription drug coverage in this legislation is simply not comprehensive enough. Too small an allowance is provided within the legislation to establish a meaningful prescription drug benefit for seniors. Instead of reducing the size of the coverage gap, the conference report would require that seniors pay for all of their drug costs after their total drug spending reaches $2,250. Despite continuing to pay their premiums, they will not receive any additional support until they spend about $5,000. This gap is about twice as large as the gap that was contained in the Senate-passed bill. Why should seniors have to continue to pay premiums when they do not receive any benefits if they are in the gap? This coverage gap must be filled. Mr. President, for too many seniors in Hawaii and across the nation, prescription drug coverage will be worse under the provisions in the conference report. Seniors who are currently provided prescription drugs through their state's Medicaid programs will have federally mandated copayments imposed on them. For example, Hawaii's seniors who have incomes of less than 100 percent of the poverty level and obtain their medications through Hawaii's Medicaid program will be worse off under this plan. They will now have to pay copayments to get their prescription medication. Hawaii's seniors are not alone. The Center for Budget and Policy Priorities believes that most of the 6.4 million individuals that have dual eligibility for Medicare and Medicaid will be charged more under the conference agreement for medication than under existing law. I am afraid that too many low-income seniors will not be able to afford even these meager copayments. Those who cannot meet these copayments will be denied access to the medications they are currently being provided. Again, they will go without the treatment they need. In addition, the financial burden that the conference report places on states may lead to a reduction in other Medicaid services that states will no longer be able to afford, because of the substantial share of prescription drug costs that states will have to pay the federal government for seniors who are eligible for Medicare and Medicaid. Mr. President, I am also concerned about the millions of retirees that will lose their existing coverage. We have seen over the past few years that there has been a disturbing trend of reducing benefits for retirees. Creating this voluntary benefit will only accelerate this trend. The intent of the legislation is to expand prescription drug coverage for seniors, not merely to shift the financial burden of existing coverage to the federal government. Many seniors will be forced to rely on Medicare, which will provide a less generous benefit than what they currently enjoy. It is estimated that 17,850 Medicare beneficiaries in my home state of Hawaii will lose their retiree health benefits as a result of the enactment of this legislation. If Medicare beneficiaries lose their employer-based coverage, they may have to pay more for a Medicare drug benefit that provides less comprehensive coverage. Despite the subsidies included in the conference report to encourage the continuation of existing coverage, it is estimated that approximately 2.5 million people will lose their coverage. Mr. President, I along with Senators Warner, Allen, Mikulski, Sarbanes, Johnson, and Corzine requested that the conferees include our bill, S. 1369, in the conference report to ensure that present and future federal retirees receive the same level of prescription drug coverage. The government's Federal Employee Health Benefit (FEHBP) program for its employees and retirees stands as a model for all employer-sponsored health care plans. Our legislation would protect prescription drug benefits for federal retirees by ensuring parity for these benefits with other FEHBP subscribers. The other body approved companion legislation, H.R. 2631, on July 8, 2003. While the Medicare reform bill includes subsidies and tax credits to employers who retain existing drug benefits for their retirees, such incentives provide no guarantee of the FEHBP drug benefit for the government's own annuitants. If FEHBP is the model for this reform, the federal government must not drop or reduce drug benefits for retired FEHBP enrollees. Our legislation sends a message to other employer-sponsored plans that the federal government stands behind its commitment to retired workers. I will continue to work to bring about the enactment of this bill. Mr. President, the cost containment provisions in the legislation provide a fast-track legislative process to cut Medicare benefits if general revenue funding for the entire Medicare program exceeds 45 percent. This arbitrary process is included while more meaningful provisions to control the costs of prescription drugs were left out. The conference report prevents the federal government from using the bargaining power of 40 million senior citizens to bring down the cost of prescription drugs for the Medicare program. Mr. President, the conference report weakens Medicare. It imposes means tests for Medicare Part B premiums and for low-income subsidies for the prescription drug benefit. This is the beginning of the end of Medicare being as a universal benefit. This is the first step towards means testing other parts of the existing Medicare program. Means tests place greater burdens on seniors. They also create administrative difficulties for the Centers for Medicare and Medicaid Services. Even more objectionable is the assets test used to determine the low- income subsidies for the prescription drug benefit. The assets test is completely unrealistic. According to Families USA, the assets test will deny subsidies to 2.8 million very low-income seniors if they have even a small amount of assets. For example, the assets test disqualifies people who have household goods and personal effects worth more than $2,000. Medicare is an entitlement and participants should not be subjected to these demeaning means tests. Additional assistance should not be denied because they happen to have set money aside for future expenses. Mr. President, this legislation also threatens existing Medicare benefits because it includes billions of dollars for subsidies for private plans. This increases premiums for seniors, raises government costs for health care, and damages the solvency of the Medicare trust fund. Mr. President, I also want to express my disappointment that language similar to an amendment that I had offered, which was accepted as part of the manager's package for S. 1, was not included in the conference report. While I thank Chairman Grassley and ranking member Baucus for their assistance with this provision, it was not included in the conference report. My amendment would have allowed my home state of Hawaii to benefit from the increase in Medicaid disproportionate share hospital (DSH) payments included in the bill. Medicaid DSH payments are designed to provide additional support to hospitals that treat large numbers of Medicaid and uninsured patients. The Balanced Budget Act of 1997 (BBA) created specific DSH allotments for each state based on their actual DSH expenditures for fiscal year 1995. In 1994, the State of Hawaii implemented the QUEST demonstration program that was designed to reduce the number of uninsured and improve access to health care. The prior Medicaid DSH program was incorporated into QUEST. As a result of the demonstration program, Hawaii did not have DSH expenditures in 1995 and was not provided a DSH allotment. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 made further changes to the DSH program, which included the establishment of a floor for DSH allotments. However, states without allotments were again left out. Other states that have obtained waivers similar to Hawaii's waiver have retained their DSH allotments. Only two states, Hawaii and Tennessee, do not have DSH allotments. The conference report provides that states without DSH allotments could receive additional assistance if their waiver was terminated or removed. While this may possibly benefit Tennessee, this language will prevent Hawaii from obtaining any additional Medicaid DSH support that is included in this bill. The conference report includes an additional $6.35 billion in Medicaid DSH relief to the states. Hawaii does not receive any of these funds. Hawaii's hospitals are struggling to meet the healthcare needs of the uninsured. Hawaii cannot continue to be left out. Additional DSH payments would help Hawaii hospitals to meet the rising health care needs of our communities and reinforce our health care safety net. All fifty states need to have access to this additional Medicaid DSH support. I will continue to work to correct this inequity. Mr. President, as I said at the start of my remarks, this legislation is a false promise. Even if this conference report is enacted, we will need to enact follow up legislation to address the flaws in the bill. We will also have to repeal several of the provisions that weaken the existing Medicare program. Many have said this is an important step forward in the Medicare program. I disagree. This conference report takes too many elderly Americans backwards in terms of their benefits to constitute forward progress or forward thinking. Many people, particularly seniors, will eventually come to the conclusion that I have reached on the legislation and Congress will regret this rush to judgment. After reviewing the provisions in this legislation, I am disappointed that this bill is a false promise that undermines the existing Medicare program. Thank you, Mr. President.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to illuminate the merits of National Retirement Planning Week, which is currently underway. National Retirement Planning Week is organized by a coalition of financial industry and advocacy organizations to raise the awareness of the importance of retirement planning. I applaud the coalition for its efforts to increase public awareness of this critical topic. The need to adequately prepare for retirement has significantly increased due to the growth in life expectancy and reduction in employer-provided retirement health benefits. In addition, increasing debt burdens confronting many families will make a comfortable retirement more difficult to achieve. Americans are living longer. According to the U.S. National Center for Health Statistics, in 1950, an individual 65 years of age was expected to live an additional 13.9 years. This grew to 17.9 years by 2000. These additional years, many or most in retirement, will require Americans to have saved and invested additional financial resources to help meet their living expenses in retirement. Furthermore, the fastest growing segment of the population is made up of those 85 years and older, according to the Bureau of Labor Statistics. While Americans have been living longer, employers have been reducing the health benefits provided to retirees. According to the Kaiser Family Foundation and Health Research and Education Trust, 38 percent of all large firms offer retirement benefits in 2003. This is a significant reduction from the 66 percent that offered retiree coverage in 1988. As employers continue to stop providing coverage and as health care costs continue to increase, proper planning is imperative for individuals to pay for healthcare expenses that may not be covered by Medicare. In addition, another important component of preparing for retirement is to effectively manage and pay down debt. According to the Federal Reserve, consumer borrowing through auto loans, credit cards, and other debt increased by $15.1 billion in September, which brings the total consumer debt to $1.97 trillion. Substantial consumer debt will likely result in individuals having to work additional years beyond their preferred retirement age in order to pay off their credit cards and other consumer debts. Obtaining home equity loans and refinancing mortgages to take cash out of homes may make it harder for working Americans to retire at the age and with quality of life they desire. Thirty-two percent of all mortgage refinancings in the third quarter of this year involved cash- outs of additional money beyond the existing loan balance, according to Freddie Mac. Although this is significantly lower than the record 93 percent in 1989, the additional debt brought on by these refinancings can significantly extend the time and cost of paying off a mortgage. There is a greater need for larger nest eggs and better debt management. Unfortunately, defined benefit pension plans have become much less common and are not available for most working Americans to help meet these increasing costs. According to the Congressional Research Service, 72 percent of pension plan assets were held by defined benefit plans in 1975. Unfortunately, by 1998, this percentage fell to 48 percent. Changes in the contributions to pension plans and benefit payments between 1975 and 1998 also reflect the significant shift towards defined contribution retirement plans. Defined contribution plans require that employees be much more involved in their preparation for retirement. Employees must be aware of their alternatives in participating in their employer's plan. The matching contributions made by employers can provide employees with an immediate return on their investment. Employees must fully understand the importance of planning for retirement and the significance of participating in tax-advantaged employer plans and investment options that can be used, such as Individual Retirement Accounts, IRAs, to ensure that they will have sufficient resources for retirement. In addition, defined contribution plans require employees to manage their investments and make important asset allocation decisions. If employees do not have a sufficient level of financial literacy they will not be able to adequately manage their retirement portfolio. Despite the need to ensure that employees have adequate resources for retirement, fewer employers are sponsoring plans and fewer employees are participating in employer-sponsored plans. According to a Congressional Research Service analysis of the Census Bureau's Current Population survey, the number of 25-to 64-year old, full-time employees in the private sector whose employer sponsored a retirement plan fell from 45.1 million in 2001 to 42.8 million in 2002. The survey also indicated that, among this population, participation in an employer sponsored retirement plan fell from 55.8 percent in 2001 to 53.5 percent in 2002. More employers must sponsor retirement plans and more employees need to participate in them. Working Americans will be in a better position to retire on their terms by starting to prepare for retirement early and utilizing investment vehicles that have preferential tax treatment such as 401(k) plans and Individual Retirement Accounts. A long-term time horizon allows investors to reap greater benefit from the compounding of their returns. An important component of retirement security is financial and economic literacy, which should be at higher levels in our country. We must do more throughout the lives of individuals to ensure that they are financially and economically literate and can make informed financial decisions and participate effectively in the modern economy. Without a sufficient understanding of economics and personal finance, individuals will not be able to appropriately manage their finances, evaluate their credit opportunities, and successfully invest for their long-term financial goals. Starting with our youth, it is necessary to fund the Excellence in Economic Education, EEE, Act, which provides resources for teacher training, evaluations, research, and other activities in K-12 education. There is no better time to instill in individuals the knowledge and skills that they need to make good decisions throughout their lives than during their years in elementary and secondary education. I have also introduced S. 1800, the College LIFE, or Literacy in Finance and Economics Act, to address needs in this area for the college population. We must give students access to the tools that they need to make sound economic and financial decisions once they are on campus. Without an understanding of finance and economics, college students are not able to effectively evaluate credit alternatives, manage their debt, and prepare for long-term financial goals, such as saving for a home or retirement. I am working with my colleagues on both sides of the aisle to come up with a package based on S. 1800 that can be included in the Higher Education Act. I also appreciate the work done by my colleague from New Jersey, Senator Corzine, in developing and introducing S. 386, the Education for Retirement Security Act of 2003. The legislation authorizes grants for financial education programs targeted towards mid-life and older Americans to increase financial and retirement knowledge and reduce their vulnerability to financial abuse and fraud. I am a cosponsor of this legislation which will help Americans prepare for retirement. I look forward to continuing to work with my colleagues to improve economic and financial literacy. I also want to express my appreciation for the significant efforts made by Senators Sarbanes, Enzi, Corzine, Allen, Stabenow, and Fitzgerald to improve economic and financial literacy. Our efforts need to continue so that individuals will be able to make informed decisions and be able to pursue their long-term financial goals, particularly into their golden years of retirement.

Mr. AKAKA

Mr. AKAKA. Mr. President, I ask unanimous consent that a fellow in my office, Ms. Barbara Peichel, be granted floor privileges for the duration of the consideration of the Energy bill.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to express a profound sense of disappointment. The Nation needs an energy bill. We need a comprehensive blueprint for an energy policy that will take us in new directions, away from dependence on declining reserves of fossil fuel and foreign sources of oil. We need a policy which will reconcile growth and energy conservation in our transportation, manufacturing, utility, and consumer sectors across the nation. We need to bring down the high costs of electricity and gasoline for the country, particularly in my state of Hawaii, and pursue greater energy independence from petroleum products. The conference report does not make these goals achievable. I believe a comprehensive energy bill is possible. As a senior member of the Senate Energy and Natural Resources Committee, I am familiar with cutting-edge technologies and approaches to generating energy. I was closely involved in crafting the energy bill that we considered earlier this year under Senator Domenici's leadership. I also contributed heavily to the energy bill that passed the Senate under Democratic leadership last year. I wish to thank the senior Senator from New Mexico for his persistence in drafting this energy bill under extremely difficult circumstances. The energy policies that we are addressing in this legislation cover a vast range of authorities and a patchwork of unruly regional alliances. This translates to an enormous challenge, and I appreciate Senator Domenici's hard work in the face of this intractable situation. I want to make it clear that I have not given up on the opportunity to have an energy bill and I will continue to work with my colleagues to shape an energy bill for the continental United States as well as for Hawaii and Alaska, which often have special energy needs. Unfortunately, the report that has emerged from the conference committee does not bear much resemblance to either of the two earlier bills, this year or last year, that had bipartisan support. I rise today to express my disappointment with the outcome of the conference report for several reasons. I am particularly concerned about Title VIII, the hydrogen title. During the Committee's consideration of S. 14 earlier this year, the hydrogen title authorizing research and development, demonstration projects, and buy-back and fleet provisions was carefully worked out by a bipartisan group of Senators on the Committee. Even though my colleague from Iowa, Senator Harkin, is not on the Committee, he contributed mightily. The hydrogen title was based on the Spark Matsunaga Hydrogen R&D Act, which has been the basic authority for federal hydrogen programs for the last 20 years. I introduced a bill to reauthorize the Matsunaga Act earlier this year, along with Senators Domenici, Bingaman, Bayh, Lieberman, Kyl, Reid, and Inouye. I continue to believe that the Matsunaga Act's basic focus on renewable R&D for the production of hydrogen is a critical component of a national hydrogen R&D program. I greatly appreciate the vision of Senator Domenici, who led the effort earlier this year to craft the hydrogen title in S. 14, along with myself and Senators Bingaman, Dorgan, Alexander, Wyden, Schumer, and Harkin who dedicated time and energy to the bipartisan compromise. Title VIII was agreed to unanimously in the Committee in markup. Title VIII, as it was crafted earlier this year, contained a robust authorization of hydrogen research, development, and demonstration projects to lead us into the hydrogen future. The title was later successfully amended on the floor during debate on S. 14, led by my good friend and colleague from North Dakota, Senator Dorgan. Senator Dorgan offered an amendment, which I cosponsored, to include important measurable goals and timelines for the commercial introduction of hydrogen fuel cell vehicles. The federal government should be a leader in introducing hydrogen to the federal fleet of cars, trucks, and vans that are used to accomplish our government's business. Not many people realize it, but the federal government has a fleet of about half a million transportation units that, as a by-product of using fossil fuels, emit nitrogen oxides, ozone, and other pollutants. The original hydrogen title sought to usher in a transition to a fuel cell fleet. The revised hydrogen title in the conference report eliminates key federal purchase requirements for vehicle fleets, stationary power, and hydrogen fueling infrastructure. It provides only the vaguest guidance to the Secretary of Energy of voluntary projects to shape demonstration programs. Why are we going to spend $1.4 billion over six years on the production of hydrogen energy by way of a demonstration project using nuclear energy to produce hydrogen? We cannot decide what to do with our nuclear waste as it is now. Why are we going to produce waste by using nuclear material to produce hydrogen? We need to explore the production of hydrogen using renewable resources, and we need to spend a great deal more on it than this conference report provides. Hydrogen may fuel the economy of the future, but we must take action now to ensure that it comes from renewable sources for those parts of the country that will not or cannot host nuclear facilities. The new hydrogen title, authorizes less funding through 2008 than we agreed on in the Senate earlier this year. It eliminates key demonstration programs and federal purchase requirements that I believe are critical to ensuring a hydrogen future. Mr. President, the hydrogen title is a pale ghost of what it was when it left the Senate on July 31st of this year. This bill has some hopeful features. It provides tax incentives for wind, solar, and geothermal energy--but not enough. It encourages energy efficiency in household appliances and homebuilding. I am pleased that the report contains provisions that I specifically requested for energy studies in Hawaii and insular areas, and for non- contiguous areas to opt-in to the ethanol trading system. I thank Senator Domenici and Senator Bingaman for their assistance on these provisions, which take into account the unique energy situation faced by more remote states and territories. I also am pleased that Senator Domenici has included provisions of a bill I introduced earlier this year, S. 1045, to designate an office in the Department of Energy and a process within the Department for safely disposing of Greater-Than- Class C, GTCC, radioactive waste. According to a General Accounting Office study that I requested on this topic, we need a stronger plan for continued recovery and storage of GTCC waste until a permanent disposal facility is available. The conference report has some objectionable features. It provides waivers for manufacturers of MTBE, thus leaving it to counties and cities to pay for the cleanup of groundwater contamination. There must be a better solution than that. We cannot leave the burden of cleaning up drinking water contaminated by gasoline additives to local communities. The conference report also has objectional omissions. It does not include fuel economy standards which significantly increase the fuel efficiency of automobiles--a vital component of a comprehensive energy policy. The American people want to spend less money on gasoline, be less dependent on foreign supplies of oil, seriously address the issue of climate change, and breathe cleaner air. Strong fuel economy standards address these needs. The conference report fails to address the accumulation of greenhouse gases, which I have spoken about several times on the floor of the Senate. Mr. President, I am disappointed in the conference report. It will not open the door for radically new energy futures such as hydrogen or even liquefied natural gas. It will not alleviate the high prices of energy in the Nation. And it will not reduce our dependency on foreign oil. I yield back the remainder of my time.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to discuss the promotion of Major General Robert T. Clark to Lieutenant General in the United States Army, which is pending consideration by the Senate. On October 23, 2003, the Senate Committee on Armed Services voted to favorably report General Clark's promotion for consideration by the Senate. The vote taken was a voice vote. I asked, however, that the record reflect that had there been a recorded vote, I would have voted to oppose this promotion. I have deep respect and admiration for our military leaders. I have often said that anyone who achieves the rank of a flag or general officer deserves a Ph.D. for the amount of education and training they have successfully completed to attain such distinguished rank. In my capacity as a member of the Senate Armed Services Committee and the co- chair of the Senate Army Caucus, I have had the privilege of working with many of our Nation's most respected military leaders. This has been a difficult decision for me. General Clark's promotion has been pending consideration before the Senate Armed Services Committee for 14 months. Military promotions are usually very simple to consider, and are rarely troublesome or controversial. I normally do not hear from my constituency about a military promotion. In this case, however, I was contacted by a number of my constituents asking me to oppose General Clark's promotion, primarily for his actions as Commanding General of the 101st Airborne Division at Fort Campbell, KY, during a difficult time when PFC Barry Winchell was murdered. For this reason, I made sure that I had the opportunity to review as much material as possible pertaining to General Clark's career as well as the facts surrounding the incident that led to Private First Class Winchell's death. In March 2003, I joined some of my colleagues in writing a letter to the distinguished chairman and ranking member of the Senate Armed Services Committee to request information regarding the specific actions General Clark took to eliminate the climate of anti-gay harassment that existed at Fort Campbell prior to Private First Class Winchell's death; statements General Clark made regarding antigay harassment to officers, soldiers, and the public; the policies he promulgated addressing this issue; other steps he took to prevent further acts of violence and harassment; how he handled the Winchell case in comparison to other serious crimes occurring during his command; and his response, as well as the response of those around him, to requests by Private First Class Winchell's family to meet with him. I reviewed the information provided and participated in an executive session held on October 23, 2003, where General Clark was available for questions. After reviewing all of the information and listening to General Clark's testimony, I decided that I could not support his promotion to Lieutenant General. General Clark's professional record reflects many distinguished accomplishments as a military officer. However, I remain concerned about his lack of what I believe to be leadership qualities that are necessary for today's military leaders. I remain disturbed by General Clark's continued reliance on lack of knowledge regarding misconduct and antigay harassment on post as a rationale for his lack of action. General Clark had been in command of the 101st Airborne Division for 17 months prior to Private First Class Winchell's death. While I understand a commanding general is not responsible for the individual actions of his soldiers, I firmly believe that a commanding general sets the tone on an installation and can influence what his soldiers believe will be considered ``acceptable'' behavior. I was disturbed to learn of repeated instances of underage drinking and harassment, and of the assessment, particularly of those soldiers in Private First Class Winchell's unit, of the command climate prior to Private First Class Winchell's death. I am also disturbed by General Clark's refusal to take responsibility for the incident. During his tenure as Chief of Staff of the Army, General Eric Shinseki took responsibility for what happened to Private First Class Winchell. This reflects official Army policy that commanders at all levels are accountable for everything their command does or fails to do. As a leader, I believe General Clark should have taken responsibility or expressed accountability for the circumstances that led to this Private First Class Winchell's death. I believe his failure to initiate a meeting with Private First Class Winchell's family reflects poor leadership on his part. His position as convening authority did not prevent him from meeting with the parents of a soldier murdered on an installation over which he had command and responsibility. Again, General Clark's record reflects that he has led a distinguished military career. However, I do not believe his actions as the Commanding General of the 101st Airborne Division at Fort Campbell, KY, warrant his promotion to lieutenant general.

Mr. AKAKA

Mr. AKAKA. Mr. President, I am pleased to be an original cosponsor for the National Beverage Producer Responsibility Act of 2003, a bill introduced today by Senator Jim Jeffords. This bill serves a need that we already have seen in Hawaii--to reduce litter and increase recycling by encouraging businesses to work together in a partnership with government to reclaim glass, plastic bottles, and cans that accumulate on our shores, in our landfills, and along our streets. The bill sets up a deposit charge that can be reclaimed when the beverage container is returned. The legislation sets a measurable performance standard of 80 percent recovery rate for used, empty beverage containers for recycling or reuse. The bill was crafted to address the concerns of industry, retain the authority of individual States, and promote a healthy environment. It empowers the beverage container industry to design a container recycling program that best fits its business requirements to meet the 80 percent goal. States like Hawaii and 10 other States across the Nation that already have bottle bills will be able to continue their programs as long as the programs meet the national performance standard. It aims to protect and preserve our Nation's natural resources and reduce costs to counties, cities, and residents. In my own State, Hawaii recently enacted a beverage container bill which will take effect in 2005. As our Nation prepares to celebrate America Recycles Day on Saturday, November 15, I am optimistic that the National Beverage Producer Responsibility Act of 2003 will help keep our parks, beaches, and roadsides cleaner; reduce burdens on landfills; decrease ground water contamination; save energy; lower taxes for disposal costs; and create new industries and jobs.

Mr. AKAKA

Mr. AKAKA. Mr. President, I am pleased to be an original cosponsor for the National Beverage Producer Responsibility Act of 2003, a bill introduced today by Senator Jim Jeffords. This bill serves a need that we already have seen in Hawaii--to reduce litter and increase recycling by encouraging businesses to work together in a partnership with government to reclaim glass, plastic bottles, and cans that accumulate on our shores, in our landfills, and along our streets. The bill sets up a deposit charge that can be reclaimed when the beverage container is returned. The legislation sets a measurable performance standard of 80 percent recovery rate for used, empty beverage containers for recycling or reuse. The bill was crafted to address the concerns of industry, retain the authority of individual States, and promote a healthy environment. It empowers the beverage container industry to design a container recycling program that best fits its business requirements to meet the 80 percent goal. States like Hawaii and 10 other States across the Nation that already have bottle bills will be able to continue their programs as long as the programs meet the national performance standard. It aims to protect and preserve our Nation's natural resources and reduce costs to counties, cities, and residents. In my own State, Hawaii recently enacted a beverage container bill which will take effect in 2005. As our Nation prepares to celebrate America Recycles Day on Saturday, November 15, I am optimistic that the National Beverage Producer Responsibility Act of 2003 will help keep our parks, beaches, and roadsides cleaner; reduce burdens on landfills; decrease ground water contamination; save energy; lower taxes for disposal costs; and create new industries and jobs.

Mr. AKAKA

Mr. AKAKA. Mr. President, I have spent the past 23 hours listening to the debate which was billed as a debate on judicial nominations and has turned into a semantics fest over who is responsible for the delayed enactment of legislation important to both sides of the aisle. One thing is clear to me, this is not getting us any closer to enacting the legislation we have identified as important. We are devoting 30 hours to debate the fact that the Senate has passed only 98 percent of President Bush's nominees, not 100 percent. I take my responsibilities as a United States Senator very seriously. My understanding is that I am to provide the President with my advice and consent regarding the individuals he nominates for a lifetime position to the Federal judiciary. It troubles me that we are spending 30 hours to discuss the fact that we have not acted on 2 percent of the President's nominees to the Federal judiciary. We are talking about 4 individuals, 4 individuals who have jobs, while 3 million people have lost jobs since President Bush took office. We should be talking about jobs. We should be debating and voting on legislation to increase the minimum wage. We should be finishing our appropriations bills. We should be talking about ways to strengthen our manufacturing base. We should be discussing extended unemployment benefits for the long-term unemployed, the 3 million Americans who have lost their jobs during the Bush presidency. If we want to start talking about legislation that is important to us as individual Senators, we could be talking about Federal recognition for Hawaii's indigenous peoples, Native Hawaiians, an issue of extreme importance to my constituents in Hawaii. We could be talking about ending mutual fund abuses for investors or promoting financial literacy for our students. We could be talking about how to fund the promises we extended when we passed the No Child Left Behind Act which has been severely underfunded since its enactment. Instead, we have spent 23 hours talking about 4 judicial nominations, 4 nominations out of 172, which have not been approved by this body. We have spent the past day blaming each other for the lack of progress on the issues that we have identified as priorities. It is sad that we have come to this point. During my tenure in the Senate, we have been able to work in a bipartisan manner to achieve our goals. I take particular offense, to the claims that have been made about Democratic Senators being anti-woman, anti-Catholic, anti-Hispanic, and anti-African-American, merely because we refuse to approve 4 of the President's judicial nominees. Since when do we cast aspersions simply because we are unable to get our own way? As a former principal and teacher, this is not behavior that I would condone in the classroom, much less on the floor of the Senate. My colleagues from the other side of the aisle argue that this is the first time a filibuster has been used for a judicial nominee. Republicans have openly filibustered 6 judicial nominees on the floor of the Senate, 5 of which were circuit court nominees. There seems to be a theme that my colleagues on the other side of the aisle have not engaged in efforts to block a judicial nomination. I want to share with my colleagues a situation I encountered during the 104th and 105th Congress. An individual from Hawaii was nominated to serve on the U.S. District Court, District of Hawaii. This was a nominee strongly supported by both Senators from Hawaii. This nominee had a hearing before the Senate Judiciary Committee and was reported favorably. However, this is where the process stopped for a period of two-and-a-half years. A colleague from another state placed a hold on this nominee for over 30 months before allowing us to confirm this nomination. In effect, a Senator from a State thousands of miles from Hawaii blocked a district court nominee that the senior Senator from Hawaii and I supported. This colleague is now the attorney general of the United States, and happens to be a good friend of mine. I found this situation to be so unusual, that a colleague from another state would place a hold on a district court nominee from my State when both Hawaii Senators strongly supported the nomination. I also find it highly ironic that the person who placed that hold is now in a position of great importance in this administration. I raise this issue to dispute the notion that this is the first time a nomination has been blocked, after the Senate Judiciary Committee favorably reported the nomination to the Senate for consideration. I could also speak about the nomination of Justice James Duffy to the United States Court of Appeals for the Ninth Circuit. A fine nominee, described by his peers as the ``best of the best,'' he had strong support from Senator Inouye and me to fill Hawaii's slot on the Ninth Circuit. Yet, Justice Duffy never received a hearing in the Senate. Seven hundred and ninety- one days without a hearing. Justice Duffy is one of the well-qualified and talented men and women nominated during the Clinton administration, individuals with bipartisan and home-State support, whose nominations were never acted on by the Senate. In back of me are pictures of those, and Mr. Duffy's picture is on the chart. The last person I will mention is Richard Clifton, who is now serving on the U.S. Court of Appeals for the 9th Circuit. Richard Clifton was nominated after President Bush withdrew Justice Duffy's nomination. Richard Clifton served as the Hawaii State Republican party counsel. While I don't necessarily agree with all of his views, I supported his nomination, and he was confirmed within a year of his nomination. Ninety-five percent of Federal judicial seats are now filled, creating the lowest vacancy rate in 13 years. So let's get back to the things we should be talking about--jobs, education, Medicare, minimum wage, unemployment insurance, and helping the poor. We are squandering valuable time that the Senate could and should be using to address matters of great importance to thousands of Americans. I am honored to cosponsor legislation offered by the senior Senator from Massachusetts, Mr. Kennedy, to raise the minimum wage. He has spoken with tremendous passion of the urgent need for an increase in the minimum wage. I remind my colleagues that since establishing the minimum wage requirement in 1938, we have had only 19 increases in the minimum wage, the latest occurring in September 1997. The minimum wage would need to reach $8.38 an hour to equal the purchasing power of the statutory minimum wage in 1968. A full-time worker paid the minimum wage earns about $4,000 below the poverty line for a family of three. This is not right. We should not only be raising the minimum wage so that employees working full time are not struggling to stay above the poverty line. We should also extend the Temporary Extended Unemployment Compensation program. This program, which was enacted on March 9, 2002, provided up to 13 weeks of federally-funded benefits for unemployed workers in all states who exhausted their regular unemployment compensation benefits. In addition, up to an additional 13 weeks for certain high unemployment states that have an insured unemployed rate of 4 percent or higher. The program has been extended several times, with the latest extension enacted into law on May 28, 2003. While this program will be phased-out through March 31, 2004, the program actually ends on December 31, 2003. Although employment has risen, the national unemployment rate has remained unchanged at 6 percent. In October 2003, the Department of Labor has indicated that 2 million unemployed persons were looking for work for 27 weeks or longer. This is greater than the 13 weeks of regular unemployment and greater than the additional extended unemployment benefits. We should be doing more not just for our men and women who are fighting our war on terrorism, but for those who are fighting the war on poverty. My time is almost up, so I will end here. In a Senate where the divide between the majority and minority is held by a mere vote, and that division reflects the viewpoint of the American body politic at- large, it is imperative that we work together to resolve so many of the issues that are important to our constituents. When it comes to judicial nominations, the confirmation rate of 98 percent clearly shows that we, in the minority, are doing what we can to work with the majority in upholding our constitutional obligation to provide advice and consent to the President on judicial nominations. I can only hope we achieve a 98 percent rate in enacting the laws addressing funding for education, healthcare reform, Medicare reform, increasing the minimum wage, extending unemployment insurance, and providing Americans with the financial tools to be successful.

Mr. AKAKA

Mr. AKAKA. Mr. President, I pay tribute to the 26.4 million military veterans and their families living in the United States who have served in defense of our great Nation. In 1918, on the 11th hour of the 11th day in the 11th month, the world rejoiced and celebrated. After four years of bitter war, an armistice was signed. The ``war to end all wars'' was over. How unprophetic were these sincere but hopeful words. The turn of events has since made us realize more than ever that ``Eternal vigilance is the price of liberty,'' and Armistice Day has turned into Veterans Day to honor all our brave men and women who served since that hope-filled day in many countries to defend liberty and freedom. America today, and this imperfect world, is a better place because of the sacrifices made by our veterans and their families, many of whom paid the ultimate price, for ``The only thing necessary for the triumph of evil is for good men to do nothing.'' When duty called, our veterans responded magnificently. As we engage in Operation Iraqi Freedom, Operation Enduring Freedom, Operation Noble Eagle, and countless other missions around the world, it is important that we support our men and women in the military by providing them with the training, equipment, and resources necessary for them to accomplish their mission so that they can return to their families in a timely manner. We must also honor their families who also sacrifice precious time with them so that they can defend our freedom. At the same time, we must never forget the contributions and sacrifices made by those veterans who served in past conflicts, and their families. We must work to ensure that our veterans are provided with appropriate services and benefits, such as adequate health care, in a timely fashion. We currently face a $1.8 billion shortfall in funding needed to provide healthcare for our veterans. I remain committed to ensuring that our veterans are provided with the services and benefits that they have earned. I am honored to pay tribute to these fine individuals on behalf of a grateful Nation.

Mr. AKAKA

Mr. AKAKA. Mr. President, I ask unanimous consent that Ms. Carol Madonna, a legislative fellow at my personal office, be permitted the privilege of the floor during consideration of the conference report on H.R. 1588, the Defense authorization bill for fiscal year 2004.

Mr. AKAKA

Mr. AKAKA. Mr. President, I fully support our men and women who have served and are currently serving in our Armed Forces. As the ranking member of the Senate Armed Services Subcommittee on Readiness and Management Support, I have worked with my colleagues to ensure that our military members are provided with appropriate resources and equipment to successfully accomplish their mission. I wish to state my appreciation for being a member of this committee, and to thank the Senator from Virginia for his leadership. I commend the Senator from Michigan for his guidance and leadership as well, and I also wish to thank my subcommittee chairman, the Senator from Nevada, Mr. Ensign, for working with me on readiness issues. I also commend the committee members of both sides of the aisle, and also subcommittee members, for a job well done. I am delighted to work with the Senator from Maine, Ms. Collins, chair of the Governmental Affairs Committee, as we deal with some of these issues. I rise today, however, to express my disappointment with the outcome of the conference report on several issues. I am particularly concerned with the DOD civilian personnel system. We worked on this issue very hard in the Senate Committee on Governmental Affairs and came up with a bipartisan approach that the committee endorsed with a 10-to-1 vote. Our approach would have provided DOD important new flexibility to manage its workforce, but it would have done so in a manner that preserved important safeguards for DOD employees. This balanced approach was supported by a substantial majority of the Senate conferees. Unfortunately, we understand that there was stiff opposition from the House conferees and the administration, which insisted that the Secretary of Defense be given unilateral authority to decide what protections, if any, would be available to Federal employees. We were able to win some significant concessions. The conference report includes Senate provisions that would preserve the right of individual employees to appeal adverse personnel actions to the Merit Systems Protection Board and the courts; direct DOD to maintain current funding levels for civilian pay; provide specific guidance on the implementation of a pay-banding system; and require DOD to work with the Office of Personnel Management on the implementation of the new system. With these protections built in, I would like to be in a position to support the civilian personnel provision. Unfortunately, I cannot, because of the outcome on the issue of collective bargaining. Unlike the Homeland Security Act, this conference report would not authorize the Secretary of Defense to waive Chapter 71 of title 5, which governs collective bargaining. These provisions remain in full force and effect for DOD. However, the conference report does authorize the Secretary of Defense to establish ``a labor relations system for the Department of Defense to address the unique role that the Department's civilian workforce plays in supporting the Department's national security mission.'' In general, the new labor relations system established by the Department must be consistent with Chapter 71, since Chapter 71 remains in effect. In a few areas, however, the conference report would specifically override Chapter 71. For example, the conference report states that the new labor relations system ``shall provide for independent third party review of decisions, including defining what decisions are reviewable by the third party, what third party would conduct the review, and the standard or standards for review.'' By giving the Secretary of Defense the authority to decide who reviews disputes, the issues to be reviewed, and the standard of review, this bill appears to hand one party the final say on all labor and management issues. This language is inconsistent with the concept of good faith bargaining between equals. At the same time the administration has asked us to establish a new National Security Personnel System, it continues to pursue an aggressive outsourcing agenda and to strongly resist cost of living increases for Federal civilian employees. I am deeply concerned that the administration's agenda of taking away employee's rights, giving away their jobs, and cutting their pay could have a real demoralizing effect on the DOD workforce that has done so much for our national security for so long. I am also disappointed by the outcome of the conference on environmental issues. In the past, our committee has worked on a bipartisan basis to ensure that DOD behaves in an environmentally responsible manner, without being unduly hampered by environmental requirements when it conducts essential military activities. This year, the administration worked with the majority in both Houses to force through a series of provisions exempting the Department from basic environmental laws. In particular, this conference report would amend the Endangered Species Act to exempt defense lands from critical habitat designations without establishing appropriate environmental safeguards, as the Senate bill would have done. It would authorize DOD to conduct activities that have a significant potential to harm large numbers of marine mammals without even applying for a permit and having the appropriate regulatory agencies review the proposed activities. It would exempt Fort Huachuca in Arizona from the requirement for cumulative impact analyses under the Endangered Species Act. And it includes language, which is not in either bill and not in the jurisdiction of our Committee, that would direct the Army Corps of Engineers to issue new rules making it easier for private citizens to avoid their obligation to preserve wetlands. The military service chiefs have testified before our committee that our armed forces are more ready today than they have ever been before. That is because the military services have gone the extra mile to find constructive ways to comply with applicable laws and regulations with a minimum impact on training and readiness. It takes hard work with regulators and impacted communities on a case-by-case basis to achieve these solutions, but the payoff comes in the credibility the department has earned as a good neighbor and a faithful custodian of the public lands. I am concerned that the exemptions included in this bill could begin to undermine the trust and cooperation on environmental issues that we have worked so hard to build between the military and civilian communities over the years. Finally, this bill includes deep cuts to essential military operations and maintenance accounts that I believe are misguided. During the committee's markup and floor consideration, I voiced my concern that the proposed reductions in the military services' working capital funds were so drastic that they may harm military readiness. The working capital funds are a complicated but crucial financial tool the military services use to ensure adequate supplies of spare parts, both now and in the future. Deep cuts to those accounts cause fluctuations in prices that units do not have the funds to pay for, which puts readiness in jeopardy and is a disservice to the men and women that serve. I am pleased that this bill represents a slight improvement from the large reductions taken in the Senate bill, but remain concerned about the almost $1 billion the conference report takes out of working capital fund accounts. I was also disappointed by the $150 million reduction in base operating support taken from the Air Force; these funds are critical to the upkeep and maintenance of Air Force bases. Without them, basic repairs will be foregone and service members' quality of work and life will suffer. This is not the right message to send to our air men and women as they continue to make huge sacrifices for our Nation. I am pleased by the military construction provisions that we were able to include in the conference report. In support of our defense infrastructure as well as the quality of life for our service men and women, this year's bill includes $9.7 billion for military construction in the U.S. and overseas, $5.7 billion will fund mission-critical projects which support important activities such as training, deployment, and ongoing operations. An additional $1 billion will fund family housing projects which will directly impact the quality of life for our servicemen and women and their families. Although this year's bill funds many essential construction projects worldwide, it also makes significant cuts to numerous overseas projects requested by the Department, specifically in Germany and Korea. Final decisions have not yet been made regarding our overseas presence, and the reductions in this bill potentially send the wrong message to our U.S. forces fighting overseas. We ensure that we continue to support our men and women overseas to accomplish their missions and that we offer them the quality of life they deserve. Again, I strongly support the men and women who serve in our Armed Forces. I also support the 750,000 Federal employees who play a crucial role in ensuring that our Armed Forces have the equipment, training, and resources they need to accomplish their mission. I believe it is imperative that DOD work closely with communities surrounding military installations and training ranges to achieve a positive working relationship based on mutual trust, understanding, and respect. For these reasons, I am greatly disappointed with the outcome of the National Defense Authorization Act for fiscal year 2004. I yield the floor.

Mr. AKAKA

Mr. AKAKA. That my understanding.

Mr. AKAKA

Mr. AKAKA. I also ask unanimous consent that a letter of support for the legislation from AARP be printed in the Record.

Mr. AKAKA. Mr. President, I rise today to introduce legislation intended to restore public trust in mutual funds, the Mutual Fund Transparency Act of 2003. I thank Senator Fitzgerald and Senator Lieberman for cosponsoring my bill. I greatly appreciate the efforts of Senator Fitzgerald to address this issue. Our Financial Management, Budget, and International Security Subcommittee held a very thorough hearing on mutual fund trading abuses on Monday. I applaud the efforts of Representative Richard Baker for his leadership and his efforts to improve mutual fund governance. I also commend the efforts of New York Attorney General Eliot Spitzer and the Secretary of Massachusetts William Galvin for their efforts to pursue individuals that have harmed mutual fund investors. Mr. President, 95 million people have placed a significant portion of their future financial security into mutual funds. Mutual funds provide middle-income Americans, blue and white collar workers and their families, with an investment vehicle that offers diversification and professional money management. Mutual funds are what average investors rely on for retirement, savings for children's college education, or other financial goals and dreams. My legislation will bring about structural reform of mutual fund governance and increase disclosures in order to provide useful and relevant information to mutual fund investors. I ask unanimous consent that a letter of support for my bill from the Consumer Federation of America, Fund Democracy, Consumer Action, U.S. Public Interest Research Group, and Consumers Union be printed in the Record.

Mr. AKAKA. Mr. President, recent revelations of widespread market- timing and late-trading abuses demonstrate the failures of mutual fund boards of directors to fulfill their fiduciary obligations to shareholders. The activities of Canary Capital Partners and Putnam Investments are two deeply troubling examples. However, it is likely that the trading abuses are much more routine. At our hearing, Mr. Stephen Cutler, Director, Division of Enforcement, Securities and Exchange Commission, SEC, testified that preliminary results of an SEC survey show that about ``50 percent of responding fund groups appear to have one or more arrangements with certain shareholders that allow these shareholders to engage in market timing.'' This statistic is just one example of mutual funds having different sets of rules for large and small investors. These differing rules allow the larger investors to profit at the expense of average, ordinary investors who are working toward their long-term financial goals. The abuses that have been brought to our attention make it clear that the boards of mutual fund companies are not providing sufficient oversight. To be more effective, the boards must be strengthened and more independent. Investment company boards should be required to have an independent chairman, and independent directors must have a dominant presence on the board. My bill strengthens the definition of who is considered to be an independent director. It also requires that mutual fund company boards have 75 percent of their members considered to be independent. To be considered independent, shareholders would have to approve them. My legislation also prohibits the board from making decisions that require a vote of a non-independent director. In addition, a committee of independent members would be responsible for nominating members and adopting qualification standards for board membership. These steps are necessary to add much needed protections to strengthen the ability of mutual fund boards to detect and prevent abuses of the trust of shareholders. In addition, this bill requires the SEC to develop rules to disclose the compensation of individuals employed by the investment advisor of the company to manage the portfolio of the company and their ownership interest in the company. Consumers deserve to know relevant information about the portfolio manager's incentives and whether they are properly aligned with those of their shareholders. Again, I am referring to ordinary American families patiently working toward their long-term financial goals. The strengthening of boards to protect shareholders is only one important aspect of my bill. My bill will also increase the transparency of often complex financial relationships between brokers and mutual funds in ways that are meaningful and easy to understand for investors. Shelf-space payments and revenue-sharing agreements between mutual fund companies and brokers present conflicts of interest that must be addressed. Brokers also compile preferred lists which highlight certain funds, which typically generate more investment than those left off the list. It is not clear to investors that the mutual fund company also may pay a percentage of sales and/or an annual fee on the fund assets held by the broker to obtain a place on the preferred list or to have their shares sold by the broker. Shelf-space and revenue sharing agreements present risk to investors. Brokers have conflicts of interest, some of which are unavoidable, but these need to be disclosed to investors. Without such disclosure, investors cannot make informed financial decisions. Investors may believe that brokers are recommending funds based on the expectation for solid returns or low volatility, but the broker's recommendation may be influenced by hidden payments. The SEC has exempted mutual funds from Rule 10b-10, which requires that confirmation notices of securities transactions be sent to customers to indicate how the broker was compensated in the trade. Mutual funds should be subject to this confirmation notice requirement. My legislation will require brokers to disclose in writing, to those who purchase mutual fund company shares, the amount of compensation the broker will receive due to the transaction, instead of simply providing a prospectus. The prospectus fails to include the detailed relevant information that investors need to make informed decisions. Mutual fund investors deserve to know how their broker is being paid. My bill also will inject a measure of reality into the expenses of mutual funds. In order to increase the transparency of the actual costs of the fund, brokerage commissions must be counted as an expense in filings with the SEC and included in the calculation of the expense ratio, so that investors will have a more realistic view of the expenses of their fund. Consumers often compare the expense ratios of funds when making investment decisions. However, the expense ratios fail to take into account the costs of commissions in the purchase and sale of securities. Therefore, investors are not provided with an accurate idea of the expenses involved. Currently, brokerage commissions have to be disclosed to the SEC, but not to individual investors. Brokerage commissions are only disclosed to the investor upon request. My bill puts teeth into brokerage commission disclosure provisions and ensures that commissions will be included in a document that investors actually have access to and utilize. This bill also creates a powerful incentive to reduce the use of soft dollars. Soft dollars refer to the bundling of services or products into commissions. Mutual fund companies often pay higher commissions in order to obtain other products and services, typically research on stocks. Soft dollars can be used to lower their expenses by having services and products paid for by soft dollars. Purchases using soft dollars do not count as expenses and are not calculated into the expense ratio. The SEC released a study in September 1998 concluding that soft dollars were used to pay for research, salaries, office rent, telephone services, legal expenses, and entertainment, among other expenses. At the hearing, Secretary Galvin called for a prohibition of soft dollars. This is a recommendation that needs to be examined. However, my bill provides an immediate alternative, which is to provide an incentive for funds to limit their use of soft dollars by calculating them as expenses. If commissions are disclosed in this manner, the use of soft dollars will be reflected in the higher commission fees and overall expenses. This will make it easier for investors to see the true cost of the fund and compare the expense ratios of funds. Some may argue that this gives an incomplete picture and fails to account for spreads, market impact, and opportunity costs. However, the SEC has the authority to address the issue further if it can determine an effective way to quantify these additional factors. This bill does not impose an additional reporting requirement that would be burdensome to brokers. It merely uses what is already reported and presents this information in a manner meaningful to investors. My legislation also directs the SEC to conduct a study to assess financial literacy among mutual fund investors. The SEC will identify the most useful and relevant information that investors need prior to purchasing shares, methods to increase the transparency of expenses and potential conflicts of interest in mutual fund transactions, and a strategy to increase the financial literacy of investors that results in positive change in investor behavior. None of our disclosure provisions will truly work unless investors are effectively given the tools they need to make smart investment decisions. Finally, my bill requires the General Accounting Office, GAO, to study the current marketing practices for the sale of shares of mutual funds. GAO will provide recommendations to improve investor protections in mutual fund advertising to ensure that investors are able make informed financial decisions when purchasing shares. Public confidence in mutual funds will not recover if funds continue to employ different sets of rules for large and small investors, engage in ethical misconduct, and enrich themselves at the expense of shareholders. The transgressions brought to light underscore the absence of effective oversight by the boards of mutual funds companies. This legislation will strengthen board independence and enhance the transparency of financial relationships. The American investing public deserves nothing less. Mr. President, I look forward to working with my colleagues in enacting meaningful reform of the troubled mutual fund industry. We must act to restore trust in this critical investment vehicle that people rely on for their financial future and goals. I ask unanimous consent that the text of the Mutual Fund Transparency Act of 2003 be printed in the Record.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to offer an amendment to H.R. 2673, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act for fiscal year 2004, that will help protect the health of the American public. This amendment would prohibit the U.S. Department of Agriculture (USDA) from utilizing funds under this Act to approve downed animals for human consumption. I thank Senators Levin, Cantwell, and Lieberman for cosponsoring this amendment. Downed animals are livestock such as cattle, sheep, swine, goats, horses, mules, or other equines that are too sick to stand or walk unassisted. Many of these animals are dying from infectious diseases and present a significant pathway for the spread of disease. I commend USDA and livestock organizations for their efforts to address the issue of downed animals. However, I am deeply concerned about diseases such as BSE, Bovine Spongiform Encephalopathy, more commonly known as mad cow disease, that pose a serious risk to the United States cattle industry and human health. A food inspection study conducted in Germany in 2001 found that BSE is present in a higher percentage of downed livestock than in the general cattle population. USDA stated that downed animals are one of the most significant potential pathways that have not been addressed in previous efforts to reduce risks from BSE. Stronger legislation is needed to ensure that these animals do not enter our food chain. My amendment prevents downed animals from being approved for consumption at our dinner tables. On January 21st of this year, USDA's Animal and Plant Health Inspection Service (APHIS) proposed rules in the Federal Register asking for comments on reducing the risks of BSE from downed and dead livestock. In the proposed rules, USDA acknowledges that downed animals serve as a potential pathway for the spread of BSE. Currently, before slaughter, USDA's Food Safety Inspection Service (FSIS) diverts downer livestock that exhibit clinical signs associated with BSE or other types of diseases until further tests may be taken. However, this does not mean that downed livestock cannot be processed for human consumption. If downer cattle presented for slaughter pass both the pre- and post- inspection process, meat and meat by-products from such cattle can be used for human consumption. Routinely, BSE is not correctly distinguished from many other diseases and conditions that show similar symptoms. This was demonstrated by the surveillance of a similar inspection process in Europe, showing that the process is inadequate for detecting BSE. Consequently, BSE-infected cattle can be approved for human and animal consumption. Although USDA increased the number of cattle tested for BSE from 5,200 during the year 2001 to 19,990 in the year 2002, this still represents less than one percent of the industry that is tested. Of the 5,200 cattle tested for BSE in fiscal year 2001, approximately 87 percent of the animals targeted for testing were downed. Today, USDA has increased its efforts to test approximately 10 percent of downed cattle per year for BSE. It is interesting to note, however, that Japan currently tests each of its 1.3 million beef cattle slaughtered annually for BSE. While I am not asking the industry and Federal Government to test every slaughtered cow, I am asking the Federal Government to address and reduce the real risks associated with BSE and similar diseases in the U.S. Some individuals fear that my amendment would place an excessive financial burden on the livestock industry. I want to remind my colleagues that one single downed cow in Canada diagnosed with BSE this year shut down the world's third largest beef exporter. It is estimated that the Canadian beef industry lost over $1 billion as a result of the discovery of BSE and more than 30 countries banned Canadian cattle and beef. As the Canadian cattle industry continues to recover from its economic loss, it is prudent for the United States to be proactive in preventing BSE and other animal diseases from entering our food chain. We must protect our livestock industry and human health from diseases such as BSE. My amendment reduces the threat of passing diseases from downed livestock to our food supply. USDA only tests a small sample of downed animals for diseases. This is not enough. My amendment ensures downed animals will not be used for human consumption. It also requires higher standards for food safety and protects human health from diseases and the livestock industry from economic distress. I urge my colleagues to support this important amendment.

Mr. AKAKA. I ask my amendment be set aside momentarily and we return to it at a future time.

Mr. AKAKA

Mr. AKAKA. Mr. President, I ask unanimous consent that Ms. Barbara Peicheo, a fellow in my office, be allowed floor privileges for the duration of the debate.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to introduce legislation intended to restore public trust in mutual funds, the Mutual Fund Transparency Act of 2003. I thank Senator Fitzgerald and Senator Lieberman for cosponsoring my bill. I greatly appreciate the efforts of Senator Fitzgerald to address this issue. Our Financial Management, Budget, and International Security Subcommittee held a very thorough hearing on mutual fund trading abuses on Monday. I applaud the efforts of Representative Richard Baker for his leadership and his efforts to improve mutual fund governance. I also commend the efforts of New York Attorney General Eliot Spitzer and the Secretary of Massachusetts William Galvin for their efforts to pursue individuals that have harmed mutual fund investors. Mr. President, 95 million people have placed a significant portion of their future financial security into mutual funds. Mutual funds provide middle-income Americans, blue and white collar workers and their families, with an investment vehicle that offers diversification and professional money management. Mutual funds are what average investors rely on for retirement, savings for children's college education, or other financial goals and dreams. My legislation will bring about structural reform of mutual fund governance and increase disclosures in order to provide useful and relevant information to mutual fund investors. I ask unanimous consent that a letter of support for my bill from the Consumer Federation of America, Fund Democracy, Consumer Action, U.S. Public Interest Research Group, and Consumers Union be printed in the Record.

Mr. AKAKA. I also ask unanimous consent that a letter of support for the legislation from AARP be printed in the Record.