Daniel Akaka

Mr. AKAKA

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 to speak about an amendment that I have filed, but will not call up today in the interest of moving this legislation forward, with regard to Title V of S. 1753, the Fair Credit Reporting Act, FCRA, bill. I would like to thank my colleagues, Senators Sarbanes, Enzi, Stabenow, and Corzine, for their diligent work on Title V to establish a Financial Literacy and Education Commission. This commission will help tremendously toward coordinating the myriad efforts of Federal agencies to increase financial literacy in this country and creating a comprehensive national strategy as an important blueprint to follow. As a part of this effort, I believe its important to emphasize the need for public awareness about the importance of financial and economic literacy. My amendment is similar to a bill introduced in the other body by the gentleman from California, Representative David Dreier, and cosponsored by several colleagues on both sides of the aisle, that would establish a pilot national public service multimedia campaign to enhance the state of financial literacy in this country. It would authorize $3 million over 3 years for this purpose. My amendment differs in that it coordinates this public service multimedia campaign with the Federal Commission created by S. 1753 and the national strategy that would be produced by the commission. It would authorize the commission to work in collaboration with an entity accomplished in public service campaigns that has secured private sector funds to supplement federal funding and community organizations well-qualified by virtue of their experience in the field of financial literacy and education. My amendment also requires that performance measures be developed to measure the effectiveness of such a public service multimedia campaign, via positive changes in behavior with respect to personal finance. It is paramount to be able to assess the effectiveness of the campaign and other financial literacy efforts so that we understand what works and does not work, and can replicate our successes into the future. I will continue to work with my colleagues on the Banking Committee and their counterparts in the other body to include the language in my amendment in FCRA legislation during their negotiations following Senate passage of S. 1753. It is important that we continue our coordinated efforts to ensure that Americans are financially literate, which will encourage better decisionmaking by individuals, stronger families, better-functioning markets, and a more secure future for our Nation.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to express my strong support for our soldiers, sailors, airmen, and Marines who are deployed around the world in defense of the principles of democracy and our great Nation. Today the Senate will pass the conference report to H.R. 3289, the FY04 Supplemental Appropriations Act for Iraq, Afghanistan and the global war on terrorism. The conference report does not include a key provision adopted by the Senate which would have required $10 billion in Iraq reconstruction funds to be used as a loan rather than as a grant unless 90 percent of foreign creditors cancel Iraqi debt. I voted for this provision because I believed that it would have helped to provide Iraqis with meaningful participation in the reconstruction of their country by making them responsible for the funding. I am disappointed that the provision has been eliminated, but I look forward to continuing to work with my colleagues to address the issue of how to appropriately respond to continued requests for Federal dollars to reconstruct Iraq. Last year, as the Senate debated authorization of the use of force in Iraq, one of my concerns was our planning of, and responsibility for, the reconstruction of Iraq. Before we even engaged in this conflict, I asked administration officials about post-war Iraq plans. I was repeatedly told that the appropriate officials were working hard to develop such plans and that details were not necessary because there were too many unpredictable factors to consider. Well, here we are, 4 months after President George W. Bush declared major combat in Iraq to be over. We are being told that our troops will be in Iraq for an extended period of time. American soldiers continue to be wounded and killed almost every day. We are faced with open-ended requests for billions of dollars to reconstruct Iraq. There seems to be reluctance on the part of our international colleagues to contribute and participate in the rebuilding of Iraq due to U.S. control and authority over the reconstruction funds and plans. It is imperative that we recruit other countries to assist us in peacekeeping activities to relieve our military members so that they can return home. It is just as imperative that we allow other countries to contribute to the reconstruction effort to relieve the American taxpayer of what has been and will continue to be a monumental expenditure of Federal funds in Iraq. The United States must be willing to take the necessary actions to make such international cooperation a reality. During the Senate's consideration of President Bush's FY04 supplemental request, I voted in support of S. 1689 because I believed the Senate was successful in adding provisions to the legislation to support our deployed troops; increase accountability and transparency in post-war Iraq contracts; improve planning for post-war Iraq; and reduce the burden on the American Taxpayer of the costs stemming from Operation Iraqi Freedom, Operation Enduring Freedom, Operation Noble Eagle and the global war on terrorism on the American taxpayer. While I am pleased to learn that the conference report retains provisions to support our troops such as the one-year demonstration program for enhanced TRICARE eligibility for certain National Guardsmen and Reservists, the retroactive reimbursement for soldiers who paid for their food while being medically treated, and the continued authorization for Imminent Danger Pay and Family Separation Pay at increased rates for FY04, I am concerned that the provisions adopted by the Senate which were eliminated will make it more difficult for us to ensure appropriate oversight, accountability, and success in Iraq, Afghanistan, and the global war on terror. I am particularly disappointed by the conference committee's decision to eliminate the provision proposed by Senator Jack Reed to increase Army end-strength by 10,000. I remain increasingly concerned about the strain of the increased OPTEMPO on the Army. I firmly believe we need to increase end-strength and look forward to working with my colleagues and the Army to address this matter. I understand that General Schoomaker has directed a study of this issue and I look forward to the results of this study. Again, I fully support our men and women in the military. For that reason, I fully support the $51.4 billion for ongoing military operations in Iraq, $10.5 billion for U.S. forces in Afghanistan, and $3.6 billion for homeland defense. I will work diligently with my colleagues to ensure that our Armed Forces are provided with the training and equipment necessary for them to accomplish their mission so that they can return home safely to their families in a timely manner. I support the $5 billion for security training for Iraqi security forces. I remain concerned, however, with the amount of funding that has been designated for reconstruction of Iraq, particularly since we have been assured that this supplemental only represents the most pressing reconstruction needs for the next 12 months and does not cover all reconstruction needs. At the same time, we have pressing domestic needs including the need to fund an additional $1.3 billion for medical care for veterans. We have a number of educational and social programs that are in definite need of increased funding. We must be responsible stewards of taxpayers' money. I voted in opposition to authorizing the use of military force against Iraq in October 2002. I voted this way because I believed we had not yet utilized all of our options at the international level. However, once the decision to utilize military force was made, I fully supported the men and women who were deployed in this effort. We are now responsible to ensure that they have the equipment and resources to undertake their mission in the safest manner possible. Our leadership of the coalition forces in Operation Iraqi Freedom also makes the United States accountable for the restoration and reconstruction of Iraq. Again, I believe we must work closely with our allies and neighbors in the international community for us to successfully bring out troops back home. I look forward to working with my colleagues to find a way to accomplish such a difficult challenge.

Mr. AKAKA

Mr. AKAKA. Mr. President, today I am introducing the College Literacy in Finance and Economics or College LIFE Act. I would like to thank my colleagues, Senators Sarbanes and Corzine, for their cosponsorship of this important legislation. The problem we're working to address with the College LIFE Act is simple. Our college students are many of America's best and the brightest. They hold the promise of our country in their hands and will go on to become leaders--in business, education, politics, the military, the community--any field you can name. It is wonderful that so many people are pursuing and fulfilling their dreams of higher education in numbers that I did not imagine when I was in college. In fact, as reported by the American Council on Education, total college enrollment surged by 3 million or nearly 27 percent over the past 20 years. However, I am gravely concerned, both as a member of this body and particularly as a grandparent and great-grandparent, that our young people are entering college without proper direction or good skills for money management or economic decisionmaking. As we work on increasing access to higher education, we must give students access to the tools that they need to make sound economic and financial decisions once they are on campus. However, the lack of personal finance and economics State K-12 education standards or implementation of existing standards in K-12 education in a number of States results in many students arriving at college with little understanding of economic concepts like supply and demand or benefits versus costs, or personal finance concepts such as household money management or the importance of maintaining good credit history. Without this basic understanding, college students are not effectively evaluating credit alternatives, managing their debt, and preparing for long-term financial goals, such as saving for a home or retirement. We can try to imagine what it's like to be a college student's shoes. A young adult leaves his home and travels thousands of miles, as do many Hawaii students attending mainland colleges, to the campus that holds his hopes and dreams. Perhaps farthest from his mind is how little spending money he has for textbooks, a new college sweatshirt, and school supplies. He gets to the campus bookstore and walks out with a bag that includes a preapproved credit card application, which he immediately fills out and mails. Months later, he has joined many other credit card-holding college student who, on average, have a credit card bill balance above $3,000. His sophomore year rolls around and, instead of conferring with his parents about the details of his renewal FAFSA for student financial aid or master promissory note, he is saddled with another $10,000 loan. According to The College Board, average college tuition and fees in 2003-04 increased to $19,710 for a four-year private institution and to $4,694 for a 4-year public institution. The same scenario repeats itself for his junior and senior years. Finally, after successfully completing all of his coursework, he graduates, finds an entry-level job, and realizes that, after servicing his debt, he has little money left for basics such as food, transportation, and rent, much less new career clothing or social outings. His lack of knowledge about how to properly use credit has led him to anxiety- causing financial missteps. With appropriate financial and economic literacy, he may have known what debt load to anticipate and made wiser financing and spending decisions while in school. Rather, he may be on the road to true financial trouble. Dan Iannicola, Jr., Deputy Assistant Secretary of the Treasury for Financial Education, testified before a House subcommittee on Tuesday, that 40 percent of Americans say they live beyond their means, with the average American household having $8,900 in credit card debt in 2002-- up from $3,200 just 10 years earlier. In 2001, more people filed for bankruptcy than graduated from college. Furthermore, the most recent Federal Reserve Bulletin reported that Americans currently pay 13.3 percent of after-tax income to service their debts, which increases to 18.1 percent when we add other recurring liabilities such as rent and auto leases. We must ensure that our youth make the right decisions to follow a better financial path, especially considering a report cited by Mr. Iannicola noting that youth spent more than $172 billion in a recent year, and figures from MarketResearch.com noting that typical 8- to 14-year-olds now spend--from allowances, jobs, and gifts--about $1,294 a year or $25 a week. The College LIFE (Literacy in Finance and Economics) Act represents a comprehensive approach to assist upcoming generations of Americans. It proposes four new grant programs that provide resources to encourage experimentation with delivery systems--innovation methods used in or out of the classroom to increase college students' financial literacy. Another grant would allow higher education institutions to share best practices about or create personal finance courses where none exist. A third grant would assist efforts that are looking at the best ways to integrate personal finance and economic education into basic educational subjects, which is especially important as schools are facing challenges under the No Child Left Behind Act and are tempted to focus on subjects being tested for Annual Yearly Progress. The final grant would train teachers and high school counselors toward increasing financial and economic literacy in grades K-12 so that our college students are prepared when they arrive at college campuses. The bill also 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. It promotes greater collaboration with and support from Federal agencies in the higher education arena with respect to economic and financial literacy. Finally, it 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. Furthermore, I intend the reach of this bill to be beyond the traditional college student. Our returning college students are a vital part of society--many who are already community leaders and breadwinners for their families who have already gained valuable work experience that they may use as they learn a new field or continue their undergraduate study in the pursuit of a graduate or doctoral degree. In addition, older adults who are entering higher education for the first time can also be lauded for their enterprising spirit in wanting to better their lives by earning an associates or bachelors degree. I anticipate that the assistance provided through the College LIFE Act will work to provided needed help to many of these students as well. I have been working on this bill over the better part of this year with several organizations in the higher education and economic and financial literacy community. I ask unanimous consent to have printed in the Record after my statement letters of support for the legislation from the National Council on Economic Education, Jump$tart Coalition for Personal Financial Literacy, and Family, Career and Community Leaders of America. I thank these and other organizations for their constant efforts in this area. For example, the National Council for Community and Education Partnerships (NCCEP) supports a provision including economic and financial literacy and counseling as allowable activities for the GEAR-UP program, which provides comprehensive mentoring, counseling, outreach, and supportive services to cohorts of disadvantaged students. Emphasis on economic and financial literacy as included in the bill would complement NCCEP'S current GEAR-UP activities that underscore the importance of the college-going experience and pursuit of postsecondary education--including discussions about financial aid, debt, grants vs. loans, savings, and tax credits--and involving parents or guardians to inform them on the costs of college and how to prepare for their child's entry into college. I will continue to work with these and other organizations toward increasing literacy in finance and economics for our students before they enter higher education and once they arrive on college campuses. I am looking forward to continuing to work with my colleagues to have the College LIFE Act passed or included in the upcoming Higher Education Act reauthorization. I encourage my colleagues' support for this bill. I ask unanimous consent that the bill be printed in the Record.

Mr. AKAKA

Mr. AKAKA. Mr. President, today I am introducing the College Literacy in Finance and Economics or College LIFE Act. I would like to thank my colleagues, Senators Sarbanes and Corzine, for their cosponsorship of this important legislation. The problem we're working to address with the College LIFE Act is simple. Our college students are many of America's best and the brightest. They hold the promise of our country in their hands and will go on to become leaders--in business, education, politics, the military, the community--any field you can name. It is wonderful that so many people are pursuing and fulfilling their dreams of higher education in numbers that I did not imagine when I was in college. In fact, as reported by the American Council on Education, total college enrollment surged by 3 million or nearly 27 percent over the past 20 years. However, I am gravely concerned, both as a member of this body and particularly as a grandparent and great-grandparent, that our young people are entering college without proper direction or good skills for money management or economic decisionmaking. As we work on increasing access to higher education, we must give students access to the tools that they need to make sound economic and financial decisions once they are on campus. However, the lack of personal finance and economics State K-12 education standards or implementation of existing standards in K-12 education in a number of States results in many students arriving at college with little understanding of economic concepts like supply and demand or benefits versus costs, or personal finance concepts such as household money management or the importance of maintaining good credit history. Without this basic understanding, college students are not effectively evaluating credit alternatives, managing their debt, and preparing for long-term financial goals, such as saving for a home or retirement. We can try to imagine what it's like to be a college student's shoes. A young adult leaves his home and travels thousands of miles, as do many Hawaii students attending mainland colleges, to the campus that holds his hopes and dreams. Perhaps farthest from his mind is how little spending money he has for textbooks, a new college sweatshirt, and school supplies. He gets to the campus bookstore and walks out with a bag that includes a preapproved credit card application, which he immediately fills out and mails. Months later, he has joined many other credit card-holding college student who, on average, have a credit card bill balance above $3,000. His sophomore year rolls around and, instead of conferring with his parents about the details of his renewal FAFSA for student financial aid or master promissory note, he is saddled with another $10,000 loan. According to The College Board, average college tuition and fees in 2003-04 increased to $19,710 for a four-year private institution and to $4,694 for a 4-year public institution. The same scenario repeats itself for his junior and senior years. Finally, after successfully completing all of his coursework, he graduates, finds an entry-level job, and realizes that, after servicing his debt, he has little money left for basics such as food, transportation, and rent, much less new career clothing or social outings. His lack of knowledge about how to properly use credit has led him to anxiety- causing financial missteps. With appropriate financial and economic literacy, he may have known what debt load to anticipate and made wiser financing and spending decisions while in school. Rather, he may be on the road to true financial trouble. Dan Iannicola, Jr., Deputy Assistant Secretary of the Treasury for Financial Education, testified before a House subcommittee on Tuesday, that 40 percent of Americans say they live beyond their means, with the average American household having $8,900 in credit card debt in 2002-- up from $3,200 just 10 years earlier. In 2001, more people filed for bankruptcy than graduated from college. Furthermore, the most recent Federal Reserve Bulletin reported that Americans currently pay 13.3 percent of after-tax income to service their debts, which increases to 18.1 percent when we add other recurring liabilities such as rent and auto leases. We must ensure that our youth make the right decisions to follow a better financial path, especially considering a report cited by Mr. Iannicola noting that youth spent more than $172 billion in a recent year, and figures from MarketResearch.com noting that typical 8- to 14-year-olds now spend--from allowances, jobs, and gifts--about $1,294 a year or $25 a week. The College LIFE (Literacy in Finance and Economics) Act represents a comprehensive approach to assist upcoming generations of Americans. It proposes four new grant programs that provide resources to encourage experimentation with delivery systems--innovation methods used in or out of the classroom to increase college students' financial literacy. Another grant would allow higher education institutions to share best practices about or create personal finance courses where none exist. A third grant would assist efforts that are looking at the best ways to integrate personal finance and economic education into basic educational subjects, which is especially important as schools are facing challenges under the No Child Left Behind Act and are tempted to focus on subjects being tested for Annual Yearly Progress. The final grant would train teachers and high school counselors toward increasing financial and economic literacy in grades K-12 so that our college students are prepared when they arrive at college campuses. The bill also 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. It promotes greater collaboration with and support from Federal agencies in the higher education arena with respect to economic and financial literacy. Finally, it 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. Furthermore, I intend the reach of this bill to be beyond the traditional college student. Our returning college students are a vital part of society--many who are already community leaders and breadwinners for their families who have already gained valuable work experience that they may use as they learn a new field or continue their undergraduate study in the pursuit of a graduate or doctoral degree. In addition, older adults who are entering higher education for the first time can also be lauded for their enterprising spirit in wanting to better their lives by earning an associates or bachelors degree. I anticipate that the assistance provided through the College LIFE Act will work to provided needed help to many of these students as well. I have been working on this bill over the better part of this year with several organizations in the higher education and economic and financial literacy community. I ask unanimous consent to have printed in the Record after my statement letters of support for the legislation from the National Council on Economic Education, Jump$tart Coalition for Personal Financial Literacy, and Family, Career and Community Leaders of America. I thank these and other organizations for their constant efforts in this area. For example, the National Council for Community and Education Partnerships (NCCEP) supports a provision including economic and financial literacy and counseling as allowable activities for the GEAR-UP program, which provides comprehensive mentoring, counseling, outreach, and supportive services to cohorts of disadvantaged students. Emphasis on economic and financial literacy as included in the bill would complement NCCEP'S current GEAR-UP activities that underscore the importance of the college-going experience and pursuit of postsecondary education--including discussions about financial aid, debt, grants vs. loans, savings, and tax credits--and involving parents or guardians to inform them on the costs of college and how to prepare for their child's entry into college. I will continue to work with these and other organizations toward increasing literacy in finance and economics for our students before they enter higher education and once they arrive on college campuses. I am looking forward to continuing to work with my colleagues to have the College LIFE Act passed or included in the upcoming Higher Education Act reauthorization. I encourage my colleagues' support for this bill. I ask unanimous consent that the bill be printed in the Record.

Mr. AKAKA

Mr. AKAKA. Mr. President, I ask unanimous consent that Ms. Barbara Peichel, a fellow in my office, be granted the privilege of the floor during the debate on the McCain-Lieberman amendment.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to support the Climate Stewardship Act of 2003. As a cosponsor of S. 139, I commend Senators Lieberman and McCain for their bipartisan efforts to craft an important first step in addressing the serious issue of climate change. As was mentioned by Senator Lieberman, Hawaii, a State in the Pacific, is certainly subject to climate change. I also support the proposed amendment which establishes an emissions reporting database, provides climate change research grants, and requires a freeze on current levels of greenhouse gas emissions using a cap and trade system. I compliment Senators Lieberman and McCain for their continued leadership on this issue. The United States makes up less than 5 percent of the world's population, but releases the largest amount of greenhouse gases of any country. The U.S. accounts for roughly 25 percent of the world's global emissions. In 2001, the National Research Council conducted a study on greenhouse gases at the request of the Bush administration. The council reported that concentrations of greenhouse gases are increasing as a result of human activities. In other words, elevated levels of carbon dioxide are not due solely to natural climate variations. One example is the increase in energy production from the burning of fossil fuels. The council concluded that increased concentrations of greenhouse gases are causing surface air temperatures and subsurface ocean temperatures to rise. As you can see in the first chart, the World Meteorological Organization, WMO, shows an increase in combined land and ocean temperatures during the past 120 years. We can see clearly the trend that has occurred and where it is at this time. If we look farther back in the historical record, the second chart shows a dramatic spike in air temperature just after the Industrial Revolution. We can see that spike and rapid rise on the chart. The Intergovernmental Panel on Climate Change, IPCC, a premier international working group, predicts an increase in air surface temperature. The IPCC estimates the increase would be between 2.5 to 10.4 degrees Fahrenheit from the year 1990 to 2100. The Panel also predicts that climate change will likely affect the distribution and availability of regional water resources. My colleagues should recognize that all the varied climate models and scenarios used by the IPCC show a continued increase in air surface temperature. Strong evidence of increased atmospheric levels of greenhouse gases and climate change is obvious in my home State. The global warming debate began in Hawaii. Over 30 years ago, the Mauna Loa Climate Observatory documented evidence of increased carbon dioxide levels. This graph clearly shows an undeniable upward trend of carbon dioxide in the atmosphere around the world. It is interesting to note, however, that island communities account for less than 1 percent of global greenhouse gas emissions. Major population centers and infrastructure are located along or near coastal areas. As a result, Pacific island nations are highly vulnerable to increased impacts of climate change. Scientists predict an increase of extreme climate change events such as hurricanes, floods, and droughts. The impacts of these events on business and agriculture in Hawaii and Pacific islands could be particularly severe and devastate our tourist- dependent economies. In just the past 100 years, Honolulu's average temperature has increased 4.4 degrees Fahrenheit while precipitation has decreased by 20 percent. In Hawaii we have seen that ``El Nino'' events can have strong influences on our climate, causing prolonged periods of drought that hurt Hawaii's agricultural industry. Some climate projections show that the Pacific may actually transition into a more persistent ``El- Nino''-like state, causing dramatic changes to the ecosystem around the world. This change would not only affect farmers, but perhaps even permanently destroy many coral reefs and their associated fisheries throughout the Pacific. In the mid-1990s, El Nino events destroyed at least one-third of Palau's coral reefs. The costs of inaction on climate change far outweigh the costs of this bill. Sea level rise is also a tremendous concern for Pacific island communities. It can greatly accelerate coastal erosion and saltwater intrusion into groundwater supplies. For many Pacific island nations facing severe shortages of drinking water, sea level rise is a devastating prospect. In Hawaii, sea level has risen six inches in Honolulu and nine inches in Hilo, the big island. The IPCC predicts that sea level will rise another one to two feet in the Pacific by the year 2100. The impacts of even a relatively small sea level rise on Pacific nations and atolls, some with maximum elevations which are less than ten feet above sea level, can be severe. As recently as 2001, rising sea levels caused the loss of land areas in Kiribati and Tuvalu, Pacific nations with low-lying atolls. In the Pacific, cultural activities were interwoven with the conservation of the environment. These traditions allowed the survival of dense populations on small land areas. Today, the global issue of climate change extends beyond our borders and threatens the livelihoods of these nations. Climate change is an important challenge and high priority for immediate action in the Pacific. The U.S. has tried initiatives such as the Voluntary Reporting of Greenhouse Gases Program. These voluntary programs have not succeeded in reducing or even stabilizing total U.S. greenhouse gas emissions. Although program participants committed to reduce certain portions of their carbon dioxide emissions, many entities had substantial increases in their overall emission levels. This rise in emissions was due to increasing demands for their products and services. According to the Pew Center on Global Climate Change, total greenhouse gas emissions have increased approximately 12 percent between the years 1990 and 2001. Emissions are projected to increase another 42 percent by 2020. The United States needs to address climate change in a significant way. We must implement a responsible and reasonable policy to stop greenhouse gas emissions from rising. Under the Lieberman-McCain amendment, the United States would adopt a uniform, Federal program to stabilize greenhouse gas emissions. The amendment would require all major electric power, industrial, or commercial facilities that emit over 10,000 metric tons of greenhouse gas per year to take action. A program that uses emissions trading would provide these sectors with the flexibility needed to determine the most cost-effective and practical approaches to stop greenhouse gas emissions from rising. The U.S. has already demonstrated that a cap- and-trade system can be both environmentally and economically effective. The primary example is the Acid Rain Program which was established in 1990 to reduce emissions of sulfur dioxide. Four U.S. corporations are already taking the lead in reducing greenhouse gas emissions. BP, British Petroleum, the largest oil and gas producer in the U.S., and DuPont, a $24 billion/year corporation that produces chemicals, materials, and energy, have already taken on emission reduction strategies. Both BP and DuPont have claimed to save millions of dollars in the process. Cinergy, the largest burner of coal in the U.S., has pledged to reduce its greenhouse gas emissions by 5 percent with the belief that they can meet this target at no additional cost to the company or ratepayers. American Electric Power, the largest emitter of carbon dioxide in the U.S., has joined the Chicago Climate Exchange. This marketplace trades greenhouse gas emissions with a target of reducing emissions. The Governors of ten northeastern States developed a regional greenhouse gas trading program because of the lack of national leadership on climate change. Their program requires a mandatory cap on power plants in July of this year. In total, carbon reduction initiatives are already underway in 27 States. We must take this first, critical step to stabilize greenhouse gas emissions in the United States. If we fail to address the issue of climate change now, the U.S. may have to face catastrophic and expensive consequences. A relatively small investment today is far wiser than spending vast amounts in the future to replace destroyed homes and infrastructure, restore altered ecosystems, and reinvest in collapsed agricultural economies. Scientists at MIT, the Massachusetts Institute of Technology, conducted a study that analyzed the proposed costs of the Lieberman-McCain amendment to S. 139. They estimated the cost to be less than $20 per household per year. The United States has the technological capabilities and intellectual resources to lead the world in an effort to reduce future greenhouse gas emissions. The Lieberman-McCain amendment demonstrates to the international community our serious commitment. The European Union, EU, has recently adopted a mandatory cap and trade program with a carbon dioxide reduction target of 8 percent by the year 2012. The proposed amendment only calls for a stabilization of U.S. greenhouse gas emissions. The compliance costs of the EU greenhouse gas reduction program are expected to total less than 0.1 percent of their GDP, Gross Domestic Product. Therefore, the EU predicts a minimal effect on their economic growth even under a rigorous approach. I thank Senators Lieberman and McCain for recognizing the importance of climate change and taking the lead on legislation to stabilize greenhouse gas emissions. Research shows that our climate is changing due to human activities. It is clear that piecemeal, voluntary approaches have failed to reduce the total amount of greenhouse gas emissions in the United States. Now is the time to send a strong message that the U.S. is serious about the impacts of climate change. A policy of inaction on climate change is not acceptable and will cost the United States more than preventive policies. I firmly believe that we can have economic growth while protecting the global environment. I urge my colleagues in the Senate to support the Lieberman-McCain amendment to S. 139.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise in support of the Mikulksi-Landrieu amendment to the Transportation/Treasury Appropriations bill. I believe the Administration's revision to A-76 is unfair to Federal workers and threatens cost-effective and accountable Federal contracting. The Commercial Activities Panel, which was mandated by Congress to find ways to improve A-76, was deeply divided on this issue. In fact, the Panel was so deeply divided that it issued two proposals to fix A- 76: one supported by Federal employee unions and the other by Federal contractors, the Comptroller General, and certain Administration officials. OMB's A-76 revision is controversial. The revision allows Federal jobs to be contracted out without appreciable cost-savings. Under the revision, Federal workers could lose their jobs before they have the chance to improve efficiencies. It does not allow Federal workers to compete for work already contracted out. Nor does the revision consider measures to improve government efficiencies outside eliminating Federal jobs. Moreover, it allows contractors to appeal decisions to contract out, but not Federal workers. The revision does not reflect the idea of fair competition, and the revision is not in the public's interest. The Mikulski-Landrieu amendment promotes fair competition by prohibiting the Administration from using what I believe is an unfair process for determining whether government work should be contracted out. The amendment does not stop privatization, nor would it force agencies to use the old A-76 rules or prevent OMB from making changes to A-76. As the Ranking Member of both the Senate Governmental Affairs Financial Management Subcommittee and the Armed Services Readiness and Management Support Subcommittee, I believe we should develop contracting out policies that are fair to Federal workers and achieve the best return on the dollar. These goals are complementary. I urge my colleagues to support this amendment.

Mr. AKAKA. Mr. President, I rise today to speak on an issue of great importance. I offered an amendment, but I was advised that it would have been an obstruction to the bill. In the interest of not holding up the bill, I agreed to withdraw my amendment, but I intend to address this issue on another vehicle. I thank Senators Bingaman, Edwards, and Fitzgerald for agreeing to be cosponsors of this amendment. My amendment is supported by the Consumer Federation of America and the National Consumer Law Center. Mr. President, certain tax preparers are lining their pockets with money that should be going toward the everyday needs of lower-income families. These preparers are taking advantage of those who have sought assistance in claiming the Earned Income Tax Credit, EITC, by successfully marketing to them exorbitantly priced refund anticipation loans, RALs. Although these firms work to guide families through the sometimes complicated tax filing process, I am concerned about their aggressive marketing of RALs in low-income neighborhoods where EITC recipients often live. These loans take money away from the day-to-day, kitchen-table needs of lower-income families. What is the extent of this problem? An estimated $839 million intended to assist low-income families went to commercial tax preparers and affiliated national banks for tax assistance, electronic filing of returns, and high-cost refund loans in 2001, according to a report published by the Brookings Institution. As you can see on the chart behind me, a total of 18.7 million returns were filed with EITC claims. Of these, 7.6 million or 41 percent of EITC taxpayers received their refund through RALs. I will ask to print in the Record a document compiled by Alan Berube from the Brookings Institution on usage of RALs among EITC recipients by State. If I may pick out some of the States where RALs are most prevalent. I would like to note that Mississippi tops the list, with 61.5 percent of EITC returns with RALs. South Carolina, Georgia, North Carolina, Louisiana, Alabama, Tennessee, Arkansas, Texas, and the District of Columbia round out the top 10, with slightly more than half of DC's EITC returns filed with RALs. Again, the point here is that RALs unfairly diminish the value of the EITC and take money away from working families, which is not justified by the service provided. Mr. President, the EITC was created to support work and reduce poverty. According to the Center on Budget and Policy Priorities, the Federal credit lifts more children out of poverty than any other Government program. However, the EITC will not continue to boast this rate of success if it continues to be eroded by the artificially high cost of highly-marketed RALs. Rather than going to pay for household essentials like food, housing, clothing, and transportation, families are being convinced to spend this money unnecessarily on RALs, rather than waiting a few more days for a tax refund deposited at no cost to them. Let me talk for a moment about the mechanics of how RALs work. A taxpayer approaches a company for tax preparation services, applies for the EITC, and is convinced to use the RAL, which provides families cash from their calculated refund within 1 to 2 days. In the RAL application process, the Internal Revenue Service, IRS, reduces the risk that lenders. Take on RALs by providing them with a Debt Indicator, DI, on all IRS e-file acknowledgments. The DI informs the lender whether or not an applicant owes Federal or State taxes, child support, student loans, or other government obligations, and this assists the tax preparer in ascertaining the applicant's ability to obtain their full refund so that the RAL is repaid. The vast majority of refunds are remitted to the preparer as prepared. Thus, interest rates for RALs that vary from 97 percent to more than 2,000 percent are not justifiable when the IRS lowers the risk of the loans by providing the DI service. My amendment terminates the use of the Debt Indicator service. For anyone who is wondering whether ending RALs pose a hardship on the very families I am working to help, there are alternatives to speeding up refunds, such as filing electronically or having the refund directly deposited into a bank or credit union account. Using these methods, taxpayers can receive their returns in about 7 to 10 days without paying the high fees associated with RALs. With economic and financial literacy awareness--which I am also pursuing for all age levels--we can help people have better access to sound money management skills and practices that can help them to plan in advance for the minimal delay of a few days for their refund. However, at this point, we must work to encourage the use of no-cost alternatives and eliminate the abusive practice of RALs. Once again, my amendment would terminate the Debt Indicator program. If we look at the history of this program, the path taken in my amendment is a fix that must be reinstated. In 1995, the use of the Debt Indicator was suspended because of massive fraud in e-filed returns with RALs. After the program was discontinued, RAL participation declined. The use of the Debt Indicator was reinstated in 1999. Remarks from H & R Block Chief Executive Officer Frank L. Salizzoni upon the reinstatement of the program state that the Debt Indicator: . . .is good news for many of our clients who opt to receive the amount of their refund through Refund Anticipation Loans. The IRS program will likely result in substantially lower fees for this service. However, according to a study conducted by the Consumer Federation of America and the National Consumer Law Center, that has not been the case for at least one of the major tax preparers. H & R Block and Household Bank's fees dropped for a year after the DI was reinstated. However, the trend reversed itself and the fees rose significantly from 2000 to 2001, which increased H & R Block's revenue from RALs by 49 percent. Per RAL revenue rose by 44 percent while RAL sales volume increased by only 2.7 percent. Therefore, the expected outcome that RAL prices would go down as a result of the reinstatement of the indicator has not occurred. Rather, it has gone in the opposite direction as the profit motive has presented itself. It is important at this point to recall the ideal of actions by government agencies to ``do no harm.'' However, the Debt Indicator conveniently provides information about an individual's credit history that is in many cases only known by the Federal Government and is helping tax preparers make excessive profits of low- and moderate- income taxpayers who utilize the service. If the Debt Indicator is removed, then the loans become riskier and the tax preparers may not aggressively market them among EITC filers. The IRS should not be aiding efforts that take the earned benefits away from low-income families and allow unscrupulous preparers to take advantage of low- income taxpayers. Again, I agree to withdraw my amendment at this time, but I encourage all of my colleagues to support my efforts to address this issue in order to protect low-income working families from the predatory practice of RALs and eliminate the ability of the IRS to facilitate the processing of RALs by ending the DI. speed rail study

Mr. AKAKA. Mr. President, certain tax preparers are lining their pockets with money that should be going toward the everyday needs of lower income families. These preparers are taking advantage of those that have sought assistance in claiming the Earned Income Tax Credit, EITC, by successfully marketing to them to obtain refunds through exorbitantly priced refund anticipation loans, RALs. An estimated $1.75 billion intended to assist low-income families went to commercial tax preparers and affiliated national banks for tax assistance, electronic filing of returns, and high-cost refund loans in 1999, according to a report published by the Brookings Institution. In 2001, 40.7 percent of taxpayers who earned the EITC received their refund through RALs. The States that had the highest percentage of EITC returns with RALs included Mississippi, 61.5, South Carolina, 58.9, Georgia, 57.6, North Carolina, 57.5, and Louisiana, 56.8. The Internal Revenue Service, IRS, reduces the risk that lenders take on RALs by providing them a Debt Indicator, DI, on all IRS e-file acknowledgements. The DI informs the lender whether or not an applicant owes Federal or State taxes, child support, student loans, or other government obligations, and this assists the tax preparer in ascertaining the applicant's ability to obtain their full refund so that the RAL is repaid. The vast majority of refunds are remitted to the preparer as prepared. Thus, interest rates for RALs that vary from 97 percent to more than 2000 percent are not justifiable when the IRS lowers the risk of the loans by providing the DI service. In 1995, the use of the DI was suspended because of massive fraud in e-filed returns with RALs. After the program was discontinued, RAL participation declined. The use of the DI was reinstated in 1999, according to H&R Block, to ``assist with screening for electronic filing fraud and is also expected to substantially reduce refund anticipation loan pricing.'' Although RAL prices were expected to go down as a result of the reinstatement of the DI, this has not occurred. The Debt Indicator should be stopped. The Akaka amendment would prohibit the use of funds in H.R. 2989, the Fiscal Year 2004 Transportation, Treasury, and Independent Agencies Appropriations Act, for the Debt Indicator program. The Akaka amendment has been endorsed by the Consumer Federation of America and the National Consumer Law Center. The DI is helping tax preparers make excessive profits of low- and moderate-income taxpayers who utilize the service. If the Debt Indicator is removed, then the loans become riskier and the tax preparers may not aggressively market them among EITC filers. The IRS should not be aiding efforts that take the earned benefits away from low-income families and allow unscrupulous preparers to take advantage of low-income taxpayers. RALS are extremely short-term loans that unnecessarily diminish the EITC. There are alternatives to speeding up refunds such as filing electronically or having the refund directly deposited into a bank or credit union account. Using these methods, taxpayers can receive their returns in about 7 to 10 days without paying the high fees associated with RALs. Mr. President, I ask unanimous consent that a letter and chart from the National Consumer Law Center be printed in the Record.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today in strong support of the amendment offered by the Senator from Nevada, Mr. Reid, to prohibit the use of fiscal year 2004 Interior funds to initiate public private competitions at the Department of the Interior, including the National Park Service. This amendment takes an important step to ensure that vital public services at Interior are not put at risk by the administration's aggressive plans to contract out Federal jobs. As the ranking member of the National Parks Subcommittee, I view the administration's outsourcing policies as especially harmful to the National Park Service. I am particularly concerned that the outsourcing of Park Service jobs could target biologists, anthropologists and archaeologists. During a Parks Subcommittee hearing this summer, Scot McElveen, the president of the Association of National Park Rangers testified that current outsourcing policies seriously threaten reliable, effective, and efficient service to the public. Mr. McElveen said the administration's outsourcing plan is incompatible with the Parks Service's decentralized workforce. Furthermore, he noted that it would only worsen National Parks' current staffing and budgetary shortfalls by diverting funds for operations and maintenance to contract out jobs. I agree with Mr. McElveen. I fail to see how outsourcing functions within the Parks Service will improve their mission to protect our national parks, historic sites, monuments, and other treasured places. Park Service employees have a strong sense of public service which cannot be replicated by the private sector. I believe this amendment takes the measures needed to ensure that contracting out at the Department of the Interior does not come at the expense of our National Parks. The Reid amendment is identical to language included in H.R. 2691, the House Interior Appropriations bill. I urge my colleagues to support this amendment.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to introduce legislation with my friend and colleague from Hawaii, Senator Inouye, to provide certain Federal public benefits for citizens of the Freely Associated States (FAS) who are residing in the United States. The bill would provide eligibility for non-emergency Medicaid, Food Stamps, Temporary Assistance to Needy Families, and Supplemental Security Income to FAS citizens residing in the United States. Citizens from the FAS are citizens from the Republic of the Marshall Islands (RMI), Federated States of Micronesia (FSM), and Palau. The United States has a very unique relationship with the FSM, RMI, and Palau. The Compact of Free Association established these Nations as sovereign States responsible for their own foreign policies. However, the Freely Associated States remain dependent upon the United States for military protection and economic assistance. The Compact provides that the United States has the prerogative to reject the strategic use of, or military access to, the FAS by other countries, which is often referred to as the ``right of strategic denial.'' The Compact also provides that the United States may block FAS government policies that it deems inconsistent with its duty to defend the FAS, which is referred to as the ``defense veto.'' Under the Compact, the United States has exclusive military base rights in the FAS. In exchange, the United States is required to support the FAS economically, with the goal of producing self-sufficiency, and FAS citizens are allowed entry into the United States as non-immigrants for the purposes of education, medical treatment, and employment. The Senate is considering S.J. Res. 16, the Compact of Free Association Amendments Act of 2003, which was favorably reported by the Senate Committee on Energy and Natural Resources this morning. S.J. Res. 16 is the codification of title II of the Compact pertaining to economic relations. As FAS citizens are allowed free entry into the United States as part of the Compact, many FAS citizens reside in the State of Hawaii. Since 1997, when Hawaii began reporting its impact costs, the State has identified over $140 million in costs associated with FAS citizens. In 2002, the State of Hawaii expended over $32 million in assistance to FAS citizens. S.J. Res. 16 provides $30 million in annual funding for Compact impact assistance to be shared between the State of Hawaii, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa. While this funding is a positive step forward, it does not begin to reimburse the affected jurisdictions for the costs associated with FAS citizens living in Hawaii. The legislation we are introducing today would provide assistance to States and territories who have continued to shoulder the majority of the costs associated with the Compact. The Federal Government must provide appropriate resources to help States meet the needs of the FAS citizens--an obligation based on a Federal commitment. It is unconscionable for a State or territory to shoulder the entire financial burden of providing necessary education, medical, and social services to individuals who are residing in that State or territory when the obligation is that of the Federal Government. For that reason, I am seeking to provide reimbursement of these costs. It is time for the Federal Government to take up some of the financial responsibility that until now has been carried by the State of Hawaii, CNMI, and Guam, by restoring public benefits to FAS citizens. This bill would restore eligibility of FAS citizens for non-emergency Medicaid. FAS citizens lost many of their public benefits as a result of the Personal Responsibility and Work Opportunity (PRWORA) Act of 1996, including Medicaid coverage. FAS citizens were previously eligible for Medicaid as aliens permanently residing under color of law in the United States. After the enactment of welfare reform, the State of Hawaii could no longer claim Federal matching funds for services rendered to FAS citizens. Since then, the State of Hawaii, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands have continued to meet the health care needs of FAS citizens. The State of Hawaii has used State resources to provide Medicaid services to FAS citizens. In 2002 alone, the State spent approximately $6.75 million to provide Medicaid services without receiving any Federal matching funds. There has been an increasing trend in the need for health care services among FAS citizens. During the current fiscal year, the number of individuals served in the State of Hawaii's Medicaid Program has grown from 3,291 to 4,818 people based on the average monthly enrollment. This is an increase of 46 percent. For only the first half of the fiscal year, the State of Hawaii has spent $4.66 million for the Medicaid costs incurred for FAS citizens. These Medicaid costs do not reflect additional State expenditures on medical care contracts to care for the uninsured, for community health care services, and for the activities of the Department of Health's Communicable Disease Branch. This bill would also provide eligibility for FAS citizens residing in the United States to participate in the Temporary Assistance for Needy Families and Supplemental Security Income programs. According to Hawaii's Attorney General, financial assistance in the form of the Temporary Assistance to Other Needy Families (TAONF) program, a State program, provided $4.5 million to FAS citizens in State Fiscal Year 2002. Of this total, $390,000 was provided through the General Assistance program, which supports individuals and couples with little or no income and who have a temporary, incapacitating medical condition; $532,000 supported aged, blind, and disabled FAS citizens with little or no income who are not eligible for Federally funded Supplemental Security Income; and $3.6 million was spent on the State's TAONF program that assists other needy families who are not eligible for Federal funding under the Temporary Assistance to Needy Families program. The number of FAS citizens served by the Hawaii Department of Human Services has increased by almost 20 percent in the span of one year alone. The financial assistance that the State of Hawaii provides to FAS citizens in the form of TAONF is a great support to those families attempting to achieve economic stability, but it has a significant financial impact on the State's budget. The bill would also provide eligibility for the Food Stamp Program. The Food Stamp Program serves as the first line of defense against hunger. It is the cornerstone of the Federal food assistance program and provides crucial support to needy households and those making the transition for welfare to work. We have partially addressed the complicated issue of alien eligibility for public benefits such as food stamps, but again, I must say it is just partial. Not only should all legal immigrants receive these benefits, but so too citizens of the FAS. Exclusion of FAS citizens from Federal, State, or local public benefits or programs is an unintended and misguided consequence of the welfare reform law. We allow certain legal immigrants eligibility in the program. Yet FAS citizens, who are not considered immigrants, but who are required to sign up for the Selective Service if they are residing in the United States, are ineligible to receive food stamps. This bill corrects this inequity. I look forward to working with my colleagues to enact this measure which is of critical importance to my State of Hawaii, which has borne the costs of these benefits for FAS citizens living in Hawaii for the past 17 years. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to comment on the debate over funding for the administration's request for studying new nuclear weapons in the Energy and Water Development Appropriations bill. The administration proposes that Congress fund the study of two new nuclear weapons: a robust nuclear earth penetrator, RNEP, and a low yield nuclear weapon. Why does the United States need these new nuclear weapons? The administration's case for these new nuclear weapons presumes that deterrence may not be working well in the post-cold war security environment. Leaders of rogue states may conclude that the United States cannot attack their deep bunkers or weapons of mass destruction, WMD, and so act or use their WMD with impunity. These new nuclear weapons supposedly will bolster the U.S. deterrent. But does our nuclear arsenal no longer deter? Deterrence involves credibly threatening an enemy to deter them from taking unwanted actions. It involves having the forces to fulfill the threat and the resolve to carry out the threat. We have enough nuclear weapons to accomplish this goal. Over a decade after the end of the cold war we possess an arsenal that could still end life on earth as we know it. This massive destructive power should give pause to any nation or dictator that wants to attack the United States with nuclear weapons. While the Congress was on recess, the annual remembrance of the bombings of Hiroshima and Nagasaki and the end of World War II passed. On August 6, 1945, the United States dropped the first atomic bomb on Hiroshima. Three days later another was dropped on Nagasaki. Shortly thereafter Japan surrendered, ending World War II. The Hiroshima bomb had an explosive power of 15 kilotons of TNT and killed almost 70,000 people immediately and injured as many more. The Nagasaki bomb was 22 kilotons and killed 40,000 people and injured another 25,000. There had been devastating conventional bombing attacks during World War II. The fire bombings of Dresden and Tokyo also caused widespread damage and loss of life. But the realization that one plane with one bomb could destroy a city was a new and fearsome development. After the end of World War II and the onset of the cold war, the U.S. arsenal expanded rapidly. By 1960, more than ten thousand nuclear weapons were in the U.S. arsenal. Weapons had expanded from kiloton to megaton size. The U.S. arsenal grew to have 20,500 megatons of TNT explosive power. A megaton is an enormous amount of destructive power. A kiloton is a thousand tons. A megaton is a million tons. In 1960, the U.S. arsenal had almost seven tons of TNT of explosive power for every one of the three billion men, women and children on the planet. The massive overkill of the U.S. arsenal, like its Soviet counterpart, has declined since the 1960s. The United States still keeps thousands of nuclear weapons. But the average explosive power of a U.S. nuclear weapons has decreased. As a result the U.S. arsenal today contains only some 1,200 megatons of explosive power. Still enough, however, for 400 lbs. for every person on Earth. Some advocates of small nuclear weapons claim massive firepower is a poor deterrent. They argue that the United States would not use a large nuclear weapon for a limited strike. They further argue that smaller, more usable nuclear weapons will be a more credible deterrent because rogue state leaders will believe the United States could use them. The administration proposes to investigate the possibilities of a new nuclear weapon with a yield of less than five kilotons to meet this goal. Five kilotons is one third the size of the Hiroshima bomb. It is not a low-yield weapon. It is equivalent to 5,000 tons of ten million pounds of TNT. Yet, the use of such new lower yield nuclear weapons is incredible because it is impractical and there are conventional weapons that can or will be able to do the job. We are told there are dozens if not hundreds of buried hardened targets. Without excellent intelligence on where WMD or rogue leaders may be hidden, the United States would need to drop dozens or hundreds of nuclear weapons. The radioactive fallout from such a strike would be large. The international political fallout would be massive and so would be the international environmental effects. The U.S. nuclear arsenal is currently diverse and flexible. the United States in fact already possesses such low-yield nuclear weapons. I asked Secretary of Energy Spencer Abraham for the record when he was before the Senate Armed Services Committee this spring if the United States had operational nuclear weapons that could have yields of less than five kilotons. Secretary Abraham's unclassified written response was that, ``The U.S. has two existing nuclear weapons that have certified yields of less than five kilotons.'' As for the robust nuclear earth penetrator, we already have one of these as well. As has been well publicized, in the mid-1990's, the United States deployed the B61-11 bomb for an earth penetrating mission. The administration claims the B61-11 is no longer adequate for the job. Energy Department officials informed congressional staff in an unclassified briefing that the B61-11 was designed not to penetrate rock but to attack only certain targets in hard or frozen soil in Russia. It is not able to counter targets deeply buried under granite rock. Moreover, it has a high yield, in the hundreds of kilotons. If used in North Korea, the radioactive fall out could drift over nearby countries such as Japan. Is the solution to a seeming limitation to the B61-11 exploring yet more and more nuclear weapon designs? This search for a perfect nuclear deterrent reminds me of the mad logic of the cold war where the United States and Soviet Union pursued more and more nuclear weapons of more and more sophisticated designs to try to cover more and more contingencies. These endless improvements are unnecessary, expensive and dangerous. For example, some argue using new small penetrator nuclear weapons is preferable to using conventional weapons for attacking buried chemical or biological weapons. They hope that a nuclear weapon would incinerate hidden weapons. However, calculations by Princeton physicist Robert Nelson indicate that, unless the strike is extraordinarily precise, the blast from a nuclear weapon has as good a chance of dispersing buried agents as destroying them. Our conventional forces can also attack or disable deeply buried targets. They will continue to improve in effectiveness and lethality. We should focus on improving their capability, not chasing some nuclear will o' the wisp. The $21 million for the RNEP and advanced weapons concepts, including the low-yield nuclear weapons, in the fiscal year 2003 budget could be better spent elsewhere to guard us against real nuclear threats. There is widespread agreement that al Qaeda or other terrorist groups would make use of a dirty bomb if they could get hold of radioactive materials. I have released three General Accounting Office reports this year that show the United States and international controls over radioactive sealed sources that could be used in a dirty bomb are severely lacking. The Energy Department could better spend the funds being proposed for new nuclear weapons on improving the tracking and security of dangerous radioactive sources here and abroad. Pursuing new nuclear weapons will undermine our non-proliferation goals. The example we set for the rest of the world does matter. Getting the world's approval for the indefinite extension of the Nuclear Non Proliferation Treaty in 1995 was dependent on the United States and the other nuclear powers signaling they would rapidly negotiate a comprehensive Nuclear Test Ban Treaty, CTBT. The United States and Russian decision to stop nuclear testing in the lead up to the CTBT talks put pressure on France and China to end their nuclear test programs in the 1990's. Had the United States and the other nuclear powers not stopped nuclear testing it would have been even more difficult to pressure Pakistan and India to put a quick to their nuclear tests. It would be even harder to put pressure on North Korea today. Getting the world to continue to help us to pressure North Korea and Iran will be more complicated if the United States weakens its commitments to non-proliferation. In early September, Russia complained that several states' failure to ratify the CTBT is delaying its entry into force at an international conference convened to look at this question. This controversy over the U.S. non-proliferation policy is not welcome news when the administration is now seeking support to condemn Iran's nuclear program at an upcoming IAEA meeting. News reports indicate that the United States will have a hard time doing this as Iran has more allies on the IAEA's board than does the United States. The non-proliferation regime, laboriously constructed by the United States and the international community over 30 years, has been a success. Rather than having dozens of countries with nuclear weapons, we confront a few, final, hard cases that have been a problem for many years but whose time is running out. New nuclear weapons are not the way to address the challenges these nations pose. Rather, a diplomacy of engagement, building the support of the international community, and maintaining our strong alliance commitments and conventional forces is the way forward. The administration is learning that force and confrontation are not a solution to the non-proliferation problem. Saddam Hussein's weapon of mass destruction program was not an imminent threat. Continued inspections and indefinite monitoring which were envisioned under the U.N. resolutions would have contained his program. Confrontation with North Korea has led to an acceleration of the North Korean nuclear program not its demise. Now the administration must negotiate seriously with North Korea to bring and end to the crisis and create a new security regime in the Northeast Pacific. The administration should understand more and more types of nuclear weapons will not guarantee deterrence, prevent the proliferation of WMD, prevent war or conflict. In fact, during the cold war we found our ever increasing nuclear arsenal could not achieve these goals. Paranoid, pygmy or pariah states, as Professor Richard Betts once characterized them, sought nuclear weapons for their defense due to their imagined or justified fears, their perceived conventional weaknesses, or because of their outcast status. Nuclear weapons did not prevent the Korean war, the Vietnam war, the Arab-Israeli wars, or the Soviet invasion of Afghanistan. Deterrence has many components: nuclear forces, conventional forces, strong alliances, a strong economy, and a strong resolve among them. At this moment in history we need an intelligent diplomacy, strengthened alliances and capable conventional forces more than we need more and new types of nuclear weapons. We have enough nuclear weapons to maintain nuclear deterrence. If anything, we should be seeking ways to further reduce ours and other countries' nuclear arsenals, not add to them. Talk to the contrary by promoters of new nuclear weapons misrepresents the strength of our existing forces and our resolve. We are sending the wrong message about our military strength. I urge my colleagues to reject funding for these new nuclear weapon designs. I urge my colleagues to vote for Senator Feinstein's amendment.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to discuss the need for greater preparation to protect our agriculture from a terrorist attack. After September 11, the President placed agriculture on the list of critical infrastructure that deserved to be protected from an agroterrorist attack. Since then, the U.S. Department of Agriculture, USDA, has moved to improve our preparedness to prevent and respond to an attack upon our agriculture. The President's February 2003 ``National Strategy for the Physical Protection of Critical Infrastructures and Key Assets'' also outlines a strategy for increasing our ability to react to an agroterrorist attack. Yet, we still have a long way to go in protecting our agriculture industry. There has been a steady drumbeat of warnings about the vulnerability of our agriculture. Two major studies were recently released that concluded we should do more to guard our agriculture. The Council on Foreign Relations, CFR, published a report on our emergency response capability that said we lacked an effective response to an attack on our national food supply. The report recommended spending an additional $2.1 billion over the next 5 years to improve our ``animal/ agricultural'' emergency response. On the heels of the CFR report, the Partnership for Public Service issued a study that examined whether the Federal Government has the necessary expertise to defend against a bioterrorist attack. In regards to agricultural security, it said that federal agencies responsible for safeguarding our agriculture and food supply from bioweapons would face ``crushing burdens'' if our food and water supplies were contaminated. These are just the most recent reports that recommend we need to do more to increase our guard. Last fall, the National Academy of Sciences published a major study on vulnerability of U.S. agriculture. The General Accounting Office, GAO, has issued three reports in the last year that looked at food processing security, foot and mouth disease, and mad cow disease. All suggested that we still have a way to go to prevent or prepare for an attack on our agriculture. An attack on our agriculture could have serious consequences. Agricultural activity accounts for approximately 13 percent of the U.S. gross domestic product and nearly 17 percent of domestic employment. The United States is a top producer and exporter of agricultural goods, including beef, pork, poultry, wheat, corn and soybeans. Major agricultural States could be severely affected depending on the nature of the attack. States with large cattle herds could be devastated by a deliberately set outbreak of foot and mouth disease. There were over 96 million cattle and calves in the United States valued at some $70 billion in 2003. Texas has the largest number by far, 14 million animals, and could be particularly hard hit. In 2001, the cattle industry generated $6.8 billion in income for Texas. The breeding herd of beef cows is particularly concentrated in Kansas, Kentucky, Missouri, Montana, Nebraska, Oklahoma, South Dakota, Tennessee, and Texas, with each State having have more than a million head of beef cows. Dairy States could also suffer. The United States has over nine million milk cows that produce almost $25 billion in income. California and Wisconsin are the largest producers. Both have more than a million milk cows that yield close to $8 billion in income. But a number of States--Idaho, Iowa, Michigan, Minnesota, New Mexico, New York, Ohio, Pennsylvania, Texas, and Washington each have more than 200,000 cows, contributing substantially to their economies. Hog-raising States also could be vulnerable to the spread of foot- and-mouth disease, or to an outbreak of African swine fever. The United States had almost 60 million hogs and pigs valued at over $4 billion dollars in 2002. Iowa has the largest industry with more than 15 million animals valued at over a billion dollars. North Carolina is next with some 9.6 million animals valued at a half a billion dollars. Ten additional States have substantial industries with more than a million animals: Illinois, Indiana, Kansas, Minnesota, Missouri, Nebraska, Ohio, Oklahoma, Pennsylvania, and South Dakota. States with large poultry industries are vulnerable to Exotic Newcastle Disease or avian influenza. In 2002, 14 States had flocks of over 15 million birds each: Alabama, Arkansas, California, Florida, Georgia, Indiana, Iowa, Minnesota, Mississippi, Nebraska, North Carolina, Ohio, Pennsylvania, and Texas. Iowa alone has over 40 million birds valued at over $64 million. Crops, such as wheat, could also be a target. A purposeful spread of the Karnal bunt wheat fungus could have a strong adverse impact on U.S. exports. The United States is the world's leading exporter of wheat, accounting for almost one-third of world wheat exports valued at over $3.5 billion in 2002. Since almost 80 countries do not allow Karnal infected wheat to be imported, a ban on U.S. exports could have a substantial effect on the U.S. economy. The Economic Research Service of the USDA estimated that the total cost of a reduction of exports from 2003 to 2007 could be over $7 billion if there was such a ban. The top wheat-producing States--Kansas, Montana, North Dakota, Oklahoma, South Dakota, Texas, and Washington--would be particularly hard hit. I have been concerned about the vulnerability of our agriculture for quite some time. When I was a member of the House Agriculture Appropriations Subcommittee, I was a supporter of the USDA's Animal and Plant Health Inspection Service, APHIS. APHIS plays a critical role in guarding our borders and farms from agricultural pests and diseases, something that is of prime importance to Hawaii. As a Senator, I continue to be concerned about this problem. In the 107th Congress I introduced a bill to enhance agricultural biosecurity in the United States. In this Congress, I have introduced two bills that will help address our shortcomings in agricultural security preparedness. The Agriculture Security Assistance Act, S. 427, and Agriculture Security Preparedness Act, S. 430, are designed to address the need for increasing coordination in confronting the threat to America's agriculture industry. The two bills provide for better funding and better- coordinated response to an incident of agroterrorism. The bills will also serve to increase our defenses against debilitating agroterrorism attacks. The Agriculture Security Assistance Act is primarily aimed at assisting States and communities in responding to threats to the agriculture industry. The legislation will provide funds for communities and States to increase their ability to handle a crisis. It also will help animal health professionals to participate in community emergency planning activities to assist agriculturists in strengthening their defenses against a terrorist threat. The Agriculture Security Preparedness Act will enable better interagency coordination thereby enhancing agriculture security. The legislation will establish senior level liaisons in Departments of Homeland Security, DHS, and Health and Human Services, HHS, to coordinate with USDA on agricultural disease emergency management and response. The bill 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. Recently Mother Nature has provided warnings of the costs and dangers of a possible agroterrorist attack. In May, Canadians discovered that an 8-year-old cow that had been killed in January was infected with mad cow disease. The same disease affected cattle in Britain in the 1980s and 1990s leading to a slaughter of over 3.7 million animals. Canada faced an enormous adverse economic impact due to the discovery of the mad cow disease. Canada's cattle industry generates $7 billion in cattle sales and the industry remained paralyzed during the period immediately following the discovery of the disease. Major importers of Canada's beef, like the United States, Mexico, Japan and Australia, temporarily halted their imports causing almost $8 million a day loss to the cattle industry. The news also affected companies like McDonald's, Wendy's, and Tyson Foods. Canada acted to control the spread of the disease by quarantining herds of suspected cattle and slaughtering them to test for the presence of the disease. All the herds believed to have come in contact with the infected cow were quarantined and killed for medical examination. More than 2,700 Canadian cattle were slaughtered and eighteen farms were quarantined in the process of determining the disease's source and to control the spread of the disease. In the United States, the southwest poultry industry has been beset by a costly outbreak of Exotic Newcastle Disease, END, since last fall. The outbreak was first detected in a backyard chicken flock in Los Angeles County in early October 2002. It then spread to Nevada, Arizona and Texas. Over the past months, some 25 countries including the European Union have put embargoes on chicken from affected areas. In Texas, where the poultry industry employs about 15,000 people and is ranked sixth in the Nation, the industry said it could lose about $100 million as a result of the embargoes. In California, State officials ordered the destruction of more than 3 million birds, enforcing a quarantine over a wide area. The outbreak in 2002 and 2003 cost the state almost $100 million to control the spread of the disease. We all know an ounce of prevention is worth a pound of cure. The Nation's capability to counter agroterrorism is increasing. But agriculture's central importance to our country suggests greater efforts are needed. As the recent cases of Mad Cow and Exotic Newcastle disease dramatically demonstrate, the consequences of a lack of preparedness could be quite high. Containing these naturally occurring diseases was costly and it involved extensive coordination. It could be much more difficult to counter a deliberate attack. The two bills I have introduced will help us to act now so that a future agroterrorist attack can be avoided, or dealt with rapidly before it can get out of hand. I urge my colleagues to support this legislation.

Mr. AKAKA

Mr. AKAKA. I thank the chairman and the ranking member for their willingness to work with us on mentoring funding as this appropriations bill moves forward. It will make a big difference in many lives around the country. funding for health professions training

Mr. AKAKA. Mr. President, I rise to enter into a colloquy with colleagues who share my zeal for quality mentoring programs, Senators Allen and Ben Nelson, and the distinguished leaders on the Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies. My concern is with the adequacy of the funding level for mentoring included in this bill today. For the two programs focused exclusively on mentoring, the Department of Education's Mentoring Programs grants and the Department of Health and Human Services' Mentoring for Children of Prisoners, the bill before us commits just $38.6 million--well short of the President's request of $150 million. I understand that limited resources are constraining the amounts we are able to provide for many programs, and I thank the chairman and ranking member for the increased they included in this bill for Mentoring Programs. But I do hope we can find some funding to further increase the allocation for mentoring. I'm sure we can all remember an adult who made a difference for each of us growing up by spending time with us, encouraging us, and serving as a positive role model. That is exactly what mentoring is: a sustained relationship between a young person and an adult in which the adult provides support, guidance, and assistance to the young person. The benefits of a mentoring relationship are wide-ranging--including gains in educational achievement, health and safety, and social and emotional development. We have some wonderful mentoring programs in Hawai'i, and they have an invaluable impact on young people throughout my State. One of these excellent examples has been the Senior Kupuna in the Preschools Project run by the Hawaii Intergenerational Network that has achieved meaningful results such as positive changes in classroom behavior. But these programs need additional funding to serve more young people. I would like to work with the distinguished chairman and ranking member of the subcommittee to increase funding for mentoring in Conference to a level at least equal to the House allocation of $75 million. Before I yield the floor to them, I am pleased to yield at this time to another strong advocate of mentoring programs, the former Governor of Virginia, Senator Allen.

Mr. AKAKA

Mr. AKAKA. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. AKAKA. Mr. President, I send an amendment to the desk.

Mr. AKAKA. I have an amendment to offer.

Mr. AKAKA. I ask unanimous consent the Byrd amendment be set aside so I can offer an amendment.

Mr. AKAKA. Hawaii Council member John Knox in the letter relays a personal story about his son, who is now a history major at American University. When John's son was a senior in high school, his son told him that he was ``angry that I wasn't offered economics till this year. I feel cheated, because most of the history courses I've taken didn't talk much about economics, and now I can tell that I just wasn't getting the full story.'' We must fund the Triple-E to help to expose more students to economics and personal finance education early in their school years, before they feel cheated out of the ``full story.'' Referring again to the Hawaii conference that I cosponsored with HCEE 2 weeks ago, the issues of integrative versus modular teaching in economic and personal finance education and challenges to fit these subjects within the demands of the No Child Left Behind Act were of tremendous interest and debate. One of the main strategies produced by the education discussion, which featured participants from the Federal and State Departments of Education and other interested parties in a separate breakout session, was to provide teachers with more support, such as meaningful professional development and related incentives, in order to provide them with the tools that they need to teach economics and personal finance. The Triple-E Act is a good starting point for teacher support, and it must be funded so that we can meet real needs that are faced by teachers and schools on the non-Federal levels. To conclude my remarks, we all face a professional and personal calling to support economic and personal financial literacy for all Americans. Professionally, as policymakers, advocates, and educators, we want to enable individuals and families. We want to give them access to the tools and knowledge that they need to make sound financial decisions. And we want to begin that education at a young age, ideally when they are first learning the look and feel of money, or learning how to work with limited resources. Personally, each of us should be literate in this area, and try to encourage our family and friends to check their credit reports annually, understand economic trends, or increase their financial and economic literacy in other ways. Funding the Triple-E is an important step in fulfilling our professional obligation to financial and economic literacy, so that we can help others to meet their personal obligations in this area, for themselves and their families. I hope that something can be worked out with the managers of the bill before us, but if we are unable to do so, I will ask for a recorded vote at that time. Again, I hope that we can work something out before that occurs. Otherwise, I urge my colleagues to support my amendment. Mr. President, I yield my time. Exhibit 1 Hawaii Council on Economic Education, Honolulu, HI, July 14, 2003. Hon. Daniel K. Akaka, U.S. Senate, Washington, DC. Dear Senator Akaka: On behalf of the students and teachers in Hawaii served by the Hawaii Council on Economic Education (the Council), I am writing to express our strong support for the Excellence in Economic Education Act (EEE Act). Congress approved the EEE Act as a part of the No Child Left Behind Act, but has not yet funded this important program. The EEE Act provides resources for teacher training, assistance to school districts looking to incorporate economics and personal finance into curricula, evaluations assessing student understanding, research, and school-based student activities. The Hawaii Council on Economic Education was organized in 1965 to promote and improve the teaching of economics in Hawaii's public and private schools and increase the economic and financial literacy of Hawaii's students and residents. The Council is an independent, nonpartisan, nonprofit, 501(c)3 educational organization that focuses on the teacher as the key to Hawaii's economic literacy. Over the span of a teacher's career, he or she can influence over 3,000 students. This impact is truly significant. The Council commends you on your tireless effort to educate the public and your peers on the importance of economic and financial literacy and we support your amendment to the FY 2004 Labor-HHS, and Education Appropriations bill which would fund the EEE Act, which will provide vital local, state, and national resources to boost economic and financial literacy in America. Several Council Members have asked me to pass on their messages of support. ``This is to encourage the Senate to accept the principles--and to fund the activities--embodied in Senator Akaka's Excellence in Economic Education Act. For more than 15 years, I have been an active volunteer and donor supporting economic education, as has my company, Alexander & Baldwin, Inc. We believe that citizens in a democracy can participate more thoughtfully in its processes if they have a basic understanding of economic principles. Regretfully, tightened local school budgets are reducing, rather than expanding, the chances for youngsters to have an early exposure to economics. Among other benefits, federal recognition and support of economic education would serve to ratify and strengthen our arguments about its value on the local level. As a former educator, Senator Akaka has a special appreciation of this need, and we urge you, his respected colleagues, to acknowledge and support his sensitivity to this issue.'' --John B. Kelley, Vice President, Investor Relations, Alexander & Baldwin, Inc., Board Member, Hawaii Council on Economic Education.

Mr. AKAKA. Mr. President, I yield myself 30 minutes to offer an amendment to the Labor-HHS appropriations bill to add $5 million in funding to the bill before the Senate for the Excellence in Economic Education Act. I thank amendment cosponsors Senators Allen, Sarbanes, Corzine, Kennedy, Stabenow, and Dodd for their support. Our leaders on the Labor-HHS Appropriations Subcommittee, Senators Specter and Harkin, have been helpful in working with me on this effort. I appreciate the difficult job they have before them to remain within tight budget constraints imposed on us by necessary increases for military operations in Iraq and the newest round of tax cuts. I opposed the budget resolution and the tax bill because I knew that it could lead to this appropriations fight, spurred by unrealistic caps on important education, social welfare, and other domestic programs, pitting important priorities against each other. Despite these challenges facing the bill before us, I hope that we can work something out to have the Excellence in Economic Education Act, or Triple-E, funded. The Triple-E provides significant resources for economics and personal finance education, which are not receiving due attention by Congress. Although the Triple-E was included in the No Child Left Behind Act, the only comprehensive economic education program being funded by this bill is one to assist the teaching of economics outside of this country. I fully support grants to improve the quality of civic and economic education through exchange programs with emerging democracies, which represent important efforts to foster democracy in former Soviet states and other areas of the world. However, the lack of support for a corresponding authorized domestic program is unconscionable. This is particularly disturbing as schools must prepare for the first National Assessment of Educational Progress, NAEP, in Economics, which according to the National Assessment Governing Board, is on track for 2006. The Triple-E can fill this gap in domestic support for economic and financial literacy, but the program must be funded. Let me tell you what I am referring to when I mention economics and personal finance education. These are very practical subjects that everyone should know--as basic in many cases as are reading, writing, and arithmetic. Again, referring to the 2006 NAEP in Economics, the framework for the assessment states that economic literacy includes an understanding of ``the fundamental constraints imposed by limited resources, the resulting choices people have to make, and the trade- offs they face; how economies and markets work and how people function within them; and the benefits and costs of economic interaction and interdependence among people and nations.'' The framework continues to note that literacy in this area ``also includes having the skills that allow people to function effectively in their roles as consumers, producers, savers, investors, and responsible citizens. These skills include economic reasoning, problem solving, decision making, and the ability to analyze real-life situations.'' Personal finance, which is an important component of economics, speaks cogently to situations that Americans face every day. How are we making decisions when we pull out our wallets at the grocery store or in the lunch line? Are we each checking our credit reports regularly and understanding how they contribute to a bank's or credit union's decision about whether our loan applications will be approved? How are families making budgeting choices every week, and are they sticking to those choices? This is difficult to say, given that personal bankruptcy filings continue to set record levels. For the first quarter of 2003, household debt service payments were almost 14 percent of disposable personal income. During the first 3 months of 2003, the percentage of mortgages in the foreclosure process climbed to another record high. We may attribute much of this to current economic conditions. However, I daresay that some of the financial troubles faced by Americans today could have been mitigated if they received pragmatic, standards-based education from a young age, when individuals are forming the habits that they may take with them throughout their lives. Indeed, our children are not being fully prepared by our schools to face the realities of life because they are proving to be illiterate in economics and personal finance. According to the 2002 National Jump$tart Survey, economic and financial literacy scores have declined since the Jump$tart Coalition for Personal Financial Literacy conducted its first survey of high school seniors in 1997. The significance of surveying high school students is that high school is the last formal opportunity many individuals will have to acquire a comprehensive understanding of economic and personal finance. Therefore, the results from the 2002 survey indicating failing scores from more than 68 percent of high school seniors taking the survey are troubling. They failed to demonstrate an understanding of the basic fundamentals of economics and personal financial management. For instance, the survey found that the majority of students believed that interest from a savings account may not be taxed. They also thought that an elderly retired man and his wife, who is also retired, should have the highest amount of life insurance, as opposed to a young single mother with children. While some may not think that this is important, young adults entering the workforce should understand that interest from investments, including savings accounts, is a form of income that is taxable just like one's salary. In addition, life insurance is meant to provide income for those who are significantly dependent upon the primary income earner in the family. The survey also found the greatest declines in scores on questions relating to money management and savings. The need to provide funding for the Triple-E Act is now. We need to send a message to our schools that we will support economic and personal finance studies. While results from the Jump$tart survey are illuminating, many public high schools did not participate out of concern that poor scores would require them to focus valuable and limited resources on courses other than those such as math, English, and science. As schools hesitate to understand the real-world implications of this attitude toward personal finance and economic education, it is the students who are the real losers. My attention was drawn to the need in this area faced by the State I represent. Over the August recess, I cosponsored with the Hawaii Council on Economic Education Hawaii's first ever Economic and Financial Literacy Conference, which drew tremendous support from many different levels and sectors of the community. I was pleased to have representatives from the Departments of Education and the Treasury, the Federal Reserve Board, Jump$tart and the National Council on Economic Education--NCEE, as well as a broad array of representatives from Hawaii's business and education sectors, State Legislature, and Governor's office. The more than 200 people at the conference heard the results of a survey of adults in Hawaii's workforce-- beneficiaries of Hawaii's education system. Although those taking the survey correctly answered an average of 13 in 20 questions, many did not have a clear understanding of basic concepts such as what constitutes a budget deficit and what is the significance of the stock market. Furthermore, the University of Hawaii department of economics unveiled a paper showing a steady increase then sharp decline in economic education in Hawaii in 1999. Thus, in the State I know best, despite a clear community interest in economic and personal finance education, we have a long way to go toward serving our children in these important subjects. Furthermore, students are not receiving this education at home, with only about 1 in 4, or 26 percent, of 13- to 21-year-olds reporting that their parents actively taught them to manage money. I am not advocating for government to be assuming this role in lieu of parents doing so. However, many Americans begin their roles as parents without having received adequate economics and personal finance education themselves, and thus lack the tools to provide their children with sound advice or the ability to steer them to useful resources. With this point made, let us turn the spotlight on state education systems. How are they doing in this area? I am sad to say not as well as they could be doing. According to the third biennial survey of States by the NCEE, the number of States having economic standards grew dramatically. In 1998, 38 States included economics in their standards. In 2000 and 2002, ten more States adopted economic standards. However, the percentage of States with standards who required them to be implemented dropped from 75 to 71 percent from 2000 to 2002. Furthermore, only one in four States tested students' economics knowledge in 1998. The current economics testing picture is in the chart behind me, where you can see only a marginal improvement to 27 States testing students, with four others--Indiana, Nebraska, Oregon, and Utah--in development. Hawaii is included in those States not testing students. Again, with the upcoming 2006 NAEP, although we are presently unsure which students will be tested, it would behoove States to begin assessing where their students are in terms of understanding economics. Measuring the presence of personal finance in State standards produces a picture even more bleak, with ground lost in key measures. According to NCEE, the number of States including personal finance in education standards grew from 21 to 40 from 1998 to 2000, but then fell dramatically to 31 States in 2002. The status of standards implementation is even worse, but slowly improving, from 14 States in 1998 to 17 in 2002. Regarding testing, although personal finance is often part of another subject test such as economics, only eight States conduct personal finance testing, with another two States with tests in development. As you can see in my next chart, testing is currently required in Alabama, Illinois, Kentucky, Maine, Michigan, New Mexico, North Carolina, and Rhode Island, with tests planned or in development in Oregon and Utah. The bright spot there is that this is a significant increase from 1998, when only one State tested student achievement in personal finance. In a related testing matter, Triple-E funding would be an important help at the State and local levels as school districts are facing the challenges of meeting Annual Yearly Progress requirements under the No Child Left Behind Act. We must provide States the opportunity to explore the possibility that math and reading scores could be increased, if economics and personal finance are integrated into these other basic subjects. We all know children who may not easily be able to add apples and oranges but can instantly arrive at an answer to a calculation involving dollars and cents. In fact, this type of integration in teaching economics and personal finance was discussed at length at a roundtable sponsored on May 16, 2002, by the U.S. Department of the Treasury, involving the U.S. Department of Education, education groups such as the Council of Chief State School Officers and National Association of Elementary School Principals, and economic and financial literacy organizations such as the National Council on Economic Education, Junior Achievement, and the Jump$tart Coalition. The roundtable resulted in a white paper which says that if we dedicate ourselves to integrating financial concepts into reading and mathematics curricula, we can teach children the basics of financial education via several access points. Modes of entry include developing standards of financial education, creating tests that correspond to the curricula taught in classrooms, cooperating with publishers of textbooks and other instructional materials to stress the incorporation of financial concepts into their products, promoting the use of ``off-the-shelf financial education curricula'' distributed by community groups dedicated to financial education, and training those most responsible for conveying these valuable lessons to students--our educators. It is also noted in the white paper that States requiring students to complete financial education courses produce graduates who have higher savings rates and net worth, as a percentage of earnings, compared with those who graduate from schools in States with no such requirement. Society as a whole benefits from higher levels of savings and investment, which drive economic activity. All of this provides the broad context of why I am offering my amendment today. The Triple-E will ensure that vital resources will go to the national, State, and local levels to provide a needed boost to economic and financial literacy. The Triple-E Act would work to do this by awarding a competitive grant to a national nonprofit educational organization that exists primarily to improve student understanding about economic and financial literacy through the classroom. The organization would distribute 75 percent of funds to State and local partnerships for teacher training, assistance to school districts desiring to incorporate economics and personal finance into curricula, evaluations of the impact of economic and financial literacy education on students, related research, and school-based student activities. The national organization would use the rest of the grant for the strengthening of relationships with State and local entities, teacher training, research on effective teaching practices, assessment development, and material development and dissemination. Furthermore, the intent of the approach in the Triple-E, due to a federal match requirement, is to help existing and new programs to be self-supporting and involve the entities that should be on the front lines advocating financial and economic literacy; that is, banks, credit unions, businesses, and private industry. They are the very entities that benefit from a well-educated citizenry that knows how to take advantage of opportunities for savings, borrowing, and investing, and avoiding financial mistakes such as misusing credit or having to file for bankruptcy. In general, these entities want the very best education for the next generation of managers, entrepreneurs, business leaders, and consumers so that sound financial decisions can be made, economic growth can continue, and Americans can be good consumers who pay their bills on time and remain personally financially independent. As Federal Reserve Chairman Alan Greenspan noted in a recent speech to the Jump$tart Coalition, ``Building bridges between community organizations, our educational institutions, and private businesses will be an essential aspect of our efforts to increase familiarity with new technological and financial tools that are fundamental to improving individual economic well-being. And the success of such efforts will bear significantly on how well prepared our society is to meet the challenges of an increasingly knowledge-based economy.'' A cooperative approach is necessary to help current efforts thrive, which is the type of effort supported by the Triple-E Act. I would like to note at this time that this body already expressed support for the type of education advocated by the Triple-E Act when it passed my resolution designating April 2003 as Financial Literacy for Youth Month. I am pleased that the other body followed suit by passing a similar version of my resolution, both of which contributed to the effort to raise awareness for financial literacy. This effort is also supported by various organizations, many associated with the Jump$tart Coalition for Personal Financial Literacy. For example, America's Community Bankers stated, `` . . . we are strong supporters of financial literacy initiatives because ACB believes that informed consumers--including young consumers--are better able to make wise credit and other financial decisions.'' Another letter from the North American Securities Administrators Association states: As a majority of Americans have become investors, there is an obligation to ensure individuals have a basic understanding of the principles of savings and investing, as well as preserving their accumulated wealth. Every day, it becomes more apparent that there is a population of investors who are ill equipped to make critical financial decisions for their lives. One could only read the names of entities and organizations that are a part of the Jump$tart Coalition to understand how broad the base of support is for financial and economic literacy. Many States are echoing these supportive statements, including my State of Hawaii. I was delighted that the Hawaii State Legislature approved a resolution similar to my Senate resolution and Governor Linda Lingle signed a proclamation for Financial Literacy for Youth Month. Furthermore, I have been working closely with the Hawaii Council on Economic Education, which supports funding for the Triple-E. I ask unanimous consent that a support letter from the Council be printed in the Record following my statement.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to introduce the Pension Benefit Guaranty Corporation Pilots Equitable Treatment Act to ensure fair treatment of commerical airline pilot retirees. This bill will lower the age requirement to receive the maximum pension benefits allowed by Pension Benefit Guaranty Corporation (PBGC) to age 60 for pilots, who are mandated by the Federal Aviation Administration (FAA) to retire before age 65. With the airline industry experiencing severe financial distress, we need to enact this legislation to assist pilots whose companies have been or will be unable to continue their defined benefit pension plans. This bill will slightly alter Title IV of the Employee Retirement Income Security Act of 1974 to require the Pension Benefit Guaranty Corporation to take into account the fact that the pilots are required to retire at the age of 60 when calculating their benefits. The Pension Benefit Guaranty Corporation was established to ensure that workers with defined benefit pension plans are able to receive some protion of their retirement income in cases where the employer does not have enough money to pay for all of the benefits owed. After the employer proves to the PBGC that the business is financially unable to support the plan, the PBGC takes over the plan as a trustee and ensures that the current and future retirees receive their pension benefits within the legal limits. Four of the ten largest claims in PBGC's history have been for airline pension plans. Although airline employees account for only two percent of participants historically covered by PBGC, they have constituted approximately 17 percent of claims. For example, Eastern Airlines, Pan American, Trans World Airlines, and US Airways have terminated their pension plans and their retirees rely on the PBGC for their basic pension benefits. The FAA requires commercial aviation pilots to retire when they reach the age of 60. Pilots are therefore denied the maximum pension benefit administered by the PBGC because they are required to retire before the age of 65. Herein lies the problem. Mr. President, if pilots want to work beyond the age 60, they have to request a waiver from the FAA. It is my understanding that the FAA does not grant many of these waivers. Therefore, most of the pilots, if not all, do not receive the maximum pension guarantee because they are forced to retire at age 60. The maximum guaranteed pension at the age of 65 for plans that terminate in 2003 is $43,977.24. However, the maximum pension guarantee for a retiree is decreased if a participant retires at the age of 60 to $28,585.20. This significant reduction in benefits puts pilots in a difficult position. Their pensions have been reduced significantly and they are prohibited from reentering their profession due to the mandatory retirement age. They are unable to go back to their former jobs. It is my sincere hope that existing airlines are able to maintain their pension programs and that the change this bill makes will not be needed for any additional airline pension programs. However, due to the difficult financial conditions of many or the airlines, I feel that we must enact this protective measure. My legislation ensures that pilots are able to obtain the maximum PBGC benefit without being unfairly penalized for having to retire at 60, if their pension plan is terminated. I urge my colleagues to support this bill. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. AKAKA

Mr. AKAKA. Mr. President, I rise today to introduce the Pension Benefit Guaranty Corporation Pilots Equitable Treatment Act to ensure fair treatment of commerical airline pilot retirees. This bill will lower the age requirement to receive the maximum pension benefits allowed by Pension Benefit Guaranty Corporation (PBGC) to age 60 for pilots, who are mandated by the Federal Aviation Administration (FAA) to retire before age 65. With the airline industry experiencing severe financial distress, we need to enact this legislation to assist pilots whose companies have been or will be unable to continue their defined benefit pension plans. This bill will slightly alter Title IV of the Employee Retirement Income Security Act of 1974 to require the Pension Benefit Guaranty Corporation to take into account the fact that the pilots are required to retire at the age of 60 when calculating their benefits. The Pension Benefit Guaranty Corporation was established to ensure that workers with defined benefit pension plans are able to receive some protion of their retirement income in cases where the employer does not have enough money to pay for all of the benefits owed. After the employer proves to the PBGC that the business is financially unable to support the plan, the PBGC takes over the plan as a trustee and ensures that the current and future retirees receive their pension benefits within the legal limits. Four of the ten largest claims in PBGC's history have been for airline pension plans. Although airline employees account for only two percent of participants historically covered by PBGC, they have constituted approximately 17 percent of claims. For example, Eastern Airlines, Pan American, Trans World Airlines, and US Airways have terminated their pension plans and their retirees rely on the PBGC for their basic pension benefits. The FAA requires commercial aviation pilots to retire when they reach the age of 60. Pilots are therefore denied the maximum pension benefit administered by the PBGC because they are required to retire before the age of 65. Herein lies the problem. Mr. President, if pilots want to work beyond the age 60, they have to request a waiver from the FAA. It is my understanding that the FAA does not grant many of these waivers. Therefore, most of the pilots, if not all, do not receive the maximum pension guarantee because they are forced to retire at age 60. The maximum guaranteed pension at the age of 65 for plans that terminate in 2003 is $43,977.24. However, the maximum pension guarantee for a retiree is decreased if a participant retires at the age of 60 to $28,585.20. This significant reduction in benefits puts pilots in a difficult position. Their pensions have been reduced significantly and they are prohibited from reentering their profession due to the mandatory retirement age. They are unable to go back to their former jobs. It is my sincere hope that existing airlines are able to maintain their pension programs and that the change this bill makes will not be needed for any additional airline pension programs. However, due to the difficult financial conditions of many or the airlines, I feel that we must enact this protective measure. My legislation ensures that pilots are able to obtain the maximum PBGC benefit without being unfairly penalized for having to retire at 60, if their pension plan is terminated. I urge my colleagues to support this bill. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. AKAKA

Mr. AKAKA. Mr. President. As the ranking member of the Subcommittee on Financial Management, the Budget, and International Security, I am honored to work with my colleague Senator Fitzgerald, Chairman of the Subcommittee, to introduce the ``Department of Homeland Security Financial Accountability Act.'' Our bill would add the Department of Homeland Security (DHS) to the Chief Financial Officers Act of 1990 (CFO Act), P.L. 101-576. It is a companion measure to bipartisan legislation, H.R. 2886, introduced in the House on July 24, 2003. Adding DHS would ensure that Congress will have timely and accurate financial information imperative for good governance of the resources of the Department entrusted to making our homeland safe. The CFO Act recognizes the responsibility of governmental agencies to be accountable to taxpayers. This bill would require the President to appoint, subject to Senate confirmation, a Chief Financial Officer for DHS, who would report directly to the Director of the Department regarding financial management matters. It also requires the DHS CFO to be a member of the CFO Council. This Council is charged with advising and coordinating the activities of its members' agencies on such matters as consolidation and modernization of financial systems, improved quality of financial information, financial data and information standards, internal controls, legislation affecting financial operations and organizations, and any other financial management matters. In addition, the bill would require the DHS CFO to prepare and provide for audit, annual financial statements that are submitted to Congress, which will aid in congressional oversight of the Department. Although the DHS bill adopted by the Govermental Affairs Committee last year, S. 2452, would have put the new Department under the CFO Act, the enacted version of the bill, P.L. 107-296, did not. All other Federal departments and major agencies are under the requirements of the Act. Since the passage of the CFO Act in 1990, tremendous improvements have been made in agency financial management. For example, all CFO Act agencies, except for the Department of Defense and the Agency for International Development, achieved clean opinions from their auditors on their financial statements in fiscal year 2003. Initially, none of the agencies were able to do so. Also, the General Accounting Office has reported that the number and severity of internal control problems reported for CFO Act agencies have been significantly reduced. We expect good corporate governance from the private sector; we should also expect good governance from federal agencies. Adding DHS to the CFO Act would also require that it meet the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA), P.L. 104-208, which mandates that all agencies subject to the CFO Act meet certain financial system conditions. The goal of FFMIA is for agencies to have systems that provide reliable financial information available for day-to-day management. It is our responsibility to ensure the Federal Government is accountable to the American taxpayers. I am pleased to join with the Chairman of our Subcommittee to ensure that DHS has the financial management systems and practices in place to provide meaningful and timely information needed for effective and efficient management decision-making.