John Ashcroft

Mr. ASHCROFT

Mr. ASHCROFT. I think that is an appropriate question. There is almost a 50-percent increase in funding for the FDA. Or did the Senator say more than that? Frankly, I have every confidence that Federal agencies will spend the money you give them. As I indicated, General McCaffrey indicated that there are at least, according to his numbers--and the numbers have been tossed around--more kids are trying drugs than they are trying tobacco. I think we ought to be careful that we don't aggravate that problem.

Mr. ASHCROFT. Yes.

Mr. ASHCROFT. I will yield with the understanding that my right to the floor is not forfeited to the Senator from Iowa. privilege of the floor

Mr. ASHCROFT. I earlier agreed and, as a matter of fact, urged you to have Members from your side go ahead of me. I don't mind them having a chance to speak. When we sought unanimous consent for that, it was objected to by the manager of the bill. I had intended, in every respect, to provide for ample debate. My view is that this is a very important topic. I learned last night in an announcement by those managing this bill that there would be an effort made to table this amendment without giving a full opportunity for discussion and that there was a time set without even so much as seeking an agreement from Senators as to how much time could be spent. In my judgment, if you are going to have an $868 billion tax increase on the American people in pursuit of an objective, which is allegedly the reduction of teen smoking, but has lots of other consequences and is unlikely to achieve the objective, we ought to at least be able to debate it. So I am very willing to consider full debate. I want to have that on this issue. But the managers of this bill have basically signaled to me that they intend to truncate debate, that they don't want this discussed. So it was my judgment that I needed to come to the floor and bring the evidence with me and then speak about this bill. I intend to speak about it and say what I think needs to be said. I am very pleased to have questions raised. But when questions are raised, obviously, that comes out of the time for me to make my remarks. That would extend the time. I think my position is clear. Early on, I tried to make it possible for those in the Chamber to go ahead of me and make remarks, and that was rejected. So if my only choice is to make my own remarks, then I will make my own remarks. But I sought to make it possible for others to speak.

Mr. ASHCROFT

Mr. ASHCROFT. Mr. President, I rise today to offer an amendment. My amendment addresses this massive tax that is to be imposed on the people of this country, particularly on hard-working, poor people in America. My amendment strips this legislation of the provisions which will impose $755 billion in new taxes on the American people. More precisely, my amendment strikes the upfront payment of $10 billion. Tobacco companies won't bear the cost of this payment; consumers will. This bill, which purports to vilify the tobacco companies--and I am certainly not here to defend them. As a nonsmoker, and having watched a number of my friends die as a result of smoking, I am not here to defend the tobacco companies. But the bill specifically provides that tobacco companies will not bear the cost of these payments, consumers will. This bill requires and would make law the fact that tobacco companies can't bear this cost of $755 billion. This bill requires that consumers bear this cost. They will bear the cost in the form of higher prices, and there are actually penalties in this proposed law for the companies if they do not transfer to the consumers any of these costs. ``Section 405. Payments to be passed through to consumers.'' Here is the text of the law itself: Target price. Each participating tobacco product manufacturer shall use its best efforts to adjust the price at which it sells each unit of tobacco products in the domestic market or to an importer for resale in the domestic market by an amount sufficient to pass through to each purchaser on a per-unit basis an equal share of the annual payments to be made by such participating tobacco product manufacturer under this Act and the Master Settlement agreement for the year in which the sale occurs. The specific law of the statute requires that these so-called penalties are really not penalties on the tobacco companies at all-- that these so-called penalties penalize the consumers. It is strange, indeed, to say to individuals, ``The tobacco companies have been misbehaving. For years, they have been targeting you unduly, they have been providing you with a product which is deleterious to your health, and what we are going to do to them is nothing, basically, except to protect their markets, make sure their market shares are locked in, and give them protection from civil prosecution. But because you have been the recipient of the disease and the difficulty you have from smoking, we are going to pass through the payments to you.'' This is adding insult to injury in the most classic of all ways. Remember, these are not penalties on tobacco companies, they are taxes levied on the users of tobacco products. Tobacco companies will still pay hefty penalties if teenage smoking targets are not met, but consumers will be safe from hundreds of billions of dollars in new taxes if my amendment is adopted. The so-called look-back provisions of this proposed law say that tobacco companies are going to have stiff penalties to pay if teenage smoking doesn't decline, and those stiff penalties are left in place by the amendment which I am offering. It is only the consumer, who is being asked to pay substantially higher prices by way of what really amounts to a tax, who will be saved the $755 billion which will otherwise be occasioned on those consumers in the event my amendment is not adopted. Americans today are working longer and harder than ever to pay their taxes. The Federal budget is in surplus. Congress should be debating how to return money to the taxpayer, not how to siphon more out of the pockets of working Americans. This is nothing more, nor less, than a massive tax increase on the American people--$755 billion, which the law requires to be passed through to consumers. Not that they receive $755 billion; the law requires that consumers end up paying $755 billion more as a means of punishing the tobacco companies--three-quarters of a trillion dollars in penalties to consumers whom we are trying to protect. As currently drafted, the proposed tobacco bill is nothing more than an excuse for Washington to raise taxes and spend money. It seems strange that, in this town, virtually anything will be an adequate excuse for raising taxes. Bad decisions by free people become excuses for massive tax increases in this country. This is the largest proposed increase in Government since President Clinton proposed his health care scheme. Oddly enough, his health care scheme was greeted initially with a relatively high level of support. But as the public learned more about the health care scheme, they understood that it was more scheme than health care, and, frankly, as the public learns more about this so-called tobacco settlement, they will realize that it is far more tax and Government than it is anything else--17 boards, commissions, and agencies. This huge tax increase will be levied against those who will be least capable of paying. According to the Congressional Research Service, right now we know that tobacco taxes are perhaps the most regressive tax levied in America. Tobacco taxes are perhaps the most regressive taxes levied in America. About 60 percent--60 percent, 59.4 percent I think is the number; yes--59.4 percent of the new $755 billion tax will land on people who make less than $30,000 a year. These are young families. They are working families. To take a three- pack-a-day figure from those families, some $1,600 a year, is to take their capacity to provide for their families and require it to be spent in Government on something else, something that the bureaucrats in Washington will consume, something that will not go to benefit their families. Sixty percent of the tax will fall on families earning $30,000 a year or less. Households earning $10,000 will feel the bite of this tax increase most of all. Listen to this: The Joint Committee on Taxation estimates that these households will see their Federal taxes rise by 44.6 percent. As currently drafted, this legislation will cause someone who smokes two packs daily to pay the Government an annual additional fee of $803--an additional $803. Smoking is already an expensive habit, and the collection of this money is predicated upon the fact that people will not quit, not that people will quit. You can't get these kinds of numbers, $755 billion, from people who quit. You are going to get this amount of money because you know people won't quit and can't quit, and the reason by those who come forward with this tax is, it is necessary, they say, because this is addictive. They say people can't quit. That is what is wrong with tobacco. And yet they say that people will choose to pay this because they choose to continue to smoke. Whether they choose to or not, someone who earns $10,000 a year, already spending a couple hundred, maybe $1,000 of that $10,000 on cigarettes, now has to pay the Government of the United States an additional $803 annually. Frankly, my amendment would prevent that from happening. As currently drafted, this legislation allows tobacco companies to deduct the mandatory payments ultimately paid by consumers as a regular business expense. So what we have here is really an implied subsidy of the tobacco industry, tobacco companies being able to pass through costs to the consumer which the tobacco company then gets to deduct. Again, we find ourselves, here in this setting, subsidizing tobacco companies, megatobacco companies, the cash cows of American industry, we are subsidizing these companies by placing on ordinary human beings, working families--we are subsidizing them by placing this $755 billion tax on working families. Over 5 years, that write-off would be worth about $36 billion to the tobacco industry. I cannot imagine anything more inappropriate than to take money from the hard-working families of America and then to use that money which we have taken from the hard- working families of America to provide a $36 billion subsidy through special write-off provisions for the tobacco industry. By eliminating the annual payments, my amendment would prevent the tobacco companies from claiming the deduction. I think we should stop the subsidy for tobacco, in particular for tobacco companies, especially providing a subsidy for them by allowing them to deduct payments that are not really going to be made by them--payments that are going to be passed through to consumers, hard-working families with children to feed and clothe, families with payments to make, families of individuals who might want to quit smoking but cannot. This bill is predicated upon the fact that these families will continue. This massive Government bureaucracy that is planned and the massive amounts of spending that are projected are all based on this willingness expressed in this bill to tax ordinary working families-- ordinary working families--massive amounts. And 59.4 percent of the money will be paid by families under $30,000; 3.7 percent by families making $115,000 or more. This is the most regressive graph of taxation that I have seen since I have had the opportunity to serve in the U.S. Senate. Before we consider passing a massive tax increase like this, it would behoove us to review the Government's record thus far with respect to taxes, spending, and Government employment. In Washington, DC, taxes and spending are more addictive than nicotine. In the 15 years prior to 1995, Congress passed 13 major tax increases. Let me refer to the chart which has just been set up here. The Crude Oil Windfall Profit Act of 1980; the Omnibus Reconciliation Act of 1980; the Tax Equity and Fiscal Responsibility Act of 1982; the Social Security Amendments of 1983; the Deficit Reduction Act of 1984; the Consolidated Omnibus Budget Reconciliation Act of 1985; the Omnibus Reconciliation Act of 1986; the Omnibus Budget Reconciliation Act of 1987; the Technical and Miscellaneous Revenue Act of 1988; the Omnibus Budget Reconciliation Act of 1989; the Omnibus Reconciliation Act of 1990; the Energy Policy Act of 1992; the Omnibus Budget Reconciliation Act of 1993--15 years, 13 major tax increases.

Mr. ASHCROFT. I think it is pretty clear that the amount of money being taken from the American family is going up and up. This year, for example, the average American family had to work until the 10th day of May--we just passed it--for Government. That was the time it took for people to satisfy the obligation to Government. That time has been extending into the year very rapidly through this entire time period. It is true that very frequently the Congress gives a little bit here and takes a lot here, so that there are in this time setting different changes in the taxes. But if you want to look over the period of time-- and I think it would be a fair thing to do; and I will be happy to do that; and I will bring information about that to the floor--that over time--over time--the Congress of the United States has taken a bigger and bigger and bigger bite of the income of workers in the United States. And, as a matter of fact, this would be another huge bite it would take out of the workers, especially of low-income families.

Mr. ASHCROFT. I thank the Senator from Massachusetts. These items, which I have listed here, are times when the taxes were raised on American families and American industry. I think over time most of us understand that we are paying more in taxes now than ever before. As a matter of fact, right now Americans work harder and longer in peace and prosperity than we have worked at any time in history to pay our taxes. So whether or not there were a few things in this list where someone was given a tax break while someone else had a tax increase, that may have been the case, but the truth of the matter is, we have been taking two steps backwards at least for every step forward. Government has been taking a bigger and bigger and bigger share. And now Americans work further and further into the year every year in order just to satisfy the appetite of Government rather than to provide for themselves. Last year's Taxpayer Relief Act was the first meaningful tax cut since--well, since about 1981. And the tobacco tax increase would more than erase every bit of what we did last year in terms of taking more from the American people. It seems to me that what we need to do is not go back on what we did last year; we need to extend what we did last year. We do not need to increase taxes. Taxes are at an all-time high. Tax freedom day, as I mentioned, was May 10 this year. Federal, State, and local taxes claimed 37.6 percent of the income of a median two-income family in 1997. Now, these taxes were more than the couple spent on food, shelter, clothing, and transportation--more than they spent on their cars, their houses, their food, and their clothing. It seems to me that we ought to be wondering about how we could reduce taxes. During Bill Clinton's first 5 years in office, the Federal Government collected 29 cents in taxes for every dollar increase in the gross domestic product. According to the Joint Economic Committee, ``The federal government is now taking a higher share of economic growth than under any president in recent history.'' The Joint Economic Committee continues: ``The average rate during the entire era before President Clinton--from Presidents Eisenhower to Bush--was 19%.'' We are now taking 29 cents of each dollar increase in domestic product. Obviously, the Federal Government has yet to reject the sentiment expressed by King Henry IV nearly 600 years ago. He put it this way: ``You have gold. I want gold. Where is it?'' Well, I think we have a bill here that says, ``You have gold. We want gold. And we don't care how poor you are. We don't care how you're struggling to make ends meet.'' As a matter of fact, we will make a very repressive tax, but we want to spend. Tax-and-spend as tax-and- spend--it does not matter which party sponsors it, who does it. Tax- and-spend is the invasion of Government in the province of the lives of individuals, and we have every reason to want to reject it. To collect this bounty, the Federal Government has developed a complex system. A recent report by the Heritage Foundation reveals just how complex. Mr. President, 136,000 employees at IRS and elsewhere in the Government who are responsible for the tax laws; $13.7 billion is the amount of tax money spent by the IRS and other agencies to enforce and oversee the code; 17,000 is the number of pages of IRS laws and regulations, 12,000 not including Tax Court decisions and IRS letter rulings--12,000. And 5.5 million is the number of words in the income tax laws and regulations; 820, the number of pages added to the Tax Code by the 1997 Budget Act; 250 is the number of pages needed to explain just one paragraph in the Internal Revenue Code; 271 is the number of new regulations issued by the IRS in 1997; 261 is the number of pages of regulations needed to clarify the Tax Code's ``arms-length standard'' for international intercompany transactions, and on and on and on. Incidentally, 293,760 is the number of trees it takes each year to supply the 8 billion pages of paper used to file income taxes in the United States. Many years ago, Senator Everett Dirksen quipped, ``a billion dollars here, a billion dollars there, and pretty soon you're talking about real money.'' Unfortunately, because of Washington's profligate ways, what was once real money has become little more than a rounding error. The budget resolution passed by the Senate last month recommended the Federal Government spend $9.15 trillion over the next 5 years. That is a 17.3- percent increase from the previous 5 years. According to a recent Cato report, the Government's fiscal record is nothing to brag about. Over the past 10 years, the Federal domestic expenditures have soared by 79 percent. After adjusting for inflation, this is an enormous 34-percent increase. Over that same period, family income adjusted for inflation has grown by 9 percent. There is the contrast. There is the problem: a 34-percent increase in Government, Federal domestic expenditures; a 9-percent increase in the income of the average family. So today I provide an opportunity for this body, the Senate of the United States, I provide an opportunity for the Senate to say to the American people, ``Enough is enough.'' Even if you make a bad decision as a free person to smoke, we are not going to decide that we are going to take from you the capacity to spend money and resources on your own family. We are not going to say that the tobacco companies are bad operators and bad companies, and as a result of their problems and their poor conduct, we are going to punish you, the individuals who smoke. We are not going to provide that 59.4 percent of all the $755 billion to be collected by individuals trapped in the habit of smoking is to be provided by individuals who make less than $30,000. We are not going to continue to inflict that kind of harm on individuals who are low income and compound the problem. Now Government will come in and sweep from them their capacity to provide for their own families. That is not something that we are interested in doing. We are interested instead of saying we don't really agree with this bill, in saying that everything has to be passed on to the consumer, that as a way of punishing tobacco companies we will take money from consumers. We are going to try to make it very difficult. If a guy smokes a couple of packs a day, we are going to make sure that he spends 800 bucks more a year just for the Government, not to be able to address the needs of his family, not to provide for his family, not to provide for himself. But we are going to just say because tobacco companies have done things that are improper, we are going to punish hard-working American citizens. My own view is that is a misplaced effort. If we really want to try to make sure that we curtail teen smoking, there are a lot of things we could do. I don't even think this bill makes it illegal for teens to possess tobacco. I don't think it even makes it illegal to possess tobacco in the District of Columbia. This bill doesn't even curtail, in my understanding, doesn't curtail smoking in the Capitol. We criticize Joe Camel, a cartoon character. We criticize a cartoon character for being a role model for young people who want to emulate and smoke. But we don't curtail, I don't believe--and I would be glad to be corrected--I don't think we stop smoking in the U.S. Capitol. In the District of Columbia, we don't make it illegal for teens to possess tobacco. Now, it is virtually uniform around the country that it is illegal to sell tobacco to teens, but there are things we can and ought to do to curtail tobacco use among teens. And I leave with this amendment, I leave in the bill the penalties on tobacco companies for failure to meet the targets. I simply, with this amendment, take the penalties against consumers out of the bill. I simply do not provide for the punishment of poor American families, working families. I do not provide for their punishment for what the tobacco companies have done. I think it is inappropriate. So I send an amendment to the desk and ask for its immediate consideration.

Mr. ASHCROFT. I ask unanimous consent reading of the amendment be dispensed with.

Mr. ASHCROFT. I will yield for a question.

Mr. ASHCROFT

Mr. ASHCROFT. Mr. President, I suggest the absence of a quorum.

Mr. ASHCROFT. I object.

Mr. ASHCROFT

Mr. ASHCROFT. Mr. President, families are the cornerstone of America. The data are undeniable: Individuals from strong families contribute to the society. In an era when nearly half of all couples married today will see their union dissolve into divorce, I believe it is both instructive and important to honor those who have taken the commitment of ``till death us do part'' seriously, demonstrating successfully the timeless principles of love, honor, and fidelity. These characteristics make our country strong. For these important reasons, I rise today to honor Margaret and Tom Floyd of Charleston, Illinois, who on June 12, 1998, will celebrate their 50th wedding anniversary. My wife, Janet, and I look forward to the day we can celebrate a similar milestone. The Floyds' commitment to the principles and values of their marriage deserves to be saluted and recognized.

Mr. ASHCROFT

Mr. ASHCROFT. I rise in opposition to the massive tax increases that are contained in the so-called tobacco settlement. I want the Senate to know that I will fight to kill any tobacco bill that contains a tax increase of the magnitude being considered, $868 billion. The proposed tobacco bill is nothing more than an excuse for Washington to raise taxes and spend more money on Federal programs. It a shame that bad decisions made by free people in Washington, DC, become the basis for a monumental task. The decision to smoke isn't a good decision, but it is something that people are free to do. And we are using it as the basis for an incredible and substantial tax. Let me just say that this tobacco settlement is the largest proposed increase in Government and bureaucracy since the proposed health care scheme, which both this Senate and the American people had the good judgment to reject. It would be a travesty for Congress to use tobacco as a smokescreen for imposing this massive tax increase on the people of America and to cover an expansion of the ``nanny'' state. This massive tax increase would be levied against those who are least capable of paying for it. According to the Congressional Research Service, ``Tobacco taxes * * * are perhaps the most regressive tax levied.'' Here we have a tax that falls most heavily on poor people. About 60 percent of this tax would fall on families earning $30,000 or less. Let me go to this chart. People earning under $30,000 would pay 59.4 percent of this tax; people paying $115,000 or more, 3.7 percent of this tax. This is nothing more or less than a massive tax increase, the incidence of which falls most heavily on poor families earning $30,000 or less. I think many times these are young families--mom and dad, maybe a couple of kids--stretching to make ends meet on $30,000 or less, and the lion's share, the overwhelming lion's share, is coming out of the pockets of individuals making less than $30,000 a year. According to the Congressional Research Service, households earning less than $10,000 would feel the bite of the tax most of all. Smokers making less than $10,000 would pay in excess of 5 percent of their income in additional taxes. This is a massive tax increase on the poor. If Washington gets its way, cigarette excise taxes will rise by $1.50 a pack. For someone who smokes two packs a day and whose spouse perhaps smokes one pack as well, this amounts to a tax increase of $1,642.50 annually. And that tax increase for three packs a day on the family would be the same, whether the family was very poor or the family was very wealthy. To find out the magnitude of this tax, if you take $1,642 a year out of the income of poor Americans, you are really impairing significantly their ability to provide for their families. It is immoral for this Government to tell poor families, you cannot provide for yourselves; we are going to take the money from you and force you to come to the Government to ask us to provide for you. Moreover, the new taxes paid by someone smoking two packs daily would exceed the per capita tax relief contained in the Senate budget resolution by a factor of 50. The Senate budget resolution proposed tax relief for America. For the average smoker, smoking two packs a day, they would have a tax burden added to them 50 times as great as the tax relief that we proposed in the budget. I think that is unconscionable. It is obvious that the most addictive thing in Washington is not nicotine, the most addictive thing is taxing and spending. In the 15 years prior to 1995, Congress has passed 13 major tax increases. A list of those tax increases includes the Crude Oil Windfall Profit Tax of 1980, the Omnibus Reconciliation Act of 1980, Tax Equity and Fiscal Responsibility Act of 1982, Social Security Amendments of 1983. Last year's Taxpayer Relief Act was the first meaningful tax cut since 1981. The tobacco tax increase will more than erase--more than erase--all of the benefit to the American people of the tax cut passed last year. The tobacco tax increase also exceeds by a factor of 3 the relief projected in the budget resolution passed by the Senate last month, even as it applies to the entire population, not just to smokers. The Congressional Budget Office expects the budget surplus will swell to between $43 billion and $63 billion this year. Why is that? Taxpayers are working longer, they are working harder, they are paying more taxes. You don't have the swelling of revenue to the Federal Government because people aren't paying taxes; you have it precisely because they are paying taxes. Taxes are going up. And we should be debating how to return money to the taxpayers, not how to siphon more out of their pockets--especially out of hard-working Americans at lower-income levels. The proposed tobacco bill is nothing more than an excuse for Washington to raise taxes and spend more money on new Federal programs. I will fight to kill any tobacco tax bill that contains a tax increase of the magnitude being considered. It is an affront to the dignity of Americans and it is immoral to take this kind of money away from poor families, which will force them into dependence on government in some circumstances, rather than allow them to have the money they earn to spend on their families. To paraphrase President Reagan, the whole controversy comes down to this: Are you entitled to the fruits of your own labor, or does Government have some presumptive right to tax and tax and tax? I urge my colleagues to oppose this legislation. Mr. President, I suggest the absence of a quorum.

Mr. ASHCROFT

Mr. ASHCROFT. Thank you, Mr. President. I want to begin by thanking Senator Abraham of Michigan for his attention to this very important issue. It seems to me that this is a fundamental issue that relates to the success and survival of this culture in the next century. The long-term impact of a Government-imposed shortage of high-tech workers is clear. If workers cannot come to these jobs, then the jobs will have to go to the workers. We have an option here, an option of whether or not we bring workers to these jobs and have the industry in the United States or these companies decide to take these jobs to wherever the workers are otherwise. Let us not fool ourselves. There are several countries that have the resources to begin a strong technology sector. I believe it would behoove us to make sure that the technology sector continues to exist in the United States of America. Some of my colleagues seem to view this bill too narrowly. They view it as an immigration issue and an immigration issue alone. My colleagues are not to be blamed for wanting to make certain that Government policies respect the needs and interests of American workers. This legislation, however, does not threaten American workers in any way. No one is being replaced. We are not dealing with a situation in which legal immigrants are coming to the United States to compete with low-income, native-born workers or, worse yet, coming to live off the Federal dole. That is not the situation here. The shortage of workers in this industry is well documented. Filling these jobs with skilled workers, whether born here or overseas, is in America's best interests. We have a chance to either import the workers or export the jobs. It seems to me that clearly we would want to bring in these critical workers who can sustain this industry and help us sustain it as an American industry. Indeed, it would be a grave mistake, in my judgment, to send even any portion of this dynamic and critical sector abroad in search of workers. It would send the wrong signal. It would be the wrong strategy. The economic and national security benefits of keeping this industry in the United States are substantial. They should not be overlooked. This industry will continue to flourish. But if the U.S. Government needlessly restricts one of the key inputs--that is, the necessary labor for growing--it will flourish somewhere else. We don't need for this industry to flourish on someone else's shores. We want this industry to flourish on our own. I understand some of our colleagues will seek to amend the legislation. These amendments have noble sounding purposes and titles, but they are wolves in sheep's clothing. Excluding those that the subcommittee chairman has agreed to accept, these amendments are designed to kill the bill and should be defeated for that reason. Isn't it ironic that some Members are unwilling to help an industry do exactly what we want every industry in this country to do, and that is to become the best in the world. Some people want to keep our industry from attaining that standard. We make the same mistake over and over again in Congress. We already are forcing the encryption industry to relocate to foreign shores through antiquated export restrictions, and now Members entertain amendments that will make difficult the United States success in the entire technology sector by restricting the import of needed skilled workers. Perhaps the most disturbing amendments are those that would let loose a swarm of Federal bureaucrats into the high-tech industry to investigate hiring practices. Is this the role that we want Government to play in any industry--to create another set of regulatory hurdles that stifle growth and productivity? The energy of this recovery, the energy of our economy, has been provided by the high-tech industry, and it has been able to do so absent Government interference and control. I believe it would be an inappropriate decision, it would be a tremendous insult, and, frankly, an injury to this industry if we were to move Government in massively, as some of these amendments will propose. As I have said before, we can allow workers to come to these jobs in America, or we can force those who want these jobs done to take the production facilities and the jobs that go with them someplace else. It seems that would be insanity. It does not take a highly trained computer expert to figure out what we want. We want to keep the jobs here. If we have the jobs here, and we can get the people, then keep the jobs here rather than export the jobs to where the workers may happen to be. The technology sector of our country has had tremendous success by almost any measure--in productivity, in capital, in growth and in sales. However, this thriving sector is running into a problem that even the best engineers cannot design around--a lack of individuals with the necessary skills to power the growth of American ``high-tech'' industries. The common approach of Silicon Valley of ``Just Fix It'' doesn't work in this instance--the engineers cannot overcome design flaws or test for efficiencies because the problem is imposed not by outdated technology but by the outdated laws of the federal government. The high tech sector has come to the federal government to ask for assistance in an area that is in the control of the federal government--the granting of visas to highly skilled technical workers. I rise today to applaud an industry that is so dynamic that it has depleted the tremendous human resources available in this country so swiftly. We, as a nation, should take great pride in our technology sector, and even greater pride that this robust sector of our economy continues to thrive. One frightening trend that has begun to emerge in this Congress is the consideration of laws that would directly involve the federal government in the operations of the technology sector. Any number of bills introduced with the best of intentions would have ignored budding and dynamic technology and instead imposed a quick legislative fix that would have remained in the code for years. This push for instant gratification and instant solutions will lead to disastrous results in the dynamic area of high technology. Instead, Members of Congress must start making the tough decisions on how to allow our technology sector to continue to be an engine of growth for our economy, continue to provide greater efficiencies for business, guarantee lifestyle enhancements to all people, and continue to position the United States as the world's technology leader. We need to focus less on imposing new government obstacles to tomorrow's technologies and more on removing government as an obstacle to growth in this dynamic sector. This brings me to Senator Abraham's legislation, the American Competitiveness Act. I am proud to be a cosponsor of this important legislation because it removes a government-imposed limit on the growth of the technology sector. We should all support the Abraham legislation as a means to facilitate the continued growth and success of an industry that is so important to our nation. In closing, Mr. President, I must call attention to another troubling aspect of this debate, the glaring omission of leadership from the Clinton Administration. I am frustrated by this Administration's continuing talk of support for the industry of Silicon Valley. As I cast about in search of that support I find precious little. So I just ask--where is the Administration support for this important legislation? Where is the support for a well thought-out encryption policy, for the elimination of arbitrarily imposed taxation of the Internet--which currently remains international in scope but subject to tax by any municipality, or for leadership in confronting what may be the most dangerous threat to our economy, The Year 2000 bug? Mr. President, where was the Administration just two weeks ago when we were fighting to take a truly damaging provision on digital signatures out of the IRS bill? I urge the Administration live up to its words and help us create jobs and growth in the technology sector. It is time for the Administration to stop talking the talk and begin walking the walk. I urge my colleagues to support this legislation. I commend the subcommittee chairman, Senator Abraham, for his outstanding work in this respect. It is not merely an immigration bill; this is a bill that relates to the success of the high-tech industry, an industry in which America continues to be the No. 1 power. What is the situation regarding time?

Mr. ASHCROFT. I suggest the absence of a quorum.

Mr. ASHCROFT. I ask unanimous consent at the conclusion of the 5 minutes speaking on this bill that I be able to continue for 10 minutes as in morning business to address other issues.

Mr. ASHCROFT. I thank you for informing me of that.

Mr. ASHCROFT

Mr. ASHCROFT. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. ASHCROFT. Mr. President, I ask unanimous consent I be allowed to speak for up to 20 minutes.

Mr. ASHCROFT

Mr. ASHCROFT. Mr. President, I rise today to have the opportunity of commenting on a matter which is a matter of great discussion in Washington and around the country. It is the so-called tobacco settlement. I say ``so-called'' because I think this is more about taxes than it is about tobacco. It is more about big government than it is about teen smoking. This is a measure of the magnitude of which obscures most of the things we have considered for a long time, at least those things considered in my time in the U.S. Senate. Now, Washington may be entering a new era of surplus politics, but its inhabitants have yet to reject the sentiment that was expressed by King Henry IV nearly 600 years ago. He put it this way: You have gold and I want gold. Where is it? Well, that may be something that really describes America right now because this measure which is flying under the flag of the tobacco settlement is really a massive tax increase on the people of this great country. This tax increase would total about $860-some billion--that is the original bill before it went to the Finance Committee. I don't know whether the increase from $1.10 to $1.50 a pack added in the Finance Committee is even reflected in those figures. We are talking about an $800 billion increase in taxes and it will be focused on people who make less than $30,000 a year. These are hard-working families, generally families with small children, at the beginning of their earning potential in life. To focus $860 billion in new taxes on those individuals is a very serious question. As a matter of fact, that kind of serious question of $860 billion in new taxes and then about 17 new boards, agencies, commissions, et cetera, in government to spend the money is so obvious a question that I objected to moving to this bill very expeditiously, very rapidly. It looked to me like there was going to be a rush to try and get into this bill, and we would somehow be asked to have consideration of this bill which was not thorough and did not have the kind of complete debate and dialog which I think the Senate of the United States ought to have, and which I think we were created to have. The founders of this great country said that the Senate of the United States was like the saucer; the cup was the House, and it was supposed to be a place where there were hot passions and emotions, but you spill things over into the saucer. It is a place where things cool. You should have the time to look at things carefully in the U.S. Senate. You should have the capacity to thoroughly discuss things. There should be open discussion. We have had a policy and a heritage in this great body of making sure that all the anticipatable consequences and results and affects of a particular proposed policy could be understood and debated and discussed here. If I have the assurance that that is the strategy which we will pursue, that it will be a Senate strategy of complete discussion, that we will not unduly or inappropriately limit the kinds of amendments which are offered, that we are going to have an open discussion, that we are not going to rush in and impose cloture to stampede the Senate to a conclusion in what is a pretty highly charged and emotional area, then I have no objection to proceeding. I wouldn't object to proceeding to this bill unless I thought it was going to be something that was a must-do project and that the definition of ``discussion'' would be someone's time objective rather than a quality objective. The ultimate objective that we should have when we are discussing things in the U.S. Senate should be the quality of our output, not whether or not we want to get home for a vacation or take a break. My own view is that I really do not want to stand in the way of this particular measure being considered, but I don't want anything to stand in the way of this measure being considered thoroughly, and that there be a full opportunity to provide debate, and that there be the potential for amendment which is thorough, which would provide the opportunity for alternatives so if we want to reach our real objective of somehow curtailing the adverse impacts of cigarettes on the young people of America, we wouldn't be locked in to some narrow set of agreements or agencies or taxes, but that we would think carefully about how it is done. I simply want to say and make clear my position that while I did oppose a unanimous consent to move to this bill, I am not locked into a position of saying we should not consider tobacco. If I believed that we have an opportunity to consider the so-called tobacco settlement fully and thoroughly and fairly in the great tradition of the Senate, then I am more than willing to proceed to consideration of this matter. As a matter of fact, I would like to begin the discussion of the matter today talking about some of the things that I think are most difficult about this bill, and perhaps I think ought best be characterized as unwise. The Federal budget surplus is likely to exceed $45 billion this year, and you wonder why Congress would be considering massive new taxes if we are finally in a place of surplus. You would think we should be debating how to give money back to the American people instead of taking more money from the American people. When our decision is to take money from the American people, our decision is basically that they can't spend it as wisely on their families as we can spend it on their families. After all, the families of America are what we are spending our resources on one way or the other. If we believe we are so much smarter than they are for meeting the needs of their family, we should take the money from them and spend it. But if we have a good awareness that American families know what they need and how to spend their money better than we can spend it on them, we ought to let American families have their resources to spend on themselves. There are some things that have to be done collectively. We know about those things--certain law enforcement functions, national defense, certain government programs--but the never- ending explosion of taking the resources from families, suggesting that we have better things to do with that money than families do, is a presumption in which I will not imagine and I certainly will not persist. I intend to fight to kill any tobacco bill that contains a tax increase of the magnitude being considered. When you are talking about over $800 billion for smokers, for example, the tax that will be imposed against them and on them as a result of this bill will be 50 times greater--50 times greater--than the tax relief we gave them last year. I am not a person who has chosen to smoke, and I am not a person who is associated with the tobacco industry. I don't know of a single smoker in my family. It hasn't been in my family. It wasn't in my father's family. We were taught that tobacco was evil from day one. Speaking of old-time English kings, King James warned citizens of England hundreds of years ago that tobacco was bad for their health. I think people have known it. I don't think it is sneaking up on anybody. I think most Americans know that tobacco is not good for you. If you are close to someone who is smoking and you start choking, I think you understand that this stuff is not good for you. We know the pollutants contained in the byproducts of combustion, smoke, are bad even if you are just walking down a city street and get too many diesel fumes from a bus. So it is not a matter of not knowing. The question is, Are we going to have a tobacco bill that taxes the American people at an incredibly high level--$860 billion-plus in new taxes--and that says to a fellow who chooses to smoke, in spite of what he knows, that, well, the kind of tax that you are going to pay is 50 times greater than any relief we have given you previously? This is a massive tax increase that will be inflicted on those who are least able to pay. Some estimates suggest that this tobacco bill would increase taxes by over $860 billion. This development of 17 new responsibilities in Government--for boards, commissions, or agencies, or, I suppose--and I hear there is a proposal now to take the formal boards, commissions, agencies out and allow them to be created not in the statute but by department heads on their own later on, so we would sort of fly the commissions, boards, and agencies below the radar screen of the American people. The truth is, if you are going to spend $860 billion, you are going to have bureaucrats do it. Over 5 years, the hike would increase taxes $109 billion, more than erasing the entire effect of the measure of the tax relief we provided last year. Of course, I will mention that 60 percent of those who would be paying these taxes earn less than $30,000 a year. That really means these are, in many cases, young couples, couples with children. They are going to be bearing the burden of this tax increase. The Finance Committee came up with the idea that these taxes be increased by $1.50 a pack for cigarettes. Now, if you have a young family with a mother who smokes one pack a day and the father smokes two, that is $4.50 a day that the Government would be taking from that family. Over the course of a month, I think that is $140 a month, and 12 times 14, if my math serves me correctly, would be close to $1,600 a year. Now, that is serious. That is very serious. In my judgment, we have to think carefully about that kind of tax increase. Mr. President, maybe you will do the math for me. I was doing that math in my head, so it may not be $1,600; it may be more than $1,600. I think it would be. But the point is, this is a massive tax increase on people. What about the children in those families? The whole presumption of this idea that we can collect the $868 billion is that people are so addicted, they can't stop, so we will tax them. In spite of the fact that taxes are going up, there is going to be persistent use. On one hand, they say these taxes are going to keep people from smoking. On the other hand, they put a lot of money in the budget saying people won't be able to stop smoking and therefore we will get the money. It seems to me there is a little tension between these two arguments. It is a massive tax increase. It seems to me the only thing more addictive than nicotine is taxing and spending in the Congress. People are going to say this is about teenage smoking, but this bill doesn't even make teenage smoking illegal in Washington, DC. This doesn't make teenage smoking illegal or unlawful in the Capitol or in the Senate office buildings. We are talking about what kind of messages we want to send to our teenagers. This Congress, the U.S. Senate, has never cared enough about the role modeling it does to forbid smoking in the in the U.S. Capitol or in the Senate office buildings. We are up here saying we are going to try and stop teenagers from smoking, and we stand around--I don't--and we don't stop smoking, we don't curtail smoking. We provide incentives. We make sure there are plenty of ashtrays. If you want to use the stairs in our buildings, that is where they put the ashtrays. If you need to draw a deep breath after four or five flights of stairs, you can be sure that because of our policy we will have a role model there smoking for you. If we are really serious about teen smoking, there are other things to do other than raising taxes by $868 billion. If Washington gets its way, excise taxes will increase by $1.50 a pack. Now, my view is that this is not the kind of tax increase I was sent here to be involved in--an $868 billion increase on the taxes of the working people in this country. This is not what Republicans were sent here to do. Lots of Republicans are fond of talking about Ronald Reagan. Well, people who make less than $30,000 a year frequently--some of them are Republicans, but some are what we call Reagan Democrats. Ronald Reagan was understood by those people to care for them, and he was understood by those people to be sensitive to their plight. They were called Reagan Democrats because of it. This is a tax increase that is aimed right at Reagan Democrats. It will take the money and resources right out of their pockets, send it to Washington, keep them from being able to spend it on their own families. Taxes are at an all-time high. Never before in the history of this country have taxes been so high. Just last week, on May 10, was tax freedom day this year. That means the average citizen had to work until May 10 in order to pay their taxes. The rest of the year, he or she can work for his or her family. What a deal. And we are going to add $868 billion to that burden? Pretty soon, we will be working more for the Government than for our families. If we think Government ought to be a bigger influence in this culture than families, I think we are sadly mistaken. Whether we succeed or fail in the next century is dependent on good, strong families. If moms and dads and families do their job, governing America will be easy. But if moms and dads and families can't do their job, governing America will be impossible. We cannot make it impossible for families to do the job that families ought to do in this country. Total taxes as a share of total income have reached an all-time high in the United States of America. When I was born, in 1942, taxes as a share of the total income amounted to 21.1 percent. That was during the war--the big war, WW-II. Yet, that was 21.1 percent as a total share of income. We are approaching twice that much now. We are over 35 percent as a total share of income. It is time for us to come to the conclusion that if families are important in this country, leaving them with some of the money they earn is important, and an $860 billion-plus tax increase would be inappropriate. Today, the median two-income family can expect to pay 37.5 percent of its income in Federal, State, and local taxes--37.5 percent. Three- eighths--3 out of every 8 days are devoted to paying the Government. It is getting worse. Taxpayers are working longer, harder than ever before to pay their taxes. It is time for us to think carefully about providing relief, rather than a massive increase in taxes. The proposed tobacco bill is nothing more than an excuse for Washington to raise taxes and spend more money on new Federal programs. I will fight to kill any tobacco tax bill that contains a tax increase of the magnitude being considered. I didn't come here, and I don't think we were sent here, to have a massive raid on the families of America and their ability to provide for the needs of their families. What we are talking about is a cut in pay for Americans. We cut their pay by taking it when they earn it. I just do not think a pay cut for American families is what is needed at this moment. I think this country knows that if there is a cut anywhere, it should be a cut in Government, not a cut in families. I think we have to understand that is what we are talking about. So I urge my colleagues to oppose this legislation, which is a massive tax increase. It is a tax burden focused on those making less than $30,000 a year. The vast majority of the taxpayers who will pay the $860-plus billion will be people making less than $30,000 a year. I think of the kids of those moms and dads, who are both working and blue-collar folks, that they want to be able to do well by and do well for. We plan to tax them with the most, the lion's share of the burden of an $868 billion tax increase. I reiterate again my position. I rose to object to moving to this bill when I thought we might be moving to it in haste; and that our consideration of the bill might be limited and compressed and inappropriately telescoped. It might be drawn together in such a way that we wouldn't have a thorough opportunity to debate this. It could be that I am wrong. With proper assurance that we would have the kind of full range of Senate debate, with the complete opportunity for amendment and that we will not be clotured so as to preclude the kind of debate that is necessary and appropriate in this respect, I don't mind moving forward to this issue. As a matter of fact, I wouldn't object to moving forward to the issue. We must, however, consider this issue based on its merits and not based on a schedule or convenience. This is too important an issue and too substantial a set of stakes for us to ignore the kind of full debate that the Senate rightfully should provide. It is with that in mind that I rise to oppose this measure and to indicate my position on considering the measure. I hope when we have the opportunity to debate this measure fully, we will be able to see that a tax increase of that magnitude is not in the best interest of the American people. It is not in the best interest of the future of America. It is not a measure that really augurs well for the children of America. It is really a big government extension of the heavy hand of government in the pocketbooks of American families. Thank you, Mr. President, for this opportunity. I yield the floor. Mr. INHOFE addressed the Chair.

Mr. ASHCROFT. I thank the Senator from Oklahoma.

Mr. ASHCROFT

Mr. ASHCROFT. Thank you, Mr. President. I am grateful for the kind remarks of the Senator from Utah and am pleased to have the opportunity to work with him and the Senator from Vermont. I rise today to speak in favor of one of the most important pieces of technology legislation in the 105th Congress. At its heart, this legislation is about updating the copyright laws for the digital age and preparing a sizable portion of our economy for the next century. The affected parties include the online service providers, computer hardware and software manufacturers; every educator in America is affected by this legislation; every student; all the libraries; all the consumer electronics manufacturers and consumers of electronics; the motion picture companies, and everyone who uses the Internet. This measure will have as broad an impact on the American public as virtually any measure we will address. The full Senate's consideration of this bill culminates an effort of updating our copyright law that I began last September when I introduced S. 1146, the Digital Copyright Clarification and Technology Education Act. S. 1146 was a comprehensive bill designed to jump-start a process that had ground to a halt and appeared to be going nowhere. The bill addresses three basic problems. First, the liability of online service providers for copyright violations; second, the need to update the provisions of the copyright law that affect educators and libraries for the digital age; and third--and not least, of course--the need to implement the World Intellectual Property Organization, or WIPO, treaties. The United States of America, as the generator of so much content and material--the innovator, the creator of so much of what is copywritten--stands to gain most by making sure that our copyrights are respected worldwide. I am gratified that today the full Senate will vote on this bill that addresses all three of these concerns, especially the concerns regarding the need to implement the World Intellectual Property Organization treaties which will provide that the United States effort to protect copyrights--the intellectual property of those who are the creators in this country and develop things in this country--those treaties will protect those copyrights. The original administration language that was introduced by Senators Hatch and Leahy focused exclusively on the WIPO treaties. However, through hard work, numerous amendments and the assistance of Senators Hatch and Leahy and their staffs--and this was really a cooperative effort--we were able to fashion a comprehensive approach to updating the copyright laws for the digital age. Many important changes were made to the bill, including amendments reinforcing on-line privacy rights, ensuring that the bill would not be read to mandate design decisions and addressing the need to update the copyright laws to permit distance education using digital technology. When I was a professor--I won't want to admit how long ago--I used to teach a television course. The very same procedures I used in analog technology for television transmission might well have been illegal if the TV signal had been transmitted digitally. It is important that we give the capacity for distance education in the digital age the same potential that we had for distance education in the analog age. I will focus on three important changes, one reflecting each of the three basic problems addressed by the original bill. First, there is the issue of the liability of on-line service providers. The notion that service providers should not bear the responsibility for copyright infringements when they are solely transmitting the material is one key to the future growth of the Internet. Now, what we are really talking about is if someone illegally transmits material on the Internet, the Internet companies that provide the opportunity for people to transmit the material shouldn't be held responsible any more than the phone company should be held responsible if you were to say something illegal over the phone, or that Xerox should be held responsible if you violate a copyright by illegally copying material on the Xerox machine. This is very important because of the way the Internet operates in terms of assembling and reassembling digital messages that they not be considered to be an illegal publisher; they, therefore, needed the protections that are provided in this bill so that we can have and continue to use the infrastructure of the Internet and allow it to operate effectively. Proper resolution of this issue is critical to unlock the potential for the Internet. For that reason, I included a title addressing on- line service provider liability in my legislation. Make no mistake about it, clarification of on-line service provider liability was one of my fundamental concerns in the debate, and after months of negotiations the affected parties were able to agree to legislative language that protects on-line service providers, or what we call the OSPs, from liability when they simply transmit--they are not involved, they don't have any interest in the message, but they are just transmitters. If there is a violation, it is not their fault that something was transmitted in contravention of the copyright law. Although I applauded the efforts of the affected industries to resolve the OSP liability issue, there was one issue which the industry agreement did not address--the protections that need to be given to users of the Internet. The agreement that the OSPs entered into would have protected the interests of the copyright owners, but it provided little or no protection for an Internet user who was wrongfully accused of violating copyright laws. I think of a little girl, perhaps, who puts on her Internet site the picture of a duck she draws. We shouldn't allow Disney to say, ``We own Donald Duck. That looks too much like Donald,'' and be able to bully a little girl from having a duck on her web site. We needed protection for the small user, not just for the big content promoters. Even though several Judiciary Committee members claimed no amendments were needed, I made sure that the industry compromise respected the rights of typical Internet users, ordinary people, by offering an amendment that provided a protection included in the original bill I had offered. It is an idea which is referred to as the ``notice and put-back'' provision. If material is wrongfully taken down from the Internet user's home page, my amendment ensures that the end user will be given notice of the action taken and gives them a right to initiate a process that allows them to put their material back on line without the need to hire a lawyer or go to court. This was a critical improvement over the industry's prior compromise agreement. A second concern of mine throughout this process has been the need to update protections for educators and libraries already included in the copyright law to reflect the digital technology. I have already mentioned that. Having been an individual who had the privilege of teaching a college course on television I knew just how important it would be for libraries and educational institutions to be able to use digital transmissions of documents and signals in the same way that they were authorized to do so with analog signals under our copyright law as it has existed. I did offer an amendment in committee, and it was unanimously incorporated into the bill, which will allow libraries to use digital technology for archiving and for interlibrary loans, for example. This will help libraries serve the American public. A final issue of profound importance, ensuring that the bill did not inadvertently make it a violation of the Federal law to be a good parent. The original bill or draft of this bill took such a broad approach to outlawing any devices that could be used to gain access to a copyrighted work that it may have made it illegal to manufacture and use devices that were designed to protect children from obscenities and pornography. An amendment I offered in committee makes it clear that a parent may protect his children from pornography without running afoul of this law. I think moms and dads will want to be able to protect their children and shouldn't have to risk running afoul of the law to do so. My own belief is that when moms and dads do their jobs, governing America will be easy. If moms and dads don't do their jobs, governing this country could be impossible. We need to make it possible for parents in every instance to do their job. The amendment recognizes that devices designed to allow such parental monitoring must be allowed. We should never allow any legislation to move forward that intentionally or unintentionally makes good parenting illegal. When the choice is between protecting our children from obscene material and perhaps allowing one machine to be diverted for unlawful use, Congress and the court should choose the protection of the children every time and then prosecute anyone who makes unlawful use of such machine. There are a number of individuals who deserve our specific thanks here, and I want to take the time to make sure that deserving individuals and organizations are thanked. I want to take a moment to thank a few particular staff members who labored into the night over and over again and through weekends to put together this legislation. I commend my colleagues Senators Hatch and Leahy. I want to say that a number of my concerns were accommodated because these members of the Leahy and Hatch staff were so hard-working. Ed Damich and Troy Dow with Senator Hatch were critical to moving forward on all issues, particularly by coordinating the OSP discussions. Beryl Howell and Marla Grossman of Senator Leahy's staff were similarly important to the process, particularly in regard to the education provisions and on drafting language for several key areas. I thank the staff. They worked very closely with two of the best staff members that I think work in any arena on Capitol Hill, and that is Bartlett Cleland of my staff and Paul Clement. They worked extremely hard with industry and with other Members of the Senate to craft a piece of legislation which I believe is going to be a tremendous asset in allowing the potential of the Internet to be realized. Finally, I want to thank all of the individuals representing various industry and education interests who were critical not only in educating me on the myriad of technical issues addressed in this legislation, but were helping in every way to reach agreement when the time came. In the end, this is perhaps not a perfect bill. I would have favored a different approach to some issues. But this is a bill that has become a comprehensive effort to bring the copyright law into the digital age. It is an important piece of legislation which we can work together to make work for America. Accordingly, I am happy to support this bill. I look forward to its final passage, with appreciation to the outstanding leadership of Senator Hatch and Senator Leahy in the committee. Working with them has been one of the most gratifying experiences of a process of reaching a conclusion on legislation which I think will advance our opportunity significantly to access the advantages of electronic and digital communication for the entirety of America. Mr. President, I want to go over some of these notions again and expand the ideas a bit further. I rise today to speak in favor of one of the most important pieces of technology legislation in the 105th congress. At its heart, this legislation is about updating the copyright laws for the digital age and preparing a sizable portion of our economy for the next century. The affected parties include the on-line service providers, computer hardware and software manufacturers, educators students, libraries, consumer electronics manufacturers and consumers, motion picture companies, and everyone who uses the Internet. The full Senate's consideration of this bill culminates an effort at updating our copyright law that I began last September when I introduced S. 1146, the Digital Copyright Clarification and Technology Education Act. S. 1146 was a comprehensive bill designed to jump start a process that had ground to a halt and appeared to be going nowhere. The bill addressed three basic problems: (1) the liability of on-line service providers for copyright violations, (2) the need to update the provisions of the copyright law that affect educators and libraries for the digital age, and (3) the need to implement the World Intellectual Property Organization, or WIPO, treaties. I am gratified that today the full Senate will vote on a bill that addresses all three of these concerns. The original Administration language that was introduced by Senators Hatch and Leahy focused exclusively on the WIPO Treaties. However, through hard work, numerous amendments, and the assistance of Senators Hatch and Leahy and their staffs, we were able to fashion a comprehensive approach to updating the copyright laws for the digital age. The bill before the Senate today now addresses all three of the basic problems identified in my bill. First, the notion that service providers should not bear the responsibility for copyright infringements when they are providing a means of communication is a key notion for the future growth and development of digital communications and most importantly the Internet. Resolution of this issue is critical for the future development of the Internet. For that reason, I included a title regarding on-line service provider liability in my legislation. After months of negotiations, the affected parties were able to agree to legislative language that protects on-line service providers, or OSPs, from liability when they simply transmit information along the Internet. The principles expressed in this legislation will provide a clear path for OSPs to operate without concern for legal ramifications or copyright infringement that may occur in the regular course of the operation of the Internet, or that occur without the OSPs knowledge. Without these issues being clearly delineated we would have faced a future of uncertainty regarding the growth of Internet and potentially whether it could have operated at all. Make no mistake that the clarification of on-line service provider liability was one of my fundamental concerns in this debate. While this was not the only crucial change in the legislation it is a change that I found essential for this legislation to even be considered, which is why Title I of my original legislation was devoted to clearly defining liability. Although I was supportive of the affected industries' efforts to resolve the OSP liability issues, there was one issue which the industry agreement did not address--what protections would be given the typical users of the Internet. The agreement protected the interests of OSPs, and it protected the interests of copyright owners, but it provided little or no protection for an Internet user wrongfully accused of violating the copyright laws. The original draft would have left these wrongly injured, innocent users with limited recourse. They would have to hire an attorney and go to court to have the court require the OSP and copyright holder to allow the web page to go back up--in other words the end user would have to go to court to prove their innocence. I found this situation to be totally unacceptable. Even though several Judiciary Committee members claimed that no amendments were needed I made sure that the industry compromise protected the rights of the typical Internet user by offering an amendment that provided protection included my original bill--an idea referred to as notice and put back. If material is wrongly taken down from an Internet user's home page because the original notice mistakenly did not take into account that the Internet user was only making a fair use of the copyrighted work, my amendment ensures that the end-user will be given notice of the action taken, and gives them a right to initiate a process that allows them to put their material back on-line, without the need to hire a lawyer and go to court. This was a critical improvement over the industry's compromise agreement. Another modification to the OSP liability material was to guarantee that companies, such as Yahoo!, could continue to operate as they have previous to the passage of this legislation. I admire companies that can succeed in the highly competitive technology sector, and Yahoo! has done just that. In no way should Congress discourage true entrepreneurship, particularly when the better ``mouse trap'' in this case has propelled a company to the top of its market. The safe harbor should not dissipate merely because a service provider viewed a particular online location during the course of categorization for a directory. If the rule were otherwise, true consumer oriented products would be eliminated or discouraged in the marketplace. Finally, I also insisted on language in the Committee role that recognized that the OSP liability provisions must be applied to educators and libraries with sensitivity to the special nature of those institutions and the unique relationships that exist in those settings. The report also makes it clear that the notice and put-back provision I mentioned above provides all the process that is due, so that state institutions need not worry about having to choose between qualifying for the safe harbors provided in the bill and the requirements imposed by the Due Process Clause. The second title of my original legislation was dedicated to similar concerns of universities, libraries, schools, educators and students, and ensured that these groups would not be left out when the content providers rushed to secure their position in the digital age. This legislation now includes some of the same provisions. I worked closely with Senator Leahy, educators, libraries and publishers to guarantee that libraries will be able to update their archives and provide materials to the public in a way that keeps pace with technology. Additionally, this legislation begins the process to allow distance education in the digital world. We should not tolerate laws that discriminate against technology, instead we should seek to guarantee that what people can do in the analog that they can continue those actions in the digital world. A study will be undertaken to help Congress to sort out the many technological and legal challenges of updating the copyright law regarding distance education. At the beginning of the next Congress I fully expect to introduce legislation specifically on distance education and I understand that both Senators Hatch and Leahy have agreed to support legislation based on the study conducted by the Copyright Office. In addition, I look forward to working with both the education community and the content community to pass, not block, this important legislation. Distance education is of fundamental importance to Missouri, as it is to most rural states, and of great importance to the many parents who home school their children. A third portion of the bill addresses the means by which the WIPO treaties will be implemented in the United States, also referred to as section 1201. This issue is of fundamental importance for a vital part of our nations economy. Piracy is a large and growing problem for many content providers, but particularly to our software industry. Billions of dollars in pirated material is lost every year and in impact is felt directly to our national bottom line. While the overall structure of the legislation in this part is not the way I would have approached the issue I believe that I have been given enough assurance both in legislative language and in legislative history that I can support the bill. I still find troubling any approach that makes technology the focus of illegality rather than the bad conduct of a bad actor, but with the accommodations that have been given I think that the bill is workable. One issue of profound importance to me was ensuring that parents continue to have the legal ability to be good parents. The original draft of this bill took such a broad approach to outlawing devices, that it may have inadvertently made it illegal to manufacture and use devices designed to protect children from on-line pornography. The bill, as amended recognizes that certain devices--such as devices that allow parents to protect their children from on-line pornography--must be allowed. An amendment I offered in Committee makes clear that a parent may protect their children from pornography without running afoul of this law. We should never be in the position with any legislation that intentionally or unintentionally makes good parenting illegal. When the choice is between protecting our children from obscene material and perhaps allowing one machine to be diverted for unlawful use, Congress and the courts should choose the protection of children every time. Additionally, the protection of privacy remains a concern. While the legislation makes some effort to make clear that a person acting to protect their individual privacy should not be liable for or guilty of circumvention some further clarification is needed. One of my primary concerns has been the use of ``cookies'' and their detrimental impact for on-line privacy. I am not convinced that cookies could not be copyrighted and protected in such a way that getting rid of them or turning them off would not violate the new law. Recently my concern has been proven further by a piece of software developed by Blizzard Entertainment called StarCraft. This software rifles through the player's hard drives and sends the information found back to the company. Again, I was told by some that I should not be concerned, but I will tell you that I am concerned and everyone in this body and in the country should have similar concerns about this or any legislation that without careful thought could create a situation where an individual's privacy is jeopardized. I believe the savings clause I added to the bill will address this problem. However, if that does not prove sufficient, I will introduce legislation to deal with this problem directly and will look forward to working with all the parties that support this bill to ensure passage of such legislation. One industry that has concerns about this legislation is the encryption industry. I sought to have included in the legislative language a provision to guarantee that the highly successful means for encryption research that are used in this country may continue to be used in the future, despite some of the prohibitions included in this bill. Unfortunately, we were not able to work out any acceptable legislative language. We were able to craft language for the report that made clear that most forms of current encryption research were left undisturbed by the bill. While I believe that this is better than nothing, I understand that there are lingering concerns, and I would certainly support efforts to try to address this issue before the House completes work on this important piece of legislation. In discussing the anti-circumvention portion of the legislation, I think it is worth emphasizing that I could agree to support the bill's approach of outlawing certain devices because I was repeatedly assured that the device prohibitions in 1201(a)(2) and 1201(b) are aimed at so- called ``black boxes'' and not at legitimate consumer electronics and computer products that have substantial non-infringing uses. I specifically worked for and achieved changes to the bill to make sure that no court would misinterpret this bill as outlawing legitimate consumer electronics devices or computer hardware. As a result, neither section 1201(a)(2) nor section 1201(b) should be read as outlawing any device with substantial non-infringing uses, as per the tests provided in those sections. If history is a guide, however, someone may yet try to use this bill as a basis for initiating litigation to stop legitimate new products from coming to market. By proposing the addition of section 1201(d)(2) and (3), I have sought to make clear that any such effort to use the courts to block the introduction of new technology should be bound to fail. As my colleagues may recall, this wouldn't be the first time someone has tried to stop the advance of new technology. In the mid 1970s, for example, a lawsuit was filed in an effort to block the introduction of the Betamax video recorder. I think it useful to recall what the Supreme Court had to say in ruling for consumers and against two movie studies in that case: One may search the Copyright Act in vain for any sign that the elected representatives of the millions of people who watch television every day have made it unlawful to copy a program for later viewing at home, or have enacted a flat prohibition against the sale of machines that make such copying possible. As Missouri's Attorney General, I had the privilege to file a brief in the Supreme Court in support of the right of consumers to buy that first generation of VCRs. I want to make it clear that I did not come to Washington to vote for a bill that could be used to ban the next generation of recording equipment. I want to reassure consumers that nothing in the bill should be read to make it unlawful to produce and use the next generation of computers or VCRs or whatever future device will render one or the other of these familiar devices obsolete. Another important amendment was added that makes clear that this law does not mandate any particular selection of components for the design of any technology. I was concerned that this legislation could be interpreted as a mandate on product manufacturers to design products so as to respond affirmatively to effective technical protection measures available in the marketplace. In response to this concern I was pleased to offer an amendment, with the support of both the Chairman and the Ranking Member of the Committee, to avoid the unintended effect of having design requirements imposed on product and component manufacturers, which would have a dampening effect on innovation, and on the research and development of new products. Accordingly, my amendment clarified that product designers need not design consumer electronics, telecommunications, or computing products, nor design and select parts or components for such products, in order to respond to particular technological protection measures. This amendment reflects my belief that product manufacturers should remain free to design and produce consumer electronics, telecommunications and computing products without the threat of incurring liability for their design decisions under this legislation. Nothing could cause greater disaster and a swifter downfall of our vibrant technology sector than to have the federal government dictating the design of computer chips or mother boards. By way of example, during the course of our deliberations, we were made aware of certain video boards used in personal computers in order to allow consumers to receive television signals on their computer monitors which, in order to transform the television signal from a TV signal to one capable of display on a computer monitor, remove attributes of the original signal that may be associated with certain copy control technologies. I am acutely aware of this particular example because I have one of these video boards on my own computer back in my office. It is quite useful as it allows me to monitor the Senate floor, and occasionally ESPN on those rare occasions when the Senate is not in session. My amendment makes it clear that this legislation does not require that such transformations, which are part of the normal conversion process rather than affirmative attempts to remove or circumvent copy control technologies, fall within the proscriptions of chapter 12 of the copyright law as added by this bill. Further, concerns were voiced during the Committee's deliberations that because 1201 applies not only to devices but to parts and components of devices, it could be interpreted broadly to sweep in legitimate products such as personal computers and accessories and video and audio recording devices. While the manufacturers of these products were understandably concerned, it was quite apparent to me that it was not the Committee's intention that such useful multipurpose articles of commerce be prohibited by 1201 on the basis that they may have particular parts or components that might, if evaluated separately from such products, fall within the proscriptions of 1201(a)(2) or (b). My amendment adding sections 1201(d)(2) and (3) was intended to address these concerns. Another issue of concern is that unless product designers are adequately consulted on the design and implementation of technological protection measures and means of preserving copyright management information, such measures may have noticeable and recurring adverse effects on the authorized display or performance of works. Under such circumstances, certain adjustments to specific products may become necessary after sale to a consumer to maintain the normal, authorized functioning of such products. Such adjustments, when made solely to mitigate the adverse effects of the measure on the normal, authorized operation of a manufacturer's product, device, component, or part thereof, would not, in my view, constitute conduct that would fall within the proscriptions of this legislation. The problems described may occur at a more fundamental level--with noticeable and recurring adverse effects on the normal operation of products that are being manufactured and sold to consumers. The best way to avoid this problem is for companies and industries to work together to seek to avoid such problems to the maximum extent possible. I am pleased to note that multi-industry efforts to develop copy control technologies that are both effective and avoid such noticeable and recurring adverse effects have been underway over the past two years in relation to certain copy protection measures. I join my colleagues in strongly encouraging the continuation of these efforts, since, in my view, they offer substantial benefits to copyright owners who add so much to the economy and who obviously want devices that do not interfere with the other normal operations of affected products. The truth of the matter is that Congress ought to operate contemporaneously with industry to solve problems. Anytime the affected industries beat government to the solution they ought to be praised. In many respects I invite the private sector to be there first and get it done well. If they are there first, they will often solve the problem. Even when they cannot solve the problem, the private sector problem solving process will at least narrow the issues for the government to address. Getting a law passed is very difficult, getting it changed is sometimes even more difficult, and so relying on government really elevates the need to have no garbage in, to result in the right output. I would encourage the content community and the device and hardware manufacturers to work together to avoid situations in which effective technological measures and copyright management information affect display quality. There is no reason why the interested parties cannot resolve these issues to ensure both optimal protection of content and optimal picture quality. To the extent that a particular technological protection measure or means of applying or embedding copyright management information to or in a work is designed and deployed into the marketplace without adequate consultation with potentially affected manufacturers, the proprietor of such a measure or means and those copyright owners using it must be aware that product adjustments by a manufacturer to avoid noticeable and recurring adverse effects on the normal, authorized operation of affected products are foreseeable, legitimate and commercially necessary. Such actions by manufacturers may not, therefore, be proscribed by this chapter. Again, several individuals and organizations deserve thanks from everyone involved in this debate. I want to take a moment to thank those few particular staff who labored into the night and over weekends to put together this legislation and to accommodate some of my concerns. Ed Damich and Troy Dow with Senator Hatch's office were critical to moving forward on all issues particularly by coordinating the OSP discussions. Beryl Howell and Marla Grossman were similarly important to the process particularly in regards to the education provisions and on drafting language for several key areas. I would like to thank all of the individuals representing various industry and educational interests who were critical not only in educating me on the myriad issues but also on copyright law in general. Finally, I would again like to thank the members of my own staff, Bartlett Cleland and Paul Clement who worked so well to produce a piece of legislation that could guide this country to a digital future. In the end, this is not a perfect bill. I would have favored a different approach to some issues. However, this bill is an important step forward in bringing the copyright law into the digital age. I am happy to support this bill and look forward to its final passage.

Mr. ASHCROFT. Mr. President, I suggest the absence of a quorum.

Mr. ASHCROFT

Mr. ASHCROFT. I object.

Mr. ASHCROFT

Mr. ASHCROFT. Mr. President, I rise today in order to introduce two bills designed to address the abuse and misuse of executive privilege by the President, the Executive Accountability Act of 1998 and a companion bill designed to expedite appeals of executive privilege claims asserted in independent counsel investigations. I want to thank Senator McConnell who has joined me as a co-sponsor of both these measures. Executive privilege is just that--a privilege extended to the President, and the President alone, to be invoked in those rare circumstances in which the President must keep discussions about official acts secret from the courts, Congress and the American people in order to protect national security. This President has abused this privilege. He has used it as a delaying tactic to try to shield the details of unofficial acts having nothing to do with national security, but everything to do with Mr. Clinton's personal legal problems. As I detailed in a letter to my colleagues back in March, the President's current claim of executive privilege is legally baseless. I would ask that that letter be included in the record. Part and parcel of the President's abuse of executive privilege is his unwillingness to acknowledge the mere fact that he has asserted the privilege. Indeed, the President's lawyers recently have attacked the Independent Counsel's office for acknowledging the Court's entirely predictable rejection of the President's assertion of executive privilege. Apparently, the President wants to be able to assert the privilege and have a court rule on it, all without the knowledge of Congress or the American people. This is an affront to Congress and the public. Congress has a vital interest in the development of the law of executive privilege. Until this Administration, grand jury investigations into presidential communications were rare. Congressional oversight hearings, by contrast, are commonplace. But Congress will have to live with whatever rules the courts develop concerning the scope of executive privilege. Without notice that the President is raising these claims, Congress cannot protect its interests by filing amicus briefs. The President's covert assertion of executive privilege is of concern not just to Congress but to every citizen. Although a limited executive privilege is necessary to protect national security, the privilege is contrary to the public's right to know. As a consequence, asserting the privilege has historically come with a political cost. President Clinton has tried to enjoy the benefits of the privilege while avoiding these costs. We should ensure that if a President takes the extraordinary step of asserting executive privilege that he not be able to keep that action from the American people. The Executive Accountability Act of 1998 addresses the problem of the covert use of executive privilege through the simple expedient of requiring full disclosure. If the President decides to invoke the privilege in court, both the President and the presiding judge must disclose that fact to Congress. If the court rules on a claim of executive privilege, the court must inform Congress. If the President decides to appeal an adverse ruling on a claim of executive privilege, he must also disclose that fact to Congress. If the Attorney General provides a written opinion concerning the validity of the privilege, that too should be shared with the Congress. Finally, the Act confirms that any Member of Congress has the capacity to file an amicus brief in any judicial proceeding in which the President asserts executive privilege. The legislation also builds in protections to ensure that none of these disclosures endangers national security. I am also introducing a companion bill to address the President's misuse of executive privilege as a delaying tactic to try to run out the clock on the Independent Counsel's investigation. The bill would provide for expedited review of such claims and for a direct appeal to the Supreme Court. Hopefully, this provision will remove the temptation to use executive privilege claims as delaying tactics, and will force the President to think twice before asserting a spurious claim of privilege. When properly confined to official acts affecting national security, executive privilege serves an important function. But when abused as a delaying tactic or to protect unofficial acts, the privilege in its distorted form becomes an unacceptable impediment to the public's right to know. These two bills impose accountability requirements on the executive to ensure that the privilege is used in an appropriate way. Mr. President, I ask unanimous consent that additional material be printed in the Record.