Lamar Alexander

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, I ask unanimous consent that the Subcommittee on Oceans, Fisheries, and Coast Guard be authorized to meet on Thursday, April 29, 2004, at 10 a.m. on NOAA Oversight, in SR- 253.

Mr. ALEXANDER

Mr. ALEXANDER. Three minutes.

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, I ask unanimous consent to speak in morning business for as much time as I may require.

Mr. ALEXANDER

Mr. ALEXANDER. Madam President, I ask unanimous consent I be allowed to speak as in morning business.

Mr. ALEXANDER. I understand the President pro tempore may be coming to the Senate floor. If he appears, I will yield to him and pick back up when he finishes. In fact, the President pro tempore has arrived. I yield the floor to the Senator from Alaska until he finishes.

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 Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, I was just at a luncheon with the distinguished chairman of the Commerce Committee, and he wondered where I had been in terms of the debate on the Internet tax question. So here I am. I am glad to have this opportunity. I know we have been diverted to discuss the Energy bill. But I appreciate the leadership creating an opportunity to debate these issues. As the Senator from New Hampshire knows, who is a member of the Commerce Committee, and has a large interest in the fastest-growing technology in America, the growth of high-speed Internet access--the question of how we approach, in a comprehensive way, the regulation and taxation of this new technology--is very important. It is important for our economic growth. It is important because, as we do this, we will be making, inevitably, major adjustments in terms of the responsibilities of State and local governments, and we need to do it right. That is why I am encouraged by the fact Senator McCain; Senator Stevens; the Commerce Committee; Michael Powell, the Chairman of the Federal Communications Commission, all have announced that we need to take a new look at the Telecommunications Act of 1996 in light of the recent growth of high-speed Internet access. I am not happy about the fact we are trying to solve problems that ought to be solved comprehensively, for the long term, on a piecemeal basis, which is exactly what some are trying to do, by turning a fairly innocuous idea--a temporary timeout on State and local taxation of Internet access; we are just talking about the connection between my computer and AOL or whoever is providing my Internet access; that is just a little bitty thing--they have turned that into a debate about whether we should give a broad exemption to the entire high-speed Internet access industry, and make decisions now about whether State and local governments will be able to continue to collect taxes on telephone services. One of the problems with this debate is that everyone who stands up on opposite sides offers different facts and figures and interpretations, so a Member of the Senate who is not really studying or following this issue closely is easily misled. Let me deal with four or five of the misconceptions. First, let me talk about what we are talking about. We are talking about high-speed Internet access, which was barely known to most Members of Congress when the 1996 Telecommunications Act was enacted, not very well known in 1998, when we all said--almost all of us said; I said this--let's take a temporary timeout. Let's not allow even State and local taxation of Internet access until we figure out what it is. So we did that for 2 years. We did it then for 3 more years. Now the effort is to not just do that permanently but to just say: OK, this is a great new invention. Let's just exempt the whole industry from taxation. High-speed Internet access is now offered in lots of different ways. The reason it is so important is because it means that lots of different services may come to my home. If I am watching television through direct satellite in my home here in the District of Columbia, there is a nice young woman who comes on and she advertises that the same DirecTV satellite television I have can also supply me with high-speed Internet access. Anywhere I am that I can get DIRECTV, which is most places in the world, I can get high-speed Internet access. It seems I get something in the mail every day from my telephone company saying they can deliver it over the telephone line. That is DSL. I would get something from the cable TV, when I had that, that said: We can deliver high-speed Internet access to you as well. There are Internet service providers, companies who deliver it, such as America Online. Now we are finding that high-speed Internet access can be delivered by power companies. In other words, there is no problem with making high-speed Internet access available to anybody in America who has a telephone wire running to their house or business, has an electric wire running to their house or business, who can put up a satellite dish or hook into a cable television. That covers about everybody. But not everybody has it. More Americans have it than in any other country, which I will get to in a minute. But this is a new technology. A lot of people have it. In Manassas, VA, you can buy it from your electric power company. The same people who provide electricity will sell it to you for $25 a month. Most cable systems or telephone companies will sell it to you for $30 or $40 a month. I get things in the mail that offer it on an introductory basis for $10 or $15 a month. What we are debating is whether State and local governments can apply the sales taxes they usually apply to such transactions and whether they can apply the business taxes they usually apply to such business activities. The tax we are talking about that Tennessee, New Hampshire, or Texas might charge might be $1 a month or $2 a month. That is what all the fuss is about. If that were all we were talking about, it really would not be worth very much of the Senate's time except the legislation that we are being offered would do much more than is advertised. Let me begin by suggesting what it will do or what it could do. I don't know why every Governor in America and every mayor in America is not sitting in the lobby right now saying to Members of the Senate: Be careful about what you are doing because the way we read the latest proposal by the distinguished chairman of the Commerce Committee, Senator McCain, and certainly the way we read the legislation that came over from the House that is expected to be put into conference with whatever we produce, you put at risk the money State and local governments collect today from taxing telephone services. If you are sitting at home listening, you might say: Hooray, I don't want to pay those taxes. Well, fine. So we take those taxes off. In Texas, if we take off the taxes Texas collects on telephone services, it is $1.7 billion a year. So if the bill passes in the form it passed the House or in the form it is now written in the Senate, we might as well call this the Texas new income tax law of 2004 or the Nashville higher local property tax law of 2004. Because you cannot put at risk billions of dollars of State and local revenues and expect those governments to continue to fully fund universities, schools, parks, roads, and the other things they are expected to do. One might say, well, let them just cut the size of government. I could be facetious about this, although I don't want to be because it is so serious. Here is a serious analogy. I just had lunch with the president of one of the largest car companies in the world. We were talking about hybrid cars, the cars that have an electric engine in them and an internal combustion engine in them. They are reported, according to Toyota Corporation, to get 50 miles a gallon. That is pretty good. Gasoline is at record prices. The Middle East is in turmoil. We are getting 65 percent of our oil from around the world, and our air is dirty. So as a Senator, I think it would be a great idea to encourage people to use hybrid cars. Why don't I propose a Federal law that stops Tennessee, New Hampshire, Texas, and California from charging a State tax on the sale of hybrid cars? That would clean the air. That is a good thing. Let's do it. You might say: That sounds good, but it sounds odd, too, because you are a Federal legislator. Why would you pass a hybrid car act about State laws? If you have an expensive idea, why don't you do it yourself? The Senator from Virginia and the Senator from Arizona have said it is not the intention of their legislation to keep States from continuing to tax telephone calls, telephone services, even if the calls are made over the Internet. That is what was said. But that is not what the language of the bill does. I don't think the Senate should take any chance that in the State of California we would pass a law on such a simple item as exempting Internet access from taxation and have the unintended effect of costing State and local governments up to $10 billion a year in revenues they now collect on telephone calls--not all telephone services, just telephone calls. In Florida, it is $1 billion a year. So you might call this act, as it is now written, the Florida income tax act of 2004, the Tennessee income tax act of 2004, the Texas income tax act of 2004, because I don't know what other revenue base is left if that much of a sales tax is taken away. You might ask: Why are you saying it would be taken away? Let's assume I am right about the way the law is written. Here is what happens. I will use the hybrid car analogy. We might set up a two-tier tax system for cars. Buy a hybrid car in Nashville and you will pay zero of the Tennessee sales tax. Buy a regular car in Nashville and you will pay 6, 7 percent on the cost of the car, I believe up to a ceiling. So we will have two tiers. That is what is going to happen with telephone calls. One of the exciting advantages of this new technology is we will soon be making regular telephone calls over the Internet, not over the telephone wires. They will be using telephone wires but not in the same way. It is a different technology. It is still a telephone call but a different way of doing it, just as with a hybrid car. Calls, as they move to the Internet, will be free of State and local taxation. That is what adds up to about $10 billion a year in State and local revenues. That won't happen overnight. The Congressional Budget Office has informed us that within the next 5 years, State and local governments will lose $3 billion of revenue. I think it will come faster than that. Most people who look at VOIP, voice over Internet protocol, believe it will and hope it does. I hope it does. I think it is a great advance. But I disagree that on this bill, we should decide the question of whether State and local governments must stop taxing telephone services and start raising property taxes, or sales taxes on food, or institute a new income tax to make up for all or part of the revenue you lose. I would much rather see the Senate Commerce Committee, over the next year or two, consider legislation such as that by the distinguished Presiding Officer, which straight out says--if I am stating it correctly--that with this new protocol, it should be free of taxation. We ought to talk about that. It ought not be snuck into a bill. I urge the chairman of the committee and Senator Allen to accept plain English language--just take it and change their bill. They asked what suggestions we have. I have given this to them several times. Just say that nothing in this legislation precludes States from collecting taxes they are collecting on telephone services, including telephone calls made over the Internet. Save that question for another day. I have heard that is their intention. That is not what it says. In Alabama, that is worth up to $213 million a year; in Alaska, it is $18 million a year; in Arizona, it is $308 million a year; California collects $1.5 billion a year. So that is a huge cost to State and local governments. It is 5 percent of the Tennessee State budget, to give you an example. Senator Feinstein says there are more than 100 cities and counties in California that estimate they could lose from 5 to 15 percent of their revenue. So that is one of the four issues that could be easily corrected. Another question that has come up quite a bit lately is the idea that suddenly we need more Government subsidy for high-speed Internet access because the United States is falling behind. Well, my view on that is I don't think it is true that we do. But if it is true, Congress ought to pay the bill and not send it to State and local governments. Just as we think hybrid cars are great and we want to give them a subsidy--that is called picking and choosing winners in the economic marketplace, which I thought conservatives were not supposed to do. If we want to do that for hybrid cars, we should take it out of our budget and not tell Governors and mayors to take it out of property taxes or take it out of the classrooms to do it. If we want to give an advantage to high-speed Internet access, we should pay for it. But we ought not to pass this bill because we think we are behind in high- speed Internet access. There is no real evidence of that. For example, in 2002, the United States had the highest number of Internet subscribers in the world, nearly 20 million. Eighty-eight percent of all ZIP codes have at least one high-speed subscriber; 29 percent of all ZIP codes have access to five or more providers. The Pew analysis recently showed that a quarter of Americans have high-speed Internet access in their home and half have it at their workplace. Consumers are adopting broadband, high-speed Internet access, at a record pace, not a slow pace. There is no emergency in terms of people not using this. They are adopting broadband technology at a faster pace than CD players. High-speed Internet access is coming in at a faster pace than cell phones, color TVs, and VCRs during their development. That is according to a report from the Department of Commerce in 2002. Cellular phones took 6 years from their introduction to reach 7\1/2\ million subscribers. High-speed Internet reached that in 3\1/2\ years. High-speed Internet service providers are increasing their investment in broadband services. For example, between 1996 and 2001, the four largest phone companies increased their investment in broadband technologies by 64 percent and cable companies by 68 percent. In short, the Congressional Budget Office told us, the Senate, in December 2003 that the broadband market is booming. In its report to us in December of 2003, ``Does the Residential Broadband Market Need Fixing?'' the CBO analysis also concluded that ``Nothing in the performance of the residential broadband market suggests that Federal subsidies for it will produce large economic gains.'' This is CBO. ``Nothing in the performance of the residential broadband market suggests that Federal subsidies for it will produce large economic gains.'' So, then, why are we coming with a bill that would give more big subsidies? I have reviewed the fact that, because of the language in the latest proposal by the chairman of the Commerce Committee, up to $10 billion of State and local tax collections on telephone companies are at risk. If you take that away, that is a subsidy to a company. You can subsidize a company in one of two ways. You can give it some money or you can say you don't have to pay taxes like everybody else does. That is a flatout subsidy. That is not the only subsidy. I mentioned to the distinguished chairman, the Senator from Arizona, that it seems to me that insofar as my research indicates, high-speed Internet access is a lot like ethanol. It is hard to find anything that has more subsidy. According to the Congressional Research Service, the Congressional Budget Office identified three programs totaling $4.8 billion in subsidy, a Federal subsidy for promoting the adoption of high-speed Internet access. They are already in place--$4.8 billion of Federal subsidy for high-speed Internet access. Established in 1996, the Telecommunications Act provided subsidies for schools and libraries, subsidies for rural health care providers. The Farm Security and Rural Investment Act of 2002 authorizes $20 million per year for loans and grants. Then I have the Alliance for Public Technologies' report on all of the State and local broadband policy experiments in the State. In virtually every State in America, there is a spending of taxpayer dollars to encourage the spread of high-speed Internet access. Yesterday, I used the example of Texas. Texas set up a fund in 1995 to spend $1.5 billion over 10 years to provide telecommunications access to public schools, hospitals, libraries, and institutions of higher education. Almost every State is doing it. So let's take how this works as an example. If this bill passes--and if I am reading the McCain proposal right and it affects telephones the way I believe it does--this is what happens in Texas to broadband. They are spending $1.5 billion already to encourage the spread of broadband in public institutions. Texas also has a law put in by President Bush when he was Governor in 1999; I think it is a good law. By the way, I think we ought to adopt that. I think it is exactly the way to encourage permanently the growth of high-speed Internet access, if that is what we want to do. Texas, in 1999, said it is the law of Texas that the first $25 is exempt of everything to pay for Internet access. So that would save you maybe $1 or $2 a month. That is what the tax would be in Texas on high- speed Internet access. You can get it anywhere from $20, to $40, or $50, depending on who sells it to you. The prices are coming down because of the competition. So you have $1.5 billion in Texas at least to encourage it. You have an exemption for every single person in Texas who wants to sign up. The first $25 is already exempt. Now here we come with our bill. What does it do? It does a lot more than exempt Texans from tax on Internet access. First, I believe it puts at risk up to $1 billion of revenues in sales taxes the State collects today on telephone services. That is one. Second, it stops Texas from collecting business taxes on telephone companies it normally would collect on any company that does business in the State. The definition of the latest proposal by the distinguished Senator from Arizona says we are not just talking about the hookup, Internet access between the end user and the provider, we are talking about the whole industry. We are talking about that, that, that, and that--in other words, all the way through. Let's go back to the example of the hybrid cars. It would be like passing a Federal law saying you cannot collect the State tax in Arizona or Tennessee on the sale of a hybrid car because it is a great new invention. Not only that, you cannot collect a sales tax--if you are an auto parts supplier in Tennessee--you can't collect a tax there. And if they brought steel to the auto parts supplier, you cannot collect a tax there. None of us like to pay taxes, but when we lower State and local taxes here, we are inevitably raising State and local taxes there. Lowering taxes in this amount of money by direction from Washington, DC, inevitably makes this the Higher Sales Tax Act of 2004, the Higher Local Property Tax Act of 2004 because every mayor and every Governor is going to be scrambling to figure out: We lost all this revenue because the Congress in its wisdom had the idea to give a big subsidy to the high-speed Internet access business, and we are going to have to find a way to pay for the schools, to keep from raising tuition so much, to pay for health care, and to open the parks. So we are going to have to close them, cut them back, or raise the sales tax on food and raise the property tax. That is why we usually leave those matters to mayors and Governors and do not do it from here. We are all for home ownership, but we do not pass a Federal law to lower property taxes. We all want our corporations to stay in the United States, and we do not want them to have high local taxes any more than high Federal taxes, but we do not pass a Federal law lowering the local corporate income tax. That is why I am perplexed by this bill. The idea that by adding a subsidy we would encourage the use of high-speed Internet access when it is already, according to the New York Times last week, the fastest growing technology in America, when already it is being accepted more rapidly than VCR and all these other innovations I do not agree with. The idea that it needs more taxpayer support I do not agree with. Let's throw that item completely out the window and say if we do believe it needs a subsidy, then why do we send the bill to State and local governments? We promised not to do that. Mr. President, 300 Republicans stood over on the steps of the Capitol in late September 1994 and said: No money, no mandates. If we break our promise, throw us out. I thought we were the party on this side of the aisle of no Federal unfunded mandates. That was a big movement back then. Everybody got fired up about it. I heard it. I was running around the country trying to offer myself for higher office, which the people rejected. I know the great Contract with America was no more unfunded mandates. I remember Senator Dole saying when he was majority leader the first act on the part of the Senate was no more unfunded mandates. In fact, this unfunded mandate might be so large that according to CBO's letter to us, they cannot calculate how much it will be, although they know it is enough to make it an unfunded Federal mandate. Why would we do that? Why don't we do what Texas did? Texas did a very direct thing. They said the first $25 you pay every month is exempt from State and local taxes. It could be $30, it could be $35, it could be $40. Then we won't have any argument about definition. We would not have to worry about whether we were subsidizing companies instead of consumers, and we would actually be giving a benefit to the individual American--maybe there will be 100 million of them 1 day--who subscribe to high-speed Internet access, and we say no State and local taxes at all, none on you. The States have asked us to do that, and we have not done it. I don't know why. That also is an unfunded mandate, but it is not much money. The way we are doing it is a lot of money. It is at least hundreds of millions of State dollars a year, and the way this latest bill is written, it could be billions a year of State and local revenues. I thought the National Governors Association letter was thoughtful and respectful and acknowledged the hard work all sides have done on this issue. That is why it is such a hard issue, maybe, because it ought to be easy. It ought to be a small amount of money and a fairly simple issue. But it has been written into a complex issue with the possibility that it might run a Mack truck through State and local budgets. The National Governors Association yesterday suggested the proposal by the Senator from Arizona falls short of their hope of balancing the interests of State sovereignty and State responsibility with the desire for keeping high-speed Internet access free of excessive taxation. They talked about the specific issues I suggested in my letter to the chairman earlier this week and that formed the basis for amendments I have filed. One, the definition. Instead of using the definition of the original moratorium in 1998, the one we all agreed to in 1998 and 2000, instead of saying let's do that permanently or do that again, they have cooked up a new definition. This definition is the one that runs the risk of costing State and local governments so much. That is one. Second, the language--and this may be inadvertent and if it is, maybe I can ask the Senator from Arizona if there is a way we can agree on how to fix it. If we agree we do not intend to keep States from continuing to collect State and local taxes on telephone services, even telephone calls made over the Internet, then we ought to get that issue off the table, and surely we can find somebody who can write that in a sentence to which we can all agree. Then there is the term. I applaud the leadership of those Senators on the Commerce Committee who want to address this issue. I think if we go 4 years, which is better than permanent, but if we go 3 or 4 years, we run the risk of freezing into the law provisions that will be much harder for the Commerce Committee and the full Senate to change. Then there is the question of the so-called grandfather act which allows States already collecting taxes to keep doing that. Those are all the issues we have here. One is the definition, one is telephone, one is term, and one is grandfather. That is tantalizingly close, it would seem to me, but the one that makes the most difference is the definition, which means for the first time, States will not be allowed to apply business taxes to the high-speed Internet industry in the same way they normally would other businesses for the first time. They are not collecting these taxes. The other issue is the language, we believe, in the latest draft and certainly the language in the House bill runs the substantial risk of over time costing the States up to $10 billion a year in sales taxes, and the House bill another $7 billion in business taxes now collected on telephone services. I do not want to overstate that point. That is not going to happen tomorrow. It is going to gradually happen as telephone calls are made over the Internet. So that would be my hope since we have narrowed it down to that, and one of them may not be an issue at all, but that is pretty close. I do not know much more that I can say about it except--well, I can say a whole lot more about it. I have stacks of stuff and I will be glad to stick around and talk about it if anybody wants to. I do have the hearing I am expected to chair at 3, but I would say to the distinguished chairman from Arizona that I hope he understands I am not persisting in this just for the purpose of being obstinate. I feel very deeply, from my background as Governor, that it is important for us to respect the ability of State and local governments to fund their programs. Since I left the Governor's office in Tennessee in 1987, Federal funding for education has gone from 50 cents out of every dollar to 40 cents. Most of that has gone to higher education. Our chances for job growth and a high standard of living depend to a great extent on the ability of State and local governments to properly fund colleges and universities and create schools our children can attend. Any time we take away resources from State and local governments, that does not sound like the Republican Party. President Reagan was giving resources to State and local governments. President Eisenhower was giving resources to State and local governments. Last year, we sent a welfare check to State and local governments of $20 billion, and this year we are talking about taking back up to at least $10 billion a year. That is my objection. We could have a separate debate about whether the subsidy is warranted and, if it is, well, we could pay for it from here. But surely we would not send the bill to State and local governments.

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, sometimes when we talk about this Internet tax proposal, eyes glaze over. It is a hard subject for people to get into their brain because we are talking about a new way of doing things. We are talking about Internet access, how one connects their computer, for example, to the Internet, but we are especially, in this case, talking about high-speed Internet access. High-speed Internet access has been known to us just for the last few years. When Congress passed the Telecommunications Act of 1996, it is possible that nobody in Congress had ever heard of high-speed Internet access. The commercial Internet was just a few years old at that time. High-speed Internet access is another one of America's great adventures. The Industrial Revolution was caused by the internal combustion engine. That was a great invention. The telephone was a great invention. Television was a great invention. The use of high-speed Internet access is a great discovery. What is possible with it is that suddenly a lot of the everyday services of life, such as making telephone calls as an example, downloading movies, even watching our regular television channels, may be done through the Internet. Maybe it will be easier; maybe it will be less expensive; maybe there will be some other advantages. So for a long time, everybody has been excited about high-speed Internet access, which we call broadband. As a result of that excitement, there has been a phenomenal amount of subsidy of high-speed Internet access by the Government. The Federal Government spends approximately $4 billion a year already to encourage the spread of high-speed Internet access. Almost every State spends its taxpayers' money to encourage the growth of the high- speed Internet access industry. The State of Texas, for example, has done at least two things. One is that it has a fund. Texas does things in a big way. So it is collecting $1.5 billion over 10 years, which will be spent to encourage high-speed Internet access just in Texas. Also, in 1999, when President Bush was Governor Bush, Texas decided it would give consumers a break on high-speed Internet access. Texas said the first $25 a consumer pays for their high-speed Internet access bill each month is exempt from the State sales tax. That is what Texas has done since 1999. Now, the irony is that the Governors and States of this country came to Congress and said, Why do we not make President Bush's Texas plan the national plan? That really helps consumers. It is pretty easy to understand. I am in Tennessee, the Chair is in Missouri, somebody else is in Texas, and we all get the bill each month from our Internet service provider. Now consumers can get this high-speed Internet access a lot of places. They can get it from their Internet service provider, such as America Online, for example, or they can get it from their cable company, the person who brings people television, or they can get it from their telephone company. They will charge about $30 or $40 a month for that. In Manassas, VA, consumers can get it from their power company. That has helped us understand that there is not going to be any digital divide problem. Almost everybody, thanks to the rural electrification system, has a power wire running to their home or near their home and they can get their high-speed Internet access from the electric company. They do it in Manassas, VA. It costs $25 a month, which is just the amount of money President Bush, when he was Governor Bush, thought ought to be the subsidy to consumers who decided to use this fastest growing new technology in the United States, high-speed Internet access. The reason I raise that is, since we already had that in Texas, what if the States say to the Congress that we will accept that unfunded Federal mandate? We will ask for that one. You know, just exempt all of our 100 million consumers across the country from the $1- to $3-a-month bill that they will pay in taxes on high-speed Internet access. But, no, from the House comes this legislation last year that would drive a Mack truck through the State budgets of virtually every State. It would drive it through the State of Texas, too. The State of Texas collects $1.7 billion a year in taxes on telephone services. That comes from the National Governors Association. This year they called up all the States and got this information. State and local governments, in taxes, collect $1.7 billion a year on telephone services. Under the proposal that is coming to the floor this afternoon that Senator McCain has suggested, as those telephone calls are made over the Internet, they would be tax free. That sounds good at first, until you think about what comes next. Let's say Texas loses a third of its revenues from telecommunications taxes. Let's be conservative about this. Of the $1.7 billion that Texas collects on taxes on telephone services, only about a billion comes from telephone calls. These are the monthly bills that you get. So Texas collects $1 billion a year. According to the Congressional Budget Office, in a letter to the Senate that I had printed in the Record yesterday, the estimate is that within the next 5 years at least a third of all the telephone calls will be made over the Internet. I think it is coming faster than that. I believe Michael Powell, the Chairman of the Federal Communications Commission, believes it is coming faster than that. So under the McCain proposal, Texas loses one-third of the revenues it collects in telephone services. That is $300 million a year. In Tennessee, it is $100 million. Then that keeps going. So gradually if you are the Governor of Texas, you are the legislators of Texas--and I know right now they, as most States, are going through a difficult time financially--they are talking about other taxes in Texas so they can pay for their schools. But I can predict what is going to happen in Texas and in Tennessee and in Washington State and in Florida. Florida collects $1.4 billion in taxes a year on telephone services. About $1 billion of that is from telephone calls. Take all that out and what happens, dancing in the streets because people aren't paying taxes on telephone calls over the Internet? No. What is going to happen is that some unfortunate Governor in Texas and in Florida is going to have to propose a State income tax. You may stand up and say we should reduce taxes by $1 billion in Texas, or reduce it by $1 billion in Florida, and maybe you can. Maybe you can. But that is a substantial challenge to those States. What we are really doing here is something I never thought I would see. We have legislation which has zoomed through the House and which the distinguished chairman of the Commerce Committee, despite his efforts to have meetings and to compromise, is still insisting on, is that we in the Congress give a big subsidy to the high-speed Internet access industry and send the bill to State and local governments, and it is a potentially big bill. I suggested in my earlier remarks that the McCain proposal can be easily fixed. For example, we can just say: Nothing in this act shall preclude State and local governments from taxing telephone services, including telephone calls made over the Internet. That is very plain English. I don't know why we don't try plain English in a statute every now and then. That would remove a lot of that problem. Then we could make it a 2-year extension instead of 4 and that only leaves two problems. One is the definition of Internet access. They have cooked up a new one. We had one since 1998. We banned taxes on Internet access in 1998. We did it again in 2000. I supported that. Instead of really banning taxes on Internet access, they are creating a big tax subsidy to a whole industry. We could fix the definition problem by going to the Alexander-Carper definition, which we suggested in December, or just by going to the 1998 definition. Then we could make all the grandfather clauses expire at the same time the moratorium ends, that would be it, and we could pass the bill and be on to reducing taxes for manufacturing companies. Sometimes I think I have not been able to get my point across as effectively as I would like. I was thinking about it this way. The Presiding Officer is the Senator from Kentucky. Kentucky has a big Toyota plant. I visited with the chairman of Toyota in Tokyo a few weeks ago. Toyota is leading the way--Ford is doing a lot, Nissan is doing a great deal, other companies are--in hybrid cars. I see the Senator from Delaware, and I am going to yield to him within 3 or 4 minutes. They tell me at Toyota in Tokyo that Toyota is selling hybrid cars in America this year at the rate of 100,000 this year. That is very important in Tennessee because we have a big clean air problem and hybrid cars have electric motors and internal combustion engines both and burn less gas and pollute the air less, so the air would be cleaner in Tennessee. So I am thinking about, perhaps, recommending a Federal law that tells Kentucky and Tennessee and Delaware they cannot tax hybrid cars. Why wouldn't that be a good idea? That would clean the air. The reason it would not be a good idea is that in Delaware and Kentucky and Tennessee, some unfortunate Governor and some unfortunate mayor is going to have to figure out what to do about the property tax to pay for the schools and whether to raise the tax on food if you can't raise it on telephones. And even though he or she might want to lower taxes, if we give a big break to one industry, if we give them lower taxes, it is going to be higher taxes at some tax level for somebody else. Whether it is hybrid cars or whether it is solving the obesity problem by passing a Federal law that we can't tax low-carb foods, or solving the energy problem by saying we can't have a State tax on solar panels on the roof--all those things sound good, but it is not our responsibility in a Federal system to tell State and local governments what services they can provide and what taxes they can charge. And especially that is true when already the Congress and the States are subsidizing this industry. I believe if Congress wants to give a big subsidy to the high-speed Internet access business, Congress ought to pay for it. The way to do it is to adopt the George W. Bush Texas proposal that was enacted in 1999. That is relatively inexpensive. It benefits consumers. It would say to everybody in the country, the first $25 you pay on high-speed Internet access every month is tax exempt. The States have asked us to do it. Why don't we do it? Why do we insist on rushing through the Congress legislation that gives a big break to the industry that is already, at least as far as my research shows, the most highly subsidized and fastest growing new technology in America today? The Department of Commerce and the Congressional Budget Office both have advised us it is growing so fast it needs no subsidy, that there is no need to spend more taxpayer money on that. I see the distinguished Senator from Delaware, former chairman of the National Governors Association. He has been a leader in the fight to remind us we have a Federal system, and that it is not up to us to come up with big ideas, take credit for it, and send the bill to the local governments. I would like to yield to him whatever time he may require.

Mr. ALEXANDER. What was going through my mind was: I don't recall a time when I was Governor of Tennessee that I ever saw the Congress do anything like this. There were unfunded Federal mandates that we didn't like. Back in the early 1970s, before I was Governor, Congress said: We ought to help children with disabilities. We will pay for a certain percentage of it, but they never did. I hear about that all the time from local school boards and local people. But I cannot remember a time when the Congress passed a law saying: We have come up with a great idea here, and we are going to give a State tax break to somebody to pay for it. I think we would have laughed about that. Then we would have gotten really mad about it. It is so farfetched. We are having a very serious debate about this in the Congress. Everybody is going through the motions, making bills doing all these things. But what we are doing is, U.S. Senators are passing State laws. That is what we are doing. If I had known that I could have run for the Senate in 2002, I could have probably been elected by a big margin in Tennessee. I could have said: When I get to Washington, I am going to pass a Federal law abolishing the State income tax, in case you ever pass it, making it illegal for Tennessee to pass a State income tax. We don't have one and people don't want one, although they may get one, if this bill passes. Or I could say, as we have said a little earlier, hybrid cars are a great invention. I think I will pass a Federal law telling Tennessee, Kentucky, and Delaware they can't tax cars. Car taxes are hated. Or obesity is a national problem. I think I will pass a Federal law saying: No sales taxes on low-carb or low-fat food. Housing is important to all of us in the United States and in the Senate, but we don't pass a Federal law lowering local property taxes in Louisville or Nashville or Wilmington in order to encourage housing. Why don't we do that? It is because we have a Federal system. We are not Belgium. We are not France. We have Governors. We have mayors. This is America. It is a part of the American character that we like to make our decisions at home. When I go to a Lincoln Day dinner--I don't go to the Democratic meetings--I always say something about local control. If I were to go to any Republican meeting in Tennessee and say, I especially don't like it when a Congressman gets up and passes a Federal law and takes credit for the idea and sends the bill to the Governor or the mayor, I would get a big round of applause for that because we believe that in the Republican Party in Tennessee, and most Tennesseans do as well. I was enjoying the remarks of the Senator, and that was going through my mind. I wish I could think of some way to convey to my colleagues that we are talking out of the box here. We are not talking about Federal taxes, Federal subsidies, or Federal programs; we are talking about State programs. That is what we are doing here. It is totally inappropriate, against the spirit of the tenth amendment and Ronald Reagan and everything else we stood for on the Republican side in the Contract with America. It is offensive to that spirit. That is why I am here today.

Mr. ALEXANDER. I have been listening to the Senator from Delaware carefully.

Mr. ALEXANDER. I am going to leave within 4 or 5 minutes.

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

Mr. ALEXANDER. Mr. President, yesterday we began our discussion of legislation which, if it should pass, would be a Federal law giving a tax break or a subsidy to the high-speed Internet industry, and the Federal law would then send the bill for that to State and local governments. There is a bipartisan group of us who object to that, who believe if Congress wants to give a subsidy to the fastest growing technology, high-speed Internet access, then Congress ought to pay for it and not send the bill to State and local governments. I, for one, also question whether there is any need to spend additional taxpayer dollars on this sort of subsidy since, as far as I can tell, high-speed Internet access must already be the most heavily subsidized technology in the country. But, nevertheless, we have reached a point in the discussion where we are trying to create a compromise result. To go back through a little bit of history, the House of Representatives sent a bill to the Senate toward the end of last year, and that bill, while it was named ``Internet tax moratorium,'' did much more than that. It purported to make permanent the temporary timeout from taxes the Federal Government set in 1998, and then renewed in 2000, on State and local taxation of Internet access, but the bill did much more than that. As I pointed out at length last night, the House bill exempted this industry from a great many State and local taxes--telephone taxes States currently collect, business taxes States currently collect, more business taxes, and then sales taxes. So for all of these, we had the Federal Government saying to the State governments: You cannot do this; You cannot collect these taxes. We have a phrase for this. We call it unfunded Federal mandates. It means: Do no harm to State and local governments. The Republican majority was elected in 1995, promising to end the practice of we Congressmen and Senators coming up with some big idea, taking credit for it, and then sending the bill to State and local governments. So we went to work to try to change the bill. Senator Carper of Delaware and I and nine other Senators of both parties offered a compromise. We said: Since the Federal Communications Commission, and since Senator McCain and the Commerce Committee, and Senator Stevens, our President pro tempore, and others, have said we need to take a comprehensive look at this phenomenon of digital migration of services to the Internet that is being caused by this new high-speed Internet access, since we want to do that, let's take a comprehensive look at it, so let's just extend the old moratorium for a couple more years. In the meantime, let's try to create a level playing field so all high-speed Internet access providers are treated the same and do no harm to State and local governments. That is the Alexander-Carper proposal. The majority leader and Senator McCain and others asked me and Senator Carper to work with Senator Allen and Senator Wyden and others to see if we could narrow our differences. We did, but we still had differences. As I pointed out yesterday, Senator Allen's bill, S. 150, which is the bill we are now considering, is permanent, not temporary. It still puts at risk $3 to $10 billion that State and local governments collect. It also causes the sales taxes that were being collected to expire. Let's recall that what we are talking about is not lowering anybody's taxes. If you lower one tax, another tax is going to go up, or the government is going to be cut. Lower taxes for the service industry means higher taxes for somebody else. That is a fact. Then Senator McCain came to the floor yesterday and offered a new proposal. I want to comment for the next 3 or 4 minutes on that. I have written Senator McCain a letter outlining my reaction to it, which I hope is being delivered now, but since we only received his proposal yesterday afternoon at about 2:15, I want to let the full Senate and others know my reaction to his proposal. First, I appreciate his proposal and his efforts to create a compromise. We all want a result. That is why we are moving ahead at 2:15 to consider his proposal. Unfortunately, Senator McCain's new proposal still harms States and still creates a huge loophole for the high-speed Internet industry. Let me be specific. No. 1, the definition that the McCain proposal uses is the same definition the Allen-Wyden proposal uses. That definition eliminates $500 million annually of telephone taxes, business taxes that State and local governments collect today. That is an unfunded mandate. No. 2, the bill does not protect States and their ability to make a decision about whether to continue collecting taxes on telephone services. This is very important to State and local governments. Last year, according to the National Governors Association, State and local governments collected $18 billion in taxes on telephone services. In the State of Tennessee, it was $361 million. In California and Florida and Texas, it is more than $1 billion. It is 5 percent of our State budget. Almost every State is affected by this. While Senator McCain's legislation in one section appears to try to protect telephone calls made over the Internet so that States may choose to continue to tax telephone services as opposed to food, for example, it doesn't do that. So that is the second problem with the bill. It takes away from the States a substantial tax base. No. 3, the bill is 4 years in duration. We think 15 months, 2 years would be much better. Four years is better than permanent, but once you freeze into place these decisions, it is like trying to take a billboard down. You can prevent one going up, but you can't ever take it down. We believe 4 years is not much better than permanent. And then there is the grandfather clause. The moratorium is 4 years starting last November. The States that were already taxing Internet access with sales taxes before this legislation moratorium took effect in 1998, we think those States and other States now collecting taxes on high-speed Internet access should be permitted to continue to exercise their option to collect those taxes. I have suggested to Senator McCain in my letter that there is a way to fix each of these four problems. The way to fix the definition problem is to use the language of the original moratorium. After all, if all we are doing is extending for 4 years the original moratorium on State and local taxation of Internet access, why not use the original moratorium? No. 2, make the extension for no more than 2 years. No. 3, express in plain English what I have heard the Senator from Virginia say, that he has no intention of trying to ban State and local taxation of telephone calls made over the Internet. So why not say, ``nothing in this Act shall preclude State and local governments from taxing telephone services, including telephone calls made over the Internet''? And, finally, all the grandfather clauses should end at the same time the moratorium expires. I am glad Senator McCain worked to offer this new proposal. I regret that it still has many of the same problems of the original proposal. The term is a little better. The protection for State prerogatives on taxing telephone services is worse. But I would hope we could take the four suggestions I have made and correct the McCain proposal. If we can, we can pass a bill and get on to something else. I wanted to come to the floor quickly, after we have had a chance to review the proposal, to make those suggestions. I will return to the floor within a few minutes with further comments. For now, I yield the floor and suggest the absence of a quorum.

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, how much time do I have?

Mr. ALEXANDER. Mr. President, I wish to make two points to the Senator from Oregon who has worked hard on this legislation from the very beginning. He is an original cosponsor. No. 1, he is right about the 1998 definition. It isn't high-speed Internet access. There is a difference between the way high-speed Internet access offered over a telephone line and high-speed Internet access offered over a cable is treated. But there are two solutions to that. One is, the Ninth Circuit just solved the problem--the Ninth Circuit Court of Appeals--by treating them the same. Now that is on appeal to the Supreme Court. So whatever we do here might be changed by the courts. That is why we need a short moratorium, so Senator McCain's committee and your committee can go into a comprehensive look and solve this whole problem over the next 2 years. We are ready to do that. The FCC is ready to do that. The second answer is, the Alexander-Carper amendment endeavors to treat all providers of high-speed Internet access the same. It is the best we can do from here. If the courts and the FCC do something in addition to that, we cannot control it. Finally, I am concerned about the digital divide, too. But if power companies are going to be offering high-speed Internet access in Manassas, VA, which they do for $25 a month--thanks to the Rural Electrification Association, everybody is going to have high-speed Internet access available to them if they have an electric wire to their house. If they do not, DirecTV will sell it to them from the sky, or their telephone company will sell it to them, or their cable company will sell it to them. Yet another way may be invented. So I do not think we have any problem with encouraging high-speed Internet access. It is the fastest growing technology in America today. It is the most heavily subsidized. They are giving it away in LaGrange, GA, and only about half the people will take it. It is coming. It is available. But if we are going to give any kind of subsidy, let's pay for it here. Let's not send the bill to State and local governments. I yield the floor.

Mr. ALEXANDER. Mr. President, how much time do I have remaining?

Mr. ALEXANDER. Mr. President, I thank the Senator from Arizona and look forward to doing that. If I may continue the discussion for a moment with the Senator from Oregon, the reason State and local governments did not lose much money in the last few years from the moratorium on State and local taxation is because, one, there was a very narrow definition--narrower than the one this latest proposal and your proposal makes. You broaden the definition to include the whole Internet access backbone. You are not just talking about the connection between the end user and provider; you are talking about this backbone. You are talking about the normal business taxes that any other business would pay. The other thing is, high-speed Internet access really had not arrived 5 or 6 years ago. It has arrived today. It is the fastest-growing technology. If we make a mistake on the telephone section of this bill, we will drive a Mack truck through State and local governments, and we can rename this bill the ``Higher Local Property Tax'' bill of 2004 or the ``State Income Tax Bill in Tennessee'' or the ``State Income Tax Bill in Texas,'' because if you take away hundreds of millions of dollars from State and local governments--or billions of dollars eventually--they have to look for another source of revenue. They may cut government some, but they will have to look for another source of revenue. We should be neutral about it. Ronald Reagan, the Republican Party--we have stood on the notion that we would return more responsibility, return more decisionmaking to local governments. I urge my colleagues to look carefully at this legislation and vote for something that does no harm to State and local governments, and vote for something that gives the Commerce Committee a short time to figure this out properly, and vote for something that does not give an unnecessary benefit, unnecessary subsidy to what I judge to be already the most heavily subsidized and fastest growing new technology existing in the United States today. I yield the floor.

Mr. ALEXANDER. Yes, I seek 30 to 45 seconds.

Mr. ALEXANDER. I thank the Senator for his question. I suggest that the 1998 definition is a better definition than the one in the latest McCain proposal. The best definition is in the Alexander-Carper compromise in December, but in the interest of trying to get to a result, I could vote for either one of those two definitions.

Mr. ALEXANDER. I yield on the Senator's time.

Mr. ALEXANDER. Yes.

Mr. ALEXANDER. I would like to finish with the other points, and then of course I will. The other two points are on duration. Four years is better than permanent, and I thank the Senator for that. But 4 years is a long time. We don't need more than 15 months or 2 years for the Commerce Committee and the Congress to look at this in a comprehensive way. What I am afraid of is once we make a fix here it will never get out of the law. And if we get the wrong definition in here, or if somehow I am right but I am defeated and the result is that we really do ban State and local governments from collecting taxes on telephone services, then we will have driven a hole through State and local budgets that we didn't intend. Finally, on the grandfather clauses, I think they should all end at the same time the moratorium ends, whenever that ends. Those are four points, and that is not many points. If they were all fixed, I could go for the bill, and maybe some other people could as well. Let me conclude with this, and I will be glad to yield to someone else, including Senator Wyden. The reason I am on the floor has nothing to do at all with the Internet. It has everything to do with my view of federalism. I do not think we should be passing laws that cost money and send the bill to State and local governments. I think we promised not to do that. The way I read Senator McCain's proposal is it costs at least $\1/2\ billion a year to State and local governments with his view of the definition. If the telephone language isn't fixed, it is $3 billion to $10 billion a year, according to the Congressional Budget Office. The grandfather clauses which exist at least in 27 States today where they are collecting taxes on Internet access are $200 million or $300 million a year. Those are significant dollars. I wish I could find a more effective way to say this. If we want to give another subsidy to high-speed Internet access, which is the most rapidly growing technology in America, according to the New York Times of last week, and which has $4 billion in Federal subsidies and subsidies from every State, if we want to give one more subsidy to this business, then why don't we pay for it? Why don't we pay for it instead of sending the bill to local governments? I am afraid this compromise doesn't do that. I have mentioned this several times. I would like to mention it again. I am preparing an amendment on this. President Bush's plan in 1999 when he was Governor of Texas exempted the first $25 that you pay on high-speed Internet access. It was exempted from taxation in Texas. That might cost you $1 to $3 a month. That is what we are talking about. Everybody in Manassas, VA, can get high-speed Internet access for $25 from their electric company. The Governors, State and local governments asked us to pass the Texas plan--to pass the Bush plan. But we are insisting on passing another plan that doesn't benefit the consumers. It benefits the most highly subsidized technology company that I can find, if we have time--and we will have time later--I have a book called ``The Nation of Laboratory Broadband Policy Experiences in the States.'' It details all of the wonderful State and local subsidies that are now being granted in addition to the $4 billion. Put the subsidies aside. My major concern is if we want to impose a cost on State and local governments, we should not break our promise of 1995, which was: No money, no mandate. If we break our promise, throw us out. I am afraid that the McCain substitute breaks the promise. I would like to work with Senator McCain to resolve those last four differences. I look forward to the opportunity of joining with him, Senator Allen, and Senator Wyden in coming to a result quickly this week.

Mr. ALEXANDER. Mr. President, I thank the Senator from Arizona for his courtesy, his hard work, and his meetings on a complex issue, about which there are differences of opinion. People might wonder why are we having a hard time agreeing. One of the reasons is we have a difference of opinion, which I will talk about in a minute. A second is that sometimes even when we agree, when we sit down and try to write down what we agree on, we then disagree. I am not sure if that is because we don't agree, or because our staffs have missed the boat, or because we Senators are not as wise as we should be. But let me be responsive to Senator McCain, because he has come to the table with a specific proposal. I appreciate that. We got that yesterday afternoon and we read it carefully last night, and I sent him a letter which he got just a little while ago. I tried to say to him my thanks for it. I identified four areas which are the principles he just talked about that I see as concerns and four ways to fix the problems. He then asked me if I would be willing to offer an amendment to fix the problems, and I am preparing such an amendment to do that. But maybe we can speed that up. Let me go through the points he made and say where I have concern. The first problem with the most recent McCain proposal is the definition. The definition is basically the same definition as in the last proposal, which is the Allen-Wyden bill. It does not simply extend the moratorium on State and local taxes on Internet access; it broadens the definition to include business taxes State and local governments collect, and those business taxes amount to a half billion dollars a year. That is the first problem. How would we fix it? We would fix it by adopting the narrower definition of the Alexander-Carper amendment which was introduced 6 months ago with 11 bipartisan sponsors, or we could go to the original definition that was in the 1998 moratorium. Let's remember what we are talking about here. Everybody is saying we have had a moratorium since 1998 that says, let's not allow State and local governments to tax Internet access. Certainly access is a very little thing. It was just the connection between you and AOL at the time it was passed. Now it is the connection between you and a variety of people--maybe the connection between you and your telephone company providing high-speed Internet access, your cable company providing high-speed Internet access, or it may be between you and DIRECTV providing high-speed Internet access, or in Manassas, VA, they provide it to you by the electric company. So it is just you and your provider. The problem with this definition--it is the same problem with the definition of the distinguished Senator from Virginia--is that it broadens that, not to include just the end user and the provider, but the business taxes, the whole process. It would be as if we were to say, OK, we want to pass a Federal law saying in Virginia and Arizona and Tennessee you can't tax hybrid cars. You can't collect State taxes on hybrid cars because that will help clean the air. We will pass a Federal law: No State tax. But not just the sales tax on the hybrid car, also on the sales taxes that might apply to the supplier tier 1, supplier tier 2, supplier tier 3, and all the way back to the supplier of steel for the raw material. That is the first problem. It is the same old definition, and that is the biggest problem. The fix would be just, if all we are doing is extending the 1998 moratorium another 4 years so Congress can work on this comprehensively, why don't we use that definition? That would be No. 1. No. 2, Senator McCain says and Senator Allen said in a debate we had at Heritage--and if I am misrepresenting their point of view, I hope they will correct me--that it was not the intent of their legislation to stop States from taxing telephone services, including telephone calls made over the Internet. It was not their intention to preclude State and local governments from taxing telephone services including telephone calls made over the Internet. I would respectfully submit if that is their intention, the newest McCain proposal does not do that. Perhaps, if he doesn't intend to do that, our staffs could meet and we could work that out, or I could offer an amendment to try to fix it. If I were offering an amendment, it would simply say: Nothing in this act would preclude State and local governments from taxing telephone services, including telephone calls made over the Internet. That is the second issue. That is a big issue because certain local governments collect $18 billion a year in State and local taxes. We may not like that but that is what they do. They choose to do that in Tennessee and Texas instead of imposing a State income tax. They prefer to do that instead of putting a higher tax on food. That is their decision. I don't think we intend by this bill which purports to just extend the Internet access moratorium to decide the huge question of whether State and local governments should be permitted to tax telephone calls. Senator Sununu has a bill on the subject. He has done that in the normal order, and it will be considered by the Commerce Committee of which Senator McCain is chairman. That is the place for that. That is No. 2. Maybe that is just a misunderstanding. If we both want the same thing, we ought to be able to write that down. Senator Allen and I have trouble in doing that.

Mr. ALEXANDER. Mr. President, I want to simply echo what the distinguished Senator from North Dakota said. I am perfectly willing and prepared to vote for a short-term ban on State and local taxation of pure Internet access, and I have been ready to do that since December. So I am for that. I can step over here and take my purist position and give you a long argument on why we don't need to do that and make that kind of subsidy, but I know there are 100 Members here and we all have to pitch in. I am ready to do that. All we have to fix in the McCain proposal is the definition, which the Senator has just mentioned. We have to make clear, in my view, that nothing in this bill should preclude State and local governments from taxing telephone services, including telephone calls made over the Internet. That is two. The short term is three. I prefer 2 years, not 4 years. The fourth item is the grandfather clause, which ought to be easy to fix. They ought to end at the same time the moratorium ends. So that is not many points of difference--the definition, telephone calls over the Internet, and the term of the grandfather clause.

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, I rise today to recognize the 10th anniversary of majority rule in the Republic of South Africa and to commend the South African people for the momentous social and economic achievements they have made since establishing a more inclusive democracy. We all remember that just ten years ago South Africa held its first democratic, non-racial election on April 27, 1994. This momentous event, along with the subsequent inauguration of Nelson Mandela as President, later in May, signaled the death knell of apartheid and the re-birth of South Africa as a more representative, non-discriminatory democracy. The struggle to end apartheid in South Africa captured the imagination and garnered the support of millions of peoples worldwide, including the people of the United States. In August 2003, my wife, Honey, and I spent a few days in South Africa as part of a Congressional Delegation led by our Majority Leader, Senator Bill Frist. While there, we toured Robben Island, the prison island where Nelson Mandela was jailed for twenty-seven years. It was a humbling and inspiring experience to walk the grounds and know that despite his imprisonment in this desolate jail, Mandela could emerge without bitterness or hate and advocate unity and peaceful change as he worked with then President F.W. de Klerk to end apartheid and establish a representative democracy, for which efforts both men received the Nobel Prize in 1993. Traveling through Cape Town, Johannesburg, and Soweto, and meeting with both white and black South Africans reminded me how far South Africa has come in its social transformation, which has improved the lives of millions. In 1994, 22 million South Africans did not have access to adequate sanitation and 60 percent of South Africans did not have electricity. Now, 63 percent of South African households have access to sanitation, more than 70 percent of households have electricity, and 9 million people have gained access to clean water since 1994. However, my visit to South Africa also underscored that South Africa still faces daunting challenges that threaten to undo the gains it has made since 1994. First, and foremost, the most pressing issue facing not only South Africa, but also all of sub-Saharan Africa, remains HIV/ AIDS. The 2003 announcement by the Mbeki government that it would soon begin providing antiretroviral treatment on a national scale to South Africans living with AIDS was an important step. President Mbeki was slow to come to this decision, and I hope now he will move forward with greater commitment. The South African government must persevere in combating the challenge of HIV/AIDS by making a strong political commitment and by expanding its prevention and treatment programs, such as the impressive ones that I visited during my time there. Also facing South Africa and its neighbors is the economic and humanitarian crisis caused by Robert Mugabe's despotic regime in nearby Zimbabwe. I have spoken on this floor before to condemn President Mugabe's brutal oppression of his own people, and it is imperative that South Africa take a lead role among the international community in agitating for real change in practices of the Zimbabwean government. Nelson Mandela aptly said, ``It is better to lead from behind and to put others in front, especially when you celebrate victory when nice things occur. You take the front line where there is danger. Then people will appreciate your leadership.'' Now is the proper time to celebrate the anniversary of South Africa's transition to an inclusive democracy, and we all look forward to South Africa taking a stronger leadership role on the front lines against the twin dangers of HIV/AIDS in Sub-Saharan Africa and the oppressive regime of Robert Mugabe. To that end, today I submit a resolution to commemorate this important event. I'm proud to be joined in this effort by Senator Feingold, the ranking member of the Subcommittee on Africa Affairs, which I chair, Senator Lugar, the Chairman of the Foreign Relations Committee, and Senator Biden, the Ranking Member of the Foreign Relations Committee. Senator Feingold has been an active leader on African issues throughout his tenure in the Senate, and I have been privileged to serve with him on our Subcommittee. Chairman Lugar and Senator Biden were both leaders on the issue of sanctions against the apartheid regime of South Africa in the 1980's and early '90's. I hope they feel a sense of satisfaction, today, in celebrating ten years of successful majority rule since the peaceful end of that regime. Today is Freedom Day in South Africa, a day to celebrate the end of apartheid, and the beginning of majority rule in that country. I hope my colleagues will join me in supporting this resolution to commemorate that event.