Lamar Alexander

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, on this Veterans Day I recognize a military public awareness initiative that Mr. K. S., Bud, Adams, the founder and owner of our NFL Tennessee Titans, played a strong role in instituting this past weekend. Mr. Adams, a U.S. Naval Officer during World War II, and five other National Football League owners who also served in the military during that same time, urged NFL Commissioner Paul Tagliabue to launch this campaign to help the hundreds of American families of our brave military servicemen and women who have died for our country in the line of duty in Afghanistan and Iraq. Mr. Adams and his fellow NFL owners urged NFL headquarters to initiate an awareness campaign at NFL stadiums and on NFL game telecasts starting Veterans Day Weekend, November 9-11, to help bring attention to the difficult financial situation that our military dependents face in the days and weeks immediately after a serviceman's or woman's death in the Middle East. The other five NFL owners who served during World War II are Tom Benson, New Orleans Saints; Wellington Mara, New York Giants; Art Modell, Baltimore Ravens; Alex Spanos, San Diego Chargers; and Ralph Wilson, Buffalo Bills. As Commissioner Tagliabue said in announcing this new program: ``Our clubs recognize that the men and women of our Armed Forces are tremendous NFL fans. This program is one small way to repay that support to families who lose a loved one in defense of our country in the Middle East. Our NFL owners, coaches and players speak with one voice when it comes to this project.'' The campaign cornerstone is a new national TV and radio announcement produced by NFL Films that aired on every NFL game telecast this past Veterans Day weekend. It is narrated by Vietnam veteran and former Pittsburgh Steelers running back Rocky Bleier. The message encourages NFL fans to support the Intrepid Foundation's Fallen Heroes Fund, which provides an immediate $10,000 grant to military families who have paid the ultimate price with the loss of a member in Iraq or Afghanistan. The following is the text for the television message narrated by Bleier: The National Football League family is committed to supporting the courageous men and women serving in the U.S. Armed Forces in the Mideast. But the fight for freedom is not without loss. And the NFL urges you to join us and the Intrepid Fallen Heroes Fund in supporting the military families of those heroes who have sacrificed their lives in the service of our country. Please visit www.nfl.com/heroesfund and help support those families in need. This program--and the $100,000 contribution that the NFL made to kickoff the initiative--is the latest in the NFL's continuing support of our U.S. military personnel. That tremendous NFL support dates back at least to World War II when 638 NFL players served in the military, including 19 who were killed in action. The NFL has worked with the USO for decades in sending NFL players overseas to Vietnam, Korea and more recently Iraq to let our courageous troops know that they are not forgotten. I hope you will join me in applauding Mr. Adams and the NFL for their latest ``Families Helping Families'' public awareness program and thank them for their support of our brave men and women in uniform.

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, yesterday, the World Trade Organization upheld its earlier ruling that the steel tariffs imposed in March of last year are illegal and in violation of global trade rules. As a result of this ruling, the European Union threatened to impose trade sanctions on American imports sold in Europe, ranging from footwear to fruits and vegetables. The EU has said that it will impose duties of 13, 15, 30 percent on these imports as soon as December 6 or at the latest December 15, if the steel tariffs continue to remain in place. The EU trade sanctions alone would amount to about $2.2 billion. Unfortunately though, the EU is not alone. Japan has announced that it will join the EU in retaliatory trade sanctions against the U.S. China, Norway and Switzerland have also notified the WTO that they will possibly impose trade sanctions against the U.S. if the steel tariffs are not removed. There is plenty of evidence that if the steel tariffs are allowed to continue they will do more harm than good. On September 19, the International Trade Commission released its report on the effects of the steel tariffs on steel consuming industries. Here is what they found. One-half of the steel-consuming firms that were surveyed reported they had difficulty in obtaining steel in the qualities and quantities they needed. Almost one-third of these firms relocated or shifted production to foreign plants or facilities after the implementation of the tariff. One-quarter reported that their customers had shifted to purchasing finished parts or assemblies overseas as a result of the steel tariff. Almost one-third of these firms also reported their contracts they had in place to purchase steel were broken or modified after the tariff was imposed and reported a loss in profits due to these problems of approximately $190 million. One-third of these firms reported longer lead and delivery times. In addition, the report further highlighted the particular impact the steel tariff has had on auto-parts suppliers. Tennessee is home to over 950 auto-parts suppliers and they make up about one-third of all our State's manufacturing jobs. Eighty-five percent of the auto-parts suppliers surveyed said that their steel prices in the US were higher than global prices. Thirty-one percent reported that customers had shifted purchases to buying finished parts or assemblies overseas as a result of the tariff. Seventy-four percent reported changes in contract prices for steel and 55 percent reported that steel tariff was the only important factor in these changes in steel prices. Seventy-nine percent reported an inability to pass on steel price increased to customers. All of these burdens have meant extra costs to steel consuming firms. Extra costs that have affected steel-consuming jobs all across America. The steel tariff may have saved some steel-producing jobs but is has already destroyed a lot more steel-consuming jobs. The American economy is beginning to recover and I strongly believe that this recovery is a direct result of the President's jobs and economic growth plan. The last thing we need now is any new cost such as the steel tariff on a major manufacturing sector that slows down economic growth. I fear that if the steel tariff remains that we will see more plant closings during 2004 in Tennessee and across America. I believe the President has made an honest good faith effort to save steel jobs, but that it has backfired by destroying automotive and other steel consuming jobs. I hope that he decides that the best decision that can make for the American worker is to end the steel tariff.

Mr. ALEXANDER

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

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

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, Mr. Carper, the Senator from Delaware, is on the floor. He may want to speak in a few minutes. I have a few comments I would like to make about the debate we are having about unfunded mandates and Internet access taxes. First, I thank Senator McCain, the chairman of the Commerce Committee, who has been working very hard to help bridge what is a fairly big philosophical difference of opinion some of us have, and I express my appreciation to the leader, Bill Frist, because he created some time today and last night for us to debate and talk about the issues. I think we have made some progress. But here is where we are. As with most of our debates in the Senate, we have two valid principles in which most of us believe: First is, no taxation of Internet access. I have yet to run into a Senator who really wants to tax Internet access. Virtually all of us are willing to keep State and local governments from taxing Internet access. I am a little bit of a purist on unfunded Federal mandates, with Washington politics telling State and local officials what to do, but the amendment which I have offered, and which Senator Carper and others have joined in, would ban State and local government taxation of Internet access. That is the first principle. We want the Internet to grow. We don't want local taxation. We don't want taxation that discriminates. The second principle is, we don't want unfunded Federal mandates. That may be a little bit of a Washington word, but most people know what it means. It means Senators and Congressmen who come to Washington and pass laws and claim credit and send the bill to the school boards and Governors and mayors. Nothing makes local officials madder. This Congress, to its great credit, since 1995, has been very resolved against unfunded Federal mandates. So we don't want to tax Internet access and we don't want unfunded Federal mandates. We haven't found out how to put the two together. We have offered a solution. There are really two basic ones out there. Ours would be to just take the current law, the current ban on taxing Internet access or allowing State and local governments to make that decision, and extend it for 2 years, and then to make a change to minimize discrimination between providers, providers being phone companies and the cable companies. That is our proposal. The proposal on the other side was to create a much broader definition of what we mean by Internet access which would create a huge unfunded Federal mandate and take away, we believe, billions of dollars from State and local government tax bases, cause them to cut services or raise taxes on many other things, and make it permanent. That is the proposal. Our argument is that our 2-year extension of the current law, with one adjustment to level the playing field between telephone companies and cable companies, is better for the country than a permanent installation of a very broad definition. So the issues are duration and definition. The reasons for our amendment are these. One, we want to preserve the original intent of the Congress. The 1998 law was to keep the basic Internet access tax free. By that we mean, when you hook up your computer to AOL, the intention is that that is tax free. In our amendment, even as the telecommunications industry moves more on to the Internet, that would continue to be tax free. It is really a significant infringement on State and local prerogatives to decide what taxes to raise on their own. We want to make sure no one will be able to tax e-mail or surfing the Web. We want to make sure that States don't lose the bulk of their telecommunications revenues. Those were our major goals. The opponents have raised many objections to these ideas. They say the Internet is so valuable that it should not be taxed. Well, we don't tax it any more than it is now. We don't allow taxing any more than it is now. And it makes me wonder. I agree the Internet is valuable. I supported the first moratorium. But it is a grown-up business now. It is no baby in a crib. We had 3 years and then 2 years. Now we are talking about another 2 years. The telephone is valuable. Television is valuable. Airplanes are valuable. The automobile was a great invention. We don't tell State and local governments what to do about their tax policy for those businesses. The Internet is not a baby in a crib anymore. It can at least afford to hire some of the most expensive lobbyists; we know that. Then they talk about interstate commerce, that we are messing around with interstate commerce when we talk about telling States what to do about taxing Internet access. I read the Constitution again to make sure I was right. Article I, section 8, says Congress has the power to regulate commerce among the States, but it doesn't say exactly what to do about it. It means Congress can impose limits. They can do some things. There is also another provision called the 10th amendment which reserves all the powers to the States unless they are specifically delegated to the Congress. That is where the whole prohibition against unfunded Federal mandates came from. That is why, in 1995, this Congress passed as its first bill S. 1 of the new Republican Congress, to stop unfunded Federal mandates--Congress telling Governors and mayors and school boards what services to provide and how to spend their money. As long as we are allowing States to make decisions about taxation on telephones and telegraphs and bus tickets and airline tickets and severance taxes, all of which are interstate commerce, I don't know why we worry so much about that. There is the assertion that we might be taxing broadband. That is Internet service delivered by telephone and cable companies. We are really not taxing anything. We are trying to decide whether we should write some rules for what States should do. Broadband is a wonderful thing. It is always just around the bend. We want to it come. What we have said is that except for grandfathered States that now tax DSL Internet phone service, it can't be taxed in the next 2 years. We are just trying to level the playing field for 2 years, as we take the current law and extend it for that period of time. Multiple taxation would be banned under our amendment, just as it is today. Discriminatory taxation is banned under our amendment, just as it is today. Taxes on e-mail and basic Internet access, banned, just as they are now. So it seems to us our amendment is a good one. We are willing to continue to visit and talk with the Senator from Virginia and the Senator from Oregon, who have worked very hard and believe very strongly in this. But our arguments are, the Congress has promised not to pass any more unfunded mandates. We have made it a violation of the Budget Act to do so. We should respect that as much as we possibly can. No. 2, their proposal is potentially a huge unfunded Federal mandate which we have promised not to do. We believe our amendment is better at reconciling two valid principles: One, continuing the ban on basic Internet access and, two, making an adjustment to create a more level playing field between cable and telephone while making a minimum offense to the principle of unfunded Federal mandates. We also believe that a short term--a couple of years--allows us to craft wise decisions about what is happening in a rapidly changing technology, and theirs would impose an inordinately broad definition of what we mean by Internet access permanently or for an unreasonably long period of time. There was a letter sent around from the Republican Policy Committee which asserted that the objective of the unfunded mandate law was to stop the Federal Government from imposing affirmative duties or regulations on the States. It basically argues that the Allen-Wyden amendment is not an unfunded mandate. All I can think is that that memo didn't make it all the way through the vetting process. It argues that the unfunded mandate law Congress passed in 1995 doesn't apply to situations where the Congress might say, for example, States may not collect taxes on telephones and telegraphs. If we were to say that, that would mean State and local governments would be deprived of $20 billion of their tax base next year, and they would have to raise taxes on food or medicine or income or property or something else, or cut services. By the very plain terms of the Unfunded Mandates Act of 1995, it includes both affirmative actions. For example, when we pass a bill that says Memphis shall do thus and so for disabled children but we only pay for half of the cost, that is one kind of unfunded mandate. But according to the Congressional Budget Office and the plain English in the 1995 law, it also includes the definition of direct cost of a mandate, ``the amounts State and local governments would be prohibited from raising in revenues to comply with the mandate.'' An unfunded Federal mandate also includes our telling the States you cannot raise revenues from these sources. If we think it is so important to do that, we are supposed to pay that. I am afraid in this case the Allen-Wyden amendment, while they have worked hard to try to narrow it, still raises the possibility many billions of dollars would be lost to State and local tax bases. In other words, we would be imposing a multibillion dollar unfunded Federal mandate on State and local governments. We believe there is a better way, that we can continue the ban on Internet access, but do it in a way that minimizes the unfunded Federal mandate. Because the leader asked us to, and we want to, we will be working over the weekend, and our staffs are meeting this afternoon. We will be working early next week, and we hope we can come to some agreement in a very short period of time. I am grateful to Senator Carper for his leadership in helping us come up with a sensible path in the future. I wanted to give that report on the status of where we are.

Mr. ALEXANDER. So from the point of view of the Federal Government interfering with local governments, we would be making a pretty significant interference there because we would be affording to the Internet access connection a protection that we didn't afford the telephone, that we didn't afford the telegraph, that we didn't afford the purchase of food, the purchase of medicine--anything. If you hook up your Internet, nobody can tax you. That would be our proposal. The other point the Senator from Delaware is making--Delaware in particular has done this--is, say, in the District of Columbia there was a big cable company or big phone company, and the District of Columbia said: We may not be able to tax the connection between Senator Alexander's computer, but we can sure tax the cable company, we can sure tax the telephone company that provides that connection, and they raise the taxes to a very high level for certain of these points along the Internet architecture. I assume it is entirely possible the Governor of Delaware may ride the train down to the District and say: The tax may be 20 percent, but come live with us in Delaware; come to our State; we don't have a right-to-work law; other States do; we don't have an income tax; other States do. We may have a higher corporate tax than other States. States have these differences all the time, and if one State gets out of line, people leave, businesses leave, elections are held and people are thrown out of office. That is the way we have operated the government for a long time. This is a nation that from its beginning operated community by community and State by State and has had a great aversion to central direction of too many of these decisions.

Mr. ALEXANDER. Mr. President, I ask unanimous consent to print in the Record two editorials from Tennessee newspapers: One from the Tennessean and one from the Chattanooga Times Free Press. They just came today. The last sentence in the Chattanooga Times Free Press article says: If the federal tax ban becomes permanent, state and local governments may have to come up with great amounts of tax money in other burdensome and permanent ways that taxpayers will not like. The Tennessean says: Sen. Lamar Alexander is not voting to raise taxes. He is not trying to increase the cost of Internet access, nor is he advocating a new tax on e-mail. Instead, Alexander is trying to protect states from excessive control by the federal government. Yet the conservative states-rights position the senator has taken on Internet access has been turned on its ear by some of his critics. . . .

Mr. ALEXANDER. Mr. President, I believe the more Senator Carper, Senator Voinovich, Senator Enzi, Senator Graham, and I talk about this issue, the more people are coming our way. I look forward to continuing to work with other Senators who have different views, and I hope we can come up with a good conclusion to this that respects both principles: banning taxation of Internet access and not imposing large unfunded Federal mandates on State and local governments. I yield the floor, and I suggest the absence of a quorum.

Mr. ALEXANDER. Mr. President, as I was listening to Senator Carper, I was thinking about what he just said. I believe I am right about this, but Senator Carper can correct me: What we are saying in our amendment is if the Senator from Delaware or I hook up a computer to the Internet, our amendment would prohibit State and local governments from taxing that event; isn't that right?

Mr. ALEXANDER. Mr. President, I ask unanimous consent to speak as in morning business for 5 minutes.

Mr. ALEXANDER. Yes.

Mr. ALEXANDER. That would be true even if Internet access moved over from the current way many people do it--and this is hard for people to understand many times--over to the cable or the phone company; is that right as well?

Mr. ALEXANDER

Mr. ALEXANDER. Mr. President, I would like to announce for the information of the Senate and the public that the Subcommittee on Energy of the Committee on Energy and Natural Resources will hold a hearing on Saturday, December 6, 2003 at 9 a.m. The hearing will be held at the Paducah Information Age Park, 2000 McCracken Blvd., Paducah, KY. The purpose of the hearing is to conduct oversight and accounting of the cleanup at the Department of Energy's Paducah, KY site. Because of the limited time available for the hearing, witnesses may testify by invitation only. However, those wishing to submit written testimony for the hearing record should send two copies of their testimony to the Committee on Energy and Natural Resources, United States Senate, SD-364, Washington, DC 20510-6150. For further information, please contact Pete Lyons (202-224-5861) or Shane Perkins (202-224-7555).

Mr. ALEXANDER

Mr. ALEXANDER. There is a letter that I received yesterday from the Congressional Budget Office on every Senator's desk. It describes the three ways in which the proposed ban on State and local Internet access taxes by Senator Allen and Senator Wyden violate the Federal Budget Act--specifically, the amendments of the Unfunded Mandates Reform Act of 1995. These are the three ways: One, there is a revenue loss of $80 million to $120 million per year to State and local governments already taxing Internet access. There are 11 such States. Second, there are losses of $40 million to $75 million of taxes on DSL services that States now collect. That is the second violation of an unfunded mandate. Third, and this makes the point it is not only an unfunded mandate, it is potentially a great big unfunded mandate. The Congressional Budget Office says in its letter that the third way this proposal violates the Budget Act is ``substantial revenue losses that could occur'' when technological change shifts traditional communication services to the Internet--for example, local and long distance phone calls--or when content, music, movies, written works is provided free with Internet access. This may sound complicated but it is not so complicated. Basically, what this says is it already is happening, that your telephone company or your cable TV company will provide your Internet access. CBO says that State and local governments today now collect more than $20 billion annually from transaction sales and use taxes on telecommunications services. What this letter further says is that the Allen-Wyden proposal will take an undetermined amount of this $20 billion and ban the ability of State and local governments to include that as part of their tax base. It is enough, according to the CBO letter, to define it as an unfunded Federal mandate. But they say they cannot tell the exact amount of the $20 billion that might be exempt from State and local taxation. The Multistate Tax Commission said it could tell. It estimated $4 billion to $5 billion. That is an awful lot of money. The Senator from Ohio, the Presiding Officer, in his argument read a list of what State revenue officers have told him, and what they estimate it might take. The problem is the broader definition of Internet access, which is contained in the bill of the distinguished Senators from Virginia and Oregon, raises the likelihood that some--maybe a lot--of the $20 billion that is now used by State and local governments to pay for schools, State parks and to keep other taxes down, would be taken away from their tax base. What do we then do about it? Well, we think we have a suggestion which we hope tomorrow our colleagues in the Senate, if we are able to vote on it, then will agree with us. Our suggestion is an extension of the current ban on Internet access for 2 years, with the same narrow definition that we now have, with the exception that we would make sure that in 23 States which do not now tax DSL, that is telephone service that delivers broadband, they would not be allowed to do that. So in taking the issues that I heard from the distinguished Senators from Virginia and Oregon, I would summarize them this way: They argue that the Internet is so valuable that we need to override this law we have against unfunded Federal mandates. I agree it is valuable but it is not an infant. It is a pretty big boy. It is out there in the world. We know what it is and it should stand on its own now. The telephone is also a magnificent invention. We do not exempt it from taxation. The television is a magnificent invention. We do not exempt it from taxation. If we really think in the Congress that the Internet deserves to be completely exempt from State and local taxation, then why do we not pay for it? Why do we not pass a law that we might call the Unfunded Federal Mandate Reimbursement Act and just let every mayor and every Governor send us a bill every year and we will send them a check. If it turns out to be $20 billion, we will send them $20 billion. If it turns out to be $4 billion, we will send them $4 billion because we will have said the Internet is so important that we in Congress think it ought to be subsidized, that there should be relief from taxation, and so we are going to pay for it. That would be the honest thing to do, rather than just to say we think it is important but you pay for it. That is what we said with how we helped disabled children. That is what we said with stormwater runoff. That is what we said with clean water. We think it is a great idea, you pay for it. That is why we are in Washington. We print money. You balance budgets. We think it is a good idea, you pay for it. That is what the fuss is about. The second thing I have heard is it is in interstate commerce and we could not touch it. Telephones are in interstate commerce. We do not keep States and local governments from taxing telephones. Televisions are in interstate commerce. Buses are in interstate commerce. Planes are in interstate commerce. Catalog sales are in interstate commerce. Severance taxes are in interstate commerce. A great big part of every State and local government's budget is made up of a tax base that included items that are in interstate commerce. So that argument does not wash at all. Taxing broadband, that is a good point. Broadband is coming fast. We do not want to interfere with that so our conclusion is, let us stop it in the 23 States that do not now tax broadband. Let us put DSL and cable--that is the broadband is delivered--on an equal playing field. In the States that do tax DSL, they can continue that for the 2 years of the ban. Multiple taxation, that was raised by the Senator from Virginia. Well, we are extending the current language and it bans multiple taxation. Discriminatory taxation, we propose to extend the current language, and that bans discriminatory taxation. State and local taxation on Internet access, we would propose to extend the ban on Internet access taxation for 2 years so we can think this through. So we have taken care of that as well. Tomorrow, when hopefully we will be voting on this, we will have this choice: Do you want a permanent ban on Internet access taxation, or do you want a 2- year ban? Do you want a broad definition of what we mean by Internet access, a definition that could cost States a significant share of their State or local tax base, or do you want a narrow definition, virtually the same one we have today? I believe the prudent thing for us to do is to take the law that we have today, slightly modify it to put DSL and cable on an equal playing field, extend it for 2 years, and let us continue the debate we are having about how to define the two words ``Internet access.'' That is really the problem. I agree with the Senator from Oregon. He has worked long and hard on this. There have been many meetings. We just don't agree on what the definition of Internet access is. But until we can agree, we should not put this potentially huge unfunded Federal mandate into the law. So tomorrow I hope to bring up this amendment I have filed tonight. I hope our colleagues will compare it with the proposal of the Senator from Virginia and Oregon, and I hope they will adopt ours. I also have a point of order I could raise, which would cause the Senate to consider whether the Allen-Wyden amendment is an unfunded Federal mandate. If there is a motion to waive the point of order, which I believe would be sustained by the Chair, then Senators would have an opportunity to cast a vote for or against an unfunded Federal mandate. But I am going to reserve that option and hope that sometime tomorrow we can have a clear up-or-down vote on the amendment which I offer with a number of other Senators. I look forward to the debate tomorrow.

Mr. ALEXANDER. I object.

Mr. ALEXANDER. Mr. President, I thank the Senator from Florida for his remarks and say to him and the Presiding Officer and Senator Carper how much I appreciate the opportunity to work with them on this issue. They have been leaders in our country, in our States, among the best Governors we have had over the last number of years, and I welcome the chance to work with them. I thank Senators Allen and Wyden for their hard work on this issue. They have been working at it for a long time. I respect that and appreciate it. I thank Senator McCain for his congeniality and his efforts to move things along. He and the majority leader, last week, agreed to give us an opportunity, as they have done tonight, and for tomorrow, to make our case, state our issues, have votes that we want to have, and I am grateful for that during a busy season. It would have been easier to just let this go by. There are a lot of issues before the Senate, but there are a bipartisan group of us who think this is very important as well. Each of you have stated tonight--and I don't need to restate it--why that is so. I think it is a part of the tradition of the Senate that it be the saucer in which the coffee cools. What we have found over the last several days is, as our colleagues on both sides of the aisle have looked at this unfunded Federal mandate that affects internet access, they have more questions about it. There are more people who are deeply concerned about the proposal of the distinguished Senators from Virginia and Oregon. So I am appealing tonight, and will be doing so tomorrow, especially to those Members of the Senate who have been mayors and Governors, who have been legislators, city council men and women, to look at this and the issues of Federalism. In sort of a reverse partisanship, I want to appeal to my colleagues on this side of the aisle, for whom the idea of unfunded Federal mandates has been a central part of our beliefs. It was the center of our Republican resurgence in 1994, the heart of the Contract With America. S. 1, the No. 1 Senate bill that the new Republican majority leader, Bob Dole, introduced in 1995, was the Unfunded Mandates Reform Act. So this is important stuff for the Republican Party. In listening, though, to the issues that are being discussed tonight, let me see if I can summarize some of what I believe I have heard and discuss for a moment the amendment that I will be sending to the desk, or have already forwarded to the desk, on behalf of several of us. The question tonight is whether and to what extent we will allow State and local governments to tax Internet access. That is the issue. There are really two arguments among those of us who are arguing. The first one is--and I may be alone in this, but I don't think so--I don't like any unfunded Federal mandate. I supported the idea of a moratorium on State and local taxation of access to the Internet when it all began. Most of us did. That was in the mid-nineties. It is hard to think back that far. The Internet was an infant in a crib then and none of us wanted it to be squashed in its infancy. Then after 3 years, along came various advocates who said: Let's give it another 2 years. That very narrow ban on Internet access, which didn't cost very much money--probably so little money during that time it didn't qualify under the Unfunded Mandates Reform Act as an unfunded Federal mandate--so it was extended 2 years. Now the advocates of the other position are coming along and saying: We want to make this ban permanent, and we want to broaden the definition of what we mean by ``Internet access,'' so what we have here is not such a complex issue. We have really two questions: Do we want a permanent ban, or do we want a 2-year ban? The second is, Do we want to extend the same definition of ``Internet access'' we now have with a minor change, or do we want a broad definition of ``Internet access'' that might cost State and local governments billions of dollars? That is really the issue that will be presented when we vote most likely tomorrow. I send to the desk, but do not call up, an amendment on behalf of myself, Mr. Carper, Mr. Hollings, Mr. Stevens, Mr. Voinovich, Mr. Graham, Mr. Dorgan, Mrs. Feinstein, Mr. Lautenberg, and ask that it be filed. I wish to discuss three issues. One is the strange case of amnesia that seems to have set in, especially on my side of the aisle, about unfunded Federal mandates. The Presiding Officer made an eloquent discussion of that issue. So did other speakers. The second is, I would like to discuss specifically why this is an unfunded Federal mandate under the specific terms of the budget law which was amended in 1995. Finally, I want to say a word about the amendment which we will offer, which we believe is a better extension of the ban on Internet access than that proposed by Senator Allen and Senator Wyden. I very well remember 1994 and 1995. Senator Voinovich remembered he was in Williamsburg, VA, when the Governors met. I remember that Senator Voinovich, then a Governor, was the acknowledged leader of State and local forces who were deeply concerned about the practice of Washington politicians passing laws claiming credit and then sending the bills to mayors and Governors. Nothing really made us Governors much madder than that, people getting elected to Congress and presuming they had suddenly arrived here in Washington, that they had a great idea about children with disabilities, and they would order us to do it and then order us to pay for it, or at least pay for half of it. We cared about children with disabilities, too, and we felt as if we were elected to make those decisions. We found nothing in our laws and constitutions about how the Federal Government ought to define for us what our tax base ought to be or ought to be telling us all of these things. I vividly remember the new Republican majority leader of the Senate, Bob Dole, coming to Williamsburg that very meeting Senator Voinovich mentioned. Governor Allen, now Senator, was presiding. Thirty Republican Governors were there. Speaker Gingrich and Majority Leader Bob Dole came. Speaker Gingrich talked about the Contract With America. We Republicans can remember that--300 Republican candidates standing on the steps of this U.S. Capitol saying: Here is our 10-point plan; elect us, and if we break our promise, throw us out. That is what we said. That is what we Republicans said. What was our promise? The heart of that promise was no unfunded Federal mandates. Senator Dole knew that. It wasn't just a matter of the House of Representatives. He came to Williamsburg, VA. He pulled out a copy of the Constitution. He must have done it 100 times in the next year because I was with him 100 times in the next year when he did it. We were both campaigning in Presidential primaries, and he would read the tenth amendment. He would read: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. That was Bob Dole in 1994 and 1995. He was good to his word. We have a practice of the Senate. The majority leader will pick the most important bill and make it his bill and call it S. 1. S. 1 that year for Senator Dole, the new Republican majority leader, was the Unfunded Mandates Reform Act of 1995. As Senator Voinovich said earlier, it passed 91 to 9. Sixty-three of the Senators who voted for it then are serving in this body today. Twelve of them were House Members then. There was a lot of steam in that argument then. I would like to read just a paragraph from a backgrounder put out by the Heritage Foundation in December of 1994. This is just a little while after the Governors met. This paragraph says: Throughout much of American history, especially since the New Deal-- This is how they were looking at it-- the Federal Government increasingly has encroached upon the fiscal and constitutional prerogatives of State and local government. Today this imbalance has reached a crisis point, and the States are fighting back. Through a variety of initiatives, they are demanding that Federal mandates be funded and, in many cases, even are challenging the authority of the Federal Government to impose these mandates, whether funded or not. With the new more State friendly Congress-- That is us, the Republican Congress-- States and localities have a historic opportunity not only to effect mandate relief, but also to restore balance in State- Federal relations. Then they begin to list in this Heritage Foundation document some of the ways States and localities that seemed to have reached their limit are fighting back. They are publicizing the costs of unfunded mandates. They are holding their Congressmen accountable. They are challenging Congress's authority to impose the mandates. They are suing the Government for the violation of the tenth amendment. They are lobbying Congress to pass mandate relief legislation--no-money, no-mandate constitutional amendments. They are considering a collective action to challenge the Federal Government's right to pass laws that impose duties on States without paying the bill. This was the mood in 1994 and 1995, and this was a major reason why the Republican majority was elected. I hope we don't forget that. I know at the time a great many of our colleagues remember it because they talked about it eloquently in their speeches when the Unfunded Mandates Reform Act was enacted in 1995. Senator Lott said: It is things like unfunded mandates that drive good people out of office. Senator Thomas said: I served in the Wyoming Legislature and a good deal of our budget was committed, before we ever got to Cheyenne, to unfunded mandates. Senator Feinstein, a cosponsor of our amendment, said: I was president of the board of supervisors. I was mayor. I saw the development of these unfunded mandates firsthand and in doing so I probably speak for the mayors and local officials all across the Nation. Senator Nickles, chairman of the Budget Committee, said: I used to serve in the State legislature and we really resented the idea that the Federal Government would come in and mandate how we would spend our resources. I am reading speeches from the Congressional Record of Members of this body in 1995, who voted to ban unfunded Federal mandates. Senator Hutchison of Texas said: Almost one-third of the increase in the Texas State budget over the past 3 years has been the result of unfunded Federal mandates--one-third, she underlined. Senator Burns talked about the impact of unfunded mandates. Senator Bennett told a beautiful story about encountering a mayor during a campaign in his State in Utah, and he ended up with the mayor saying, well, if I had a U.S. Senator in front of me with his undivided attention, the one thing I would say to him is stop the unfunded mandates. That is just a few of the things that were said. So the question now then is, is this really an unfunded Federal mandate? Well, that is not too hard to figure out. Some of my colleagues seemed surprised when I suggested this might be, so I have put a letter on every Senator's desk. I ask unanimous consent that the letter be printed in the Record. U.S. Congress, Congressional Budget Office, Washington, DC, November 5, 2003. Hon. Lamar Alexander, U.S. Senate, Washington, DC. Dear Senator: This letter responds to the three questions you posed in your letter of November 4, 2003, regarding S. 150, the Internet Tax Nondiscrimination Act. 1. How much revenue is being collected by state and local governments from taxes on DSL? CBO estimates that state and local governments currently collect at least $40 million per year in taxes on DSL service (Digital Subscriber Line--a high-speed data transmission over regular telephone wires). They are likely to collect revenues totaling more than $80 million per year by 2008 due to growth in the use of high-speed Internet access. These collections are primarily sales and use taxes on DSL service. 2. What would be the revenue loss to state and local governments under the managers' amendment to S. 150? Based on the version of the proposed amendment CBO received late this afternoon (S150MGR.6), CBO has determined that the bill would create intergovernmental mandates as defined in the Unfunded Mandates Reform Act. We estimate that those mandates would impose costs on state and local governments in at least one of the next five years that would exceed the threshold established in that act ($60 million in 2004, increasing to $66 million in 2008). We have identified three major impacts, each of which would, by itself, exceed the threshold: Revenue losses of $80 million to $120 million per year, starting in 2007, to state and local governments that are already taxing Internet access and were covered by the ``grandfather clause'' contained in the Internet Tax Freedom Act. Some of these are taxes on DSL services. We have no information to suggest that other states will impose taxes on Internet access in the near term. Other states are currently imposing taxes on charges for the portions of DSL services they do not consider Internet access. Those states would lose at least $40 million in sales and use taxes on DSL services in 2004, and at least $75 million by 2008. The preemption of DSL taxes would stem from section 2(c) of the amendment, which defines ``Internet access.'' Substantial revenue losses that could result from: (a) The inability of state and local governments to collect transactions taxes (including sales and use taxes and gross receipts taxes) on certain types of telecommunications services. For example, if technological change shifts traditional telecommunications services to the Internet, those services--for example local and long distance phone calls--could be included, for free, when a customer purchases Internet access; (b) The free inclusion of content (movies, music, and written works) with Internet access in response to the tax exemption provided by this bill. Such content is subject to sales and use taxes under current law but might increasingly be available at no charge as part of an Internet access package. CBO does not have sufficient information to estimate these revenue losses, but we believe they could grow to be large. There is some question, however, as to what types of transactions could not be taxed under the bill; under some interpretations, these revenue losses could remain quite small. The issue might ultimately have to be resolved in the courts. 3. How much tax revenues do state and local governments collect on telecommunication services? Based on information from industry representatives, state and local governments, and federal statistical sources, CBO estimates that state and local governments currently collect more than $20 billion annually from taxes on telecommunications services. Such taxes generally fall into two categories: transactions taxes and business taxes. Transactions taxes (for example, gross receipts taxes, sales taxes on consumers, and taxes on 911 service) account for about two-thirds of the total. In arriving at this estimate, CBO took into account the fact that some companies are challenging the applicability of taxes to their services, and thus may not be collecting such taxes, even though states and local governments feel they are obligated to do so. Such potential liabilities are not included in the estimate. If you would like further details on the information provided in this letter, we would be pleased to provide it. The staff contacts for this legislation are Sarah Puro and Theresa Gullo. Sincerely, Robert A. Sunshine (For Douglas-Holtz-Eakin, Director).

Mr. ALEXANDER

Mr. ALEXANDER. So the point I am trying to make is, if I were to come before my colleagues today and we had no other----

Mr. ALEXANDER. Again, thoroughly unpopular. Alabama is interested in football and Alabama is interested in prayer, and for a public official to write every school and tell them they cannot pray before a football game is not an easy thing to do, even if the law does require it. Then, on the issue of abortion, he is a Roman Catholic and he has a religious belief about it, but did I understand the Senator from Alabama to say that he told the legislature that he could not enforce a law they passed limiting abortion because it was unconstitutional?

Mr. ALEXANDER. I see.

Mr. ALEXANDER. As I was listening to the Senator from Alabama, and maybe he will correct me if I have this wrong, but we are talking about Alabama, this is not Brooklyn, NY, we are talking about; right? And we are talking about the attorney general of the State of Alabama. If I understand it right, after he was appointed, he went out of his way to point out that to have the words banning an interracial marriage in the Alabama State Constitution was wrong; did I understand the Senator to say that?

Mr. ALEXANDER. Mr. President, I listened very carefully to the Senator from Alabama, and I have been listening to the debate about the judges. I understand what some of our colleagues on the other side are saying is somehow Mr. Pryor is, for some reason, not sensitive to civil rights, is an activist, is a person who is unwilling to put his own personal beliefs, political beliefs aside and enforce the law; is that what the charge is?

Mr. ALEXANDER. Mr. President, before the Senator from Alabama leaves, may I ask him a question, and if it is appropriate to make a comment about his remarks?

Mr. ALEXANDER. Of course.

Mr. ALEXANDER. If we had never heard of this individual and someone came today and said he is attorney general of the State of Alabama, and he voluntarily scolded the State for still having interracial marriage words in the State constitution at a time when he really did not have to, who is enforcing the proceedings against a judge who has taken an overwhelmingly popular position about the Ten Commandments, who took to the Supreme Court a case that was adverse to the Republican Party of which he was a member, who advised the district attorneys they could not enforce a law about abortion that he personally disagreed with but he felt that the law required it, who wrote all of the schools that they could not pray before a football game, where is someone going to find anybody who has more clearly proven that he or she is able to take personal positions and subjugate them to a willingness to enforce the law? As I said earlier, this is not northern California or the Bronx we are talking about, even though those might be difficult positions in those States. He was taking positions that were contrary to virtually all of the people that he represented and against his own beliefs. I am not sure the Senator from Alabama is even aware of this, but I was also a law clerk for Judge John Minor Wisdom of the Fifth Circuit Court of Appeals, as was Mr. Pryor. Judge Wisdom was one of the great judges of America. He was a part of the panel that ordered Ole Miss to admit James Meredith in 1962. He, along with Judge Elbert Tuttle of Atlanta, Richard Rives of Florida, and John R. Brown of Texas, presided over the peaceful desegregation of the South. I want to be careful how I say this. I was technically not a law clerk. I was a messenger to Judge Wisdom in 1965 and 1966 because he already had one of the top graduates of Harvard, but he had a little money left for a messenger and he said he would treat me like a law clerk. So I am saying that so people will not think I am talking about myself. All through the 1960s and 1970s and 1980s and 1990s, law graduates in America fought each other to be a law clerk for Judge Wisdom. I was lucky to be his messenger who was treated as a law clerk. He hired the best and the brightest. He was also a graduate of Tulane Law School. He would consider the editor in chief of the Tulane Law School to be one of the finest persons in America eligible for a law clerkship. I can also guarantee that he would never have hired anyone as a law clerk who he did not think of as someone of the highest character, good intelligence, capacity to be a good lawyer and committed to civil rights and to the rights of the individual. So something is really amiss in our system of approving judges when someone of the academic character and personal integrity of Mr. Pryor, who clearly is one of the finest lawyers in the country, who has taken a position contrary to the position of most of the people of the State he represents because he believes in the law, how could he not be confirmed by the Senate? What is it that causes our friends on the other side to pick someone like that out and seek to destroy him or turn him down? I congratulate the Senator from Alabama for his vigorous advocacy of such an outstanding person, and I hope very much when the vote comes he will be confirmed.

Mr. ALEXANDER. Just a couple of other questions, because I think the Senator from Alabama is making an important statement. I believe I heard him say that the attorney general of Alabama wrote a letter to every school district in Alabama, every superintendent and every school, telling them that the football coach could not lead a prayer before the football game, not because that was what he believed but because he researched the law and came to the conclusion that is what the law requires, and then he went ahead and suggested to the schools what they could do as well as what they could not do, and that his advice turned out to be almost exactly the same advice that President Clinton and former Secretary of Education Dick Riley advised schools all over America. Do I have that about right?