Cass Ballenger

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H. Res. 847.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, during this Congress, the President has laid out a bold plan to return men to the moon and then go on to Mars as we begin to explore the wonders of our solar system, a vision that would not be possible were it not for a group of exceptional men who stepped forward to accept our Nation's Manifest Destiny of the 20th century. In those very early days some 45 years ago, we were behind in the race into space. The Russians had put the first satellite into orbit, sent the first living creature into space, and were the first to send an object to the Moon. American prestige was suffering around the world, and President Eisenhower and the Congress realized that things had to change. In response to that challenge, they created NASA and along with it, Project Mercury, the initial step that got us to the moon first. But those were difficult days. Our scientists and engineers were struggling to build rockets that were capable of lifting the heavy payloads needed to get us there, and those rockets would explode in gigantic fireballs almost as often as they didn't. Being strapped inside a flying bomb and hurled into space at 17,000 miles an hour was hazardous duty of the highest order, but in April 1959, the Nation chose seven courageous men who were willing to put the interests of the Nation ahead of their own. One of these was Leroy Gordon Cooper, Jr., a native of Shawnee, OK, a colonel in the U.S. Air Force and a test pilot who logged more than 7,000 hours flying time--4,000 of which were in jet aircraft. They called him ``Gordo'', and in May 1963, he became the first American to orbit the earth for more than a day. Two years later along with astronaut Peter Conrad, Gordon Cooper set a new space endurance record by traveling more than 3 million miles as the command pilot of the Gemini 5 mission and demonstrated for the first time that men could live and work in space long enough to make the trip to the Moon and back. He continued to support our national goal of landing a man on the Moon by serving as the backup command pilot for the Gemini 12 mission in 1966 and as backup commander for the Apollo 10 trip to the moon in 1969, logging a total of 222 hours in space and receiving a number of special honors along the way before he retired in 1970. Mr. Speaker, I remain convinced that the exploration of space in many ways holds the key to our future here on earth. Just as it was when Gordon Cooper first went into space more than 40 years ago, space travel remains a dangerous business. We have experienced some setbacks along the way, and yet it remains our destiny. In future years as we explore the moon and beyond, the successes that we will enjoy and the wonders that we will find on the other side will have been made possible by the courage and devotion to country of men like Gordon Cooper, and it is with great pleasure that I rise today in support of House Resolution 847 to honor his gifts to our Nation.

Mr. BALLENGER. Mr. Speaker, I ask unanimous consent that the Committee on Science be discharged from further consideration of the resolution (H. Res. 847) honoring the life of astronaut Leroy Gordon Cooper, Jr., and ask for its immediate consideration in the House.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, during my nearly two decades in Congress, our country has made major efforts throughout the world to develop the growth and success of democratic governments. Because of our efforts in Central America over the years, the specter of Communism has receded and the democracies and economies of El Salvador, Guatemala, Nicaragua and Honduras are beginning to flourish. These countries have now had at least three peaceful changes of government through elections. I think we in this body should be proud of the part we have played in their success. Mr. Speaker, much of this success is due to opening up trade between the U.S. and Central America. With the Caribbean Basin Initiative, we have helped build growing economies based on trade with the United States. More prosperity in CBI countries leads to more successful democratic governments in this hemisphere and more prosperity and security here at home. At the present time we are undertaking a similar mission in the Middle East. Increasing democracy and freedom in that region is vital to the war on terrorism and America's security. However, we must not let our focus on Iraq and Afghanistan cause us to forget the work that remains to be done to strengthen our neighbors in Central America. We have come too far to abandon them now. Five Central American nations and the Dominican Republic have negotiated a free trade agreement with the United States that, despite concerns voiced by some in this country, is beneficial to all concerned. The presidents of the Central American nations have approved this agreement and these nations are now waiting for us to join them in making the Central American Free Trade Agreement a reality. Mr. Speaker, as we continue to divert our attention elsewhere, time is running out for our legislature to approve DR-CAFTA. Without this agreement, the democracies we have helped build in Central America will be less prosperous in the increasingly competitive global marketplace. Unless we allow these fledgling democracies the access they need to compete with the rising tide of Chinese imports, they will be more likely to revert to corrupt regimes that base their existence on trade in illegal drugs instead of trade in goods and services. It would be a tragedy to abandon our Central American neighbors now. We in this body have done so much to foster democracy and economic stability in Central America--we cannot allow them to fail at this crucial moment. I urge my colleagues to support DR-CAFTA and I urge the House leadership to bring it to the floor for a vote this year.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I am a cosponsor of H. Con. Res. 496. I fully support helping to relieve the suffering of people in the Caribbean. The news reports of the death and destruction in Haiti, Greneda and elsewhere in the Caribbean is just terrible. We all want to reach out and help our neighbors who are suffering. USAID's Office of Foreign Disaster Assistance has been on the ground distributing emergency aid since just after these storms hit. The $50 million aid package proposed by the Administration is, by all measures, a good start. But, it should not be considered an end to U.S. assistance. The current proposal represents what the Administration believes can be spent in the first year. By way of comparison, $52 million was expended during the first year of implementing disaster reconstruction after Hurricane Mitch hit in 1999. I expect to see more aid going to the Caribbean in subsequent years. Mr. Speaker, while I believe that $50 million is not sufficient to meet the needs of the Caribbean in the long term, I do believe it is enough to meet the immediate needs of those nations hardest hit. To meet the long term needs of these countries, I would support an effort to provide additional reconstruction funds. Although I am retiring, I am willing to work with my colleagues to secure long term assistance for the Caribbean nations before I go. I hope that my colleagues here tonight will join me in this area. I thank my colleague from California for bringing this important resolution recognizing the terrible suffering inflicted on the Caribbean by the same hurricanes that did so much damage to our own country. I urge my colleagues to support this resolution.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I yield myself such time as I may consume to close. A great deal has been said about the inactivity of our Federal government with regard to Customs and the inspection of imports, so I would like to deliver a special knowledgeable story that I know about. In my own hometown of Hickory, North Carolina, we have 47 hosiery mills, and they were being worked against substantially by imports from China and South Korea. We also have a little place called Catawba Valley Technical Institute, where we invested money to train people as to how to take apart a pair of hose and find out what the makeup of that hosiery is; in other words, if it is 60 percent cotton and 40 percent wool, they can find out for sure. We started checking the imports being brought into our hometown and found none of them matched what they said on the labels. So I called up a lady named Ms. LaBuda, who happened to be at that time the new Customs person in our Federal government, and told her about this. Within several days, I got a panicked phone call from a person that I had known for years who happens to own a couple of hosiery mills in Hickory, North Carolina. He said, ``Cass, you have to do something for me. I am in real trouble.'' So I asked him what the problem was, and he said, ``Well, Customs has seized two containers of my goods coming in.'' So I asked where they were coming from. He said, ``Well, we buy a little bit from China, and we have hired other people.'' I think personally he hired one or two people just so he could say that. But, anyway, they had one or two containers held up and he said that they were making them wait until they could test the hosiery out. So I asked him what the makeup of the hosiery was supposed to be. He said, ``I'm not sure about that. But I wonder if you could check them and ask them what is the hosiery made of.'' Polyester in China is very cheap. So he said, ``And find out what the makeup is, the percentages, and so forth, and we will change the labels.'' I said, well, unless I am mistaken, that is not quite legal. So here we have the Customs agents actually doing something positive. This same lady, because of AGOA, went to Kenya, in Africa, and she trained the people in Kenya as to how to inspect goods coming through. Because AGOA was designed to help African people, not Chinese people, shipping goods through Africa. Well, these people were trained by her. She reported to me that they caught two container loads of goods coming from China going through Kenya. They stopped the goods, they checked the goods out, and they dumped them in the ocean. What I am trying to say is that our government is doing things. It may take a little time, but if there were more people like Gladys LaBuda working for Customs, we would be in great shape. Mr. Speaker, I yield back the balance of my time.

Mr. BALLENGER. Mr. Speaker, I yield 4 minutes to the gentleman from Indiana (Mr. Souder). (Mr. SOUDER asked and was given permission to revise and extend his remarks.)

Mr. BALLENGER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of House Resolution 576, urging the government of the People's Republic of China to improve its protection of intellectual property rights, and I would like to thank the gentlewoman from California (Ms. Watson) for introducing this resolution. Mr. Speaker, the unprecedented scale and speed of China's ongoing modernization commands the world's attention. Given the immensity of that country, its transformation cannot but have a profound effect and impact well beyond its borders. All of those witnessing China's rebirth understand that its actions and ambitions will become increasingly central factors in determining the fortunes of the 21st century. As China assumes an ever more prominent role in the international system, it remains uncertain if this will be matched by an acceptance of responsibilities commensurate with the increasing power it has. Of immediate importance is its willingness to abide by a network of agreements and rules that underlie the international trade system, which operates by consensus and relies heavily on voluntary compliance with its many provisions. If this system is to work, cooperation cannot be restricted to selected areas of individual advantage but most extend across the whole. For that reason, China's entry into the World Trade Organization was a milestone in the country's development and signaled a welcome commitment to adopting and enforcing its comprehensive rules and agreements. China's stake in the health of the global economic system is readily apparent. The country's transformation has been financed largely through direct investment from outside the country and by an ever- increasing deluge of exports above all to the United States. Our annual trade deficit with China has grown every year and now exceeds $100 billion, making the United States the indispensable source of capital for rapid economic development. Given this reality, it is a matter of great concern that the extent of China's commitment to upholding the rules underpinning the system remains ambiguous, especially in the area of intellectual property rights. The protection of these rights is of great and growing importance to many developed countries whose economies are increasingly composed of knowledge-based industries, with the U.S. leading the list. The piracy of copyrighted materials is a global problem, including in our own country, but nowhere is the problem greater than in China. It is estimated that 60 percent of all goods imported into the United States that infringe on intellectual property rights originated in China. In that country, an estimated 20 percent of all manufactured products are counterfeits. Although the Chinese government has adopted increasingly comprehensive legislation and regulation to address this issue, these will remain largely empty gestures unless enforced. Here the situation is far less positive. One can walk down virtually any street in Chinese cities and be assaulted by English offers of pirated videotapes and other illegal products in full view of police and other authorities. The blame for this open flouting of this law is often ascribed to laxity or even complicity by local governments over which the central authorities claim to have insufficient control, but this assertion is difficult to accept. Few would point to China as an example of a country in which the government is too weak to enforce its own laws. We have witnessed repeated examples of energetic, even harsh measures taken against those who would defy the central authorities. It is impossible to believe that if China's leaders decided to rein in this open defiance of the law that it could not do so and do so quickly. We are confident that, being rational, the Chinese authorities will eventually realize that a relentless pursuit of self-interest that does not accommodate the interests of others cannot be sustained. But until that acceptance occurs, it is incumbent upon us to maintain sufficient pressure on China and other countries harboring these illegal activities to ensure that their costs from tolerating violations are as tangible as many benefits that they now enjoy. That is why this resolution is both timely and necessary. It recognizes the genuine progress that China has made in the area of protecting intellectual property rights but couples with this the several specific recommendations that the Chinese government must adopt if it is to demonstrate its genuine commitment to the protection of intellectual property rights. It would be difficult to find a better or more precise issue by which to judge Chinese leadership, determination on their part to play by the rules of the game in the international trading system, and thereby discern the nature of its intended participation in the international system as a whole. Mr. Speaker, I reserve the balance of my time.

Mr. BALLENGER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H. Res. 576.

Mr. BALLENGER. Mr. Speaker, I move to suspend the rules and agree to the resolution (H. Res. 576) urging the Government of the People's Republic of China to improve its protection of intellectual property rights, and for other purposes, as amended.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I am introducing legislation today to promote employee ownership through employee stock ownership plans (ESOPs). Most of our colleagues are familiar with these plans, but are they aware that the most common form of providing stock ownership to non-managerial employees today is through ESOPs? During my service in the House, Congress has expanded employee ownership in America. I have worked to expand ownership through ESOPs by introducing, cosponsoring and advocating legislation. Many new provisions of ESOP law first surfaced in legislation I introduced in 1990, 1991, 1993, and 1995. Through the years, I have worked to build bipartisan support for ESOPs in Congress. Let me say to my colleagues that ESOPs are not just special arrangements for the top executives in a company. ESOPs are broad-based stock ownership plans that, over the past 30 veers. have created significant wealth for employees. In many instances, they have been the innovators in participatory management practices that respect the individual while maximizing the performance of the company. Studies demonstrate that the overwhelming majority of employee-owned companies are more successful and treat their employees better than non-employee-owned companies. For example, in the most comprehensive study of ESOP companies ever done, over 1100 ESOP companies were matched against their counterparts for an eleven-year period. The ESOP companies had a survivability rate 15 percent greater than the non-ESOP companies, had annual sales 2.4 percent greater on average, and provided more retirement benefits than their counterparts. In another study, Washington State's Economic Development Office found in 1997 and 1998 that ESOP companies in Washington State, when compared with non- employee-owned companies, paid higher wages, had better retirement, and had twice the retirement income for employees. Despite all this favorable data, I cannot say that ESOP companies are always successful. But, I will say that they are usually high- performing companies that share with employees the wealth they help create and bring a real ownership culture into the workplace. Overall, we have good ESOP laws on the books through our tax code and the Employee Retirement Income Security Act, which is overseen by the Department of Labor. My legislation does not unravel existing law, nor does it overreach with new, costly tax incentives for ESOP creation. Rather, my bill is a modest step toward aiding the creation of employee ownership through ESOPs and helping existing ESOP companies maximize their ownership structure. Primarily, the ESOP Promotion and Improvement Act of 2004 would make minor changes in tax law to treat S-corps the same as C-corps in the ESOP arena, which would help foster ESOP creation. My legislation would also extend to ESOPs some of the popular features accorded to retirement programs such as 401K's. Following is a brief explanation of my legislation: First, I will clarify what was really an oversight in the drafting of the 1997 law encouraging S corporations to sponsor ESOPs. The 1997 law prevented S corporations from taking a tax deduction for dividends (`distributions on current earnings'). Since S corporations do not pay a corporate level tax, it is reasonable not to give a corporate level tax deduction. However, under current law, distributions from current earnings on ESOP stock paid to employees of S-corps are subject to a 10 percent penalty tax because the payments are treated as if they were early withdrawals from plan contributions to the ESOP. Clearly, Congress never intended for S corporations to have their dividends on ESOP stock treated more harshly than C corporation dividends paid on ESOP stock. To address this problem, my legislation does away with the unfair 10 percent penalty and makes it clear that, as in C corporations, dividends paid by an S corporation on ESOP stock can be deducted if the deduction is used to pay the debt incurred to acquire the stock for the employees through the ESOP. Next, my legislation permits the owners of S corporation stock to sell that stock to an ESOP and, under tight rules, to defer the gain on that sale if the following conditions are met. First, the ESOP must hold at least 30 percent of the outstanding stock of the S corporation. Second, the seller must reinvest his or her proceeds in American companies. This treatment has been permitted for owners of C stock of a private company since 1984, and it has been a boon to ESOP creation. In fact, surveys by the ESOP Association show that 70 to 75 percent of the ESOP companies in America were created by exiting shareholders of private companies using this 1984 law. I believe that if this provision, Code Section 1042, is expanded to include S corporations, there will be many more S corporation ESOPs. I believe we also need to clarify a 1989 law that the IRS has stretched too far. Under an IRS regulation interpreting the corporate Alternative Minimum Tax (AMT), C corporation dividends that are paid on ESOP stock are calculated as part of a company's adjusted current earnings, which is used in calculating the corporate AMT. Three taxpayers have taken cases all the way to the Court of Appeals saying the IRS went beyond the reach of the law in this interpretation. However, the Courts have rejected these claims, stating that the IRS has wide discretion in promulgating regulations. We should reaffirm our commitment to ESOP creation and clarify that Congress never intended to make an ESOP benefit a tax liability by overturning these IRS rulings. Finally, my bill contains two technical amendments clearing up some unfair and out of date elements of the 1984 IRC 1042 provision. My bill clarifies who can participate in a 1042 ESOP, and it permits the proceeds from a 1042 sale to be invested in mutual funds of U.S. stock, versus requiring direct stock purchases. In addition, my bill brings parity to ESOPs with other defined contribution plans by permitting ESOP participants to withdraw money from the ESOP under limited circumstances to pay for a first-time home or college tuition. With these few provisions, my legislation will do much to advance the cause of employee ownership, making ESOPs more effective and fostering the creation of many more ESOP companies. I thank the House and my colleagues for their time, and I ask that they consider joining me by cosponsoring this legislation. Section-by-Section Explanation of ESOP Promotion and Improvement Act of 2004 Makes six amendments to the Internal Revenue Code to improve the operation of existing ESOPs for both the plan sponsor and the employee participants, and in some instances make the creation of a new ESOP easier and more attractive. Section 1. Clarifies that the 1996 and 1997 laws permitting S corporations to sponsor employee ownership through ESOPs allows S corporation distributions on current earnings (referred to as dividends in C corporations) on ESOP shares to be utilized in the same way as dividends under a 1984 law and 1986 law applying to dividends in a C corporation. Specifically, this section would permit the distributions from current earnings by an S corporation on ESOP stock to be passed through to employees without the 10 percent early withdrawal tax currently imposed on the employees. It would also permit distributions on current earnings on ESOP stock to be used to pay the ESOP acquisition debt. Regular income tax will still be due and, in keeping with current law, the S corporation would not be permitted a tax deduction for the distributions from current earnings on ESOP stock. *(The distributions from current earnings are not to be confused with regular contributions to the ESOP by the S corporation which would still continue to be subject to early withdrawal penalties if withdrawn by an employee before death, termination, disability, or retirement.)* Section 2. Permits the seller of stock to an S corporation ESOP to utilize the current law ESOP tax deferral rollover tax benefit (IRC 1042), under the same restrictions applied to sellers to C corporation ESOPs. In general, to take advantage of IRC 1042, the ESOP most hold at least 30 percent of the corporation's highest class of stock at close of transaction, and the seller must reinvest the proceeds of the sale into the equities of operating U.S. corporations. If these conditions and others are met, the seller may defer the capital gains tax on his or her proceeds until he or she disposes of the qualified replacement property acquired with the sale proceeds. Furthermore, the benefit is applicable only to sales of non-publicly traded stock. Section 3. Reverses a series of federal court decisions that have upheld a 1989 regulation by the Internal Revenue Service that includes tax deductions taken for dividends paid on ESOP stock when calculating a C-corp's AMT liability. This IRS regulation imposes the corporate AMT under an interpretation of IRC Section 56 that deductible ESOP dividends are included under the preference item known as ACE, or adjusted current earnings. Despite reasoned challenges to the IRS regulation by three taxpayers, courts have upheld the IRS regulations. Section 4. Makes two minor changes to IRC Section 1042 (first enacted in 1984). The changes would make this ESOP tax benefit more reasonable, particularly due to developments since its enactment. Specifically, this section permits the proceeds from a 1042 sale to be reinvested in mutual funds that are invested in U.S. equities, and provides that an owner of 25 percent or more of one class of non-voting stock will not be automatically prohibited from participating in an ESOP with 1042 securities, and aggregates the 25 percent owner restriction on participation in a 1042 ESOP to all of the outstanding shares of the corporation, not just one class of shares. Section 5. Permits early withdrawals from ESOPs (as with other ERISA plans) for purposes of a first time home purchase or payment of college tuition, with various restrictions, including that the withdrawal may not be more than 10 percent of an account balance, and the individual has had to participate five years in the ESOP.

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, I rise in support of the amendment. Mr. Chairman, I rise today in support of the amendments to increase the funding for the National Endowment For the Arts and the National Endowment for the Humanities. I understand the importance of fiscal restraint during a time of large deficit; however, the relatively small amount of Federal funding of the arts and humanities is needed to leverage private dollars. These combined resources make the arts and our heritage come alive in communities across the Nation. For example, in 1973 we people in Hickory, North Carolina, decided we wanted to convert an old high school building, and with a small amount from the National Endowment as sort of a Good Housekeeping Seal of Approval we raised $2.8 million and had a museum of art. As another example, in October I was proud to arrange for the Aquila Theater Company to perform Othello for students in the Northview Middle School in Hickory, North Carolina. This was possible due to an NEA program called ``Shakespeare in American Communities.'' This program brings touring groups to rural communities which normally do not have the opportunity to see a professional theater company. In fact, one young eighth grader was so impressed he contacted his local paper and he wrote, ``I never really knew much about Shakespeare until a couple of days ago. When I saw that play, I was amazed. It was awesome.'' By the conclusion of the Shakespeare in American Communities Program it will have toured all 50 States, visited 200 cities and 14 military bases. It will have utilized the talent of 29 theater companies whose actors will have touched the lives of 1 million children. Dollars that fund this type of program are dollars well spent. Not only are the arts and humanities essential teaching tools for our children but they are also good business. In North Carolina's 10th Congressional District, my district, there are 757 arts-related businesses which employ 2,677 people. In addition, arts-related organizations contributed $32 million in payroll taxes to North Carolina in fiscal year 2003. Mr. Chairman, the annual budget of the NEA and NEH return immeasurable benefits to our children and economy, and I urge my colleagues to vote ``yes'' on this amendment.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I would like to thank the gentleman for yielding me the time. For the edification of the people that are watching, I may be the only Member of this body who has enjoyed the possible penalties of that lovely group called ``OSHA.'' Mr. Speaker, I want to take a moment to refresh everyone's memory. As the former chairman of the Subcommittee on Workforce Protections, I cannot help but remember the testimony that our committee took from small business owners several years ago. I recall very clearly what we heard, that despite a genuine desire to provide workers with a safe work environment, OSHA seemed more interested in confrontation than problem solving. For years, OSHA acted more like a policeman handing out fines and penalties for every little infraction of the law than an agency that would be willing to help employers improve worker health and safety. Actually, surprisingly, and I do not want to put my friend from Georgia down, but the pay increases for OSHA worker inspectors were based on the number of fines that they turned in. We used to say that is why, going through south Georgia, you have to watch out. Sorry about that. Anyhow, that is how they got their pay increases. That is why we worked to refocus OSHA, making it more of a partner with business. The idea was simple, if an employer in good faith wants to bring a workplace into compliance, let us do everything we can within the law to assist. I am proud to stand here today and say that the simple reforms that we enacted a few years ago helped to bring balance to OSHA. Businesses, especially small businesses, are now able to receive the expert advice they need to comply with OSHA standards, without the fear and adversarial temper often associated with OSHA inspections. In fact, in a recent GAO study, it seemed to point out that voluntary compliance programs have reduced workplace injuries, improved worker productivity, lowered worker compensation costs, and provided other intangible benefits. When OSHA partners with business and helps them comply, everyone benefits. The four bills we have before us today are built on our original reforms. Compliance is what is really desired, and it is all that really counts. These are common-sense bills that would help give small businesses more equitable treatment in dealing with OSHA, while letting employers know that the government is truly interested in helping to achieve a safer and healthier workplace. These bills take small, yet significant, steps in bringing about change to the way OSHA operates. I want to thank the gentleman from Georgia (Mr. Norwood) for his hard work on these four important bills that will benefit both employers and employees alike, and I urge my colleagues to support these bills. H.R. 2728, it is the Small Business Day in Court that gives relief on time to react to charges. Let me give my colleagues an example. On an inspection in my plant, there were seven changes that OSHA said needed to be made. Six were made in less than 1 week, and the last one took an unknown length of time. We did not know how long it would be, and it was to repair a platform that was 20 feet in the air. It took more than a month, but luckily, OSHA allowed us the extra time, not limited to 15 days. All this was done without penalty, and our partnership with OSHA made my plant a safer place to work. I would ask all of the people to vote in favor of H.R. 2728.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I thank the gentleman for yielding me the time. Mr. Speaker, I am a small business owner, and I know the burden that rising health care costs are having on small companies across America. My health insurance costs in my company have skyrocketed over the past few years, and I know that other small U.S. firms are experiencing the same burden. In my particular case, over the last 10 years my sales have doubled, but my health care costs have gone up by 450 percent. When I first started my business, we could cover the full cost of an employee's medical insurance; but even with growing sales, we have not been able to keep pace with the ever-increasing cost of medical premiums, and I hear this same story over and over again from other small business owners in my district. Like me, most employers care deeply about their employees and want to give them access to quality health care. Unfortunately, soaring costs have forced many small businesses to shift their health insurance costs to the employees, to drop health care coverage or to close up shop altogether. Considering that more than half of the uninsured are small business employees and their dependents, this is nothing short of a tragedy. We must act to help small businesses which are at the mercy of the insurance companies. They simply do not have the bargaining power or resources needed to get the best deal. That is why I am a strong supporter of the Small Business Health Fairness Act. This bill allows small businesses to pool their resources into association health plans, giving them purchasing clout and power to do what they do not have today. AHPs will allow small businesses to negotiate better rates and purchase better plans at a lower cost. It is good for small employers. It is good for employees. Now, we know the problem of the uninsured will not got away with this bill, but it will help small employers and millions of their employees and their dependents to gain access to quality care; and it may help prevent some companies from dropping their health care plans altogether. I strongly urge my colleagues to support this employer- and employee- friendly bill, and I thank the gentleman for yielding me the time.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, I am happy to come to the floor today in support of lowering taxes on American families--all American families. The Democrat substitute basically says that it's O.K. to cut taxes on some American families, but that other American families should have to pay for those tax cuts. Mr. Speaker, that's not tax cut at all. As everyone in this body knows, the Alternative Minimum Tax was enacted to prevent the wealthiest taxpayers from using loopholes to avoid paying any federal taxes. Today, the AMT doesn't just affect the rich, but hits a substantial portion of middle-income Americans. The 2001 and 2003 tax relief bills increased the AMT exemption to help deal with this problem. However, this needed relief is scheduled to expire at the end of this year. If we do not act today, 11 million middle class taxpayers will experience an average tax increase of $1,520 next year. Mr. Speaker, we can't allow the AMT to take away everything Congress and President Bush have done to lower the tax burden on American families. We also shouldn't force some Americans to pay for other American's tax cuts. I urge my colleagues to defeat the Democrat substitute and extend the AMT exemption by voting for the underlying bill, authored by my Republican colleague and friend, Representative Rob Simmons.

Mr. BALLENGER

Mr. BALLENGER. I thank the gentleman for yielding me this time. Mr. Speaker, I believe that the Chinese currency is undervalued by some 40 to 50 percent and has been for years. A 40 percent discount for China is unacceptable. American companies deserve a chance to fairly compete on a level playing field. Chinese companies do not have governmental regulations like EPA or OSHA, they do not have minimum wage laws or workplace safety mandates, and they do not have to make a profit. It goes without saying that China has emerged as the biggest threat to our manufacturing base, and it is not because they make things better than we can, because they cannot. It is because China is cheating the system. China ships textile and apparel goods through Vietnam to avoid textile quotas. That is cheating. China's cheating is scaring all textile producing countries. In 2005, textile quotas disappear. Central American nations are worried. The South Korean hosiery industry is worried. Everybody is worried because we all know about China's cheating and predatory pricing practices. This cannot continue. That is why we are standing up for our textile workers against China. The Chinese are ignoring international rules and putting millions of hardworking Americans out of jobs. We are standing up for U.S. workers by calling on China to fulfill its commitments under international trade agreements and to establish monetary and financial market reforms. Other countries and international institutions are calling on China to adopt a more flexible exchange rate policy. The market-based valuation of currencies is a key component in the global trading system. As Secretary Evans said earlier this week on his travels in China, ``We expect the markets to reflect the true value of currency.'' I applaud the administration for their efforts to help U.S. companies better compete, for calling on China to quicken the relatively slow pace of reforms thus far. Further action must follow. In closing, I urge my colleagues to support H. Res. 414 as a means of putting the Chinese on notice that the Congress is tired of the $103 billion trade surplus. We will expect them to live up to their commitments and to open their markets to U.S. goods and services.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, on October 15, I inadvertently did not vote on rollcall vote 543, the Syria Accountability and Lebanese Sovereignty Restoration Act (H.R. 1828). I supported this amendment.

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, I understand the need to support Iraq in its quest to become a free democracy. I still believe we did the right thing. But I also recognize that there must be greater attention for those who need help in the United States. In no way does the Pence Amendment alter or change funding for our troops. That money is set aside and will be given with full faith and assurance. However, families in my district are reeling from the manufacturing recession. As a result, I believe we need a more balanced approach to the Iraq reconstruction funding. I support Congressman Pence's approach to giving the first 50 percent as a grant for those projects in greatest need of repair and the remaining 50 percent as a loan to the new Iraqi government. This savings of 10 billion dollars could be well spent on economic development and retraining funds for unemployed workers in my district as well as many others. I applaud Congressman Pence for his efforts to craft a compromise on this important issue.

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, without a doubt, this period in history will record that the United States was committed to spreading democracy and freedom throughout the world. Building and guiding new democracies is one of the most difficult, yet important tasks, that the United States--as a leader of the free world--can undertake. With this debate today on the Iraq supplemental spending package, we seek to recommit ourselves to providing for those in the midst of that most important mission, our armed and foreign services. Deciding to wage war is not a decision that is made lightly or for political expediency. It involves the sweat and sacrifice of America's most courageous patriots, our armed forces. When someone joins the military and takes the yoke of freedom upon their shoulders, they deserve the maximum support we can muster. Mr. Chairman, that is why I have come to the well of this House, to make sure they are provided for. I support President Bush and believe that we should pass this supplemental as soon as possible. There should be no doubt about United States intentions: We stand behind our troops and their mission to bring democracy and freedom to Iraq.

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I think anybody that has any knowledge at all recognizes drug abuse is the most dangerous threat that we have in our country today. We spend nearly $11 billion inside the country to fight this drug disaster. Aid to Colombia is the most effective weapon we have against drug production, not drug use. The estimated economic cost of illegal drug use in the United States has been over $160 billion in the year 2000. The $731 million provided in the Andean Drug Initiative in this appropriations bill is necessary and money well spent and these funds will save the U.S. money in the long term. The previous speaker spoke of the number of people that were dying of AIDS and where the money could be of use to them. There is an estimated 4.7 million Americans age 12 and older in the year 2000 who needed treatment for illicit drug use and drug abuse problems. That accounts for 2.1 percent of the national population. If you could measure the cost per individual what drugs have cost us in this country, it is $34,200 a year. The Federal Bureau of Investigation estimates that 1.6 million people were arrested in the United States in 2001 for drug abuse violations. Nearly one in four persons were held in U.S. jails and prisons in 2000, 57 percent were imprisoned for drug offenses. I think the statement that the war on drugs and Plan Colombia is not working is completely false. It was very slow in getting started and I blame this body right here for the first 2 years that we were ineffective because it was an argument about how the money should be spent, how it should be allotted as far as which helicopters and which aid. It is our fault here that it took so long to get going. There was a statement made that the production of coca had increased. That is false. It has shrunk in the last year. In fact, it has been one of the most successful years that we have ever had in reducing the production of this coca in Colombia. Also, there were statements made about how horrible the paramilitary forces have been, and in the past they were terrible, but paramilitary forces within the last week have signed a peace agreement with the government. If the ELN and FARC would do the same, the communist element that we are supposedly helping out by shrinking this budget would go away. I would like to say that reducing drug production is what we need in this country most, and every penny that we spend on it is worth its effort, not only from North Carolina to Massachusetts but California to Missouri. Drugs are blind on who they affect, and the effort we are putting forth in Colombia is probably the most effective way that we have of reducing drug use in this country.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, first of all, I would like to thank the gentleman for yielding me this time. I want to say some good words about something that very few people say in a positive fashion and that is the AID supplement that goes on by our State Department in handling disastrous areas and helping develop countries that need all the assistance in the world. As I am chairman of the Western Hemisphere Subcommittee, I have been heavily involved in Central and South America for 35 years, and I have watched AID build and construct efforts on growing democracy in all of these areas, as well as trying to take care of people who are starving. It is hard to believe it, but in Venezuela after the floods killed close to 50,000 to 75,000, AID was there immediately to supply equipment for fresh water, to help supply foods, to help supply all of the necessary things to rebuild that country. In Honduras, I do not know how many people remember Hurricane Mitch, but it almost wiped out the whole country of Honduras. AID helped build, at least I know I was involved with them in 3,000 homes that they helped build, and to rebuild their banana crops which were completely destroyed. In El Salvador after the earthquake that people may or may not remember, 1,000 people were killed. AID furnished a hospital in the area that had been completely just about wiped out by landslides caused by the earthquake, and also helped to rebuild the homes that were destroyed in the countryside of El Salvador. But mostly I want to thank AID for the effort that they have done in Colombia in developing alternative crops, every type of crop that one can think of, trying to develop some with a method of replacing coca, which is the major producer of cocaine. They supply pretty close to 100 percent of all the cocaine that is used in this country, killing our children on a daily basis; and AID and its workers have been all over Colombia developing anything they can to strengthen their economy and to give them some other way of earning a living, rather than growing coca. Coffee itself was Colombia's major crop, and then some brilliant mind came along with the idea of let us teach the Vietnamese how to grow coffee. The Vietnamese expanded coffee growth and so forth, along with the Brazilians. It just about destroyed the market for coffee. So the area that AID is trying to help the Colombian people, where the major production of coffee exists, is to somehow strengthen the product in such a way of making it cleaner and easier to sell it in this country. And they are doing a wonderful job, and they need all the assistance they can get. They are also working in the area of Putamayo, which is the heaviest area of growth of coca in the whole country of Colombia, in developing what people would say is something that makes a great deal of sense. They happen to be in almost the Amazon area of South America with large amounts of lumber, timber, and so forth and so on; and they have been cutting trees and shipping the whole tree to Bogota where it is cut up and sawn and so forth, and they have a fairly large furniture industry that happens to be tied into the furniture industry in Hickory, North Carolina, where I come from. What they are doing is, they are trying to help these people down there in Putamayo, a very poor area of their country, to develop an actual timbering process where they cut the trees down, they saw them up into boards, and then they kiln dry it in such a way that it all of a sudden is usable as lumber in the industry of manufacturing furniture. Also, the shipment of the goods from Putamayo to Bogota, if they ship the whole tree, they are shipping half water. With this effort that they are putting in right now, it is an effort to really be able to upgrade the living standard of those people there, and I would just like to say that any time anybody questions what AID is doing, I hope they will speak to me.

Mr. BALLENGER

Mr. BALLENGER. Mr. Speaker, on rollcall No. 389, I was inadvertently not recorded. Had I been present, I would have voted ``yes.''

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, in the past we were upset by the actions of the NEA, but that has changed completely to a very positive program, and with congressional oversight. Last year, the Congressional Arts Caucus sponsored an amendment to increase funding of the NEA and the NEH. Even though the amendment was bipartisan, it was dropped during conference. This year, the Congressional Arts Caucus again wants to stress the importance of the arts to our districts and call upon the House to increase the funding for the National Endowment for the Arts by $10 million and the National Endowment of the Humanities by $5 million. According to a 2002 study of 3,000 local arts organizations across America, the nonprofit arts industry generates $134 billion in economic activity. That is for last year. This includes $24.4 billion in tax revenue, which covers the costs many times over. Not only do governments gain economically from the arts, but almost 5 million Americans have full-time jobs in the arts industry. In 2002, my congressional district received grants for NEA for both the Penland School of Crafts and Lenoir-Rhyne College, contributing greatly to the local communities in our lives. Both the NEA and NEH have new programs with strong bipartisan support that will not only enhance the two agencies but will also bring a new understanding of American history and culture. Challenge America, sponsored by the NEA, and We the People, sponsored by the NEH, will both focus on educational outreach and promoting the best in arts and art education that our communities have to offer. We owe it to ourselves and to our neighbors to support this amendment, and I urge my colleagues to vote yes on the Slaughter-Shays- Dicks-Leach amendment.

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, I thank the chairman for yielding me time. First, I would like to begin by thanking the chairman and the ranking member for working with me and my colleague from North Carolina (Mr. Price) to include aspects of the gentleman's Teaching Fellows Act in today's bill. The Ready to Teach Act authorizes competitive grants to encourage development of teacher-training programs and to create highly qualified teachers. I believe that one of the most important additions that we made to this legislation is that it allows a partnership grant to be used to coordinate with community colleges to strengthen teacher- training programs. It is estimated that North Carolina will need 80,000 new teachers over the next decade. To address this problem in my area, Appalachian State Teachers' College, it used to be, it is now Appalachian State University, which is a branch of the university and recognized as one of the best teaching colleges in the United States, Caldwell Community College and the local public schools initiated a proposal to leverage technology and integrate their resources to develop a model teacher- training program. Area residents who typically would not have had access to the teacher prep program would have the opportunity to become highly qualified teachers through the use of distance technology. It is this kind of innovative thinking that the Ready to Teach Act aims to encourage, and I strongly encourage my colleagues to support this bipartisan legislation.

Mr. BALLENGER

Mr. BALLENGER. Mr. Chairman, I would like to speak to the point of order.