Kit Bond

Mr. BOND

Mr. BOND. Madam President, I rise to report on the state of small business and share with my colleagues, staff, and our constituents some of the concerns in the small business communities. The President declared this week Small Business Week and we have had small business activities all week talking about wonderful entrepreneurs who are making the economy grow and providing jobs as well as strengthening their communities. I don't think there is any question that small businesses are the foundation of our economy. They employ over half the private sector workforce. Two-thirds of all new jobs are created by small businesses. They constantly lead the way in innovative and creative solutions to the challenges that face us. Some very large businesses, obviously, started as small businesses. Others have chosen to remain small. This country's future will be determined by today's small businesses. With so much at stake, we have adopted the policy in the Committee on Small Business of doing something that was not traditional prior to 1995 when we started going out and listening to the broad range of concerns of small business. I am proud to say on a bipartisan basis the Committee on Small Business over the last 7 years has not only listened to the needs of small business but done a very good job in responding to those needs. As the ranking member of the committee, I can say I have always learned when I have listened to the small businesses in my State and around the country. There is something now they are discussing that has moved to the top of their concerns, moved to the top of the ladder. Small business concerns used to be regulatory issues, tax issues, bundling issues, availability of the SBA credit assistance. The issue driving small business owners and their employees nuts is the issue of the cost of health care. Small businesses are saying they cannot get the kind of health care for themselves and their employees and families that a large business or a union or a government can provide. There are about 40 million people in this country without health insurance. We talk about that a lot. This is a serious concern. Madam President, 60 percent of those--24 million--are in the small business family. Of the 40 million without health insurance, 24 million are from small business. They are either workers in small business or members of the family of small business employees. Why? To a large extent in the past we have not given tax deductions for entrepreneurs, small business proprietors who buy health insurance for themselves. I started that battle in 1995 and by 2003 we finally get 100-percent deductibility. Now the problem is the cost of health insurance. Many individuals who are among the employed but uninsured work for small businesses that would like to provide health insurance but can't because in some instances it is too expensive; in other instances they cannot bargain with and get the kind of benefits they need. They are not talking about lavish benefits. We are trying to get basic health care for employees, their families, their children, mothers who need prenatal and postnatal care, children getting vaccinations. It does not matter how many mandates are passed regarding what States say to businesses, what they ought to do, health plans saying what they ought to do, or even a Patients' Bill of Rights. One basic right the small businesses don't have is the right to be able to purchase affordable health care. It seems to me the only solution to help the employed but uninsured is to allow small businesses across the country to pool together and access health insurance through their membership in a bona fide trade or professional organization. This should provide small businesses the same opportunities as other large insurance purchasers. The association health plans, or AHPs, would reduce cost, to spread the costs and risk, increase group bargaining power with large insurance companies, and generate more insurance options for small business. The principle underpinning AHPs is simple, the same principle that makes it cheaper to buy a soda by the case than in individual cans. Bulk purchasing is why large companies and unions get better rates for employees and small business. It is time we bring the same kind of Fortune 500-style employee health care benefits to the Nation's Main Street small businesses and their employees. AHPs are not a new idea. They have been talked about, argued about, compromised for almost a decade. During that period, what once was thought to be a manageable problem has become the crisis we have today. A bill has been introduced by my neighbor, my friend from Arkansas, Senator Hutchinson, that creates these AHPs. It is the Small Business Health Fairness Act of 2001. I cannot overstate the urgency of moving this legislation. The House has passed a similar bill. The President has strongly come out in support of AHPs. The President does not want small businesses to be health insurance islands under themselves. I agree. We must do this for small businesses, their employees, and their employees' families. Also, it is important we go ahead and make permanent the tax cuts we provided last year. More than 21 million businesses filed tax returns as individuals. These are nonfarm, sole proprietorships, partnerships and S Corporations. They had receipts of less than $1 million. And 92 percent of all small businesses under $1 million are passthrough entities. The tax rate relief we gave last year means there will be more money to invest in the business, to invest in equipment, and to put more people to work. We need to make it permanent. We are not talking about rich ``fat cats'' here. According to 1999 Census data, of the nearly 15 million full-time, self-employed people in 1999, median business earnings were $30,000 and 38 percent of them earned between $30,000 and $75,000. In addition, the former chief economist for the SBA's Office of Advocacy, testified last March before the Senate Finance Committee that ``[e]very dollar of profit or tax relief tends to be re-invested in the [owner's] firm.'' With more of their tax dollars in hand, these small business owners will be able to reinvest in their businesses--purchase new and more efficient equipment. They will be able to expand their product lines and the services they render. And--most importantly--they will be able to continue creating more jobs in our home towns. But the tax bill did not stop at just cutting tax rates. It also dramatically changed the death tax, putting it on the road to extinction by 2010. Too often we have heard about the family-owned company that has had to be sold just to pay the death taxes. According to the SBA, more than 70 percent of all family businesses do not survive through the second generation and fully 87 percent do not make it to a third generation. That's an absurd result of the tax code. But we are forgetting an even greater problem caused by the estate tax. Thousands of small businesses in this country waste millions of dollars each year on estate planning and insurance costs just to keep the doors open if the owner should die. To put this into perspective, a survey of family owned businesses in Upstate New York revealed that average spending for tax planning, attorney and consultant fees, life insurance premiums, internal labor costs, etc., was nearly $125,000 per company over a 5 year period. That's even before any Federal estate taxes are counted. Just think what could be done with that kind of money in a small business if it didn't have to be paid to accountants, lawyers, and insurance companies. It could be used to create more jobs in our communities. In short, the estate tax can spell the end of a small business, but it is also a jobs killer in this country. With all of its strengths, however, the tax bill has one major flaw-- procedural rules in the Senate forced it to be limited to a ten-year life. So, while America's entrepreneurs can enjoy the benefits of the tax bill today and over the next several years, our work is not finished. We must make the tax cuts, and in particular the repeal of the estate tax, permanent. Otherwise, our success in reducing the tax burden will turn into the largest tax increase in American history come 2011. That's a result I will strongly oppose and hope never to see. Of course, another of the primary issues that come to me is how to create more small businesses. Money and good management skills are keys to starting and running a successful small business. The federal government has demonstrated that it is capable of delivering help in both areas to small businesses through the Small Business Administration. Each year, over one million small business people and entrepreneurs receive help from the SBA's core management assistance programs: the Small Business Development Centers, SCORE, and the Women Business Centers. At the same time, SBA has demonstrated an ability to make loans and venture capital available to 40,000-50,000 small businesses annually. While the number of small businesses has exploded over the past decade, the SBA credit programs have not been able to keep pace with the demand. As many of my colleagues in the Senate know, SBA's credit programs are not designed to compete with the private sector; rather, they are supposed to meet the demand from small businesses that cannot otherwise obtain a regular commercial loan or investment capital. This demand is great; unfortunately, these programs are not meeting the growing small business demand, particularly from women-owned small businesses, which is the fastest growing small business segment. Much of the blame can be placed on career bureaucrats in the Office of Management and Budget who use unrealistically high default estimates to drive up the cost of the SBA's flagship 7(a) guaranteed business loan program. Just for next year, OMB's estimates are adding an unnecessary $100 million in appropriations to the cost to run the program. Since 1992, OMB's estimates have caused the borrowers and lender to pay about $1.4 billion in excess fees. The excess fees and the pressure for higher appropriations have placed unnecessary and counterproductive limits on the growth of the 7(a) loan program. The other SBA credit programs have also experienced similar problems. The 504 Development Company Loan Program has paid excessive fees totaling over $400 million, and the Small Business Investment Company Program has paid in $500 million over the amount needed to run that program. To begin to correct this problem, last December Congress enacted S. 1196, which included key provisions lowering the fees from the 7(a) and 504 loan programs. These changes will go into effect on October 1, 2002. Last fall, I introduced the Small Business Leads to Economic Recovery Act of 2001, S. 1493, which is designed to provide effective economic stimulus to small businesses in three distinct but complementary ways: increasing access to capital for the Nation's small enterprises; providing tax relief and investment incentives for our small firms and the self-employed; and directing one of the Nation's largest consumers--the Federal government--to shop with small business in America. Subsequently, Senator Kerry and I introduced S. 1499, which adopts the access to capital provisions from S. 1493. This bill is a bipartisan collaboration to devise one-time modifications to the 7(a) and 504 Loan Programs because the traditional approach to disaster relief will not address the critical needs of thousands of small businesses located at or around the World Trade Center, the Pentagon and in strategic locations throughout the United States. S. 1499 has passed the Senate and is waiting for action in the House of Representatives. In the near future, I am hopeful we can add this important bill to another must-pass bill so that it can be on the President's desk for his approval. The SBA has undertaken the first creative steps to reach more small business borrowers. I applaud their efforts and encourage the SBA management team led by Administrator Hector Barreto to do more. It is estimated there are as many as 25 million small businesses in the United States. Our Federal credit programs need to be able to reach many more small commercial borrowers. When I hear from women's business owners that they cannot obtain loans or investment capital, I want to know why the SBA programs are not serving this fast-growing segment of our Nation's business community. When minority entrepreneurs cannot obtain credit, I want to know what SBA is doing to correct this problem. As the ranking member of the Committee on Small Business and Entrepreneurship, I am in a position to take the battle to the OMB. But it is up to the SBA to work with our Nation's lenders and venture capitalists to find ways to expand existing programs and to create new ways to deliver credit assistance to help fuel the engine that drives the economy of the United States--the small business community. One thing that can sap the strength of that engine is the burden imposed on small businesses by regulations. The SBA Office of Advocacy has estimated that regulations cost businesses with less than 20 employees almost $7000 per employee per year. This is nearly 60 percent higher than businesses with over 500 employees. Six years ago, Congress, without dissent in the Senate, took an historic step towards reigning in the federal government's regulatory machine and protecting the interests of small businesses. My Red Tape Reduction Act, what others call the Small Business Regulatory Enforcement Fairness Act, ensured that small businesses would be given a voice in the regulatory process at the time when it could make the most difference: before the regulation is published as a proposal. Without question, the Red Tape Reduction Act has yielded some remarkable results and provided small businesses with a greater voice and opportunity to have an impact in the rulemakings which threaten to do them the most harm. Perhaps the best known provision is the requirement that OSHA and EPA convene panels to receive comments from small businesses before their regulations are proposed. This gives these agencies the unique opportunity to learn up front what the problems with their regulation may be, and to correct these problems when it will cause the least difficulty. This has resulted in significant changes being made, and in one case, EPA abandoning a regulation because they recognized that the industry could deal with the issue more effectively on their own. Experience with this panel process has proven to be an unequivocal success. The former Chief Counsel for Advocacy of the Small Business Administration Jere Glover has stated that, ``Unquestionably, the SBREFA panel process has had a very salutary impact on the regulatory deliberations of OSHA and EPA, resulting in major changes to draft regulations. What is important to note is that these changes were accomplished without sacrificing the agencies public policy objectives.'' Unfortunately, however, there are still examples where agencies have not provided small businesses with the appropriate opportunity to participate, and have flouted the requirements of SBREFA through abusing the flexibility Congress provided to the agencies to determine how and when they would comply. It has become clear that these are more than mere isolated incidents and that the Red Tape Reduction Act itself needs to be amended to achieve the goal Congress had in mind when passing the original Regulatory Flexibility Act, and the subsequent Red Tape Reduction Act. This is why I introduced The Agency Accountability Act, S. 849 during last year's Small Business Week. This bill would further amend the Regulatory Flexibility Act and close some of the loopholes that agencies have exploited in their desire to pursue their regulatory agendas on the backs of small businesses by doing the following: It requires the agency to publish a summary of their economic analysis supporting the decision not to certify a regulation as not having ``a significant economic impact on a substantial number of small entities,'' and to make the full economic analysis available to the public so that interested parties will be able to evaluate whether the agency has met their burden to do adequate outreach and analysis in determining the impact of the regulation. It allows small entities to seek judicial review of this certification decision if they believe that the agency has not supported it with adequate data and analysis. It directs the Chief Counsel for Advocacy of the Small Business Administration to promulgate a regulation to define further the terms of ``significant economic impact'' and ``substantial number of small entities'' so that agencies can no longer define these terms themselves and claim that they were within the bounds of the law when their definitions allow them to avoid the requirements of SBREFA and the Regulatory Flexibility Act. Finally, it adds the Internal Revenue Service, the U.S. Forest Service, the National Marine Fisheries Service, and the Fish and Wildlife Service to the list of agencies that must conduct small business review panels before they can issue proposed regulations. Another area the agencies have failed at miserably is to supply the compliance assistance that is required by the Red Tape Reduction Act. GAO has issued a report that clearly indicates how agencies have ignored this requirement or made a complete botch of it when they have attempted to meet it. I will be introducing legislation to address this problem soon. My views are simple. I want an agency that intends to regulate how a business must conduct its affairs to do so carefully and only after it has taken every step to insure that it will impose on that small business the least amount of burden to achieve its stated objective. Once they do issue a regulation, they have an obligation to be able to explain what small businesses must do to comply with it. This is not about blocking agencies from promulgating regulations, it is about making sure they produce the best regulations possible with the least unnecessary burden on small businesses. Six years ago, the Senate said in a unanimous voice that it wanted agencies to treat small businesses fairly. That commitment to protecting this most vulnerable segment of our economy, at a time when the Federal government can literally determine if a business will survive as a result of the regulatory burden imposed on it, is still alive. It is time that we ensured agencies are accountable for their actions by enacting the Agency Accountability Act. On the positive side, the Federal Government can be and should be a reliable and committed purchaser of goods and services from small businesses. The Small Business Act says that small firms shall have the maximum practicable opportunity to compete for Federal contracts. This is good for small business, good for the purchasing agencies, and good for the taxpayer who pays the bills because when small business competes for contracts this lowers the prices and raises the quality. Small business benefits from having access to a stable revenue stream while they get up-and-running. The Small Business Act recognizes how government contracting can contribute to business development and economic renewal. For example, my HUBZone program provides contracting incentives for small firms to locate in blighted neighborhoods, helping them win Federal contracts and stabilize their revenues while they develop a nongovernmental customer base. The State of Small Business, on this front, is mixed. We finally succeeded in restoring funding for the HUBZone program, as SBA finally sent up a reprogramming request that the Appropriations Committee found acceptable. The mishap that occurred last year, of defunding the HUBZone program, has now been corrected. Moreover, SBA is on the verge of removing the biggest of the roadblocks currently holding the HUBZone program back. Contrary to express Congressional direction, the previous Administration had put the HUBZone and 8(a) contracting programs in competition with each other, by trying to give an automatic preference to 8(a) in all cases. We at the Small Business Committee had sought to avoid pitting these programs against each other, by mandating parity between the programs. Contracting officers would be equally obligated to carry out both programs. SBA disregarded the congressional will on this point, and contracting officers found the regulations confusing. SBA's noncompliance hurt both programs, because contracting officers did not know what to do. In January, SBA published proposed rules to correct this situation and to establish the parity that Congress intended. I am confident we are about to enter a new era in which the HUBZone program will finally live up to its potential. And not a moment too soon, either. This program will direct contracting dollars into the most chronically distressed areas of the nation. People who live in these areas, without jobs and often without hope, need the opportunities that the HUBZone program will provide. Finally, we are going to get serious about getting help to these folks who need it so desperately. Unfortunately, Federal government's performance in contracting with women-owned small businesses is less encouraging. Since 1994, when Congress enacted a goal of 5 percent of contract dollars for women- owned firms, the Government has consistently fallen short. We have never met that goal. We have never come close. Last year, I received a report from the General Accounting Office on contracting participation by women-owned firms. The clear message was this: if the Government is to meet the 5 percent goal, the Department of Defense must meet its own 5 percent goal. DOD is the 800-pound gorilla in Federal procurement. Sixty-four percent of Federal contracting dollars come from the Pentagon. Without a full DOD commitment to the women-owned business goal, the rest of the Government does not handle enough contracting dollars to make up the shortfall. Similarly, DOD frequently uses the practice of bundling small contracts together so that small businesses are unable to bid on the work. In the words of President Bush ``Bundling effectively excludes small businesses.'' He understands this hurts small business and has asked OMB to look for ways to avoid this approach and for opportunities to break up bundled contracts to permit more participation by small business. I welcome the President's support in this cause. This week Senator Kerry and I offered a bill that would close loopholes in the definition. I appreciated working with him to develop this important measure. Increasingly, it looks like we are getting close to a meeting of the minds on this issue, and I am hopeful we can at long last do something serious to control contract bundling and ensure that the Federal government's contracting practices allow for the maximum possible participation by small business. Never has our country needed or relied upon small businesses as much as now in the wake of the devastating attacks of September 11. Yesterday, my colleague Senator Kerry and I introduced a resolution, S. Res. 264, expressing the sense of the Senate that small business participation is vital to the defense and security of our Nation. On September 11, 2001, the people of the United States were subject to the worst terrorist attack in American history. Our nation's response has been truly astounding. And it should come as no surprise that small businesses are playing a vital role in that response. Small businesses have the unique ability to respond quickly and precisely, to emerging needs and conditions. Many of the most innovative solutions to our problems such as new technologies for defense readiness come from small firms. In fact, in October 2001, the Pentagon's technical support working group sent out an urgent plea, seeking ideas and technology to assist the military fight terrorism. In just two months, legions of small businesses responded to the Pentagon's call. Over 12,500 ideas poured into the Pentagon, most of them from small businesses. This remarkable response once again shows that small business remain the most innovative sector of the United States economy, accounting for the vast majority of new product ideas and technological innovations. Just last week I had the opportunity to acknowledge the volunteer efforts of three Missouri companies that are helping re-build over an acre-long section of the Pentagon's roof, which was damaged badly in the September 11 terrorist attacks. Frederic Roofing and Sheet Metal Company of St. Louis, Performance Roof Systems of Kansas City, and Watkins Roofing of Columbia, are participating in a massive effort to help repair part of the damage sustained by the Pentagon. These Missouri companies are independent, small businesses, modern-day Davids ready and willing to take on part of a Goliath-sized project. They have joined with roofing contractors from across country and the National Roofing Contractors Association to raise in excess of $500,000 worth of cash, materials, and labor toward this project. Their work reflects the enterprising spirit that makes small businesses such a potent force in our economy. They deserve our admiration for rolling up their sleeves and pitching in to help restore the Pentagon. To help raise awareness of small business innovation in the homeland defense area, on July 10, 2002, Senator Kerry and I will co-host an expo on Capitol Hill to showcase small businesses and their homeland security products. The Small Business Homeland Security Expo will provide an opportunity for small business owners to educate us here in Washington about their latest innovative products, technology, and research. I am excited to bring these hardworking entrepreneurs here to show us just how valuable their contributions are to our Nation's security and defense. These small businesses are a cross-section of America--they are women-owned, minority-owned, and often represent economically disadvantaged areas. Numerous small businesses have lined up to showcase their exciting products and services for homeland defense and the fight against terrorism. We intend to highlight these businesses at the Expo and in the accompanying book being prepared for the event. The work of small businesses toward this goal is a product of the same volunteer spirit that helped save lives, combat unthinkable disaster, and restore the nation's hope after the darkest hours of September 11. Madam President, I am happy to report to the Senate that the small business sector of our economy is thriving even though the challenges they face are stiff and numerous. The determination to be successful is a hallmark of small businesses as it has been the foundation of our nation throughout the years. Small businesses are at the forefront of new advances in technology, health care, environmental management, and virtually every industry possible. I have no doubt that small businesses will continue to lead the way. The big question I have is whether we will be able to help them. Small business wants the Federal government to be a friend, not an adversary. They want us to be their customer and advisor, not a competitor or intruder. In every action we take, we must always ask what the impact on small businesses will be, and make every effort to refrain from that action if we do not believe it will have a beneficial impact. The future of our country is tied to the future of small business and by enhancing the conditions that support small business, we will ensure a more prosperous future for all. I suggest the absence of a quorum.

Mr. BOND

Mr. BOND. I thank my colleague from Iowa, the distinguished chairman of the Agriculture Committee. I compliment the chairman and ranking member and the conferees who worked so hard to produce a final product. This one was not easy. There is the old saw about watching sausage and the law being made. It probably applies to this bill as well as any others. I commend our House colleagues for continuing the tradition of bipartisan work on the farm bill, for soliciting broad input, for finishing the bill early this year, for not pitting farmers against farmers and one region against another, processors against farmers and environmentalists against farmers. In my view, the House did succeed in avoiding the temptation to politicize farm policy, and I believe the product they have reached in conference with the Senate is good for all agriculture. The staff worked long days, nights and weekends, as did, of course, the conferees. It is not very often that we do anything around here ahead of time. For that, the conferees deserve special recognition. Clearly, there are many provisions in the bill that I support. There are some issues on which each of us would have a much different take, we would have handled differently, if not burdened by the natural constraints of a democracy. I know that some Senators are making a strongly held case that this legislation costs too much. I have my own misgivings about the price of farm policy. I will focus on that in my remaining remarks. First, as with any estimate, it is based on assumptions. The new assumptions used in this case to calculate a score include new expectations of market prices for individual commodities years in advance of reality. These estimates are done in good faith. But, of course, it is laughable to think that we know what farm prices will be over a period of years that depend on world demand, trade preferences, the relative strength of foreign currency, peace, war, and weather. The reason this latest score is higher is because the expectations of market prices have been revised downward. If market prices are less, then there is more urgency for the stronger safety net included in this bill, not less. Let me point out something many people overlook. There are folks saying this is 70 percent more expensive than the last farm bill. If you look at the underlying farm bill, yes. But we didn't stick with the underlying farm bill. When the world market for agcommodities crashed with the Asian contagion, the Asian flu in the late 1990s, Congress stepped up to the plate. We have been providing emergency assistance because we did not want the artificial collapse in the demand of world prices to bankrupt farmers. What we are doing now in this bill is essentially building into the safety net the level of spending that we have reached when we have had to come forward with emergency appropriations for the emergency costs each year. I guarantee, if we had passed the old farm bill, if we had kept the old farm bill in place, if the year 2003 rolled around and it appeared that we were going to have the same disastrously low farm prices we have this year, we would have come right back here and people would have said: Yes, you can't have large segments of agriculture going bankrupt because they can't get a return from the marketplace. As most of us know, when farmers come into our Senate offices, they have a broad agenda. Some of it we deliver; most of it we have not, despite the best efforts of a good many Members of this body. I will mention on my side alone, Senators Lugar, Roberts, Grassley, Cochran, and others. Yes, farmers want a stronger safety net, but they would much rather get their returns from the marketplace than the mailbox. They would rather have lower taxes and less regulation, more market and trade opportunities, modernized transportation options, all of which we as a body, collectively and individually, have promised them but have delivered too little. Many Senators who oppose the farm bill argue that trade and taxes and relief from regulation are what farmers need. I agree. Farmers heard that 7 years ago. It hasn't been delivered, despite the best efforts of a determined minority of us. I will continue fighting for all of those measures that are good for farmers, good for the economy, and which will significantly reduce the cost of this farm bill. In the meantime, I am going to support a responsible safety net built in to provide relief for farmers when the world demand situation and our exclusion from the world market keep prices artificially low. If we want to reduce the cost of this farm bill--and certainly all of us do--we should pass the full farm agenda, not just the farm bill. We should pass a trade bill. We should pass the energy bill, such as the bill we passed out of the Senate. I hope our House colleagues are taking a look at it because that is very good for farmers as well as for energy and the environment. We should not place more mandates on farmers every time regulators have a new idea. We should improve our land and water transportation. We should reduce taxes. We should encourage more use of farm products. If we do that, the farm bill will cost much less. American farmers will be getting their return from the marketplace rather than the mailbox, and the American farmers will be happy. The taxpayers will be happy, and we will all be happy. Farmers, just as others in the economy, should be free to fail, but they should also be free to succeed. That will not happen if we continue to ignore the rest of the farm agenda. There is another criticism of the farm bill; that is, that it provides a disincentive for international market liberalization. It will encourage foreign trade-distorting subsidies. I think the opposite is the case. I do not believe our European trade competitors find it compelling or would be persuaded if we produced a good example. In fact, they probably would find it laughable that we are thinking about how to clean up our act when they haven't cleaned up theirs. President Ronald Reagan didn't get the Soviet Union to pull its intermediate-range missiles out of Eastern Europe by saying: We are not going to do that. He put in the Pershings. He put the pressure on them. The Soviet Union collapsed. It is naive to think that we can unilaterally disarm and go into negotiations and expect to win. The same applies with food policy. Additionally, I know many Members are sensitive to editorial opinion that is decidedly against this policy. I was asked today by some reporters about an editorial in a newspaper I generally respect. They said they really condemn this as pork. I said: Normally, they write good editorials, well-reasoned and based on fact. This was not one of them. They don't know what they are talking about. Many of those newspapers are published in high-rise buildings in some of our wonderful metropolitan areas. I doubt if they know what a combine is or how you raise cattle or the impact of the world market on farmers. Still, I can't say that all the points the editorial opponents raise are invalid. But there are a great many things those people in the ivory towers take for granted. They take for granted the volume, the low price, the high quality, the unparalleled safety of our food supply and the national economic contribution made by U.S. farmers and the many suppliers who ultimately end up with the farmers' money. Editorial writers may be critical of farm policy, but they are critical with full stomachs. In the emerging countries of Asia and Africa, they say that a well-fed country has many problems, but a hungry country has but one problem. Fortunately, we don't have it. We ask our farmers to produce more with less, to accept more Federal mandates without the ability to pass costs on to consumers, and we ask them to compete in an international marketplace with competitors whose government gives much greater levels of assistance. Then we have a period of good worldwide weather that has produced surplus world production, which has ensured that market prices around the world are low. The big city papers can take our food supply for granted, but those of us who live in flyover country--the real America between the two coasts--cannot and neither can the consumers in this country and elsewhere, who are unwittingly the biggest beneficiaries of the hard labor and sacrifice of those who struggle on the farm. I do agree that those critical of this bill are raising an argument that we need to have, and that is where we draw the line. Given the numerous ad hoc disaster bills, it is clear that the status quo is yielding little discipline from a fiscal standpoint. With this new program and its strengthened and more expensive safety net, I say to farmers: The criteria for additional ad hoc disaster is now significantly more demanding, if not prohibitive. The budget issues raised by those critical are not without validity and we will have a good opportunity to see if those who support this dramatically stronger safety net will resist the impulse to pile on more and more in the months and years ahead. While I support this farm bill, I warn all farmers that like the previous farm bill, the commodity title will not increase market prices. Those who came to the floor with frequency the previous 4 years suggesting the previous farm bill was a failure because market prices were low knew better then and I hope everyone understands now that this commodity section is a safety net only. The rural development and research titles should help expand markets and reduce costs to some degree but not the commodity title. If we want a chance to increase market prices over the long term, we will have to give the rest of the farm agenda of trade, taxes, transportation, energy, and regulatory relief a fraction of the urgency we have demonstrated here in being so generous with other people's money. The President has indicated that he approves of this legislation and the House passed it on a bipartisan basis by a 2-1 margin. The farm groups and livestock groups support the legislation. I congratulate the chairman and the ranking member and those who participated and worked so hard on this conference report and urge its adoption.

Mr. BOND

Mr. BOND. Madam President, today I join the Senator from Massachusetts, Mr. Kerry, in introducing this important legislation on an issue of vital concern to small businesses. This bill, a truly bipartisan effort, represents one of the best opportunities in a long time to remove the current logjam on controlling contract bundling. We often say around here that, in some cases, all that is necessary to help small business is for government policy to stop visiting harm upon them. Contract bundling is one of those harmful policies. It eliminates small businesses from competing for contracts to sell the government some of the $200 billion in goods and services it buys every year. The Small Business Act says that small firms shall have the maximum practicable opportunity to compete for Federal contracts. This is good for small business, good for the purchasing agencies, and good for the taxpayer who pays the bills. Small business benefits from having access to a stable revenue stream while they get up-and-running. The Small Business Act recognizes how government contracting can contribute to business development and economic renewal. For example, my HUBZone program provides contracting incentives for small firms to locate in blighted neighborhoods, helping them win Federal contracts and stabilize their revenues while they develop a nongovernmental customer base. Federal agencies also benefit from small firms in Federal procurement. Many of the most innovative solutions to our problems, such as new technologies in defense readiness, come from small firms. Large business can be just as bureaucratic as the worst Federal agencies. Complex chains of command, the need to consult with the corporate headquarters, and repetitive sign-offs on a new idea that have to be cleared with Accounting, Marketing, and Human Resources can stifle innovation and creativity. The absence of all these structures can make small business able to ``turn on a dime,'' deliver new innovative products at lower cost, and clobber their big competitors. Agencies trying to carry out their governmental functions can take advantage of these innovations and deliver better quality services to our constituents. Finally, the taxpayer wins when small business competes for contracts. The more competition, the lower the prices and the higher the quality. But contract bundling gets in the way of all those benefits. To simplify the contracting process, agencies will take a bunch of small contracts and roll them into one massive contract. The result is a contract that a small business could not perform, due to its complexity or its obligation to do work in widely disparate geographic locations. A small business owner says, ``I could not perform the contract, even if I won it. So I won't even bid.'' When that happens, we all lose. During my tenure as Chairman of the Senate Small Business Committee, we took a stab at trying to control bundling. At that time, no statutory definition of bundling existed. It was like the Supreme Court trying to deal with pornography, we know it when we see it. In the Small Business Reauthorization Act of 1997, I pushed for a specific definition of bundling and created an administrative process to review instances of bundling. Agencies were supposed to make a determination whether a proposed bundle was ``necessary and justified.'' Since that time, we have seen agencies poke holes in that definition. For example, they say that a proposed contract represents a new requirement. Since it is new, it was never issued previously as separate smaller contracts, so it isn't bundling, they say. Now they don't have to do the ``necessary and justified'' determination. Or, they will point to another phrase in the current definition of bundling. Currently, a bundle involves consolidating contracts in a way that makes small business participation unlikely. If they structure a tiny piece of the contract so that a small business somewhere, someday might be able to win that piece, the rest of the massive contract isn't technically bundling. Therefore, the agency doesn't have to do the determination. This bill will close those kinds of loopholes. It builds upon some very positive language introduced in last year's Defense Authorization bill when the Senator from Michigan, Mr. Levin, proposed a draft during markup in the Senate Armed Services Committee. The Senator from Michigan noticed that it doesn't make sense for Federal agencies to avoid the ``necessary and justified'' determination. The goal of that process is to ask, does a proposed bundle make sense? Is it good value to the taxpayer and to the agency? Does it help or harm the vendor base that would be available to the agency in the future? My colleague from Michigan decided it was time to make Defense agencies complete these bundling studies, to make sure we weren't doing harm to our defense readiness through these acquisition policies. I think we need to do the studies to make sure the Small Business Act is not cast aside and ignored. Suddenly, after a long impasse on this issue, the Senators from Michigan and Massachusetts and I found we had common ground on this issue. Unfortunately, we were unable to get these positive provisions included in last year's Defense bill. That's why we are trying again. The Bush Administration sought to have a single governmentwide policy apply to all Federal agencies, not just the Defense establishment. This is a sound approach, but it would have required making changes to the governmentwide bundling policy in the Small Business Act. We were ready to agree to such a change, but our counterparts in the other body objected, citing jurisdictional claims about using an Armed Services bill to make changes in Small Business Committee jurisdiction. The bill we offer today should overcome these problems. It would make a uniform governmentwide policy, through the Small Business Act. It is a stand-alone bill. It builds upon an approach suggested by the Armed Services Committee as a reasonable one. I thank the Senator from Massachusetts for his work on this issue and I am pleased to have been at the table with him in crafting this proposal. I look forward to its enactment.

Mr. BOND

Mr. BOND. Madam President, today I join the Senator from Massachusetts, Mr. Kerry, in introducing this important legislation on an issue of vital concern to small businesses. This bill, a truly bipartisan effort, represents one of the best opportunities in a long time to remove the current logjam on controlling contract bundling. We often say around here that, in some cases, all that is necessary to help small business is for government policy to stop visiting harm upon them. Contract bundling is one of those harmful policies. It eliminates small businesses from competing for contracts to sell the government some of the $200 billion in goods and services it buys every year. The Small Business Act says that small firms shall have the maximum practicable opportunity to compete for Federal contracts. This is good for small business, good for the purchasing agencies, and good for the taxpayer who pays the bills. Small business benefits from having access to a stable revenue stream while they get up-and-running. The Small Business Act recognizes how government contracting can contribute to business development and economic renewal. For example, my HUBZone program provides contracting incentives for small firms to locate in blighted neighborhoods, helping them win Federal contracts and stabilize their revenues while they develop a nongovernmental customer base. Federal agencies also benefit from small firms in Federal procurement. Many of the most innovative solutions to our problems, such as new technologies in defense readiness, come from small firms. Large business can be just as bureaucratic as the worst Federal agencies. Complex chains of command, the need to consult with the corporate headquarters, and repetitive sign-offs on a new idea that have to be cleared with Accounting, Marketing, and Human Resources can stifle innovation and creativity. The absence of all these structures can make small business able to ``turn on a dime,'' deliver new innovative products at lower cost, and clobber their big competitors. Agencies trying to carry out their governmental functions can take advantage of these innovations and deliver better quality services to our constituents. Finally, the taxpayer wins when small business competes for contracts. The more competition, the lower the prices and the higher the quality. But contract bundling gets in the way of all those benefits. To simplify the contracting process, agencies will take a bunch of small contracts and roll them into one massive contract. The result is a contract that a small business could not perform, due to its complexity or its obligation to do work in widely disparate geographic locations. A small business owner says, ``I could not perform the contract, even if I won it. So I won't even bid.'' When that happens, we all lose. During my tenure as Chairman of the Senate Small Business Committee, we took a stab at trying to control bundling. At that time, no statutory definition of bundling existed. It was like the Supreme Court trying to deal with pornography, we know it when we see it. In the Small Business Reauthorization Act of 1997, I pushed for a specific definition of bundling and created an administrative process to review instances of bundling. Agencies were supposed to make a determination whether a proposed bundle was ``necessary and justified.'' Since that time, we have seen agencies poke holes in that definition. For example, they say that a proposed contract represents a new requirement. Since it is new, it was never issued previously as separate smaller contracts, so it isn't bundling, they say. Now they don't have to do the ``necessary and justified'' determination. Or, they will point to another phrase in the current definition of bundling. Currently, a bundle involves consolidating contracts in a way that makes small business participation unlikely. If they structure a tiny piece of the contract so that a small business somewhere, someday might be able to win that piece, the rest of the massive contract isn't technically bundling. Therefore, the agency doesn't have to do the determination. This bill will close those kinds of loopholes. It builds upon some very positive language introduced in last year's Defense Authorization bill when the Senator from Michigan, Mr. Levin, proposed a draft during markup in the Senate Armed Services Committee. The Senator from Michigan noticed that it doesn't make sense for Federal agencies to avoid the ``necessary and justified'' determination. The goal of that process is to ask, does a proposed bundle make sense? Is it good value to the taxpayer and to the agency? Does it help or harm the vendor base that would be available to the agency in the future? My colleague from Michigan decided it was time to make Defense agencies complete these bundling studies, to make sure we weren't doing harm to our defense readiness through these acquisition policies. I think we need to do the studies to make sure the Small Business Act is not cast aside and ignored. Suddenly, after a long impasse on this issue, the Senators from Michigan and Massachusetts and I found we had common ground on this issue. Unfortunately, we were unable to get these positive provisions included in last year's Defense bill. That's why we are trying again. The Bush Administration sought to have a single governmentwide policy apply to all Federal agencies, not just the Defense establishment. This is a sound approach, but it would have required making changes to the governmentwide bundling policy in the Small Business Act. We were ready to agree to such a change, but our counterparts in the other body objected, citing jurisdictional claims about using an Armed Services bill to make changes in Small Business Committee jurisdiction. The bill we offer today should overcome these problems. It would make a uniform governmentwide policy, through the Small Business Act. It is a stand-alone bill. It builds upon an approach suggested by the Armed Services Committee as a reasonable one. I thank the Senator from Massachusetts for his work on this issue and I am pleased to have been at the table with him in crafting this proposal. I look forward to its enactment.

Mr. BOND

Mr. BOND. Mr. President, we have dealt with this before. We are going to push for higher standards and fuel efficiency, but only to the extent technologically feasible to require an arbitrary figure pulled out of the air to be substituted for the procedure in the Levin-Bond amendment. It makes no sense. I urge all our colleagues who voted for the Levin-Bond amendment to support the motion to table for jobs, for safety and for consumer choice.

Mr. BOND

Mr. BOND. Madam President, I rise in opposition to the amendment by my colleague from Delaware, Mr. Carper. This amendment to the energy bill would substantially raise Corporate Average Fuel Economy, CAFE, standards with negative impacts on jobs, safety and the health of our domestic economy. On March 13, the Senate overwhelmingly passed a bipartisan amendment I wrote with my colleague from Michigan, Senator Levin. The Levin-Bond amendment mandates that the National Highway Traffic Safety Administration, NHTSA, increase CAFE standards for cars and light trucks to the maximum feasible levels. The Bond-Levin amendment replaced a provision in the original energy bill which called for significant increases in CAFE based only on a political number, not science. The Senate wisely rejected that underlying provision as being bad for American jobs, bad for highway safety and bad for consumer choice. Unfortunately, the Carper-Specter amendment on oil consumption would result in CAFE increases similar to the Kerry provision. It must be defeated. While Senator Carper's goal may be to reduce American dependence on foreign oil, the effect of his amendment would be lost factory jobs, more highway fatalities and reduced vehicle choice. Don't be fooled by arguments that Senator Carper's proposal is not a CAFE increase. The only way to meet the target under the amendment is for NHTSA to increase fuel economy standards beyond the maximum feasible level. And why would NHTSA only look at the CAFE program? Because it is the only regulatory authority currently available to pursue the mandated oil reductions under the Carper amendment! The debate on the Levin-Bond amendment was only a few short weeks ago but let me refresh your memories as to the details of this proposal which passed on a 62-38 vote. Specifically, the Levin-Bond amendment directs the Department of Transportation to increase fuel economy standards for cars and light trucks based on consideration of a number of factors including the desirability of reducing U.S. dependence on foreign oil. I agree with the sponsor of the amendment that a goal of our national energy policy should be a reduction in the amount of imported oil. That is why I included language in my amendment last month requiring NHTSA to include it in the regulatory process to set new CAFE standards. Other factors that NHTSA must consider include: technological feasibility; economic practicability; the effect of other government motor vehicle standards on fuel economy; the need to conserve energy; the effect on motor vehicle safety; the effects of increased fuel economy on air quality; the adverse effects of increased fuel economy standards on the relative competitiveness of manufacturers; the effect on U.S. employment; the cost and lead-time required for introduction of new technologies; the potential for advanced technology vehicles--such as hybrid and fuel cell vehicles--to contribute to significant fuel usage savings; and the effect of near- term expenditures required to meet increased fuel economy standards on the resources available to develop advanced technology. The Department of Transportation shall complete the rulemaking for light trucks within 15 months of enactment and shall give automobile manufacturers sufficient lead-time to comply with the new standards. The rulemaking for passenger cars shall be initiated within 6 months of enactment and shall be completed within 24 months. Each rulemaking shall be multiyear for a period not to exceed 15 model years. If DOT fails to act within the required time frame, it will be in order for Congress to consider, under expedited procedures, legislation mandating an increase in fuel economy standards, consistent with the considerations set forth above. These are the details of what the Senate adopted last month on a bipartisan vote. It is a carefully balanced proposal with firm deadlines and clear criteria. Unfortunately, the Carper amendment before us today would undermine and distort the rulemaking considerations by NHTSA. The Carper amendment returns to the notion of setting an arbitrary target--in this case, to reduce the amount of oil that can be consumed in our passenger car and light trucks in 2015. Not only would this lead to CAFE increases similar to those proposed in the original bill, but it would also force the Department of Transportation to disregard the careful balancing of criteria in its rulemakings. Indeed, DOT would have to impose a overriding element (saving a specific amount of oil) on top of the considerations that the rulemaking would otherwise try to balance. If you get nothing else out of my statement today, please simply remember that this proposed amendment will absolutely hurt consumers who choose to drive minivans and SUVs. Because the Senate adopted a measure excluding pick-up trucks from the CAFE increases, the burden on the rest of that light truck category is increased dramatically. This effect would be magnified with the adoption of the Carper-Specter amendment today. Oh, and has anyone besides me taken the time to ask NHTSA or the Department of Transportation if this amendment is even feasible? I talked to Secretary Mineta yesterday, and 2 days ago I spoke with Dr. Runge, the NHTSA Administrator. Both indicated to me that it is not feasible to guarantee specific fuel savings through CAFE standards. There are simply too many variables and assumptions preventing any guarantee of this sort. Many of the Senators who supported the Bond-Levin amendment agreed that the CAFE program is complex with many tradeoffs. That's why the experts at NTHSA are best qualified to determine future CAFE levels based on sound science and dependable data. Rather that CAFE increases based on nothing more than a political number which would have negative consequences for American jobs, highway safety and economic growth, NHTSA can determine the appropriate standard after extensive review and study. Given the complexities of the issues, there are great advantages to allowing a rulemaking process to resolve these issues rather than pre- selecting an arbitrary outcome as the Carper oil consumption amendment would do. One of the most useful reports in the entire fuel economy debate is the National Academy of Sciences study on the Effectiveness of CAFE. As I did last month, let me share with you a key finding about the safety and higher standards: In summary, the majority of the committee finds that the downsizing and weight reduction that occurred in the late 1980s most likely produced between 1,300 and 2,600 crash fatalities and 13,000 and 26,000 serious injuries in 1993. If an increase in fuel economy is effected by a system that encourages either downweighting or the production and sale of more small cars, some additional traffic fatalities would be expected. I believe that NAS report offers all of us in the Senate clear guidance and expert, scientific analysis as we debate fuel economy levels. I also point out that the NAS panel was extremely careful to caution its readers that its fuel economy targets were not recommended CAFE goals, because they did not weigh other considerations such as employment, affordability, and safety. I urge you to join me, along with numerous business and labor groups, in opposing the Carper amendment which only complicates NHTSA's effort to set appropriate CAFE standards under the mandates of the Bond-Levin amendment. If you want appropriate CAFE standards for cars and light trucks that won't harm jobs, highway safety and vehicle choice, vote ``no'' on the Carper amendment. Madam President, we have been here before. We have had this debate. We have done the bill. We got the T-shirt. Unfortunately, we are back on the floor with this again. Let me be clear: This amendment totally negates the careful direction that we put in law in the Levin-Bond amendment that the National Highway Transportation Safety Administration must use the best science and technology available to increase standards to get more fuel- efficient cars, vans, and trucks on the road. Setting an arbitrary standard which comes out of somebody's hip pocket does nothing for sound science. I have talked to NHTSA. They say there is no way we can guarantee it. There would have to be a wild estimate that would come out somewhere around where the original proposal in the underlying bill was. Do my colleagues know what we found out when we took a look at that? We have the National Academy of Sciences saying the mandated fuel efficiency previously done has resulted when we could not meet those goals through technology in cars that weighed roughly 1,000 pounds less. What happens? Thousands and thousands of people have been killed in unsafe cars. Despite what some of my friends on the other side of this issue say, you cannot mandate by law that technology will come out of thin air. We have asked the experts at NHTSA to use the National Academy of Sciences and find out what technology is available. If we can make diesel out of sludge in Pennsylvania, great, we will do it. That will be available to the National Academy of Sciences. We are changing in Missouri and Arkansas. We are using poultry waste and turning it into power. Good. Let's use all those things we can, but let us not go back on the carefully agreed upon construct that was developed in the Levin-Bond amendment and overwhelmingly supported which says: Yes, we need more fuel-efficient minivans and cars, and it is going to be based on how much science can move forward, not how much an arbitrary limitation--in terms of saving gallons which cannot be controlled solely by fuel efficiency standards--would do. There is technology. There will be increases, but it should not be arbitrary. We do not want to deprive people of the opportunity to buy the cars and minivans they need. We have talked in the past about forcing people into purple-people eaters and golf carts. Frankly, that is where you go when you have an unrealistically high CAFE standard. We need to give people the choices of vehicles that fit their needs that incorporate the new technology which is designed to save as much fuel as possible. We need to keep the jobs in the United States. We need to keep our economy going. We need not compromise safety, as would be done by this amendment. This amendment is not merely a refinement. This amendment is simply a bad shot at setting a standard that is not based on science but is based on an arbitrary figure that is infeasible, unworkable, destroys consumer choice, costs us jobs in the United States, and risks more lives on highways. I urge my colleagues not to support the Carper- Specter amendment. I reserve the remainder of my time and yield the floor.

Mr. BOND

Mr. BOND. Mr. President, I thank you for that good news, and I urge support. I ask my colleagues to support the Senators from Alaska.

Mr. BOND. They take a look at the estimates for oil produced at ANWR. And obviously, since it hasn't been drilled, we can only estimate. If it is not there, they won't drill. So this effort is all in vain, but I believe our U.S. Geological Survey and the other scientific experts have a pretty good idea. On average, if you take in the high and the low, U.S. Geological Survey says there would be an increase of domestic production by about 14 percent. If you assume the high case, there could be an increase of 25 percent of domestic production. And when you have this kind of production, this is what it means for us. People say that is not much oil. In Missouri, 71 years of consumption could be sustained by that; or Connecticut, 132 years; Minnesota, 85 years. To say that is not significant misses the picture very badly. What would be our dependence upon foreign oil? Well, without ANWR in 2020, the energy outlook is that 66.7 percent of our crude oil would come in from abroad. If you take the medium case, the medium production case, it would drop that to 62.2 percent. That is a 5-percent or 4- percent reduction. If it is the high case, it would go down to 58.7 percent, an 8-percent decline. Those percentages make a huge difference. They make the difference between whether we have a situation where we can manage it in tight consumption or whether we are up against the wall. The 1.5-million-acre Coastal Plain, called the 1002 area, of the 19.6-million-acre Arctic National Wildlife Refuge, is one of the best places to look for the oil that America needs. When large chunks of Alaska were set aside in 1980, they saved a small 1.5-million-acre Coastal Plain out of 19.6 million acres. Why did they save it? Well, we have the letter of July 3, 1980, from Senator Hatfield and Chairman Henry Jackson. They were right when they wrote this in 1980. They said: One-third of our known petroleum reserves are in Alaska, along with an even greater proportion of our potential reserves. Action such as preventing even the exploration of the Arctic Wildlife Range, a ban sought by one amendment, is an ostrich-like approach that ill-serves our nation in this time of energy crisis. ``Ostrich-like approach,'' those are the words of Chairman Jackson. He said: This is an energy issue. It is a national defense issue. It is an economic issue. It is not just an easy vote you can throw away and get some greenie points. Chairman Jackson concluded: It is a compelling national issue which demands the balanced solutions crafted by the Energy and Natural Resources Committee. The only regret I have today is that the Energy and Natural Resources Committee did not have an opportunity to craft a bill because I am confident that they know the energy situation. And they would have said that this is a necessary step. The Energy Department said: The Coastal Plain is the largest unexplored, potentially productive onshore basin in the United States. The USGS estimates there are up to 16 billion barrels of recoverable oil, enough to offset Saudi imports for 30 years. The 1002 area is not a beautiful piece of America. Congress set it aside for oil exploration. The people who talk about this give these word pictures of a magnificent forest. I don't think they have been there. When I go back home, I ask anybody: Have you been to the North Slope? Do you know what it looks like? They tell me: No. I kid my colleagues from Oklahoma that it is as attractive as a frozen Oklahoma. Nobody I know has refused to drill for oil in Oklahoma because of its pristine beauty. I have been there. I have swatted away the mosquitos. This is what it looks like in the winter. My good friend, the senior Senator from Alaska, refers to it as the proverbial Hades. It is quite a few degrees colder. When I have been there in the middle of July, it has gone up to 38 or 39 degrees, and there are those hardy souls who work out there in shirt sleeves, 39 degrees, because it is a heat wave. This is the best we can show you. This is what the 1002 area looks like. That is Kaktovik in the background. Look at this magnificent beautiful piece of Alaska. Look a little flat? Look a little same? It is. But it has its own beauty. It really does. One of the beauties is it has caribou and wildlife and birds, and they thrive up there. Here is a picture of drilling in Prudhoe Bay. This is Prudhoe Bay. If you can't see very well what it is, all these are caribou. The caribou herds thrive. The drilling does put permanent structures in there. But the temporary rock and gravel roads make a great place for caribou to calve. And the birds are there and the other wildlife is there. Somebody said we are going to destroy this great swath, this beautiful natural reserve in Alaska. Are we talking about the same thing? We are talking about 2,000 acres, roughly 3 square miles, out of the Coastal Plain of 30,600 square miles. That is less than the size of Dulles Airport and the State of South Carolina. It is 3 square miles out of 30,600 square miles. This was in the area consciously set aside, on a bipartisan basis, because Chairman Jackson and the people on the Energy Committee then realized that this was where we were going to have to get our natural resources. What would happen if we drilled and they found oil? It would mean 700,000 jobs would be created across the United States--not from a Government make-work program, but from private investment. Wildlife habitat will be protected under the world's strictest and most environmental standards. To drill out there, you have to take all the equipment in, in the midwinter on ice roads, when it is 100 to 200 degrees below zero. That is so cold that I cannot even think about it. But you do that so you don't disrupt the land. The caribou herd in and near Prudhoe Bay's oilfield is five times larger than when development began. It is five times larger. Prudhoe Bay is producing 20 percent of our Nation's oil production. Now, let me say one other thing. As a result of my personal visit up there, the people who live there, the indigenous people, the Native Alaskans, the people who live in the region, they understand that this is the way they can improve their lives. They can make a positive economic contribution to the welfare of this Nation and benefit from it. They begged us to allow them to go ahead and develop a resource that will not interfere with their fishing and their hunting and the wildlife around them. I heard it said that it would be 10 years before we got any oil. Well, it depends on how much Congress delays it, how many lawsuits. Perhaps as soon as 3 years after the first lease sale. There has already been discovery on State lands of an oilfield that extends under the Coastal Plain. We know it is there, just not how much. If the Congress were serious about it and we said we want to develop this in an environmentally sound manner and do it quickly, we could get it online. Contrary to a myth that many on the other side have spread, and as my friends from Alaska pointed out, we are not exporting the North Slope oil. None has been exported since May 2000. The average well at Prudhoe Bay produces over 550 barrels per day, more than 45 times the 12.5 barrels of oil produced per day by the average oil well in the United States. If the oil in ANWR is locked up, a lot of wells will have to be drilled to replace it, or we will be back in the situation in which we found ourselves several weeks ago. By a very significant majority, 63 Members of this body, said we want to continue to be able to give American consumers the choice to drive SUVs, light pickup trucks, or vans. We ordered the Department of Transportation to use the best scientific and technological information available to push for increased oil and petroleum efficiency, gasoline combustion efficiency, and do everything we can to increase the efficiency. But don't force unrealistic standards that merely require us to move down to smaller and smaller cars until we are driving around in golf carts. If we are going to continue to supply the energy needs that my colleagues who voted with us on the CAFE amendment said we are going to need, we need the oil coming from ANWR. This is absolutely essential for our economy, for the sound development, the business of industry, and, most of all, to supply the transportation needs of our families. For each dollar of crude oil and natural gas brought to the market, there will be $2.25 of economic activity generated through the economy. The actual impact of the ANWR oil could be anywhere from $270 billion to $780 billion. These are all good economic arguments. But this is not the only question. Keeping the oil production in the United States means we are buying less oil from overseas. We keep our domestic dollars at home. These are U.S. dollars not going to foreign countries, with leaders who may be on a mission to destroy our entire existence. If that was too subtle for some colleagues, let me explain it. Just last week, we watched Iraq announced a month-long oil export embargo to protest Israel's response to the terror campaign. Some argue that Iraq only produces 1.5 billion barrels a day, roughly 4 percent of world production. We are told Saddam Hussein is only supplying 8 percent of U.S. imports. It ought to be time that we tell the American people this country can not and should not maintain that level of dependence on Iraqi oil. Last year, we paid Saddam Hussein $6.5 billion. Does that sound like good policy? Do the American people really want to continue any efforts to benefit a tyrant such as Saddam Hussein, who continues his reckless oppression of his own people while threatening the security of the world with the development of weapons of mass destruction? Madam President, let me answer that question emphatically. The United States must not continue this type of dependence, resulting in billions of dollars going directly to one of this century's most demented and ruthless rulers. The time has come for the United States to develop its own ability to produce oil and petroleum so we don't have to depend on him. I commend President Bush for his actions in the Middle East, and I fully support him in the efforts to defend our national security. If it should occur one of these days in the near term when the President, we would hope in consultation with this body, deems it necessary, for the protection of peace and safety in the world and our own security, that we take on Saddam Hussein and his tyrannical regime once again, we must not be held hostage by the fact that they are supplying us oil. Right now, they have us over the oil barrel when we have oil and petroleum products in the United States we can develop to maintain our security. Drilling for oil in Alaska is not just a good, sound option, it is a necessity. We must decrease our dependence on foreign oil every way we can. As I said a couple weeks ago, the Senate wisely adopted reasonable, scientifically based mandates to increase our automobile fuel usage. The CAFE provisions mandate an increase in standards that will help reduce our dependence. We provide incentives for alternative fuels such as electric power, solar-powered vehicles, and other provisions that include the use of biodiesel in bus fleets and school bus systems. Yes, we must have renewables. Last week, the Senate voted in opposition to an amendment by my colleagues from California and New York that would have undermined the renewable fuels standards. I applaud my colleagues for opposing that effort because renewable standards are one important part of our energy policy. We need to make every effort to decrease our dependence on foreign sources of oil. I urge my colleagues in the strongest possible way to support the efforts of the Senators from Alaska. I have been there. I have gone with them to visit this region. I have seen the oil exploration underway. I have seen the wildlife running on those plains. Madam President, when they finish, there will not be any signs of development, and it will still be a barren, mosquito-filled plain in the summer, with its natural attributes and an absolutely hideously cold winter, and the wildlife, the birds, and the fish that thrive up there will continue to thrive. We are not destroying anything. Even if they were going in to burn and turn it upside down, we are talking about 2,000 acres--2,000 acres, just a little over 3 square miles out of 30,600 square miles. There is no way anybody can legitimately say we are going to No. 1, destroy anything, because we are not destroying it. It is not a pristine wilderness that will not survive the drilling. We have shown how it can be done, and we are only talking about a thumbnail size out of the entire area.

Mr. BOND. Madam President, I rise today to discuss what I think is one of the most important issues our Nation faces, and that is national security. Yes, this is an energy bill. More specifically, we are talking about an amendment to drill for oil in a small remote region of Alaska. What does that have to do with national security? Let's set the stage because the facts are getting lost in some wonderful rhetoric that takes me away in a dream world. I don't recognize the place I know as Alaska when I listen to it. We have tried to put out the facts. I have heard other things that are not quite so factual. Just as a beginning, over the next 20 years, U.S. oil consumption is projected to grow even after factoring in a projected 26-percent increase in renewable energy supply, which we strongly support, and a 29-percent increase in efficiency. Some people think that is outrageous. Some people have a terrible guilt trip that the United States uses so much oil we don't have enough, so we ought to give up. Drilling in ANWR reasonably could almost double our reserves. The United States has about 22 billion barrels of proven reserves, 3 percent of the world's reserves. ANWR could hold 16 billion barrels of oil more. That is almost doubling. It is adding 16 to 22 billion in our reserves. We use oil. There is no question about it. We have 5 percent of the world's population. We use 25 percent of the world's oil. But we also produce 31.5 percent of the world's total economic output. We are more efficient than the world as a whole, and we produce food and medicine and goods to improve the lives of Americans and people around the globe. Let's be serious. When we are talking about the fact that we use oil, yes, we do. There is no question about it. We need to make sure we have adequate oil reserves. We just heard some information from the Energy Information Administration that is a little outdated. There is more recently a letter of March 22 to Senator Murkowski from Mary Hutzler, Acting Administrator for Energy Information. I ask unanimous consent that a copy of the letter and the addendum be printed in the Record.

Mr. BOND

Mr. BOND. I agree with my colleagues Senator Wyden and Senator Cantwell, as to how the compromise works, and I would like to thank them for working diligently on this compromise. I am pleased we were able to make a change to the identification provision that all states can comply with. I have said repeatedly that requiring first time voters to verify their identity is a reasonable means of preventing fraud, and in fact many States already have this requirement. But I agree completely with the Senators from Washington and Oregon that voters who vote by mail, but fail to include a copy of their photo identification, should be able to cast a provisional ballot, just like voters who go to the polls without their identification. By ensuring that it is a state or local election official that is making the determination about whether a provisional vote is valid, I believe we have built in significant safeguards that will prevent fraud. I also agree that allowing election officials to verify the identity of a first time voter by matching specific information about the voter on the registration card to an existing state record with information on the voter, is a reasonable means to prevent fraud. I am happy to support this compromise and look forward to passing the final legislation later today.

Mr. BOND. Mr. President, how much time is available on this side?

Mr. BOND. I thank the Chair. I will not require that much time, but please advise me if I go over 5 minutes. Mr. President, I come back again to congratulate and thank the chairman and ranking member of this committee, Senator Dodd and Senator McConnell, for their great work. It has been 10 long, arduous months to do something that is vitally important to the health and the vitality of our system of legislative government. The 2000 election opened the eyes of many Americans to the flaws and failures of our election machinery, our voting systems, and even how we determine what a vote is. We learned of hanging chads, inactive lists, and we discovered our military votes were mishandled and lost. We learned that legal voters were turned away while dead voters cast ballots. We discovered that many people voted twice while too many were not even counted once. That is why we are here today. The final compromise bill--and it is a compromise in the true essence of the word--tries to address each of these fundamental problems we have discovered and to meet the basic test. That test, I trust all of my colleagues now understand, is that we must make it easier to vote but tough to cheat. In the 2000 elections, fraud was prevalent. Fraud was too frequently found. Among the most bizarre and fraudulent efforts that occurred in St. Louis was the filing of a lawsuit by a dead man to keep the polls open beyond closing time because he feared the long lines would prevent him from voting. That probably wasn't the only problem he had. His identification was later switched to that of a partisan political operative for a congressional candidate even though evidence showed that man had already voted that day. Unfortunately, the practice of the deceased voting was not limited to the lawsuit to keep the polls open. We have had a number of ballot registrations made in the name of people who have departed this earthly veil. Albert ``Red'' Villa registered to vote on the 10th anniversary of his death--truly a significant theological effort. The deceased mother of a prosecuting attorney in St. Louis City was also registered to vote. This was the mayoral primary of 2001 which got people excited in St. Louis because it wasn't a minor election where we just voted for the President, the Governor, the Senators, and Congress. We were talking about relevant votes there. We were talking about the race for the mayor's office which controls votes and which controls jobs in the City of St. Louis. We also had our own outrageous system of provisional voting underway in St. Louis City. People went to judges and said they didn't show up on the registration list so they asked for court orders to be permitted to vote. Some of the reasons given, which were accepted by our judiciary, were that they should be allowed to vote because they were legally registered. One of them said: I am him a Democrat. The other said: I wanted to vote for Gore. The other said: I was suffering from a mental illness. My favorite was: I am a convicted felon and didn't realize I had to reregister. That person, and 1,300 others, were allowed to vote even though it is against the law for a felon to vote in Missouri. Subsequent investigation by the secretary of state in Missouri found that 97 percent of those who were ordered to vote by judges voted illegally. They were not entitled to vote. That is why the whole structure of this bill is so important. Provisional voting will be permitted, but actually putting the ballot in the ballot box will be delayed until there has been an opportunity to ascertain that the person is a registered voter. We have seen fraud. I think perhaps it was best described by the Missouri Court of Appeals in shutting down the fraudulent effort to keep the polls open. The argument in St. Louis City was that the Democratically controlled City Election Board in the Democratic City of St. Louis was conspiring to keep the Democratic voters in St. Louis City from voting for Democratic candidates. That was the suit filed by the dead man who said that the long lines kept him from voting. The Missouri Court of Appeals said it best in its order shutting down the polls when it said: Commendable zeal to protect voting rights must be tempered by the corresponding duty to protect the integrity of the voting process. Equal vigilance is required to ensure that only those entitled to vote are allowed to cast a ballot. Otherwise, the rights of those lawfully entitled to vote are inevitably diluted. We have seen not only people who have rightfully been denied the opportunity to vote. Unfortunately, the votes of those who have the right to vote have been diluted and have been canceled because fraud has been prevalent in St. Louis, and I believe in other areas of the country. This bill goes a long way towards achieving the goal of making it easier to vote and harder to cheat. I urge the support of my colleagues for this very important bipartisan measure. I extend my thanks to the chairman and the ranking member of the Rules Committee.

Mr. BOND

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

Mr. BOND. Madam President, I rise today to address the amendment introduced by my colleagues from New York and California to do away with the renewable fuel standard. I think it is important that we correct some of the misunderstandings, misapprehensions, and misstatements of fact that have gone on in this debate. First, what does the bill do and what does it not do? The fact is that S. 517 does not require that a single gallon of renewable fuels be used in any particular State or region. The additional flexibility provided by the RFS credit trading system provisions of S. 517 will result in a much lower cost to refiners and thus to consumers. The credit trading system will ensure that ethanol is used where it is most effective. Now, according to one of the leaders in the petroleum industry, ChevronTexas: The free market will not allow a California price differential of 20-30 cents a gallon to be sustained. The market will always find a way to take advantage of a much smaller differential. Furthermore, a nationwide Federal MTBE ban provides certainty for investments and eliminates the greater use of boutique fuels, thereby lowering gasoline prices. The continuation of current policy whereby States may ban MTBE without any regard to regional coordination is more costly than a uniform Federal ban. Increasing the use of renewable fuels, such as ethanol and biodiesel, diversifies our energy infrastructure, making it less vulnerable to acts of terrorism and increases the number of available fuel options, increasing competition, and reducing consumer costs of gasoline. A review of the publicly available price information demonstrates that ethanol has been consistently less expensive per gallon in net cost to refiners than MTBE for the last 3 years. In fact, the March 4 issue of Octane Week quotes MTBE at 89 cents per gallon and ethanol at just 60 cents per gallon. Instead of higher prices, ethanol would lower pump prices. While this is undeniably true in conventional gasoline, it is also true in RFG areas. Refiners do incur a small cost per gallon to produce the RFG ethanol blendstocks, but the lower ethanol price more than makes up for the difference. Thus, replacing MTBE with ethanol should lead to reduced, not increased, consumer gasoline prices. In other words, it is not accurate to say that the price in Missouri will rise 5.9 cents per gallon or 4 cents per gallon in Wyoming. My good friend and colleague from New York tells me that in my home State of Missouri, gas prices as a result of the RFS will increase by 5.9 cents per gallon. He went on to tell us all that the increase is based on the unavailability of ethanol, the inability of us to get ethanol in Missouri. I want to assure the senior Senator from New York that we produce a lot of corn in Missouri, and our friends seem to be ignoring all of the residual economic benefits of ethanol use. For example, ethanol production increases personal and business income and results in a net savings to the Federal budget of $3.6 billion annually. Ethanol also adds over $450 million to State tax receipts. Ethanol production reduces the taxpayer burden for unemployment benefits and farm deficiency payments. When you raise the price of corn by increasing the demand, it cuts down on the amount of payments that are made under existing farm programs to people who raise corn. Ethanol production reduces the unfavorable U.S. trade balance in energy by $2 billion annually. Ethanol production increases net farm income by $4.5 billion, adding 30 cents to the value of every bushel of corn. Ethanol reduces the consumer cost of gasoline by extending supplies, providing an alternative to more costly imported oil, and leverage for independent gasoline marketers to compete against the larger, more powerful, integrated oil companies. A recent study found that doubling ethanol production would create nearly 50,000 new jobs, $1.9 billion in economic development, and increase household incomes by $2.5 billion. Some may say: Isn't the ethanol program just corporate welfare? The simple answer is no. The ethanol tax credit is provided to gasoline marketers and oil companies, not ethanol producers, as an incentive to blend their gasoline with clean, domestic, renewable ethanol. It is a cost-effective program that actually returns more revenue to the U.S. Treasury than it costs due to the increased wages, taxes, reduced unemployment benefits and, most importantly, reduced farm deficiency payments, while at the same time holding down the price of gasoline and helping the American farmer. In summary, I encourage those who support the amendment against the renewable fuels standard to come out to the heartland where the occupant of the chair and I live to see Nebraska, to see Missouri, and see what the industry is all about. They can learn the benefits of ethanol, soy diesel, biodiesel, the home-grown renewable fuels to the environment and to the communities and our economy, particularly our rural economy. Come down to my State and see what the Missouri Corn Growers Association has done to provide value-added opportunities for Missouri farmers. The Missouri Corn Growers Association and the Missouri Corn Merchandising Council provided support for two groups of Missouri farmers seeking to add value to their corn production by processing corn into ethanol. In 1994, Golden Triangle Energy of Craig, MO, and Northeast Missouri Grain Processors of Macon, MO, organized as new generation cooperatives. The latter, known as NEMOGP, broke ground for their plant on April 17, 1999. I was pleased, proud, and excited to be there. It is now producing 22 million gallons of ethanol per year, and they are in the process of doubling the capacity to make over 40 million gallons. Similarly, the prospects at Craig are also very promising, and other groups of farmers are looking to build ethanol plants and to build soy diesel plants. We are growing it, we are processing it, we are producing it, and we are ready to sell it. It is going to be good for our trade balance, for our farmers, for our economy, and for the environment. I believe when one goes to a station that offers the E85 plan--there are 100 of them nationwide: 1 in Kansas City, 2 in St. Louis, 2 in Jefferson City, MO, and they are expected to have more around the country. One can find out about the closest station by checking the Web site of the National Ethanol Vehicle Coalition. One will find one can get good cleaner burning ethanol blended gasoline, and it is available. Before we decide we are going to back off from this very wise, multiple-benefit usage of renewable fuels, come see in the heartland what a positive deal this is and come see why we in Missouri--I assume my neighbors in States around us--are proud to be using E85 ethanol and B20 soy diesel. I yield the floor. I urge my colleagues not to support the amendment. I suggest the absence of a quorum.

Mr. BOND

Mr. BOND. Mr. President, this news release will give a small idea of some of the work that has been done by law enforcement officials. I also point out the Missouri secretary of state reviewed 1,300 judge-ordered registrations on election day in Missouri. Of those 1,300, 97 percent of them were illegal. We have set up a provisional voting system that allows the election authorities, if somebody is not registered and believes they are registered, to cast a provisional vote. This provisional voting system should help those who are legitimate voters who registered where the election authority messed up. It will help make sure their votes are counted. Those who try to vote without being properly registered will be discovered and their vote will not be counted; it will not be placed in the ballot box. For those who say vote fraud does not occur, the April 4, 2002, Houston Chronicle headline reads: ``2,000 Voted Illegally in City Polling'': More than 2,000 people voted illegally in the local November elections in the Houston mayoral runoff in December, including 712 who cast ballots in city races and don't live in the city. . . . There could be a major impact in close elections. That is my point. We want to make sure the system works for those who have difficulty getting registered and those who have voted in the past have an opportunity to vote and those who have voted once do not try to vote twice. With the amendment presented by the Senator from New York, I am afraid it oversimplifies the issue and offers a remedy which will create far more problems than it solves. She has indicated that 2 million people in each of the last four Presidential elections did not have their votes counted because of unintentional voter error. From that, we are to conclude with this fix all those votes might be counted. The problem is that this 2 million number cited is the residual vote rate for those elections, meaning those ballots which are unmarked, spoiled, or where the intent of the voter could not be determined. There are people, as I believe the Senator has mentioned, who choose not to vote in races. The Carter-Ford commission estimates that is about .77, or almost eight-tenths of 1 percent, who chose not to cast a vote in a Presidential race. An MIT study says it is about half a percent. Clearly, it fluctuates from election to election. This underlying bill takes significant steps to address the problems coming from machinery, the equipment, in voter errors, and sets a national standard for error rates. The Commission will assist the States in identifying the best equipment available. Standards for notification and voter education, which is very important, are established, and there is $3.5 billion authorized to purchase machines that will comply with the standards and provide voter education. The problem we have is that some people just plain make mistakes. If it is not a voting machine problem or a voting system problem, we know there are people who just choose not to vote. They may not vote for a President or they may not vote for other races down the line. If we establish some kind of standard that says if you do not meet this standard, then the Justice Department is going to come in and sue you, you have, unfortunately, created an incentive for election poll workers to look at every ballot. Ballot secrecy goes out the window because if you know you are going to get sued and your election is going to be called off because there were too many errors, the pressure is going to be on to make sure everybody voted right. The voting officials may not be so bold as to walk into the polls and look over the voters' shoulders as they are punching the punchcard or filling out the ballot, but there is certainly a strong temptation for them to look at the ballots when they come out and to say: Excuse me, you made a mistake; you didn't vote here or you voted in too many places. Once we do that, once we try to account for a voter error, a human error, I am afraid we are going down the road of destroying the secrecy of the ballot and saying that people who are election judges and election officials are going to have to look at the ballots of each voter. We will have poll workers reviewing ballots. Under no circumstances do we want poll workers reviewing ballots before they are cast, destroying the secrecy and the privacy of the ballot. To make sure you do not violate the voter error standard, you would be forced into that position. We have dealt with bringing down the error rate the best way possible in this bill--new machines, voter education, which is extremely important. We are already seeing an increase in mail voting which does offer a compromise of a secret ballot. But with this amendment, we could see the end of the secret ballot. I am afraid it goes the wrong way. I urge my colleagues to agree to a study to determine how we can improve voter efficiency and effectiveness, but let us not set a standard that might force poll workers to reach out and touch somebody's ballot before they put it in the ballot box. I thank the Chair, and I particularly thank my colleagues who worked on this so long and so diligently. I urge all of our colleagues to support this measure, move it to conference, and get a bill back from conference that we can send to the President so that in the shortest possible time, we will have a measure in law that will make it easier to vote and tougher to cheat.

Mr. BOND. Mr. President, I want to address, very briefly, the amendment of the Senator from New York. We put too much time and effort into this without taking just a moment to express my thanks to the Senator from Connecticut, the Senator from Kentucky, and their staffs for a lot of work that has gone into this effort. It is with great pride and much relief to be back on the floor today, we hope, completing work on election reform. The 2000 election opened the eyes of many Americans to the flaws and failures of the election machinery, our voting systems, and how we determine what a vote is. We learned of hanging chads and inactive lists. We discovered our military's votes were mishandled and lost and not counted. We learned of legal voters who were turned away, while dead voters cast ballots. We discovered that many people voted twice, while too many people were not counted even once. Finally, that is why we are here today. This final compromise bill--and it is a compromise in the truest sense of the word. I have never seen any more effort to reach a compromise, to try to accommodate the legitimate concerns on all sides, than I have seen in this effort. I believe that, while nothing we do is perfect, we have gone a long way toward meeting those concerns. The $3.5 billion in this bill provided in funding over the next 5 years should make a significant improvement for States and localities to improve and update their voting systems. We also provide specific minimum requirements for the voting systems so that we can be assured that the machinery meets minimum error rates and the voters are given the opportunity to correct any errors they have made prior to their votes being cast. The bill also provides funding to help ensure that the disabled have access to the polling place and the voting system is fully accessible to those with disabilities. Nobody has been a greater champion for assuring the ability of those with disabilities to vote than the Senator from Connecticut; his passion for this is unmatched. I believe and trust that we will see a significant improvement that will be a great benefit to all of our citizens with disabilities. A new election administration commission is created to be a clearinghouse for the latest technologies and improvements. The Senator from Kentucky worked long and hard on that. We incorporate several recommendations by the Carter-Ford commission, and particularly the requirement that States set up a statewide voter registration system. That is going to help solve a lot of problems, from confused registration lists that lose voters' registrations to ineligible voters. It should keep the registration lists more up to date, and it will eliminate the duplicates and assist voters who move within a State. Then the bill also goes on to address one of my key concerns, and that is the issue of fraud. Much has been said about the issue. Much more will be said, but as the Senator from Connecticut noted when we began this long journey 10 months ago, we agreed on the basic principle--we must make it easier to vote and tougher to cheat. That ought to be everybody's goal in election reform. I think this bill meets the test and the conference report will need to meet this simple test, too. I have heard some critics--and unfortunately, it has been out there so long we have generated a backlash. Some of the critics say it is going to require every voter in America to show a photo identification before they are allowed to vote each time. Well, I have been involved in politics for a number of years, so I know the art of the big deception, as in the belief that the bigger the deception, the greater the chance you will get away with it. So to give the public, or anybody who may be watching or listening, a fighting chance to get the facts--and I hope that somebody in the media is listening today as well--let me just go through the compromise. First, as most of you know, in my home State of Missouri, in St. Louis, we have seen a number of interesting figures registering to vote recently. There was Albert ``Red'' Villa, Joline Joyce, the mother of the prosecuting attorney, or circuit attorney in St. Louis, and, of course, the famous Ritzy Meckler. Each of these people, and dogs, pulled off their remarkable feat because they were able to register by mail. Even in St. Louis it would have been hard to believe they would have gotten on the voter rolls if they registered in person. Red Villa died 10 years ago, and Ms. Joyce died slightly more recently than that. Ritzy Meckler, of course, is a lovable spaniel, a dog, that is registered to vote. All three of them signed ``their names'' on the registration rolls. So to some who say that all we need is a signature, I say that has been the source of a lot of fraud in St. Louis and, I believe, elsewhere. All we say is, if you choose to register by mail, you will need to provide some proof of identity to an election official at some point in the process before you vote the first time. Dead people and dogs need not apply. The proof of identity requirement only applies one time--the first time--to those who choose to register by mail. What does the individual need to provide? A photo identification. This will obviously be the simplest and easiest for many. Student identification, driver's licenses, and government identification all qualify. As we know, requiring an identification has become a norm for Amtrak, airline passengers, buying beer or cigarettes, or to write a check at the grocery store, or to cash a check. We recognize that everybody does not have photo identification. So we created an expansive list of alternatives: A bank statement, a paycheck, a government check, a transfer payment, a utility bill, or any other government document that is current and shows the name and address of the voter. We have made significant dollars available to States and localities to use their best efforts to find out, if there are some people who do not have any of those documents, how they can get them registered. They can go out and help people who need help who do not have the required photo identification or an official document with their name and address on it. Money is also available to expunge from the list those who are dead, who have moved, or who do not have any business voting in that State. We simply do not want the names to be registered by mail and then voted in an election with no one checking to see if they are a live human being qualified to vote in that State. It has always been a simple proposition. We must recognize that vote fraud cheats all other voters. It is a denial of a basic civil right to lose your vote because somebody not qualified to vote has cast a vote that wipes yours out. Those who took time to follow the rules, stand in line, wait their turn, and then cast their votes should not have to fear their vote will be diluted or canceled by an illegal vote. There are those who do not believe vote fraud exists. There was a political science professor in New York who told us in that great wisdom that only academics have that vote fraud is a myth: Stuffing the ballot box happens only in cartoons and old movies. Perhaps you would like to talk to three recently indicted individuals in St. Louis, indicted as a result of fraud prior to the mayoral primary in St. Louis city. Three people were charged with a combined 17 counts. They cheated by registering dead people and nonexistent people by mail. I will be happy to show it to my colleagues. I ask unanimous consent that a news release from the Office of Attorney General Jennifer M. Joyce be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, I rise today to introduce a bill that addresses an inequity facing an important segment of the small business community. This legislation is simple and straight forward, it adjusts the current tax exemption that has existed since 1942 for small property and casualty, (P&C), insurance companies so that it keeps pace with inflation. As the ranking member of the Committee on Small Business and Entrepreneurship, I have heard from many small P&C insurers in Missouri and across the Nation that they are having to consider raising their premiums simply because the tax laws have not kept pace with inflation. Under current law, mutual and stock P&C insurance companies are exempt from Federal income taxes if the greater of their direct or net written premiums in a taxable year do not exceed $350,000. For companies that grow above the $350,000 threshold, current law permits electing P&C insurance companies to be taxed only on their investment income, provided their premiums do not exceed $1.2 million. Unfortunately, these thresholds, which were last updated in the Tax Reform Act of 1986, have not been adjusted for inflation. This situation has created an unintended outcome. Take, for instance, a small P&C insurer in my State that started insuring the local farmers in the late 1980s. Over the ensuring years, the company's client base changed very little, but the insurance premiums increased gradually to keep pace with inflationary pressures. As a result, while the business itself has not grown, its premium base has and with it the loss of the tax exemption, (or the alternative tax on investment income). For the farmers and ranchers covered by the small P&C insurer, this loss is certain to mean higher insurance premiums, leaving the client with the choice of cutting coverage or paying higher costs, neither of which is a real option. And for our agricultural community over the past few years, this choice is about the last thing they need. The bill I introduce today would correct this problem by simply adjusting the $350,000 and $1.2 million thresholds to bring them up to the level they would have been this year if the 1986 tax code had included an inflation adjustment. Accordingly, the tax exemption would apply to P&C insurers with premiums that do not exceed $551,000, and the alternative for taxation of investment income would apply to companies with premiums above $551,000 but not more than $1,890,000. The bill would apply for taxable years beginning in 2002 and would index both thresholds for inflation thereafter. According to the National Association of Mutual Insurance Companies, this legislation will help at least 652 small P&C insurance companies nationwide. In my State, at least 62 small insurance companies will continue to be covered under the current tax provisions, thereby enabling them to continue providing critical insurance coverage to small businesses across Missouri. With this legislation, we have an opportunity to infuse some fairness into our tax code and at the same time help the thousands of farmers, ranchers, and entrepreneurs covered by small P&C insurers in this country. I ask my colleagues to support this legislation, and I look forward to working with the Finance Committee to see it enacted into law. I ask unanimous consent that the text of the bill be provided in the Record.

Mr. BOND

Mr. BOND. Madam President, today I wish to congratulate the National Committee for Employer Support of the Guard and Reserve, ESGR, its 4,200 volunteers and Department of Defense, DOD, staff, in celebrating 30 years of service to this Nation. The National Committee for Employer Support of the Guard and Reserve was established in 1972, the year the United States ended the Selective Service System and established an all-volunteer military force. DOD realized that support from employers and communities would be instrumental in maintaining Reserve component membership. ESGR was created to obtain employer and community support for the National Guard and Reserve and to promote the role of Reserve forces in the national defense. ESGR has lived up to the task and accomplished much more. Since 1972, with the help of the Advertising Council, Inc., ESGR has benefitted from nearly $1 billion in pro bono advertising reaching the six million employers with one or more employees in the United States. Employers have, in turn, signed ESGR Statements of Support, publicly committing to support the National Guard and Reserve. The former Chairman of the Board and CEO of General Motors, Mr. James H. Roche signed the first Statement of Support in the Office of the Secretary of Defense on December 13, 1972. The next day, President Richard Nixon signed a Statement of Support covering all Federal civilian employees. Since the inception of this program, Presidents Ford, Carter, Reagan, Bush, Clinton and President George W. Bush have all signed Statements of Support, along with hundreds of thousands of employers, including Dell Computer Corporation, Xerox, the Society for Human Resource Management and the U.S. Chamber of Commerce. To date, over 300,000 employers have signed statements of support. Additionally, the strategic alliance formed in 1998 between ESGR and the U.S. Chamber of Commerce resulted in more than 1,200 chambers of commerce nationwide signing a Statement of Support for the Guard and Reserve. ESGR offers Ombudsman services designed to provide information to employers and Reservists regarding their rights and responsibilities under the law, and to resolve conflicts through informal mediation. These services operate in cooperation with the Department of Labor. ESGR volunteers in 54 U.S. States and territories contribute thousands of hours of effort representing millions of dollars of volunteer service in support of ESGR programs, its services, and the men and women of our nation's Reserve forces. The National Committee for Employer Support of the Guard and Reserve is smart government in action. The small ESGR staff in Arlington, VA under the direction of the Assistant Secretary of Defense for Reserve Affairs provides guidance and support to a network of 4,200 volunteer business, civic, and community leaders. ESGR educates employers on their rights and obligations under the law and recognize employers who actively support employee participation in the Guard and Reserve. ESGR also educates members of the National Guard and Reserve in regards to their rights and responsibilities to the value of their employers support. Committees can be found in all 50 States, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam. With the end of the cold war, the Reserve components have been called with increasing frequency. During the Gulf War in 1990-1991, more than 250,000 Reserve component members were called to active duty to support military operations in the Persian Gulf. Since the start of Operation Noble Eagle and Enduring Freedom, more than 80,000 National Guard and Reserve troops have been activated and are playing a critical role. Thousands of employers, local and State government officials, Active and Reserve component leaders, and military members from across the Nation and around the world request ESGR's employer support expertise on a daily basis. When Guardsmen and Reservists return home following mobilization, ESGR committee members are there to provide information and support services to those in need. The U.S. Congress passed the Uniformed Services Employment and Reemployment Rights Act, USERRA, of 1994, and updated it in 1996. This law completely revised the Veterans Reemployment Rights Act of 1940. USERRA articulates the rights and responsibilities of Guard and Reserve members with regard to job protection and explains employer rights under Federal law. ESGR helps employers and Reservists understand this law and helps them informally resolve any employment conflicts that may arise. Again, I want to congratulate ESGR and its 54 ESGR committees on their 30 years of service and commend this network of over 4,200 volunteer patriots for their time and talent. They are serving their country and maintaining the much needed support of our employers and communities for the Guard and Reserve. Through the efforts of agencies like ESGR, we can call on our Reserve forces to answer the Nation's call without the fear of job loss. Thank you Madam President, and thank you ESGR.

Mr. BOND

Mr. BOND. Mr. President, I urge my colleagues in the Senate to vote in favor of S. 1499, the American Small Business Emergency Relief and Recovery Act. I thank my colleague from Massachusetts, Senator Kerry, for introducing the bill, and I am pleased to be its principal cosponsor. Since S. 1499 was introduced on October 4, 2001, 62 of our Senate colleagues have joined us as cosponsors. The measure before the Senate today is a comprehensive managers' substitute amendment to S. 1499, which incorporates significant changes that have been agreed to following lengthy negotiations with the staffs from the White House and the Office of Management and Budget, OMB. In particular, I thank Andy Card, the President's Chief of Staff, Dr. Lawrence Lindsey, Director of the National Economic Advisors, and Steve McMillin, Assistant Director at OMB, for their personal involvement in the negotiations. The managers' substitute amendment modifies S. 1499 to recognize changes in the disaster relief and credit programs at the Small Business Administration, SBA, that were enacted on January 10, 2002, in section 203 of the Department of Defense and Emergency Supplemental Appropriations for Recovery from and Response to Terrorists Attacks on the United States, P.L. 107-117 Emergency Disaster Supplemental. Enactment of S. 1499, as amended, will insure that valuable credit and management assistance will flow to small businesses that were harmed by the September 11 terrorist attacks on the World Trade Centers and the Pentagon. It is my understanding the House of Representatives is prepared to act quickly on the bill soon after the 2-week recess, so that it can be sent to President Bush for his signature in the near future. Fast action by Congress is critical. Small businesses from across the United States are continuing to struggle under the dual pressures from the economy and the aftermath of the terrorist attacks. As the ranking member of the Committee on Small Business and Entrepreneurship, I have received pleas for help from small business in Missouri and across the nation: small restaurants that have lost much of their business due to the fall off in business travel; local flight schools that have been grounded as a result of the recent terrorist attacks; and Main Street retailers who are struggling to survive. The American Small Business Emergency Relief and Recovery Act contains sound initiatives to help our nation's small businesses and their employees. We in Congress must act and act soon to help our Nation's small businesses. In response to the urgent calls for strong and effective Federal Government action to reverse the decline in the economy and stimulate a business rebound, last October I introduced the Small Business Leads to Economic Recovery Act of 2001, S. 1493, which was designed to provide effective economic stimulus in three distinct but complementary ways: increasing access to capital for the nation's small enterprises; providing tax relief and investment incentives for our small firms and the self-employed; and directing one of the Nation's largest consumers--the Federal Government--to shop with small business in America. Historically, when our economy slows or turns into a recession, the strength of the small business sector helps to right our economic ship, with small businesses leading the Nation to economic recovery. Small businesses employ over one-half of the U.S. workforce and create 75 percent of the net new jobs. Clearly, we cannot afford to ignore America's small businesses as we consider measures to stimulate our economy. S. 1499 goes to the heart of a major problem confronting thousands of small businesses today by taking on access to capital barriers. This bill is a bipartisan collaboration between Senator Kerry, and me and our staffs of the Committee on Small Business and Entrepreneurship. We have worked together to devise one-time modifications to the SBA Disaster Relief, 7(a) and 504 Loan Programs because the traditional approach to disaster relief will not address the critical needs of thousands of small businesses located at or around the World Trade Center, the Pentagon and in strategic locations throughout the United States. In New York City, it could be a year and more before many of the small businesses destroyed or shut down by the terrorist attacks can reopen their doors for business. Small firms near the Pentagon, such as those at the Reagan National Airport or Crystal City, VA, are also shut down or struggling. And there are small businesses throughout the United States that were shut down for national security concerns and continue to struggle to regain lost customers. Small enterprises located in the Presidentially declared disaster areas surrounding the World Trade Center and the Pentagon are not the only businesses experiencing extreme hardship as a direct result of the terrorist attacks of September 11. Nationwide, thousands of small businesses are unable to conduct business or are operating at a bare- minimum level. Tens of thousands of jobs are at risk of being lost as small businesses weather the fall out from the September 11 attacks. Regular small business disaster loans fall short of providing effective disaster relief to help these small businesses. The Emergency Disaster Supplemental included a provision from S. 1499 as introduced that allows small businesses to defer for up to 2 years repayment of principal and interest on their SBA disaster relief loans. Interest that would otherwise accrue during the deferment period would be forgiven. The thrust of this essential ingredient is to allow the small businesses to get back on their feet without jeopardizing their credit or driving them into bankruptcy. The managers' substitute amendment restates this key provision. The managers' substitute amendment also retains the provision permitting small businesses located in the Presidentially declared disaster areas and those small businesses directly affected by the terrorist attack to refinance existing business debt. Repayment of principal shall be deferred for disaster loans to refinance existing business debt, however, interest would accrue during the deferment period. S. 1499 would provide a special financial tool to assist small businesses as they deal with these significant business disruption. Small businesses in need of working capital would be able to obtain SBA-guaranteed ``Emergency Relief Loans'' from their banks to help them during this period. Fees normally paid by the borrower to the SBA would be eliminated, and the SBA would guarantee 85 percent of the loan. A key feature of the bill is the authorization for banks to defer repayment of principal for up to one year. This section would remain in effect for 9 months after the date of enactment of the act. My colleagues and I have heard from thousands of small businesses since the terrorist attacks that small businesses are experiencing significant hardship. The downturn in business activity, however, was clearly underway prior to September 11. The downturn was further exacerbated by the terrorist attacks. S. 1499 would provide for changes in the SBA 7(a) Guaranteed Business Loan Program and the 504 Certified Development Company Loan Program to stimulate lending to small businesses that are most likely to grow and add new employees. The managers' substitute amendment incorporates the provision from the emergency supplemental that reduces the annual fee paid by lenders from 50 basis points, 0.50 percent, to 25 basis points, 0.25 percent. In addition, the up front origination fee paid by small business borrowers would be reduced. These enhancements to the SBA's 7(a) program, and comparable reductions in 504 loan program fees, are to continue through September 30, 2004. They are designed to make the programs operate more effectively and efficiently during the period when the economy is weak and banks have tightened their underwriting requirements for small business loans. Specifically, when the economy is slowing, it is normal for banks to raise the bar for obtaining commercial loans. However, making it harder for small businesses to survive is the wrong reaction to a slowing economy. By making these adjustments to the 7(a) and 504 loans to make them more affordable to borrowers and lenders, we will be working against history's rules governing a slowing economy, thereby adding a stimulus for small businesses. Essentially, we will be providing a counter-cyclical action in the face of a slow economy with the express purpose of accelerating the recovery. The SBA has a very effective infrastructure for providing management assistance to small businesses located nationwide. The Small Business Development Center, SBDC, SCORE, Women's Business Center and Microloan programs provide much needed counseling to small businesses that are struggling or facing problems in their start-up phase. With the U.S. economy under unusual stress, many segments of the small business community are today unable to cope with daily management issues. S. 1499 would authorize expansions in these programs so that the SBDCs, the SCORe chapters and the Women's Business Centers are positioned to address the needs of a large influx of small businesses looking for help. Our bill would create special authorization for each program to provide assistance tailored to the needs of small businesses following the September 11 terrorist attacks. In addition, the bill would increase the authorization levels by the following amounts: SBDC program, $25 million, SCORE $2 million, Women's Business Centers $2 million, and Microloan technical assistance, $5 million. For small businesses that are doing business with the Federal Government section 9 of the managers' substitute amendment to S. 1499 would authorize a fund of $50 million to compensate small businesses when Federal action as the result of the terrorist attacks, has caused the costs to increase for small businesses to meet the terms of their contracts. The fund would be administered by the Department of the Treasury. The Office of Federal Procurement Policy would establish guidelines for administering the program, and the contracting agencies would consult with the SBA when determining whether an award should be made. The American Small Businesses Emergency Relief and Recovery Act is important legislation that is needed to help the many struggling small businesses. Swift passage will be very helpful to the long-term survival of many of American's small businesses, and I urge each of my colleagues to vote in favor of the bill.

Mr. BOND

Mr. BOND. Mr. President, in these perilous times, citizens who have overcome adversity to serve our nation with distinction deserve to be recognized. I rise today to pay special tribute to an American who has served with distinction as both a fighter pilot and a civilian. In a 30 year military career that included service in three foreign wars, Colonel Charles E. McGee logged over 6,300 flying hours, including over 1,100 hours on more than 400 fighter combat missions. Colonel McGee's career began with enlistment in the U.S. Army and subsequent training at the Tuskegee Army Air Field in 1942. Upon graduation in 1943, Colonel McGee flew 136 missions with the 302nd Fighter Squadron of the 332nd Fighter Group in the European African Middle Eastern Theater. Tactical missions were flown under the 12th Air Force using the P-39 Aerocobra and then, on transfer to 15th Air Force, strategic missions flying the P-47 Thunderbolt and P-51 Mustang. He returned to Tuskegee as a captain and served as a Twin-Engine Instructor until the close of the base. Colonel McGee later served in the 67th Fighter-Bomber Squadron, flying the P-51 aircraft on 100 missions during the Korean War, earning him a promotion to Major. In 1953, Colonel McGee returned to the United States to attend the Air Force Command and Staff School at Maxwell Air Base, AL. Upon graduation, he was qualified to fly the F-89 Interceptor and promoted to Lt. Colonel. In 1967, Colonel McGee received tactical Reconnaissance and RF-4C flight training and was assigned to command the 16th TAC Recon Squadron at Tan son Nhut Air Base. From there, he flew 172 missions in Vietnam, earning the Legion of Merit. After his tour in Vietnam, Col. McGee was stationed in Europe, where he served USEUR and the 7th Army in Air Liaison duty and was promoted to Colonel. He then served as Chief of Maintenance of the 50th Tactical Fighter Wing. He returned to the United States in 1971 to serve for two years at Richard Gebaur Air Force Base, MO. He served the Air Force Communications Service as Director of Maintenance Engineering and Commander of the base and the 1840th Air Base Wing before retiring in 1973. Over his career, he received many awards, including: the Legion of Merit with Oak Leaf Cluster, Distinguished Flying Cross with two Oak Leaf Clusters, Legion of Merit, Air Medal with 25 Oak Leaf Clusters, Army Commendation Medal, Air Force Commendation Medal, President Unit Citation, Korean President Unit Citation, and the Republic of Greece WWII Commendation Medal. Colonal McGee's service to his fellow citizens did not end with his retirement from the military. In 1972, he assisted in the founding of Tuskegee Airman, Incorporated. This organization is dedicated to the preservation of the Tuskegee Airman legacy and the motivation of American youth, with a focus on minority youth, toward career interests in aerospace technology. To date the organization has raised over $1.7 million and helped over 500 gifted American students of all races. Currently, Colonel McGee is serving his second term as the organization's Executive President. Throughout his life, Colonel McGee has shown extraordinary commitment to both our nation and his fellow citizens. Early in life, he overcame a society adverse to the advancement of African Americans and served with distinction in World War II, Korea and Vietnam. Even in retirement, Colonel McGee remains dedicated to the advancement of American youth and our Nation. On behalf of the citizens of Missouri and our great nation, I thank Colonel McGee for a lifetime of outstanding service.

Mr. BOND

Mr. BOND. Mr. President, I rise today to introduce the National Response to Terrorism and Consequence Management Act of 2002. This bill is designed to take a few of the very important steps necessary to put in place a national policy and plan for responding to the consequences and aftermath of acts of terrorism, including acts involving weapons of mass destruction. The cowardly terrorist attacks on September 11 on the Pentagon, the World Trade Center and Pennsylvania is one of the saddest days in the history of our Nation. However, I can personally attest that the spirit of the American people has never been stronger or more caring. Last month, I visited ground zero, I talked with survivors as well as many of the heroic men and women who continue to rebuild from our losses in the aftermath of this terrible tragedy. I have never been more touched or more proud of our Nation's ability to stand tall, and to stand unbowed. While the President has advanced a plan since September 11 which the Congress has begun to fund, there is still much work to be accomplished before we have in place the necessary protection and capacities to respond to both the threat of acts of terrorism and the consequences of such acts. In particular, we need a statutory structure that will enable the various agencies of both the states and the Federal Government to coordinate and build a Federal, State and local capacity to fully respond to acts of terrorism, including acts involving weapons of mass destruction. We must do more to ensure that states and localities have the needed resources, training and equipment to respond to threats and acts of terrorism and the consequences of such acts. In response, the President is proposing to fund FEMA at an unprecedented $3.5 billion for FY 2003 as a further downpayment to ensure that the Nation will not be caught unaware again by a cowardly act of terrorism and is fully capable of responding to both the threat and consequence of any act of terrorism. These FEMA funds are targeted to states and localities and are intended to create a safety net of First Responders with firefighters, law enforcement officers and emergency medical personnel at its heart. Despite the response to September 11, the current capacity of our communities and our First Responders vary widely across the United States, with even the best prepared States and localities lacking crucial resources and expertise. Many areas have little or no ability to cope or respond to the consequences and aftermath of a terrorist attack, especially ones that use weapons of mass destruction, including biological or chemical toxins or nuclear radioactive weapons. The recommended commitment of funding in the President's Budget is only the first step. There also needs to be a comprehensive approach that identifies and meets state and local First Responder needs, both rural and urban, pursuant to federal leadership, benchmarks and guidelines. This legislation is intended to move the Federal Government forward in developing that comprehensive approach with regard to the consequence management of acts of terrorism. The bill establishes in FEMA an office for coordinating the federal, state and local capacity to respond to the aftermath and consequences of acts of terrorism. This essentially represents a beginning statutory structure for the existing Office of National Preparedness within FEMA as the responsibilities in this legislation are consistent with many of the actions of that office currently. This bill also provides FEMA with the authority to make grants of technical assistance to states to develop the capacity and coordination of resources to respond to acts of terrorism. In addition, the bill authorizes $100 million for states to operate fire and safety programs as a step to further build the capacity of fire departments to respond to local emergencies as well as the often larger problems posed by acts of terrorism. America's firefighters are, with the police and emergency medical technicians, the backbone of our Nation and the first line of defense in responding to the consequences of acts of terrorism. The legislation also formally recognizes and funds the urban search and rescue task force response system at $160 million in fiscal year 2002. The Nation currently is served by 28 urban search and rescue task forces which proved to be a key resource in our Nation's ability to quickly respond to the tragedy of September 11. In addition, Missouri is the proud home of one of these urban search and rescue task forces, Missouri Task Force 1. Missouri Task Force 1 made a tremendous difference in helping the victims of the horrific tragedy at the World Trade Center as well as assisting to minimize the aftermath of this tragedy. These task forces are underfunded and underequipped, but, nontheless, are committed to be the front-line soldiers for our local governments in responding to the worst consequences of terrorism at the local level. I believe we have an obligation to realize fully the capacity of these 28 search and rescue task forces to meet First Responder events and this legislation authorizes the needed funding. Finally, the bill removes the risk of litigation that currently discourages the donation of fire equipment to volunteer fire departments. As we have discovered in the last several years, volunteer fire departments are underfunded, leaving the firefighters with the desire and will to assist their communities to fight fires and respond to local emergencies but without the necessary equipment or training that is so critical to the success of their profession. We have started providing needed funding for these departments though the Fire Act Grant program at FEMA. However, more needs to be done and this legislation is intended to facilitate the donation of used, but useful, equipment to these volunteer fire departments. I urge my colleagues to support this legislation. I ask unanimous consent that a summary of the bill be printed in the Record.

Mr. BOND

Mr. BOND. Mr. President, I rise today to introduce the National Response to Terrorism and Consequence Management Act of 2002. This bill is designed to take a few of the very important steps necessary to put in place a national policy and plan for responding to the consequences and aftermath of acts of terrorism, including acts involving weapons of mass destruction. The cowardly terrorist attacks on September 11 on the Pentagon, the World Trade Center and Pennsylvania is one of the saddest days in the history of our Nation. However, I can personally attest that the spirit of the American people has never been stronger or more caring. Last month, I visited ground zero, I talked with survivors as well as many of the heroic men and women who continue to rebuild from our losses in the aftermath of this terrible tragedy. I have never been more touched or more proud of our Nation's ability to stand tall, and to stand unbowed. While the President has advanced a plan since September 11 which the Congress has begun to fund, there is still much work to be accomplished before we have in place the necessary protection and capacities to respond to both the threat of acts of terrorism and the consequences of such acts. In particular, we need a statutory structure that will enable the various agencies of both the states and the Federal Government to coordinate and build a Federal, State and local capacity to fully respond to acts of terrorism, including acts involving weapons of mass destruction. We must do more to ensure that states and localities have the needed resources, training and equipment to respond to threats and acts of terrorism and the consequences of such acts. In response, the President is proposing to fund FEMA at an unprecedented $3.5 billion for FY 2003 as a further downpayment to ensure that the Nation will not be caught unaware again by a cowardly act of terrorism and is fully capable of responding to both the threat and consequence of any act of terrorism. These FEMA funds are targeted to states and localities and are intended to create a safety net of First Responders with firefighters, law enforcement officers and emergency medical personnel at its heart. Despite the response to September 11, the current capacity of our communities and our First Responders vary widely across the United States, with even the best prepared States and localities lacking crucial resources and expertise. Many areas have little or no ability to cope or respond to the consequences and aftermath of a terrorist attack, especially ones that use weapons of mass destruction, including biological or chemical toxins or nuclear radioactive weapons. The recommended commitment of funding in the President's Budget is only the first step. There also needs to be a comprehensive approach that identifies and meets state and local First Responder needs, both rural and urban, pursuant to federal leadership, benchmarks and guidelines. This legislation is intended to move the Federal Government forward in developing that comprehensive approach with regard to the consequence management of acts of terrorism. The bill establishes in FEMA an office for coordinating the federal, state and local capacity to respond to the aftermath and consequences of acts of terrorism. This essentially represents a beginning statutory structure for the existing Office of National Preparedness within FEMA as the responsibilities in this legislation are consistent with many of the actions of that office currently. This bill also provides FEMA with the authority to make grants of technical assistance to states to develop the capacity and coordination of resources to respond to acts of terrorism. In addition, the bill authorizes $100 million for states to operate fire and safety programs as a step to further build the capacity of fire departments to respond to local emergencies as well as the often larger problems posed by acts of terrorism. America's firefighters are, with the police and emergency medical technicians, the backbone of our Nation and the first line of defense in responding to the consequences of acts of terrorism. The legislation also formally recognizes and funds the urban search and rescue task force response system at $160 million in fiscal year 2002. The Nation currently is served by 28 urban search and rescue task forces which proved to be a key resource in our Nation's ability to quickly respond to the tragedy of September 11. In addition, Missouri is the proud home of one of these urban search and rescue task forces, Missouri Task Force 1. Missouri Task Force 1 made a tremendous difference in helping the victims of the horrific tragedy at the World Trade Center as well as assisting to minimize the aftermath of this tragedy. These task forces are underfunded and underequipped, but, nontheless, are committed to be the front-line soldiers for our local governments in responding to the worst consequences of terrorism at the local level. I believe we have an obligation to realize fully the capacity of these 28 search and rescue task forces to meet First Responder events and this legislation authorizes the needed funding. Finally, the bill removes the risk of litigation that currently discourages the donation of fire equipment to volunteer fire departments. As we have discovered in the last several years, volunteer fire departments are underfunded, leaving the firefighters with the desire and will to assist their communities to fight fires and respond to local emergencies but without the necessary equipment or training that is so critical to the success of their profession. We have started providing needed funding for these departments though the Fire Act Grant program at FEMA. However, more needs to be done and this legislation is intended to facilitate the donation of used, but useful, equipment to these volunteer fire departments. I urge my colleagues to support this legislation. I ask unanimous consent that a summary of the bill be printed in the Record.

Mr. BOND

Mr. BOND. Reserving the right to object, the Senator from Arkansas has an amendment that I plan to cosponsor. I do not think it will be controversial. We do not have it fully cleared. I talked to the Senator from Arizona. He does not seem to have an objection. I ask if the Senator from Arkansas might be permitted to go.

Mr. BOND. Mr. President, I particularly appreciate the great work of my colleague from Arkansas. There is a lot of rivalry across the border, but on this one, the Senators from Arkansas and Missouri and many other States are working together. I have just come from a very exciting session outside with the National Biodiesel Board Assistant Secretary, J. D. Penn; USDA; Congressman Hulshof; members of the Missouri Soybean Merchandising Council talking about the benefits that soy diesel can provide to our environment, to reducing our dependence on imported oil, and to strengthening our rural economy. They had a wonderful old soy diesel truck that the Missouri Soybean Council first brought here 10 years ago. That baby is still running, still smells sweet. You follow that diesel down the road, you don't get smoke coming out of it that smells like burning tires. Think of french fries. It is not only cleaning up the air, but it is using a renewable fuel. We have been talking about renewable fuels; they are doing it. They are doing it in my State and Arkansas and Illinois and Iowa and Delaware, I gather. It works. This is a fuel that doesn't require special kinds of newfangled engines. Right now the B-20 blend is being used in major bus fleets. The St. Louis Bi-State Transit Authority has agreed to use 1.2 million gallons of soy diesel in a B-20 blend. We are working with the Kansas City Area Transit Authority, which covers Kansas and Missouri, to use it. We have worked with Ft. Leonardwood in Missouri to train soldiers using soy diesel for battlefield smoke rather than petroleum diesel. Again, the real problem is that soldiers get hungry when they smell that soy diesel smoke. I think it is particularly useful because studies have shown there are dangers from using regular diesel in school buses, and soy diesel can significantly clean up the emissions from buses as well. What we are doing is very simple, as my good friend from Arkansas has already pointed out. We are just changing a qualification or limitation that was in the 1992 Energy Policy Act. We have not seen the progress we expected under that act, also known as EPACT, to displace 10 percent petroleum by 2000 and 30 percent by 2010. One of the problems is the limitations on the use of biodiesel or soy diesel because they don't require alternative-fueled vehicles. Incidentally, the CAFE amendment proposed last week by the Senator from Michigan and myself and adopted on the energy bill specifically mandated that the alternative-fueled vehicles that are mandated in the existing act actually use alternative fuels. And soy diesel is one way of getting there. What we believe is important under the Energy Policy Act is to allow 100 percent of the usage of biodiesel to be applied toward the requirement. Now, the fleets that are using it include the Army, Air Force, Marines, NASA, Department of Agriculture, national parks, State departments of transportation, in Missouri, Iowa, Ohio, Virginia, Maryland, and others, and public utilities, such as Commonwealth Edison, Georgia Power, Kansas City Power and Light, and Duke Energy. These fleets have found the biodiesel fuel use option to give them more flexibility to comply with their requirements, while more directly addressing the original intent of EPACT--displacing foreign petroleum sources. These fleets, particularly public utility fleets, that are strapped for resources have urged Congress to lift the 50-percent limitation on biodiesel fuel use credits. In addition to more directly addressing the primary intent of EPACT, the biodiesel fuel use provision serves to address the secondary intent of EPACT, which is providing for cleaner air emissions. According to Government estimates, 90 percent of heavy-duty fleet emissions come from the oldest vehicles in the fleet. New vehicles that are being purchased are much cleaner. Biodiesel offers a solution to cleaning up the emissions of older vehicles. Lifting the 50-percent limitation on biodiesel--which does not exist for any other alternative fuel--will serve to enhance the effectiveness of the EPACT program. Biodiesel offers one of the best ways immediately to reduce our reliance on foreign petroleum through the use of our existing national infrastructure and current and future diesel technology. I would love to discuss the benefits of soy diesel at great length. If anybody has any questions, the Senator from Arkansas or I will be more than happy to discuss them. But given the fact that we do have many contentious provisions and amendments to discuss, we will limit our comments, unless somebody wants to get into a debate. We welcome the opportunity to provide more information on it. With that, I simply urge all of my colleagues to support this amendment. It has tremendous bipartisan support in the heartland. I think, as more people look at it, this should be overwhelmingly accepted. I urge colleagues to look at it and ask questions and support the amendment. I yield the floor.

Mr. BOND

Mr. BOND. Mr. President, I rise today to introduce the Small Business Investment Company Capital Access Act of 2002, whose purpose is to increase the amount of venture capital available to small businesses. I am pleased that my good friend from Iowa, Senator Grassley, the ranking member on the Senate Finance Committee, has agreed to be the principal cosponsor of this important bill. During the past 18 months, there has been a significant contraction of the private-equity market. During this same period, the Small Business Administration's Small Business Investment Company program has taken on a significant role in providing venture capital to small businesses seeking investments in the range of $500,000 to $3 million. Small Business Investment Companies, SBICs are government-licensed, government-regulated, privately managed venture capital firms created to invest only in original issue debt or equity securities of U.S. small businesses that meet size standards set by law. In the current economic environment, the SBIC program represents an increasingly important source of capital for small enterprises. While Debenture SBICs qualify for SBA-guaranteed borrowed capital, the government guarantee forces a number of potential investors, namely pension funds and university endowment funds, to avoid investing in SBICs because they would be subject to tax liability for unrelated business taxable income, UBTI. More often than not, tax-exempt investors generally opt to invest in venture capital funds that do not create UBTI. As a result, 60 percent of the private-capital potentially available to these SBICs is effectively ``off limits.'' The Small Business Investment Company Capital Access Act of 2002 would correct this problem by excluding government-guaranteed capital borrowed by Debenture SBICs from debt for purposes of the UBTI rules. This change would permit tax-exempt organizations to invest in SBICs without the burdens of UBTI record keeping or tax liability. In 1958, Congress created the SBIC program to assist small business owners in obtaining investment capital. Forty years later, small businesses continue to experience difficulty in obtaining investment capital from banks and traditional investment sources. Although investment capital is readily available to large businesses from traditional Wall Street investment firms, small businesses seeking investments in the range of $500,000-$3 million have to look elsewhere. SBICs are frequently the only sources of investment capital for growing small businesses. Often we are reminded that the SBIC program has helped some of our Nations best known companies. It has provided a financial boost at critical points in the early growth period for many companies that are familiar to all of us. For example, when Federal Express needed help from reluctant credit markets, it received a needed infusion of capital from two SBA-licensed SBICs at a critical juncture in its development stage. The SBIC program also helped other well-known companies, when they were not so well-known, such as Intel, Outback Steakhouse, America Online, and Callaway Golf. What is not well known is the extraordinary help the SBIC program provides to Main Street America small businesses. These are companies we know from home towns all over the United States. Main Street companies provide both stability and growth in our local business communities. A good example of a Main Street company is Steelweld Equipment Company, founded in 1932, which designs and manufacturers utility truck bodies in St. Clair, Missouri. The truck bodies are mounted on chassis made by Chrysler, Ford, and General Motors. Steelweld provides truck bodies for Southwestern Bell Telephone Co., Texas Utilities, Paragon Cable, GTE, and GE Capital Fleet. Steelweld is a privately held, woman-owned corporation. The owner, Elaine Hunter, went to work for Steelweld in 1966 as a billing clerk right out of high school. She rose through the ranks of the company and was selected to serve on the board of directors. In December 1995, following the death of Steelweld's founder and owner, Ms. Hunter received financing from a Missouri-based SBIC, Capital for Business, CFB, Venture Fund II, to help her complete the acquisition of Steelweld. CFB provided $500,000 in subordinated debt. Senior bank debt and seller debt were also used in the acquisition. Since Ms. Hunter acquired Steelweld, its manufacturing process was redesigned to make the company run more efficiently. By 1997, Steelweld's profitability had doubled, with annual sales of $10 million and 115 employees. SBIC program success stories like Ms. Hunter's experience at Steelweld occur regularly throughout the United States. In 1991, the SBIC program was experiencing major losses, and the future of the program was in doubt. Consequently, in 1992 and 1996, the Committee on Small Business worked closely with the Small Business Administration to correct deficiencies in the law in order to ensure the future of the program. Today, the SBIC Program is expanding rapidly in an effort to meet the growing demands of small business owners for debt and equity investment capital. And it is important to focus on the significant role that is played by the SBIC program in support of growing small businesses. When Fortune Small Business compiled its list of 100 fastest growing small companies in 2000, 6 of the top 12 businesses on the list received SBIC financing during their critical growth year. The Small Business Investment Company Capital Access Act of 2002 is important for one simple reason: once enacted it paves the way for more investment capital to be available for more small businesses that are seeking to grow and hire new employees. According to the National Association of Small Business Investment Companies, NASBIC, a conservative estimate of the effect of this amendment would be to increase investments in Debenture SBICs by $200 million from tax-exempt investors in the first year and $400 million in the second year. Government-guaranteed SBIC leverage commitments equal to $400 million in year one and $800 million in year two would be added to the private capital. Thus, total year one capital available for investment would equal $600 million and total year two capital would equal $1.2 billion. Data developed by Venture Economics for the period 1970-1999 indicates that one job is created for every $22,600 investment in a small company. At that rate, this bill could be responsible for the creation or support of as many as 62,000 jobs within the next two years, whether within companies receiving investments directly or within those firms benefiting indirectly through increased sales of goods and services to the former companies. And the cost? Industry experts estimate that if the change were effective now, there would be less than a $1 million in lost tax revenues. About $1.5 billion in private capital is invested in Debenture SBICs. A NASBIC poll of Debenture SBICs indicates $30.3 million of that amount is from tax-exempt investors. For the previous 10 years, Debenture SBIC returns have averaged 7.78 percent. Applied to the $30.3 million, that would result in lost taxable income of $2.36 million per year. If all of that were taxed at the top 39 percent rate, the tax revenue loss would be $922,000 per year. The cost is low and the potential for economic gain is great. Passage of the bill will make the Government's existing SBIC program more effective in providing growth capital for America's small business entrepreneurs. And most importantly, it will provide sorely needed capital for the sector of our economy that provides about 75 percent of the net new jobs, small businesses. That is a real stimulus that would cause new investments to be made and the creation of critically needed new jobs. Our economy is primed for this kind of support, and I urge my colleagues to support this important bill. I ask unanimous consent that the text of the bill be printed in the Record.