John Cornyn

Mr. CORNYN

Mr. CORNYN. Mr. President, I rise today to address the Senate with some regret and with somewhat of a heavy heart. I believe in the rule of law. Indeed, this Nation was built on the rule of law, the ultimate strength of our institutions that make up our representative democracy. So it saddens me, along with many of my distinguished colleagues, when I witness the abject failure of one of these institutions. Nowhere has this institution met with greater failure than in the area of judicial nominations. Nearly two years ago, President Bush announced his first class of nominees to the Federal court of appeals. Five of the eleven nominees have not had a single vote in the Senate two years later. This list includes Justice Priscilla Owen, with whom I served on the Texas Supreme Court, and whose nomination is now pending before this body. Two years is too long. I believe the Senate has reached a new low in recent months, with the unprecedented use of a filibuster of dubious merit that blocks an exceptionally qualified nominee who enjoys the support of a bipartisan majority. If we were allowed to vote, I am convinced that a bipartisan majority of the Senate would today vote to confirm Justice Priscilla Owen to the Fifth Circuit Court of Appeals. This dismal political anniversary indicates the true range of the failure of the judicial confirmation process in this body. This process has become unnecessarily but increasingly bitter and destructive, and it does a terrible disservice to the President, to Senators, to nominees, and ultimately to the American people. I do not know anyone who truly believes in their heart of hearts that the process works now the way it should. I believe most reasonable people looking at this process from the outside would agree with me that the process is broken. But the question now becomes, is it broken without hope of repair? Today I announced that the Judiciary Committee's Subcommittee on the Constitution will convene a hearing on reform of the broken judicial confirmation process. This hearing will allow distinguished Members of the Senate, on a bipartisan basis, as well as the Nation's leading constitutional experts, the opportunity to discuss the serious constitutional questions raised by the obstruction of judicial nominations. We will address the problems facing the Senate and the Federal judiciary, and we will consider and debate potential solutions and reforms. Yes, I believe two years is too long. Specifically, it is too long for a candidate as worthy and as qualified as Justice Priscilla Owen. Of the nominees currently pending before the Senate, no one has waited longer than Justice Owen for a vote on the Senate floor on a judicial nomination--no one. As a former state supreme court justice who served with Justice Owen for three years, and now as a member of the Senate Judiciary Committee which carefully considered and endorsed her nomination to the Federal bench last month, I firmly believe Justice Owen deserves to be confirmed to the Court of Appeals for the Fifth Circuit. Of course, the Fifth Circuit covers my home State of Texas as well as the States of Mississippi and Louisiana. If the Senate applies a fair standard, if we continue to respect our Constitution, Senate traditions, and the fundamental democratic principle of majority rule, she will be confirmed. The arguments of those who oppose Justice Owen's nomination can be summed up in one phrase: Don't confuse us with the facts. The facts are these: First, the American people are in desperate need of highly qualified individuals of the greatest legal talent and legal minds to fill the numerous vacant positions on the Federal bench, particularly those on the Fifth Circuit Court of Appeals, whose three vacancies are all designated judicial emergencies by the U.S. Judicial Conference. Second, we must ensure that all judicial nominees understand that judges must interpret the law as written and not as judges or special interest groups would like them to be written. In other words, the judiciary must be a means by which the laws that are passed by Congress and signed by the President are implemented in the daily lives of the American people. The Constitution does not comprehend nor is it appropriate for judges to serve as a super-legislative body or to serve as another legislative branch in a black robe. Of course, when it comes to interpreting the law faithfully and avoiding the pressure of special interest groups, Justice Owen satisfies both of these standards with flying colors. She is quite simply, by any measure, an outstanding jurist. The facts are testimony to her ability and her intelligence. Justice Owen graduated at the top of her class at Baylor Law School and was an editor of the Law Review at a time when few women entered the legal profession. She received the highest score on the bar examination. And she was extremely successful in the private practice of law for seventeen years before joining the bench. Since she has become a judge about eight years ago, she has served with enormous distinction on the Texas Supreme Court. In her last election to the Texas Supreme Court, she was endorsed by virtually every major Texas newspaper, and most recently when she was reelected she received the vote of 84 percent of those who cast a vote in the election. She has the support of prominent Texas Democrats and Republicans alike, Democrats such as former members of the Texas Supreme Court, Chief Justice John Hill and Justice Gonzales, as well as a long list of former presidents of the State bar, and leaders in the legal profession in my State. The American Bar Association that provides some analysis of judicial nominees, an objective analysis, has rated her well qualified, a rating that some of my colleagues used to refer to as ``the gold standard,'' but which they now conveniently choose to ignore. I simply cannot fathom how any judicial nominee can receive all these accolades from opinion leaders, from constituents, from legal experts across the political spectrum, unless the nominee is both an exceptionally qualified lawyer, a judge who respects the law, and a person who steadfastly refuses to insert his or her own political beliefs into the judging of cases. Based on this remarkable record of achievement and success, of eloquent and evenhanded rulings, it should come as no surprise that Justice Owen has long commanded the support of a bipartisan majority of the Senate. I would like to take a couple of moments to talk about my own personal observations while serving with Justice Owen on the Texas Supreme Court. She and I served together on that court for three years--from the time she joined the court in January 1995 until the time I left the court after serving seven years in October of 1997. During those three years, I had the privilege of working closely with Justice Owen. I had the opportunity to observe on a daily basis precisely how she approaches her job as a judge, how she thinks about the law, and what she thinks about the job of judging in literally hundreds, if not thousands, of cases. I spoke with and indeed debated in conference with Justice Owen on countless occasions about how to faithfully read and follow statutes and how to decide cases based upon what the law is--not based on some result we would like to see achieved. I saw her taking careful notes, pulling down the law books from the shelves and studying them with dedication and diligence. I saw how hard she works to faithfully interpret and apply what the Texas legislature had written, without fear and without favor. Not once did I ever see her attempt to pursue some political agenda in her role as a judge, or try to insert her own belief as opposed to the intent of the legislature or some precedent from a higher court in the case at hand. To the contrary, I can tell you from my personal observation that Justice Owen feels very strongly that judges are called upon--not as legislators or as politicians, but as judges--to faithfully read statutes on the books and interpret and apply them faithfully in cases that come before the court. I can testify from my own personal experience, as her former colleague and as a fellow justice, that Justice Owen is an exceptional judge who works hard to follow the law and enforce the will of the legislature. She is a brilliant legal scholar and a warm and engaging person. To see the kind of disrespect the nomination of such a great Texas judge has received in this body is disappointing and really beneath the dignity, I believe, of this institution. It is hard to recognize the caricature that opponents of this nominee have drawn. Unfortunately, as a Member of the Senate Judiciary Committee who has had a chance now to vote on a number of President Bush's nominees for the Federal bench, I have seen that the practice of vilifying and marginalizing and demonizing President Bush's judicial nominees is becoming all too common. Indeed, I began to wonder whether there are any good, honorable people with distinguished records in the legal profession or in the judiciary who will submit their names for consideration by this body, knowing that, regardless of the facts, regardless of the truth, they will be painted as some caricature not of what they really are, but of what others have cast them to be, when in fact the truth is far different, and with no justification. It pains me to see what can only be called the politics of personal destruction played out in the course of the judicial confirmation process. We can and we must do better. The special interest groups, and the minority in this body--who oppose even calling a vote on Justice Owen have no real arguments to oppose her nomination, at least none based in fact or any that would withstand scrutiny under any fair standard. Their past record shows these groups who have cast aspersions on many highly qualified nominees--many of whom currently serve on the Federal bench--their attacks against judges are simply not credible. For example, these opponents of a bipartisan majority who would vote to confirm Justice Owen today are the very same folks who predicted that Justice Lewis Powell's confirmation would mean that ``justice for women will be ignored.'' Justice Owen's opponents are the same folks who argued that Justice John Paul Stevens had demonstrated ``blatant insensitivity to discrimination against women'' and ``seems to bend over backwards to limit'' rights for all women. Justice Owen's opponents are the same folks who testified that confirming David Souter to the United States Supreme Court would mean ``ending freedom for women in this country''-- the same folks who said they ``tremble for this country if you confirm David Souter''--who even described now-Justice Souter as ``almost Neanderthal'' and warned that ``women's lives are at stake'' if the Senate were to confirm him. How many times must these irresponsible and baseless allegations be made before we finally say these special interest groups have no credibility when it comes to judicial confirmations? Their claims about Justice Owen are no more accurate and no less hysterical. It reminds me of the boy who cried wolf. After these repeated charges and accusations and shrill attacks, which typically turn out--certainly in the cases I mentioned--to be utterly baseless and unfair, it makes you wonder just how credible these groups think they really are, or how long their arguments will continue to have currency in this body or in the media. It also makes you wonder whether these groups make their claims not because they actually believe they are true, but in order to achieve their own political aims--in order to defeat judges nominated by this President, who believe that a judge's role is not to be an activist in a black robe or a super legislator. But I believe these shrill attacks are made with one purpose and one purpose only--to scare people and to support unsubstantiated and baseless attacks against highly qualified nominees like Justice Owen. In the case of Justice Owen, their attacks are true to form. And they conform to their past patterns and practices--for they are like their attacks of the past, unfair and without foundation either in fact or in law. For example, some of Owen's detractors claim she rewrites statutes in order to further her own political agenda. That is a pretty incredible charge in light of her ABA rating of well qualified, which was unanimous, her strong bipartisan backing, and her enthusiastic support from Texans, people who know her best. It is also a baseless charge. To ostensibly prove their point, Justice Owen's opponents point out that on occasion, other justices on the Texas Supreme Court have written opinions saying Justice Owen sometimes was rewriting statutes in order to achieve a particular result. That is an absurd standard to apply in a Senate confirmation, for reasons I will detail now. All judges of good faith struggle to read statutes and other legal texts carefully, and faithfully. In close and difficult cases--and the docket of the Texas Supreme Court is chock full of them--judges will often disagree about the proper and most correct legal interpretation. Indeed, we establish courts of multiple members--nine members--a collegial decision-making body, believing that judges will sometimes disagree, but in that decision-making process, that there will be a full and fair debate about the various positions, about the various interpretations, and that ultimately majority rule will win out and a case will be fully and finally decided. But when disagreements occur, a judge may naturally conclude that his or her own reading of a statute is correct. That is why they will decide the case in the way they choose, based on a belief that their interpretation of a statute is correct. And, of course, it only follows that if I believe, in deciding a case, that my interpretation of the statute is correct, that the interpretation of the statute by someone who achieves a different result is not correct. Now, that is not the final word. Obviously, the final word is the decision of the majority of the court which decides, for all practical purposes, not necessarily in the abstract, but for all practical purposes, what the correct result is, so that the people in our States and across the country can know what the rules are and apply them with some predictability. I would point out that practically everyone with any significant judicial experience has faced the same criticism that Justice Owen has received in terms of rewriting statute. Yet if Justice Owen's opponents are to be taken seriously, any judge who has been criticized of rewriting a statute is presumptively unfit for the Federal bench. As I pointed out at Justice Owen's confirmation hearing last month, such an absurd standard would exclude practically all of her current and past colleagues on the Texas Supreme Court. Such an absurd standard would also disqualify numerous members of the U.S. Supreme Court, people with whom Justice Owen's opponents are known to agree. For example, in 1971, Justice Hugo Black and William O. Douglas sharply criticized Justices William Brennan, Harry Blackmun, and others, stating that the ``plurality's action in rewriting this statute represents a seizure of legislative power that we simply do not possess.'' In a 1985 decision, Justice John Paul Stevens accused Justices Lewis Powell, Sandra Day O'Connor, and Byron White of engaging in ``judicial activism.'' Countless other examples pervade the U.S. Reports. Would Justice Owen's opponents and detractors apply the same standard and exclude those Justices with whom they tend to agree from Federal judicial service? Of course not. It is a double standard. It applies to Justice Owen but not to judges who they would prefer. But fairness only dictates that Justice Owen not be made to suffer from an absurd and unreasonable double standard. I remind my colleagues that just last year, the Democrat-controlled Senate confirmed Professor Michael McConnell to the Federal court of appeals by unanimous consent, even though Judge McConnell, like Justice Ruth Bader Ginsburg and liberal law professors and commentators, has publicly criticized the analysis of several Supreme Court rulings, including Roe v. Wade. That is not something, however, that Justice Owen has done. Now, don't get me wrong. I am glad that Judge McConnell was confirmed. He is an exceptional jurist who is already proving to be a fine judge on the Federal court of appeals. But his case illustrates the inherent foolishness of using ideological litmus tests when assessing the abilities and evenhandedness of judicial nominees. Mr. President, I can tell you from personal experience, when you put your left hand on the Bible, and raise your right hand, and take an oath as a judge, you change. Your job changes. No longer are you an advocate for a particular position in a court of law that you hope some court will embrace. No longer are you a legislator--assuming you have been a legislator--used to making the law or affecting public policy in a very stark and direct way. Mr. President, when you raise your right hand, and put your left hand on the Bible, and take a sacred oath to perform the duties of a judge, you change. And, indeed, Justice Owen has been true to that oath and has faithfully discharged her responsibilities as a judge, and will do so on the Fifth Circuit Court of Appeals if this body would simply vote on her nomination. I want to spend a few moments talking about filibusters. Clearly, debate is important. In a body such as the Senate, this is one place where we know if there is a difference of opinion on any issue, if there are competing points of view, that there will be a full debate. Debate is, indeed, the only way to ensure we make known to each other our views and our values. It is the only way to ensure we have the opportunity to make our arguments known and to respond to the arguments of others; to appeal to the public and reasonable people who will assess those arguments and achieve or arrive at a judgment on their own about what they believe, what they do not believe, which arguments have value and which have no value, which arguments are supported by facts or evidence and which are baseless. It is the only way to ensure that each of us can be convinced we have been given at least the opportunity to persuade others and to appreciate the wisdom of our respective positions. But for democracy to work, and for the fundamental democratic principle of majority rule to prevail, the debate must eventually end, and we must eventually bring matters to a vote. As Senator Henry Cabot Lodge famously said about filibusters: ``To vote without debating is perilous, but to debate and never vote is imbecile.'' So let's have a debate about this exceptional nominee. And after we have had the debate, let's vote. There should not be a filibuster. A minority of the Senate should not try to impose what is in effect a supermajority requirement for confirming judicial nominees, operating under the constant threat of filibuster. The Constitution makes clear when the Founders intended to require a supermajority of this body to act. It specifies that two-thirds of each House shall be necessary to override a Presidential veto on legislation, and that two-thirds of each House shall be necessary to amend the Constitution, subject to the ratification by the people. It provides that two-thirds of the Senate shall be necessary to convict an officer pursuant to an impeachment trial, and that two-thirds of the Senate shall be necessary to consent to the ratification of treaties. It does not say that a supermajority shall be necessary to confirm a President's judicial nominees. And it is well-settled and well- established law, as a matter of both Senate practice and Supreme Court precedent, that majority rule is the norm, whenever the text of the Constitution does not expressly provide otherwise. The Constitution vests the advice-and-consent function in the entire Senate, not just in the Senate Judiciary Committee. During the last Congress, the Senate Judiciary Committee refused to report Justice Owen's nomination out to the entire Senate. The committee, it should be obvious, does not speak for the entire Senate. Indeed, the committee itself could have reconsidered the nomination and could have reported Justice Owen to the floor even after it had previously refused to do so. The Constitution requires elections to make sure that the Senate remains accountable to the people. To insist that a new Senate cannot, after an intervening election, reconsider legislation or a nomination rejected by a previous Senate is to reject the very principle of democracy and accountability. Accordingly, there is no Senate tradition that forbids the President from renominating an individual previously rejected by the full Senate, let alone by the Senate Judiciary Committee. Quite to the contrary, there is a wealth of precedent for such re-nominations. As recently as 1997, the Senate Judiciary Committee refused to report Bill Lann Lee to the entire Senate. Yet President Clinton not only renominated Lee in subsequent sessions of the Senate, he even gave Lee a recess appointment in 2000 without triggering substantial opposition from the Senate. I am not asking for the Senate to depart from its traditions. Indeed, the only departure from tradition that is occurring today is the filibuster of Miguel Estrada and now Priscilla Owen, something that has never happened before to a circuit court nominee. I hope we have a good, vigorous debate on this nomination because I believe that by any measure Justice Owen is an exceptional judge and an exceptional human being who deserves confirmation. I am confident that, at the end of the debate, if Members of the Senate really want to know what the facts are, as opposed to the caricature that has been drawn of Justice Owen by special interest groups intent on vilifying, marginalizing, demonizing a good and decent human being, that if we were allowed to have a vote, we would have a strong bipartisan majority that would support her nomination. I hope no matter what the outcome, we will come to an end of the debate, and we will simply do what the people of our respective states sent us here to do, and that is to vote. I would not ask the Senate to depart from its traditions of fairness in this case. By any fair measure, Justice Owen is an exceptional judge and exceptional nominee. I am confident she will not only maintain the strong bipartisan majority she has in support of her nomination, but that it will grow as Senators examine the record, test some of the allegations made against her, and find them without substantiation, without justification; that if what we are really interested in is finding the truth about this nominee, and determining whether she will uphold the oath she has taken and that she will take as a judge on the circuit court, she will be confirmed. I hope this body will abide by the Constitution as written, and not impose some supermajority requirement where the Constitution requires none, and where the Supreme Court and Senate traditions and the fundamental principle of majority rule dictate a majority vote on this nominee, not a 60-vote supermajority. As long as the Senate applies a fair standard to this nominee, I have no doubt Justice Owen will be confirmed. Now nearly two years have passed since she was nominated to the Federal bench. The Senate should vote to confirm her immediately. We ask judges to be fair, to be impartial in deciding cases, to show neither fear nor favor. But certainly the requirement of fairness does not end in the judicial branch. It also applies to the Congress and to the Senate in performing our responsibilities. Certainly you would think it is self-evident that it should apply in confirming judicial nominees. Our current state of affairs is neither fair nor representative of the sentiment of a bipartisan majority of this body. The distinguished Senator from Nevada has said that, when it comes to setting the hours of debate, ``there is not a number in the universe that would be sufficient.'' I say two years is more than sufficient. I yield the floor.

Mr. CORNYN

Mr. CORNYN. Mr. President, I am pleased to join my colleague, Senator Kyl, to introduce today this landmark legislation to clean up our civil justice system. This legislation would enact a badly needed reform to the way in which attorneys are paid in some of the Nation's largest cases. It is designed to address some of the worst abuses of our civil justice system that I have witnessed in my nearly thirty years in the legal profession as a lawyer in private practice, as a state trial and appellate judge, and as state attorney general. This legislation, the Intermediate Sanctions Compensatory Revenue Adjustment Act of 2003, ISCRAA, will combat the gross abuse of attorney contingent fee agreements, abuses which we have been witnessing at an increasing rate in recent years. The legislation will enforce attorneys' fiduciary duties to their clients in a small but important category of cases--those resulting in judgments greater than $100 million. Contingent fee agreements can have an important role to play in our civil justice system. Sometimes, when people are injured but cannot afford to hire lawyers out of their own pockets, attorneys will accept the case with the expectation that, if their clients prevail, the attorney will be paid for his or her services out of the judgment or settlement that the attorney is able to secure for the client. Such agreements between attorneys and their clients are called contingent fee agreements, because the attorney's fee is contingent on the client obtaining a money judgment or settlement. Contingent fee agreements, properly understood and utilized, reward attorneys for their work in obtaining monetary recovery for their clients, and the risk that they take that, despite their hard work and best efforts, they are unable to obtain any recovery for the client at all. Contingent fees can thus help ensure that plaintiffs with legitimate claims have the opportunity to obtain justice from our courts through the assistance of counsel. But contingent fees also present serious ethical problems for our legal system--particularly in cases in which the dollar amounts at stake are extraordinary, and result in a contingent fee award that overwhelmingly exceeds the relatively light or even negligible effort and risk actually undertaken by the attorneys. Under the time-tested traditions of our legal system, clients hire attorneys with the understanding and expectation that the attorney is ethically, legally, and morally obliged to represent their best interests, and that the attorney will use his or her legal skills in order to produce the best possible result--not for the attorney, but for the client. Thus, as my colleague has noted, contingent fee agreements are no ordinary agreements between consumers and businesses. It is a bedrock principle and well-established tenet of our Anglo-American system of justice that attorneys are not ordinary businessmen who can engage in hard bargaining with their customers, as courts have made clear on countless occasions. Rather, attorneys are officers of the court who bear a fiduciary duty to their clients. As fiduciaries, attorneys occupy a position of trust in their dealings with their clients, a trust which attorneys may not lawfully abuse. One obligation that flows from this status as a fiduciary is the attorney's obligation not to charge an unreasonable or excessive fee. This obligation is a fundamental part of an attorney's ethical duties, universally recognized in the ethics rules of all 50 States. Courts have made clear, time and time again, that every attorney fee contract automatically and necessarily includes the requirement that the fee be a reasonable one, a fundamental and basic duty of all attorneys, and one that no provision of such agreements may abrogate. ISCRAA affirms and reinforces the longstanding substantive law of attorneys' fiduciary duties, by providing a special mechanism to enforce those duties in a particularly high risk category of cases--a category that the courts themselves have singled out as posing special risks of unethical, windfall fees. Courts have noted that allowing standard contingency fee agreements in cases involving judgments of $100 million or more have a distinct tendency of grossly overcompensating attorneys for their actual services rendered. ISCRAA prevents attorneys from evading their obligation to charge a reasonable fee in extraordinarily large recovery cases, by effectively limiting awards to a generous multiple of reasonable hourly fees. State courts, Federal courts, and even trial lawyers' themselves have all recognized that a reasonable fee must be proportional to the attorney's actual efforts. ISCRAA codifies and enforces this principle, while continuing to guarantee lawyers ample and generous compensation for their efforts--using fee multipliers that are as generous as the most liberal limits adopted by state courts, and which are considerably more generous than the limits set by federal courts in $100 million cases. This legislation thus promises to clean up our civil justice system and to repudiate the grossest abuses of our legal system. Make no mistake: Although all attorneys are supposed to uphold a strict ethical code, under which they are strictly forbidden from charging their clients unreasonable or excessive attorney fees, the temptation to abuse contingent fee agreements is a strong one, and even more so when the dollar amounts are truly extraordinary--such as in the $100 million cases that would be covered by this legislation. And make no mistake: the victim of such attorney fee abuse, and the beneficiary of this legislation, is not the defendant who pays the judgment--after all, the defendant pays the same total amount whether the money goes to the attorney or to the client. Rather, the real victim of this abuse, and the real beneficiary of this legislation, is the injured client, whose money is being taken away from the lawyer through an abusive contingent fee arrangement. As my colleague has also noted, ISCRAA is unquestionably an appropriate exercise of Congress's power to regulate and protect interstate commerce, considering the large size of the litigations to which it applies. $100 million is a standard threshold used by the federal government to determine whether an economic transaction significantly affects interstate commerce. But the most important reason for federal intervention in this area I have not yet mentioned, and I would like to take a moment to discuss it here: the gross abuses that we have already witnessed in large litigation fee awards. Recent experience amply demonstrates that, if the Federal Government does not act to prevent unethical and grossly abusive fee awards in massive, nationwide lawsuits, no one will. Moreover, recent experience further demonstrates that unreasonable fee payments in such suits threaten not just the attorneys' fiduciary obligations; they also place at risk the integrity of our governmental institutions. The unwholesome incentives created by windfall, unethical fee awards in large-scale litigations have induced some public officials to abandon their civic obligations. The textbook example of the types of abuses that make ISCRAA necessary is the attorney fee arrangement awarded in the State lawsuits to recover tobacco-related Medicaid expenses. Individual law firms that represented the States in that litigation have been given hundreds of millions and sometimes even billions of dollars in fees. To date, approximately $15 billion in fees has been awarded to the tobacco settlement lawyers, to be paid out in $500-million-a-year increments. Attorneys representing just three of the States--Mississippi, Texas, and Florida--were awarded $8.2 billion in fees. In many cases, such fees were paid to attorneys who filed duplicate, copycat lawsuits at a time when settlement negotiations had already begun and the risk that the states would not recover any money was negligible. Yet these lawyers nevertheless received massive contingency fees, for suits that involved no real contingency. And for most of the tobacco settlement lawyers, the size of the fee awards bears no reasonable relation to the actual effort expended or risk involved. There is widespread agreement that the fees awarded in the tobacco settlement are excessive and unreasonable. Perhaps the most damning indictments come from those who took the plaintiffs' side in this litigation--including from plaintiff lawyers themselves. For example, Michael Ciresi, a pioneer in the tobacco litigation who represented the state of Minnesota in its lawsuit, and who is no doubt familiar with what these lawsuits actually require, has said that the Texas, Florida, and Mississippi lawyers' fee awards ``are far in excess of these lawyers' contribution to any of the state results.'' Similarly, former Food and Drug Administration Commissioner David Kessler, another leader in the fight against tobacco, has said that the states' private lawyers ``did a real service, but I think the fee is outrageous. All the legal fees are out control.'' Washington, D.C. lawyer and tobacco-industry opponent John Coale has denounced the fee awards as ``beyond human comprehension'' and stated that ``the work does not justify them.'' Even the Association of American Trial Lawyers, the nation's premier representative of the plaintiffs bar, has condemned attorney fees requested in the state tobacco settlement. The President of ATLA has noted: ``Common sense suggests that a one billion dollar fee is excessive and unreasonable and certainly should invite the scrutiny, of the courts. ATLA generally refrains from expressing an institutional opinion regarding a particular fee in a particular case, but we have a strong negative reaction to reports that at least one attorney on behalf of the plaintiffs in the Florida case is seeking a fee in excess of one billion dollars.'' This letter, written in 1997, only concerned one of the Florida lawyers' request for attorney fees. Ultimately, Florida's private counsel was awarded a total of $3.4 billion in fees. These statements demonstrate beyond all doubt that there is real abuse going on here, and that the victim of this abuse is the client, the plaintiff--and not the defendant. Perhaps the best gloss on the tobacco fee awards is that provided by Professor Lester Brickman, a professor of law at Cardozo Law School and noted authority on legal ethics and attorney fees. Professor Brickman has stated: ``Under the rules of legal ethics, promulgated partly as a justification for the legal profession's self-governance, fees cannot be `clearly excessive.' Indeed, that standard has now been superseded in most States by an even more rigorous standard: fees have to be `reasonable.' Are these fees, which in many cases amount to effective hourly rates of return of tens of thousands--and even hundreds of thousands--of dollars an hour, reasonable? I think to ask the question is to answer it.'' The attorney fees awarded in the state tobacco settlement are simply indefensible. And the process by which the fees were awarded partly explains how they came to be so. Outside counsel fees were determined by a private arbitration panel established by the Master Settlement Agreement, MSA, that resolved 46 of the states' litigation. Four other states had settled their suits earlier. Their lawyers, however, also were paid out of the accounts created by the MSA. Amazingly, the settlement agreement explicitly immunized all fee awards from judicial review. Even more amazingly, one of the three arbitrators who made the awards had a clear conflict of interests: he was the father of a South Carolina lawyer whose law firm has received the largest fee awards of all, believed to amount to over $2 billion. Another one of the arbitrators had no background in fee arbitrations or any related matter, and simply ignored the law in order to make outrageous awards, using the salaries of sports stars and entertainers as a basis of measure. Revealingly, the third arbitrator, a retired Federal judge appointed by President Carter, dissented from the key fee decisions. As incredible as the MSA fee awards and the arbitration procedures may seem, even more dubious is the process by which many of the law firms that participated in this lucrative litigation were selected in the first place to represent the states. In my home State of Texas, trial lawyers have accused the then-state attorney general of demanding $1 million in campaign contributions in exchange for their being hired to represent the state in the tobacco litigation. One prominent lawyer--a former president of the Texas Trial Lawyers Association--has since said that the attorney general's solicitation was so blatant that ``I knew th[at] instant . . . that I could not be involved in the matter.'' He even later wondered if the meeting had been a ``sting operation.'' Another lawyer simply characterized his encounter with the attorney general as a bribery solicitation. This former Texas attorney general was recently indicted on Federal charges of attempting to fraudulently divert $260 million in tobacco- settlement legal fees to one of his personal friends. He had given a sworn affidavit that this lawyer had served as Texas' ``primary adviser'' in its tobacco lawsuit--despite the apparent fact that the lawyer had attended no court hearings, depositions, or strategy meetings, wrote no memos or legal briefs about the case, and apparently never even spoke to any of the other attorneys. The attorney general even went so far as to forge and fraudulently backdate documents in order to win his friend a share of the tobacco settlement fee. As for the five law firms that actually did represent Texas in the tobacco litigation, they filed relatively late lawsuits that were based on other lawyers' work--and yet, despite the minimal energy expended on those suits, were awarded $3.3 billion in attorney fees. This award amounts to compensation that, even assuming that the attorneys worked all day every day during the entire period of the litigation, remains well in excess of $100,000 an hour. As one newspaper editorial has noted, for the amount of money that these lawyers were awarded, Texas could hire 10,000 additional teachers or policemen for ten years. Instead, four of these firms gave the attorney general $150,000 in campaign contributions in recent years. Texas' experience is not an isolated example. In other states as well, lawyers' participation in the tobacco litigation appears to have been the product of political favoritism--and to have resulted in unfathomable fees that bear no reasonable relation to the services provided. For example: New Jersey: The private in-state lawyers who represented this state in the tobacco litigation have admitted that they had no mass-tort litigation experience and played no role in the state settlement talks. They have also admitted that all the key work in the state's lawsuit was done by out-of-state firms--the in-state firms' principal work was drafting pro hac vice motions to have these outside lawyers admitted in New Jersey courts. Any work that the New Jersey lawyers did was submitted to the outside lawyers, who made all of the substantive arguments. Result: these in-state lawyers were awarded $350 million in the MSA fee arbitration. Connections: the New Jersey lawyers were an inside group of past presidents of the New Jersey trial lawyers' association. The State refused to even consider hiring a nonprofit firm to conduct the New Jersey lawsuit. Pennsylvania: Settlement talks had already begun, the states' tobacco litigation was being resolved, and all of the legal theories already had been developed long before the Pennsylvania state suit was filed. Result: Pennsylvania's private lawyers were awarded $50 million in the MSA arbitration--equivalent to 1000 percent of a reasonable hourly rate. As one expert has noted, ``there's not $50 million of work in there.'' Connections: the two law firms that the state Attorney General selected to conduct the litigation were among his top campaign contributors. The firms were awarded no-bid contracts. As one Pennsylvania commentator has noted, ``obviously, it was a political kind of thing.'' Maryland: Billionaire tort lawyer Peter Angelos demanded a one billion dollar fee for his work on that State's case, even though, according to the State Senate President, the State legislature had retroactively ``changed centuries of precedent to ensure [Angelos] a win in the case.'' Angelos ultimately received an accelerated $150 million payment for this no-risk lawsuit. Louisiana: The private law firms that represented the State in the tobacco litigation were awarded $575 million. The MSA arbitration panel actually increased this award on the ground that the State government-- the lawyers' supposed client--was opposed to suing tobacco companies. The Louisiana fee award amounts to almost $7,000 an hour, based on the lawyers' estimate that they worked a total 85,000 hours. Moreover, this estimate is unverifiable, because the state's private lawyers kept no billing records--as the attorney general explained, ``I wasn't that big on hourly or written reports.'' The dissenting member of the arbitration panel simply noted that the Louisiana fee award ``shocks the conscience'' The single biggest beneficiary of this largesse-- receiving $115 million in attorney fees--was a law firm based in Lake Charles, the hometown of the state's attorney general. This firm and the next largest fee recipient had donated over $42,000 to the attorney general's political campaigns. Together, all of the firms that represented Louisiana gave more than $100,000 to the attorney general in the years before they were selected to participate in the state's tobacco team. Ohio: The lawyers representing this State received fees estimated to exceed $50,000 per hour, despite the fact that, according to independent observers, ``all of the legal issues were resolved long before these Ohio lawyers stepped up to the plate.'' The state's outside counsel had donated $26,000 in campaign contributions to the State attorney general prior to their appointment to the state's tobacco team. After the attorney general chose one private lawyer to serve as the state's ``lead special counsel,'' that lawyer hired one of the attorney general's top aides for an undisclosed sum in order to--in the lawyer's own words--``help me get acquainted with a technique called PowerPoint.'' When told that ``there were many people in Ohio capable of doing a PowerPoint presentation,'' the state's outside counsel responded that this particular attorney general's aide ``was the only one I knew of.'' Massachusetts: According to other tobacco plaintiffs' lawyers, Massachusetts's suit piggybacked on the work of other lawyers and was not pivotal to the outcome of the tobacco litigation. Result: $775 million was awarded to the Massachusetts lawyers in the MSA arbitration. New York: When this State's then-attorney general hired private counsel to represent the State in its tobacco lawsuit, tobacco companies already had paid $15 billion to Florida and Mississippi for identical claims and a national settlement agreement already was under discussion. As one local anti-tobacco leader has noted, ``these were copycat lawsuits, there wasn't all that much work to do.'' The firms' primary job was to collect New York-specific data in order to calculate damages. Ultimately, the New York firms represented the State for just 13 months. And they received a fee award of $625 million. This amounts to at least $14,000 an hour, for a lawsuit that by all accounts involved no risk. The dissenting member of the arbitration panel has denounced the award as ``an astronomical sum unrelated to, the attorneys', efforts or achievements.'' The New York firms had contributed more than $250,000 to New York politicians and their campaign organizations in the years preceding their selection - and another $200,000 after the State settlement. Wisconsin: The Wisconsin lawyers' tobacco litigation work has been described as chiefly consisting of media and public relations efforts on their own behalf. Their billing records included time spent selecting office space and buying furniture. One lawyer effectively billed $3,000 to the State for reading an article in a Madison newspaper. The lawyers also billed the State for limousine rides around the state, trips on private jets, and stays at luxury hotels. Result: $75 million was awarded to the Wisconsin lawyers. Based on the law firms' records of the total number of hours they devoted to the case-- including work by paralegals--this fee amounts to $3,000 per hour. Missouri: A State supreme court justice in Missouri resigned his post in order to join one of the private law firms expected to receive a portion of the MSA arbitrators' fee award. Ultimately, the firms representing the State spent just 5 months on the state's lawsuit. They received a fee award of $111 million. One State leader has described the award as ``the biggest rip-off in the 180-year history of the state.'' The law firms receiving these fees had donated more than $500,000 to State politicians and parties in the years leading up to their selection as the State's outside counsel. These examples are too numerous to dismiss. In State after State, the temptations created by the massive, windfall fees awarded in the Medicaid tobacco settlement corrupted not only lawyers involved, but the government as well. The fee awards poisoned everything that they touched. No one who examines these events closely--who surveys the obscene fee awards, and the political cronyism that determined who benefited--can disagree that this must never be allowed to happen again. As a final point, I would like to address a question that has been raised with regard to remedy. Some have argued that nothing can be done to correct the excesses of the tobacco settlement fee awards--even with regard to fees that are still being or have yet to be paid. On several occasions, State judges who were called upon to approve their State's tobacco settlement have also, on their own initiative, inquired into the apparent unreasonableness of the fees awarded. In each case, both the plaintiffs' lawyers--and in some cases, even State officials--have challenged the State courts' authority to act. They have argued that these courts lack jurisdiction to review a national settlement, and that excessive fees cannot be restored to the State. One state's attorney general implicated in these events has argued that it is a ``misconception'' that the tobacco settlement ``attorneys' fees are coming out of the public's pocket. That is not the case. They [sic] defendants have agreed to pay these fees.'' Because of the way that the MSA fee payments are structured, no lawyer's award comes out of any one particular, identifiable State's recovery. Instead, all of the lawyers are being paid from one of two separate accounts, each of which is funded by the tobacco companies. It is a mistake, however, to contend that, because the MSA fee payments are made directly from defendants to plaintiffs' lawyers-- without ever formally or actually passing through the plaintiffs' hands--they are immunized against ethical scrutiny or correction. It is well and long established in our law that fee awards originate as the property of the client regardless of how the fee agreements are structured. The courts have been very clear on this point. As they have stated: ``The allowance of attorney fees in a judgment gives the attorneys no interest and ownership in the judgment to the extent of the amount of the fee allowed, but the judgment in its entirety is the property of the client. The award for fees is for the client, not the attorney.'' ``[A]ttorneys' fee provisions exist for the benefit of parties and not the attorneys. . . . Several jurisdictions have noted that the real party in interest with regard to fees is the client and not the attorney.'' ``A judgment for costs is a judgment in favor of the party, and not of his attorney, and the money represented by the costs is the property of the party.'' ``[T]he award of attorney fees [is] made not to the attorneys but to the litigant who was personally liable to the attorneys. This is also the view in other states when the courts award attorney fees.'' ``An award of attorney's fees belongs to the client and not the attorney.'' Indeed, an award of attorney fees is generally taxable as income to the client. In a recent case, the U.S. Court of Appeals for the Ninth Circuit noted that a plaintiff's obligation to compensate the law firm that represented him ``was satisfied by [the defendant]. The payment was therefore to [the client]. The discharge by a third person of an obligation to him is equivalent to receipt by the person taxed.'' The Ninth Circuit emphasized that the fact ``[t]hat [the client] never laid hands on the money paid to the lawyers does not obliterate their constructive receipt.'' In other words, the fee award belongs to the client, regardless of how the award is made. The rule that fee awards belong to the client is strongly supported by important policy considerations. It is necessary because any other rule would be an invitation to collusion and self-dealing between plaintiffs' lawyers and defendants. Again, the courts have been very clear on this point. As the Third Circuit has noted: ``[A] defendant is interested only in disposing of the total claims asserted against it, and the allocation between the [plaintiff's] payment and the attorneys' fees is of little or no interest to the defense. Moreover, the divergence in class members' and class counsel's financial incentives creates the danger that the lawyers might urge a class settlement at a low figure or on a less-than-optimal basis in exchange for red-carpet treatment for fees.'' The Second Circuit has made the same point, noting: ``Defendants, once the settlement amount has been agreed to, have little interest in how it is distributed and thus no incentive to oppose the [attorneys] fee. Indeed, the same dynamic creates incentives for collusion--the temptation for lawyers to agree to a less than optimal settlement in exchange for [generous fees].'' The Ninth Circuit has also addressed the question of ``whether a class member has standing to appeal class counsel's attorney fee and cost award when that award is payable by the defendant independently, and not out of the class settlement.'' The court concluded that ``[e]ven if class counsel's attorney fees are not to be paid from the class settlement . . . , the aggregate amount of the attorney fees and the class settlement payments may be viewed as ``a constructive common fund.'' The court reasoned that ``[i]f . . . class counsel agreed to accept excessive fees and costs to the detriment of class plaintiffs, then class counsel breached their fiduciary duty to the class. If that were the case, any excessive award could be considered property of the class plaintiffs, and any injury they suffered could be at least partially redressed by allocating to them a portion of that award.'' As several commentators have noted, the policy considerations underpinning the rule that fee awards belong to the client apply with full force to the State tobacco settlement. Indeed, that settlement could serve as a textbook example for why this rule exists. As Professor Brickman has noted: ``To the tobacco companies, dollars are dollars, whether paid to States or paid to lawyers. So the real amount on the bargaining table was not the $246 billion that the states settled for, but a larger sum, including the amount to be paid to the attorneys. . . . Stated simply, because dollars are fungible, the fees are coming out of the settlements.'' Even foreign commentators have noted that the State tobacco settlement's ``arbitration is a mere figleaf. The money going to the lawyers was clearly part of the overall amount that the tobacco companies were willing to pay to settle the case. Whatever the lawyers get, the states do not.'' And this point has not been lost upon members of Congress. Representative Chris Cox, R-CA, has testified on the matter: ``It is specious to argue that, billions of dollars, in fees are not being diverted out of funds available for public health and taxpayers. The tobacco industry is willing to pay a certain sum to get rid of these cases. That sum is the total cost of the payment to the plaintiffs and their lawyers. It is a matter of indifference to the industry how that sum is divided--75 percent for the plaintiffs and 25 percent for their lawyers, or vice versa. That means that every penny paid to the plaintiffs' lawyers--whether it is technically ``in'' the settlement or not--is money that the industry could have paid to the state or the private plaintiffs. Excessive attorneys' fees in this case will not be a victimless crime.'' These authorities and their reasoning should be more than sufficient to permanently dispel the notion that an attorney fee agreement can be structured so as to evade the ethical obligation to charge only a reasonable fee. The defenders of the MSA fee payments are simply misleading the public and this distinguished body when they assert that a particular lawyer's award under the settlement does not come out of a particular state's recovery. That fee comes out of all of the State's recoveries. All excessive or unreasonable fees should be restored to all 50 of the States. Senator Kyl has already presented estimates of the monetary recovery each State can expect if ISCRAA is enacted. I would simply point out here that, according to those estimates, Texas has been charged excessive and unreasonable attorney fees in the amount of $667 million, and therefore would recover those funds if this legislation is adopted. ISCRAA's return of unethical tobacco-settlement fee awards to the states is manifestly proper in light of the fact that all fee awards are the property of the client, and the attorney is entitled only to a reasonable fee. No attorney is above these ethical rules and obligations. They cannot be waived or ignored. And in light of our experience with the State tobacco settlement fee awards, and their effect on our public officials, these ethical duties must be carried out and enforced strictly and fully. Our Federal and State courts generally do a good job of protecting consumers and enforcing the rights of all Americans. But there are problems in our courts that require attention and significant reform. Class action abuse not only threatens the integrity and the perception of rationality in our nation's courts, it also strongly hinders economic and job growth. Tort reform is badly needed to rescue many industries, especially our health care industry, from abuses of our legal system. The judicial confirmation process at the federal level has become bitter, severe and destructive, and that broken process poses a serious threat to judicial independence and the quality and efficiency of our courts. And abusive attorney fee arrangements make a mockery of our civil justice system, all while enriching a small band of unscrupulous litigators at the expense of the real victims, their clients. To enforce the longstanding fiduciary duty of all attorneys to charge only a reasonable fee, in a class of cases that poses heightened risks of abuse and special significance to the national economy, I urge that this Senate consider expediently, and approve quickly, this important measure, the Intermediate Sanctions Compensatory Revenue Adjustment Act of 2003.

Mr. CORNYN

Mr. CORNYN. Mr. President, I am pleased to join my colleague, Senator Kyl, to introduce today this landmark legislation to clean up our civil justice system. This legislation would enact a badly needed reform to the way in which attorneys are paid in some of the Nation's largest cases. It is designed to address some of the worst abuses of our civil justice system that I have witnessed in my nearly thirty years in the legal profession as a lawyer in private practice, as a state trial and appellate judge, and as state attorney general. This legislation, the Intermediate Sanctions Compensatory Revenue Adjustment Act of 2003, ISCRAA, will combat the gross abuse of attorney contingent fee agreements, abuses which we have been witnessing at an increasing rate in recent years. The legislation will enforce attorneys' fiduciary duties to their clients in a small but important category of cases--those resulting in judgments greater than $100 million. Contingent fee agreements can have an important role to play in our civil justice system. Sometimes, when people are injured but cannot afford to hire lawyers out of their own pockets, attorneys will accept the case with the expectation that, if their clients prevail, the attorney will be paid for his or her services out of the judgment or settlement that the attorney is able to secure for the client. Such agreements between attorneys and their clients are called contingent fee agreements, because the attorney's fee is contingent on the client obtaining a money judgment or settlement. Contingent fee agreements, properly understood and utilized, reward attorneys for their work in obtaining monetary recovery for their clients, and the risk that they take that, despite their hard work and best efforts, they are unable to obtain any recovery for the client at all. Contingent fees can thus help ensure that plaintiffs with legitimate claims have the opportunity to obtain justice from our courts through the assistance of counsel. But contingent fees also present serious ethical problems for our legal system--particularly in cases in which the dollar amounts at stake are extraordinary, and result in a contingent fee award that overwhelmingly exceeds the relatively light or even negligible effort and risk actually undertaken by the attorneys. Under the time-tested traditions of our legal system, clients hire attorneys with the understanding and expectation that the attorney is ethically, legally, and morally obliged to represent their best interests, and that the attorney will use his or her legal skills in order to produce the best possible result--not for the attorney, but for the client. Thus, as my colleague has noted, contingent fee agreements are no ordinary agreements between consumers and businesses. It is a bedrock principle and well-established tenet of our Anglo-American system of justice that attorneys are not ordinary businessmen who can engage in hard bargaining with their customers, as courts have made clear on countless occasions. Rather, attorneys are officers of the court who bear a fiduciary duty to their clients. As fiduciaries, attorneys occupy a position of trust in their dealings with their clients, a trust which attorneys may not lawfully abuse. One obligation that flows from this status as a fiduciary is the attorney's obligation not to charge an unreasonable or excessive fee. This obligation is a fundamental part of an attorney's ethical duties, universally recognized in the ethics rules of all 50 States. Courts have made clear, time and time again, that every attorney fee contract automatically and necessarily includes the requirement that the fee be a reasonable one, a fundamental and basic duty of all attorneys, and one that no provision of such agreements may abrogate. ISCRAA affirms and reinforces the longstanding substantive law of attorneys' fiduciary duties, by providing a special mechanism to enforce those duties in a particularly high risk category of cases--a category that the courts themselves have singled out as posing special risks of unethical, windfall fees. Courts have noted that allowing standard contingency fee agreements in cases involving judgments of $100 million or more have a distinct tendency of grossly overcompensating attorneys for their actual services rendered. ISCRAA prevents attorneys from evading their obligation to charge a reasonable fee in extraordinarily large recovery cases, by effectively limiting awards to a generous multiple of reasonable hourly fees. State courts, Federal courts, and even trial lawyers' themselves have all recognized that a reasonable fee must be proportional to the attorney's actual efforts. ISCRAA codifies and enforces this principle, while continuing to guarantee lawyers ample and generous compensation for their efforts--using fee multipliers that are as generous as the most liberal limits adopted by state courts, and which are considerably more generous than the limits set by federal courts in $100 million cases. This legislation thus promises to clean up our civil justice system and to repudiate the grossest abuses of our legal system. Make no mistake: Although all attorneys are supposed to uphold a strict ethical code, under which they are strictly forbidden from charging their clients unreasonable or excessive attorney fees, the temptation to abuse contingent fee agreements is a strong one, and even more so when the dollar amounts are truly extraordinary--such as in the $100 million cases that would be covered by this legislation. And make no mistake: the victim of such attorney fee abuse, and the beneficiary of this legislation, is not the defendant who pays the judgment--after all, the defendant pays the same total amount whether the money goes to the attorney or to the client. Rather, the real victim of this abuse, and the real beneficiary of this legislation, is the injured client, whose money is being taken away from the lawyer through an abusive contingent fee arrangement. As my colleague has also noted, ISCRAA is unquestionably an appropriate exercise of Congress's power to regulate and protect interstate commerce, considering the large size of the litigations to which it applies. $100 million is a standard threshold used by the federal government to determine whether an economic transaction significantly affects interstate commerce. But the most important reason for federal intervention in this area I have not yet mentioned, and I would like to take a moment to discuss it here: the gross abuses that we have already witnessed in large litigation fee awards. Recent experience amply demonstrates that, if the Federal Government does not act to prevent unethical and grossly abusive fee awards in massive, nationwide lawsuits, no one will. Moreover, recent experience further demonstrates that unreasonable fee payments in such suits threaten not just the attorneys' fiduciary obligations; they also place at risk the integrity of our governmental institutions. The unwholesome incentives created by windfall, unethical fee awards in large-scale litigations have induced some public officials to abandon their civic obligations. The textbook example of the types of abuses that make ISCRAA necessary is the attorney fee arrangement awarded in the State lawsuits to recover tobacco-related Medicaid expenses. Individual law firms that represented the States in that litigation have been given hundreds of millions and sometimes even billions of dollars in fees. To date, approximately $15 billion in fees has been awarded to the tobacco settlement lawyers, to be paid out in $500-million-a-year increments. Attorneys representing just three of the States--Mississippi, Texas, and Florida--were awarded $8.2 billion in fees. In many cases, such fees were paid to attorneys who filed duplicate, copycat lawsuits at a time when settlement negotiations had already begun and the risk that the states would not recover any money was negligible. Yet these lawyers nevertheless received massive contingency fees, for suits that involved no real contingency. And for most of the tobacco settlement lawyers, the size of the fee awards bears no reasonable relation to the actual effort expended or risk involved. There is widespread agreement that the fees awarded in the tobacco settlement are excessive and unreasonable. Perhaps the most damning indictments come from those who took the plaintiffs' side in this litigation--including from plaintiff lawyers themselves. For example, Michael Ciresi, a pioneer in the tobacco litigation who represented the state of Minnesota in its lawsuit, and who is no doubt familiar with what these lawsuits actually require, has said that the Texas, Florida, and Mississippi lawyers' fee awards ``are far in excess of these lawyers' contribution to any of the state results.'' Similarly, former Food and Drug Administration Commissioner David Kessler, another leader in the fight against tobacco, has said that the states' private lawyers ``did a real service, but I think the fee is outrageous. All the legal fees are out control.'' Washington, D.C. lawyer and tobacco-industry opponent John Coale has denounced the fee awards as ``beyond human comprehension'' and stated that ``the work does not justify them.'' Even the Association of American Trial Lawyers, the nation's premier representative of the plaintiffs bar, has condemned attorney fees requested in the state tobacco settlement. The President of ATLA has noted: ``Common sense suggests that a one billion dollar fee is excessive and unreasonable and certainly should invite the scrutiny, of the courts. ATLA generally refrains from expressing an institutional opinion regarding a particular fee in a particular case, but we have a strong negative reaction to reports that at least one attorney on behalf of the plaintiffs in the Florida case is seeking a fee in excess of one billion dollars.'' This letter, written in 1997, only concerned one of the Florida lawyers' request for attorney fees. Ultimately, Florida's private counsel was awarded a total of $3.4 billion in fees. These statements demonstrate beyond all doubt that there is real abuse going on here, and that the victim of this abuse is the client, the plaintiff--and not the defendant. Perhaps the best gloss on the tobacco fee awards is that provided by Professor Lester Brickman, a professor of law at Cardozo Law School and noted authority on legal ethics and attorney fees. Professor Brickman has stated: ``Under the rules of legal ethics, promulgated partly as a justification for the legal profession's self-governance, fees cannot be `clearly excessive.' Indeed, that standard has now been superseded in most States by an even more rigorous standard: fees have to be `reasonable.' Are these fees, which in many cases amount to effective hourly rates of return of tens of thousands--and even hundreds of thousands--of dollars an hour, reasonable? I think to ask the question is to answer it.'' The attorney fees awarded in the state tobacco settlement are simply indefensible. And the process by which the fees were awarded partly explains how they came to be so. Outside counsel fees were determined by a private arbitration panel established by the Master Settlement Agreement, MSA, that resolved 46 of the states' litigation. Four other states had settled their suits earlier. Their lawyers, however, also were paid out of the accounts created by the MSA. Amazingly, the settlement agreement explicitly immunized all fee awards from judicial review. Even more amazingly, one of the three arbitrators who made the awards had a clear conflict of interests: he was the father of a South Carolina lawyer whose law firm has received the largest fee awards of all, believed to amount to over $2 billion. Another one of the arbitrators had no background in fee arbitrations or any related matter, and simply ignored the law in order to make outrageous awards, using the salaries of sports stars and entertainers as a basis of measure. Revealingly, the third arbitrator, a retired Federal judge appointed by President Carter, dissented from the key fee decisions. As incredible as the MSA fee awards and the arbitration procedures may seem, even more dubious is the process by which many of the law firms that participated in this lucrative litigation were selected in the first place to represent the states. In my home State of Texas, trial lawyers have accused the then-state attorney general of demanding $1 million in campaign contributions in exchange for their being hired to represent the state in the tobacco litigation. One prominent lawyer--a former president of the Texas Trial Lawyers Association--has since said that the attorney general's solicitation was so blatant that ``I knew th[at] instant . . . that I could not be involved in the matter.'' He even later wondered if the meeting had been a ``sting operation.'' Another lawyer simply characterized his encounter with the attorney general as a bribery solicitation. This former Texas attorney general was recently indicted on Federal charges of attempting to fraudulently divert $260 million in tobacco- settlement legal fees to one of his personal friends. He had given a sworn affidavit that this lawyer had served as Texas' ``primary adviser'' in its tobacco lawsuit--despite the apparent fact that the lawyer had attended no court hearings, depositions, or strategy meetings, wrote no memos or legal briefs about the case, and apparently never even spoke to any of the other attorneys. The attorney general even went so far as to forge and fraudulently backdate documents in order to win his friend a share of the tobacco settlement fee. As for the five law firms that actually did represent Texas in the tobacco litigation, they filed relatively late lawsuits that were based on other lawyers' work--and yet, despite the minimal energy expended on those suits, were awarded $3.3 billion in attorney fees. This award amounts to compensation that, even assuming that the attorneys worked all day every day during the entire period of the litigation, remains well in excess of $100,000 an hour. As one newspaper editorial has noted, for the amount of money that these lawyers were awarded, Texas could hire 10,000 additional teachers or policemen for ten years. Instead, four of these firms gave the attorney general $150,000 in campaign contributions in recent years. Texas' experience is not an isolated example. In other states as well, lawyers' participation in the tobacco litigation appears to have been the product of political favoritism--and to have resulted in unfathomable fees that bear no reasonable relation to the services provided. For example: New Jersey: The private in-state lawyers who represented this state in the tobacco litigation have admitted that they had no mass-tort litigation experience and played no role in the state settlement talks. They have also admitted that all the key work in the state's lawsuit was done by out-of-state firms--the in-state firms' principal work was drafting pro hac vice motions to have these outside lawyers admitted in New Jersey courts. Any work that the New Jersey lawyers did was submitted to the outside lawyers, who made all of the substantive arguments. Result: these in-state lawyers were awarded $350 million in the MSA fee arbitration. Connections: the New Jersey lawyers were an inside group of past presidents of the New Jersey trial lawyers' association. The State refused to even consider hiring a nonprofit firm to conduct the New Jersey lawsuit. Pennsylvania: Settlement talks had already begun, the states' tobacco litigation was being resolved, and all of the legal theories already had been developed long before the Pennsylvania state suit was filed. Result: Pennsylvania's private lawyers were awarded $50 million in the MSA arbitration--equivalent to 1000 percent of a reasonable hourly rate. As one expert has noted, ``there's not $50 million of work in there.'' Connections: the two law firms that the state Attorney General selected to conduct the litigation were among his top campaign contributors. The firms were awarded no-bid contracts. As one Pennsylvania commentator has noted, ``obviously, it was a political kind of thing.'' Maryland: Billionaire tort lawyer Peter Angelos demanded a one billion dollar fee for his work on that State's case, even though, according to the State Senate President, the State legislature had retroactively ``changed centuries of precedent to ensure [Angelos] a win in the case.'' Angelos ultimately received an accelerated $150 million payment for this no-risk lawsuit. Louisiana: The private law firms that represented the State in the tobacco litigation were awarded $575 million. The MSA arbitration panel actually increased this award on the ground that the State government-- the lawyers' supposed client--was opposed to suing tobacco companies. The Louisiana fee award amounts to almost $7,000 an hour, based on the lawyers' estimate that they worked a total 85,000 hours. Moreover, this estimate is unverifiable, because the state's private lawyers kept no billing records--as the attorney general explained, ``I wasn't that big on hourly or written reports.'' The dissenting member of the arbitration panel simply noted that the Louisiana fee award ``shocks the conscience'' The single biggest beneficiary of this largesse-- receiving $115 million in attorney fees--was a law firm based in Lake Charles, the hometown of the state's attorney general. This firm and the next largest fee recipient had donated over $42,000 to the attorney general's political campaigns. Together, all of the firms that represented Louisiana gave more than $100,000 to the attorney general in the years before they were selected to participate in the state's tobacco team. Ohio: The lawyers representing this State received fees estimated to exceed $50,000 per hour, despite the fact that, according to independent observers, ``all of the legal issues were resolved long before these Ohio lawyers stepped up to the plate.'' The state's outside counsel had donated $26,000 in campaign contributions to the State attorney general prior to their appointment to the state's tobacco team. After the attorney general chose one private lawyer to serve as the state's ``lead special counsel,'' that lawyer hired one of the attorney general's top aides for an undisclosed sum in order to--in the lawyer's own words--``help me get acquainted with a technique called PowerPoint.'' When told that ``there were many people in Ohio capable of doing a PowerPoint presentation,'' the state's outside counsel responded that this particular attorney general's aide ``was the only one I knew of.'' Massachusetts: According to other tobacco plaintiffs' lawyers, Massachusetts's suit piggybacked on the work of other lawyers and was not pivotal to the outcome of the tobacco litigation. Result: $775 million was awarded to the Massachusetts lawyers in the MSA arbitration. New York: When this State's then-attorney general hired private counsel to represent the State in its tobacco lawsuit, tobacco companies already had paid $15 billion to Florida and Mississippi for identical claims and a national settlement agreement already was under discussion. As one local anti-tobacco leader has noted, ``these were copycat lawsuits, there wasn't all that much work to do.'' The firms' primary job was to collect New York-specific data in order to calculate damages. Ultimately, the New York firms represented the State for just 13 months. And they received a fee award of $625 million. This amounts to at least $14,000 an hour, for a lawsuit that by all accounts involved no risk. The dissenting member of the arbitration panel has denounced the award as ``an astronomical sum unrelated to, the attorneys', efforts or achievements.'' The New York firms had contributed more than $250,000 to New York politicians and their campaign organizations in the years preceding their selection - and another $200,000 after the State settlement. Wisconsin: The Wisconsin lawyers' tobacco litigation work has been described as chiefly consisting of media and public relations efforts on their own behalf. Their billing records included time spent selecting office space and buying furniture. One lawyer effectively billed $3,000 to the State for reading an article in a Madison newspaper. The lawyers also billed the State for limousine rides around the state, trips on private jets, and stays at luxury hotels. Result: $75 million was awarded to the Wisconsin lawyers. Based on the law firms' records of the total number of hours they devoted to the case-- including work by paralegals--this fee amounts to $3,000 per hour. Missouri: A State supreme court justice in Missouri resigned his post in order to join one of the private law firms expected to receive a portion of the MSA arbitrators' fee award. Ultimately, the firms representing the State spent just 5 months on the state's lawsuit. They received a fee award of $111 million. One State leader has described the award as ``the biggest rip-off in the 180-year history of the state.'' The law firms receiving these fees had donated more than $500,000 to State politicians and parties in the years leading up to their selection as the State's outside counsel. These examples are too numerous to dismiss. In State after State, the temptations created by the massive, windfall fees awarded in the Medicaid tobacco settlement corrupted not only lawyers involved, but the government as well. The fee awards poisoned everything that they touched. No one who examines these events closely--who surveys the obscene fee awards, and the political cronyism that determined who benefited--can disagree that this must never be allowed to happen again. As a final point, I would like to address a question that has been raised with regard to remedy. Some have argued that nothing can be done to correct the excesses of the tobacco settlement fee awards--even with regard to fees that are still being or have yet to be paid. On several occasions, State judges who were called upon to approve their State's tobacco settlement have also, on their own initiative, inquired into the apparent unreasonableness of the fees awarded. In each case, both the plaintiffs' lawyers--and in some cases, even State officials--have challenged the State courts' authority to act. They have argued that these courts lack jurisdiction to review a national settlement, and that excessive fees cannot be restored to the State. One state's attorney general implicated in these events has argued that it is a ``misconception'' that the tobacco settlement ``attorneys' fees are coming out of the public's pocket. That is not the case. They [sic] defendants have agreed to pay these fees.'' Because of the way that the MSA fee payments are structured, no lawyer's award comes out of any one particular, identifiable State's recovery. Instead, all of the lawyers are being paid from one of two separate accounts, each of which is funded by the tobacco companies. It is a mistake, however, to contend that, because the MSA fee payments are made directly from defendants to plaintiffs' lawyers-- without ever formally or actually passing through the plaintiffs' hands--they are immunized against ethical scrutiny or correction. It is well and long established in our law that fee awards originate as the property of the client regardless of how the fee agreements are structured. The courts have been very clear on this point. As they have stated: ``The allowance of attorney fees in a judgment gives the attorneys no interest and ownership in the judgment to the extent of the amount of the fee allowed, but the judgment in its entirety is the property of the client. The award for fees is for the client, not the attorney.'' ``[A]ttorneys' fee provisions exist for the benefit of parties and not the attorneys. . . . Several jurisdictions have noted that the real party in interest with regard to fees is the client and not the attorney.'' ``A judgment for costs is a judgment in favor of the party, and not of his attorney, and the money represented by the costs is the property of the party.'' ``[T]he award of attorney fees [is] made not to the attorneys but to the litigant who was personally liable to the attorneys. This is also the view in other states when the courts award attorney fees.'' ``An award of attorney's fees belongs to the client and not the attorney.'' Indeed, an award of attorney fees is generally taxable as income to the client. In a recent case, the U.S. Court of Appeals for the Ninth Circuit noted that a plaintiff's obligation to compensate the law firm that represented him ``was satisfied by [the defendant]. The payment was therefore to [the client]. The discharge by a third person of an obligation to him is equivalent to receipt by the person taxed.'' The Ninth Circuit emphasized that the fact ``[t]hat [the client] never laid hands on the money paid to the lawyers does not obliterate their constructive receipt.'' In other words, the fee award belongs to the client, regardless of how the award is made. The rule that fee awards belong to the client is strongly supported by important policy considerations. It is necessary because any other rule would be an invitation to collusion and self-dealing between plaintiffs' lawyers and defendants. Again, the courts have been very clear on this point. As the Third Circuit has noted: ``[A] defendant is interested only in disposing of the total claims asserted against it, and the allocation between the [plaintiff's] payment and the attorneys' fees is of little or no interest to the defense. Moreover, the divergence in class members' and class counsel's financial incentives creates the danger that the lawyers might urge a class settlement at a low figure or on a less-than-optimal basis in exchange for red-carpet treatment for fees.'' The Second Circuit has made the same point, noting: ``Defendants, once the settlement amount has been agreed to, have little interest in how it is distributed and thus no incentive to oppose the [attorneys] fee. Indeed, the same dynamic creates incentives for collusion--the temptation for lawyers to agree to a less than optimal settlement in exchange for [generous fees].'' The Ninth Circuit has also addressed the question of ``whether a class member has standing to appeal class counsel's attorney fee and cost award when that award is payable by the defendant independently, and not out of the class settlement.'' The court concluded that ``[e]ven if class counsel's attorney fees are not to be paid from the class settlement . . . , the aggregate amount of the attorney fees and the class settlement payments may be viewed as ``a constructive common fund.'' The court reasoned that ``[i]f . . . class counsel agreed to accept excessive fees and costs to the detriment of class plaintiffs, then class counsel breached their fiduciary duty to the class. If that were the case, any excessive award could be considered property of the class plaintiffs, and any injury they suffered could be at least partially redressed by allocating to them a portion of that award.'' As several commentators have noted, the policy considerations underpinning the rule that fee awards belong to the client apply with full force to the State tobacco settlement. Indeed, that settlement could serve as a textbook example for why this rule exists. As Professor Brickman has noted: ``To the tobacco companies, dollars are dollars, whether paid to States or paid to lawyers. So the real amount on the bargaining table was not the $246 billion that the states settled for, but a larger sum, including the amount to be paid to the attorneys. . . . Stated simply, because dollars are fungible, the fees are coming out of the settlements.'' Even foreign commentators have noted that the State tobacco settlement's ``arbitration is a mere figleaf. The money going to the lawyers was clearly part of the overall amount that the tobacco companies were willing to pay to settle the case. Whatever the lawyers get, the states do not.'' And this point has not been lost upon members of Congress. Representative Chris Cox, R-CA, has testified on the matter: ``It is specious to argue that, billions of dollars, in fees are not being diverted out of funds available for public health and taxpayers. The tobacco industry is willing to pay a certain sum to get rid of these cases. That sum is the total cost of the payment to the plaintiffs and their lawyers. It is a matter of indifference to the industry how that sum is divided--75 percent for the plaintiffs and 25 percent for their lawyers, or vice versa. That means that every penny paid to the plaintiffs' lawyers--whether it is technically ``in'' the settlement or not--is money that the industry could have paid to the state or the private plaintiffs. Excessive attorneys' fees in this case will not be a victimless crime.'' These authorities and their reasoning should be more than sufficient to permanently dispel the notion that an attorney fee agreement can be structured so as to evade the ethical obligation to charge only a reasonable fee. The defenders of the MSA fee payments are simply misleading the public and this distinguished body when they assert that a particular lawyer's award under the settlement does not come out of a particular state's recovery. That fee comes out of all of the State's recoveries. All excessive or unreasonable fees should be restored to all 50 of the States. Senator Kyl has already presented estimates of the monetary recovery each State can expect if ISCRAA is enacted. I would simply point out here that, according to those estimates, Texas has been charged excessive and unreasonable attorney fees in the amount of $667 million, and therefore would recover those funds if this legislation is adopted. ISCRAA's return of unethical tobacco-settlement fee awards to the states is manifestly proper in light of the fact that all fee awards are the property of the client, and the attorney is entitled only to a reasonable fee. No attorney is above these ethical rules and obligations. They cannot be waived or ignored. And in light of our experience with the State tobacco settlement fee awards, and their effect on our public officials, these ethical duties must be carried out and enforced strictly and fully. Our Federal and State courts generally do a good job of protecting consumers and enforcing the rights of all Americans. But there are problems in our courts that require attention and significant reform. Class action abuse not only threatens the integrity and the perception of rationality in our nation's courts, it also strongly hinders economic and job growth. Tort reform is badly needed to rescue many industries, especially our health care industry, from abuses of our legal system. The judicial confirmation process at the federal level has become bitter, severe and destructive, and that broken process poses a serious threat to judicial independence and the quality and efficiency of our courts. And abusive attorney fee arrangements make a mockery of our civil justice system, all while enriching a small band of unscrupulous litigators at the expense of the real victims, their clients. To enforce the longstanding fiduciary duty of all attorneys to charge only a reasonable fee, in a class of cases that poses heightened risks of abuse and special significance to the national economy, I urge that this Senate consider expediently, and approve quickly, this important measure, the Intermediate Sanctions Compensatory Revenue Adjustment Act of 2003.

Mr. CORNYN

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on April 8, 2003, at 10:00 a.m., to conduct a hearing on ``the impact of the proposed `RESPA' rule on small businesses and consumers.''

Mr. CORNYN. Mr. President, I ask unanimous consent that the subcommittee on Strategic Forces of the Committee on Armed Services be authorized to meet during the session of the Senate on Tuesday, April 8, 2003 at 2:30 p.m., in open and possibly closed session, to receive testimony on strategic forces and policy in review of the defense authorization request for fiscal year 2004.

Mr. CORNYN. Mr. President, I ask unanimous consent that the subcommittee on Governmental Affairs Subcommittee on Oversight of Government Management, the Federal Workforce and the District of Columbia be authorized to meet on Tuesday, April 8, 2003 at 9:30 a.m. for a hearing entitled ``The Human Capital Challenge: Offering Solutions and Delivering Results'' to review the federal government's strategic human capital management and consider pending legislation on the federal workforce.

Mr. CORNYN. Mr. President, I ask unanimous consent that the subcommittee on Consumer Affairs and Product Safety be authorized to meet on Tuesday, April 8, 2003 at 10 a.m. on promoting corporate responsibility through the elimination of dividend taxation.

Mr. CORNYN. Mr. President, I ask unanimous consent that the subcommittee on Clean Air, Climate Change, and Nuclear Safety be authorized to meet on Tuesday, April 8 at 2:00 p.m. to conduct a legislative hearing on the Clear Skies Act, S. 484. The meeting will be held in SD 406.

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on Rules and Administration be authorized to meet during the session of the Senate on Tuesday, April 8, 2003, at 9:30 a.m., to conduct an oversight hearing on the operations of the Sergeant at Arms, Library of Congress and Congressional Research Service.

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on ``A Proposed Constitutional Amendment to Protect Crime Victims, S.J. Res. 1'' on Tuesday, April 8, 2003, at 10:00 a.m. in the Dirksen Senate Office Building Room 226. Panel I: The Honorable Viet Dinh, Assistant Attorney General, Office of Legal Policy, Department of Justice, Washington, DC. Panel II: Collene Campbell, San Juan Capistrano, CA; Earlene Eason, Gary, IN; Jamie Orenstein, New York, NY; Patricia Perry, New York, NY; Duane Lynn, Peoria, AZ; Steve Twist, Phoenix, AZ.

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet for a hearing on MQSA: Patient Access to Quality Health Care during the session of the Senate on Tuesday, April 8, 2003, at 10:00 a.m. in SD- 430.

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Tuesday, April 8, 2003, at 2:30 p.m., to hold a hearing on an overview of global energy security issues. Witnesses Panel 1: Mr. Kyle E. McSlarrow, Deputy Secretary of Energy, Department of Energy, Washington, DC; and The Honorable Alan P. Larson, Under Secretary for Economic, Business and Agricultural Affairs, Department of State, Washington, DC. Panel 2: Mr. Vahan Zanoyan, President & CEO, PFC Energy, Washington, DC Dr. Daniel Yergin, Chairman, Cambridge Energy Research Associates, Cambridge, MA; and Dr. Martha Brill Olcott, Senior Associate, Carnegie Endowment for International Peace, Washington, DC.

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Tuesday, April 8, 2003, at 9:30 a.m., to hold a hearing on NATO enlargement. Witnesses Panel 1: ``New Members, New Missions.'' The Honorable Marc I. Grossman, Undersecretary of State for Political Affairs, Department of State, Washington, DC. Panel 2: ``The Future of NATO.'' General Wesley K. Clark, USA (ret.), Former SACEUR, Chairman and CEO, Wesley Clark & Associates, Little Rock, Arkansas. Mr. William Kristol, Editor, The Weekly Standard, Washington, DC.

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session on Tuesday, April 8, 2003, at 10:00 a.m., to hear testimony on Enron: Joint Committee on Taxation Investigative Report--Compensation--Related Issues.

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Tuesday, April 8; Wednesday, April 9; and Thursday, April 10 at 10:00 a.m., to consider comprehensive Energy Legislation.

Mr. CORNYN. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Tuesday, April 8, 2003, at 10:15 a.m., in open and possibly closed session, to receive testimony on Homeland Defense in review of the defense authorization request for fiscal year 2004 and the future years defense program.

Mr. CORNYN

Mr. CORNYN. Senator Hatch, chairman of the committee, also gave me the opportunity to chair a portion of the hearing at which Justice Owen's nomination was voted out. I publicly thank him for that special opportunity to not only express my strong support but to demonstrate it at that hearing. At the same time I have taken a deeply personal interest in this nomination, I also want to step back and carefully consider the arguments that have been presented by opponents of the nomination. I have mentioned some of those at the outset, particularly in response to what Senator Leahy had to say. I am forced to conclude Justice Owen's opponents have no real arguments--none that stand up under scrutiny; at least none that will withstand scrutiny under any reasonably fair standard. It bears noting, by the way, that Justice Owen's opponents are the same folks who predicted Lewis Powell's confirmation to the Supreme Court of the United States would mean ``justice for women will be ignored.'' Her opponents, the special interest groups who oppose her nomination, are the same folks who argued Judge John Paul Stevens had demonstrated ``blatant insensitivity to discrimination against women'' and ``seems to bend over backward to limit'' rights for all women. Amazing as it may seem, her opponents are the same folks who testified that confirming David Souter to the Supreme Court would mean ``ending freedom for women in this country.'' Then the same folks who said they ``tremble for this country, if you confirm David Souter,'' even described now-Justice Souter as ``almost neanderthal'' and warned ``women's lives are at stake'' if the Senate confirms Souter. Well, the rhetoric and the histrionics and the lack of credibility of those outlandish verbal assaults on judicial nominees sound all too familiar because, of course, these are many of the same accusations being made against Justice Owen, which are equally unfounded. This reminds me of the story of the little boy who cried wolf. After these repeated charges, accusations, and shrill attacks--and we have heard many of the same directed against Miguel Estrada, without foundation--it makes you wonder just how credible these special interest groups really are that oppose some of President Bush's highly qualified nominees. It also makes you wonder whether these special interest groups makes these claims not because they believe they are truthful, but because they have another agenda, some other reason for making these claims, for scaring people. In the particular case of Justice Owen, the attacks are, I am sad to say, true to form and conform to past patterns and practice, for they are, like the attacks of the past on the judges whose names I have mentioned, unfair and without foundation in either fact or law. I mentioned just a moment ago how I believe the critics--people like the distinguished Senator from Vermont--point out judges sometimes disagree about the interpretation of statutes. You may read one judge's criticism of another judge's interpretation as ``rewriting a statute.'' I hope you will consider those comments and take them into account, as I hope others will who currently oppose Justice Owen's nomination. But if that is the standard--and I don't think it should be--then such a standard would also disqualify numerous U.S. Supreme Court justices, whom Owen's opponents are known to adore. For example, in a 1971 opinion, Justices Hugo Black and William O. Douglas sharply criticized Justices William Brennan, Harry Blackmun, and others, stating that the ``plurality's action in rewriting the statute represents a seizure of legislative power that we simply do not possess.'' In a 1985 decision, Justice John Paul Stevens accused Justices Lewis Powell, Sandra Day O'Connor, and Byron White of engaging in ``judicial activism.'' Of course, these are not the only examples that pervade the U.S. Reports. Would Justice Owen's opponents apply the same standard and exclude from consideration or confirmation their own favorite justice from Federal judicial service? I imagine not. Fairness only dictates that Justice Owen not be made to suffer from this same absurd and unreasonable standard either. This whole issue reminds me of the scene from the movie ``Jerry Maguire,'' when Cuba Gooding, Jr., tells Tom Cruise: ``See, man, that's the difference between us. You think we're fighting, I think we're finally talking.'' Well, simply put, this is the way judges talk in opinions, and it certainly does not disqualify Justice Owen from confirmation. Those who emphasize critical quotes about Justice Owen from other justices on the Texas Supreme Court think they are fighting, but actually the justices are just talking. They are just judging and they are just doing the duty they were asked to do and took an oath to perform. Mr. President, I note we have about 5 minutes remaining on the clock, so I will cut short the remainder of my remarks. I will be back on the floor as needed, depending upon how this debate continues. It is my hope we will see a unanimous consent agreement to achieve a limit on debate, an adequate time certainly, where everybody who wants to be heard can be heard on this highly qualified nominee. I hope during that debate the people listening--both colleagues in the Senate and those listening across this country--will take all of the debate into account, both the charges and the answers, some of which I have given today, and make their own assessment of the credibility of some of these charges--charges which I believe are unfair and unfounded and without any merit as regards Justice Owen. Finally, let me just say I hope the Democratic minority in this body does not choose to make the same ill-considered decision to filibuster Justice Owen as they made in the case of Miguel Estrada. I believe debate is important. But, of course, sooner or later, we have to, and we should, do what the voters of our States have sent us here to do, what the Founders of this country, the Framers of our Constitution, expected us to do--that is, to vote. They expected the Senate to be a body where debate would be favored--and certainly it is that--where nothing happens precipitously--and certainly it is that--and where enough debate and time can be taken to cool tempers and emotions and passions and make the very best decisions we can possibly make on behalf of the American people. But after everything has been said once, or twice, or five times, or 10 times, or a hundred times, you would think the Senate should vote. I believe the Senate should vote. I believe that is what the Framers expected, and I believe they never considered a minority of this body could obstruct the will of a bipartisan majority when it comes to the nomination of a highly qualified judicial nominee. I hope at the appropriate time there will be that unanimous consent agreement and we will continue to debate Justice Owen's nomination for a reasonable period of time--as long as anyone has anything new to say--but, in the end, that we will have an up-or-down vote, which is something currently being denied to Miguel Estrada. I certainly hope the precedent that has been set now in the case of Miguel Estrada-- which I believe is a black mark on the record of this institution--will not be repeated in the case of Priscilla Owen. I thank the Chair, and I yield the floor.

Mr. CORNYN. Mr. President, I want to take the next few minutes to respond to some of the comments the ranking member of the Judiciary Committee has made with regard to the process by which we confirm judicial nominees of the President, and to specifically respond to some of the areas of criticism that he and a handful of special interest groups have directed at the nomination of Priscilla Owen. I believe, even though I am a new Member of the Senate--having been a Senator for all of about 4 months now--I have, at least in this area, some special knowledge I would like to share with my colleagues with regard to this particular nominee because for 7 years I served on the Texas Supreme Court and for 3 years concurrently with Justice Priscilla Owen. So during that time I had the chance to work with her on a daily basis, learn her work habits and her frame of mind when it came to addressing her responsibilities as a judge on the highest court of my State. I believe in each instance the criticism the ranking member has lodged--really repeating that which special interest groups have lodged unfairly against Priscilla Owen since her nomination on May 9, 2001-- can be refuted, or at least explained in a way that I think demonstrates she should be given the opportunity for an up-or-down vote in the Senate, where I am convinced that a bipartisan majority of this body stands ready to confirm her nomination. Senator Leahy has gone through some history of the Clinton administration and the nominees of that administration and the treatment--unfair treatment, in his eyes--of President Clinton's nominees. I think what we are supposed to conclude from that is that somehow this game of tit for tat, or what is sauce for the goose is sauce for the gander, somehow rises to the high level of performance that the American people have cause to expect of us whom they send to the Senate. I contend that rather than serve the interests of the American people, the way in which the Senate Judiciary Committee proceedings have been conducted for some time now--particularly as evidenced now by the filibuster being imposed against the nomination of Miguel Estrada-- have been a disservice to the American people. I have supported--and Senator Leahy has said he agrees with me--that we need to find some way to bring a conclusion to this downward spiral, in a way that serves the interests of the American people and does credit to this institution. I hope, in the days that lie ahead, we will find an opportunity to do that. I trust we will. I only hope the Senate does not grab defeat from the jaws of victory in terms of our opportunity to reform this broken system of judicial confirmation, one that does not reflect well on this institution. Senator Leahy talked about how unprecedented this nomination is, pointing out that last year, during Senate Judiciary Committee hearings, Justice Owen was voted down in a strict party-line vote, and that she would now be renominated by the President and then brought to the floor. I guess these are unprecedented times when it comes to judicial confirmation proceedings. As I mentioned just a moment ago, we have an unprecedented filibuster by the Democratic minority of Miguel Estrada, someone who, I believe, would receive a majority vote from a bipartisan group of Senators on this floor should the Senate just be allowed to vote. Of course, we have been through, I think, four cloture motions, which have failed, which means that debate continues on that nomination. Here again, unprecedented in the annals of this institution: a circuit court judge being filibustered for no good reason, I would contend. Senator Leahy says Justice Owen is an activist, someone who would impose her own will or political judgment on the people regardless of what precedent had established earlier decisions by the highest court in the land or what the legislature says. But the way he explains what he means by ``activism'' I think equates with: I don't agree with the results of the decision. If that is the definition of ``activism,'' then activism has no meaning, or certainly no commonly understood meaning, because, of course, any reasonable person might disagree with the outcome of any judicial decision and thereby label that judge who made the decision an activist. But that is certainly not the commonly understood meaning: just the fact that judges may, in fact, disagree with each other from time to time. I think some have pointed out, as an example of Justice Owen's failings, that some judges at different times have had cause to disagree with her decision. But, in fact, that is what we expect of judges--certainly at the highest levels of our judiciary--that they will do their very best to research the law, to comb the record, to try to discern what precedents might apply, what statutes that have been passed by Congress might apply, and then to apply that law to the facts as decided by the fact finder in order to reach a decision. At the highest levels of our judiciary we commit that decision to nine people, and frequently they disagree with each other. We do not point that out as a fault or a failing; we view that as a strength because in the debate, the dialog, the back and forth--the conversation really--these judges have, we believe the public purpose for which the judiciary was created is served. I believe that to say it represents a failing or represents a reason a judge should not be confirmed turns the whole purpose of that body on its head. Senator Leahy claimed that Justice Owen is simply too extreme to be confirmed--this notwithstanding the fact that in her last election to judicial office in the State of Texas, 84 percent of the voters voted in her favor. She has been endorsed by a bipartisan group of the leadership of the bar in my State, Republicans and Democrats alike, former presidents of the Texas Bar Association. She has received the highest endorsement, the highest recommendation given by the American Bar Association. How, in any fair-minded person's view, could Justice Owen be characterized as too extreme in light of those simple facts? As some evidence of his argument that Justice Owen is somehow an activist, somehow too extreme, Senator Leahy has pointed to language in a number of opinions where she has been criticized for rewriting statutes. As somebody who has, for better or worse, served for 13 years as a judge before I came to this institution, I can tell you, that is simply the way judges talk to each other when they disagree about the outcome in any case. They do their very best to research the law, to try to ascertain what the legislative intent is in any particular case, and then they reach a conclusion. Someone who disagrees with that judge may say: Well, I disagree. I believe you are rewriting the statute. It is not as serious nor certainly as consequential a statement as Senator Leahy might suggest. It is just another way of saying: I disagree. Here again, judges disagree, particularly on the most difficult questions that confront our States or this Nation. We expect judges to speak their mind. We expect judges to enter into intelligent debate and discussion, and when they disagree, so much the better. But finally-- finally--there has to be a decision. That is where the majority comes into play and makes a final decision. So judges being accused of rewriting statutes does not have nearly the sinister connotation that some might suggest and, in fact, to me just represents judges trying to do their jobs to the best of their ability. I just have to mention that Senator Leahy pointed to one case where Justice Owen and I disagreed when I was on the Texas Supreme Court, the Weiner v. Wasson case, and it was one of a number of cases where she and I disagreed. But, here again, the fact that we disagreed does not make her incompetent to serve on the Fifth Circuit Court of Appeals or unqualified or somehow activist. It means simply that we had different opinions of how the law ought to be ascertained, what that law was, and how it should be applied to the facts. The language Senator Leahy read, with which he said he agreed, about the importance of stare decisis, adheres to the precedents set out by our highest court in terms of setting expectations of the litigants, achieving finality of a decision rather than relitigating the same legal questions over and over again. That was no lecture but merely an explanation to the one who was challenging the constitutionality of the statute in that case or the one who claimed the statute was constitutional; in fact, it was important that we adhere to an earlier decision where we had held a similar statute unconstitutional. It was certainly not a lecture. It just goes to prove that when you read the written record in black and white, sometimes it fails to impart enough information to make an informed decision about what is going on. That is why we have juries, to listen to witnesses, confront witnesses face to face in court. That is why, as appellate judges, we defer to the facts found by juries and lower courts, because they are in the best position to determine the veracity of the testimony and the credibility of the witness. That is why a written record can sometimes simply mislead you into a wrong conclusion, which has happened in the case of Justice Owen. I could not support the nomination of Justice Owen to the Fifth Circuit Court of Appeals more strongly. This court, of course, covers the States of Texas, Mississippi, and Louisiana and all Federal appeals that come from those States. I firmly believe Justice Owen deserves to be confirmed. She will be confirmed by a bipartisan majority of the Senate as long as the Senate applies a fair standard and as long as we continue to respect Senate traditions and the fundamental democratic principle of majority rule by permitting an up-or-down vote on her nomination. The American people desperately need the Nation's finest legal minds to serve on our Federal courts, particularly vacancies such as those on the Fifth Circuit, which have been designated judicial emergencies by the U.S. Judicial Conference. We must ensure that all judicial nominees understand that judges must interpret the law as written and not as they personally would like to see them written. Justice Owen satisfies both of these standards with flying colors. She is, quite simply and by any measure, an impressive attorney and jurist. She graduated at the top of her class at Baylor Law School and was an editor of the Law Review at a time when few women entered the legal profession. She received the highest score of her class on the bar examination, and she was extremely successful as a practicing attorney in Houston, TX, and across the State for 17 years before she began her service on the Texas Supreme Court, where she has served with distinction for 8 years. I alluded to this a moment ago, but in her last election not only did she receive the overwhelming majority of the statewide vote, she was endorsed by virtually every Texas newspaper editorial board--hardly the record of an out-of-the-mainstream nominee. She has the support of prominent Democrats in Texas, including former members of the Texas Supreme Court such as former Chief Justice John Hill, former Justice Raul Gonzalez, and a bipartisan array of former presidents of the State bar association. The American Bar Association has given her its unanimous and highest well-qualified rating, which some in this Chamber have called the gold standard. I cannot understand nor fathom how any judicial nominee can receive all of these accolades from legal experts and public servants across the legal and political mainstream unless that nominee is both exceptionally talented as a lawyer and a judge who respects the law and steadfastly refuses to insert his or her own political beliefs into the decision of cases. Based on this amazing record of achievement and success, it is no wonder that Justice Owen has long commanded the support of a bipartisan majority of the Senate while her nomination has lingered since May of 2001. I would like to talk about my own personal perspective on this nominee, having worked with her for 3 years. During that time, I had the privilege of working closely with Justice Owen. I had the opportunity to observe on a daily basis precisely how she approaches her job as a jurist, what she thinks about the job of judging in literally hundreds, if not thousands, of cases. During those 3 years, I spoke with Justice Owen on countless occasions about how to read statutes faithfully and carefully and how to decide cases based on what the law says, not how we personally would like to see it read or to have come out. I saw her take careful notes, pull the law books from the shelves and study them very closely. I saw how hard she works to faithfully interpret the law according to her oath and to apply the law as the Texas Legislature has written. I can testify from my own personal experience, as a former colleague and as a former fellow justice, that Justice Owen is an exceptional judge, one who works hard to follow the law and enforce the will of the legislature, not her will. Not once did I see her try to insert her own political or social agenda into her job as a judge. To the contrary, Justice Owen believes strongly, as do I, in the importance of judicial self-restraint, that judges are called upon not to act as legislators or as politicians but as judges, to faithfully read statutes and to interpret and apply them to the cases that come before the court. It is because I have such a deep admiration for Justice Owen that I have taken such a personal interest in talking about her nomination and hoping, not beyond hope, that Senator Leahy and others who, I am convinced, have profoundly misjudged this nominee will reconsider their views and perhaps will take what I have to say today in the overall context of the nominee and reconsider her nomination. On the morning of Justice Owen's confirmation hearing in the Judiciary Committee last month, I published an op-ed in the Austin American-Statesman discussing Justice Owen's qualifications for the bench. I ask unanimous consent to print that op-ed in the Record.

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

Mr. CORNYN

Mr. CORNYN. Mr. President, I ask for the yeas and nays on the nomination.

Mr. CORNYN

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

Mr. CORNYN

Mr. CORNYN. My thanks to Senator Nickles. Finally, I want to point out that 45 percent of those who earn $50,000 a year or less--many of whom are seniors--will benefit from this ability to enhance and secure their retirement years. It will also boost the stock market and the value of hundreds of thousands of retirement plans, as corporations that don't currently pay dividends choose to do so because of the elimination of the bias against payment of corporate dividends in our Tax Code, and grow the stock market value in all likelihood, and, as I say, help secure the retirement of American workers. Finally, this budget resolution increases to $75,000 the amount small businesses may expense from taxable income in the year that investment occurs. This incentive to further investment by small businesses--which create the vast majority of jobs in our country--will help lower the tax-adjusted cost of capital for small business, the ``job factory of America,'' as the President has called it. This increases the ability of small businesses to make new purchases, invest in new equipment, hire new workers, or retain current ones. That is more jobs and more growth. In conclusion, while the Congressional Budget Office has scored this proposal by the President, this growth package, in a static way, both sides of the aisle recognize--indeed, one of the Democratic alternatives to the President's proposal embraces the concept--a stimulus effect and growth effect by tax cuts. PriceWaterhouseCoopers, for example, has reported that the President's growth package would increase the number of jobs by an average of 1.2 million a year during the first 5 years and an average of 900,000 per year over 10 years, and that the proposal would add $738 billion in new income to the economy during the first 5 years and about $1.5 trillion over 10 years, and other private sector estimates are even higher. The President's Council of Economic Advisers estimates that the jobs and growth plan will create 1.4 million new jobs by the end of 2004. Mr. President, if we are serious about growing jobs, about putting this economy back on track, and if we are serious about the need to restrain massive Government spending, then we must get serious about setting these priorities in our budget blueprint. Let's not just talk about preventing deficits while at the same time calling for more spending. Let's not decry a plan that benefits the economy by benefiting taxpayers and call for that money instead to be spent by Government. Let's, instead, set limits and stick by them. I yield the floor.

Mr. CORNYN. I ask the chairman for 2 or 3 more minutes.

Mr. CORNYN. Mr. President, I thank the distinguished chairman of the Budget Committee on which I had the honor of serving for his work on this budget resolution and for his leadership on the Budget Committee. My compliments as well to the ranking member, Senator Conrad, for the civil but spirited way in which the committee debated the markup of this budget resolution. I believe the budget resolution we have before us represents the priorities of the Federal Government and, more importantly, of the American people. I rise today to discuss some fundamental questions which I believe are important to this debate, and to address arguments that have been made in support of spending more of the taxpayers' money in the name of fiscal restraint, as odd as that may sound, and at the same time to talk about cutting deficits. As many of my colleagues on the committee and here on the floor, I support this budget resolution, including the President's jobs and growth package. I believe it can make a real difference, not only to my State of Texas but to the Nation. I believe, if we hold to our principles and our priorities, we can assure that the needs of the Nation are met and help our economy grow. If we are successful, we can help prevent future generations from being saddled with the bill for excessive spending that some in this body seem determined to create. Over what remains of the 50 hours allotted under the Congressional Budget Act under this debate, many amendments will be offered and have already been offered that reduce the amount of the President's growth package. If that were not enough, many of those who want to cut tax relief want to turn around and spend what would have been tax relief on bigger government. Rather than allow American taxpayers to choose how they want to spend their hard-earned money, those who would seek to cut tax relief and increase spending want to choose for the American people how that money should be spent and grow Government ever larger. The fundamental question in this debate is simple: Should we support higher taxes, more Federal spending, and bigger government or should we facilitate economic opportunity and jobs? For me, that is what this debate is all about. Who should spend that money: politicians and bureaucrats or taxpayers? Families or the Government? Small business owners on investment and job creation or the Federal Government? Senior citizens on enhancing their retirement security or the Federal Government? This debate is really about who we should trust to get done the job of growing our economy and creating greater economic opportunity for all Americans. Should we help people keep more of their money so they can spend it, invest it, or save it as they wish or should we simply add more taxes to an already beleaguered American taxpayer, giving up on economic growth and increasing the deficit? I urge my colleagues, don't be fooled. This debate is not about shrinking deficits. It is about growing spending. The first chart to which I would like to direct my colleagues is one that demonstrates a rather dramatic fact; that is, over the last couple of years we have seen spending soar, while Government revenues have shrunk. In fact, revenues have fallen by nearly 9 percent over the last 2 years. At the same time, though, Congress has seemed not to have even noticed because spending has increased by 12 percent over that same period. We all agree on the need to control deficits. Our friends on the other side of the aisle contend that allowing more people to keep what they themselves earned would, in fact, balloon the deficit. I disagree. It is not spending by taxpayers that balloons deficits; it is spending by Congress, as this chart dramatically represents. If you listen to this debate closely, you will notice that opponents of the President's growth package and this budget resolution do not propose that we pay down the debt instead of tax relief. They, in fact, propose spending hundreds of billions of dollars instead of tax relief and this growth package. They want to spend every penny of what would be relief to taxpayers and an investment in economic growth on something else altogether. Those on the other side of the aisle, and on the other side of this issue, seem to be concerned about deficits when there is a proposal to provide relief to the beleaguered American taxpayer. They spend hours on the Senate floor and in committee rooms warning that taxpayers keeping more of what they earned is a risky proposition. We have heard all that before and it still does not wash. Notice carefully that they are not shy about spending more of the taxpayers' money, even if that spending causes the very same deficits they complain about here on the floor. In fact, despite the deficit, despite a sluggish economy, despite the costs of waging war and rebuilding our military, many of our colleagues want to increase discretionary spending but not just on the Department of Defense and on homeland security. That funding is already provided for in this budget resolution. The money that should flow back to the taxpayers will, if our colleagues who oppose this resolution are successful, flow instead to more and more Government spending. The next chart I show to my colleagues is a list of Budget Committee amendments to what was ultimately voted out as the budget resolution. Each of these amendments failed. But as you can see, this chart, I believe, is an indicator of what those who oppose this budget resolution propose instead. For example, here is one amendment for an additional $2.2 billion. You can see the figure of $200 billion more for Medicare, an additional $1.8 billion for function 700 for veterans, another for increased spending on natural resources--all of which are provided for, to some extent, in the budget resolution that was voted out of committee. But you can see from the chart the total of these amendments would have added, if they were not defeated, approximately $440 billion in new spending. That is why I say those who complain so loudly about budget deficits but at the same time propose huge increases of hundreds of billions of dollars in new Federal spending really do not have their story straight. Because, of course, if we do not cut spending, and if we do not see the economy grow, that means less hope and less opportunity for American workers. And that means more taxes for the beleaguered American taxpayer. My question is simply this: Why shouldn't the Government be required to do what American families have to do during lean times? Why shouldn't the Government have to tighten its belt in lean times? Indeed, the growth of Government continues, but the economic recovery will not under these tax-and-spend proposals. Shared sacrifice, which is what is called for during lean times, is not shared, at least by the American taxpayers, if they continue to see nondiscretionary increases in spending with no end in sight. I support the President's growth package as recommended in this resolution because I believe individuals and families in my State and across America, the people who pay the taxes and earn the money, can better save, spend, and invest their money as they see fit--far better than can the Federal Government. I believe Texans know better what they need than the spenders in the Halls of Congress. According to the latest Scripps Howard Texas poll, the people of my State are worried about not having enough money for their retirement, about skyrocketing energy prices, and about college tuition for our children. They are worried about the issues that affect their lives directly. The President's jobs-and-growth plan addresses these concerns by providing a short-term economic stimulus that will encourage investment and job growth, as well as strengthening our long-term economic growth. The President's plan will create more wealth, provide higher wages and more jobs, thereby leaving more money for families, while increasing their standard of living. As for the argument that this proposal would cause greater deficits, I disagree. If we were to hold the line on new spending, if we were responsible with the taxpayers' money--the money they send to Washington every year--and if we make the most out of the revenues we have by following the limits set out in this budget resolution, then we will prevent growing deficits and extinguish this deficit entirely in the foreseeable future. It is only by spending beyond our means that we create deficits. Last year's failure to pass a budget resolution is a clear example of the failure to act, the failure to set important guidelines for the Federal budget. The failure of last year's Senate leadership to accomplish what we are now doing on the Senate floor meant the Senate had few guidelines to follow, few limits on spending, and no responsibility, at least within the constraints of a budget resolution, to control boundless spending by the Government. Let's recall a little bit of history that revisionist historians both in this body and outside seem to forget. The chart I have in the chamber shows, of course, what we all remember; that is, at the time President Bush came into office, we saw a tremendous trend downward in terms of the growth of our gross domestic product. And, of course, we have seen a tremendous decline in the stock market. It has really only been by virtue of the tax cuts that were passed in 2001--which would be made permanent--that we see increased money in consumers' pockets, money they have been able to use to buy a car, to buy a house, in conjunction with lower interest rates. That is what has kept the meager recovery we have seen as good as it has been. Of course, the economic recovery was staggered by the events of 9/11 and, of course, the continuing war against terrorism and, obviously, the uncertainty associated with the geopolitical situation in the Middle East. As a result, our economy has been sluggish and investor confidence remains low. GDP has grown at an anemic rate, while the labor market has remained soft, with an unemployment rate in February of 5.8 percent. To address the economic challenges that confront our Nation and confront America's families, the President proposed, and I support, and this budget resolution reflects, a jobs-and-growth package. This package will spur near-term and long-term economic growth. It will provide an opportunity for more robust business investment and, yes, it will encourage new job growth. His proposal, which this budget resolution includes, would first accelerate to January 2003 portions of the tax bill that was passed by this body in 2001 that are currently scheduled to be phased in, including a reduction in marginal income tax rates, additional relief from the marriage penalty, a larger tax credit for children, and increasing the size of the 10-percent income tax bracket. The net effect of these proposals is allowing taxpayers to keep more of what they earn, so they can spend it as they see fit. Who benefits? Well, obviously, the individual taxpayer. But just as importantly, small business owners, including sole proprietors and partnerships, most of whom report and pay taxes on their personal income tax returns. This plan will increase the incentives for small business owners to invest in technology, machinery, and other equipment to help them expand and create jobs, and reduce the cost of capital needed to help small businesses grow. And, of course, as a result, people who are looking for work, who want to work but cannot find a job, will benefit, too. As the President has stated: [M]ore than two-thirds of taxpayers who pay the highest marginal tax rates are small business owners who include their profits when they file their individual tax returns with the IRS. All together, the tax relief I propose will give 23 million small business owners an average tax cut of $2,042 this year. And I'm asking Congress to make those reductions permanent, so that America's entrepreneurs can plan for the future, add more employees, and invest in our economy. Those were the words of the President of the United States when he made this proposal. Again, it translates into a single word, and that word is ``jobs.'' Under this proposal, this budget resolution, a married couple with two children and an income of $40,000 will see their income tax reduced by $1,133, a 96-percent decline; an older couple with an income of $40,000 will see their taxes reduced by 41 percent; a married couple with one child and an income of $40,000 will see their taxes decline by 33 percent; a married couple with two children and an income of $60,000 will see their taxes decline by 24 percent; and a married couple with two children who earn $75,000 between them will see their taxes reduced by 19 percent. I also want to address briefly that portion of the budget resolution that eliminates the double taxation of corporate income such that dividend income will no longer be taxed at the individual level. As the chairman of the Budget Committee has pointed out earlier, American taxpayers pay some of the highest taxes in the world--second only to Japan, I believe, on corporate dividends. Under current law, dividends can be taxed once at the corporate level and up to the highest tax bracket for individual taxpayers, once those dividends are paid by a corporation to its shareholders. That is more than any nation in Western Europe. Under the President's proposal--which is only fair--those dividends will be taxed once and not twice. There are numerous economic benefits to the economy, and I really believe this is one of the most important aspects of this growth package. The first effect will be to lower the cost of capital. This will make new investments in technology and equipment more attractive to firms while providing investors with larger after-tax returns. For individual taxpayers and families, this means more money to spend, save, or further invest. For companies, as individuals invest more, increasing the amount of capital available in the capital markets, worker productivity will increase, real wages will rise, and more jobs will be created. This proposal will also--not incidentally--remove the current bias toward debt financing. As Alan Greenspan said in testimony before the House Financial Services Committee in February: In my judgment, the elimination of double taxation will be helpful to everybody. . . . There is no question that this particular program will be, net, a benefit to virtually everyone in the economy over the long run, and that's one of the reasons I strongly support it.

Mr. CORNYN

Mr. CORNYN. I thank the Chair. Mr. President, Daniel Webster once said that ``justice is the greatest interest of man on Earth.'' I cannot help but think of that phrase as I read from today's letter from President George W. Bush, which was previously admitted as part of the Record, when he says: The Chief Justice warns that the high number of judicial vacancies, when combined with the ever-increasing caseloads, leads to crowded courts and threatens the administration of justice. It has also long been recognized that ``justice delayed is justice denied,'' and that is exactly what is happening to American citizens throughout this country, while President Bush's judicial nominees are being filibustered and slow boated. The President is being denied his prerogative of choosing his nominees for Federal benches subject to the advice and consent, the proper constitutional role of the Senate, being exercised. I rise this morning with great concern about the state of our judicial confirmation process, something that Senator Specter and others have commented on. They have called for reform, for a fresh start, and I believe that is called for. The Constitution makes clear that the President appoints judges with the advice and consent of the Senate. It has long been established, by constitutional text, by Senate tradition, and by Supreme Court precedent, that that means a majority of the Senate. But today, a bipartisan majority of the Senate is being denied the opportunity to vote on Miguel Estrada, by a minority that is intent on changing the rules, applying a double standard, and denying Miguel Estrada an up-or- down vote in this Chamber. Somehow, this process has disintegrated to the point where a partisan minority of the Senate will not even allow a bipartisan majority to vote. This, of course, is not what the Constitution says or what the Founders had in mind. Our Founders never intended that the judicial confirmation process would become so poisonous as it has today. This filibuster, this act of preventing a bipartisan majority from expressing its consent to Mr. Estrada's nomination, is, as we have heard, without precedent. I could not help but think also about last year's debate over the confirmation of another nominee of President Bush, someone with whom I served on the Texas Supreme Court, and that is Justice Priscilla Owen, who will come up again this Thursday for another hearing in the Senate Judiciary Committee. Some people during that process criticized the Texas system of electing judges, one that has been established in our constitution since Reconstruction and which also is replicated in the constitutions of other States. Justice Owen has, as I have, long been an advocate for reforming the way in which Texas selects judges. But, Mr. President, whatever the problems the various States may have in their judicial selection systems, nothing--absolutely nothing--compares to how badly broken the system of judicial confirmation is here in Washington, DC. In Texas, at least, the people are given a choice of judicial nominees and there is an opportunity for debate and discussion and, at long last, there is a vote. Whatever you can say about the process, we always get there. We always hold a vote. Somehow we have lost our way in the Senate. When the President nominates individuals of high caliber to serve the American people through an appointment to the Federal bench, and bipartisan majorities of the Senate stand enthusiastically ready to confirm those individuals, the process of confirming these highly qualified nominees is simply obstructed. As I say, I have long believed we need a fresh start, as articulated by others, to the judicial confirmation process, and the first step would be to bring this fine judicial nominee, Miguel Estrada, to a vote. It has already been too long. It is time to vote. I yield the floor.