Pete Domenici

Mr. DOMENICI

Mr. DOMENICI. I sat here for 30 minutes. I am very sorry.

Mr. DOMENICI. Madam President, I have the floor.

Mr. DOMENICI. I did not interrupt his comments when there was tremendous opportunity to point out inconsistencies. I made only five notes and I could have stopped and asked him if something he said is really what he meant, but I chose not to. I am going to finish my few remarks. I will not be much longer. I did not say that would happen, nor that they were discriminating against him, but the implication is clearly that it is kind of strange that this bright Hispanic young man is a Republican. I believe that is in the marketplace of ideas on the Democratic side. I suggest there are some things happening in our country. In my own State, a young Hispanic came up to me the other day from a very large family--young people, middle-age people, grandmas, grandpas. They all have very beautiful Spanish names for all of those categories of people. He put his arm around me and he said: We have all been Democrats. There are probably 200 people in my family. We have all been Democrats. But you know, I am wondering if I should not join with you and become a Republican. It seems like you think like we do, and wouldn't it be something if I did and my whole family decided that I was right? I said to him: I believe there are thousands like you who feel that way in New Mexico and in our country, and we welcome you. If this young man, Miguel Estrada, when he became a citizen, became a Republican--and I do not know that, but there is an implication he is one of us or he is conservative--I welcome him. I am proud of him. I am glad he did it. I do not believe he ought to be eliminated from consideration on the circuit court of appeals or even a higher court because of that issue. I honestly believe it takes people of diversity in our country to join both parties and speak through their ideology and their feelings about what they think of our country. I am not at all sure the argument being made today by the distinguished Senator from New York is anything other than ``we are afraid of this guy; we're not so sure he should be on the bench,'' but they really do not know why. I hope that many Republicans join with Democrats and decide that if the distinguished Senator from New York wants to speak and wants to be joined for 2 weeks, that we will do him the favor and let him talk for 2 weeks. I am not sure our leader will do that because maybe we should shut off debate, but maybe it would be doing a favor for America and Hispanics across this country if we let him speak for 2 weeks. I do not think their cause will get any better. I think it might get even worse with the passage of time. This young man went through all this effort thinking that he might complete the American dream. What must it have been like for this young man who learned English so quickly, went on to school and law school at Harvard? He must have thought the American dream for him might mean fulfillment as a judge. He was appointed by the President of the United States more than 630 days ago, and instead of a dream, he has had a nightmare. I think it should end. The nightmare should be over. If they would like to make it 2 weeks longer and want to talk that long in the Senate, I hope the Senate insists that those who want to talk long on the Senate floor can talk long. Certainly I am a very knowledgeable Senator about the institution. I love it, where some Senators do not even like to hear people say that. They think we waste too much time; we do this, that, and the other. I really love it. I did not at first, but I do now. I do not believe the other side will spend 2 weeks talking about this man unless they clearly do not want him to be on the bench, perhaps because of what I have said here; that maybe he does not belong as a Hispanic because, after all, he is conservative. I yield the floor.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I rise before you today not only to recognize the dedication and hard work of a fellow New Mexican, but to celebrate a century of conservation by the National Wildlife Refuge System. On February 1 of this year, the man I honor today, Dr. James Montgomery of Roswell, NM, will receive the 2003 Refuge Volunteer of the Year award offered by the National Wildlife Refuge Association. This award is given to an individual who displays outstanding dedication to the preservation and advancement of the national refuge system and its endeavors to protect the beauty of the American landscape. Dr. Montgomery has spent the last 15 years and given more than 10,000 hours of service protecting and improving the Bitter Lake National Wildlife Refuge in Roswell. He has done this for no compensation, motivated only by his concern and appreciation of the refuge. During his work, Dr. Montgomery played an integral role in many important projects, including: spearheading efforts to maintain and establish species on the refuge; providing support to community outreach and events service; and assisting refuge staff in their budget process. Dr. Montgomery also holds the position of treasurer for the Friends of Bitter Lake nonprofit organization. Clearly his work on behalf of the refuge sustains the accessibility and natural beauty of one of New Mexico's treasures. Bitter Lake is one of the 540 sites comprising the National Wildlife Refuge System and one of seven in New Mexico, Bitter Lake, Bosque del Apache, Grulla, Las Vegas, Maxwell, San Andres, and Sevillita. On these 540 refuges, 30,000 hard-working men and women annually donate more than 1 million hours of their time to protect, maintain, and improve our Nation's environmental resources. Given the impressive number of individuals worthy of praise, it gives me great pride as a New Mexican that Dr. James Montgomery has been chosen for this honor. President Bush, in his State of the Union Address, spoke of building a more compassionate America; an America energized by individuals such as Dr. Montgomery who dedicate great portions of their lives to the generous spirit that has made this country great. Whether that spirit be embodied by volunteers who assist those in need, or by those who work to ensure that our natural wonders are preserved, all are necessary and vital to our existence as Americans. Furthermore, it wouldn't do to discuss Dr. Montgomery without mentioning the program for which he has tirelessly worked. This March we celebrate a milestone in American wildlife conservation: the 100th Anniversary of the National Wildlife Refuge System. This momentous occasion is worthy of recognition because over the past century, normal citizens, along with the refuge system, have been at the forefront in protecting the unique beauty of the American landscape. The National Wildlife Refuge System protects a wide range of wildlife and landscapes throughout the country. In particular, the refuges in the Southwest are necessary to secure the well being and survival of migratory birds, including the bald eagle, which make the area their home during the fall and winter months. The system concentrates also on scientific endeavors that span such fields as habitat alteration and biodiversity research. These efforts coincide with maintaining places of unspoiled natural beauty that can be enjoyed by all Americans. New Mexico is privileged to have some of the most beautiful natural wonders within this great Nation. Wildlife refuges such as Bitter Lake in Roswell and Bosque del Apache in Socorro are perfect examples of the 100 years of success by the refuge system in ensuring the treasures of our environment are preserved and enjoyed for generations. Of course, the success would not be as great without the hard work, passion, and sacrifice of those dedicated volunteers like Dr. James Montgomery. To that end I salute the National Wildlife Refuge System for its many successes and Dr. James Montgomery for embodying the great spirit of charity and volunteerism that America cherishes.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, today I rise to bring the Senate's attention to a matter that is slowing Los Alamos County, NM, in its efforts to fully recover from the Cerro Grande Fire of May 10, 2000. The Cerro Grande fire severely reduced available housing in Los Alamos. Indeed, a major deterrent to new hires is the lack of housing choices in the city. The housing market is even tighter because of the loss of about 400 housing units through the devastating Cerro Grande Fire. Los Alamos has a population of about 18,000 people. While we have Federal programs to help low and moderate income Americans find good housing, in Los Alamos these programs are ineffective due to the current practice of averaging Los Alamos County and Santa Fe County incomes into one Metropolitan Statistical Area, MSA. This is harmful to Los Alamos residents, where the median income is about $82,000 because the Federal programs use the MSA median income of about $65,000 to determine participation. Eighty percent of median income is a standard measure. Santa Fe's median income of about $40,000 thus becomes a significant factor for a Los Alamos teacher, fireman, or policeman seeking subsidized Federal assistance. Their incomes in Los Alamos are deemed to be too high to qualify for housing because 80 percent of $65,00 is used as the maximum allowed for assistance. Thus, $52,000 becomes the effective ceiling for assistance, when the actual 80 percent ceiling figure for Los Alamos incomes is about $65,000. This makes a huge difference in a high-priced and competitive market. The result is that developers are discouraged from applying for tax credits and other assistance programs because their applicants do not qualify to live in their new or remodeled housing projects. The Los Alamos County Manager reports that not a single County employee is eligible for housing created by the Low Income Housing Tax Credits. He, like many residents and the LANL recruiting effort, remain concerned that the limited housing supply has raised rents and sales prices. Los Alamos County is also landlocked by federal government land ownership. There is a desperate need for affordable housing at a time when, once again, our nation is calling upon LANL for helping to meet its internal and international security needs. This situation also exists around the New York City area, where Westchester County incomes unfairly raise the metropolitan average to the detriment of the metropolitan housing market. In that case, Congress agreed to separate Westchester County to ease the housing market situation. All I am asking in my bill is to accomplish the same goal by allowing Los Alamos County to stand on its own in terms of HUD median income requirements. My bill does not simultaneously lower the Santa Fe County income to its actual median, but, rather, allows Santa Fe County to continue to use the higher median, because the Santa Fe housing market is also very unusual, and the two-county average helps make more Santa Fe residents eligible for federal assistance on many fronts. I appreciate my colleagues attention to this matter, and I know the residents of Los Alamos County will be grateful for this assistance to allow more of them to make use of available HUD and other affordable housing assistance programs. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, today I rise to bring the Senate's attention to a matter that is slowing Los Alamos County, NM, in its efforts to fully recover from the Cerro Grande Fire of May 10, 2000. The Cerro Grande fire severely reduced available housing in Los Alamos. Indeed, a major deterrent to new hires is the lack of housing choices in the city. The housing market is even tighter because of the loss of about 400 housing units through the devastating Cerro Grande Fire. Los Alamos has a population of about 18,000 people. While we have Federal programs to help low and moderate income Americans find good housing, in Los Alamos these programs are ineffective due to the current practice of averaging Los Alamos County and Santa Fe County incomes into one Metropolitan Statistical Area, MSA. This is harmful to Los Alamos residents, where the median income is about $82,000 because the Federal programs use the MSA median income of about $65,000 to determine participation. Eighty percent of median income is a standard measure. Santa Fe's median income of about $40,000 thus becomes a significant factor for a Los Alamos teacher, fireman, or policeman seeking subsidized Federal assistance. Their incomes in Los Alamos are deemed to be too high to qualify for housing because 80 percent of $65,00 is used as the maximum allowed for assistance. Thus, $52,000 becomes the effective ceiling for assistance, when the actual 80 percent ceiling figure for Los Alamos incomes is about $65,000. This makes a huge difference in a high-priced and competitive market. The result is that developers are discouraged from applying for tax credits and other assistance programs because their applicants do not qualify to live in their new or remodeled housing projects. The Los Alamos County Manager reports that not a single County employee is eligible for housing created by the Low Income Housing Tax Credits. He, like many residents and the LANL recruiting effort, remain concerned that the limited housing supply has raised rents and sales prices. Los Alamos County is also landlocked by federal government land ownership. There is a desperate need for affordable housing at a time when, once again, our nation is calling upon LANL for helping to meet its internal and international security needs. This situation also exists around the New York City area, where Westchester County incomes unfairly raise the metropolitan average to the detriment of the metropolitan housing market. In that case, Congress agreed to separate Westchester County to ease the housing market situation. All I am asking in my bill is to accomplish the same goal by allowing Los Alamos County to stand on its own in terms of HUD median income requirements. My bill does not simultaneously lower the Santa Fe County income to its actual median, but, rather, allows Santa Fe County to continue to use the higher median, because the Santa Fe housing market is also very unusual, and the two-county average helps make more Santa Fe residents eligible for federal assistance on many fronts. I appreciate my colleagues attention to this matter, and I know the residents of Los Alamos County will be grateful for this assistance to allow more of them to make use of available HUD and other affordable housing assistance programs. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DOMENICI

Mr. DOMENICI. Madam President, Senator Stevens is the senior Republican in terms of time--I am sure many people do not know it, but I am second--and I want to say I am very proud that he has said what he said. Many people speak all the time. The Senator from Alaska speaks when it is important. He does not come to the Chamber and engage himself in rhetoric. He is too busy doing tough work. He understands this issue. Truly, many of the Democrats ought to be ashamed of themselves. We try to support Presidents. We would have supported President Bill Clinton if he had done what he was talking about in that statement the Senator read. I do not think there is any doubt about it. We would not have questioned whether he had the right security briefing and whether he knew what he was doing. Our President has been warning us, he has been going back to the table, letting the inspectors go in again, coming to the American people, going to the U.N., and nothing happens. As a matter of fact, I believe it is correct, when the Senator cites the date that President Clinton gave that speech, I do not believe anything of a positive nature has happened in Iraq at the hands of Saddam Hussein since that time. It has gotten worse, if anything. He has not ameliorated or made anything better, to my knowledge, and look what it was like on the date the Senator read in his statement. I commend the Senator, and I do believe the resolution introduced today ought not deter anyone from what we are doing. It ought not change minds in this Senate which voted overwhelmingly in support of our President. I thank the Senator for what he has said.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I rise today to introduce again legislation to eliminate one of the great inconsistencies in the Internal Revenue Code. The bill I am introducing today with Senator Bennett is designed to restore some internal consistency to the tax code as it applies to art and artists. No one has ever said that the tax code is fair even though it has always been a theoretical objective of the code to treat similar taxpayers similarly. The bill I am introducing today would address two areas where similarly situated taxpayers are not treated the same. Internal inconsistency #1 deals with the long-term capital gains tax treatment of investments in art and collectibles. If a person invests in stocks or bonds, holds the asset for the requisite period of time, and sells at a gain, the tax treatment is long term capital gains. The top capital gains tax rate is 20 percent, 18 percent, if the asset is held for five or more years. However, if the same person invests in art or collectibles the top rate is hiked up to 28 percent. Art for art's sake should not incur an additional 40 percent tax bill simply for revenue's sake. That is a big impact on the pocketbook of the beholder. Art and collectibles are alternatives to financial instruments as an investment choice. To create a tax disadvantage with respect to one investment compared to another creates an artificial market and may lead to poor investment allocations. It also adversely impacts those who make their livelihood in the cultural sectors of the economy. Santa Fe, NM, is the third largest art market in the country. We have a diverse colony of artists, collectors and gallery owners. We have fabulous Native American rug weavers, potters, and carvers. Creative giants like Georgia O'Keeffe, Maria Martinez, E.L. Blumenshein, Allan Houser, R.C. Gorman, and Glenna Goodacre have all chosen New Mexico as their home and as their artistic subject. John Nieto, Wilson Hurley, Clark Hulings, Veryl Goodnight, Bill Acheff, Susan Rothenberg, Bruce Nauman, Agnes Martin, Doug Hyde, Margaret Nez, Dan Ostermiller are additional examples of living artists creating art in New Mexico. Art, antiques, and collectibles are a $12 to $20 billion annual industry nationwide. In New Mexico, it has been estimated that art and collectible sales range between $500 million and $1 billion a year. Economists have always been interested in the economics of the arts. Adam Smith is a well-known economist. He was also a serious, but little-known essayist on painting, dancing, and poetry. Keynes was a passionate devotee of painting. Even the artistically inclined economists found it difficult to define art within the context of economic theory. When asked to define jazz, Louis Armstrong replied: ``If you gotta ask, you ain't never going to know.'' A similar conundrum has challenged Galbraith and other economists who have grappled with the definitional issues associated with bringing art within the economic calculus. Original art objects are, as a commodity group, characterized by a set of attributes: every unit of output is differentiated from every other unit of output; art works can be copied but not reproduced; the cultural capital of the Nation has significant elements of public good. Because art works can be resold, and their prices may rise over time, they have the characteristics of financial assets, and as such may be sought as a hedge against inflation, as a store of wealth, or as a source of speculative capital gain. A study by Keishiro Matsumoto, Samuel Andoh and James P. Hoban, Jr. assessed the risk-adjusted rates of return on art sold at Sotheby's during the 14-year period ending September 30, 1989. They concluded that art was a good investment in terms of average real rates of return. Several studies found that rates of return from the price appreciation on paintings, comic books, collectibles and modern prints usually made them very attractive long- term investments. William Goetzmann when he was at the Columbia Business School constructed an art index and concluded that painting price movements and stock market fluctuations are correlated. I conclude that with art, as well as stocks, past performance is no guarantee of future returns but the gains should be taxed the same. In 1990, the editor of Art and Auction asked the question: ``Is there an `efficient' art market?'' A well-known art dealer answered ``Definitely not. That's one of the things that makes the market so interesting.'' For everyone who has been watching world financial markets lately, the art market may be a welcome distraction. Why do people invest in art and collectibles? Art and collectibles are something you can appreciate even if the investment doesn't appreciate. Art is less volatile. If buoyant and not so buoyant bond prices drive you berserk and spiraling stock prices scare you, art may be the appropriate investment. Because art and collectibles are investments, the long-term capital gains tax treatment should be the same as for stocks and bonds. This bill would accomplish that. Artists will benefit. Gallery owners will benefit. Collectors will benefit. And museums benefit from collectors. About 90 percent of what winds up in museums like the New York's Metropolitan Museum of Art comes from collectors. Collecting isn't just for the hoyty toity. It seems that everyone collects something. Some collections are better investments than others. Some collections are just bizarre. The internet makes collecting big business. The flea market fanatics are also avid collectors. In fact, people collect the darndest things. Books, duck decoys, chia pets, snowglobes, thimbles, handcuffs, spectacles, baseball cards, and guns. For most of these collections, capital gains isn't really an issue, but you never know. You may find that your collecting passion has created a tax predicament, to phrase it politely. Art and collectibles are tangible assets. When you sell them, capital gains tax is due on any appreciation over your purchase price. The bill provides capital gains tax parity because it lowers the top capital gains rate from 28 percent to 20 percent, 18 percent if the asset has been held for five or more years. Internal inconsistency #2 deals with the charitable deduction for artists donating their work to a museum or other charitable cause. When someone is asked to make a charitable contribution to a museum or to a fund raising auction it shouldn't matter whether you are an artist or not. Under current law, however, it makes a big difference. As the law stands now, an artist/creator can only take a deduction equal to the cost of the art supplies. The bill I am introducing will allow a fair market deduction for the artist. It's important to note that this bill includes certain safeguards to keep the artist from ``painting himself a tax deduction.'' This bill applies to literary, musical, artistic, and scholarly compositions if the work was created at least 18 months before the donation was made, has been appraised, and is related to the purpose or function of the charitable organization receiving the donation. As with other charitable contributions, it is limited to 50 percent of adjusted gross income, AGI. If it is also a capital gain, there is a 30 percent of AGI limit. I believe these safeguards bring fairness back into the code and protect the Treasury against my potential abuse. When I introduced this legislation in the last Congress, the Committee on Joint Tax estimated that revenue for the capital gains provision was $2.3 billion over ten years and for the charitable deduction was approximately $48 million over ten years. I hope my colleagues will help me put the internally consistent into the Internal Revenue Code for art's sake. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DOMENICI. Mr. President, I am pleased to be joined by Senator Bingaman in introducing legislation that declares the United States holds certain public domain lands in trust for the Pueblos of San Ildefonso and Santa Clara in New Mexico. This body, in the 107th Congress, passed this legislation by unanimous consent. The House did not act on it's companion and so we are here today to reintroduce the legislation. In 1988 the Bureau of Land Management, BLM, pursuant to the Federal Lands Policy and Management Act, declared approximately 4,484 acres located in the eastern foothills of the Jemez Mountains in north central New Mexico, including portions of Garcia and Chupadero Canyons, to be ``disposal property.'' The Garcia Canyon surplus lands qualify for disposal partially because the track is an isolated tract of land almost inaccessible to the general public. It is bordered on three sides by the reservations of Santa Clara Pueblo and the Pueblo of San Ildefonso, and by U.S. Forest Service land on the remaining side. The only road access consists of unimproved roads through the two Pueblo's reservations. These factors have resulted in minimal or no public usage of the Garcia Canyon surplus lands in recent decades. I understand that currently there are no resource permits, leases, patents or claims affecting these lands; nor is it likely that any significant minerals exist with the Garcia Canyon transfer lands. The Garcia Canyon transfer lands contain a limited amount of lesser quality forage for livestock and have not been actively grazed for over a decade. However, the Garcia Canyon surplus lands constitute an important part of the ancestral homelands of the Pueblos of Santa Clara and San Ildefonso. Santa Clara and San Ildefonso are two of the Tewa-speaking federally- recognized Indian Pueblos of New Mexico. Both Pueblos have occupied and controlled the areas where they are presently located many centuries before the arrival of the first Europeans in the area in the late 16th century. Their homelands are defined by geographical landmarks, cultural sites, and other distinct places whose traditional Tewa names and locations have been known and passed down in each Pueblo through the generations. Based upon these boundaries, about 2,000 acres of the Garcia Canyon surplus lands is within the aboriginal domain of the Pueblo of San Ildefonso. The remaining approximately 2,484 acres are in Santa Clara's aboriginal lands. The Bureau of Land Management currently seeks to dispose of the Garcia Canyon surplus lands and the Pueblos of Santa Clara and San Ildefonso seek to obtain these lands. In addition, the BLM and Interior Department for years have supported the transfer of the land to the two Pueblos, provided the Pueblos agree upon a division of the Garcia Canyon surplus lands. In response, the two Pueblos signed a formal agreement affirming the boundary between the respective parcels on December 20, 2000. The Pueblos of Santa Clara and San Ildefonso have worked diligently in arriving at this agreement. They have also worked collaboratively in seeking community support and garnering supporting resolutions from Los Alamos, Rio Arriba and Santa Fe Counties, the National Congress of American Indians and supporting letters from the National Audubon Society's New Mexico State Office, the Quivira Coalition and the Santa Fe Group of the Sierra Club. This unique situation presents a win-win opportunity to support more efficient management of public resources while restoring to tribal control isolated tracts of federal disposal property. Upon transfer, the Pueblos of Santa Clara and San Ildefonso intend to maintain these lands in their natural state and use them for sustainable traditional purposes including cultural resource gathering, hunting and possible livestock grazing. Where appropriate, both tribes are interested in performing work to restore and improve ecosystem health, particularly to support habitat for culturally significant animal and plant species. Both Pueblos have experience Natural Resource Management and Environmental Protection programs and are capable of managing these lands for both ecologic health and community benefits. We want to secure Congressional authorization to transfer control of these lands to the two Pueblos, with legal title being held in trust by the Secretary of the Interior for each of the Pueblos for their respective portions of the property. I urge my colleagues to support this legislation as they did last term. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I rise today to introduce again legislation to eliminate one of the great inconsistencies in the Internal Revenue Code. The bill I am introducing today with Senator Bennett is designed to restore some internal consistency to the tax code as it applies to art and artists. No one has ever said that the tax code is fair even though it has always been a theoretical objective of the code to treat similar taxpayers similarly. The bill I am introducing today would address two areas where similarly situated taxpayers are not treated the same. Internal inconsistency #1 deals with the long-term capital gains tax treatment of investments in art and collectibles. If a person invests in stocks or bonds, holds the asset for the requisite period of time, and sells at a gain, the tax treatment is long term capital gains. The top capital gains tax rate is 20 percent, 18 percent, if the asset is held for five or more years. However, if the same person invests in art or collectibles the top rate is hiked up to 28 percent. Art for art's sake should not incur an additional 40 percent tax bill simply for revenue's sake. That is a big impact on the pocketbook of the beholder. Art and collectibles are alternatives to financial instruments as an investment choice. To create a tax disadvantage with respect to one investment compared to another creates an artificial market and may lead to poor investment allocations. It also adversely impacts those who make their livelihood in the cultural sectors of the economy. Santa Fe, NM, is the third largest art market in the country. We have a diverse colony of artists, collectors and gallery owners. We have fabulous Native American rug weavers, potters, and carvers. Creative giants like Georgia O'Keeffe, Maria Martinez, E.L. Blumenshein, Allan Houser, R.C. Gorman, and Glenna Goodacre have all chosen New Mexico as their home and as their artistic subject. John Nieto, Wilson Hurley, Clark Hulings, Veryl Goodnight, Bill Acheff, Susan Rothenberg, Bruce Nauman, Agnes Martin, Doug Hyde, Margaret Nez, Dan Ostermiller are additional examples of living artists creating art in New Mexico. Art, antiques, and collectibles are a $12 to $20 billion annual industry nationwide. In New Mexico, it has been estimated that art and collectible sales range between $500 million and $1 billion a year. Economists have always been interested in the economics of the arts. Adam Smith is a well-known economist. He was also a serious, but little-known essayist on painting, dancing, and poetry. Keynes was a passionate devotee of painting. Even the artistically inclined economists found it difficult to define art within the context of economic theory. When asked to define jazz, Louis Armstrong replied: ``If you gotta ask, you ain't never going to know.'' A similar conundrum has challenged Galbraith and other economists who have grappled with the definitional issues associated with bringing art within the economic calculus. Original art objects are, as a commodity group, characterized by a set of attributes: every unit of output is differentiated from every other unit of output; art works can be copied but not reproduced; the cultural capital of the Nation has significant elements of public good. Because art works can be resold, and their prices may rise over time, they have the characteristics of financial assets, and as such may be sought as a hedge against inflation, as a store of wealth, or as a source of speculative capital gain. A study by Keishiro Matsumoto, Samuel Andoh and James P. Hoban, Jr. assessed the risk-adjusted rates of return on art sold at Sotheby's during the 14-year period ending September 30, 1989. They concluded that art was a good investment in terms of average real rates of return. Several studies found that rates of return from the price appreciation on paintings, comic books, collectibles and modern prints usually made them very attractive long- term investments. William Goetzmann when he was at the Columbia Business School constructed an art index and concluded that painting price movements and stock market fluctuations are correlated. I conclude that with art, as well as stocks, past performance is no guarantee of future returns but the gains should be taxed the same. In 1990, the editor of Art and Auction asked the question: ``Is there an `efficient' art market?'' A well-known art dealer answered ``Definitely not. That's one of the things that makes the market so interesting.'' For everyone who has been watching world financial markets lately, the art market may be a welcome distraction. Why do people invest in art and collectibles? Art and collectibles are something you can appreciate even if the investment doesn't appreciate. Art is less volatile. If buoyant and not so buoyant bond prices drive you berserk and spiraling stock prices scare you, art may be the appropriate investment. Because art and collectibles are investments, the long-term capital gains tax treatment should be the same as for stocks and bonds. This bill would accomplish that. Artists will benefit. Gallery owners will benefit. Collectors will benefit. And museums benefit from collectors. About 90 percent of what winds up in museums like the New York's Metropolitan Museum of Art comes from collectors. Collecting isn't just for the hoyty toity. It seems that everyone collects something. Some collections are better investments than others. Some collections are just bizarre. The internet makes collecting big business. The flea market fanatics are also avid collectors. In fact, people collect the darndest things. Books, duck decoys, chia pets, snowglobes, thimbles, handcuffs, spectacles, baseball cards, and guns. For most of these collections, capital gains isn't really an issue, but you never know. You may find that your collecting passion has created a tax predicament, to phrase it politely. Art and collectibles are tangible assets. When you sell them, capital gains tax is due on any appreciation over your purchase price. The bill provides capital gains tax parity because it lowers the top capital gains rate from 28 percent to 20 percent, 18 percent if the asset has been held for five or more years. Internal inconsistency #2 deals with the charitable deduction for artists donating their work to a museum or other charitable cause. When someone is asked to make a charitable contribution to a museum or to a fund raising auction it shouldn't matter whether you are an artist or not. Under current law, however, it makes a big difference. As the law stands now, an artist/creator can only take a deduction equal to the cost of the art supplies. The bill I am introducing will allow a fair market deduction for the artist. It's important to note that this bill includes certain safeguards to keep the artist from ``painting himself a tax deduction.'' This bill applies to literary, musical, artistic, and scholarly compositions if the work was created at least 18 months before the donation was made, has been appraised, and is related to the purpose or function of the charitable organization receiving the donation. As with other charitable contributions, it is limited to 50 percent of adjusted gross income, AGI. If it is also a capital gain, there is a 30 percent of AGI limit. I believe these safeguards bring fairness back into the code and protect the Treasury against my potential abuse. When I introduced this legislation in the last Congress, the Committee on Joint Tax estimated that revenue for the capital gains provision was $2.3 billion over ten years and for the charitable deduction was approximately $48 million over ten years. I hope my colleagues will help me put the internally consistent into the Internal Revenue Code for art's sake. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I am pleased to be joined by Senator Bingaman in introducing legislation that declares the United States holds certain public domain lands in trust for the Pueblos of San Ildefonso and Santa Clara in New Mexico. This body, in the 107th Congress, passed this legislation by unanimous consent. The House did not act on it's companion and so we are here today to reintroduce the legislation. In 1988 the Bureau of Land Management, BLM, pursuant to the Federal Lands Policy and Management Act, declared approximately 4,484 acres located in the eastern foothills of the Jemez Mountains in north central New Mexico, including portions of Garcia and Chupadero Canyons, to be ``disposal property.'' The Garcia Canyon surplus lands qualify for disposal partially because the track is an isolated tract of land almost inaccessible to the general public. It is bordered on three sides by the reservations of Santa Clara Pueblo and the Pueblo of San Ildefonso, and by U.S. Forest Service land on the remaining side. The only road access consists of unimproved roads through the two Pueblo's reservations. These factors have resulted in minimal or no public usage of the Garcia Canyon surplus lands in recent decades. I understand that currently there are no resource permits, leases, patents or claims affecting these lands; nor is it likely that any significant minerals exist with the Garcia Canyon transfer lands. The Garcia Canyon transfer lands contain a limited amount of lesser quality forage for livestock and have not been actively grazed for over a decade. However, the Garcia Canyon surplus lands constitute an important part of the ancestral homelands of the Pueblos of Santa Clara and San Ildefonso. Santa Clara and San Ildefonso are two of the Tewa-speaking federally- recognized Indian Pueblos of New Mexico. Both Pueblos have occupied and controlled the areas where they are presently located many centuries before the arrival of the first Europeans in the area in the late 16th century. Their homelands are defined by geographical landmarks, cultural sites, and other distinct places whose traditional Tewa names and locations have been known and passed down in each Pueblo through the generations. Based upon these boundaries, about 2,000 acres of the Garcia Canyon surplus lands is within the aboriginal domain of the Pueblo of San Ildefonso. The remaining approximately 2,484 acres are in Santa Clara's aboriginal lands. The Bureau of Land Management currently seeks to dispose of the Garcia Canyon surplus lands and the Pueblos of Santa Clara and San Ildefonso seek to obtain these lands. In addition, the BLM and Interior Department for years have supported the transfer of the land to the two Pueblos, provided the Pueblos agree upon a division of the Garcia Canyon surplus lands. In response, the two Pueblos signed a formal agreement affirming the boundary between the respective parcels on December 20, 2000. The Pueblos of Santa Clara and San Ildefonso have worked diligently in arriving at this agreement. They have also worked collaboratively in seeking community support and garnering supporting resolutions from Los Alamos, Rio Arriba and Santa Fe Counties, the National Congress of American Indians and supporting letters from the National Audubon Society's New Mexico State Office, the Quivira Coalition and the Santa Fe Group of the Sierra Club. This unique situation presents a win-win opportunity to support more efficient management of public resources while restoring to tribal control isolated tracts of federal disposal property. Upon transfer, the Pueblos of Santa Clara and San Ildefonso intend to maintain these lands in their natural state and use them for sustainable traditional purposes including cultural resource gathering, hunting and possible livestock grazing. Where appropriate, both tribes are interested in performing work to restore and improve ecosystem health, particularly to support habitat for culturally significant animal and plant species. Both Pueblos have experience Natural Resource Management and Environmental Protection programs and are capable of managing these lands for both ecologic health and community benefits. We want to secure Congressional authorization to transfer control of these lands to the two Pueblos, with legal title being held in trust by the Secretary of the Interior for each of the Pueblos for their respective portions of the property. I urge my colleagues to support this legislation as they did last term. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, parliamentary inquiry. I thought I was to have 10 minutes. Am I too late for that?

Mr. DOMENICI. I will use 10 at this time.

Mr. DOMENICI. Mr. President, it is rather amazing, in the United States we only have one country, we have one people, we have one President, and he gives one State of the Union Address. Today we began to see how difficult partisan politics has made the idea of having one President, because before our President--the one President we have-- takes the one opportunity to address the American people as to what he would like to do and what he would like help from the Congress and the people on, we have an array of Democratic Senators come to the floor, all of whom have today set their own standard for what he ought to do, all of whom have criticisms of what he might say, all of whom suggest if he doesn't do this, it will not work. Well, I submit the President will have a myriad of healthy ideas for the American economy, and I would like to discuss one major one for a few minutes with the Senate and the American people--that is, the concern we have in the United States about our economy not producing jobs as it should and, thus, creating worry among our people beyond the unemployed. Many Americans who are employed will not spend money, purchase, or build a new house because their fear causes restraint. The American economy is not producing jobs. The business investors don't want to invest because they are not sure what is going to happen, so they too are withholding. They are being investigated and have all kinds of pressures so they are holding back. Even with this combination, the American economy, when you add it all together, is moving ahead quite well. That piece of the economy or that element that we call the gross domestic product is increasing. Normally, when it is increasing, you produce more jobs. The gross product is not going down, which is negative, meaning a recession; it is going up. In fact, sometimes in history, if it went up this amount, jobs would be increasing in large numbers. This time it is not happening. That is why we call it a ``jobless'' recovery. Our President isn't laying blame on the Bill Clinton Presidency, when this recession started. I don't believe he has uttered a word about who caused it. I hope he does not tonight. As a matter of fact, on that score, we can all waste America's time talking about 3 years ago, what was going on--was the American economy on the downturn, and was President Clinton to blame or the Democrats? The truth of the matter is a series of phenomena have occurred, including a huge terrorist strike that occurred in New York, and a huge drop in the stock market of the United States. You cannot blame that on this President. All of those things, and others, have combined with a 10 or 11-year growth cycle that had to come down, bringing the American economy into a nongrowth era for a while. Now it is starting up, and we want our President to tell us how we can improve that situation for America. That is what it means to speak about the economy and jobs. Our President says: You all may have a lot of good ways, but I believe we ought to cut taxes. Most economists suggest cutting taxes, if you cut them right, will stimulate economic growth. The more money that is put into the economy--that means into the pockets of people and the pockets of business so they can spend it--the more you do that, the more you have a chance of moving the American economy. I understand the Democrats, with Senator Daschle as their leader, have a $141 billion package, a portion of which is giving money to the States because their treasuries are broke. If you want to do that, don't call it a stimulus package. We may do that in another event in the Senate, but our President, rightfully, is not including that in a stimulus package. That is not a stimulus, to help our States. At one time, we had a countercyclical problem. I don't know if Don Nickles remembers, but Senator Muskie started it, and every time the economy would go down, you give the States money. Well, the President doesn't have that in this budget, in this proposal on taxes; but it may be considered separately if we have to help. What he does is look at accelerated expansion of the 10 percent bracket, accelerated reduction in income tax rates, accelerated elimination of the marriage penalty, with some refund of money, and an accelerated increase in the tax credits. It has the exclusion of dividends from individual taxable income and increases in small business expensing. That means if they can expense more, they keep more, which I just said you must do. Let them keep more so they can buy more equipment, spend more on jobs. The President has a hold harmless provision under the alternative minimum tax, a very necessary provision, and the cost of the plan is $98 billion in the first calendar year and $670 billion over 10 years. The Democrat plan is so small I think we ought to nickname it. I think we ought to call it ``the mouse.'' The American economy is $10 trillion. If we are talking about 5 years, it is $50 trillion. That means the sum of the transactions going on, paychecks, car purchases, house purchases, financing, equals $10 trillion a year. When my colleagues say let's accelerate it, that means let's put money into the economy that stirs that up enough and shakes up all those transactions where a little bit more fever is put in each one of them so some action is occurring which we would equate with growth and jobs. Clearly, that cannot be done unless enough is put in to move the giant battleship called the American economy. So how can that be moved with a mouse? It cannot. If a mouse is put out there to do it, the mouse will die and nothing will happen. If my colleagues don't want to throw away taxpayers' money, then produce a plan that purports to create jobs and is so small it does nothing. Otherwise, that money will have been thrown away and my colleagues would be back in 18 months or 2 years asking the American people to give them another shot at it because we did not do enough. So I submit that the President's proposal, which he has already given us a glimpse of, which he will tell the American people about tonight in detail, is the right one for America. Am I alone? Of course I am not alone in thinking this. There are 110 economists. One would think from what some on the other side say that the President called on a few people and they gave him ideas and he picked this one and said: Oh, here is a new idea. Let's not tax dividends on the individuals who receive them. That idea has been around. I have been in Congress 30 years. It was around when I arrived. This is what 110 economists, with three Nobel prize winners, said. I ask unanimous consent to have printed in the Record a summary of their approach.

Mr. DOMENICI. They suggest that only the private sector can do what is required. Government cannot create wealth or expand the economy. Friedman, Buchanan, and Vernon Smith, all Nobel laureates, said increased spending to combat terrorism must be done, but to the extent that it is a lot of money, it will not help the American economy. They go on to say we need what the President is suggesting in his plan. This summary I have before me, News World Communications, from the Washington Times quotes this series of communications. I see Mr. Nickles, the Senator from Oklahoma. I was going to speak about Iraq for a few minutes but I think I will not because I assume he will speak on the economy and taxes. I think it would be good today to have my speech and his back to back.

Mr. DOMENICI

Mr. DOMENICI. I conclude with some comments on Iraq. I hope that tonight our President will tell our people the issue in Iraq is why has Saddam Hussein not destroyed the weapons of mass destruction that are in his country; not that we did not find them, not that we did not find a smoking gun. The United Nations verified that he had thousands of weapons in his country, thousands of weapons of biological and chemical makeup that can kill millions of people. I ask unanimous consent for 2 additional minutes.

Mr. DOMENICI. Some 9 or 10 years ago, the United Nations said Saddam must get rid of them, and then we pulled out. The United Nations sat around, Iraq started selling oil again, and Saddam started being Saddam. Then we decided we will go in and see if he has gotten rid of them. Noncompliance by him means he has not shown what happened to the weapons. The 12,000-page document, which was all over the press as if they had submitted 12,000 pages of real explanation, was presented some days ago as though it explained where these thousands of weapons went. The United States and its agents of absolute integrity have read every single page, every single line. The conclusion is that the 12,000-page document is a farce. It does not explain what happened to all of those weapons. It is a joke. They put in those pages what they wanted, and they described what they wanted. The sum total is, where are they? He continues to say: I am showing them everything. And we continue to say: It is your responsibility to show us what you did with them. After all, it is not like every country in the world would accept thousands of these chemical weapons. Some nation that is crazy enough to take them would have to be found. So we have to be told they are not here. But where are they? If they are dumped in the ocean, somebody would find out. They cannot easily be gotten rid of so he has not gotten rid of them. He hid them. Now we are telling the world there is noncompliance. I hope the world sees it our way, but more importantly I hope Saddam sees it our way. I hope he understands there are a lot of us that understand what is going on and that it is like I just said: He better come clean or, in fact, something will happen. I hope he does it himself and I hope our friends realize they better join us in putting him on the spot or he will put the world on the spot, and he will do it very soon. I yield the floor.

Mr. DOMENICI

Mr. DOMENICI. I move to reconsider the vote.

Mr. DOMENICI. Mr. President, I rise to discuss provisions in the Omnibus Appropriations bill relating to Price-Anderson nuclear liability. As you know Price-Anderson coverage for NRC licensees ended last August 1. Extension of Price-Anderson had been agreed upon by conferees on last Session's Comprehensive Energy Bill, but the demise of that Bill ended hopes of extension of Price-Anderson before it lapsed. I've discussed this situation with Senator Inhofe and Senator Voinovich, from their perspectives involving the Environment and Public Works Committee with jurisdiction over Nuclear Regulatory Commission issues. I'm pleased that they concur that the nation is best served by prompt renewal of Price-Anderson legislation, retroactive to August 1 of last year, to ensure that both NRC licensees and Department of Energy contractors are subject to its full provisions. I believe we agreed that the language agreed to by the energy bill conferees last year was adequate to accomplish this goal.

Mr. DOMENICI

Mr. DOMENICI. Will you give me 1 minute?

Mr. DOMENICI. I want to tell the Senate, 10 years ago I made a speech downtown to 350 people. They were anxiously paying attention. I said: It is this year we are going to reform that crazy fund where we can't get anything done. The money is piling up and chemicals don't get cleaned up--the Superfund. I am looking to make sure I never go back to that group because it has been 10 years, and I don't want them to ask me what happened. Maybe it will happen next year.

Mr. DOMENICI. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendments Nos. 33, 102, As Modified; 205, 236, 243, 135, As Modified; 116, As Modified; 226, As Modified; 163, As Modified; 187, As Modified; 62, As Modified; 238, and 129, En Bloc

Mr. DOMENICI

Mr. DOMENICI. Mr. President, as we are all aware, the events of September 11 have changed how we perceive our country and our own safety. For over a half century, Americans have felt safe and secure being isolated by sheer distance from our enemies. As we have all found, we are no longer safe inside the borders of our own country. We feel vulnerable, and we are vulnerable. We must rethink how we do business and in doing so re-organize our Government to meet the challenges of the future. We did this with the passage of the Homeland Security bill. Now we must find strong leadership to help us manage this process. I believe Governor Tom Ridge is immensely qualified to be the first Secretary of the new Department of Homeland Security, and to begin the arduous tasks of securing our Nation against the threat of terrorism, not to mention the challenge of consolidating 22 agencies into a 170,000-employee-strong Department--the largest Government re- organization in 50 years. Tom Ridge selflessly left his own political career as Governor of the great State of Pennsylvania, where he was his own boss, to become the point man for President Bush on homeland security and now reporting to 100 Senators. We in Congress should all make an effort to work with Mr. Ridge. It will be our job to give him the tools in order to do his job properly. I look forward to working with Secretary Ridge and his new organization. As the Chairman of the Energy Committee, I plan to work with the Department of Energy, particularly the National Nuclear Security Administration and our national labs to make sure they work closely with Homeland Security. Our labs were born from the Manhattan Project during World War II and it is once again time for them to step to the plate and help our country defend itself. As a Senator from a border State, I will work with Governor Ridge to make sure that he gets the tools needed to do the job he was chosen for. This will include: more funding for equipment at our land borders; additional funding for personnel; additional funding for training; and additional funding for industry/business partnership programs along the land border. It will be important for the border enforcement agencies of the new Department to work with the private sector on both sides of the border and reward those partners who adopt strong internal controls designed to defeat terrorist access to our country. It is also important that the Federal Law Enforcement Training Center was transferred to the new Department. I will make sure that the transition of that Bureau from Treasury to Homeland Security goes smoothly. I know FLETC-Artesia, New Mexico will play a growing role in providing the training to the men and women who protect our country. I fully support the nomination of Governor Tom Ridge to be the first Secretary of the Department of Homeland Security.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, could I ask a question of Senator Specter? Do we have time?

Mr. DOMENICI. Mr. President, I have a very simple question. If in fact this amendment is agreed to, and let us assume the next step is that the board grants it--although you were saying that is optional, let us assume it is granted--do the other airlines have a chance of losing money as far as that fund is concerned now or in the future because of this incident?