Michael Enzi

Mr. ENZI

Mr. ENZI. Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session on Wednesday, March 10, 2004, at 2 p.m., in 215 Dirksen Senate Office Building, to hear testimony on ``United States Economic and Trade Policy in the Middle East.''

Mr. ENZI. Mr. President, I ask unanimous consent that the full Committee on Environment and Public Works be authorized to meet on Wednesday, March 10, 2004, at 9:25 a.m., to conduct a business meeting to consider a GSA resolution and S. 1904, S. 2022, and S. 2043, and to conduct a hearing on the proposed FY 2005 EPA budget. The hearing will be held in SD 406.

Mr. ENZI. Mr. President, I ask unanimous consent that the Joint Economic Committee be authorized to conduct a hearing in Room 628 of the Dirksen Senate Office Building, Wednesday, March 10, 2004, from 10 a.m. to 12:30 p.m.

Mr. ENZI. Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet on Wednesday, March 10, 2004, at 9:30 a.m., in room 485 of the Russell Senate Office Building to conduct an oversight hearing on the proposed reorganization of major agencies and functions related to Indian trust reform matters without the Department of the Interior.

Mr. ENZI. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Wednesday. March 10, 2003, at 2:30 p.m., to hold a hearing on ``A Fresh Start for Haiti? Charting the Future of U.S.-Haitian Relations.''

Mr. ENZI. Mr. President, I ask unanimous consent that the Subcommittee on Emerging Threats and Capabilities of the Committee on Armed Services be authorized to meet during the session of the Senate on March 10, 2004, at 9:30 a.m., in open and closed session to receive testimony on the Nuclear Nonproliferation Programs of the Department of Energy and the Cooperative Threat Reduction Program of the Department of Defense, in review of the Defense Authorization Request for fiscal year 2005.

Mr. ENZI. Mr. President, I ask unanimous consent that the Subcommittee on International Trade and Finance of the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Wednesday, March 10, 2004, at 1 p.m. to conduct a hearing on ``Argentina's Financial Crisis.''

Mr. ENZI. 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 Wednesday, March 10, at 11:30 a.m., to consider pending calendar business. Agenda On Wednesday, March 10, at 11:30 a.m., the Committee will hold a Business Meeting in Dirksen 366 to consider the following items on the agenda: Agenda Item 1: To consider the nomination of Susan Johnson Grant, to be Chief Financial Officer at the Department of Energy. Agenda Item 8: S. 1307--A bill to authorize the Secretary of the Interior, acting through the Bureau of Reclamation, to assist in the implementation of fish passage and screening facilities at non-Federal water projects, and for other purposes. Agenda Item 9: S. 1355--A bill to authorize the Bureau of Reclamation to participate in the rehabilitation of the Wallowa Lake Dam in Oregon, and for other purposes. Agenda Item 10: S. 1421--A bill to authorize the subdivision and dedication of restricted land owned by Alaska Natives. Agenda Item 12: H.R. 620--To authorize the Secretary of the Interior to provide supplemental funding and other services that are necessary to assist the State of California or local educational agencies in California in providing educational services for students attending schools located within the Park. Agenda Item 17: H.R. 2696--To establish institutes to demonstrate and promote the use of adaptive ecosystem management to reduce the risk of wildfires, and restore the health of fire-adapted forest and woodland ecosystems of the interior West.

Mr. ENZI. Mr. President, I ask unanimous consent that the subcommittee on Seapower of the Committee on Armed Services be authorized to meet during the session of the Senate on March 10, 2004, at 2 p.m., in open session to receive testimony on the posture of the U.S. Transportation Command, in review of the Defense authorization request for fiscal year 2005 and the future years defense program.

Mr. ENZI. Mr. President, I ask unanimous consent that the subcommittee on Science, Technology and Space be authorized to meet on Wednesday, March 10, 2004, at 2:30 p.m. on NASA/Mars Exploration Program.

Mr. ENZI

Mr. ENZI. Madam President, I rise in opposition to the amendment. I really appreciate the comments of the Senator from New Hampshire where he went over the No Child Left Behind legislation and what it really does. The No Child Left Behind legislation is to get kids to be able to read and do math, hopefully by the time they are in third grade but definitely by the time they graduate from high school, and to have some confidence in it. Every State has the right to set their own standards and they have to follow them, but the idea is to get them to do reading and math. We held some hearings in Wyoming. I had the Department of Education come to Wyoming and talk about some of the rules and there were concerns about the law and some of the ways it affected Wyoming. We are a very rural State. We have a large State. We have very small populations. We have some different classrooms than in other places and we needed to be sure when the rules were written they would work for Wyoming, which has a very tough law that was already in place before No Child Left Behind even came along. It has increasingly difficult standards that have to be met over the next several years, and they adopted that as their No Child Left Behind standards. I do not want people to have the impression No Child Left Behind forced the States to do all of these things. Yes, it did force some of the States to do some of these things, but a lot of the States were already doing things to make sure no child got left behind. I appreciate the President joining those States and encouraging in a very forceful way the other States to do that, too. Incidentally, I had people drive as far as 200 miles to come to one of these hearings and we are going to hold two more of them in Wyoming yet. But I did have one person stand up and say there is not anything in No Child Left Behind about improving physical education and that is very important. If people are not healthy, they cannot do well in school. I pointed out there also is not anything in No Child Left Behind that says they have to have competence in science until several years from now, and that is very important. We are starting with some very basic points. If a child cannot read and do math, they do not stand much of a chance. Their choices in life are very limited, and the President recognized that. He did not say: On the average, we want everybody to be able to read and do math. He said: I want every child in this country to be able to read and do math. That is where we are starting. Now, we have places we can go with that, science will be added in, and other things can be added in, but we are trying to do something very basic. We also get the impression from this discussion the Federal Government provides all of the money for education. That is not true and it never was true. I do not think it was ever intended to be true. We used to provide about 7 percent of the education dollars in the United States. The local people provided the rest of it. It always fascinated me that for the 7 percent in education funding we provided, we caused 50 percent or more of the paperwork. Yes, we really tie a lot of things to our money that does not have anything to do with local control. It has to do with jobs in Washington because if we have a lot of reporting that has to be done, somebody has to make sure those reports are filled out. I had a school superintendent who came out for one semester. He spent some time in my office, and actually I had him go down to the Department of Education and look at where his reports were going and what was done with them. He was fascinated to find out they read all of them. He was tremendously disappointed to find out that is all that happened to them, and he did not see why we were filling out reports that just provided people with a job to make sure the report was complete. There is a lot of room to eliminate paperwork. That would save time and money at the local level, which is absolutely essential. I also wish there was more in the bill that dealt with parental responsibility. When the parents are involved in a child's education, the child does better. Again, we focused on reading and math and what the schools could do because that is where the money goes. We held a hearing last week and one of the people present mentioned that in one area of the country, Washington State, there was a high school that forced the parents to sign up the courses for the kids. That is a fascinating concept. Kids in high school can go sign up for their own courses, and when they do they will say: This one looks easy, and this teacher is easy for an A, and I like doing this because it is a little more outdoors. But when the parents look at it, they say: I want my kid to excel and these are the things he or she will have to do or be able to do to excel in the school. It makes a whole lot of difference in what the kids take. The biggest difference is the parents have to pay attention to what they want their kids to be able to do and make sure the plan they are signing their kids up for will make that kind of progress. In the discussion over our priorities on the current budget, my colleagues continue to suggest funding for education is being ignored. Well, we have had some charts that show it is not being ignored; it has been greatly increased under the Bush administration. We had a fascinating display of a chart on the other side that gave the impression the reason the Clinton administration had declining amounts going into education funds was because there was a deficit and they were trying to overcome the deficit. I remember when I arrived here 8 years ago we were trying to force that balanced budget constitutional amendment. We failed by one vote, but it had a positive effect. The positive effect was both sides of the aisle understood we needed to do a better job on balancing the budget, and we did. That helped grow the economy, and the economy's growth is really what provided the money. We did not cut programs. We increased programs. We did not eliminate programs. We added new programs. The growth of the economy kept ahead of the spending. There have been a number of things that have affected the economy lately, but a very important part of this discussion is, we are on the U.S. budget. We are not appropriating. We are not doing Finance Committee work of figuring out what the taxes should be. We are doing a budget. The purpose of a budget is to set targets. Maybe that is not a good word to use on this floor, but I think it is a very important word to use. It reminds me of a cartoon that I saw of a grizzly bear that had this big target on his chest, and the other bears gathered around and said: Oh, rotten birthmark, rotten birthmark. Targets are important, and all the budget does is set targets up. We do not shoot at them. We do not decide how big the rings are going to be. But we set targets up. Now, if my colleague will listen to the debate we are having, sometimes we are suggesting the target be moved a little higher. Sometimes we suggest the target be moved a little to the left. Sometimes we suggest the target be moved a little to the right. Listen carefully and see if anybody ever suggests moving the target down. No. That is not good politics. It is important politics, but it is not good politics. What we are going to do is set the budget, the targets. Once those targets are set, the authorization committees get to work with them. They are the ones who actually work with the rings of the budget. They decide what the priorities are and how big each of those ought to be, and then the money gets turned over to the Appropriations Committee. They are the first ones that get to shoot at the target. When that comes to the floor, we get to shoot at the target. Everything before that is setting up targets. A lot of the discussion we have heard this morning is based on three assumptions I believe are mistaken. The first assumption of my colleague from Washington State is that raising taxes, by repealing some or all of the recent tax reductions, will not have a negative impact on the economy. I noticed that the discussion changed a little bit to loopholes, and it was pointed out that in the budget there are some loopholes. We talked very specifically about some loopholes, how big those loopholes are and whether they could be achieved in the budget assumption. I think in order to add to that, a person would have to figure out what those other loopholes are. There is a limited amount of loopholes. There are some real ones that can be identified. They can have a price put on them. But if that is not done, what is being talked about is the common campaign tactic of saying we are going to take it out of waste, fraud, and abuse. Yes, probably in many of the Government programs there is waste, fraud, and abuse. If you add it up, there is a limited amount of it. Finding it and eliminating it is a whole other problem. The same with loopholes. So when they talk about the money here, they are talking about raising taxes, which would repeal all or some of the recent tax reductions, and it would have an impact on the economy. The truth is, a tax increase would hurt economic growth, which is the most important factor in terms of revenue. I mentioned that how we were actually able to come up with surpluses was growth, not reducing programs. The second assumption my colleague is making is that the Federal Government is somehow responsible for creating new jobs. As a former small business owner, I know firsthand that expanding Government is not the best way to create jobs. Taxing small business is not the best way to create jobs. We keep talking about these rich people out there. A lot of those rich people are not rich at all. They have businesses and, because they are single proprietorships or partnerships or subchapter S corporations, whatever profit shows up on the balance sheet goes to the bottom line on their taxes. It is considered to be money they have earned on which they need to pay taxes. But having been a small businessman, this is how that really works. Yes, your business shows a profit at the end of the year. Yes, it is honest accounting. But you don't get to take the money out. Hopefully, you have a growing business, and a growing business needs ever more amounts of revenue. That is what the big corporations do, too. Their profits don't get paid out every year in the way of dividends. They stay in the corporation to grow the corporation. The difference is, if you are a regular corporation you pay a small tax on the money that stays in there. When the dividend gets paid out, there are additional taxes that get paid on it. So it is not very appealing to the small businessman to use that form of corporation. But if they go with the subchapter S, or single proprietorship, there are some advantages to that, but the big disadvantage is they pay the tax in the year the balance sheet shows they earn it and they don't get to take that out. When we are talking about raising taxes on the rich people in this country, that is a nice phrase people like to use but most of those business owners I know don't consider themselves to be rich. They do consider themselves to have a good business and they are employing a lot of people. When we are talking about businesses, we are talking about small businesses, we are talking about 90 percent of the businesses in this country, and we are talking about the vast majority of jobs in this country. I can tell you for a fact when somebody works for a small business, they understand how tenuous their job is. They understand how fragile some of these small businesses are. They don't have the vast market to fall back on. If there is a small change in their market, it can mean the end of their job; the same as a change in taxes can make a difference in whether that person stays in business or goes to work for somebody else, abandoning the business and losing jobs. When we are talking about taxes, we have to keep that in mind. The Federal Government can leverage resources. We were talking about job training, too. They can leverage resources to help train individuals for available jobs, but job creation is something done best by the private sector in this economy and it functions best when the Federal Government is not taxing these small businesses beyond the point where they are sustainable. It has been interesting. When we were back in the times of the mega mergers, when the big companies would combine together to form an even bigger company, and then have what they called a downsizing, or a ``right sizing''--that is when they would lay off 6,000 or 9,000 people; I called it laying people off--when that happened, the small businesses of the country picked up those employees. So it is not the big businesses of this country that do the job for us; it is the small businesses in this country. And a change in taxes affects those small businesses. I am also confused as to why my colleagues argue for additional funding for programs that they argue will help generate jobs, yet they continue to oppose naming conferees to the Workforce Investment Act, which would help train individuals for jobs that are already available. The Workforce Investment Act passed last year. Senator Murray and I worked on that, along with Senator Kennedy. We got it out of committee unanimously. We got it through this body unanimously. Now we can't name a conference committee. Until a conference committee is named and we can work out the differences with the House, improvements to that bill are not available. Training for 900,000 people is in jeopardy. Training for people who could upgrade their skills to fill in the kinds of jobs that are available in the country versus the jobs they are trained for. It is 900,000 jobs a year and we can't have a conference committee to get that done. It makes more sense to me that we would try to fill the jobs that are available now rather than spending more Federal dollars to try to create jobs. The third assumption my colleagues are making is that this Congress is not maintaining its commitment to education. I would like to point out to my colleagues that under this Federal budget resolution, Federal education funding will be at its highest level in history. It will come close to doubling since the year 2000--doubling. We doubled the National Institutes of Health's budget over a period of about 8 years, but this President has nearly doubled the education budget since 2000-- nearly doubled it. It amazes me. The opposition, of course, is upset with that because this President has had the audacity to take the leadership on education. Leadership in education used to be from the other side of the aisle. But this President said, We are going to do it, and he put the dollars behind it to do it. It amazes me that, despite these increases every year, we hear about how this administration and the current congressional leadership failed to support adequate funding for educational programs, particularly title I of No Child Left Behind. The truth is, these programs have seen enormous increases over the past 4 years. Even so, my colleagues assert that we are somehow undermining our commitment to education. I am reminded of the debate this body had over last year's budget resolution. We heard over and over from our minority colleagues that the Federal commitment to education was too small. Despite all of the discussion surrounding our failure to support education funding, the current Senate leadership has increased spending for title I and other educational programs more than any other Congress in history. Yet my colleagues argue that is insufficient. They argue we need to raise taxes to support more education spending. What is the impact of all this new spending on education? State and national studies show that funding for No Child Left Behind is adequate. I would like to remind my colleagues from Massachusetts that a study in their State suggested that more than enough funding is available for implementation of the law. Opponents of the budget resolution might suggest that other States have found that funding for No Child Left Behind is insufficient and that more money is needed. Many of these estimates are based on some risky assumptions. Some of these studies are anticipating costs more than 10 years into the future. As an accountant, it strikes me that these studies are missing the point, because they are suggesting that current funding is inadequate for challenges that are not even going to appear for 5 or 10 years in the future, if they appear at all. I asked for some information about the title I grants for local educational agencies to see what kinds of increases we have had between 2001 and 2005. I was fascinated to see Louisiana, which has been part of the discussion this morning, had a 46.9-percent increase in funding. Massachusetts got a 24.1 percent increase in Title I. New York got an increase of 65.2 percent. Rhode Island got an increase of 76 percent. Washington State got an increase of 47.9 percent. The Senator from Louisiana also mentioned they didn't have enough money. It is kind of fascinating to me that out of the discretionary funds, those that weren't used reverted to the U.S. Treasury. I have the list by State. Louisiana surrendered 6.37 million to the United States Treasury. All together more than $154 million was returned to the Treasury. All of it isn't being used. I spoke to one Wyoming superintendent. He said the biggest problem with title I was they needed more flexibility to be able to shift that money to salaries because they already have all they can possibly buy with title I. I thought that was interesting. I also would like to point out to my colleagues that the ``wealthy'' individuals who would be paying for these increases couldn't possibly afford to fund all the additional spending my colleagues in the minority are recommending. They would have to earn much more than $1 million a year. As my colleague from Utah has pointed out repeatedly, it is the small business owners who will be paying the bulk of these taxes. I don't believe you want to send the message to the people who managed to achieve the American dream and finally have financial security that the Federal Government will then turn to them and ask them to surrender a much larger portion of their income and call it their ``civic duty.'' I shouldn't have to remind my colleagues that the highest tax rates in this country already apply to the wealthiest Americans. The graduated tax scale relies largely on the wealthiest 10 percent of Americans for most of the Federal Government's revenue already. The ``wealthiest'', as I have explained, are the people who are business owners who are putting most of that back into a business. My colleagues are suggesting these Americans don't contribute enough and if these Americans were truly interested in their country's well-being, they would agree their taxes should be even higher. I think that is simply ridiculous. I don't believe the tax increase is the only option we should consider. We are discussing a budget that would provide $814 billion in discretionary spending. My colleagues are saying that simply is not enough money. Reflecting on my experience as an accountant again, when a company is running deficits there are two things that can be done: They can raise revenue or they can cut spending. This body has shown an insatiable appetite for new spending, but there is a genuine lack of support for reductions in spending. We talk about tax loopholes, we talk about fraud, waste, and abuse, and we talk about tax increases, but we don't talk about truly cutting because we haven't got the will to do it. Even when we talk about increases, it is not enough. I mention the targets we put up for the budget, the targets the appropriators actually see. We talk about raising them, moving them to the right or moving them to the left, but never lowering them. In the President's budget, there was some tremendous leadership. The President actually suggested cutting some programs. Why did he suggest cutting programs? He suggested it because Congress imposes on the Federal Government the Government Performance and Results Act. We said every federal program in this country has to do a report every year. In that report they have to show what their application is, what their goals are, how they are going to accomplish it, and how that fits with the money they are spending. They have to tell us what the job is they are doing and how they are getting it done. It might be interesting to people who are listening, that in some of the agencies some of their programs failed those reviews. They aren't doing what they said they would do. According to the reports those people are writing, they are not doing their job. The President said if they are not doing their job, let us cut the program. I can tell you that on the Budget Committee we did not do that. That is not in the budget. We didn't cut any of those programs no matter how bad the Government Performance and Results Act showed them to be. That would have been $5.9 billion. I hear that is not enough to do anything, but it would be a big part of what we are trying to do in this amendment for education. We are not cutting those programs. We will have constituents and interested people who will try to prove the Government Performance and Results Act reports were absolutely wrong. We need to have some courage to cut some things, to revise some things, and to consolidate some things. That is what businesses would be doing. Businesses have to make cuts when revenues go down unless they can figure out a way to get those revenues to come up. They usually do both. They try to figure out a way to get the revenues to come up, but they also cut programs that don't work. They get rid of products that aren't selling. For some of those programs, the products are only selling to the people who are employed by the programs--not to all of them. For some of them, it was probably a gross error in writing their report. But if we ever cut some of those, I would bet there would be a lot more attention paid to their own reports on performance and goals. That is something we ought to be doing. Even under the current budget circumstances, my colleagues are asking for even more spending. At what point can we say enough is enough? How much Federal spending is adequate? I think I have said enough about raising taxes and why this body must oppose any effort to finance additional government spending by levying further taxes on our citizens. Discretionary education spending has increased by 64 percent since 2000. In real dollars, there has been more than a $13 billion increase in discretionary program funding since 2000. Of that total, $4.5 billion has been in title I alone. More than enough has been dedicated in spending to cover the mandatory expenses of the No Child Left Behind Act. Additional increases are both unnecessary and irresponsible given the current budget situation. As we speak, States are waiting on new increases even though they have nearly $6 billion in unobligated funding to them. Almost $2 billion of that total is title I funding. It is time we stop taxing and spending to meet needs that have not presented themselves yet. I yield the floor and reserve the remainder of our time.

Mr. ENZI

Mr. ENZI. Mr. President, today is, and will always be, a special day in the life of one of my staffers, Sujey Kallumadanda. For on this day, Sujey has successfully completed all the requirements, passed all the tests, completed the interviews and officially taken the oath as a new citizen of the United States. I appreciate having this opportunity to congratulate him on his effort and to wish him well on his acceptance of this wonderful new title he will carry with him for the rest of his life, United States Citizen. Sujey's story is quite a remarkable one. It begins with his emigration from India when he was young and his arrival in the United States with his family. He is the latest of his family to become a citizen of the United States, and he couldn't be more proud of his new status. The journey that began in India brought him to Texas where he graduated from Texas A&M with a bachelor's degree in Economics. He then graduated from Michigan State University with his law degree, and from there he went on to Georgetown University where he received his Master of Laws in Securities and Financial Regulations. Sujey is a member of the New York Bar and his background and understanding of banking and financial matters made him an invaluable source of information for my staff. He has also proved to be an important asset as we have worked on and studied issues of importance to the small business community. My staff and I have greatly enjoyed having Sujey on our team and I would like to think we have taught him some valuable lessons about American life. For instance, thanks to my staff, Sujey has developed an appreciation for the finer things in life like Wyoming Honey Candy. I haven't been able to convince him to read fiction novels or that Wyoming is the center of the sports universe but that will come with time. All in all, I don't think he'll ever be the same. But one thing is for certain, and that is the drive and focus he placed on achieving his dream of life in the United States. Now his apprenticeship is over, and he has received the greatest honor our Nation has to bestow--American citizenship. I know he will carry it proudly and with purpose in the years to come. Sujey knows full well that being an American Citizen is not only a great honor, but that it brings with it both great freedoms and rights--and great duties and responsibilities. He will become very familiar with them both as he continues to take part in one of the greatest experiments in government the world has ever known--the American democracy. Congratulations, Sujey. By your example you have reminded us that we are very fortunate to be American citizens. By your heartfelt dedication and commitment to earning your citizenship you have taught us that citizenship is a great honor and we should never take it for granted. Good luck and God bless.

Mr. ENZI

Mr. ENZI. I will talk about an amendment that has not been laid down. There were comments about overtime a while ago, and I want people to know the rest of the story. The bill we are on has the catchy name of FSC/ETI. What we are trying to do is comply with some World Trade Organization requirements that allow penalties to be put on our exports overseas and agricultural products are a big one. They always get targeted when this sort of thing happens. We need to correct our law so we are not being penalized, so we do not eliminate business that the United States can have. Penalties went into effect on March 1 and go up 1 percent per month on U.S. businesses if we do not change the law. We are trying to change the law. It needs to be done quickly. It should be done pretty cleanly. It obviously is not going to be. We keep talking about jobs, but our actions do not match our words. I point out one very important jobs program we have that affects Americans who want to improve their skills and get a better job. We have the Workforce Investment Act, and that has the potential each and every year to retrain 900,000 people so they have the skills and talents to handle the jobs available, the well-paying jobs available in this country that we are having to fill from overseas. Do you know what has happened to that bill? Let me give Members a brief history. We passed it out of the Health, Education, Labor, and Pensions Committee unanimously. How often do you think that happens in that committee? It can be a very contentious committee. It passed out of the committee unanimously. What happened in the Senate? We passed it in the Senate by unanimous consent. That means not one person in the Senate wanted to amend the bill; not one person in the Senate wanted to vote against the bill. It was unanimous. That is as bipartisan as we can possibly get. Where is that bill now? We cannot appoint a conference committee. That is the committee made up of Republicans and Democrats who would meet with Republicans and Democrats from the House to work out differences between what they passed and what we passed. We cannot have a conference committee to do that. That is 900,000 jobs in this country that are being stalled out; 900,000 opportunities we are not going to give to Americans. Instead, we are going to talk about a whole bunch of amendments to this bill that are going to slow down this bill and increase penalties on American businesses trying to ship goods overseas. In fact, all American businesses. Keep that in mind. If we want to take care of jobs in this country and make sure jobs stay in this country, we would get a conference committee appointed on the Workforce Investment Act and get that thing resolved and get people trained and to work. One of the examples of what will happen on this is the overtime amendment that we have been promised. I could wait until it actually came up, but there were some comments made and there is a need to respond on the 40 minutes we have already heard about the overtime amendment. It is time to strip the rhetoric from the reality and consider who is really helped and hurt by this amendment which prohibits the Department of Labor from updating the rules exempting white-collar employees from overtime pay. It is not all that simple. When I am back in Wyoming, I like to hold town meetings to find out what is on the minds of my constituents. At each town meeting, there is usually someone in attendance who is quite concerned about government regulations. I am often told to rein big government in, keep the rules and regulations simple, keep them current and responsive, and make sure they make sense in today's ever changing workplace. Most of the people I talk to are small businessmen, but that is most of business in this country. They are being killed by the rules and regulations, and, in some cases, by trial attorneys. Today we are reviewing an amendment that takes the opposite approach. Instead of keeping it simple and current, it will prohibit the Secretary of Labor from updating the rules exempting white-collar employees from the Fair Labor Standards Act and overtime requirement in some cases, an attempt to reject the new, turn back the clock, and look to yesterday for the answer to tomorrow's problems. It is an approach that is doomed to failure before it is even applied. I am opposed to the amendment. There is no question that the workplace has dramatically changed during the last half century. The regulations governing white-collar exemptions remain substantially the same as they were 50 years ago. The existing rules take us back to the time when workers held titles such as straw boss, keypunch operator, legman, and other occupations that no longer exist today. Our economy has evolved. New occupations have emerged that were not even contemplated when the regulations were written. A 1999 study by the General Accounting Office recommended that the Department of Labor: Comprehensively review current regulations and restructure white-collar exemptions to better accommodate today's workplace and to anticipate future workplace trends. That is precisely what the Department of Labor's proposal to update and clarify the white-collar regulations will do. While the Department's proposal will update and clarify, this amendment will do neither. Instead, it will set the clock back to 1954 and try to force the square peg of the 21st century jobs into the round hole of the workplace of 50 years ago. I am a former shoe salesman and I know how to tell when something will not fit. This just will not fit. It is like trying to force a size 10 foot into a size 6 shoe. It will not fit no matter how hard you try. Through the course of the debate on overtime over the next several days, we will hear a lot of numbers. Some of them are statistics and we know how statistics work. I am an accountant so I will try to give some good numbers and hope you will put up with me with the numbers, but there are numbers you need to know. Let us be clear about what this amendment will do. The amendment will undermine the Department of Labor's efforts to extend overtime protection to 1.3 million low-wage workers. Under the current rules, only those rare workers earning less than $8,060 a year are protected for overtime pay. That is how old this rule is. You are protected if you are making less than $8,060 a year. Now the administration's proposed rule will raise that threshold to $22,100 a year. Doesn't that sound more common sense in today's market? Doesn't that sound like a number that covers more people? If the old rule covered those making less than $8,060, a new rule, covering those making less than $22,100, would cover more people. As a result, 20 percent of the lowest paid workers would be guaranteed overtime pay. The overtime provisions of the Fair Labor Standards Act were originally intended to protect lower income workers. The proposed rules will provide lower income workers with the protection they deserve. That also makes it easier for businesses to know when they are complying with the law. And that is important, particularly for small businesses. They need to know. They should not have a bunch of different criteria that they need a special accountant or attorney to interpret for them so they can tell whether they are violating the law. This rule, the one proposed--proposed; it is not finalized yet--by the Department of Labor will make it easier for businesses to know when they are complying. By undermining the administration's efforts to better protect lower income workers, who will this amendment protect? The supporters of the amendment--the amendment that is going to be laid down, I guess--claim that an estimated 8 million workers will become ineligible for overtime under the proposed rules. However, this estimate is based on a study by the Economic Policy Institute, and it is riddled with errors. For example, the study includes in its calculations at least 18 percent of the workforce who work 35 hours or less a week. These part-time workers do not work more than 40 hours a week and, therefore, they do not receive overtime in the first place. The study also claims the proposed rule will deny overtime pay to white-collar employees earning more than $65,000 a year. However, not all the employees earning over $65,000 are exempt under the proposed rules--only those performing office or nonmanual work and one or more exempt duties. This means workers, such as police officers, firefighters, plumbers, Teamsters, carpenters, and electricians will not--will not--lose their overtime pay. The Department of Labor acknowledges the possibility that 644,000 highly educated workers making over $65,000 a year might lose their overtime. Mr. President, 1.3 million get picked up on the bottom end; 644,000 drop out on the top. Supporters of this amendment claim that the proposed rules will strip overtime pay for first responders and nurses. If we look behind the rhetoric, we find there will be virtually no change in status for first responders and nurses under the Department of Labor proposal. Under both the current and proposed regulations, only registered nurses are exempt from overtime pay. Supporters of this amendment claim that military personnel and veterans will lose their overtime pay under the proposed rules. However, military personnel and veterans are not affected by the proposed rules by virtue of their military status or training. Nothing in the current or proposed regulation makes any mention of veteran status. Who will this amendment protect, if not low-income workers, first responders, nurses, veterans, or millions of other working Americans? The antiquated and confusing white-collar exemptions have created a windfall--a windfall--for trial lawyers. Ambiguities and outdated terms have generated significant confusion regarding which employees are exempt from the overtime requirements. The confusion has generated significant litigation and overtime pay awards for highly paid, white-collar employees. Wage and hour cases now exceed discrimination suits as the leading type of employment law class action. Let me repeat that again. Wage and hour cases now exceed discrimination suits as the leading type of employment law class action. This amendment--the amendment that Senator Harkin is going to put in--will not preserve overtime for millions of working Americans. The amendment will not help employers and employees clearly and fairly determine who is entitled to overtime. The only clear winners from this amendment will be the trial lawyers who will continue to benefit from the current state of confusion. We are spending taxpayers' dollars sorting through what could be solved with clarity. I stress that these are proposed rules--proposed rules. The Department of Labor has received, and is currently reviewing, around 80,000 comments to their proposed regulations. We should allow the regulatory process to continue and give the Department a chance to complete its review of the proposed rules. Once the review is completed, the Department will align the white-collar regulations with the realities of the 21st century workplace, the intent of the Fair Labor Standards Act, and--this is most important--what they have learned from the comments. They have 80,000 comments. I expect them to read those. I expect them to react to those, and make sure that it becomes a part of the rule. Now, supporters of this amendment are, in effect, denying the public a voice in the regulatory process. This amendment will deny the Department of Labor an opportunity to respond to public comments. I happen to believe that public comments play a critical role in the regulatory process. I will tell you, I go back to Wyoming most weekends. I go out on Friday, travel to a different part of the State, and come back on Sunday. It is the most valuable thing I do around here, and that is because I get to talk to the person who has the problem firsthand. Do you know what? They are working on that all day, every day. And the advantage is they have usually thought of some kind of a solution. Now, when I bring it back, quite often, the comment is: It is too simple. It will never work. Where did you come up with a crazy idea like that? And I have to explain: From the guy with the problem who works on this every day and knows the commonsense approach to solving that problem. Those are the people writing in with comments. Those are the people who are saying: This is where it is right. This is where it is wrong. Fix it where it is wrong. Leave it in the new context where it is right. That is how the process is supposed to work. We want the Department of Labor to look at those comments and respond--respond by changing the rule, or respond by letting the people know how that will not work or how it is covered a different way. We have to have that process work. Now, I hope if there are substantial changes it gets put out one more time for comments. There is not anything around that says they cannot reissue them for comment. The public comments are what help us get it right. We do not do these jobs, so we do not know all the right answers. But the people out there working on them do. The answers can be made right. Now, if the final rule has gone astray, after all of this process, we can use the Congressional Review Act to reverse it. And we have done that before. That is where we say: You did not pay attention to the process. You did not pay attention to the comments. We are going to jerk you back to reality. But now is not the time or the vehicle for making that determination. I hope my colleague will not put down the amendment, but if he does, I hope my other colleagues will support me in allowing the Department to move forward with the review and response that they need to be doing. They do need to be paying attention to all of this debate. But we do need to bring that rule into the current century and make sure people are working at jobs and the rules are understandable, particularly with small businesses that are trying to provide a service, not figure out Government regulations. I yield the floor and reserve the remainder of my time.

Mr. ENZI

Mr. ENZI. Madam President, our Nation's medical litigation system is broken and we need to start working to fix it. I urge my colleagues to vote for cloture on the Gregg-Ensign bill. It is time to stop filibustering and to start working. I just got back from Wyoming. They are having this same debate there. They don't trust us to finish it here. They are trying to finish it on a local basis. They are having a debate on a constitutional amendment to be able to do medical tort reform. I tell you, that is a very difficult thing. Litigation reform requires a constitutional amendment in Wyoming. That means there may be a vote of the people, but that can't happen until at least November and we are in a crisis in Wyoming right now. We are not the only State in a crisis. Last year, we brought a medical litigation reform bill to the Senate. The legislation would have placed reasonable limits on the amount of money attorneys can take from a verdict or a settlement in an injured patient's favor. The bill also would have limited awards for punitive damages and noneconomic damages. In other words, the pain and suffering awards. The bill would not have limited awards to compensate patients for economic losses. This is an important point for everyone to keep in mind. If a judge and jury were to decide a person suffered an injury due to a doctor's mistake or a hospital's negligence, that person would be entitled to receive full compensation for their economic loss, including everything from rehabilitation to lost wages resulting from their injury. I cannot stress this point enough. The bill would not have limited awards for any part of economic losses. What the bill would have done is place a ceiling on noneconomic damages. The bill would have limited the maximum award for noneconomic damages to $250,000 in States that do not have their own limits on such awards. In Wyoming, we do not currently have limits on noneconomic damage awards. We do not have limits despite evidence which shows limits on noneconomic damage awards have helped control the cost of medical liability insurance premiums in other States. As a result, people in Wyoming are losing access to affordable health care in their communities. The rising cost of medical liability insurance in my State of Wyoming is forcing doctors to curtail their practices or close them entirely. We have a shortage of doctors in Wyoming as it is and the cost of medical liability insurance is making a bad problem even worse. To address this problem, I cosponsored the medical litigation reform bill we offered for debate last year. We needed 60 Members in this body to vote in favor of working on the bill to get past a filibuster, but only 49 voted in favor. So it was back to the drawing board. Here we are again, 9 months later, with a new bill. It is ironic we are here 9 months later because this bill focuses on mothers and babies. Medical liability crisis affects many patients and doctors. Those it affects most are the expectant mothers and their obstetricians. Doctors who deliver babies have a dubious honor when it comes to medical liability insurance. The typical obstetrician pays more in annual premiums for professional liability insurance than almost any other type of doctor. Part of the reason is that in some states the child has the right to sue when they get to adulthood. That is a pretty long tail on the liability. If the parent fails to sue, the child can sue. Some of my colleagues have pointed out the statistics and numbers on this crisis, so instead I will tell a short story about an obstetrician in Wyoming. I told this story in July so I apologize if you have heard it before, but it is worth retelling. There was an article in the Washington Post about a year ago about the medical liability crisis. The reporter for the Post had gone to Wyoming to see how the crisis affected a State already struggling to keep enough doctors as it is. According to the article in the Washington Post, the doctor in Wheatland, WY, went to a high school basketball game between the Wheatland Bulldogs and the nearby Douglas Bearcats. Here is Wheatland on a map; here is Douglas. Wyoming is a pretty big State. This map shows about a quarter of the State. Each of the counties on this map is bigger than Delaware, and the distance between Wheatland and Cheyenne is pretty close to the length of Delaware. We are talking about a lot of distance, but not many people. One of these counties the size of Delaware has 2,500 people living in it total, so we have a lot of land, few people, and consequently not many doctors. Wheatland and Douglas are 60 miles apart. That qualifies as nearby in my State. Now the doctor had just announced he would not be delivering any more babies in Wheatland or Douglas because of the cost of liability insurance. The irony is he delivered just about every player on both teams at that basketball game. I would like to read a section of this story. The name of the doctor is Willard Woods: The national malpractice insurance crisis . . . hit home for Wheatland this winter when Woods' insurance company joined a number of national malpractice carriers in declaring bankruptcy. I emphasize that last part. Malpractice carriers are declaring bankruptcy. Some people say these companies are making out like bandits on medical liability insurance. If they are, they would not be declaring bankruptcy. These insurance companies are in crisis. They are raising their rates to cover the costs from legal cases and settlements. Back to the quote. That left only two firms selling malpractice insurance in Wyoming, and neither one was willing to take on a new obstetrical coverage. Woods did get insurance for his gynecological practice--a branch of medicine that spawns far fewer lawsuits than delivering babies--but the annual premium cost him $116,000, three times what he paid the year before. In this wheat-growing region of eastern Wyoming, where medical services are sparse and scattered, the impact is acute. Platte County, with a population of less than 9,000, has five doctors, equal to the number of veterinarians. Women with normal pregnancies can still have their babies delivered in the hospital; Woods's two partners, both general practitioners, share the delivery duties. ``But if you have any kind of problem like I did,'' said Wheatland mother Kori Wilhelm, who has a genetic blood mutation that makes pregnancy dangerous, ``you have to go to Cheyenne now''--and that's a 140-mile round trip--``to get the specialized treatment we used to get right down the street at Dr. Woods's clinic.'' Put yourself in that woman's shoes. Until the cost of medical liability insurance drove Dr. Woods out of obstetrics, a woman experiencing a difficult pregnancy in Wheatland could get specialized care in her own community. Now that woman has to drive 140 miles round trip for proper prenatal care and to have a specialist deliver her baby. Madam President, 140 miles is a long way for anyone to travel to see a doctor. It is even a longer 140 miles for a pregnant woman. And it is truly a long 140 miles for a pregnant woman in the middle of winter when high winds and blowing snow often force the highway department to close the interstate between Wheatland and Cheyenne. I wish this were the only story I could tell about the crisis in Wyoming, but it is not. I could talk about Dr. Jack Richard, an OB/GYN who reluctantly retired last year due to his high cost of medical liability insurance. Dr. Richard served the people of Casper, WY, for more than 30 years, but he was not ready to retire at the age of 61. Dr. Richard had already stopped providing routine obstetrical care in 2000, but even as a part-time physician, his premiums had doubled since then. I could talk about Lisa Minge, an OB/GYN who left my hometown of Gillette in November and moved her practice to Boise, Idaho. She cited the high cost of liability insurance as one of the factors in her move to Idaho, which has a $250,000 limit on noneconomic damage awards. I could talk about Dr. Bert Wagner, an OB/GYN in Cheyenne who stopped delivering babies this year to avoid the high cost of insurance for the obstetrical side of his practice. Or I could talk about a group of family practice doctors in Cheyenne who are trying to decide whether they can keep delivering babies. The four doctors in this group saw their premiums go from $65,000 in 2003 to $110,000 in 2004. This is despite the fact they had already limited the number of babies they would deliver to 30 per doctor per year to avoid having to pay the full obstetrical rate. I don't know what you do if you are the mom who needs the 31st baby delivered. I have more stories I could tell, but I am not sure what good it would do. I am an optimist by nature, but I am afraid I am pessimistic about the outcome of this vote. Nevertheless, I commend Senators Gregg and Ensign and our majority leader, Dr. Frist, for trying again. They have developed a bill that is focused on one of the most critical parts of this nationwide crisis-- the plight of expectant mothers who depend on obstetricians to provide a safe and healthy delivery for their babies. What Senators Gregg and Ensign have proposed is a modest approach that will provide some measure of relief to doctors who are squeezed by the high cost of medical liability insurance. The bill puts reasonable limits in place on the amount of money attorneys can take from settlements and verdicts awarded to injured mothers and babies. The bill does not limit the amount of money juries and judges can award to cover lost wages, rehabilitation, special services, and other economic losses an injured mother or child might face. It simply puts a reasonable limit on what judges and juries can award for punitive and noneconomic damages, which are the types of unpredictable awards that are contributing to this health care access crisis. I have noticed something interesting during our debates on this issue. While we have been debating the pros and cons of reform, no one is standing up to defend our current system of medical litigation. No one is standing up to defend our current system. We are talking about limits on noneconomic damages, or the role of the insurance industry, and Senators are saying: Yes, there is a problem, but the bill before us doesn't solve it. One thing I have not heard is a rousing defense of our medical litigation system. Even some of the lawyers in this body have agreed frivolous lawsuits are a problem and our medical litigation system needs reform. Why aren't we hearing anyone defend the merits of our current medical litigation system? It is because it is indefensible. Our system does not work. It simply does not work for the patients or for the health care providers. The bill we are debating today is a good bill for mothers and babies and the doctors who serve them. But even the sponsors would probably admit it is a short-term measure that does not address the fundamental problems with our medical litigation system. This is an important bill, but it is just a tourniquet to stop the bleeding. It is not going to heal our broken system. I would like to share with my colleagues a brief analysis of our medical litigation system. It comes from this book, ``Fostering Rapid Advances in Health Care, Learning From System Demonstrations,'' published by the Institute of Medicine of the National Academy of Sciences. Let me quote a section of this book: There is widespread agreement that the current system of tort liability is a poor way to prevent and redress injury resulting from medical error. Most instances of negligence do not give rise to lawsuits, and most legal claims do not relate to negligent care. Many injured patients do not know they have suffered an injury resulting from error, and those who go through the legal process often do not even recover the cost of their continued health care. A few plaintiffs and their attorneys, however, win large sums that may be disproportionate to their injuries or unrelated to the defendant's conduct. Prolonged, adversarial haggling over claims by plaintiffs' attorneys and liability insurers alienates both providers and patients, and generates legal fees and administrative expenses that consume more than half the cost of liability insurance premiums. The apparent randomness and delay associated with this pattern of accountability not only prevent severely injured patients from receiving prompt, fair compensation, but destabilize liability insurance markets and attenuate the signal that liability is supposed to send health care providers regarding the need for quality improvement. Fear and distrust breed inefficient ``defensive medicine,'' and lead to missed opportunities for information exchange and apology that might avoid lawsuits in the first place. The shortcomings of the current malpractice system therefore come from three directions, all of which have contributed to the present crisis: inefficient and inequitable legal processes for resolving disputes, problematic responses by clinicians to the threat and cost of liability, and volatile markets for liability insurance. Although some states face greater insurance instability than others as the result of different legal standards, public expectations, and professional cultures, no state is immune to the threat of service interruptions affecting physicians, hospitals, and other health care providers. These are not my words. They are not the words of personal injury lawyers. They are not the words of tort reform advocates either. As I pointed out earlier, these words are from the National Academy of Sciences, specifically the Institute of Medicine. This organization was created by the Federal Government and chartered by Congress to provide unbiased and evidence-based advice on health policy. This congressionally chartered body issued a report in 2002 that called upon the Federal Government to support demonstration projects in the States to evaluate alternatives to current medical tort litigation. In response, I have introduced a bill in the spirit of this report. This bill, the Reliable Medical Justice Act, would authorize funding for States to create alternatives to current tort litigation. The funding would cover the costs of planning and initiating proposals based on models outlined in the bill or other innovative ideas. My bill would require participating States and the Federal Government to work together in evaluating the results of the alternatives as compared to traditional tort litigation. This way, all States and the Federal Government could learn from new approaches. As I speak, some States are already looking into alternatives to medical litigation as we know it. My home State of Wyoming is one of them. Another is Massachusetts, where Governor Romney is working with Harvard University on an innovative project. Another is Florida, where the Governor's task force recommended the implementation of projects along the lines of those suggested in my bill. We should encourage and support these States and others that are considering similar ideas. Believe it or not, both Newt Gingrich and the editors of the New York Times have endorsed the idea of creating and evaluating alternatives to medical litigation. If Newt Gingrich and the New York Times are in the same tent on an issue, maybe there is room in that tent for most of my fellow Senators to support it as well. I support the Gregg-Ensign bill. It provides some short-term relief for mothers and babies and their doctors. A lot of my colleagues will be voting with me, and a lot will probably vote against me. Regardless of how we vote on this legislation before us, we must acknowledge there is a medical liability crisis, and we must work together to find a solution. Our medical litigation system is failing us. Medical lawsuits are supposed to compensate people fairly and deter future errors. But most patients do not get fair and timely compensation, and there is nothing to show the lawsuits are deterring medical errors or making patients safer. I hope my colleagues will vote in favor of providing mothers, babies, and their doctors with some immediate relief through the Gregg-Ensign bill. I also hope they will look seriously at my legislation, S. 1518, which would put us on the road to replacing medical lawsuits with better and fairer systems for compensating and protecting patients. We need to pass both of these bills before we can say we have begun to solve this medical liability crisis. I thank the Chair and yield the floor.

Mr. ENZI

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

Mr. ENZI

Mr. ENZI. Mr. President, I do want to talk a little bit this morning about the pension bill, which is the current bill we are considering. I am sure all of us can remember our first jobs when we came home with our first paycheck, anxious to spend it, and if our parents happened to be around they gave some advice and suggestions for us. First, they probably suggested we figure out where we were going and, secondly, that we put something away. If it was before college, it was probably for college. If it was after college, it was probably a suggestion that we start thinking about when we retire. The pension funding laws that we are considering today have that same objective. We have reached a major crossroads in the private pension system that affects the retirement security of millions of American workers. The funding requirements for defined benefit plans contained in the Employer Retirement Income Security Act--ERISA is what it is usually referred to--and the Internal Revenue Code are very complex. Yet their goal is clear, and that is to make sure a plan has sufficient assets to pay the future benefits when workers retire. I am not sure there has been much explanation on the difference between defined benefits and defined contributions. The ones we are talking about are defined benefits. There is a transition happening in this country. As fast as companies can, they are going to define contributions. That is where they say how much they will put away for future retirement, as opposed to this crisis area which is defined benefits. Defined benefits means you are guaranteed something when you retire; based on the length of time you have worked and maybe how much money you have made, it is a defined benefit. It is what you are going to receive. So there can be a lot of complexities to calculating how to have enough money so that at the time you retire there is money in the bank to pay the annuity that you deserve at that point in time. So we can see why there would be kind of a rush to the defined contribution, which is where the company at that point in time knows exactly what they have to pay in each year and they are willing to do that, but they are not telling you that you are going to have a specific amount when you do happen to retire. There will be money there, but it will not be a specific plan of receipt at that point in time. All we are talking about in this particular pension bill are the defined benefit plans. That was set up under law so that when a company says you will have these benefits, you know that the Federal Government is providing some oversight to make sure those benefits will be available when the time for you to retire happens. So companies are forced to show they have the resources on hand to make these future benefit payments when they come due. Pension law must be finely tuned to accurately reflect the plan's ability so that the appropriate funding levels can be determined. Unfortunately, the current system is off key. We have had some different things happen than we have had to worry about in this system for a long time. The outdated 30-year Treasury rate, which is what is used to calculate a plan's current liability, has distorted the funding levels. Simply put, a lower interest rate means employers have to put more cash into their plans to satisfy the pension funding requirements, and continued use of this artificially low interest rate places the worker's retirement, the pension plan, and the employer's business at risk. If all of the money for the retirement plans was actually being held in 30-year Treasurys, then that would be an accurate calculation, but it is not. It has not been for quite awhile. We have not changed the way that it is calculated. So continued use of this artificially low interest rate does place the retirement plan, the worker's retirement, and the business itself at risk, particularly if we expect them to make up differences that occur for a number of reasons in a very short period of time. Pension plans are built over a long period of time, and it has always been the intent that they be built over a long period of time, so that when the person retires the money is there, and what we are trying to do in this bill is to make sure all of those things happen. A business that goes out of business no longer provides the security for the employee, and too steep of a curve for putting money in there keeps them from doing the business they are designed to do, which over even a short period of time can eliminate that business. A bankrupt business does not provide the kind of security that is needed for the retirement system. Under the current system, with the 30-year Treasury rate, businesses will have to divert billions of dollars from development and job creation to satisfy the misguided funding rules of the 30-year Treasury. Again, if that is where all the money was--it is where very little of the money is--then that would be an accurate way to do it. The number of defined benefit pension plans in this country is steadily declining. I have given you a little bit of the reason why that is, but it is due in large part to the complex and restrictive pension laws. In 1983, there were 175,000 defined benefit pension plans. Today there are fewer than 35,000. Many more companies may choose to freeze or discontinue their plans when faced with artificially inflated funding payments. We must act now to prevent further deterioration of the pension system and to protect our economic recovery. But we must not act in haste to pass long-term sweeping changes that might undermine the retirement security of American workers. A use of the obsolete 30-year Treasury rate has combined with recent stock market losses and economic conditions to create what we are all referring to as ``the perfect storm'' for the pension fund environment. Last year the Pension Benefit Guarantee Corporation had a record $11.2 billion deficit. The amendment offered today will provide temporary relief to recover from this perfect storm, while Congress considers comprehensive pension funding reform--comprehensive reform, but not just done in a hurry so it is just an overreaction. The amendment provides the following temporary relief. I am very pleased this is supported in a very bipartisan way. There were agreements to limit the number of amendments, to make sure the second- degree amendments were germane to the main amendment, so that we can get this wrapped up in a hurry and get some temporary relief in place. What the bill does, it replaces the 30-year Treasury bond rate with a conservative long-term corporate composite rate. This is done for a period of 2 years. It also defers a portion of accelerated deficit reduction contributions by airlines and steel companies for 2 years. That is the accelerated deficit reduction, accelerated because of this perfect storm. That is just for a period of 2 years. It also defers the amortization of recent investment losses by multiemployer plans for 2 years, which allows these collectively bargained plans time to return to the bargaining table. I stress this relief is temporary. It does not forgive a pension plan's debt. It contains the important safeguards to prevent further decline in the financial health of a plan. It gives the plans time to recover their footing--and this may be just as important--and gives Congress time to carefully consider the best way to improve the troubled pension funding system. It is often the case here that if something is worth reacting to, it is worth overreacting to. We have to be careful not to overreact to the pension system's current funding troubles. Replacing the 30-year Treasury rate along with improving economic and market conditions should improve the temporary funding deficiencies created by this perfect storm. But we have to look beneath the clouds of recent unique circumstances to see the true health of the pension funding system and identify where reform is needed. We must learn from the lessons of the perfect storm to reduce the volatility, to bring pension accounting closer to reality, to increase the transparency and disclosure of pension information to participants. They deserve to, and have to, know where their fund is at all times. With this legislation, we give ourselves time to ensure that we make the right decisions to strengthen the pension system and improve retirement security. These decisions will be very difficult but we have to make them. Anything less is unacceptable. We cannot pass the burden of a broken pension system on to future generations. Of course, while we are doing that we need to make sure we are also taking a look at Social Security, because Social Security is a defined benefit plan and it is underfunded. We have a chance to fix that. The earlier we work on it, the better it can be fixed with the least pain. Of course, part of that process has to be to ensure that those who are entering the job market continue to pay into Social Security. In another 25 or 30 years there will not be anybody here who is here now. It will be the generation coming into the job market right now, the ones who are going to discover that 15 percent of their paycheck is going into a defined benefit plan, Social Security, and that the money isn't going to be there when they get out, when they are ready to take advantage of it because what goes in today gets paid out today, essentially. They could end that defined benefit system because they will say we don't owe anything to those people, just ourselves. I am hoping that is not the attitude in this country. But it is something we have to worry about as well. But the more immediate need, the one that is having difficulties right now with the funding process, and unlike the Social Security system, is funded--it is funded and we are having a crisis with it--that is the one we want to take care of. But we need the time to do it right and this bill will give us time to do it right. I ask people to pay careful attention to the amendments, work in a very bipartisan way to get this 2-year solution, so we can come up with the overall solution. I yield the floor.

Mr. ENZI

Mr. ENZI. Mr. President, I rise to speak about a specific provision in the Omnibus Appropriations bill. The bill before the Senate includes a 2-year delay in the implementation of country of origin labeling for all products except fish. I am highly frustrated with this delay because the conference committee went beyond the scope of its conference. The House bill only had a 1-year delay for implementation of country of origin labeling for meat and meat products. The Senate bill included an amendment indicating the strong support that country of origin labeling had in the Senate. The discovery of bovine spongiform encephalopathy, BSE, within our borders this holiday season was a wake-up call to the urgency of country of origin labeling implementation and the detriments of further delays. After the announcement of a ``presumptive positive'' BSE cow in the U.S. domestic herd, the national and international response was immediate. Domestic markets plunged and our international trading partners slammed their doors shut to our meat products. Exports account for almost 10 percent of total U.S. beef production. Our largest export markets are refusing our product and bloating the domestic market. We've already lost a majority of our export market, a void that other beef exporting countries are eager to fill. Unless we act now to restore the confidence of those markets, the relationships we have built for many years will be lost for good. In this situation, our trading partners need to be reassured that meat they purchase is ``born, raised, and slaughtered'' in the U.S. American consumers deserve this assurance, too. Country of origin labeling does this. We have already paid for this lack of country of origin labeling. Exhaustive traceback and research by the U.S. Department of Agriculture has shown that the cow infected with BSE was imported from Canada. The rules that govern whether a country maintains ``BSE Free'' status are found in the Terrestrial Animal Health Code of 2003 generated by the Office of International Epizootics, OIE. The code say that a country can maintain its BSE-free status despite the discovery of a diseased animal if the animal was imported and all progency--calves--of the diseased animal are disposed of. With country or origin labeling in place, the United States could have begun the fight for ``BSE-free'' status immediately. Instead, we were forced to wait weeks until it was confirmed beyond doubt that the diseased cow was born Canada. I understand that some people say that we don't need to have country of origin labeling with the USDA is already pursing a national animal identification program. This is simply not the case. A national ID program will be useful for health safety reasons. It will help pinpoint and track the spread of disease, but this informatin will not be passed on to the consumer. Tracking disease is not the only concern. Rebuilding consumer confidence should also be a high priority, and the only consumer-focused program is country of origin labeling. Clearly, the answer to bolstering consumer confidence is country of origin labeling. We would do a great disservice to American consumers if the Senate suppressed country of origin labeling when the need for labeling is heightened. The regulations for country of origin labeling were intended to be completed and implemented this year. I urge my colleagues to take the necessary steps to make sure this is the case. Now more than ever, we must stabilize the confidence of our consumers and let them enjoy the privilege of knowing that they are eating from the safest food supply in the world.

Mr. ENZI

Mr. ENZI. Mr. President, it wasn't all that long ago that a good education consisted of providing our children with a strong background in reading, writing and arithmetic skills, mixed with an understanding of history and a good hard look at civics and how our government works. We thought, if our sons and daughters had taken courses in those subjects and mastered them, they were as prepared as they could be to face the real world, get good jobs, and one day, live happily ever after. Unfortunately, we left one vital skill out of the mix. As an accountant, I have become increasingly concerned about the lack of knowledge we have as a society, and especially, the lack of insight we share with our children about money and how to properly handle it, budget it, and use it to plan for their retirement. The numbers are quite startling when you take a close look at how many of our children are leaving college already saddled with credit card debt and school loans that need to be repaid. It wasn't like that when many of us were in college. School didn't seem to cost nearly as much as it does now, and the scourge of a strong economy, easily available credit, hadn't reached the ranks of our schools yet. This is a problem at the present time, but if we don't act quickly to make sure our Nation's young people receive the advice and education they need on handling money and planning their finances for the future, we will have a disaster on our hands. Young men and women, in their prime earning years, are facing a mountain of personal debt at high interest rates, with little hope of paying it off anytime soon. Clearly, that is something we must take every action to help future generations of students avoid. That is why I am introducing the Financial Literacy in Higher Education Act with my colleague, Senator Akaka. Senator Akaka and I share many of the same ideas with respect to the importance of financial literacy and ensuring our children have a grasp of the implications of their actions when they use the credit they have been extended by banks eager to make quick loans at high interest rates. Senator Akaka and I worked together on language included in the No Child Left Behind Act to ensure elementary and secondary students would have more access to financial literacy training that we hope will make our children wiser and better users of consumer credit. This bill builds on the activities we helped authorize in No Child Left Behind. It emphasizes financial literacy for students enrolled in institutions of higher education, or students who will soon be enrolled. With the training and real life advice they will receive in these courses we will be able to reduce the number of our children who leave high school and head out into the world on their own with little or no preparation for the demands that will be placed on their limited incomes. Our legislation would include financial literacy and personal finance in the list of permissible activities of several programs authorized under the Higher Education Act. These programs are set up to support students, and I believe financial literacy should be an important aspect of the support process. Attending college is a necessary step that must be taken if our young adults are to succeed in the work force, and learning how to make a personal budget and meet individual financial obligations should be a priority in that process. Our bill would also emphasize financial literacy in exit counseling for college students receiving federal student financial assistance. Today's undergraduate students are leaving school with an average of nearly $17,000 in student loan obligations. This can be a large burden to bear, but it becomes impossible to address if a young man or woman is unable to successfully manage their own finances. The answer to this challenge is to start educating students before they experience financial difficulty. Students who are faced with the possibility of accruing larger and larger levels of debt must be taught the full meaning and significance of concepts as simple as compound interest, credit scores, and minimum payments. That way, when they leave school with their lives before them, they will be able to plan how to pay back their student loans, and keep credit card debt to a minimum. Taking the initiative while these students are in school will help them avoid some of the serious problems that can develop when someone has little or poor financial skills. These problems can literally have lifelong implications for those who overextend their resources or fail to learn to live within the limits of a budget. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. ENZI

Mr. ENZI. Mr. President, it wasn't all that long ago that a good education consisted of providing our children with a strong background in reading, writing and arithmetic skills, mixed with an understanding of history and a good hard look at civics and how our government works. We thought, if our sons and daughters had taken courses in those subjects and mastered them, they were as prepared as they could be to face the real world, get good jobs, and one day, live happily ever after. Unfortunately, we left one vital skill out of the mix. As an accountant, I have become increasingly concerned about the lack of knowledge we have as a society, and especially, the lack of insight we share with our children about money and how to properly handle it, budget it, and use it to plan for their retirement. The numbers are quite startling when you take a close look at how many of our children are leaving college already saddled with credit card debt and school loans that need to be repaid. It wasn't like that when many of us were in college. School didn't seem to cost nearly as much as it does now, and the scourge of a strong economy, easily available credit, hadn't reached the ranks of our schools yet. This is a problem at the present time, but if we don't act quickly to make sure our Nation's young people receive the advice and education they need on handling money and planning their finances for the future, we will have a disaster on our hands. Young men and women, in their prime earning years, are facing a mountain of personal debt at high interest rates, with little hope of paying it off anytime soon. Clearly, that is something we must take every action to help future generations of students avoid. That is why I am introducing the Financial Literacy in Higher Education Act with my colleague, Senator Akaka. Senator Akaka and I share many of the same ideas with respect to the importance of financial literacy and ensuring our children have a grasp of the implications of their actions when they use the credit they have been extended by banks eager to make quick loans at high interest rates. Senator Akaka and I worked together on language included in the No Child Left Behind Act to ensure elementary and secondary students would have more access to financial literacy training that we hope will make our children wiser and better users of consumer credit. This bill builds on the activities we helped authorize in No Child Left Behind. It emphasizes financial literacy for students enrolled in institutions of higher education, or students who will soon be enrolled. With the training and real life advice they will receive in these courses we will be able to reduce the number of our children who leave high school and head out into the world on their own with little or no preparation for the demands that will be placed on their limited incomes. Our legislation would include financial literacy and personal finance in the list of permissible activities of several programs authorized under the Higher Education Act. These programs are set up to support students, and I believe financial literacy should be an important aspect of the support process. Attending college is a necessary step that must be taken if our young adults are to succeed in the work force, and learning how to make a personal budget and meet individual financial obligations should be a priority in that process. Our bill would also emphasize financial literacy in exit counseling for college students receiving federal student financial assistance. Today's undergraduate students are leaving school with an average of nearly $17,000 in student loan obligations. This can be a large burden to bear, but it becomes impossible to address if a young man or woman is unable to successfully manage their own finances. The answer to this challenge is to start educating students before they experience financial difficulty. Students who are faced with the possibility of accruing larger and larger levels of debt must be taught the full meaning and significance of concepts as simple as compound interest, credit scores, and minimum payments. That way, when they leave school with their lives before them, they will be able to plan how to pay back their student loans, and keep credit card debt to a minimum. Taking the initiative while these students are in school will help them avoid some of the serious problems that can develop when someone has little or poor financial skills. These problems can literally have lifelong implications for those who overextend their resources or fail to learn to live within the limits of a budget. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. ENZI

Mr. ENZI. Mr. President, I rise today to engage the distinguished chairman of the Finance Committee, Senator Grassley, in a colloquy regarding benefits that Medicare beneficiaries may receive through retail pharmacies and community pharmacists. Section 1860D-4 of the conference report to accompany the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 states that sponsors of Medicare drug plans or organizations that offer MedicareAdvantage plans shall permit plan enrollees to receive benefits through a pharmacy other than a mail-order pharmacy. These benefits may include a 90-day supply of drugs or biologicals. The conference report states that such enrollees would pay any differential in charge. I offered the amendment to add this language to the Senate version of the Medicare bill during our debate in June. My intent in offering this amendment was to prohibit plans from implementing restrictions that would steer consumers to mail-order pharmacies. The Senate voted 95 to 0 in favor of requiring Medicare drug plans and MedicareAdvantage organizations to allow local community pharmacists to fill long-term prescriptions and offer any other services that they are equipped and licensed to provide. The language does permit a Medicare drug plan or MedicareAdvantage organization to charge a different copayment for a mail-order prescription versus a prescription filled by a community pharmacist. This happens today in many health plans. I note that the conference report would require plans to provide clear information about copayments and deductibles. This information would have to include details on the differences in charges between mail-order and retail prescriptions. My concern is that any differences in charges between mail order and retail be reasonable differences, based on the actual cost of delivering the service. I would be concerned if differences in charges were used as a method of steering seniors and the disabled to mail order pharmacies. I know that Chairman Grassley and I both agree that since seniors trust their local pharmacists, they should be allowed to keep those relationships in place.

Mr. ENZI. I thank the distinguished chairman for this clarification.

Mr. ENZI

Mr. ENZI. I thank the Chair. Mr. President, in the Senator's remarks he did point out there have been a lot of health care advances. Science has played a great part in health from genetically engineered vaccines, to coronary angioplasties, to heart transplants, to the human genome project that is coming up with a lot of new medicines that will take care of us. That project, incidentally, came in 2 years ahead of time, in 2003, and has led to a massive increase in the number of projects that are being done to come up with new drugs that will help us. This is the way Medicare has advanced. It is pretty inflexible. There has not been much advancement. We have an opportunity to correct that right now. We need to get the flexibility of Medicare to increase the same way that medical advances are increasing, and those are mostly in the area of prescription drugs. So it is time we added a prescription drug benefit. The bill also takes care of some problems we have with Medicare. I mentioned this task force that Senator Breaux and Senator Frist were on. The task force recognized the problem that when Medicare got underway, there were 20.4 million people under Medicare. Today there are 40.8 million people under Medicare. That is a doubling. By 2030, 77.6 million people will be under Medicare. That is another doubling. That is a huge increase in the number of people who will come under Medicare. How is it paid for? It is paid for by people who are in the workforce, not the people who are retired--the people in the workforce. In 1973, there were 7.3 people. That tenth of a person probably didn't feel too well. But 7.3 people were paying for every person under Medicare. In the year 2000, there were 3.9 people paying the bill for those in Medicare. By the year 2030, 2.4 people per person will be paying the bill for those on Medicare. These people have to pick up the costs of all of Medicare for those people. So it is important we have some cost containment, that we put in some reforms to make sure the system is available for those 77 million people in the year 2030. Prescription drugs are the most important treatment factor now. They were not in 1965. We have come a long way on the issue of prescription drugs. This is where we are headed. These are the number of drugs in clinical development: Cancer, 402 different kinds in clinical development. The percentage of drugs that actual make it is very small. Is there a high cost to develop a drug? Yes. Diabetes, there are 30 different kinds of medicines; rheumatoid arthritis, 24; osteoporosis, 20; obesity, overweight, 29; depression 19; congestive heart failure, 18; Alzheimer's disease, 17; schizophrenia, 16; hypertension, 11; hyperlipidemia, 10; migraine headaches, 20, and so on. There are a lot of drugs that are being worked on. That is a new treatment. That is a tool that has to be put in the hands of doctors. Now, we have heard some comments, as well as different versions, about surprise that AARP has backed this bill. It is not a perfect bill. We never pass a perfect bill out of the Senate. AARP has had some comments on it. I hope my colleagues all pay attention to them. AARP believes that millions of older Americans and their families will be helped by this legislation. AARP also endorses the Medicare bill. On November 17, they stated, ``The integrity of Medicare will be protected.'' These are the most significant reforms. It provides access to medical prescription drugs. It dramatically expands voluntary, private health plan choices. I hope my colleagues will look at the comments the leader made and read them in full. I thank the President for the time, and I yield the floor.

Mr. ENZI. Mr. President, as we all know by now, the Medicare conferees have reached agreement on the most significant changes to the Medicare Program in history. I thank the Presiding Officer for the hours he has spent working on this, the agony he has gone through at understanding and reaching agreement with this diverse body of Senators. There are 100 of us. We usually amount to probably 150 opinions on anything. The Chair has had to put all of that together into a bill that not only the 100 Senators agree with--and not all 100 Senators do--as many of the Senators as possible, and as many of the House as possible, because a bill to go through to the President has to pass both the House and the Senate. When it gets this complicated, it is an extremely talented person who is able to put together the kind of legislation that reaches a compromise that will be able to pass. This is a copy of the bill. If anybody thinks it is simple, they haven't looked at it. It takes a long time to wander through this. We have been working on it for a few days and now have the finalized copy, the copy that has passed the House. It is the most significant change in the history of Medicare. It may be the most significant change in medical delivery in the history of the world. I congratulate the Presiding Officer, the Senator from Iowa, Mr. Grassley, for all the hard work he put in on this bill. We will soon be voting on it. This bill will add a prescription drug benefit to Medicare, it will offer new Medicare coverage options to seniors, and it will expand tax incentives for people who save money to pay for their own health care needs. That is quite a package. I want to strengthen Medicare. Seniors and disabled people in Wyoming depend upon Medicare to pay for their health care needs. We have relatively few major employers in Wyoming so most of our retired seniors don't have access to health care coverage through their former employers. Medicare is critical to the health and well-being of 66,000 elderly and disabled citizens in my home State. That may not sound like a lot of people, but it is over 13 percent of Wyoming's population. Adding a prescription drug benefit to Medicare makes sense. Medicare is the only traditional insurance plan in the United States that does not cover outpatient prescription drugs. The reason Medicare does not cover prescription medications is that pharmaceuticals were not a major part of medical care in the 1960s, when Medicare was founded. It is a different story today. Today, prescription drugs are absolutely integral to providing quality health care. All of us rely on them. It makes sense for Medicare to keep up with the times by offering voluntary prescription drug coverage to seniors. Let me emphasize the voluntary nature of this program some more. We have heard that the AARP is going to regret supporting this Medicare bill just as they regretted supporting the catastrophic coverage bill of the 1980s. I will come back to that a little bit later. The reason seniors revolted against the catastrophic coverage bill back then was that it was mandatory. They didn't have a choice. They had to pay for the coverage even if they didn't want it. This bill does not make that mistake. This bill is different. If seniors don't want Medicare drug coverage, they don't have to pay for it. If they have coverage through their former employer, they can keep that. Plus we provide a lot of support in this bill for employers to continue providing their retirees with drug coverage so that seniors won't be forced to buy a Medicare drug plan because they lost their retiree coverage. So this is indeed a voluntary program. It gives seniors a chance to sign up for Medicare drug coverage or stay in the traditional Medicare and keep what they have. Choice is a great concept. America was built on the idea that people should have the freedom to choose how to live their lives, as long as their choices don't infringe on the freedom of others. When it comes to health care, choice is also important. Today seniors don't have choices. Medicare is a one-size-fits-all program, take it or leave it. But we all know that most seniors cannot afford to leave it. So right now they are stuck with Medicare, warts and all. The fact that Congress has to pass a law to add a prescription drug benefit is part of the problem with the Medicare system. Medicare is not flexible enough to adjust and adapt to the complex nature of health care today. As I have noted, prescription drugs play a much greater role in treating disease today than they did when Medicare was created nearly four decades ago. But unlike private health plans, Medicare has not changed with the times. Under this Medicare agreement, seniors will have the option to choose drug coverage through Medicare. They will also have options that go beyond voluntary drug coverage. The conference agreement would allow a variety of private health plans to offer coverage of Medicare beneficiaries. I am not talking about HMOs. Despite what I have heard here on the Senate floor, this bill does not force seniors and disabled into HMOs. Medicare HMOs exist today, and no one is being forced into them. What this bill does is allow preferred provider organizations, or PPOs, to offer Medicare plans. Most of us are familiar with PPOs. They are the type of health plans to which more Americans belong than any other type. HMOs give you a list of doctors. If your doctor is not on the list, you can't visit him. The great thing about PPOs is, you can use any doctor you choose. And if the doctor is part of the plan's network, you get a discount on the cost of his or her services. These private PPO plans will compete to serve seniors by offering new choices and benefits, choices that are currently unavailable under Medicare's one-size-fits-all structure. To be blunt, I believe the legislation could be bolder in stimulating competition. But it represents a good step in the direction of flexibility, innovation, and here is that word again--choice. Let's be clear on what the Medicare bill would do. It would offer security to seniors who are without drug coverage. It would provide incentives to employers to encourage them to maintain the coverage they provide to their retirees. At the same time, the bill would create new Medicare options for seniors. It also would create incentives for private health plans to innovate and compete for the businesses of today's seniors and invigorate the Medicare Program for future generations. Let's also be clear on what the bill won't do. It won't force seniors and the disabled to pay for a Medicare drug benefit if they don't want it. It won't encourage employers to drop drug coverage for their retirees. It won't force seniors and the disabled into HMOs. I should also point out that the Medicare bill won't pay for every dollar of a senior's prescription drug costs. A drug benefit for needy seniors is important, but it is also important that we preserve Medicare for future generations. Already 30 percent of Medicare funding comes from the general government revenues. Projected expenditures are expected to exceed projected tax and premium revenues after 2015. I will be keeping a careful eye on Medicare spending, especially now that we have passed this drug benefit. If we are going to add anything new to Medicare beyond a basic and sensible drug benefit, we need to pay for it directly. This drug benefit isn't free, but it is responsible. We set aside $400 billion of the Federal budget over the next 10 years to pay for this benefit. That is how much the agreement is projected to cost. Actually, it comes in slightly under that. But last year when we were doing the appropriations, we set aside the $400 billion. Some people say $400 billion is not enough. They point out that seniors are expected to spend $1.8 trillion on prescription drugs over the next 10 years. Well, nothing in life is truly free, and prescription drugs will not be an exception. We need to remember that every new Federal program comes at a price. We need to be aware of just what that price is when we ask for a new program. It is not always the people receiving the benefit that are paying the benefit. The $400 billion is the equivalent of $1,600 from every taxpayer over that 10-year period. What would taxpayers say about the need for any program if we put it into that kind of a form for them? There would be increased concern just like there is increased concern when people have to pay their own costs of medical treatment. That is how the competition comes into the market. I suppose we could have passed a $1.8 trillion drug benefit. Of course, we would have had to raise taxes by $1.4 trillion to do it. I cannot speak for the rest of my colleagues, but I just became a grandfather this year and I am not willing to put that kind of a tax burden on my grandson. Even the critics of this agreement acknowledge that low-income seniors would be eligible for substantial subsidies for their prescription drugs. Even the critics admit that seniors with catastrophic drug expenditures get measurable relief under this bill. There is a generous 95 percent coverage of a seniors' drug cost over $5,000. This bill also includes important projections for which I fought on the Senate floor this summer, which protect every senior's right to visit their community pharmacy and receive the high level of service they are accustomed to receiving from them. We have put a huge burden on our pharmacists in this country, the local ones that are right there to answer your questions face to face. There is a provision in the bill that will help to keep that local pharmacist in place and operating. It gives them an equal chance under the bill to be providing prescription drugs for seniors on Medicare. It is important that we keep those small businesses and pharmacists--local people that you can talk to--in place. This bill doesn't cover every dollar of every prescription for every senior. But that is not a reasonable expectation. What this bill does is provide help and protection for the two groups that need it the most--those who can least afford prescription drugs, and those who otherwise would be bankrupted by a serious illness that requires expensive drug therapies. These are worthy objectives and this agreement accomplishes those goals. I want to discuss a couple of other aspects of this agreement. First, the bipartisan Medicare agreement would establish health savings accounts, HSAs. These HSAs are tax advantaged savings accounts that all people could use to pay for medical expenses. This is a huge advancement in taking care of the uninsured. Health savings accounts would be open to everybody with a high deductible health insurance plan. The higher the deductible, the less the cost to the insurance plan. The higher the deductible, the more a person is allowed to put into a HSA. Employers would also be able to contribute to the employee's health savings account, and neither the employer's nor the employee's contribution would be taxable. Tax free, you can set up this account. If you have an HSA, your total yearly contributions to it would be as large as your health insurance plan deductible. Just like an individual retirement account, the interest and investment earnings your health savings account would generate are not taxable. Furthermore, the money you take out of HSAs to pay for medical costs are not taxable, as long as the money is used to pay for health care expenses. Let's see, you don't pay taxes on it when you put it in, you don't pay taxes on the earnings, and you don't pay taxes when you take it out. It is a little incentive to put away money to cover deductibles, or anything to do with health care later on. I hope that every young person in this country will establish a health savings account. No matter what their income level is, no matter how good their health is, it is an opportunity to put away money for when the health is not as good, and to take care of any deductibles that are necessary at any point in life with an insurance plan. It is an opportunity to be insured from the time you enter the job market, and to put a little away and perhaps have a lot for the years when 50 to 80 percent of the health care costs come up. One of the best features of health savings accounts is they would be portable. That means that if you change jobs, the health savings account goes with you, you still have it. It is yours. Health savings accounts are a great innovation. Health savings accounts create a tax incentive for everybody--not just seniors--to save for health care expenses, plus it doesn't matter whether your employer offers health insurance or not; you can still save money in a health savings account and receive the tax benefit. This provides some tax fairness for those of you who don't have access to tax advantages of the employer- sponsored health insurance. Let me say that again. This provides some tax fairness to those who don't have access to the tax advantage of employer-sponsored health insurance. Employer-sponsored health insurance is tax free. It doesn't even show up on anything that you have to file. This would give the average person the same opportunity to have tax-free health coverage. Health savings accounts are an idea whose time has come. Giving people more flexibility and responsibility in their health care spending will result in healthier and wiser consumers. I wholeheartedly support this part of the Medicare agreement. It is long overdue. It needs to be advertised. Young people of this country need to understand that that is their part of Medicare, that they can get into this now and it will save them costs later. It will be a part that will shore up the system. I also want to speak to the provisions that would address a very sore subject on the frontier, the inequity in Medicare reimbursement between urban and rural areas. I am pleased that the conference agreement ensures reimbursement equity to doctors, hospitals, and other providers of health care in Wyoming and other rural States. Right now, Medicare underpays rural hospitals, home health alleges, and other providers, as compared to urban counterparts. This limits the ability of these providers to maintain their services and their infrastructures and to recruit qualified personnel. Some people do not understand the challenges that rural health care providers face in providing quality care to seniors and the disabled. For instance, I read a column in the Washington Post last Friday by a gentleman named Steven Pearlstein. I think it was supposed to be a semi-humorous column--I hope so--although it was in the business section. Well, to those of us in rural areas, it wasn't even semi- humorous, and it wasn't accurate either. I suppose I could ask that this column be printed in the Congressional Record, but I would not want to waste the space. I will, however, cite a paragraph from the column in which this gentleman called politicians from rural States ``nothing more than welfare queens in overalls.'' At this point, I'll state that I still believe Senators ought to be able to bring laptops onto the floor. But I assure my colleagues I will not be petitioning them to wear overalls on the Senate floor. Let me read one of the paragraphs that Mr. Pearlstein wrote: Then there is Medicare bill, which was supposed to be about providing drug benefits to seniors, but wound up being yet another chance to whine about the plight of country doctors and hospitals. Although the cost to providing medical service is actually lower out there in God's country [the God's country is true] that hasn't stopped your guys from squeezing $25 billion more from the Federal Treasury over the next decade to pad Medicare payments to rural providers. I don't know if this gentleman has ever been to God's country or not. Maybe he has flown over God's country, Mr. President. I doubt he has ever visited the Niobrara Health and Life Center, a very small hospital in Lusk, WY. Lusk has a population of 1,500. Lusk is the county seat Niobrara County, population 2,500. That is Wyoming's least populated county. Incidentally, it is a little bigger than the State of Delaware. It has one person for every 524 acres of land. The hospital in Lusk has been closed since May of 2000. Since then, folks in Niobrara have had to travel to Douglas and Torrington for surgery or other hospital care. Douglas and Torrington are in different directions from Lusk. They are both about 55 miles from Lusk. That is a long drive any time, but in winter--and we are having winter there now. I don't know if you saw pictures of the Bronco football game where they were scraping snow off of the field; but yesterday there was a blizzard in Colorado and in Wyoming, and the temperatures were about 16 degrees, and it gets a little tough to get around, if you can at all. Fifty-five miles is a long drive in winter when the winds are howling and the snow blows across two-lane roads. That is an important hospital for the people of Niobrara County, and they are getting ready to reopen it. They are hoping to be able to afford it. It is also important for the State of Wyoming because there is a State prison for women in Lusk. The State tried to keep the hospital open in the 1990s, but the financial pressures were simply too great. Hospitals across rural America are struggling, particularly the smallest hospitals, such as the one in Lusk. If it were really true that the ``cost of providing medical service was actually lower out there in God's country'' then why are the rural hospitals struggling to stay open? Our Federal Government's own Medicare Payment Advisory Commission published a report in 2001 on Medicare in rural America. That report found that the Medicare ``payment system does not recognize factors that have a greater effect on the cost of rural hospitals.'' The study also found that there are aspects of Medicare's prospective payment system for inpatient hospital care that tend to work against rural hospitals. Every hospital has to buy a certain amount of medical equipment from hospital beds to x-ray machines. If rural hospitals get a rural discount on this equipment, it is news to me. In fact, I think there are probably some quantity discounts on which they lose out. Rural hospitals also have to hire nurses and technicians, just as urban hospitals. It is hard enough to recruit nurses because we have a nationwide shortage. Trying to recruit nurses to come to the Wyoming frontier is even harder. So our rural hospitals have to offer a competitive wage. Most rural hospitals also have a low patient volume compared to their urban counterparts, and this contributes to a higher cost of rural hospital care. There is a certain amount of staff and everything that has to be on hand ready for patients if they show up. As the Medicare Payment Advisory Commission rightly points out in its study, hospitals in small and isolated communities ``cannot achieve the economies of scale and service scope of their larger counterparts and thus have higher per-case costs.'' The current Medicare rates do not directly account for the relationship between cost and volume, potentially placing smaller providers at a financial disadvantage relative to the other facilities. I am pleased to note that the Lusk hospital is scheduled to reopen in October 2004 after completing some important upgrades and renovations. I am confident the hospital will be able to survive this time because Congress passed a law in 1997 to allow for special payments to hospitals in rural areas that are too sparsely populated to support a full-service facility. The Medicare conference agreement would increase payments over the 1997 law to critical access hospitals, such as the one in Lusk. Despite Mr. Pearlstein's criticisms, he ignored the fact that urban hospitals have higher Medicare margins than rural hospitals. The additional support for rural health care providers in this bill will help close the gap between higher Medicare margins of urban hospitals and the lower Medicare margins of the rural hospitals. This additional help will not come a moment too soon for the people of Niobrara County, WY, and other counties in Wyoming and other counties throughout the United States. I hope Mr. Pearlstein will visit Lusk if he ever visits Wyoming. I have been there, and I can tell you that the Medicare payments he considers ``padding'' are critical to the hospital in Lusk and to the seniors who depend on it. It is a long drive to Lusk from Yellowstone National Park or skiing in Jackson Hole, but I think it would be quite educational for him or anyone else who makes the journey. There are a lot of good aspects about this Medicare agreement. Adding a prescription drug benefit to the program is good. Providing seniors and the disabled with new Medicare options is good. Offering all Americans new ways to save money for their health care expenses is good. Providing fair Medicare payments to rural doctors and hospitals is good. Having health savings accounts is outstanding. For these reasons, I am going to vote for this bipartisan Medicare agreement, and I am going to work in the future to ensure that Medicare continues to offer a reasonable drug benefit for many of America's seniors, but one that does not place a huge financial burden on future generations. Earlier the majority leader, Senator Frist from Tennessee, the only doctor in this body, gave an outstanding speech outlining the reasons that in a bipartisan way he and others have worked on this for 6 years to bring this to fruition. A person from the other side of the aisle who has worked on that for 6 years has been Senator Breaux from Louisiana. They served on a special task force to come up with a way to make Medicare be solvent for generations to come. This will be the first significant piece of legislation to address what they have talked about for 6 years. Mr. President, how much time do I have remaining?

Mr. ENZI

Mr. ENZI. Mr. President, there is an old adage we have heard many times that says that the journey of a thousand miles begins with a single step. Today we are taking another one of those steps in a long journey that will hopefully lead to an increase in our energy independence, more reliable sources of energy, and more stable prices that are not so subject to fluctuations in the energy market. The bill we have before us is something that will truly affect every American, no matter their age, where they work, where they live, or what activities they pursue in life. One of the many things that bonds us as Americans is our love of so many things that makes us consumers of energy. No matter who you are, you are a strong and vital part of that market. If you drive a car, you won't get very far without a full tank of gas. If you use a computer, you have to tie it to some source of electricity to get the power you need to access the Internet or the information stored on your hard drive. If you live in a mobile home, or in a cabin in the woods and cook your food over an open fire, you are still an energy consumer who is using a resource to make your dinner. Every lifestyle has its own energy needs and we have been incredibly blessed to have had access to an abundance of energy for many, many years. In fact, we had such relatively easy access to energy we started to take it for granted. That led to calls for conservation and more wise use of our resources when energy costs first started to rise. That was the start of our journey to create an energy policy--one that has seen us through these past years. Unfortunately, it has taken quite a long time to agree on an update to our policy, one that takes into consideration the changes we have seen in our society and in the availability of energy both here and abroad. Our dependence on foreign sources of energy continues to be a national concern, one that had me and many others calling for the creation of a national energy policy, which we have done since 1973 when OPEC and the Saudi Arabians first pulled the plug on our supply of crude oil. The irony was the fact that we had an abundance of oil here in the United States at the time. In fact, we still have a huge supply of oil in the country today, but that oil has not been made available for exploration. Because we hadn't taken the steps to develop it, we allowed a foreign government to disrupt and control part of our daily lives. We became vulnerable to their manipulations and it took us months to recover. In some ways, we are continuing to recover from those days of the long gas lines, high prices and short supplies that we saw in the 1970s. Things were bad enough back then when we didn't have an energy policy. Still, they could have been much worse. I shudder to think what might have happened if we'd had a situation like 9/11 occur at the heart of that crisis. If the terrorists had struck when we were economically crippled and energy supplies were low, what effect could they have had on our national security? That kind of scenario is exactly the kind of thing that a national energy policy like the one we are taking up today is supposed to avoid. It has taken us quite a while to get where we are, but we finally have something before us that will provide us with a plan, a blueprint for the future that will also address our needs in the present. It is time now for us to take it off the planning board and put it into action. After all, 30 years ought to be enough time to put the basics of a plan together, and that is how long we have had since the energy crisis of the 1970s to work out a plan like this. Now we have before us the beginning of what will be a long and continuing effort to stabilize our energy markets and protect our national security. This bill isn't perfect, but it is a good start. It is more than a beginning, but it is not the final answer. It is a temporary remedy that will start producing results immediately while it lets us continue working on a more permanent solution. In other words, it is a chance to grab the brass ring and get another ride on the energy merry-go-round, while providing for the ride we are currently on. I am pleased that this bill includes a number of important provisions that support and promote clean coal development. Coal is an important product of Wyoming, and one of the most important ways we can reduce our dependence on foreign energy is to find ways to diversify our energy supplies and better utilize our Nation's abundant coal supplies--especially clean burning coal like what we mine in Wyoming. In addition to our coal supplies, in recent years our new energy development has focused on the increased use of natural gas. I support natural gas development and I hope that our gas industry continues to grow and flourish. IO am also keenly aware of the fact that there isn't enough natural gas or infrastructure available to supply all of the world's energy needs so we are going to have to continue relying on coal for some of our energy uses. That does not mean we have to continue doing business as usual and continue to push our aging coal-fired power plants well beyond their originally designed lifetimes. We have the technology and the ability to design and build cleaner and more efficient power plants that utilize new clean coal technology, but we won't be able to do that if we cripple our economy and prohibit new development. This won't surprise anyone, but none of us are going to be enthusiastic about everything in this bill. Again, it is not a perfect bill, but it is a good start on a policy. It does not have everything I want in it, but it does have more than enough to make it worth our support. There is a provision that would have greatly helped Wyoming get the more than $400 million that it is owed by the Federal Government through the Abandoned Mine Lands Trust Fund, but that provision was not included in this bill. We have received assurances from the Finance and Energy Committees that they would take up this matter early next year, and we are grateful for their commitments. However, I would have preferred that the provision had been included in this bill and we didn't have to take up any of the committee's time next year. Still, again, on balance, and taking the whole bill into consideration, it is a good bill and it deserves our support. I know I am not the only one who feels that one provision or another could have been added or left out and it would have made for a better bill. Like me, almost every State can point at something that they wish could have been included but was not. It is a reason to be disappointed, but it's not a reason to ignore the task at hand, which is to continue the process and develop a national energy policy. There are just too many positive things that the bill would do for the country in the long and short term. To begin with, the bill would create nearly 1 million jobs and implement mandatory electricity reliability standards that we believe may prevent future massive blackouts as was experienced in August by the Northeast. It would encourage the Federal Government to increase energy efficiency in Federal installations. It would increase assistance for lower income families by raising the base authorization of LIHEAP to $3.4 billion. The bill also includes incentives to increase solar, wind, geothermal and other biomass technologies. It encourages modernizing and streamlining our Nation's hydropower laws. It provides incentives for responsible oil and gas development and royalty relief for marginal wells. In other words, it helps keep wells that are slow, but long-term energy suppliers going so we don't always have to rely on short-term, get-rich-quick wells for all of our energy needs. It provides incentives to encourage consumers to purchase more hybrid and alternative fuel vehicles and authorizes two new programs that would improve the efficiency and quality of our Nation's fleet of school buses. There are a number of other provisions included in this bill that will contribute to our Nation's energy security and I hope my colleagues will take the time to look at what is in this bill for what it really is: A desperately needed and all-important first step toward a policy that will increase our energy independence, ensure we have a more reliable supply of energy available, and a more stable energy market for consumers to purchase from with prices that are not so subject to as much fluctuation and change.

Mr. ENZI

Mr. ENZI. Mr. President, I rise to introduce the Stock Option Accounting Act. This bill has been a long time in the making. It is a strong bipartisan bill that addresses the important role stock options play in our economy. As an Accountant, and as a member of the Senate who was a small businessman for many years, I tend to believe most of the issues we address in Congress should be examined with an eye toward preserving the strength and integrity of our small business sector, and ensuring that the regulations that govern it are fair and preserve and promote, rather than discourage, innovation and competition. I think that's something we can all agree on, so I know I won't have to go into too much detail about the importance of our small business sector, especially our small, high tech businesses. When it comes to small businesses, especially our high technology centers, we truly are the envy of the world. Our talented and creative engineers and inventors have paved the way for innovations in advanced technologies and computer software that other countries will always try to imitate. Here in the United States, our Small Business Administration is well aware of the importance of that sector to our Nation's economy. Nearly 23 million strong, small businesses represent more than 99.7 percent of all employers, employ more than half of all private sector employees, generate 60 to 80 percent of net new jobs annually, create more than 50 percent of nonfarm private gross domestic product (GDP) and produce 13 to 14 times more patents per employee than large patenting firms. Last week, I chaired a hearing in the Banking Committee's Subcommittee on Securities and Investment that featured testimony from the Financial Accounting Standards Board (FASB) and the small business community. It became quite evident during the hearing that FASB is ill equipped to conduct economic impact studies of the accounting standards that it adopts even through its one of their precepts. FASB may be able to conduct a cost analysis of an accounting standard proposal determining the costs of computers and additional manpower necessary to implement a new statement. But, it does not have the expertise to look at the comprehensive impact a new standard may have on the economy. In addition, as the hearing progressed, it was evident that FASB is not listening to small businesses, and not taking their concerns seriously about a standard that FASB Board members stated was ``set in concrete'' prior to an official comment period on any draft proposal. At the hearing, small business witnesses testified about how they are worried that the expensing of stock options would make this form of employee compensation prohibitive. They said it would make it very difficult if not impossible to attract and retain talented employees. It would also have a detrimental effect on the entrepreneurial nature and spirit of our country. In all of my years listening on this issue, not one small business owner has spoken in favor of expensing stock options. After the hearing, I was more convinced than ever that legislation like this bill was needed to address the issue of the expensing of stock options. A key element of FASB's current structure is its independence and I want to make it clear that I support that principle. FASB's independence, like freedom, must be earned--and it's independence does not provide a shield that absolves FASB of accountability and due process. When it comes to the issue of stock options, a case can be made that FASB took up the project with a pre-ordained result in mind. It's no surprise, therefore, that the process that was established to pursue the matter seems to reflect a project that was begun with the end in mind. There is enough evidence there to at least make one wonder. First, FASB doesn't seem to have given much consideration to the more than 200 public comment letters they received. The public comments made by FASB Board Members seem to also reflect a skewed process, as does the lack of response to the many high tech companies that have visited with FASB in the past several months. In addition, FASB has refused to conduct real road tests to actual valuation methods. According to the FASB website ``Facts about FASB 2003-2004,'' the Board follows certain precepts in the conduct of its activities. They are: 1. To be objective in its decision making and to ensure, insofar as possible, the neutrality of information resulting from its standards. To be neutral, information must report economic activity as faithfully as possible without coloring the image it communicates for the purpose of influencing behavior in any particular direction. 2. To weight carefully the views of its constituents in developing concepts and standards. However, the ultimate determinant of concepts and standards must be the Board's judgment, based on research, public input and careful deliberation about the usefulness of the resulting information. 3. To promulgate standards only when the expected benefits exceed the perceived costs. While reliable, quantitative cost-benefit calculations are seldom possible, the Board strives to determine that a proposed standard will meet a significant need and that the costs it imposes, compared with possible alternatives, are justified in relation to the overall benefits. 4. To bring about needed changes in ways that minimize disruption to the continuity of reporting practice. Reasonable effective dates and transition provisions are established when new standards are introduced. The Board considers it desirable that change be evolutionary to the extent that it can be accommodated by the need for relevance, reliability, comparability and consistency. 5. To review the effects of past decisions and interpret, amend or replace standards in timely fashion when such action is indicated. Precept number 3 greatly interests me. I am very concerned that FASB has repeatedly refused to consider the economic consequences of its decisions. The mandatory expending of all employee stock options has serious economic, labor, trade and competitiveness implications. These issues fall squarely within the jurisdiction and oversight of Congress. It's not hard to imagine what would be said of Congress if we failed to take note of the economic implications of the actions we take on the floor. Simply put, at the end of the day, if FASB is going to earn its independence, it will have to adhere to a process that is objective, fair, open and balanced. So far, FASB seems to be more concerned about getting the job done--than in getting it right. That is why I am offering legislation that will expense the stock options given to the top five executives of a company, exempt small businesses and start up companies, and set conditions for the expensing of broad-based options for the remaining employees. I treat the three groups differently in this matter because a very real and strong accounting distinction exists between the two types of workers. First of all, in a very real sense the top five executives of an organization are different from the general employee group in the manner in which they are treated by the SEC and the manner in which their compensation is defined and distributed from an accounting perspective. The top five executives, for instance, are treated differently when it comes to their compensation and a wide range of other matters. Proxy rules, for instance, require significant additional disclosures from the top five executives than they do of any other group. Second, from an accounting perspective, there is a clear distinction between executives and the broad employee group. In their recent book, In the Company of Owners, Professor Joseph Blasi and Douglas Kruse concluded, based on extensive research, that options granted to all but the top executives in a company are not labor income, but a form of capital income. To quote from their book, ``They represent risk sharing profits that workers receive on top of their normal market wages and benefits. As such, it makes little sense to deduct the value of those options from profits.'' In addition, Blasi and Kruse found that, ``options turn employees into economic partners in the enterprise. As such, they stand to share in the stock appreciation that they help to bring about. . . . Options provide an additional dimension to their employment relationship, allowing workers to participate in both the risks and the rewards of property ownership. . . . There's substantial economic evidence that options bring workers capital rather than labor income. . . . The earnings workers get from options comes on top of their regular market wage.'' In contrast, options for top executives function more as labor income, particularly in companies without broad based option plans. These top executives bargain for their entire ``compensation'' package and, in many cases, stock options represent a large part of the total package. Their negotiations about compensation are distinctly different than other employees. That brings me to our bill and its purpose--or, to continue with my line of reasoning--If these two groups should be compensated differently for their efforts when it comes to stock options, how should it be done? Our legislation would mandate a valuation method of the options given to the top five executives that does not require companies to predict their future stock price volatility. One of the members of the Option Valuation Group, Fred Cook, appointed by the FASB strongly recommended this method--one where stock price volatility is set at zero so that companies don't have to use a crystal ball and try to predict their future stock price. Another key principle in our legislation is the requirement that FASB develop a method of ``truing up''--or correcting errors--that are made when stock option estimates are made at grant date. There are several other areas where estimates are made in financial statements, and then corrected over time as the precise facts are learned. Today, no such corrections are made in the stock options area--a fundamental flaw in the system. To address these issues, the bill has three major components. First, the bill would target executive compensation. A company would be required to expense immediately options of the top five highly compensated individuals at a company. The Securities and Exchange Commission already requires this information in annual statements and proxy statements. In addition, it would provide investors with a clearer understanding of the stock options of top company officials. This also would work in conjunction with the self-regulatory organization's rules, approved last week by the Securities and Exchange Commission, to require shareholder approval of stock option plans. Second, small business would be exempt from expensing stock options. The exemption for small businesses would follow the current SEC rules for defining small businesses. The bill would allow small companies a 3-year grace period after an initial public offering prior to a company being required to expense stock options. This would allow a sufficient period of time to work out any initial volatility after the initial public offering. Finally, the bill would not permit the Securities and Exchange Commission to recognize a stock option expensing standard unless two things happen. First, companies must be able to recognize the true expense of stock options on their financial statements. Currently, FASB wants companies to expense stock options upon the grant date of an option. Unfortunately, the current valuation models for stock options, Black-Scholes, binomial, Crystal Ball, and others, are horrible indicators of the true cost to a company stock options. The bill would require that a company be able to ``true-up'' its financial statements when a stock option is exercised, lapses or is forfeited. If the cost goes up then the company must record the increase when an option is exercised. Likewise, if an option lapses or is forfeited then a company should be able to wipe those previously taken expenses off its balanced sheet. This is only fair. The second item prior to an accounting standard to be recognized is the completion of an economic analysis study by the Secretary of Commerce and the Secretary of Labor. This study would look at how the use of stock options may stimulate economic growth in our nation's economy. In addition, the study would relate how stock options expensing could effect the competiveness of U.S. companies in international markets. I strongly believe that this bill is essential to our economic strength. It is clear that FASB is not listening to small business and therefore is not listening to the future of our country. FASB is therefore ill equipped to make the economic analysis decisions to determine the true effect of stock option expensing on our economy. In addition, the bill also targets the invasion's need for greater information on executive compensation. I ask my colleagues to take a serious look at this bill and to support its passage. I ask unanimous consent that a summary of the bill be printed in the Record.