Dianne Feinstein

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I call up amendment No. 1060, as modified.

Mrs. FEINSTEIN. Mr. President, this amendment is presented on behalf of myself, Senators Nickles, Chafee, Lindsey Graham, Alexander, and McCain. This amendment provides that Medicare beneficiaries with an annual adjusted gross income of over $200,000, or above, pay the full cost of the Medicare Part B premium. The amendment uses a sliding scale to ramp up the beneficiary's share of the Part B premium. The amendment we are offering would hold Medicare beneficiaries with annual adjusted gross incomes between $100,000 and $150,000 a year responsible for 50 percent of the cost of the premium. In 2003, this amounts to $116.40 a month, or $1,396 annually, rather than $58.20 monthly, or $698 annually, which is what the beneficiary pays today for the benefit. Medicare beneficiaries with incomes between $150,000 a year and $200,000 a year--that is $300,000 to $400,000 for a couple--would be responsible for 75 percent of the total cost of the Part B premium. In 2003, this amounts to $174 or $2,095 annually. Medicare beneficiaries with annual incomes above $200,000--that is $400,000 for couples--would be responsible for 100 percent of the total cost of the premium. In 2003, this amounts to $232.80 a month, or $2,793 annually. Now, for a beneficiary with an annual income of $200,000, this amounts to less than 1.4 percent of their annual income. For the vast majority of Medicare beneficiaries, some 37 million of the 38 million beneficiaries, Part B premiums would remain the same as they are today. According to the Census Bureau, about 98 percent of all Medicare beneficiaries have annual incomes below $100,000. So the amendment we are proposing will affect about 2 percent of the most affluent and well off Medicare beneficiaries. Let me be clear. This amendment does not deprive any Medicare beneficiary of any benefit. What this amendment says is that if you can afford to pay the price for the Medicare Part B premium, you should. Those Medicare beneficiaries who have annual incomes below $100,000 a year will still be able to receive a 75-percent Government subsidy for their premium. Now, I strongly believe the time has come to begin to income-relate some of these benefits. The Federal Government should not be subsidizing the Part B premiums of those beneficiaries who can afford to pay for the cost of the premiums themselves. Much has changed since the creation of Medicare in 1965. People are living longer, due in large part to improved diagnostic tools and treatment. There is no way Congress could have predicted the number of people who would come to rely on Medicare or the rate at which medical expenses would grow. When Medicare was established in 1965, the Part B premium was set at a level to cover about 50 percent of program costs. With medical inflation, the dollar amount of the premium has declined to cover only 25 percent of program costs. The Omnibus Budget Reconciliation Act of 1993 established the Medicare Part B premium to equal 25 percent of the program cost from 1996 to 1998. The Balanced Budget Act of 1997 permanently established the Part B premium at 25 percent. The bill to balance the budget in 1997 that passed out of the Senate Finance Committee included a provision to income relate the Medicare Part B premium. So this is nothing new. The provision included in 1997 would have had beneficiaries with incomes over $50,000 for an individual and $75,000 for a couple paying a greater share of the premium. This provision was stripped out during conference. Well, we were in a different financial situation when Congress made the decision to set the beneficiary's share of the Part B premium at 25 percent in 1997. At that time, we had only a $22 billion deficit. The next year the budget was in surplus to the tune of $69 billion. With a Federal budget deficit of over $400 billion in the year 2003 and an increase in the Federal debt of $5.3 trillion, for a total of $12 trillion in debt expected by 2013, I believe that now is the time to rethink the premium structure of Medicare Part B. As the baby boomers age, there will be an increasing reliance on and demand for the Medicare Program. The number of people age 65 and older will more than double over the coming decades, rising from 37 million today to 70 million in 2030 and 82 million in 2050. Over the next 75 years, the Medicare program will cost 71 percent more than that provided under current law in order to meet its needs. It is predicted the Medicare hospital trust fund will be insolvent by 2030. The CBO projects Medicare spending will nearly quadruple by 2075 in order to meet the growing need for the program, with budget outlays of $277 billion in 2003. This means spending for the program could reach $1.1 trillion by 2075. With the legislation currently before the Senate, Congress is proposing some major changes to the Medicare Program. I am in full support of adding a drug benefit, but Congress should also rethink the financing mechanisms of the program, and this bill is short in that direction. High-income beneficiaries can afford to pay a larger share of Medicare's costs, at least of the premium. They can afford to pay for the benefits they receive. In light of the fact the Federal Government has just provided tax cuts in the range of $1,841 for people with incomes between $77,000 and $154,000 and up to $30,000 for people with incomes above $374,000, it seems to me people with annual incomes above $200,000 can afford to pay $2,793, which is the annual premium for Medicare Part B this year. We should focus funding so that 98 percent of Medicare beneficiaries who have an annual adjusted gross income of less than $100,000 can continue to access benefits. I think it is reasonable to ask those who can afford it to pay a greater share of the premium. We are still waiting for an official cost savings score from CBO, but I believe this amendment could save billions of dollars. Once again, Mr. President, this amendment affects less than 2 percent and only those with incomes of more than $200,000 a year adjusted gross income would pay the full premium of about $2,900 a year. We think this is a reasonable proposal. It is scaled up. It impacts no one below $100,000 adjusted gross income a year, and at the maximum for people of over $200,000 a year in adjusted gross income, the premium would be just $2,900. The income limits would be indexed to medical inflation and, according to current population survey data from 2002, only 2 percent, or about 1 million people of the 38 million Medicare beneficiaries, have incomes of over $100,000 a year. This would protect the tax subsidy for people who need it by encouraging those who have the dollars simply to pay either a greater share of the premium cost or the full premium cost. I thank the Chair. I yield the floor.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I rise today to introduce legislation to amend the Graton Rancheria Restoration Act to give the State of California and the local communities of Sonoma, Napa, and Marin counties the opportunity for input and review of the tribe's plan for a major casino in the Bay Area. I am offering this legislation because the Boards of Supervisors of the local communities impacted by this planned casino have asked me to amend the Graton Rancheria Restoration Act. The Boards of Supervisors of Sonoma, Marin, and Napa counties have each unanimously passed resolutions seeking a change in Federal law to restore the Secretary of Interior's discretion in approving land into trust and allowing the State and local government to have a voice in the process. Prior to today's introduction I have met with the Presidents of the Sonoma and Marin Boards of Supervisors, the Graton tribe, and Senators Campbell and Inouye the Chairman and Ranking Member of the Indian Affairs Committee. This week I had a very spirited and frank conversation with Graton Tribal Chairman Greg Sarris and representatives from the casino investors. During the meeting Chairman Sarris committed to work with the local Boards of Supervisors and he committed to look at alternative sites for the casino. Chairman Sarris also said the Tribe and the casino investors would conduct an environmental review based on the criteria laid out in the National Environmental Policy Act, NEPA, before a site is selected. These are positive signs and I have told both the Boards of Supervisors and the Tribe that I would like to see them continue to work together. This legislation guarantees that the local and State officials have a voice in the process. Without this change to the Graton Rancheria Restoration Act they do not have that voice. In 2000, Congress passed the Graton Rancheria Restoration Act to restore Federal recognition to the 355 members of the Federated Indians of the Graton Rancheria. The Graton Tribe's original Rancheria was in the northern Sonoma County town of Graton on land purchased by the Bureau of Indian Affairs, BIA, in 1920 for the ``village home'' of otherwise homeless Miwok and Pomo Indians. The Rancheria was terminated in 1958 when the BIA approved a plan to distribute the assets to resident Indians and remove the Rancheria from Federal trust. The original version of the Graton restoration bill, H.R. 946, sponsored by Congresswoman Lynn Woolsey in the 106th Congress, passed the House of Representatives with a gaming restriction, to which the Tribe agreed. In testimony before the House Resources Committee in May 2000, and in other public comments, Graton Chairman Greg Sarris stated that the Tribe had no intention of conducting gaming. In fact, before the House Resources Committee, Chairman Sarris stated, ``Many may think our motives for restoration have been influenced by the opportunity gaming affords some other recognized tribes. Because our local political constituency, both democratic and republican has opposed any sort of development for environmental reasons, we agreed with these local political forces to not develop a gaming complex. So, as proof, we voted as a tribe to include a non- gaming clause in our bill, stipulating that we will not be a gaming tribe.'' Furthermore, in an article in the Marin Independent Journal on September 21, 2000, Chairman Sarris said, ``All we want is to be formally recognized as Indians and have the same rights that other Indians do for education and health care. We are not interested in gambling.'' I ask unanimous consent to print a copy of this article in the Record.

Mrs. FEINSTEIN. Senator Boxer sponsored legislation identical to Congresswoman Woolsey's in the Senate, but the gaming restriction was stricken when the bill was ultimately passed as part of the Omnibus Indian Advancement Act of 2000. The day the legislation passed on December 11, 2000, Senator Boxer stated on the Senate Floor that dropping the gaming restriction was necessary because of opposition to the no-gaming clause by the Senate Committee on Indian Affairs and the Clinton Administration and because, according to Senator Boxer, ``Senator Inouye asserts that the no-gaming clause is unnecessary because the Graton Rancheria have no intention of conducting gaming.'' So what has changed one might ask? Well, even though the Gratons voluntarily and repeatedly took a no- gaming pledge while their restoration bill was under consideration by Congress, on April 23, 2003, the Tribe and its partner, Stations Casinos of Las Vegas, announced plans to purchase approximately 2,000 acres of land in Southern Sonoma County near Sears Point for the development of a casino. This site is located on environmentally sensative open space and San Francisco--North Bay tidelands which have been the subject of a decades-long conservation effort by environmentalists and local residents. This site is roughly 30 miles from San Francisco--along the gateway to Sonoma that leads thousands of travelers into the beautiful wine country each day. The Tribe's casino proposal has outraged local elected officials and residents who had sympathized with the Tribe's plight and supported their restoration on the condition that they not seek to develop a casino. The Sonoma and Marin County Boards of Supervisors have each passed unanimous resolutions objecting to the Graton casino proposal. In fact, even the Board of Supervisors of neighboring Napa has also passed a resolution against the casino proposal. I ask unanimous consent to print these resolutions and letters from the counties in the Record.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Senator Boxer sponsored legislation identical to Congresswoman Woolsey's in the Senate, but the gaming restriction was stricken when the bill was ultimately passed as part of the Omnibus Indian Advancement Act of 2000. The day the legislation passed on December 11, 2000, Senator Boxer stated on the Senate Floor that dropping the gaming restriction was necessary because of opposition to the no-gaming clause by the Senate Committee on Indian Affairs and the Clinton Administration and because, according to Senator Boxer, ``Senator Inouye asserts that the no-gaming clause is unnecessary because the Graton Rancheria have no intention of conducting gaming.'' So what has changed one might ask? Well, even though the Gratons voluntarily and repeatedly took a no- gaming pledge while their restoration bill was under consideration by Congress, on April 23, 2003, the Tribe and its partner, Stations Casinos of Las Vegas, announced plans to purchase approximately 2,000 acres of land in Southern Sonoma County near Sears Point for the development of a casino. This site is located on environmentally sensative open space and San Francisco--North Bay tidelands which have been the subject of a decades-long conservation effort by environmentalists and local residents. This site is roughly 30 miles from San Francisco--along the gateway to Sonoma that leads thousands of travelers into the beautiful wine country each day. The Tribe's casino proposal has outraged local elected officials and residents who had sympathized with the Tribe's plight and supported their restoration on the condition that they not seek to develop a casino. The Sonoma and Marin County Boards of Supervisors have each passed unanimous resolutions objecting to the Graton casino proposal. In fact, even the Board of Supervisors of neighboring Napa has also passed a resolution against the casino proposal. I ask unanimous consent to print these resolutions and letters from the counties in the Record.

Mrs. FEINSTEIN. Let me just read one part of the Resolution from Marin County which will give you an idea of the opposition to the Graton tribe's proposed casino: RESOLVED, that the Board of Supervisors of the County of Marin calls on its elected members of the United States Senate, Dianne Feinstein and Barbara Boxer, and its elected member of the House of Representatives, Lynn Woolsey, to assist the residents of Marin and the entire North Bay to preserve their environment by introducing legislation that would amend the Graton Rancheria Restoration Act and/ or the Indian Gaming Regulatory Act to stop the unregulated creation of tribal lands and to subject development of tribal lands in the Marin and Sonoma Counties at a minimum to the regulatory and approval processes applicable to newly acquired tribal lands by the Indian Gaming Regulatory Act. While the counties acknowledge that the Graton have a right to be recognized, they object to the site selected by the tribe and they especially object to language in the Restoration Act that precludes the local community, the Governor, or the Secretary of the Interior from providing input on the suitability of this location for land taken into trust for gaming purposes. There is a problematic section of the Restoration Act that states, ``Upon application by the Tribe, the Secretary shall accept into trust for the benefit of the Tribe any real property located in Marin or Sonoma County . . .'' According to the Department of the Interior, this language removes any discretion by the Secretary as well as any tribal obligations for consultation with the surrounding community or environmental review, as required by the normal process under the Indian Gaming Regulatory Act for newly acquired land taken into trust for gaming purposes. According to the Department of the Interior, the tribe must only conduct a hazardous materials review and show title to the land for land to be taken into trust. This could be completed in 9 months--and it is an inadequate review in my opinion. Since the local communities are seeking a remedy which would restore the Secretary's discretion in approving its land trust application and allow local government to provide input in the process, I am introducing this legislation today that will change the ``shall take land into trust'' to ``may take land into trust.'' This legislation will also require the two-part test that is standard under the Indian Gaming Regulatory Act of 1988 to apply so that the State and local communities have input in the process. There is precedent for this change. In 1994, legislation was passed restoring the United Auburn Tribe with the same directive to the Secretary of the Interior, requiring that land ``shall'' be taken into trust for the Tribe. One of the restoration act's sponsors, Congressman John Doolittle sponsored an amendment to change ``shall'' to ``may'' after it had been passed, thereby affording the Secretary of Interior discretion in accepting particular parcels of land into trust and local government officials an opportunity to weigh in on the Tribe's proposed site. The result of that change was that the Auburn Tribe and Placer County officials successfully cooperated in not only identifying a mutually agreeable site, but they signed a Memorandum of Understanding to mitigate potential impacts from the proposed Thunder Valley Casino. And earlier this month, the tribe opened its casino. Today California is home to 109 federally recognized tribes. 61 tribes have gaming compacts with the State and there are 54 tribal casinos. With more than 50 tribes seeking Federal recognition and approximately 23 recognized tribes seeking gaming compacts from the Governor, revenues from California's tribal gaming industry are expected to surpass Nevada's by the end of the decade. The dramatic growth in tribal gaming in California has the potential to yield much needed benefits for tribal members in terms of healthcare, education and general welfare, as Congress and California voters intended. However, the question is not whether gaming should be permitted, but rather how and where. Those questions were asked and answered in the Indian Gaming Regulatory Act of 1988, IGRA. But without the modest change made by this legislation, the Graton tribe will be allowed to develop an off-reservation casino outside the requirements established in IGRA, the first time such an exception has ever been made for a California tribe. Allowing this to happen would set a dangerous precedent not only for California, but every State where tribal gaming is permitted. The changes we are seeking today are extremely modest. We are not reversing any restoration of the tribe. We are not infringing on Native American sovereignty. We are not even blocking the casino proposal. We are only seeking to give the State and the local communities a voice in the process. They were promised the tribe would not open a casino. That promise was broken, so the least we can do is ensure a normal review will take place. I hope my colleagues will support this legislation and I look forward to working with the Chairman and Ranking Member of the Indian Affairs Committee to pass this legislation quickly. I ask unanimous consent that the text of the bill be printed in the Record.

Mrs. FEINSTEIN. Mr. President, I rise today to introduce legislation to amend the Graton Rancheria Restoration Act to give the State of California and the local communities of Sonoma, Napa, and Marin counties the opportunity for input and review of the tribe's plan for a major casino in the Bay Area. I am offering this legislation because the Boards of Supervisors of the local communities impacted by this planned casino have asked me to amend the Graton Rancheria Restoration Act. The Boards of Supervisors of Sonoma, Marin, and Napa counties have each unanimously passed resolutions seeking a change in Federal law to restore the Secretary of Interior's discretion in approving land into trust and allowing the State and local government to have a voice in the process. Prior to today's introduction I have met with the Presidents of the Sonoma and Marin Boards of Supervisors, the Graton tribe, and Senators Campbell and Inouye the Chairman and Ranking Member of the Indian Affairs Committee. This week I had a very spirited and frank conversation with Graton Tribal Chairman Greg Sarris and representatives from the casino investors. During the meeting Chairman Sarris committed to work with the local Boards of Supervisors and he committed to look at alternative sites for the casino. Chairman Sarris also said the Tribe and the casino investors would conduct an environmental review based on the criteria laid out in the National Environmental Policy Act, NEPA, before a site is selected. These are positive signs and I have told both the Boards of Supervisors and the Tribe that I would like to see them continue to work together. This legislation guarantees that the local and State officials have a voice in the process. Without this change to the Graton Rancheria Restoration Act they do not have that voice. In 2000, Congress passed the Graton Rancheria Restoration Act to restore Federal recognition to the 355 members of the Federated Indians of the Graton Rancheria. The Graton Tribe's original Rancheria was in the northern Sonoma County town of Graton on land purchased by the Bureau of Indian Affairs, BIA, in 1920 for the ``village home'' of otherwise homeless Miwok and Pomo Indians. The Rancheria was terminated in 1958 when the BIA approved a plan to distribute the assets to resident Indians and remove the Rancheria from Federal trust. The original version of the Graton restoration bill, H.R. 946, sponsored by Congresswoman Lynn Woolsey in the 106th Congress, passed the House of Representatives with a gaming restriction, to which the Tribe agreed. In testimony before the House Resources Committee in May 2000, and in other public comments, Graton Chairman Greg Sarris stated that the Tribe had no intention of conducting gaming. In fact, before the House Resources Committee, Chairman Sarris stated, ``Many may think our motives for restoration have been influenced by the opportunity gaming affords some other recognized tribes. Because our local political constituency, both democratic and republican has opposed any sort of development for environmental reasons, we agreed with these local political forces to not develop a gaming complex. So, as proof, we voted as a tribe to include a non- gaming clause in our bill, stipulating that we will not be a gaming tribe.'' Furthermore, in an article in the Marin Independent Journal on September 21, 2000, Chairman Sarris said, ``All we want is to be formally recognized as Indians and have the same rights that other Indians do for education and health care. We are not interested in gambling.'' I ask unanimous consent to print a copy of this article in the Record.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I rise to introduce the Notification of Risk to Personal Data Act of 2003. This legislation will require that individuals are notified when their most sensitive personal information is stolen from a corporate or government database. Specifically, the bill would require government or private entities to notify individuals if a data breach has compromised their Social Security number, driver's license number, credit card number, debit card number, or financial account numbers. In most cases, if authorities know that someone is a victim of a crime, the victim is notified. But that isn't the case if an individual's most sensitive personal information is stolen from an electronic database. Unfortunately, data breaches are becoming all too common. Consider the following incidents which have compromised the records of hundreds of thousands of Americans. On April 5, 2002, a hacker broke into the electronic records of Steven P. Teale Data Center, the payroll facility for California State employees. The hacker compromises files containing the first initials, middle initials, and last names, Social Security numbers, and payroll deduction information of approximately 265,000 people. Despite the breathtaking potential harm of the crime, the breach was not publicly acknowledged and State employees were not made aware of their vulnerability to identify theft until May 24, 2002--17 days later. On December 14, 2002, TriWest Health Care Alliance, a company that provides health care coverage for military personnel and their families, was burglarized at its Phoenix, AZ offices. Thieves broke into a management suite and stole laptop computers and computer hard drives containing the names, addressed, telephone numbers, birth dates and Social Security numbers of 562,000 military service members, dependents and retirees, as well as medical claims records for people on active duty in the Persian Gulf. In February 2003, a hacker gained access to 10 million Visa, MasterCard, American Express Card and Discovery Card numbers from the databases of a credit processor, DPI Merchant services of Omaha, NE. Company officials maintained that the intruder did not obtain any personal information for these card numbers such as the account holder's name, address, telephone number or Social Security number. However, at least one bank canceled and replaced 8,800 cards when it found out about the security breach. And in March of this year, a University of Texas student was charged with hacking into the university's computer system and stealing 55,000 Social Security numbers. These are just some examples of the types of breaches that are occurring today. Except for California, which as a notification law going into effect in July, no State of Federal law requires companies or agencies to tell individuals of the misappropriation of their personal data. I strongly believe Americans should be notified if a hacker gets access to their most personal data. This is both a matter of principle and a practical measure to curb identity theft. Let me take a moment to describe the proposed legislation. The Notification of Risk to Personal Data Act will set a national standard for notification of consumers when a data breach occurs. Specifically, the legislation requires a business or government entity to notify an individual when there is a reasonable basis to conclude that a hacker or other criminal has obtained unencrypted personal data maintained by the entity. Personal data is defined by the bill as an individual's Social Security number, State identification number, driver's license number, financial account number, or credit card number. The legislation's notification scheme minimizes the burdens on companies or agencies that must report a data breach. In general, notice would have to be provided to each person whose data was compromised in writing or through e-mail. But there are important exceptions. First, companies that have developed their own reasonable notification policies are given a safe harbor under the bill and are exempted from its notification requirements. Second, encrypted data is exempted. Third, where it is too expensive or impractical, e.g., contact address information is incomplete, to notify every individual who is harmed, the bill allows entities to send out an alternative form of notice called ``substitute notice.'' Substitute notice includes posting notice on a website or notifying major media. Substitute notice would be triggered if any of the following factors exist: 1. the agency or person demonstrates that the cost of providing direct notice would exceed $250,000; 2. the affected class of subject persons to be notified exceeds 500,000; or 3. the agency or person does not have sufficient contact information to notify people whose information is at risk. The bill has a tough, but fair enforcement regime. Entities that fail to comply with the bill will be subject to fines by the Federal Trade Commission of $5,000 per violation or up to $25,000 per day while the violation persists. State Attorneys General can also file suit to enforce the statute. Additionally, the bill would allow California's new law to remain in effect, but preempt conflicting State laws. It is my understanding that legislators in a number of States are developing bills modeled after the California law. Reportedly, some of these bills have requirements that are inconsistent with the California legislation. It is not fair to put companies in a situation that forces them to comply with database notification laws of 50 different States. I strongly believe individuals have a right to be notified when their most sensitive information is compromised--because it is truly their information. Ask the ordinary person on the street if he or she would like to know if a criminal had illegally gained access to their personal information from a database--the answer will be a resounding yes. Enabling consumers to be notified in a timely manner of security breaches involving their personal data will help combat the growth scourge of identity theft. According to the Identity Theft Resources Center, a typical identity theft victim takes six to 12 months to discover that a fraud has been perpetuated against them. As Linda Foley, Executive Director of the Identity Theft Resources center puts it: ``Identity theft is a crime of opportunity and time is essential at every junction. Every minute that passes after the breach until detection and notification increases the damage done to the consumer victim, the commercial entities, and law enforcement's ability to track and catch the criminals. It takes less than a minute to fill out a credit application and to start an action that could permanently affect the victim's life. Multiply that times hundreds of minutes, hundreds of opportunities to use or sell the information stolen and you just begin to understand the enormity of the problem that the lack of notification can cause.'' If individuals are informed of the theft of their Social Security numbers or other sensitive information, they can take immediate preventative action. They can place a fraud alert on their credit report to prevent crooks from obtaining credit cards in their name; they can monitor their credit reports to see if unauthorized activity has occurred; they can cancel any affected financial or consumer or utility accounts; they can change their phone numbers if necessary. I look forward to working with my colleagues to pass this vitally needed legislation. This bill will give ordinary Americans more control and confidence about the safety of their personal information. Americans will have the security of knowing that should a breach occur, they will be notified and be able to take protective action. I ask unanimous consent that the text of the bill be printed in the Record.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. I rise to introduce with Senator Wyden a bill to reduce the risk of catastrophic fire in our country's magnificent national forests. No one who watched last week as Arizona's community of Summerhaven on Mount Lemmon burned can doubt the importance of this issue. My heart goes out to the residents of Summerhaven, and to the others who will be displaced by the fires yet to come this summer. Americans know that there is something wrong with our national forests. For too long we have suppressed fires, gradually letting brush and small trees multiply until many of our forests are now choked by a dense thicket. Today, there are 57 million acres of Federal lands at the highest risk of catastrophic forest fires. If we do not take action now, these forests could go up in smoke. This bill we are introducing today is balancing, and it will reduce the risk of catastrophic fire in our country's magnificent national forests. This legislation would speed up the environmental review process-- without sacrificing the most important environmental protections. It also would protect the communities which face the highest risk and safeguard old growth stands and large trees. And it would include sensible provisions on judicial review that will help projects go forward quickly without compromising our independent judiciary. These are provisions that makes sense, and I hope that my colleagues will support the bill. We have crafted our bill around three fundamental principles: We should focus limited Federal resources on protecting communities and on the forest lands truly most at risk; We should speed up the environmental review process, but without sacrificing the most important environmental protections; and We should protect old growth stands and large trees. Let me show how the bill achieves these three goals. First, the bill prioritizes our efforts. Many people believe that we should protect communities first. The bill does so. Seventy percent of the funding is directed to the wildland-urban interface near communities. Of course, conditions vary by State. The bill allows Governors to adjust the percentage of work that is to be done within the wildland-- urban interface for their State, up to a maximum of 75 percent, or down to a minimum of 50 percent. By way of contrast, H.R. 1904, which passed the House, includes no focus on protecting communities. All the money can be spent far from communities under H.R. 1904, even if the Governor of a State wishes otherwise. Senator Wyden and I believe that in addition to protecting communities, there are some forest lands that should be thinned to ensure that catastrophic fires do not devastate the forest and eliminate habitat for the species that have there. In the last century, Americans have rigorously suppressed fires, stamping them out whenever they start. In certain forests like ponderosa pine, these fires would naturally have cleared out the brush and small trees every 10 or 20 years or so. In the absence of these fires, brush has grown into ``doghair thickets'' with dangerous levels of fuel loadings. When fires burn now in these forests, they will be so hot that they won't just clear out the brush but will kill the large trees and often scorch the soil. These are the forests where we need to focus our efforts. We thus target thinning projects to forests that are both Fire Regime I and Condition Class 3. Fire Regime I forests are those that used to have low-intensity, brush-clearing fires; and Condition Class 3 forests are the most altered from their natural condition. The combination of Fire Regime I and Condition Class 3 are the highest priority lands for treatment. We also direct projects to municipal watersheds and diseased or windblown forests that are in Condition Class 3. If we don't protect the municipal watersheds, catastrophic fires could strip off the tree cover that prevents soils from eroding into creeks and lakes. Municipalities' water quality could suffer. In contrast to our bill, H.R. 1904 fails to prioritize brush-clearing projects for the areas that need it the most. Instead, H.R. 1904 provides expedited processes for lands that are only moderately altered by fire suppression--Condition Class 2 lands in addition to Condition Class 3. In many of the forests where H.R. 1904 would direct brush-clearing work, there naturally would have been severe fires that burned all the trees in the stand. After a thinning project, fires in these forests will still behave the same way, scorching and killing most of the trees. Thus, much of the thinning called for in H.R. 1904 would have little effect on the fire behavior or forest health. Senator Wyden and I have worked very hard to develop a bill that speeds up the review process so important work can get done without sacrificing environmental protections. Almost everyone agrees that we need to work quickly to protect the areas immediately around communities. There is little controversy or debate over these projects. The Forest Service has proposed an analytical short-cut for these projects, which requires very little environmental analysis and no formal pubic comment process or administrative appeal. There is some uncertainty, however, over the Forest Service's proposed approach. People can claim that laws Congress has previously passed will require some of these projects to be held up by more environmental analysis or administrative appeals. Our bill eliminates this uncertainty. When the Forest Service works in the immediate vicinity of a community, the bill would make absolutely clear that there need to be no environmental analysis or administrative appeals. The only exception is where there might be extraordinary circumstances, such as a major threat to endangered species. We also prohibit the Forest Service from conducting clearcuts around communities, requiring them to focus on clearing out the brush. By way of comparison, the House-passed bill does not provide any assistance to thinning projects in the immediate vicinity of communities, even though everyone agrees on the need for these projects. Senator Wyden and I have also sped up the process for projects outside the immediate vicinity of communities. These projects are more controversial, so we want to make sure that the public has some opportunity for input. In the past, the Forest Service and the Department of the Interior have been able to conduct the majority of brush-clearing mechanical treatment following a National Environmental Policy Act process known as environmental assessments. Our bill simplified these environmental assessments in several ways. The bill provides one round of public comment--the administrative appeal process--rather than two. The bill shortens the time frame for administrative appeals from 90 to 60 days. Finally, the appeal deciding offer can make necessary changes rather than having to send the project back to the original decisionmaker for further time-consuming review. Together, these changes will likely speed up the process by a few months or more. We do all this without eliminating public comment or gutting core parts of the environmental analysis. In contrast, the House-passed bill would eliminate the requirement that the Forest Service consider alternatives to the proposed project as part of its environmental analysis. In other words, the Forest Service doesn't have to study other, less damaging ways of undertaking the project--it can just do the project the way it wants. Many people think that public debate over alternatives is the core of the National Environmental Policy Act. Our bill does not eliminate this important environmental protection. Another important part of our bill is its protection of magnificent old growth stands. The remaining groves of these trees provide a connection to nature untrammeled by human activity, a connection that many of us cherish. Our bill would require full protection of these old growth stands. In addition, outside old growth stands, the bill focuses on small-diameter trees and protects large trees that promote fire-resistant stands and species diversity. By way of contrast, H.R. 1904 provides no protection for these magnificent resources. Let me now talk about judicial review. No one wants court cases to go on too long. In addition, people should not be able to tie up projects by gaming the system and picking and choosing the friendliest courts to hear their lawsuits. Our bill addresses these problems. The bill encourages courts, to the maximum extent practicable, to resolve lawsuits over brush-clearing projects quickly. These are important projects for the safety of our communities and our forests, and it is appropriate to give them some priority. In addition, we require that potential litigants file suit in the same judicial district where a fuels reduction project takes place, No one can game the system by looking for a friendly judge somewhere else. Finally, we limit temporary injunctions that are typically issued at the outset of a case to 60 days. They can be renewed if necessary--but the challengers to a projects must submit updates explaining why the injunctions should be extended. This provision prevents projects from being held up any longer than is strictly necessary. These changes will expedite the process--but they still respect our court system's essential autonomy. As a member of the Judiciary Committee, I spend much of my time trying to make sure our court system is as fair as possible. Americans count on a judiciary independent of the executive branch to preserve their liberties and to right any wrongs that their government commits. I think it is very important that we do not interfere with the independence of our judiciary. The House-passed bill would require the courts to give weight to certain findings by the Forest Service and the Department of the Interior. Even if projects had been found to violate the environmental laws, courts would be told to give weight to the agencies' findings and allow many of the projects to go ahead anyway. This is a dangerous provision for a bill to include, and I cannot support it. I believe our bill includes more sensible provisions on judicial review that will help projects go forward quickly without compromising the independence of our judiciary. Our bill includes several provisions to address forest health problems on private and State lands. We authorize $50 million annually in emergency grants to States and localities where lives are at risk. The last few years have seen vast insect epidemics killing millions of trees in Southern California, Arizona, and elsewhere. In places like Lake Arrowhead, Big Bear and Idyllwild in Southern California, communities are surrounded by dead and dying trees that are perfect kindling for a catastrophic fire. There is a real threat to people's lives that we must address. There is now no good funding source for clearing evacuation routes and clearing around schools and other emergency shelters that are on State and private lands. The emergency grants in the bill would authorize funds for these essential purposes. The bill also includes two measures to encourage homeowners to clear brush around their houses and install non-flammable roofs. A study of Southern California fires by Forest Service researcher Jack Cohen has shown that these measures could reduce a blaze's threat to homes by as much as 85 to 95 percent. Our bill would encourage these home-saving practices in two ways: The bill would prioritize grants to those communities that encourage brush-clearing and use of non-flammable roofs or develop comprehensive fire plans. The bill would record the Sense of Congress that insurers should offer lower premiums to homeowners who take steps to protect their homes. Our bill would also include grants to encourage the use of woody material, or biomass, for energy production. Biomass-to-energy plants serve multiple beneficial purposes: one, they are a clean and renewable source of energy; and two, they make brush-clearing projects more cost- effective, so we can protect more with the finite Federal dollars available. Finally, our bill would also include contracting provisions to benefit rural communities. The Forest Service and the Department of the Interior would be required to use ``best value contracting'' for brush- clearing projects under the Act. This contracting approach requires the agencies to consider other factors besides the price of the bid in awarding contractors. Bidders would be rewarded for such factors as their commitment to hire local workers, and their past record of environmental stewardship. I would like to close by saying that this is truly a bipartisan issue. All of us, Democrat and Republican, have an interest in clearing out dangerous accumulations of brush in our national forests. All of us have an interest as well in protecting the magnificent old growth stands and species habitat that Americans cherish, and in upholding our environmental laws. I look forward to working with my colleagues on both sides of the aisle to pass a bill as soon as possible.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I wish to acknowledge the efforts of my colleagues and many others participating in the Rally Against Hate on Capitol Hill today. The rally has been organized by Senators Edward Kennedy and Gordon Smith, along with the Human Rights Campaign and its coalition partners, to show support and build momentum for passage of Federal hate crimes legislation, ``The Local Law Enforcement Enhancement Act.'' Also participating in the rally today is a very brave and amazing constituent of mine, Trev Broudy. Trev is a handsome 34-year old actor from West Hollywood, CA, and he is also the victim of a hate crime motivated by his sexual orientation. On September 1, 2003, Trev was hugging and saying goodbye to his friend, Teddy Ulett, on the street in West Hollywood when two men jumped out of a car without warning and began swinging at Trev's head with a baseball bat and an iron pipe. After the attack, Trev was rushed to Cedars-Sinai Medical Center where doctors cleaned away pieces of skull from the back of his head and pieced together other parts of skull that had been crushed. He was then placed in an induced coma for over a week to guard against swelling of his brain. Today, Trev looks and sounds fine, although he will never fully recover from the attack. He has said, ``People assume because I look all right and I'm healthy and I'm walking and I'm talking, I'm all better, but I'm not.'' When Trev finally left the hospital--10 weeks after the attack--he thought his injuries would eventually heal and he would soon return to work. However, Trev belatedly learned that a major part of his brain had to be removed, leaving him with only half the vision in both of his eyes. Once having a good career as a voice-over artist, Trev now struggles with the results of his injuries every day and finds it difficult to read even the simplest sentence. He has returned home to his old apartment, but he will never be able to return to his old life. Yet Trev is an inspiration and a hero to his family and friends back home, and particularly to other gay men and lesbians who see this heinous crime as a personal attack on their community. Los Angeles' gay and lesbian community even came together and protested the county district attorney's decision not to file hate crime charges against the men suspected of beating Trev. Although the West Hollywood sheriff's station, which investigated the case, initially filed State hate crime charges, the district attorney's office chose not to file hate crimes enhancements in the case. And, unfortunately, the limitations of current Federal hate crimes law prevent it from helping Trev because it does not extend basic civil rights protections to every American--only to a few and under certain circumstances. Congress should expand the ability of the Federal Government to investigate hate crimes, and it should expand the ability to prosecute anyone who would target victims because of hate. We can, and must, do more to prevent these types of hateful threats and acts of violence, and passing The Local Law Enforcement Enhancement Act would do just that. The Local Law Enforcement Enhancement Act would: expand current Federal protections against hate crimes based on race, religion, and national origin; amend the criminal code to cover hate crimes based on gender, sexual orientation, and disability; authorize grants for State and local programs designed to combat and prevent hate crimes; and enable the Federal Government to assist State and local law enforcement in investigating and prosecuting hate crimes. Enacting the Local Law Enforcement Enhancement Act is long overdue. It is necessary for the safety and well-being of millions of Americans. Until it is enacted, many hate crime victims and their families may not receive the justice they deserve. Efforts to enact this legislation have received strong bipartisan support in the past, and the Local Law Enforcement Enhancement Act now has 48 cosponsors in the Senate. We just have not been able to get it to the President's desk for consideration. Today, I ask all of my colleagues to rally against hate by working to ensure that this legislation is not simply supported but actually passed and signed into law. Let us send a message to all Americans that we will no longer turn a blind eye to hate crimes in this country.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I thank Senator Reid. I wish to speak as cosponsor of the Graham-Feinstein amendment to remove the inventory of Outer Continental Shelf oil and gas resources from the Energy bill. I deeply believe that this proposed inventory threatens our coasts and should not be part of this Energy bill. The House already stripped the studies out of the Energy bill. The Senate should do the same. The Energy bill's current language requires a new inventory of all the Outer Continental Shelf resources and a study of impediments to production. We oppose these studies because the purpose of the studies is really meant to undermine the moratoria which is in place. Many of these moratoria have been in place with bipartisan support on both coasts for 20 years. Proponents of the inventory argue that it is meant to provide information and nothing more. However, the real intent is clear: The Minerals Management Service is specifically directed to inventory moratorium areas that are not available for development. Inventorying these areas does not make sense unless you want to overturn the moratoria. The provision's second study on impediments to production makes the intent of the studies even clearer. In section 105, the popular moratorium that now protects our States' coastal resources is disparaged as ``an impediment to production.'' An impediment is something to be removed. So this is a hint as to the intention of these studies. Perspective is important in this debate. The moratorium is there to protect our coast, not just to impede production of oil and gas. Facts are that we do not need the information these studies would provide to make an informed decision. We have inventoried the Outer Continental Shelf's resources before. In fact, the Minerals Management Service already publishes an update of this inventory every 5 years. We have a good idea what resources are out there, and we do not need additional studies. Californians are also too familiar with the consequences of offshore drilling. An oilspill in 1969 off the coast of Santa Barbara killed thousands of birds, as well as dolphins, seals, and other animals. We know this could happen again, and how well I remember that cleanup effort on those beaches. A healthy coast is also vital to California's economy and our quality of life. One of our major economic areas is the visitor industry-- conventions, tourists. People do not want to see oil rigs off the coast of California, and they do not come there for that purpose. The ocean- dependent industry is estimated to contribute $17 billion to our State each year. So the economics of what the ocean produces in its pristine state are critical to our State. In 1991, the California Department of Parks and Recreation found that almost 70 percent of Californians participated in beach activities and 25 percent of our population did some saltwater fishing. So Californians know what is at stake, and we made an informed decision: We do not want drilling off our coast. As Mike Reilly, chairman of the California Coastal Commission, said to me in a letter: The energy bill's provision is directly contrary to California's strong interest in safeguarding its precious coastal resources from offshore oil and gas-drilling related activities, and for that reason we oppose this study. The California Coastal Commission is the State governmental agency in charge of the coastline. I myself served on one of the regional boards of the Coastal Commission, so I know it well. Even without the threat of future drilling, we would oppose conducting these studies in moratorium areas. We have moratoria to protect our coasts. The studies would harm resources we want to protect. I wish to focus for a moment on the destructive studies required by this provision. The provision's original language would have allowed for exploratory drilling. I appreciate that the current version no longer allows for exploratory drilling. However, the bill still requires invasive study methods that will harm our coastal resources. The provision specifically calls for 3-D seismic testing. One might ask, What is that? This technology requires a sparker or air gun and loud repeated pulses of underwater sound. These sounds can be heard for miles under water. Seismic surveys harm marine mammals and have been linked to strandings of whales on beaches on multiple occasions. Seismic testing also hurts fish. Recent studies show these surveys damage the ears of at least some fish species, and that the damage may well be permanent. Fish rely on their hearing for survival. Additional seismic testing would threaten our fishery resources and our commercial fishing industries. This is a $17 billion industry in California, so we cannot afford threats to our fisheries and our fishing industry. The inventory would also likely include something called dart core sampling. Dart cores are collected by dropping large metal tubes from ships. The tubes sink fast enough to penetrate the sea floor to a substantial depth, remove a column of rock, and then are retrieved to the ship. This is suspiciously similar to drilling. So that is what is going to go on. This is not just a benign study of people sitting at their desks on land studying something. They are sinking these tubes down to some depth, obviously to examine core samples to determine the presence of natural gas or oil. Dart core sampling also damages organisms and habitat on the ocean floor. The dart cores also create silt plumes that smother nearby organisms. Protecting our coastlines is not a partisan issue. The Governors of both Florida and California oppose these studies. Furthermore, the successful effort to defeat the studies in the House was a bipartisan effort. A broad coalition of Senators, including the distinguished Senators from Florida and North Carolina, opposes the studies in this provision. We should not override the wishes of the most affected States and people to protect their own coastlines. So I ask my colleagues to vote for our amendment to strike the Outer Continental Shelf study from the Energy bill. Directly following my remarks, I ask unanimous consent that a letter from the League of Conservation Voters dated June 10 be printed in the Record.

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

Mrs. FEINSTEIN. I may need another 5 minutes.

Mrs. FEINSTEIN. That letter, of course, on behalf of the League, which has stood fast in defending and advocating important environmental issues solidly is in support of the Graham-Feinstein amendment. I yield the floor, and I suggest the absence of a quorum.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Mr. President, I rise today to introduce an amendment to improve the air quality on commercial aircraft. In 1986, in response to a National Research Council Report, the FAA took several actions to improve aircraft cabin air quality on flights, including banning smoking on nearly all domestic flights. However, over 15 years later, many cabin air quality issues remain and new health questions have been raised by passengers and crew. More recently, the National Research Council released a study of the air quality on commercial airline flights that was funded by the Federal Aviation Administration. The National Research Council found that: There is no operational standard for the ventilation of an aircraft cabin, but that such an operation standard should be established to ensure that passenger aircraft are properly ventilated; Passengers have been exposed to airborne contaminants while onboard aircraft, and that such contaminants can originate outside and inside the aircraft, and within the aircraft's environmental control system itself; The environmental control system on a passenger aircraft can become contaminated with engine oils, hydraulic fluids, or deicing fluids and those fluid contaminants can enter the passenger cabin through the air supply system; Contaminants in the air of a passenger aircraft may be responsible for acute and chronic health effects in crew and passengers; Reduced partial oxygen levels in aircraft air may adversely affect health-compromised passengers, particularly those with cardiopulmonary disease; Aircraft passengers may be exposed to ozone during flight, and studies suggest that ozone concentrations on some flights can exceed the Federal Aviation Administration and Environmental Protection Agency ozone levels; Air that contains elevated ozone concentrations is associated with airway irritation, decreased lung function, exacerbation of asthma, and impairments of the immune system; Since carbon monoxide is an indicator of mechanical fluids contaminating the air supply, the FAA should require aircraft to install monitors and establish procedures for responding to elevated levels of carbon monoxide; and The FAA should establish a passenger aircraft air quality and health surveillance program to determine compliance with existing FAA regulations and document health effects and complaints so that data is collected in a way that allows analysis of the relationship between health effects and aircraft air quality. The amendment I rise to introduce today addresses several findings on cabin air quality. It incorporates the original House language plus two additional provisions. The House language is as follows: (a) In General.--The Administrator of the Federal Aviation Administration shall undertake the studies and analysis called for in the report of the National Research Council entitled ``The Airliner Cabin Environment and the Health of Passengers and Crew.'' (b) Required Activities.--In carrying out this section, the Administrator, at a minimum, shall-- (1) conduct surveillance to monitor ozone in the cabin on a representative number of flights and aircraft to determine compliance with existing Federal Aviation Regulations for ozone; (2) collect pesticide exposure data to determine exposures of passengers and crew; and (3) analyze samples of residue from aircraft ventilation ducts and filters after air quality incidents to identify the contaminants to which passengers and crew were exposed. (c) Report.--Not later than 30 months after the date of enactment of this Act, the Administrator shall transmit to Congress a report on the findings of the Administrator under this section. My amendment builds on the above language by adding the following two provisions: Authorizes an FAA study to analyze cabin air pressure and altitude; and Requires the FAA to establish an air quality incident reporting system. Poor air quality in flight cabins poses a health risk for the flying public and crew members who spend most of their working hours onboard commercial aircraft. Passengers should feel confident that they are not endangering their health when they fly, and airline industry workers should not feel their health is threatened as they earn a living. I hope you will join me in supporting this legislation. And finally I want to thank Senator McCain and Senator Hollings for allowing me to introduce this amendment.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. I thank the Chair, and I also thank the distinguished Senator from Kentucky for his leadership on this issue. I am very proud to join with him. Madam President, in 1996, Senator William Cohen and I introduced a sanctions bill on Bumra. It passed in 1996, and was signed by the President. In 1997, the sanctions were exercised. We had a brief period of hope during that time, and the ASEAN nations were going to be helpful. It looked like the military junta was going to be receptive. Then, recently, for a brief period, Aung San Suu Kyi, the democratic leader of Burma, was released, and discussions took place. Well, that was short lived and this diabolical attack took place on Aung San Suu Kyi. According to reports, her motorcade was met by 100 to 200 people at a bridge near Mandalay in northern Burma. Most of these people were disguised as monks. Another 400 people--convicts and other militia recruits who were also disguised as monks--blocked the convoy from the rear. Both groups then discarded their costumes and attacked the entourage with bamboo sticks and wooden clubs, smashing vehicles and beating up their targets. Officially, four people were killed and 50 injured. Witnesses contend that as many as 70 may have been killed and many more injured. This is outrageous. The level of coordination, the deception, and the brutality of the crimes cannot go unanswered. They really demand a forceful and a substantive response that makes clear the United States will not deal with this junta and will not tolerate such blatant disregard for common human decency. This legislation sends a message. It says: We will not import their products. And those Burmese exports to the United States are about 25 percent of what Burma exports. So it is a considerable message. It has to be remembered, Aung San Suu Kyi is the democratic leader of Burma. She has never been permitted to serve. Her people have been arrested. Members of the Parliament have been arrested and held in custody. Over 1,300 political prisoners are still in jail, many of them elected parliamentarians. The practice of rape as a form of repression has been sanctioned by the Burmese military. The use of forced labor is widespread. Trafficking in young boys and girls as sex slaves is rampant, and the government engages in the production and distribution of opium and methamphetamine. So the United States must act. Now, in general, I do not support trade embargoes as an effective instrument of foreign policy. However, there are certain circumstances--South Africa was one of them, largely because of the world response, and the world saying enough is enough--where there must be change, and where we are prepared to carry out these sanctions together to effect that change. I hope in this sense the United States will lead the way to enact these sanctions in a meaningful way in which other nations will follow. Our legislation imposes a complete ban on all imports until the President determines and certifies to Congress that Burma has made substantial and measurable progress on a number of democracy and human rights issues. As Senator McConnell will indicate, there is a provision in the legislation, similar to the most favored nation status for China, that will allow an annual review of this to assess progress. It allows the President to waive the ban should he determine and notify Congress that it is in the national security interest of the United States to do this. It would freeze the assets of the Burmese regime in the United States. It directs United States executive directors at international financial institutions to vote against loans to Burma. It expands the visa ban against past and present leadership of the junta, and it encourages the Secretary of State to highlight the abysmal record of the junta in the international community. Now, Senator McConnell mentioned that both business and labor are united in support of this legislation. He said the American Apparel and Footware Association, which represents apparel, footware, and sewn products companies and their suppliers, has called for this ban. The president and CEO has stated--and I think this is worth being in the Record--``The government of Burma continues to abuse its citizens through force and intimidation, and refuses to respect the basic human rights of its people. AAFA believes this unacceptable behavior should be met with condemnation from not only the international public community, but from private industry as well.'' So well said. A number of stores, including Saks, Macy's, Bloomingdales, Ames, and The Gap have already voluntarily stopped importing or selling goods from Burma. The AFL-CIO and other labor groups also support this legislation. In addition, the International Labor Organization, for the first time in its history, called on all ILO members to impose sanctions on Burma. Such diversity in support of this legislation speaks volumes about the brutality of this military junta and its single-minded unwillingness to take even a modest step toward democracy and national reconciliation. And to add to it, Aung San Suu Kyi, the democratic leader, is once again being held in custody. This is unacceptable. The military junta knows full well they do not enjoy the popular support of the Burmese people. That is why they resort to such actions. As Aung San Suu Kyi traveled the country, and thousands turned out to hear her speak, the junta realized that after years of house arrest and repression, they had failed to curb the power of her message of democracy, of human rights, and the rule of law. They realized that the Burmese people were determined to see the democratic elections of 1990 fully implemented without delay. So in a cowardly and despicable manner they took this action. Now we must take action. We must take a stand on the side of the people of Burma and on the side of the values we cherish the most. I urge support and I hope it will be unanimous. Thank you very much, Madam President. I yield the floor.

Mrs. FEINSTEIN. I certainly agree, I say to the Senator through the Chair. I think it would be very useful. And I think when the recalcitrance, the repression, is on the floor of this Senate every year, hopefully it will be helpful in changing the minds of this military junta.

Mrs. FEINSTEIN. Madam President, I will just use a quick minute. I mentioned some of the retail establishments supporting this but I left out a couple. I mentioned Saks Fifth Avenue, and there is also Macy's, the Gap, Bloomingdale's, Ames, Williams Sonoma, IKEA, Wal-Mart, Nautica, and Pottery Barn. I am very proud of these retail establishments for standing up and joining us. I wanted to recognize that on the floor.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. I thank the Chair.

Mrs. FEINSTEIN. Madam President, I would like to use this time to respond to some of the comments that have been made. It is really a misconception to think this is an amendment against derivatives. This isn't an amendment against derivatives. I have never said derivatives caused the western energy crisis. What I said was that there is a loophole in the law: Where all other finite commodities, except for energy and metals, have certain regulations with respect to transparency, these particular finite commodities do not; and that certain traders use this loophole to practice, if you will, a kind of fraud in their trading. The fraud was to artificially find ways to boost their products. I wish to respond to that. Let's go into one of the ways they proceeded to do this--through what is called a round trip or a wash trade. Yesterday on the floor, Senator Fitzgerald and I, as well, very clearly pointed out what a wash trade is: I sell you a finite commodity, and you sell that same commodity back to me. On our balance sheets, we both carry a sale. Yet nothing ever changes hands. What we are saying is that this should be an illegal practice. What we are saying is that, at the very least, it ought to have transparency to it. We ought to be required to keep a record, to have an audit trail, and to have anti-fraud and anti- manipulation oversight of these practices by the Commodity Futures Trading Commission. What we more fundamentally say is that a great deal of this was done in the western energy crisis through electronic trading. Madam President, I understand I have the right to modify the amendment. Is that not correct?

Mrs. FEINSTEIN. Madam President, once again, what we are seeking to do is close a loophole that was created in 2000 when this Congress passed the Commodity Futures Modernization Act. That act exempted just energy and metals. It was not the intention actually to do that. The Senate part of that bill did not exempt them. What happened was Enron went to the House and Enron secured an exemption of energy and metals in the House. That exemption was handled in the conference, and the Senate language was not in the bill. The exemption was effectively created. The loophole was created. We are just trying to eliminate that loophole. We are not attacking derivatives. All we are saying is: If you do this kind of trading, you must keep a record just as anybody else does. You must be transparent. You must have an audit trail, and you are subject to any fraud or manipulation oversight by the Commodity Futures Trading Commission. This is where it gets a little complicated. If I sell energy to you and you deliver, then that is covered by the Federal Energy Regulatory Commission. If I sell energy to you and you sell it to a third person or entity that sells it to a fourth entity that sells it to a fifth entity and then it goes into the field, those interim trades are not covered. That is what we seek to cover because that is where the games exist. It is a rather subtle point, but it is also an important point. I heard people say that this will stifle the market. I will tell you what has been happening out there. Without transparency and without record keeping stifles the market. When Mr. Fortney was arrested last week for creating schemes such as Ricochet, Death Star, and Get Shorty, you don't think that stifles the market when you have other traders pleading guilty to fraud and wire fraud? Does that not stifle the market? And does that not give the average consumer the belief that they cannot trust this marketplace as being fair and transparent? I believe it does. More fundamentally, I believe the rules that govern the marketplace should be rules to protect the average consumer, not the big boys; they can take care of themselves. But the average consumer has to have confidence in the marketplace that it is fair and that it is transparent. I would like to correct the idea that this amendment has not gone through regular order. I moved this amendment last year to the Energy bill. Senator Gramm of Texas, who, incidentally, subsequently went to work for EnronOnline in its new life with UBS Warburg--which is fine-- argued against my amendment. We tried to settle our differences. It took quite some time. We could not settle our differences on this amendment, and we did have a vote. Another reason for the vote is there were people who believed this had not had enough committee hearing. So we had a vote, and I think we got 48 votes. The amendment went to the Agriculture Committee. The Agriculture Committee held hearings. The staff of both sides reviewed the legislation. Senator Harkin, who was chairman, and Senator Lugar, who was ranking member, are both cosponsors of this amendment. The problem is, the end of the session came without a markup, so this is really the opportunity we have to place this amendment into some form of law, and so we take this opportunity. I also wish to say that the President's working group in 1999, in their report--this was before the Commodity Futures Modernization Act of 2000--very specifically said, on page 2 of their report, that: An exclusion from the CEA [Commodities Exchange Act] for electronic trading systems for derivatives, provided that the systems limit participation to sophisticated counterparties trading for their own accounts and are not used to trade contracts that involve non-financial commodities with finite supplies. . . . In other words, they are saying that commodities with finite supplies should be included in the bill, but they are recommending that those that do not have finite supplies, such as financials derivatives, not be included in the bill. Now, apparently, they are changing their position. But I want to make very clear that was the position of the ``Over-the-Counter Derivatives Markets and the Commodity Exchange Act, Report of The President's Working Group on Financial Markets'' dated November 1999. And the Senate version of the Commodity Futures Modernization Act actually did just what this working group stated. Again, to refute the allegation that I am in some way blaming derivatives for the western energy crisis--I am not--I am blaming this loophole which allows all this secret trading, which we have seen result in fraudulent schemes, to try to close that loophole. And the way to close it is to bring the light of day to it. That is what we are trying to do. I pointed out yesterday, because some people said, well, we need to study this more, that it has been studied more and that the ``Final Report On Price Manipulation In Western Markets, Fact-Finding Investigation Of Potential Manipulation Of Electric And Natural Gas Prices,'' which was prepared by the staff of the Federal Energy Regulatory Commission, and dated March 2003, says the following as one of their recommendations: Recommend that Congress consider giving direct authority to a Federal agency to ensure that electronic trading platforms for wholesale sales of electric energy and natural gas in interstate commerce are monitored-- That is what we do-- and provide market information that is necessary for price discovery in competitive energy markets. That is exactly what this does, as recommended by this report of the Federal Energy Regulatory Commission. With the modification I made, metals will have the same level of oversight as exists under current law today. Now, let me go back again to 2000. I mentioned the change that was made to accommodate Enron lobbying to the Commodity Futures Modernization Act. It also did not take long for EnronOnline and others in the energy sector to take advantage of this new freedom by trading energy derivatives absent any transparency or regulatory oversight. Thus, after the 2000 legislation--and really right away--EnronOnline began to trade energy derivatives bilaterally without being subject to proper regulatory oversight. It should not surprise anyone that without this transparency, prices soared. In 2000, if Enron's derivatives business had been a stand-alone company, it would have been the 256th largest company in America. That year, Enron claimed it made more money from its derivatives business-- $7.23 billion--than Tyson Foods made from selling chicken. That is according to author Robert Bryce, who wrote a book on Enron called ``Pipe Dreams.'' EnronOnline rapidly became the biggest platform for electronic energy trading. But unlike regulated exchanges, such as the New York Mercantile Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, EnronOnline was not registered with the CFTC, the Commodity Futures Trading Commission, so it set its own standards. And that is the problem. Traders and others in the energy sector came to rely on EnronOnline for pricing information. Yet the company's control over this information, and its ability to manipulate it, was large. As this same author, Robert Bryce, describes--and let me quote-- Enron didn't just own the casino. On any given deal, Enron could be the house, the dealer, the oddsmaker, and the guy across the table you're trying to beat in diesel fuel futures, gas futures, or the California electricity market. The Electric Power Supply Association, EPSA, has sent a letter to all Senators asking them to oppose our oversight amendment. This should not be strange to anybody because its members are exactly the same companies that are being investigated and have been investigated by FERC for wrongdoing in the western energy crisis. It is AES Corporation; it is BP Energy; it is Duke Energy; it is Mirant Energy; it is Reliant Energy; it is UBS Warburg, which purchased Enron's trading unit; and it is Williams Energy. Now, with others, they are all members of EPSA, not companies that Westerners trust very much these days in light of what we have been through. Now, I want to just document some of this. Let me quickly run through these again because, again, a lot of these round-trip trades were done on the Internet. Other schemes were carried out on the Internet. Let's just go through this. Duke Energy disclosed that $1.1 billion worth of trades were round trip since 1999. Roughly two-thirds of these were done on the Intercontinental Exchange, which is an online trading platform owned by the banks, again, where there is no transparency, no net capital requirements, and no recordkeeping whatsoever. Now, this also meant that thousands of subscribers would have seen false price signals. Why would they see false price signals? That is because of the nature of a wash or round-trip trade. Again, a wash or round-trip trade would be that I am going to sell you energy at a certain price and you are going to sell me energy at a certain price, but no energy ever changes hands; yet we both post sales. That is what a wash trade or a round- trip trade is. A class action suit accused the El Paso Corporation of engaging in dozens of round-trip energy trades that artificially bolstered its revenues and trading volumes over the last 2 years. CMS Energy admitted conducting wash energy trades that artificially inflated its revenue by more than $4.4 billion. These round-trip trades accounted for 80 percent of their trade in 2001. So 80 percent of this company's trades in 2001--in the heart of the energy crisis--were not trades at all. No energy ever traded hands. They just boosted their sales--artificially. This is another facet of artificially filing false reports: reporting fictitious natural gas transactions to an industry publication. You can read it for yourself. The overwhelming figure in this is, if you look at what was done with energy and you look at California, where one year the total cost of energy was $7 billion and the next year it was $28 billion, which is a 400 percent increase, there is no way that could be legitimate. There is no way the energy need of a State could increase 400 percent in 1 year. Demand didn't increase 400 percent. So without this type of legislation, there really is insufficient authority to investigate and prevent fraud and price manipulations since parties making the trade are not required to keep a record. What we would require them to do is keep a record. Therefore, the Commodity Futures Trading Commission, in the event of many of these interim trades, and the FERC, where energy is directly delivered as a product of a trade, has the ability to do the investigation based on records. If you don't keep records, it is very hard to prove that. I would like to repeat that this amendment does not ban trades. This amendment does not affect financial derivatives. This amendment would only require oversight and transparency for those energy trades that are now taking place within this loophole, and it would provide oversight, as recommended in the FERC report. We are very proud to have the support of the National Rural Electric Cooperative Association, the Derivative Study Center, the American Public Gas Association, American Public Power Association, California Municipal Utilities Association, Southern California Public Power Authority, Transmission Excess Policy Study Group, U.S. Public Interest Research Group, Consumers Union, Consumers Federation of America, Calpine, Southern California Edison, Pacific Gas and Electric, and FERC Chairman Patrick Wood. Again, this amendment is not going to do anything to change what happened in California and the West. But it does provide the necessary authority for the CFTC and the FERC to help protect against another energy crisis. I might say I am very suspicious of people who want to do trading in the dark. I am very suspicious when they say, oh, we are so sophisticated you cannot possibly know how this is done and you are going to stifle trade, because they don't want to keep a record of that trade, they don't want transparency, they don't want to keep an audit on trade, and they don't want any Government agency assuring there isn't fraud or manipulation. I am doubly suspicious of them, particularly because of the fraud and manipulation we now know took place. So, please, don't tell me I am not sophisticated enough to understand. I understand plenty. I understand, when the price goes from $7 billion to $28 billion in a very short period of time, that you have to begin to look. I understand now that these arrests are occurring and the manipulations of Ricochet and Death Star and Get Shorty and wash trades are all becoming well known. I understand. The point is it is wrong. The point is, you cannot prove it is wrong if there are no records of those trades. So what we are saying is these trades can go on, but you keep records. We give the CFTC the responsibility to set net capital requirements commensurate with risk. That is good oversight for the public and that is good oversight for anybody who is going to invest, because when net capital is not available and the house begins to collapse, as it did with Enron, the company goes bankrupt. I think I have made my case. We have gone over this. I sent this legislation to the head of Goldman Sachs. They run an electronic exchange. I said, please, if you have problems with it, let me know. I did not hear. We have vetted it and talked over the past year and a half, 2 years, with virtually anyone who wanted to come in and talk with us about it. Mr. President, I am absolutely determined and I am going to come back and back and back until this loophole is closed. Nobody can tell me I am not sophisticated enough to know that sunshine and records and transparency are critical to the effective functioning of a free marketplace, because I believe that just as much as I believe in the Pledge of Allegiance--and I do believe in the Pledge of Allegiance. When you allow hiding and you allow these trades to take place surreptitiously, that is when there are problems. I am afraid I have said this over and over again, but we went through it and we saw it. We read the 3,000 pages California has sent to the FERC. This is another intrigue. Can you imagine that no State has the right today to present evidence to the FERC of fraud or manipulation? California had to go to the Supreme Court to get that right, and then when we got that right, we were told it had to be in in 100 days. California submitted 3,000 pages within the 100 days, and it is loaded with examples of fraud and manipulation. We know there is fraud, we know there is manipulation, and we know that was present in the western energy crisis, and all we are trying to do is bring light of day to one loophole that was in the Commodity Futures Modernization Act because a major offender lobbied for it in the laws. It was not in the Senate bill. The Senate bill originally covered this, but they lobbied in the House. It was taken out in conference, and the loophole was created. If the past 3 years have not been evidence enough, if the arrests are not evidence enough, if we do not want a transparent marketplace, if we want people to be able to do this trading-- and we can tell you the language of some of these trades; if they knew they were being recorded, I do not think they would do it in the way they did it--if we want to allow those procedures to continue to happen, that is what a motion to table and a tabling vote will do. I am very hopeful and I am asking my colleagues to vote nay on the motion to table and vote yea on the modified amendment which is now at the desk. I thank the Chair, and I yield the floor. Mr. President, I suggest the absence of a quorum.

Mrs. FEINSTEIN. Madam President, I would like to send a modified amendment to the desk. That modified amendment contains an additional cosponsor, Senator Kennedy. The modified amendment makes two changes to the amendment which I submitted before. The first change is to be absolutely crystal clear that this does not affect financial derivatives. I said that in my comments yesterday. I say it again today. To make it crystal clear, because some are concerned, and say, ``Oh, well, this will upset the financial derivatives marketplace,'' this is not the intent. It would only apply to finite commodities. Right upfront, we are clearly saying that this title shall not apply to financial derivatives trading. The other change to this amendment simply takes Senator Reid's amendment to exclude metals and adds this to this bill. If I may, I send that amendment, as a modified, to the desk at this time.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. I yield our time to the Senator from Iowa.

Mrs. FEINSTEIN

Mrs. FEINSTEIN. Madam President, I rise to thank the Senator from Illinois. We have worked on this now through two Congresses. It was very clear to me that he has a great deal of knowledge in this area. His advice, his support, his efforts have been very helpful. I think he has very clearly stated the facts of this legislation. There are those who, for purposes I do not understand, want to make this legislation out to be much more than it is, some heavy requirement of Government. Really, all we are saying is, if you are going to trade online, energy and metals and broadband, those trades are subject to recordkeeping, to an audit trail, and to antifraud and antimanipulation oversight. That is the same as any other finite commodity. Anywhere else does this same thing. But this loophole, at the request, as the Senator from Illinois said, of Enron--by the House, and then in a conference in 2000 they dropped the requirement for coverage from the Commodity Futures Modernization Act. Therefore, this loophole was created into which these companies jumped and began to set up these online trading exchanges. I couldn't believe my eyes when I saw that one company announced that 80 percent of the trades they did in 2001 were round trip or wash trades. Senator Fitzgerald just explained that very clearly, what a round trip or a wash trade is.

Mrs. FEINSTEIN. I am not?