Peter Fitzgerald

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I ask unanimous consent to speak as in morning business for 20 minutes.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I thank Senator Durbin for the kind words. I hope to come back to his breakfasts and get some of those free doughnuts myself. I might not have to pay for them. But I will miss it. I thank Senator Durbin. Finally, I thank my brothers and sisters, Gerry, my older brother, Jim, Tom, my sister Julie. A lot of people in public office worry that their siblings might embarrass them. I have never had to worry because they are wonderful, upstanding people, all of whom I think are probably worried about what I might do that they might worry about. They are wonderful people. I thank my wife Nina. We met together in D.C. when we were interns back when we were 19 years old, and after college and law school we got married. I moved her, plucked her from her home State of Colorado. She came to Illinois. I want to thank her for her steadfast support through all my years in public office. Finally, last but not least, I thank my 12-year-old son Jake. Jake missed his father at baseball and basketball games. I have been in public office for his entire 12 years. I am going to make it up to Jake now. I am pleased that he is doing so well as a baseball pitcher. I thank Jim Bunning and others for their advice. And finally, the people of Illinois from one end of the State to the other, to the south, from Rockport to Freeport in the north, thank you for your kindness to me. I have loved every minute of it. You gave me your trust, and I worked hard every day to keep it safe. Thank you all. God bless. I will miss you all.

Mr. FITZGERALD. Mr. President, I rise with some sadness on my last time to speak on the Senate floor. It is a very bittersweet occasion for me because I have loved every minute of the last 6 years, and I will miss this body greatly. I am sure I will think about it every remaining day in my life hence forward. The past 6 years have been amongst the most thrilling in my life, and it has been a privilege and honor to serve here. I rise really to thank my colleagues for their kindness to me over the years and to thank my staff and my family and the entire Senate staff and everyone who is part of this institution for the wonderful 6 years I have had here. I was first elected to the Senate from Illinois in 1998. I was sworn in in 1999, and almost immediately thereafter, the first Presidential impeachment trial in 130 years began. For my first 35 days, I think it was, or 38 days, on the Senate floor, I was immersed in the impeachment trial of former President Clinton. Thereafter, we had times of war, war in Kosovo and Afghanistan and now Iraq. We had the events of 9/11. I have served in times of war and peace, in times of great prosperity, as well as in times of recession. I have seen a whole lot. What I will remember most probably is the wonderful people who are part of the Senate. When I entered the Senate in 1999, I came in as the youngest Member. I was 38 at the time. I am older now, obviously, and have probably less hair and more gray hair. The oldest Member of the Senate at that time was Strom Thurmond. He was 96 years of age. I will never forget Strom Thurmond telling me, when he was 96, about how he used to work out 45 minutes every day, and I was thinking about whether I might be as active as Strom when I am 96, if I make it that long. Even at that age, I remember Strom giving me advice, telling me about how I could help the coal industry in southern Illinois. It was remarkable to meet someone like that. There are many who have retired. There are others like Strom who have passed away. There are some giants who are still with us, such as Senator Robert Byrd. One of my first memories of meeting Senator Byrd is going in to talk to him after I first got elected and asking him to sign for me a copy of his book on the history of the Roman Republic. Early on in my term in the Senate, I actually read Senator Byrd's whole book on the history of the Roman Republic. I have to say it is a marvelous book, and any Member of the Senate who has not read that book should please go out and get it because it has bountiful lessons for every Member of the Senate. It traces the decline and fall of the Roman Republic. It traces the decline of the Republic to the Roman Senate giving up more and more of its powers to the Executive, finally to the point where the Senate became meaningless and Rome was just governed by Caesers, dictators, and kings. It is an outstanding book. To meet the man who wrote this book and to realize that book was taken from a series of speeches that he delivered on the Senate floor, without notes, as to the hundreds of thousands of names and dates in that book, is truly astonishing. Senator Byrd has written a much larger four-volume history of the Senate, which when I retire from this body I hope to have time to tackle. But just to think of someone who could be so productive not only in the Senate for so long but accomplish so much in other areas writing such scholarly books, I will miss people like Senator Byrd and Senator Thurmond and all the others, the leaders with whom I have had the privilege to serve. Senator Trent Lott was the majority leader when I entered. For a period of time, Tom Daschle was the majority leader. Now Senator Frist is the majority leader, and soon Senator Harry Reid will be the minority leader. Each one of those individuals is remarkable, in my judgment. They have always been gentlemen of the highest order, and they work very hard. They are very good at what they do in representing their perspectives. They are good and honorable people whom our country is lucky to have. Our whips on the Republican side, Don Nickles and Mitch McConnell, Don Nickles has done such a good job for the taxpayers of this country. It has been an absolute pleasure to watch him fighting excessive spending and confiscatory taxation. I have been pleased to join him over and over again to hold the line on spending and to vote against tax increases and for tax relief, something that I view as very important. I am retiring at the same time as Senator Nickles. I will miss him greatly as part of this body, but I hope to see him often in life outside of the Senate. Other colleagues of mine are so important to me for reasons one might not think of. I did not know what I might have in common with Senator Bunning from Kentucky. He was elected at the same time I was in 1998. Senator Bunning is always so kind in giving me advice, as I advise my own son how to practice his pitching for his Little League games. The other night, I saw Senator Bunning in his car, and I said: Jim, having been a Hall of Fame baseball pitcher--where else can you get that kind of advice for your son's pitching lessons--I am not going to be able to ask you for advice on how to coach my son on pitching. He said: You know what. You can still call me afterwards. I will always be there. It is comments like that and the friendships like that, where I have spent so much time with the other 99 Members of this body, so many late nights and long weekends and sometimes retreats together, all of us really have become almost kind of like a family. It is much more family like than I think the media in America recognizes because so often the differences between the parties or the personalities get emphasized by the media. But I will miss them all. John McCain, the chairman of the Senate Commerce Committee on which I have been privileged to serve the last 4 of my 6 years, a man I admire greatly. Most Americans know about his heroism as a prisoner of war during the Vietnam War, where he was in the Hanoi Hilton for 5 years and the enemy forces tortured him, crushed his bones and could never get him to buckle or back down. Few men have the kind of courage that John McCain has. It is not just physical courage but the courage he has had to always fight for what he believes is right. Sometimes I have not agreed with him, but when he believes he is right he is willing to stand up to some very powerful forces that often threaten him politically, but nothing scares this American hero, John McCain. I am so thankful to him for the opportunity he gave me to chair the Consumer Affairs Subcommittee on the Senate Commerce Committee where I have been able to work on child safety and booster seat safety and automobiles and also to play a very critical role in the corporate governance hearings that we had a few years back first with Enron, Adelphia, WorldCom and those other corporate scandals. We have also worked on aviation and transportation, the Internet, telecommunications. There is never a dull moment with Senator McCain chairing the committee, and for the seven new Senators who are coming in who are thinking of what committees they might want to serve on, that is one I have always loved. With Senator McCain, there is never a dull moment. Susan Collins, the chairman of the Senate Governmental Affairs Committee--what a great American, what a hard-working American. We all saw that recently with her hard work on putting together the Intelligence bill under very difficult circumstances with a very short time to work. I thank her for giving me the opportunity to chair the Financial Management, the Budget, and International Security Subcommittee of the Governmental Affairs Committee, together with my friend and colleague Danny Akaka, from Hawaii, who has been my ranking member on that subcommittee. Danny is such a gentleman. I tell you, I am going to miss him personally, and I am also going to miss the macadamia nuts that he regularly sent over to me. But I may have time to visit him on a beach in Hawaii, now that I think about it. Maybe that is where I will see him and Senator Inouye next. But Senator Akaka and I were able to wake up what might normally be thought of as a very sleepy subcommittee of the Governmental Affairs Committee, where we dealt with improving accountability of Government financial reporting. We increased audit requirements on Federal agencies, we extended the Chief Financial Officers Act to the Homeland Security Department, and we put it in to apply to the new Intelligence Directorate. But, also, we have worked very hard in that subcommittee to spotlight some of the great challenges our country confronts. I think in that regard, with the staff on that committee on both sides of the aisle being so able, we have been able to put together some of the best hearings the Senate has had on issues such as our defined benefit pension problem in this country. The Pension Benefit Guaranty Corporation has a massive deficit with no end to increasing deficits on the horizon. We have had hearings on the Government-sponsored entities such as Fannie Mae and Freddie Mac and the Homeowner Bank Boards and other entities that are privately owned but have Government charters, and what risk they may or may not pose to the system. We had a series of hearings on huge funds and the problem of high fees. Mr. President, I was honored to have your cosponsorship on a landmark bill to reform the mutual fund industry. While we were not successful in passing that legislation this year, the Securities and Exchange Commission has adopted many of the items in that bill, including requiring independent chairmen of the boards of mutual funds in America. Just this week we did a hearing on the problems that we have seen in the insurance brokerage industry in which we heard from experts on all sides and got Washington's first perspective on the indictments that have come out of Attorney General Eliot Spitzer's office in New York. We had a hearing on the issue of the expensing for stock option compensation, which has been so actively debated amongst accountants in our country. Finally, the Accounting Financial Standards Board is going to require publicly traded corporations to expense stock option compensation on their earnings statements. On the Agriculture Committee, if I think of the word ``gentleman,'' I would think of Senator Lugar, who was the chairman of the Agriculture Committee when I first came in, and Senator Cochran, from Mississippi, who is the current chairman of the Agriculture Committee. It is regretful I will not be here a second term because I now have enough seniority on the Agriculture Committee to chair it in the second term, believe it or not. But Senators Lugar and Cochran have been a pleasure to work with. We passed a number of measures to make life better for our Nation's farmers, some very simple but important allowing farmers to file all their USDA paperwork on the Internet. We improved child nutrition and passed legislation to make it easier for people who depend on Government assistance for their nutrition and food needs, that those people through the Food Stamp Program can now get their benefits across State lines--somebody who may live in St. Louis and goes back and forth to Illinois, or somebody living in northwest Indiana and goes back and forth to Chicago. Also, a very important industry in my State, Mr. President, and in your State as well, is the commodity futures industry. In Chicago, we have the Board of Trade and the Chicago Merchantile Exchange. We also have the Chicago Board Options Exchange. I am told, directly and indirectly, in Chicago we employ some 200,000 people in the futures industry. The Agriculture Committee has given me the opportunity to work on the rewrite of our commodity trading laws. I was pleased to be an active participant in the Commodity Futures Modernization Act, where we first allowed the trading of futures on individual stocks in this country. That market is now developing. I hope to see it come back. I want to say some words of thanks to the senior Senator from Illinois, Mr. Dick Durbin. He referred to us as the political odd couple--one conservative Republican, one liberal Democrat, from the land of Lincoln. More often than not, we probably disagreed from a policy perspective on some of the key issues confronting our Nation, but it never prevented us from working well together. In fact, we jointly held 163 breakfasts, constituent breakfasts together. Every Thursday morning at 8:30 when the Senate was in session, Senator Durbin and I would host a breakfast, allow constituents who were visiting Washington from Illinois to ask us any question that was on their mind, whether it was political or policy related, and we paid for the breakfast. My understanding is, there are not many other examples of bipartisan breakfasts where you have one Republican and one Democrat who have such a weekly gathering for their constituents. We worked well together on the selection of judges. We almost never had an open vacancy that we couldn't resolve on the district courts in the northern, central, or southern Illinois districts. Senator Durbin was terrific in supporting me in my effort to clean up corruption in Illinois. One of the most important things I did in that regard was to bring in independent U.S. attorneys to the State of Illinois who were not beholden to the political class in the State. That was something new. When I went to appoint U.S. attorneys, I found everybody and their brother, particularly all the local politicians on both sides of the aisle, trying to influence the selection of my U.S. attorney. I didn't want to lay awake at night wondering who was trying to influence my U.S. attorney, either to go after someone unjustly or to protect someone wrongly from prosecution. I, ultimately, decided for that reason to do a nationwide search for our U.S. attorneys, which yielded, I think, amongst the best U.S. attorneys anywhere in the country: Patrick Fitzgerald in the Northern District of Illinois, Jan Paul Miller in the Central District of Illinois, and Ron Tempas, in the Southern District of Illinois. They are doing a tremendous job and no one is asking whether they are influenced politically or what their motivation would be. I thank Senator Durbin for supporting that effort to bring independent U.S. attorneys to Illinois. Senator Durbin is a man whose stamina, hard work, and intelligence I greatly admire. He is very devoted and hard working. He travels back to his hometown of Springfield every weekend. That is a harder commute than my commute. I travel back to Palatine, IL, which is only about 12 miles northwest of O'Hare. So I had a fairly easy commute; I just had an hour and a half plane flight and then a short drive and I was at my house. But Senator Durbin would go back to O'Hare every weekend and then catch another flight down to Springfield and he does that every weekend. He is constantly back in the State of Illinois. I think we worked well on just about everything, except aviation. We had a disagreement over O'Hare Airport. I think I am right. He thinks he is right. But aside from that difference of opinion, it has been a pleasure to work with him. I am sure Senator Durbin will be an effective spokesman for his side of the aisle as the whip for the incoming Democratic caucus in the 109th Congress. I do not necessarily wish Senator Durbin success in that role, but I do wish him well. Barack Obama, my successor, I wish him well. It was a privilege to have lunch with him yesterday in the Senate dining room. I served with Barack Obama in the State senate for 2 years. He was coming in, in the legislature in Springfield, in my last 2 years of service there. He is an uncommonly bright and talented young man. He is 1 year younger than I. He is the first African-American president of the Harvard Law School. He is almost unequaled in his potential and promise. I am confident he will be a credit to the State of Illinois. I think he may surprise the political pundits by voting, crossing party lines at times that you don't expect him to. It may be a challenge for him with Senator Durbin as his whip. But I see Barack Obama as possibly being a fairly moderate voice, more moderate than many people suspect. To my staff, many of whom are gathered in the Senate Chamber, I could not have been blessed with a more wonderful staff to have gotten me through the last 6 years. I first need to start by thanking former Senator Bob Dole and the current Senator Elizabeth Dole for recommending to me the man who is my chief of staff, Gregory Gross. Greg worked for Senator Bob Dole when he was the leader in the Senate and during his Presidential campaign in 1996. He worked for Mrs. Dole when she was at the American Red Cross. He is extremely bright, as Bob Dole told me when I first called for a reference on Greg Gross. Bob Dole said to me: Greg is what you call a genius. And I thought, that is the kind of person I want, a genius on my staff. But he is more than just a brilliant and talented and knowledgeable chief of staff. He is also incredibly devoted and incredibly loyal, and I thank him for that. For the first 3 years, my chief of staff was Richard Hertling. He is now at the Justice Department. Richard did an outstanding job in getting us up and running. It is very hard when a new Senator is coming in and assembling a new staff, as some of the new Senators are finding out. I have been blessed to have had an outstanding legislative director, Terry Van Doren from Macoupin County, IL, whose father owns a cattle operation in Macoupin County. Terry started out doing agriculture policy for me. Terry was just what the doctor ordered. He had straight A's from the University of Illinois in agriculture sciences. Then he got a master's in agriculture policy from Colorado State University. He had a 4.0 there. I was called by the dean of the University of Illinois Agriculture School. He told me what an outstanding young man Terry is. Terry has been instrumental in agricultural policy. He has been my legislative director. Before him, Joe Watson was my legislative director, a brilliant young Harvard Law School graduate whom I pocketed out of the Sutter and Hopkins law firm. He is now at the Commerce Department serving under Secretary Evans. My office manager, Sherri Hupart, has done such an outstanding job; always pleasant and kind and willing to help, and calm under pressure. Her predecessor, Tina Tyrer, came to me from Senator Fred Thompson's office. She had some 20 years of experience in Washington running Senate offices. My Chicago chief of staff, Maggie Hickey, is a one-woman army, entirely devoted, very hard working. I want to thank her. My staff director for my Financial Management and Budget and International Security Subcommittee, Mike Russell, and the team he has put together, which I think enabled us to do the best hearings on some of the key issues confronting our financial markets in this country, I can't thank them enough. I thank my schedulers and executive assistants, Lanae Denney, Julie Cate, Julie Crisolano, and Doris Gummino. Scheduler has to be the toughest job on Capitol Hill because you know how busy Senators' schedules get and how it is for them to hear when a Senator is tired, or frustrated, or thinks he is overscheduled. Senators hear about it. There is no question about that. I thank my schedulers for being there, staying here working late into the evening. They have to be here even when the rest of the staff has gone home. My campaign manager and first communications director, Mike Cys, is now in the private sector. He is brilliant and energetic and enthusiastic. I thank him for all his support. I thank my communications, legislative assistants, legislative correspondents, receptionists, front office and back office, duty entry personnel, the interns, the kids we have had serve over the years. My staff handled 6,000 to 10,000 letters a week for the past 6 years. The first year we came in, we were getting some 22,000 e-mails a day on the impeachment. My State office has handled over 22,000 individual constituent cases. They conducted traveling office hours all over the State, 1,574 traveling office hours in 675 towns. My State staff met individually with 831 mayors and village clerks telling them how to apply for Federal grants for sewer and water. I thank the staff on the floor of the Senate: Dave Schiappa, the floor staff; Myron Fleming, the chief doorkeeper, the cloakroom staff, the Parliamentarians, leadership and Sergeant at Arms staff, and the pages who come and go every semester. I always look at them. They have to get up at 5 in the morning to do school work before they can come here. But they work so hard. I hope their experience has been as wonderful as we want it to be for them. And, finally, I would be remiss if I didn't thank the most important people in my life, my family, my mother and father, who always supported me through my 12 years in public service, but through all the years of my life. It was always clear they would have been there to lay their lives down for their son.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to introduce the Program Assessment and Results Act, or ``PAR Act.'' This bill is a companion bill to H.R. 3826 that Congressman Todd Platts, Chairman of the House Government Reform Subcommittee on Government Efficiency and Financial Management, introduced on February 25, 2004. The PAR Act builds upon the reforms adopted by Congress in the early 1990s, such as the Government Performance and Results Act of 1993 (GPRA). This bill would increase the effectiveness, and accountability of the Federal Government by requiring the review of Federal programs at least once every five years to evaluate their performance. Information obtained from these reviews would be incorporated in the President's budget requests and would assist Congress in its oversight and funding of Federal programs. The PAR Act would strengthen the program evaluation requirements under the strategic planning requirements of GPRA, the one area that the Government Accountability Office (GAO) recognized as a government- wide deficiency under GPRA. GAO found that most agencies were implementing the requirement for program evaluation merely by making lists of observations rather than presenting and analyzing performance data. To build upon the framework of reforms established by GPRA, the PAR Act would require the Office of Management and Budget (OMB) to work with Federral agencies to carefully and periodically assess the strengths and weaknesses of all Federal programs. This legislation would enable policy makers to compare data from different agents to determine how different programs with similar goals are achieving their results. The PAR Act would improve the accountability of Federal programs in a number of areas. Congress would be able to use this information to make more informed budget decisions and conduct more effective oversight. Federal managers would use the information to improve the way they manage programs. Moreover, taxpayers will be able to track the progress of these programs with more precision. The ultimate result of the PAR Act will be a more effective and efficient government. Therefore, I urge my colleagues to support passage of this legislation. I ask unanimous consent that the bill be printed in the Record following my remarks.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to introduce the Program Assessment and Results Act, or ``PAR Act.'' This bill is a companion bill to H.R. 3826 that Congressman Todd Platts, Chairman of the House Government Reform Subcommittee on Government Efficiency and Financial Management, introduced on February 25, 2004. The PAR Act builds upon the reforms adopted by Congress in the early 1990s, such as the Government Performance and Results Act of 1993 (GPRA). This bill would increase the effectiveness, and accountability of the Federal Government by requiring the review of Federal programs at least once every five years to evaluate their performance. Information obtained from these reviews would be incorporated in the President's budget requests and would assist Congress in its oversight and funding of Federal programs. The PAR Act would strengthen the program evaluation requirements under the strategic planning requirements of GPRA, the one area that the Government Accountability Office (GAO) recognized as a government- wide deficiency under GPRA. GAO found that most agencies were implementing the requirement for program evaluation merely by making lists of observations rather than presenting and analyzing performance data. To build upon the framework of reforms established by GPRA, the PAR Act would require the Office of Management and Budget (OMB) to work with Federral agencies to carefully and periodically assess the strengths and weaknesses of all Federal programs. This legislation would enable policy makers to compare data from different agents to determine how different programs with similar goals are achieving their results. The PAR Act would improve the accountability of Federal programs in a number of areas. Congress would be able to use this information to make more informed budget decisions and conduct more effective oversight. Federal managers would use the information to improve the way they manage programs. Moreover, taxpayers will be able to track the progress of these programs with more precision. The ultimate result of the PAR Act will be a more effective and efficient government. Therefore, I urge my colleagues to support passage of this legislation. I ask unanimous consent that the bill be printed in the Record following my remarks.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to introduce the Veterans Eye Treatment Safety Act of 2004, or VETS Act, which will protect the eye care of our veterans by providing that only licensed physicians may perform eye surgery at Department of Veterans Affairs (VA) facilities or under contract with the VA. Presently, 49 out of 50 States prohibit optometrists from performing surgery. Oklahoma is the only State that allows optometrists to perform laser surgical procedures. Recently, Oklahoma enacted a law expanding existing law to allow optometrists to perform nonlaser surgical procedures such as cataract surgery. Under the VA credentialing practice, optometrists have been granted laser surgery clinical privileges within the VA Medical Center. The VA's credentialing practice allows medical practitioners to be granted privileges to perform procedures within the VA system that they are authorized to perform in the State in which they are licensed. Thus, an optometrist licensed in Oklahoma can be granted clinical privileges to perform laser surgery at the VA. In 2003, the VA allowed at least three optometrists to perform laser eye surgery at multiple VA hospitals throughout the Nation. This practice is inconsistent with the policies of the Army, Navy, and Air Force, which do not allow optometrists to perform eye surgery. The VA, which also treats TRICARE beneficiaries, is the outlier. If a military retiree, a TRICARE beneficiary, needs laser eye surgery, only a licensed medical doctor or doctor of osteopathy could perform it, as required by the Army, Navy, and Air Force. However, if that same TRICARE beneficiary seeks treatment at a VA facility--as is his or her right--it is possible that an optometrist could perform the surgery. In this case, such person would receive a lower standard of care than the Department of Defense would allow in a military treatment facility. This VA credentialing practice regarding eye surgery creates two standards of care: a high standard of care for active duty personnel, dependents, and TRICARE beneficiaries when seen in a military treatment facility, and a lower standard of care for TRICARE beneficiaries and veterans if treated in the VA system. The VA's practice is questionable. Optometrists typically do not have the requisite training and experience to perform eye surgery. Only one school of optometry in the United States offers courses in laser eye surgery. To become certified, optometrists must complete two courses at this school, with less than 40 hours of training, and perform only four supervised surgeries. In contrast, ophthalmologists during medical school, internship, and residency complete between 9,000 to 12,000 hours of training and education before practicing without supervision. The Veterans Eye Treatment Safety Act of 2004 provides that only licensed medical doctors, licensed doctors of osteopathy, or licensed dentists whose practice is limited to oral or maxillofacial surgery may perform eye surgery at Department of Veterans Affairs facilities or under contract with the department. This legislation is narrowly targeted and does not prevent optometrists from performing noninvasive, nonsurgical procedures--the procedures that optometrists are trained and qualified to perform. The bill simply ensures that only licensed physicians can perform invasive, surgical procedures on our veterans. The VETS Act has been endorsed by the Vietnam Veterans of America, the National Gulf War Resource Center, the American Medical Association, the American Academy of Ophthalmology, the American Osteopathic Association, and the American College of Surgeons. Additionally, the Veterans of Foreign Wars and the Blinded Veterans Association have written letters to the Department of Veterans Affairs opposing allowing optometrists to perform surgery. This bill is a patient safety measure that protects our veterans. It protects the law of 49 States, preventing the will of one from becoming the law of the land. We must send a clear message to the VA that veterans should receive the same quality eye care that ordinary citizens receive. I would like to thank Senator Cantwell, Senator Hollings, Senator Feinstein, and Senator Sessions for cosponsoring this important legislation. I urge all of my colleagues to join me in supporting this bill that will protect the ocular safety of our veterans--ensuring that they receive the same high level of care that almost all Americans and members of the armed forces receive. I ask unanimous consent that the text of bill be printed in the Record.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to introduce two bills that would ensure fiscal accountability throughout the Judicial and Legislative Branches of the Federal Government: the Judicial Branch Financial Accountability Act of 2004 and the Legislative Branch Financial Accountability Expansion Act of 2004. These bills would strengthen the financial management of both branches by requiring them to prepare annual financial statements and have them independently audited. These bills also build on S. 2680, the Financial Accountability Expansion Act of 2004, that Senator Akaka and I introduced on July 16, 2004, to expand independent audit requirements to the remainder of the executive branch that currently is not covered under the Chief Financial Officers Act or the Accountability of Tax Dollars Act. Taken together, this legislative package would ensure--for the first time-- that all agencies and entities in the entire United States Government are subject to stringent financial audit requirements. Congressional efforts to improve financial management and to reduce the waste, fraud and abuse of taxpayer dollars began almost 25 years ago with the enactment of the Federal Managers Financial Integrity Act of 1982, which intended to strengthen internal controls and accounting systems. Another important financial management reform initiative was the Chief Financial Officers Act (CFO) of 1990. Among other things, the CFO Act created 24 CFO and deputy CFO positions in cabinet departments and major executive branch agencies, and required the annual preparation and audit of financial statements. I would briefly like to mention that the Department of Homeland Security, which has 180,000 employees and a budget of over $30 billion, is the only cabinet level department not now subject to the CFO Act. In order to address this problem, on August 1, 2003, I was joined by Senator Akaka in introducing S. 1567, the Department of Homeland Security Financial Accountability Act, which would subject the department to the same financial management practices currently required of all other major Federal agencies. The Senate passed S. 1567 in November 2003, and the House of Representatives passed its version, H.R. 4259, on July 20, 2004. It is my hope and expectation that final congressional action on this legislation will occur in the near future. The CFO Act improved the financial management of cabinet departments and major Federal agencies; however, it did not address the fiscal policies and practices of the rest of the executive branch. Therefore, in 2002, I was the Senate sponsor of the Accountability of Tax Dollars Act (ATDA). This legislation, which became law on November 7, 2002, amended the CFO Act to require agencies with budget authority of over $25 million to prepare annual financial statements and have them independently audited. Due to the enactment of the ATDA, an additional 76 agencies are now subject to requirements for annual audited financial statements. The ATDA also provided authority to the Director of the Office of Management and Budget (OMB) to waive or exempt certain agencies from the act's requirements. The OMB director may waive these requirements during the first 2 years of implementation if an agency lacks the budgeted resources or requires additional time to develop financial management practices and systems. The OMB director may exempt agencies with budget authority under $25 million if it is determined that there is an absence of risk associated with the agency's operations. To improve upon the legislative changes Congress enacted in 2002, the Financial Accountability Expansion Act of 2004, which I introduced last week, would further expand the requirements of the CFO Act to every remaining entity in the executive branch. Each executive branch agency or entity, regardless of its size or budget authority, would be subject to the financial oversight and accountability that annual, independently audited financial statements provide. In order to assist small agencies that may not have adequate financial resources or personnel to comply with these requirements, this bill would authorize the Secretary of the Treasury to enter into one or more contracts on behalf of the agency, or multiple agencies through ``bundling,'' for the preparation and independent audit of the financial statement. To begin the process of expanding audit requirements through the Executive Branch, on July 19, 2004, I was joined by Senator Akaka in introducing S. 2688, the Executive Branch Financial Accountability Reporting Act of 2004, which would require the Director of the Office of Management and Budget (OMB) to submit a report to the relevant congressional committees that lists all Federal entities not currently required to prepare annual, independently audited financial statements. We were pleased that the Governmental Affairs Committee favorably reported this bill on July 21, 2004, and we intend to work with our colleagues to expedite Senate passage of this important legislation. Although significant progress has been made in strengthening financial accountability of the executive branch, similar audit requirements in the judicial and legislative branches are woefully inadequate or completely lacking. At a hearing held on July 8, 2004, by the Governmental Affairs Subcommittee on Financial Management, the Budget, and International Security, which I chair, we heard surprising testimony that the judicial branch does not conduct annual audits of its financial statements. Similarly, many entities in the legislative branch do not prepare annual financial statements, and many that do prepare financial statements do not have them independently audited. As part of the Contract with America in the 104th Congress, the financial statements of the House of Representatives have been annually audited by an independent accounting firm. While several other legislative branch entities voluntarily comply with the requirements of the CFO Act--the Government Accountability Office and the Congressional Budget Office--these agencies of Congress are not statutorily required to do so. I find it disturbing that the United States Senate does not hold itself to the same standards of financial accountability that it imposes on the executive branch of government. The financial activities of all entities established by and within the legislative branch--such as the Senate Disbursing Office, the Capitol Police, the Library of Congress, the Government Accountability Office, the U.S. Botanic Garden, and the Architect of the Capitol--should be subject statutorily to the oversight provided by an independent financial statement audit. In fiscal year 2004, the Congress appropriated over $3.5 billion for the legislative branch and approximately $5.2 billion for the judicial branch. To ensure that these two co-equal branches of government are subject to independent audit requirements similar to the executive branch, the legislative package I introduce today includes two bills to strengthen the financial management practices of the Federal courts and legislative entities. The Judicial Branch Financial Accountability Act of 2004 that I introduce today would require the Federal judiciary to have independent audits of annual financial statements covering all accounts and activities. In deference to a co-equal branch of government, the bill would require the Judicial Conference of the United States, the principal policy-making body for the administration of the U.S. Courts, to determine whether the U.S. Supreme Court, the U.S. Court of Appeals for the Federal Circuit, the U.S. Court of International Trade, and other judicial branch entities, should submit separate financial statements, or whether there should be a single consolidated statement that is independently audited. To ensure that judicial branch entities have the procedures and resources in place to comply with the requirements of this act, this bill would require the submission of a report regarding the act's implementation to the appropriate committees in the Senate and House of Representatives. This report is to be submitted not later than 90 days after the date of the bill's enactment, and is to include any legislative recommendations that may be necessary to carry out the provisions of the act. Similar to the requirements imposed by OMB on executive branch entities, this bill would require the completion and public release of the audited financial statement not later than 45 days after the end of the fiscal year. The second bill I introduce today--the Legislative Branch Financial Accountability Expansion Act of 2004--would require that each House of Congress and each legislative agency or other entity prepare financial statements that must be independently audited. In order to ensure that entities in the legislative branch have the procedures and resources in place that are necessary to fulfill this requirement, the bill requires each House of Congress and each legislative agency or other entity to submit a report to the appropriate committees in the Senate and House of Representatives regarding the implementation of the act. The report is to be submitted within 90 days of the date of enactment, and is to include whether the establishment of a special office is necessary to carry out the act's requirements, as well as any legislative recommendations that may be necessary. Within 60 days after the submission of this report, each House of Congress is to establish an office to prepare the financial statement. Each legislative agency or other entity is also required to establish an office, or designate an individual if that is more appropriate, to prepare the financial statement. An independent audit of the financial statement is to be completed and made public within 45 days after the close of the applicable fiscal year. I am sensitive to how other co-equal branches of the Federal Government conduct their fiscal affairs. Therefore, these bills defer to the leadership of these branches to determine the most appropriate means of implementing annual independent audits of financial statements. In light of these sensitivities, I recognize that these bills represent the first step toward improving the financial accountability of the entire Federal Government. I look forward to working with my colleagues to provide the best legislative solution to ensure full and equal accountability for the use of taxpayer dollars. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. FITZGERALD. Mr. President, I rise today to introduce the Veterans Eye Treatment Safety Act of 2004, or VETS Act, which will protect the eye care of our veterans by providing that only licensed physicians may perform eye surgery at Department of Veterans Affairs (VA) facilities or under contract with the VA. Presently, 49 out of 50 States prohibit optometrists from performing surgery. Oklahoma is the only State that allows optometrists to perform laser surgical procedures. Recently, Oklahoma enacted a law expanding existing law to allow optometrists to perform nonlaser surgical procedures such as cataract surgery. Under the VA credentialing practice, optometrists have been granted laser surgery clinical privileges within the VA Medical Center. The VA's credentialing practice allows medical practitioners to be granted privileges to perform procedures within the VA system that they are authorized to perform in the State in which they are licensed. Thus, an optometrist licensed in Oklahoma can be granted clinical privileges to perform laser surgery at the VA. In 2003, the VA allowed at least three optometrists to perform laser eye surgery at multiple VA hospitals throughout the Nation. This practice is inconsistent with the policies of the Army, Navy, and Air Force, which do not allow optometrists to perform eye surgery. The VA, which also treats TRICARE beneficiaries, is the outlier. If a military retiree, a TRICARE beneficiary, needs laser eye surgery, only a licensed medical doctor or doctor of osteopathy could perform it, as required by the Army, Navy, and Air Force. However, if that same TRICARE beneficiary seeks treatment at a VA facility--as is his or her right--it is possible that an optometrist could perform the surgery. In this case, such person would receive a lower standard of care than the Department of Defense would allow in a military treatment facility. This VA credentialing practice regarding eye surgery creates two standards of care: a high standard of care for active duty personnel, dependents, and TRICARE beneficiaries when seen in a military treatment facility, and a lower standard of care for TRICARE beneficiaries and veterans if treated in the VA system. The VA's practice is questionable. Optometrists typically do not have the requisite training and experience to perform eye surgery. Only one school of optometry in the United States offers courses in laser eye surgery. To become certified, optometrists must complete two courses at this school, with less than 40 hours of training, and perform only four supervised surgeries. In contrast, ophthalmologists during medical school, internship, and residency complete between 9,000 to 12,000 hours of training and education before practicing without supervision. The Veterans Eye Treatment Safety Act of 2004 provides that only licensed medical doctors, licensed doctors of osteopathy, or licensed dentists whose practice is limited to oral or maxillofacial surgery may perform eye surgery at Department of Veterans Affairs facilities or under contract with the department. This legislation is narrowly targeted and does not prevent optometrists from performing noninvasive, nonsurgical procedures--the procedures that optometrists are trained and qualified to perform. The bill simply ensures that only licensed physicians can perform invasive, surgical procedures on our veterans. The VETS Act has been endorsed by the Vietnam Veterans of America, the National Gulf War Resource Center, the American Medical Association, the American Academy of Ophthalmology, the American Osteopathic Association, and the American College of Surgeons. Additionally, the Veterans of Foreign Wars and the Blinded Veterans Association have written letters to the Department of Veterans Affairs opposing allowing optometrists to perform surgery. This bill is a patient safety measure that protects our veterans. It protects the law of 49 States, preventing the will of one from becoming the law of the land. We must send a clear message to the VA that veterans should receive the same quality eye care that ordinary citizens receive. I would like to thank Senator Cantwell, Senator Hollings, Senator Feinstein, and Senator Sessions for cosponsoring this important legislation. I urge all of my colleagues to join me in supporting this bill that will protect the ocular safety of our veterans--ensuring that they receive the same high level of care that almost all Americans and members of the armed forces receive. I ask unanimous consent that the text of bill be printed in the Record.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to submit a resolution on the importance of maintaining the independence and integrity of the Financial Accounting Standards Board (FASB). I am pleased to be joined by my colleagues, Senator Levin, Senator McCain and Senator Durbin in this initiative. For the past 30 years, the Financial Accounting Standards Board has been responsible for establishing and improving standards of financial accounting and reporting that are deemed ``generally accepted accounting principles.'' In order to ensure that these accounting principles are ``generally accepted,'' the FASB utilizes a deliberative process that is open to comment from the public, including the users of the financial statements and other third parties. The FASB has a diverse, seven-member board of accounting experts representing not only users of the financial statements but also preparers of financial statements. Because of its open deliberative process, the FASB has been able to maintain the integrity of its work through the independence it enjoys in setting accounting standards, away from special interests. But it appears that special interests are pressuring the FASB and lobbying Congress to take a different route than the norm on the financial accounting treatment of employee stock options. Several bills have been introduced in Congress that would block the FASB's proposal to require the fair value of employee stock options to be expensed on grant date. Instead, those bills dictate the specific accounting treatment to be applied to employee stock options and when and under what circumstances the Securities and Exchange Commission should recognize accounting standards for employee stock options. Political interference with the FASB's standards setting process would set a dangerous precedent. It is a bad idea for politicians in the House and the Senate to be substituting political decisions for the decisions by an expert private sector accounting standards board. On July 6, 2004, The Washington Post published an editorial by Mr. Warren Buffett, Chief Executive Officer of Berkshire Hathaway, entitled ``Fuzzy Math And Stock Options.'' Mr. Buffett points out that the House of Representatives' ``anointment of itself as the ultimate scorekeeper for investors . . . comes from an institution that in its own affairs favors Enronesque accounting.'' Accordingly, he urges Congress not to interfere with the FASB's standard setting process and encourages chief executives who issue stock options ``to live with honest accounting.'' I ask unanimous consent that Mr. Buffet's op-ed be reprinted in the Record following my remarks. We have been down this road before. A decade ago, the FASB proposed an accounting standard that would have required companies to record the value of employee stock options as a compensation expense on their income statements. At that time, the Senate overwhelmingly passed a resolution that condemned the FASB's new standard, and a separate bill was introduced that would have stripped the FASB of its rulemaking authority. Under this threat of evisceration, the FASB withdrew its recommendation. In my opinion, Congress' interference with that 1993 FASB proposal resulted in disastrous consequences with the accounting scandals at Enron, Global Crossing and WorldCom. I believe congressional interference in this issue will ultimately undermine the FASB's credibility and make it more difficult in the future for the FASB to adopt standards when a powerful special interest stands in the way. If that occurs, the real losers will be the millions of investors who help drive our economy by investing in companies' debt and equity securities. Investors depend on financial statements to make critical judgments about where to direct their capital investments. It is no exaggeration that the integrity of these investment decisions and, indeed, of U.S. financial markets as a whole, depend upon the integrity of the accounting rules that ensure that each company's true financial condition is reflected in its financial statements. I believe it is critical for the United States Senate to speak out at this pivotal time. Therefore, the resolution I introduce today would express the sense of the Senate that the Senate: (1) should continue to recognize and support the independence and integrity of the FASB's accounting standard setting process; (2) should not interfere with the FASB's independence; and (3) should not dictate accounting standards to the FASB for stockbased compensation or for any other financial accounting issue. As members of Congress, we must allow the FASB to do its job, free from political interference. Therefore, I urge my colleagues to support expeditious adoption of this resolution. [From the Washington Post, July 6, 2004] Fuzzy Math and Stock Options (By Warren Buffet) Until now the record for mathematical lunacy by a legislative body has been held by the Indiana House of Representatives, which in 1897 decreed by a vote of 67 to 0 that pi--the ratio of the circumference of a circle to its diameter--would no longer be 3.14159 but instead be 3.2. Indiana schoolchildren momentarily rejoiced over this simplification of their lives. But the Indiana Senate, composed of cooler heads, referred the bill to the Committee for Temperance, and it eventually died. What brings this episode to mind is that the U.S. House of Representatives is about to consider a bill that, if passed, could cause the mathematical lunacy record to move east from Indiana. First, the bill decrees that a coveted form of corporate pay--stock options--be counted as an expense when these go to the chief executive and the other four highest- paid officers in a company, but be disregarded as an expense when they are issued to other employees in the company. Second, the bill says that when a company is calculating the expense of the options issued to the mighty five, it shall assume that stock prices never fluctuate. Give the bill's proponents an A for imagination--and for courting contributors--and a flatout F for logic. All seven members of the Financial Accounting Standards Board, all four of the big accounting firms and legions of investment professionals say the two proposals are nonsense. Nevertheless, many House members wish to ignore these informed voices and make Congress the Supreme Accounting Authority. Indeed, the House bill directs the Securities and Exchange Commission to ``not recognize as ``generally accepted'' any accounting principle established by a standard setting body'' that disagrees with the House about the treatment of options. The House's anointment of itself as the ultimate scorekeeper for investors, it should be noted, comes from an institution that in its own affairs favors Enronesque accounting. Witness the fanciful ``sunset'' provisions that are used to meet legislative ``scoring'' requirements. Or regard the unified budget protocol, which applies a portion of annual Social Security receipts to reducing the stated budget deficit while ignoring the concomitant annual costs for benefit accruals. I have no objection to the granting of options. Companies should use whatever form of compensation best motivates employees, whether this be cash bonuses, trips to Hawaii, restricted stock grants or stock options. But aside from options, every other item of value given to employees is recorded as an expense. Can you imagine the derision that would be directed at a bill mandating that only five bonuses out of all those given to employees be expensed? Yet that is a true analogy to what the option bill is proposing. Equally nonsensical is a section in the bill requiring companies to assume, when they are valuing the options granted to the mighty five, that their stocks have zero volatility. I've been investing for 62 years and have yet to meet a stock that doesn't fluctuate. The only reason for making such an Alice-in-Wonderland assumption is to significantly understate the value of the few options that the House wants counted. This undervaluation, in turn, enables chief executives to lie about what they are truly being paid and to overstate the earnings of the companies they run. Some people contend that options cannot be precisely valued. So what? Estimates pervade accounting. Who knows with precision what the useful life of software, a corporate jet or a machine tool will be? Pension costs, moreover, are even fuzzier, because they require estimates of future mortality rates, pay increases and investment earnings. These guesses are almost invariably wrong, often substantially so. But the inherent uncertainties involved do not excuse companies from making their best estimate of these, or any other, expenses. Legislators should remember that it is better to be approximately right than precisely wrong. If the House should ignore this logic and legislate that what is an expense for five is not an expense for thousands, there is reason to believe that the Senate--like the Indiana Senate 107 years ago--will prevent this folly from becoming law. Sen. Richard Shelby (R-Ala.), chairman of the Senate Banking Committee, has firmly declared that accounting rules should be set by accountants, not by legislators. Even so, House members who wish to escape the scorn of historians should render the Senate's task moot by killing the bill themselves. Or if they are absolutely determined to meddle with reality, they could attack the obesity problem by declaring that henceforth it will take 24 ounces to make a pound. If even that friendly standard seems unbearable to their constituents, they can exempt all but the fattest five in each congressional district from any measurement of weight. In the late 1990s, too many managers found it easier to increase ``profits'' by accounting maneuvers than by operational excellence. But just as the schoolchildren of Indiana learned to work with honest math, so can option-issuing chief executives learn to live with honest accounting. It's high time they step up to that job.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I am joined today by Senator Daniel K. Akaka in introducing the Financial Accountability Expansion Act of 2004, which would ensure the fiscal accountability of Federal entities. This bill would strengthen Federal financial management by subjecting all Federal entities in the Executive Branch to the stringent financial audit requirements that currently apply to most cabinet level departments and major agencies. Congressional efforts to improve financial management and to reduce the waste, fraud, and abuse of taxpayer dollars began almost 25 years ago with the enactment of the Federal Managers Financial Integrity Act of 1982, which intended to strengthen internal controls and accounting systems. Another important financial management reform initiative was the Chief Financial Officers Act (CFO) of 1990. Among other things, the CFO Act created 24 CFO and deputy CFO positions in cabinet departments and major Executive Branch agencies, and required the annual preparation and audit of financial statements. I would briefly like to mention that the Department of Homeland Security, which is now the third largest Federal department, is the only cabinet level department that is not subject to the CFO Act. Therefore, on August 1, 2003, Senator Akaka and I introduced S. 1567, the Department of Homeland Security Financial Accountability Act, that would subject the Department to the same financial management practices currently required of all other major Federal agencies. We are pleased that the Senate passed this bill, as amended, and the House of Representatives is expected to pass its version of the bill in the near future. The CFO Act improved the financial management of cabinet departments and major Federal agencies; however, it did not address the fiscal policies and practices of the rest of the Executive Branch. Therefore, in 2002, I was the Senate sponsor of the Accountability of Tax Dollars Act (ATDA). This Act, which became law on November 7, 2002, amended the CFO Act to require agencies with budget authority of over $25 million to prepare annual financial statements and have them independently audited. Due to the enactment of the ATDA, an additional 76 agencies are now subject to requirements for annually audited financial statements. The ATDA also provided authority to the Director of the Office of Management and Budget (OMB) to waive or exempt certain agencies from the Act's requirements. The OMB Director may waive these requirements during the first two years of implementation if an agency lacks the budgeted resources or requires additional time to develop financial management practices and systems. The OMB Director may exempt agencies with budget authority under $25 million if it is determined that there is an absence of risk associated with the agency's operations. To improve upon the legislative changes Congress passed in 2002, the Financial Accountability Expansion Act of 2004 would further expand the audit requirements of the CFO Act to every remaining Federal entity in the Executive Branch. Each Executive Branch agency or entity, regardless of its size or budget authority, would be subject to the financial oversight and accountability that annual audits of financial statements provide. In order to assist small agencies that may not have adequate financial resources or personnel to comply with these requirements, this bill would authorize the Secretary of the Treasury to enter into one or more contracts on behalf of the agency, or multiple agencies through ``bundling,'' for the preparation and independent audit of the financial statement. The bill also would require OMB to conduct a thorough assessment and submit a report to Congress regarding those Federal entities not currently required to prepare financial statements and have them independently audited. This study is necessary to ensure that OMB and Congress have an accurate and complete picture of the breadth and depth of the gaps in the financial accountability of the Executive Branch. Senator Akaka and I have long had an interest in ensuring that the Federal Government operates effectively and efficiently, and does not waste taxpayer dollars through poor fiscal management. The independent audits of financial statements that this bill would require of the entire Executive Branch would strengthen the fiscal accountability of the entire Federal Government and reduce the opportunities for waste, fraud, and abuse. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I am joined today by Senator Daniel K. Akaka in introducing the Financial Accountability Expansion Act of 2004, which would ensure the fiscal accountability of Federal entities. This bill would strengthen Federal financial management by subjecting all Federal entities in the Executive Branch to the stringent financial audit requirements that currently apply to most cabinet level departments and major agencies. Congressional efforts to improve financial management and to reduce the waste, fraud, and abuse of taxpayer dollars began almost 25 years ago with the enactment of the Federal Managers Financial Integrity Act of 1982, which intended to strengthen internal controls and accounting systems. Another important financial management reform initiative was the Chief Financial Officers Act (CFO) of 1990. Among other things, the CFO Act created 24 CFO and deputy CFO positions in cabinet departments and major Executive Branch agencies, and required the annual preparation and audit of financial statements. I would briefly like to mention that the Department of Homeland Security, which is now the third largest Federal department, is the only cabinet level department that is not subject to the CFO Act. Therefore, on August 1, 2003, Senator Akaka and I introduced S. 1567, the Department of Homeland Security Financial Accountability Act, that would subject the Department to the same financial management practices currently required of all other major Federal agencies. We are pleased that the Senate passed this bill, as amended, and the House of Representatives is expected to pass its version of the bill in the near future. The CFO Act improved the financial management of cabinet departments and major Federal agencies; however, it did not address the fiscal policies and practices of the rest of the Executive Branch. Therefore, in 2002, I was the Senate sponsor of the Accountability of Tax Dollars Act (ATDA). This Act, which became law on November 7, 2002, amended the CFO Act to require agencies with budget authority of over $25 million to prepare annual financial statements and have them independently audited. Due to the enactment of the ATDA, an additional 76 agencies are now subject to requirements for annually audited financial statements. The ATDA also provided authority to the Director of the Office of Management and Budget (OMB) to waive or exempt certain agencies from the Act's requirements. The OMB Director may waive these requirements during the first two years of implementation if an agency lacks the budgeted resources or requires additional time to develop financial management practices and systems. The OMB Director may exempt agencies with budget authority under $25 million if it is determined that there is an absence of risk associated with the agency's operations. To improve upon the legislative changes Congress passed in 2002, the Financial Accountability Expansion Act of 2004 would further expand the audit requirements of the CFO Act to every remaining Federal entity in the Executive Branch. Each Executive Branch agency or entity, regardless of its size or budget authority, would be subject to the financial oversight and accountability that annual audits of financial statements provide. In order to assist small agencies that may not have adequate financial resources or personnel to comply with these requirements, this bill would authorize the Secretary of the Treasury to enter into one or more contracts on behalf of the agency, or multiple agencies through ``bundling,'' for the preparation and independent audit of the financial statement. The bill also would require OMB to conduct a thorough assessment and submit a report to Congress regarding those Federal entities not currently required to prepare financial statements and have them independently audited. This study is necessary to ensure that OMB and Congress have an accurate and complete picture of the breadth and depth of the gaps in the financial accountability of the Executive Branch. Senator Akaka and I have long had an interest in ensuring that the Federal Government operates effectively and efficiently, and does not waste taxpayer dollars through poor fiscal management. The independent audits of financial statements that this bill would require of the entire Executive Branch would strengthen the fiscal accountability of the entire Federal Government and reduce the opportunities for waste, fraud, and abuse. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, as one of the two Senators from Illinois, I am very proud of Ronald Reagan and his contributions to this country. Ronald Reagan is the only American President who was, in fact, born in Illinois. Many people think of Abraham Lincoln as having been born in Illinois, but he was actually born in Kentucky and later moved there. Of course, I think there is no question that Ronald Reagan will join Abraham Lincoln as one of our Nation's greatest Presidents. I only want to say a few words about him. I didn't actually serve in the Senate when he was President. I didn't ever have the opportunity to get to know him. I did, however, get the opportunity to meet him once as a very young man, when I was about 20 years old or so and he was campaigning for President in 1980. But my first real recollection of him came from watching his address on television in 1976 at the Republican National Convention. He had lost the primaries to incumbent President Gerald Ford but had nonetheless had a very strong showing. He gave a speech at that 1976 convention that literally brought down the house and fired up the delegates. I remember watching that at home and thinking, What an outstanding leader. You could see that this man certainly still had a great contribution to make. He won against all the odds. All the pundits and many of the commentators dismissed Ronald Reagan. They thought he was too old. They thought he was too conservative to run and be elected President in 1980. But he proved them all wrong. I think a pivotal moment came in 1980 during his primary elections. At that time he lost the Iowa caucuses and he had a lot of pressure on him to win the New Hampshire primary. Many of us will recall that New Hampshire primary debate where he grabbed the microphone as they tried to shut it off. He grabbed the microphone and said: ``Mr. Green, I paid for this microphone.'' He wanted his other opponents to be allowed the opportunity to speak at that debate, as opposed to just having a one- on-one debate with George Bush, who later became his Vice President and succeeded him as President. I remember watching that Nashua, NH, debate in 1980 from the basement television room of my fraternity house in Hanover, NH, at Dartmouth College. I was very much paying attention to that primary because it was happening in New Hampshire where I was attending college. I will never forget seeing Ronald Reagan in that debate and his remarkable performance. Later, in 1980, I had the opportunity to meet him when he came to Illinois to campaign for a U.S. Senate candidate in October of 1980, about a month before Reagan was elected President. I was actually an intern on the campaign of a fellow by the name of Dave O'Neal who was running for the Senate in Illinois. He actually lost. But as an intern on that campaign, I had the opportunity to meet Ronald Reagan and to welcome him into the back room before we had the dinner in honor of Dave O'Neal. I will never forget Ronald Reagan. Everybody called him Governor at that time. That was the most recent office he had. They didn't call him President Reagan yet. But when he walked into the holding room, the bartender immediately told him: Governor Reagan, we have squeezed some fresh oranges for you. We have some freshly squeezed orange juice for you. Would you like some of this? Governor Reagan looked at him and said: I'll take it if you put a little vodka in that. I was struck immediately at the time by his charm and his sense of humor and his relaxed nature, even though he was just a few weeks out from the election day in what everyone thought would be a very close election with President Carter. But, of course, as we know, Ronald Reagan went on to win in a landslide. He had a remarkable career. He was an enormous source of inspiration to me as I was finishing college and going on to law school. I was very proud at the time to be a Republican and to have him as the leader of our party, but also to be an American and have him lead our country and represent us in the world. I thought he handled himself with incredible poise and dignity. His achievements are monumental. You will recall that he had few allies in Congress. The other party controlled both Houses of Congress while he was President. Yet he was able to work his will through Congress by calling upon the American people to lobby Congress for some of his important initiatives, such as lowering taxes. President Reagan succeeded in lowering the highest tax rates, which at that time were up to 70 percent. He dramatically lowered the tax rates and unleashed a flurry of economic activity that is with us today. He went on to achieve major arms control agreements, and also, with the threat of his willingness to spend whatever it took to defend our country--his will in that regard, his sheer will to succeed in defeating what he saw as an evil ideology, communism--in ending the cold war with the Soviet Union, he ultimately succeeded in doing that. No one has a greater claim on ending the cold war than Ronald Reagan and, as Margaret Thatcher has said, he did so without firing a single shot. I think one of his greatest accomplishments occurred in his second term, and that was the simplifying of the Tax Code. If you recall, we went for a time where we got rid of a lot of the Swiss cheese loopholes and deductions that are in our Tax Code. We dramatically simplified the Tax Code, collapsed the rates, and it held for a few years. We have gone back now and allowed all the special interests to fill up the Tax Code with all sorts of special interest loopholes and giveaways to politically connected interests. Sometimes I wish we were rereading what Ronald Reagan said at the time about the necessity of cleaning up that Tax Code. One of the most cherished treasures in the State of Illinois is the boyhood home in which Ronald Reagan grew up in the 1920s, in Dixon, IL. That home has been purchased and lovingly restored by a foundation and by members of the Dixon, IL, community. It is a wonderful place for Americans who want to pay their respects to Ronald Reagan and his legacy, to go by and visit on Interstate 88 in Dixon, IL, just off Interstate 88. I certainly hope a lot more Americans who are interested in the history of Ronald Reagan will visit that home. Ronald Reagan himself went back to visit it, I believe, after he left the White House even. He has recounted many tales of his growing up there. He was actually born in Tampico, IL, in an apartment above a commercial building in downtown Tampico, and later moved to Dixon, IL. Some of his fondest memories are of growing up in Dixon, along the Rock River. Of course, many people will remember Ronald Reagan talking about one of his proudest accomplishments in life was actually saving 77 people from drowning over the 7 years that he was a lifeguard along the Rock River in Dixon, IL. If you go to Dixon, IL, you can see this wonderful small town that shaped Ronald Reagan, his character, his values, his common sense, his Midwestern way of thinking, of looking at the world. I don't think that ever left him. There is also an interesting story not many people are aware of, but President Reagan wrote about this in his biography. He graduated from Eureka College, about 130 miles south of Dixon, in Illinois. After graduating from college, he went back to Dixon and he applied for a job in the sporting goods department, I believe, at a Montgomery Ward store in Dixon, IL. Guess what happened. Montgomery Ward turned down Ronald Reagan for that job. That set him off in different pursuits, and he ultimately went to Iowa and became an announcer, did Cubs games from a regional radio station there. But he wrote in his biography he wonders what would have happened had he actually gotten that job at the Montgomery Ward store in Dixon, IL. He suspected he might never have left Dixon, IL. We need to thank somebody who failed to hire Ronald Reagan at Montgomery Ward in 1932, I think, because it was that little twist, that little turn in his life that turned out for the better, not only for him but certainly for our entire Nation and the world. I ask that we not forget the example of Ronald Reagan and his cheerful optimism about our country and our future. No one could communicate their thoughts as well as Ronald Reagan, in my judgment. I know of no equal he had in public service in terms of communicating with people. He was an inspiring leader. Ronald Reagan came to the presidency of a self-doubting nation, a nation more suspicious of its power than inspired by its possibilities. And he understood--as magnificently as any American leader--the restorative force of faith, of conviction, of pride. He was the Great Communicator, not because he mastered the sound bite, but because this midwestern man of 10,000 handwritten letters knew that words matter-- words with simple, self-evident integrity, words that reach into the vagueness of a volatile democracy and perfectly describe the essential goodness of our character. Ronald Reagan returned us to ourselves. He did not work miracles. But he emboldened us to see the grace of God in the destiny of our great Nation. He enabled us to hear the still, small voice in the clamor of great historical conflicts. He reminded us to treasure the simple miracles of life, laughter and love. This man, who survived into the 21st century, embodied as perhaps none other the panoramic sweep of America's 10th century. Reagan was born in the small town of Tampico, IL. It was 1911, the year of the first coast-to-coast airplane flight, a 49-day ordeal with 69 stops and 16 crash landings. It was also the year of the first aircraft landing-- crude though it was--on a ship anchored in San Francisco Bay. A series of ropes stopped the aircraft. Ninety years later, on March 4, 2001, the United States christened the Navy's newest Nimitz-class aircraft carrier, the USS Ronald Reagan, a 90,000-ton nuclear-powered fighting ship, and the pride of the most powerful navy in the world. Ronald Reagan fundamentally changed the face of American politics-- and profusely contributed his name to the new political lexicon. What American before or since Ronald Reagan has become the popular namesake for a theory of economics, a political and electoral sea change, and a decisive partisan crossover? I speak of Reaganomics, the Reagan Revolution, and Reagan Democrats. The man was that large. He had strong and distinct views which he was able to communicate with remarkable effectiveness. He had a irresistibly winning personality and was irrepressibly optimistic. Though the establishment of both political parties often ridiculed his beliefs, the people somehow always seemed to have faith and confidence in him. In fact, they loved as perhaps they have loved no other President in modern history. Conventional intellects and comfortable pundits were aghast when President Reagan spoke so freely of ``evil'' in the world. In a world where ``evil'' is neatly banished because it is too judgmental, the moral declarations of Ronald Reagan were inevitably revolutionary. The Great Communicator understood perfectly well that communication without a moral compass becomes all talk. And so we are the heirs of a more civilized and less menacing world because Ronald Reagan had the courage to maintain firm beliefs and to stand up for those beliefs. As a Senator from Illinois, I am proud to remark briefly and comparatively about another great son of Illinois, the only President to be elected from Illinois, Kentucky-born but Illinois-settled Abraham Lincoln, whom our history honors as few others. Lincoln and Reagan both grew up humbly and gained a natural comfort with people from all walks of life. They were both frequently underestimated by opponents who imagined themselves intellectually, culturally or socially superior. They both possessed an equanimity and fortitude that kept them serene while navigating treacherous waters. They both loved the United States of America. And they both cherished American freedom and staked their public lives on the resolute promotion of it--for Lincoln, against the forces of disunity and enslavement at home, and for Reagan, against a godless imperial tyranny abroad. I am proud to hail from the State of Illinois. When we finally measure the worth of a statesman, the words of political or ideological adversaries can speak volumes. And here Ronald Reagan--a statesman with many more converts than implacable enemies--is a shining beacon in his own shining city. When President Clinton announced in 1996 that ``the era of big government is over,'' it was homage to the durable influence--across the political landscape--of Ronald Reagan's faith in the American people. When Mikhail Gorbachev recently said of Ronald Reagan, ``he was sincere,'' he captured with fitting simplicity the worldwide power of the American dream in the hands of America's finest dreamer. Ronald Reagan stayed the course, throughout and after his presidency, until a progressive illness consumed him. Indeed, sliding irretrievably into forgetfulness a decade ago, Ronald Reagan remembered to say goodbye to his beloved American people. ``When the Lord calls me home, whenever that may be, I will leave with the greatest love for this country of ours and eternal optimism for its future,'' Reagan wrote. ``I now begin the journey that will lead me into the sunset of my life. I know that for America there will always be a bright dawn ahead. Thank you my friends. May God always bless you.'' May God rest his soul, and may God bless Nancy Reagan, who is also from Illinois, and all the Reagan children and their families. I yield the floor.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I suggest the absence of a quorum.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today with Senator Bond in support of a bill to put into place recommendations by the Army Corps of Engineers for navigation capacity improvements and ecosystem restoration for the Upper Mississippi and Illinois Rivers Waterway System. Modernizing the inland waterway transportation system is a high priority for the Upper Mississippi River basin and for agricultural, commercial, and labor interests that rely on the river to transport their products. Without modernization, Midwest producers will not be able to fully participate in growing world markets. On April 29, 2004, the Army Corps of Engineers released its proposal to upgrade the locks and to provide for ecosystem restoration on these two waterways. I have consistently fought for funding to revitalize these locks to help Illinois producers more easily transport their products to market. I have joined Senator Bond as a cosponsor to this bill because our country's agriculture and business interests have waited far too long for these improvements. The Mississippi River plays a vital role in our economy. The Mississippi and Illinois Rivers are two of the major routes by which Illinois agricultural commodities are distributed to the world. In fact, roughly 70 percent of U.S. agricultural products are transported through the Mississippi River system. More than 60 million tons of commodities are transported on the Illinois River alone, including more than half of Illinois' annual corn crop. By controlling the water's flow, locks and dams help facilitate the transportation of commodities along rivers. The outdated and deteriorating 600-foot locks on the Mississippi and Illinois Rivers create unnecessary delays because the locks are too small to accommodate modern size barge tows. This causes transportation costs to rise and results in lost market share for Illinois agriculture producers. Along with modernizing this river system's locks, we must not allow the deterioration of its ecosystem. A cooperative solution can meet the needs of waterway users and, at the same time, improve the environment and stem the decline of the Mississippi and Illinois Rivers' ecosystems. This legislation strikes a good balance by upgrading the lock system while protecting the ecosystem of these rivers. I commend Senator Bond for introducing this important legislation and am pleased to join him in cosponsoring this bill. Illinois farmers and other producers have waited far too long for these improvements. This bill brings the Upper Mississippi and Illinois Rivers Waterway System into the 21st century.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today with Senator Bond in support of a bill to put into place recommendations by the Army Corps of Engineers for navigation capacity improvements and ecosystem restoration for the Upper Mississippi and Illinois Rivers Waterway System. Modernizing the inland waterway transportation system is a high priority for the Upper Mississippi River basin and for agricultural, commercial, and labor interests that rely on the river to transport their products. Without modernization, Midwest producers will not be able to fully participate in growing world markets. On April 29, 2004, the Army Corps of Engineers released its proposal to upgrade the locks and to provide for ecosystem restoration on these two waterways. I have consistently fought for funding to revitalize these locks to help Illinois producers more easily transport their products to market. I have joined Senator Bond as a cosponsor to this bill because our country's agriculture and business interests have waited far too long for these improvements. The Mississippi River plays a vital role in our economy. The Mississippi and Illinois Rivers are two of the major routes by which Illinois agricultural commodities are distributed to the world. In fact, roughly 70 percent of U.S. agricultural products are transported through the Mississippi River system. More than 60 million tons of commodities are transported on the Illinois River alone, including more than half of Illinois' annual corn crop. By controlling the water's flow, locks and dams help facilitate the transportation of commodities along rivers. The outdated and deteriorating 600-foot locks on the Mississippi and Illinois Rivers create unnecessary delays because the locks are too small to accommodate modern size barge tows. This causes transportation costs to rise and results in lost market share for Illinois agriculture producers. Along with modernizing this river system's locks, we must not allow the deterioration of its ecosystem. A cooperative solution can meet the needs of waterway users and, at the same time, improve the environment and stem the decline of the Mississippi and Illinois Rivers' ecosystems. This legislation strikes a good balance by upgrading the lock system while protecting the ecosystem of these rivers. I commend Senator Bond for introducing this important legislation and am pleased to join him in cosponsoring this bill. Illinois farmers and other producers have waited far too long for these improvements. This bill brings the Upper Mississippi and Illinois Rivers Waterway System into the 21st century.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to introduce the Healthy Lifestyles Act of 2004 with Senator Kennedy. This bill places the crafting of the Dietary Guidelines for Americans squarely on the shoulders of the independent Institute of Medicine of the National Academies of Sciences. This bill also establishes several grant programs to help curb the obesity epidemic that plagues more than one- third of Americans. In the United States, approximately 300,000 of our citizens die each year as a result of being overweight or obese. This information becomes even more dire when you consider that 64 percent of adults and 13 percent of children and adolescents are overweight, according to the Centers for Disease Control and Prevention. More staggering, twice as many children and three times as many adolescents are characterized as overweight today as in 1980--when the Federal Government, through the U.S. Department of Agriculture, first published the Dietary Guidelines. In 1990, Congress took a larger role in the establishment of these Guidelines and passed legislation requiring the USDA and HHS to review, and, if necessary, revise the Guidelines every 5 years. According to the CDC, in 1985, in no State in the union were more than 14 percent of the resident's obese, but in 2001, in every State but Colorado more than 15 percent of residents were obese. My own State of Illinois dramatically demonstrates this disturbing trend. According to CDC, in 1985, less than 10 percent of Illinois residents were obese. By 2001, between 20 and 24 percent of Illinois residents were obese. Furthermore, according to the CDC, the medical expenses of the overweight and obese accounted for 9.1 percent of total U.S. medical expenditures in 1998 and may have reached as high as $78.5 billion. Approximately half of these costs were paid by Medicaid and Medicare. It is time to fix this dysfunctional system. By placing the IOM in charge of drafting the Dietary Guidelines, we can help to ensure that the Guidelines are based upon unbiased, sound, scientific evidence rather than which organization has the greatest influence. When dealing with the health and welfare of Americans, we can expect no less. Additionally, this measure directs the IOM to examine nutrition programs run by the Federal Government, an important step to discern whether USDA, HHS, and other Federal agencies are properly conducting nutrition research. While many factors contribute to this growing health crisis, the problem, in part, may be attributed to a lack of nutrition and fitness information available to the public, especially among low-income groups. This bill will help our communities to a better job of educating Americans about proper nutrition and the serious risks associated with obesity. The Federal Government can fund all the research that it wants, but that research will do no good unless it is properly communicated to the public. This legislation empowers schools, local and State governments, and employers, through grant programs, to establish obesity-prevention initiatives. We can only limit the prevalence of obesity in America by empowering the individual through grassroots and community programs to change their eating and exercise behaviors. Obesity is not only a preventable disease, it is a curable disease. By encouraging more physical activity and better eating habits, we can help reduce the size of waistbands in America and help curb heart disease, type II diabetes rates, and other obesity-related diseases. In communities at risk for poor nutrition, this legislation provides grant funding to help promote the consumption of foods that are consistent with the Dietary Guidelines and to promote water as the main daily drink choice for people. The measure provides grants to train health professionals and health science students in identifying, preventing, and treating obesity-related conditions. With 64 percent of the people in our country classified as overweight or obese, it is obvious that the Dietary Guidelines and Federal nutrition monitoring programs have failed. I thank Senator Kennedy for joining me today to introduce the Healthy Lifestyles Act of 2004. We owe it to the American people to disseminate unbiased, sound, scientific nutrition information. I urge my colleagues to support this important piece of legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to introduce the Healthy Lifestyles Act of 2004 with Senator Kennedy. This bill places the crafting of the Dietary Guidelines for Americans squarely on the shoulders of the independent Institute of Medicine of the National Academies of Sciences. This bill also establishes several grant programs to help curb the obesity epidemic that plagues more than one- third of Americans. In the United States, approximately 300,000 of our citizens die each year as a result of being overweight or obese. This information becomes even more dire when you consider that 64 percent of adults and 13 percent of children and adolescents are overweight, according to the Centers for Disease Control and Prevention. More staggering, twice as many children and three times as many adolescents are characterized as overweight today as in 1980--when the Federal Government, through the U.S. Department of Agriculture, first published the Dietary Guidelines. In 1990, Congress took a larger role in the establishment of these Guidelines and passed legislation requiring the USDA and HHS to review, and, if necessary, revise the Guidelines every 5 years. According to the CDC, in 1985, in no State in the union were more than 14 percent of the resident's obese, but in 2001, in every State but Colorado more than 15 percent of residents were obese. My own State of Illinois dramatically demonstrates this disturbing trend. According to CDC, in 1985, less than 10 percent of Illinois residents were obese. By 2001, between 20 and 24 percent of Illinois residents were obese. Furthermore, according to the CDC, the medical expenses of the overweight and obese accounted for 9.1 percent of total U.S. medical expenditures in 1998 and may have reached as high as $78.5 billion. Approximately half of these costs were paid by Medicaid and Medicare. It is time to fix this dysfunctional system. By placing the IOM in charge of drafting the Dietary Guidelines, we can help to ensure that the Guidelines are based upon unbiased, sound, scientific evidence rather than which organization has the greatest influence. When dealing with the health and welfare of Americans, we can expect no less. Additionally, this measure directs the IOM to examine nutrition programs run by the Federal Government, an important step to discern whether USDA, HHS, and other Federal agencies are properly conducting nutrition research. While many factors contribute to this growing health crisis, the problem, in part, may be attributed to a lack of nutrition and fitness information available to the public, especially among low-income groups. This bill will help our communities to a better job of educating Americans about proper nutrition and the serious risks associated with obesity. The Federal Government can fund all the research that it wants, but that research will do no good unless it is properly communicated to the public. This legislation empowers schools, local and State governments, and employers, through grant programs, to establish obesity-prevention initiatives. We can only limit the prevalence of obesity in America by empowering the individual through grassroots and community programs to change their eating and exercise behaviors. Obesity is not only a preventable disease, it is a curable disease. By encouraging more physical activity and better eating habits, we can help reduce the size of waistbands in America and help curb heart disease, type II diabetes rates, and other obesity-related diseases. In communities at risk for poor nutrition, this legislation provides grant funding to help promote the consumption of foods that are consistent with the Dietary Guidelines and to promote water as the main daily drink choice for people. The measure provides grants to train health professionals and health science students in identifying, preventing, and treating obesity-related conditions. With 64 percent of the people in our country classified as overweight or obese, it is obvious that the Dietary Guidelines and Federal nutrition monitoring programs have failed. I thank Senator Kennedy for joining me today to introduce the Healthy Lifestyles Act of 2004. We owe it to the American people to disseminate unbiased, sound, scientific nutrition information. I urge my colleagues to support this important piece of legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to oppose the conference report for H.R. 3108, the Pension Funding Equity Act, which the Senate is now considering. The original version of this bill that the House passed last year changed the discount rate used by defined benefit pension plans to calculate their pension liabilities from an interest rate based on the now defunct 30-year Treasury bond to an interest rate based on the average rate of return on high-quality long-term corporate bonds for plan years beginning in 2004 and 2005. There is a strong but not conclusive argument that the discount rate should be changed. According to the Pension Benefit Guaranty Corporation--PBGC, replacement of the 30-year Treasury rate will allow companies to lower their pension contributions by $80 billion over the next 2 years. When this legislation reached the Senate, however, it became a magnet for giveaways to financially weak companies. The industries in which some of these financially weak companies operate are notorious for having woefully underfunded pension plans. Furthermore, select companies were also given additional relief. Why these companies deserve special breaks and others do not is not easily discernable. Multi-employer plans were also given a 2-year delay in recognizing investment losses. The most troubling section in the Senate version of the bill provided that any company could apply with the Secretary of the Treasury to waive a portion of its deficit reduction contribution. Fortunately for taxpayers, this provision was stripped from the bill during conference. While the House-Senate conference report produced a pension bill that is much more limited in increasing PBGC's deficit than the Senate version, it still allows companies with underfunded pension plans to set aside less, thus increasing their pension deficits. According to the PBGC, the deficit reduction contribution waivers, special breaks to select companies, and the multi-employer plan relief, will allow companies to pay billions less into their pension plans, in addition to the $80 billion less because of the discount rate change. In total, the conference committee report probably relaxes corporate pension funding requirements by close to $90 billion over 2 years. Allowing weak companies to pay less into their pension plans than is required by current law would be analogous to a credit card company allowing a financially distressed customer to pay less than his or her required monthly minimum payments. Just as credit card companies require minimum payments to ensure consumers do not fall too far behind in debt, the PBGC requires companies with defined benefit pension plans to make deficit reduction contributions to catch up on their funding. I think all of my colleagues would agree, when you're in a hole, the first rule of thumb is to stop digging. Allowing companies with underfunded pension plans to dig the hole deeper could cause premiums for well-funded plans to rise, and retirees could face cuts in pension benefits if their defined benefit pension plans are terminated. I also am deeply concerned that the conference report does not include a ``hold harmless'' provision for the PBGC. The agency is currently in the worst financial condition in its history. Because it continues to absorb the losses of terminated pension plans, the PBGC reported a record deficit in its single employer program of $11.2 billion for fiscal year 2003, and for the first time ever, its multi- employer program ended the fiscal year in a deficit situation. The PBGC currently remains exposed to $85 billion in pension underfunding in plans sponsored by financially weak employers. I am thus concerned that taxpayers may one day be forced to bail out the PBGC. In September 2003, as chairman of the Governmental Affairs Subcommittee on Financial Management, the Budget, and International Security, I held a hearing on the PBGC and defined benefit pension plans. While proponents of the deficit reduction contribution waiver and multi-employer plan relief claimed that funding rules are too strict for companies in America, what I found was just the opposite-- that current funding requirements are inadequate to fully protect the pensions of America's workers and retirees when their plans terminate. Companies can stop making contributions when their plans are funded at 90 percent of ``current liability.'' Trouble is, the definition of ``current liability'' is the result of past legislative compromises, and does not reflect the amount of money needed to pay all benefits if a plan terminates. ``Current liability'' assumes the company is an on- going business, and thus does not recognize the early retirements that take place when an employer goes out of business and terminates its pension plan. Nor does ``current liability'' recognize the full cost of providing annuities as measured by group annuity practices in the private market. Pension benefits are measured against ``termination liability'' if a company goes out of business and terminates its pension plan. Termination liability reflects an employer's cost to settle pension obligations in the private market. In the example of Bethlehem Steel, the company reported that it was 84 percent funded on a ``current liability'' basis in its last filing prior to termination. When the PBGC took over the Bethlehem plan, however, it turned out that the plan was only 45 percent funded on a termination basis. In my judgment, therefore, further relaxing the already lax contribution requirements for weak companies with underfunded plans is imprudent. As members of Congress we should not pass laws that encourage companies to manage pension plans in an irresponsible manner. Companies with underfunded pension plans will continue to run up deficits until everyone loses--workers, retirees, and taxpayers. We make a mistake today by giving weak companies the tools to dig their holes deeper.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I rise today to submit a resolution that would designate June 2004 as National Safety Month. National Safety Month is not just a tribute to our Nation's advances in health and safety and our never-ending efforts to protect lives. It represents a standard of excellence in safety to which we as a Nation must continue to aspire. While our Nation has enjoyed great advances in safety, we must continue to work to reduce the number of unintentional and preventable injuries and deaths. As summer is traditionally a time in which the number of unintentional deaths increases, it is appropriate to dedicate a month at the beginning of the season to the improvement of safety and health in our country. During National Safety Month, the National Safety Council will provide tips, articles and information to raise awareness and promote safe driving, home and community safety, general preparedness, and workplace safety. This year, the National Safety Council will focus on reducing the number of motor vehicle crashes, which are the leading cause of injury death in the United States. I would like to commend the National Safety Council for the contributions that it has made to public safety. I am proud that the National Safety Council is headquartered in my home State of Illinois. The National Safety Council is celebrating its 91st anniversary as an organization this year, and its 51st anniversary as a federally chartered organization. Congress chartered the National Safety Council in 1953 to educate and influence society to adopt safety, health, and environmental policies, practices, and procedures that prevent and mitigate human suffering and economic loss arising from preventable causes. The National Safety Council fulfills its mission through a network of approximately 50 local and regional chapters that provide safety and health programs and services to communities across the United States. The Council currently has 37,500 members. I thank Senator Feinstein for joining me to introduce this resolution that declares June 2004 National Safety Month and recognizes the National Safety Council for its important work. During a time when homeland security is foremost on the minds of Americans, this month will continue to heighten public awareness of the ongoing quest to save and protect lives. I urge all of my colleagues join me in supporting this resolution.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, today I rise to introduce the Mutual Fund Reform Act of 2004. This legislation would make fund governance truly accountable, require genuinely transparent total fund costs, enhance comprehension and comparison of fund fees, confront trading abuses, create a culture of compliance, eliminate hidden transactions that mislead investors and drive up costs, and save billions of dollars for the 95 million Americans who invest in mutual funds. Above all, the Mutual Fund Reform Act strives to preserve the attraction of mutual funds as a flexible and investor-friendly vehicle for long-term, diversified investment. I am pleased to be joined today by my distinguished colleagues on the Committee on Governmental Affairs, Senator Carl Levin and Senator Susan Collins, the committee's chairman, who are original cosponsors of this legislation. I am grateful for the extensive and important input both Senators provided in the drafting of this bill, and appreciate the invaluable perspective Senator Collins provided based on her first-hand experience as Maine's Commissioner of Professional and Financial Regulation. I would like to take this opportunity to recognize the work of a number of our colleagues in this area. Last year, I was pleased to cosponsor S. 1822, introduced by Senator Daniel Akaka, the Ranking Member of the Senate Governmental Affairs Subcommittee on Financial Management, the Budget, and International Security, which I chair, to address mutual fund trading abuses. Senators Corzine, Dodd, and Kerry also have sponsored mutual fund bills from which I drew, as well as legislation introduced by Congressman Richard Baker last summer and overwhelmingly passed by the House of Representatives at the end of the last session. I also would like to acknowledge the ongoing work of the Senate Committee on Banking, Housing and Urban Affairs, the authorizing committee which will ultimately decide questions of mutual fund industry reform. The committee is conducting a series of legislative hearings to examine the mutual fund scandal and the merits of various reform proposals. I commend the leadership of Chairman Richard Shelby and Ranking Member Paul Sarbanes, and look forward to continuing to work with them and the other members of the Banking Committee on this issue in the coming months. The bill I am introducing today reflects extensive testimony that was presented during oversight hearings of the Financial Management Subcommittee that I chaired on November 3, 2003, and January 27, 2004. The general consensus of the panelists at the November hearing was that illegal late trading and illicit market timing were indeed very serious threats to investors but that excessive fees and inadequate disclosure of those fees were an even more serious threat to American investors. Witnesses at our hearing last month testified regarding the propriety and the adequacy of the disclosure of mutual fund fees, specifically hidden fees such as revenue sharing, directed brokerage, soft money arrangements, and hidden loads such as 12b-1 fees. The subcommittee also heard from two whistleblowers who were responsible for the initial revelations regarding Putnam Investments and Canary Capital Partners, LLC. The bill also reflects the constructive input from a number of key organizations and leaders of mutual fund reform. I especially appreciate the extensive contributions of Mr. John Bogle, the founder and former CEO of the Vanguard Group, who has been a champion of reforms in the mutual fund industry for many years. I ask unanimous consent that letters from Mr. Bogle, Massachusetts Secretary of State William Galvin, and organizations representing investors and consumers endorsing this bill be printed in the Record. In 1980 only a small percentage of Americans invested in mutual funds and the assets of the industry were only $115 billion. Today, roughly 95 million Americans own shares in mutual funds and the assets of all the funds combined are now more than $7 trillion. Mutual funds have grown in popularity in part because Congress has sanctioned or expanded a variety of tax-sheltered savings vehicles such as 401(k)s, Keoghs, traditional IRAs, Roth IRAs, Rollover IRAs, and college savings plans. Given that mutual funds are now the repository of such a large share of so many Americans' savings, few issues we confront are as important as protecting the money invested in mutual funds. I want to commend the many recent regulatory initiatives from the Securities and Exchange Commission (SEC). They are collectively a step in the right direction and a demonstration of our seriousness in Washington about putting the interests of America's mutual investors first. But the SEC does not have the statutory authority to take all of the needed steps to restore integrity and health to the mutual fund industry. The current scandals demand that Congress take a comprehensive look at an industry still governed by a 64-year old law. Therefore, the Mutual Fund Reform Act of 2004 puts the interests of investors first by: ensuring independent and empowered boards of directors, clarifying and making specific fund directors' foremost fiduciary duty to shareholders; strengthening the fund advisers' fiduciary duty regarding negotiating fees and providing fund information, and instituting Sarbanes-Oxley-style provisions for independent accounting and auditing, codes of ethics, chief compliance officers, compliance certifications, and whistleblower protections. The Mutual Reform Act of 2004 empowers both investors and free markets with clear, comprehensible fund transaction information by: standardizing computation and disclosure of (i) fund expenses and (ii) transaction costs, which yield a total investment cost ratio, and tell investors actual dollar costs; providing disclosure and definitions of all types of costs and requiring that the SEC approve imposition of any new types of costs; disclosing portfolio managers' compensation and stake in fund; disclosing broker compensation at the point of sale; disclosing and explaining portfolio turnover ratios to investors, and disclosing proxy voting policies and record. The Mutual Fund Reform Act of 2004 vastly simplifies the disclosure regime by: eliminating asset-based distribution fees (Rule 12b-1 fees), the original purpose of which has been lost and the current use of which is confusing and misleading--and amending the Investment Company Act of 1940 to permit the use of the adviser's fee for distribution expenses, which locates the incentive to keep distribution expenses reasonable exactly where it belongs--with the fund adviser; prohibiting shadow transactions--such as revenue sharing, directed brokerage, and soft-dollar arrangements--that are riddled with conflicts of interest, serve no reasonable business purpose, and drive up costs; ``Unbundling'' commissions, such that research and other services, heretofore covered by hidden soft-dollar arrangements, will be the subject of separate negotiation and a freer and fairer market; requiring enforceable market timing policies and mandatory redemption fees--as well as provision by omnibus account intermediaries of basic customer information to funds to enable funds to enforce their market timing, redemption fee, and breakpoint discount policies; and requiring fair value pricing and strengthening late trading rules. The Mutual Fund Reform Act also would perpetuate the dialogue and preserve the wisdom gathered from hard experience. The Act directs the SEC and the General Accounting Office to conduct several studies, including a study of ways to minimize conflicts of interest and incentivize internal management of mutual funds; a study on coordination of enforcement efforts between SEC headquarters, SEC regional offices, and state regulatory and law enforcement entities; and a study to enhance the role of the internet in educating investors and providing timely information about laws, regulations, enforcement proceedings and individual funds, possibly by mandating disclosures on websites. Enactment of the Mutual Fund Reform Act would help restore the integrity of the mutual fund industry and would dramatically enhance the amount of retirement savings for many long term investors. Shareholders would be the big winners under this legislation, and the losers would be high cost mutual funds. I therefore urge my colleagues to support passage of this legislation. I ask unanimous consent that the text of the bill, as well as a one- page summary and white paper describing the legislation, be printed in the Record.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, today I rise to introduce the Mutual Fund Reform Act of 2004. This legislation would make fund governance truly accountable, require genuinely transparent total fund costs, enhance comprehension and comparison of fund fees, confront trading abuses, create a culture of compliance, eliminate hidden transactions that mislead investors and drive up costs, and save billions of dollars for the 95 million Americans who invest in mutual funds. Above all, the Mutual Fund Reform Act strives to preserve the attraction of mutual funds as a flexible and investor-friendly vehicle for long-term, diversified investment. I am pleased to be joined today by my distinguished colleagues on the Committee on Governmental Affairs, Senator Carl Levin and Senator Susan Collins, the committee's chairman, who are original cosponsors of this legislation. I am grateful for the extensive and important input both Senators provided in the drafting of this bill, and appreciate the invaluable perspective Senator Collins provided based on her first-hand experience as Maine's Commissioner of Professional and Financial Regulation. I would like to take this opportunity to recognize the work of a number of our colleagues in this area. Last year, I was pleased to cosponsor S. 1822, introduced by Senator Daniel Akaka, the Ranking Member of the Senate Governmental Affairs Subcommittee on Financial Management, the Budget, and International Security, which I chair, to address mutual fund trading abuses. Senators Corzine, Dodd, and Kerry also have sponsored mutual fund bills from which I drew, as well as legislation introduced by Congressman Richard Baker last summer and overwhelmingly passed by the House of Representatives at the end of the last session. I also would like to acknowledge the ongoing work of the Senate Committee on Banking, Housing and Urban Affairs, the authorizing committee which will ultimately decide questions of mutual fund industry reform. The committee is conducting a series of legislative hearings to examine the mutual fund scandal and the merits of various reform proposals. I commend the leadership of Chairman Richard Shelby and Ranking Member Paul Sarbanes, and look forward to continuing to work with them and the other members of the Banking Committee on this issue in the coming months. The bill I am introducing today reflects extensive testimony that was presented during oversight hearings of the Financial Management Subcommittee that I chaired on November 3, 2003, and January 27, 2004. The general consensus of the panelists at the November hearing was that illegal late trading and illicit market timing were indeed very serious threats to investors but that excessive fees and inadequate disclosure of those fees were an even more serious threat to American investors. Witnesses at our hearing last month testified regarding the propriety and the adequacy of the disclosure of mutual fund fees, specifically hidden fees such as revenue sharing, directed brokerage, soft money arrangements, and hidden loads such as 12b-1 fees. The subcommittee also heard from two whistleblowers who were responsible for the initial revelations regarding Putnam Investments and Canary Capital Partners, LLC. The bill also reflects the constructive input from a number of key organizations and leaders of mutual fund reform. I especially appreciate the extensive contributions of Mr. John Bogle, the founder and former CEO of the Vanguard Group, who has been a champion of reforms in the mutual fund industry for many years. I ask unanimous consent that letters from Mr. Bogle, Massachusetts Secretary of State William Galvin, and organizations representing investors and consumers endorsing this bill be printed in the Record. In 1980 only a small percentage of Americans invested in mutual funds and the assets of the industry were only $115 billion. Today, roughly 95 million Americans own shares in mutual funds and the assets of all the funds combined are now more than $7 trillion. Mutual funds have grown in popularity in part because Congress has sanctioned or expanded a variety of tax-sheltered savings vehicles such as 401(k)s, Keoghs, traditional IRAs, Roth IRAs, Rollover IRAs, and college savings plans. Given that mutual funds are now the repository of such a large share of so many Americans' savings, few issues we confront are as important as protecting the money invested in mutual funds. I want to commend the many recent regulatory initiatives from the Securities and Exchange Commission (SEC). They are collectively a step in the right direction and a demonstration of our seriousness in Washington about putting the interests of America's mutual investors first. But the SEC does not have the statutory authority to take all of the needed steps to restore integrity and health to the mutual fund industry. The current scandals demand that Congress take a comprehensive look at an industry still governed by a 64-year old law. Therefore, the Mutual Fund Reform Act of 2004 puts the interests of investors first by: ensuring independent and empowered boards of directors, clarifying and making specific fund directors' foremost fiduciary duty to shareholders; strengthening the fund advisers' fiduciary duty regarding negotiating fees and providing fund information, and instituting Sarbanes-Oxley-style provisions for independent accounting and auditing, codes of ethics, chief compliance officers, compliance certifications, and whistleblower protections. The Mutual Reform Act of 2004 empowers both investors and free markets with clear, comprehensible fund transaction information by: standardizing computation and disclosure of (i) fund expenses and (ii) transaction costs, which yield a total investment cost ratio, and tell investors actual dollar costs; providing disclosure and definitions of all types of costs and requiring that the SEC approve imposition of any new types of costs; disclosing portfolio managers' compensation and stake in fund; disclosing broker compensation at the point of sale; disclosing and explaining portfolio turnover ratios to investors, and disclosing proxy voting policies and record. The Mutual Fund Reform Act of 2004 vastly simplifies the disclosure regime by: eliminating asset-based distribution fees (Rule 12b-1 fees), the original purpose of which has been lost and the current use of which is confusing and misleading--and amending the Investment Company Act of 1940 to permit the use of the adviser's fee for distribution expenses, which locates the incentive to keep distribution expenses reasonable exactly where it belongs--with the fund adviser; prohibiting shadow transactions--such as revenue sharing, directed brokerage, and soft-dollar arrangements--that are riddled with conflicts of interest, serve no reasonable business purpose, and drive up costs; ``Unbundling'' commissions, such that research and other services, heretofore covered by hidden soft-dollar arrangements, will be the subject of separate negotiation and a freer and fairer market; requiring enforceable market timing policies and mandatory redemption fees--as well as provision by omnibus account intermediaries of basic customer information to funds to enable funds to enforce their market timing, redemption fee, and breakpoint discount policies; and requiring fair value pricing and strengthening late trading rules. The Mutual Fund Reform Act also would perpetuate the dialogue and preserve the wisdom gathered from hard experience. The Act directs the SEC and the General Accounting Office to conduct several studies, including a study of ways to minimize conflicts of interest and incentivize internal management of mutual funds; a study on coordination of enforcement efforts between SEC headquarters, SEC regional offices, and state regulatory and law enforcement entities; and a study to enhance the role of the internet in educating investors and providing timely information about laws, regulations, enforcement proceedings and individual funds, possibly by mandating disclosures on websites. Enactment of the Mutual Fund Reform Act would help restore the integrity of the mutual fund industry and would dramatically enhance the amount of retirement savings for many long term investors. Shareholders would be the big winners under this legislation, and the losers would be high cost mutual funds. I therefore urge my colleagues to support passage of this legislation. I ask unanimous consent that the text of the bill, as well as a one- page summary and white paper describing the legislation, be printed in the Record.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I take just a few moments to introduce to my colleagues the nominee on whom we are going to be voting in a couple of minutes. I recommended Mark Filip to President Bush. President Bush nominated him. Senator Durbin concurred in my recommendation to President Bush. I thank Senator Durbin for his support in this effort. I also thank Chairman Hatch and Senator Leahy on the Judiciary Committee, and all members of the Judiciary Committee, for helping to move this nomination forward to the floor. I think one of the most difficult tasks most of us have in the Senate is finding outstanding nominees to the Federal judicial branch of Government. In many cases, at least from my perspective, the choice has been very difficult. Oftentimes, we will get 80 applicants for a single district court judgeship opening in Chicago and you have to pick just one person. That one person, obviously, is very happy and you have many others who are disappointed that they did not get chosen. In this case, I was elated to find a person of such outstanding credentials that I could wholeheartedly recommend him to the President. I think in the case of this nominee, Mark R. Filip, we are in fact lucky to have someone of his caliber who is willing to leave a very lucrative practice in the private sector. He is now a partner at Skadden Arps' Chicago office. He is willing to leave that very prestigious position to move into public service and become a district court judge in the Northern District of Illinois. Mark Filip lives in Winnetka, IL, with his wife Beth. They have four sons. Mark grew up in Chicago and attended the University of Illinois at Champaign. He graduated summa cum laude from the University of Illinois. While there, he received many academic fellowships, including the prestigious Phi Beta Kappa fellowship. After graduating from U of I, he won the highly sought after Marshall Scholarship to attend Oxford. While there, he received a B.A. and M.A. in jurisprudence and won first class honors at Oxford. Returning from his Marshall scholarship to the United States, he matriculated at the Harvard Law School. He did similarly well at Harvard. He became an editor of the Harvard Law Review. In Mark Filip's second year at Harvard, he won the Sears Prize, which is given annually to the two students of the second year class who achieved the highest grades. Ultimately, in the early 1990s, Mark Filip graduated magna cum laude from Harvard Law School. He began his professional career in Chicago, serving as an associate at Kirkland & Ellis, one of the best and oldest firms in Chicago. After a couple of years in the Kirkland & Ellis Chicago office, he moved to the U.S. Attorney's Office and became an assistant U.S. attorney in the Northern District of Illinois, where he gained a lot of experience in a wide variety of criminal cases that he prosecuted successfully, including racketeering, white-collar crime, public corruption, tax fraud cases; and he successfully defended the U.S. Attorney's Office on appeal in many of those cases. Mark Filip returned to the private sector. After leaving the U.S. Attorney's Office, he became an associate at Skadden Arps in 1999, and in 2001 he became a partner at Skadden Arps. In recent years, he has been an adjunct professor of law at Northwestern University and the University of Chicago Law School, both outstanding institutions. Now, again, I emphasize how delighted I am to be able to present to my colleagues in the Senate such a well-qualified nominee, Mark Filip, who is a very young man. He has four children, who range in age from 8 months to 6 years. He is in his late thirties, and I expect that if he goes on the district court in Chicago at this early age, he may well have the opportunity to rise to the circuit court of appeals. I neglected to mention that between law school and his professional career, he had two very prized judicial clerkships. He served as a law clerk to Steven Williams on the DC Court of Appeals and then as a law clerk for Supreme Court Justice Scalia. I am confident, having researched and talked to all those he has worked with over the years, that there is no question he will make a superior district court judge. Mr. President, I yield the floor.

Mr. FITZGERALD

Mr. FITZGERALD. Mr. President, I think the Washington Post editorial page had a very good editorial on this issue this morning. They dealt with the irresponsibility of allowing companies with underfunded pension plans to dig the hole deeper. They also talked about how it is troubling that in Washington there are always incentives for Members of the House and Senate to do what is wrong, to cater to the special interests--in this case, the airlines, the steel companies. This is a situation in which the airlines and the steel companies and their managers have conspired with their union members to come to Congress and allow dispensation which allows the companies to put less money into their pension plans. And no one in those companies cares because the pension plans are guaranteed by the taxpayers. So you have the labor unions and you have the managers coming here to Washington lobbying for this relief. We have gone far beyond just the airline and steel companies. Apparently, in the Senate bill every company in America would be eligible to ask the Secretary of Treasury for a waiver from its pension contributions. Allow me to read this editorial from this morning's Washington Post. It is called ``Pension Perniciousness.'' Monday, January 26, 2004, by the Washington Post: Not for the first time, Congress has muscled up to an important problem, taken a good long look at it and resolved to make it worse. The problem is the vast hole in the nation's corporate pension schemes, and the perverse rules that helped create them. Congress's solution, championed in the Senate by an alliance of Sens. Charles E. Grassley (R- Iowa), Judd Gregg (R-N.H.), Max Baucus (D-Mont.) and Edward M. Kennedy (D-Mass.), is to reward the hole-diggers with what amounts to a $16 billion loan from taxpayers. About one in five private-sector workers has a ``defined- benefit'' pension, the sort in which an employer guarantees a certain pension to its workers when they retire. To pay for these future benefits, employers are supposed to put sufficient money into a pension fund; the problem is they often don't. The gap between money put aside and money needed in the underfunded pension plans comes to an enormous $350 billion. When companies go bust, the Pension Benefit Guaranty Corp., the government-backed entity that insures pensions, gets saddled with plans that are in deficit. As a result, the PBGC itself has a deficit of $11.2 billion, which taxpayers may have to plug eventually. As more companies go bust, more of the $350 billion problem out there in the private sector will land on taxpayers' shoulders. Why do companies run these pension deficits? Because regulations perversely encourage them to do so. If a firm gives workers a pay raise, it will have to pay for that immediately; if it gives them an increase in their pension, accounting rules allow it to defer the cost into the future. This deferral is especially tempting for cash-strapped companies--which often means ones with a strong chance of going bust. Bethlehem Steel, for example, upped its pension promises and declared bankruptcy three years later. Wobbly companies that underfund their pensions would pay extra insurance premiums if the insurer were a private company. But the PBGC's rules do not allow it to price risk properly, adding a further incentive for shaky companies to hitch a free ride with the others. There is, as Congress is demonstrating, no political constituency for fixing this problem. Weak companies with underfunded pensions lobby lawmakers for permission to continue their imprudence; labor leaders from those same firms lobby lawmakers in the same direction; nobody is on the other side. In the deal currently being cooked up, a group of hard-pressed companies led by the steel industry and the airlines will be given a special break for two years; if any of these firms goes bust in the meantime, the public will end up shouldering the deficits, which is why the congressional measure amounts to a taxpayer loan. Yet taxpayer support for people in defined-benefit pension plans is a perverse notion. Fully one in two private-sector workers has no company pension plan whatever. Why should the less fortunate bail out the lucky ones? That was the editorial from this morning's Washington Post. It accurately summed up the imprudence of the bill that the Senate will be considering this week. Ideally, it would be great if the Senate did not pass such an irresponsible bill. Obviously, as the Washington Post points out, when you have labor leaders and CEOs of airlines and steel companies lobbying together, conspiring together to stick a liability of theirs off on the taxpayers, I fear they are probably going to win. My hope, however, is that the House, which has been more responsible on this issue, and the White House, which is opposed to the vast expansion of underfunded liabilities that would be engendered by this legislation--my hope is that the White House and the House will prevail upon the conference committee to pass something more responsible than the legislation currently before the Senate. One final point. The Washington Post editorial referred to this case of Bethlehem Steel and the editorial talked about how Bethlehem Steel was sweetening its pension benefits for the 3 years prior to its going into bankruptcy; then it just handed the pension plan and all its liabilities off on the Pension Benefit Guaranty Corporation and, by extension, the taxpayers. That brings up another issue. Some people think the pension funding rules are too severe for companies in America and that we ask too much of companies in the ERISA law where we require them to fund their pension plans as well as possible. But it turns out that--I held a hearing on this issue over the summer and what I found was very troubling--the current rules are exceedingly lax. The law, ERISA, which was passed in 1974, requires defined benefit plans to be 90 percent funded. If they are not 90 percent funded, they have to make extra catchup payments. But that 90 percent funding level is referred to in ERISA as ``current liability.'' It turns out that the definition of current liability is not an actuarial definition. It is not the definition of how much would actually be owed to pay the benefits that have been promised. It turns out that the definition of current liability is actually a political definition. To illustrate this, the Bethlehem Steel case probably is the best example of how woefully inadequate the current pension funding rules are. In its last filing with the Pension Benefit Guaranty Corporation, Bethlehem Steel claimed it was 84 percent funded on a current liability basis. That was Bethlehem Steel's last filing. Then they filed for bankruptcy and handed their pension plan over to the PBGC. It turns out that Bethlehem Steel's pension plan was not 84 percent funded; it was only 45 percent funded as a percentage of how much the PBGC actually had to pay, to pay the benefits that had been promised. That example shows how the pension funding laws of this country are already woefully lax. We are allowing companies to make promises to employees that they have no hope of ever fulfilling, promises which risk that the taxpayers will ultimately have to pay these pensions. This legislation the Senate is considering this week will make this lax funding of pensions in this country far more lax. It will do a lot of long-term damage. I hope my colleagues in the Senate will think carefully about this notwithstanding the political pressures they will have from airline executives and from labor union leaders. I yield the floor and suggest the absence of a quorum.

Mr. FITZGERALD. Mr. President, a couple of days ago, Elaine Chao, Secretary of the Department of Labor; John Snow, Secretary of the Treasury; and Don Evans, the Secretary of the Department of Commerce, the three board members of the Pension Benefit Guaranty Corporation, wrote a letter to our majority leader, Bill Frist, which asks that the Senate not go beyond amending the interest rate changes that were passed by the House. They said they would oppose it and recommend that the President veto any legislation that would further exacerbate the systemic underfunding of defined benefit pension plans in America. I ask unanimous consent that this letter be printed in the Record.

Mr. FITZGERALD. Mr. President, I would like to address for a few moments the bill that is now on the floor, H.R. 3108, dealing with pension funding for defined benefit pension plans. The House passed this bill. In the House version of the bill, what it does is it mainly changes the interest rate assumptions that plans are required to use when figuring their actuarial liability for their pension plans and for their annuitants in their plans. The House bill mainly addresses the situation that has arisen by virtue of the 30-year Government bond being done away with. A few years ago, the Treasury Department made the decision that it would no longer issue 30-year Treasury bonds and the interest rate for 30-year Treasury bonds had historically been what was used in calculating the liabilities for defined benefit pension plans. Now that there are fewer and fewer 30-year Government bonds in circulation, the interest rates for those bonds have gone down, and, of course, interest rates have been very low in general for the last couple of years. So industries in sectors where defined benefit pension plans are common have come to Washington, asking for some relief in the way they calculate their unfunded liabilities, or their liabilities, and they have asked for the replacement of the 30-year Treasury bond with a benchmark that is, instead, made up of the yield of high-grade corporate bonds. By going to that different reference point, plans ultimately will have to put less money in their pension plans because they can assume a higher rate of return if they are using 30-year corporate debt or high-grade corporate debt as opposed to 30-year Treasury bonds. In fact, right now companies in America, absent any legislation, would have to put about $170 billion into their defined benefit pension plans next year. If the interest rate relief alone in H.R. 3108 is passed, that will cut about 25 percent off the required payments that all companies with defined benefit pension plans will be required to make into their plans over the next 2 years. So the relief in this bill as it passed the House--and the only relief in the House bill is the interest rate relief--if that relief passes, it would cut about $40 billion per year off the amount that companies have to put into their defined benefit pension plans. Over 2 years, the life of the bill, it would cut $80 billion off of the required payments. What has happened in the Senate is somewhat disappointing, to me. I could see the public policy rationale for changing the interest rate benchmark that companies use, now that we have done away with the 30- year Treasury bond. I can see the argument for coming up with a different reference. I can see the argument for changing the assumptions that would allow plans to put less money into their pension plans. But the Senate is going way beyond that. In addition to giving the interest rate relief that the House passed, the Senate now is on the verge of passing amendments that would provide special relief for airlines and steel companies. The airlines and the steel companies would get further reductions in the amounts they have to pay into their pension plans. This is very troubling because airlines and steel companies, as we all know, tend to have the most woefully underfunded pensions of all industry in America. Obviously, they are asking for permission to dig their hole even deeper. In addition, the Senate amendment that will be offered this week has a sweetheart provision for Greyhound Bus Company. I don't know why Greyhound Bus Company is singled out for this special treatment of all the companies in America, but it certainly must have some powerful friends here on Capitol Hill. Also getting a sweetheart deal is CNF Trucking, which apparently gets some sort of relief in this bill and some limitation on liability that it might have to a former subsidiary that it spun off a couple of years ago. So there are a couple of sweetheart deals, not just for some chosen industries, the airlines and steel companies, but also some rifle shots that would be put in here for two special companies, Greyhound and CNF Trucking. In addition, and perhaps most discouraging, is that the Senate amendment will, in effect, go way beyond just the steel and the airline industries and allow all companies that have underfunded pension plans to go through a political process in applying for a waiver from their required contributions to their pension plans. All companies would be able to go to the Treasury Department and request a waiver. If this provision becomes law, you can just imagine right before the election all the industrial companies in the Upper Midwest, in Michigan, Pennsylvania, Illinois, Wisconsin, and so forth, all those industrial companies in States that are critical for the upcoming election, they will all be going to the administration, asking for this special waiver from the Treasury Department. They will be making political threats at the same time, that if the administration doesn't give them this relief, they may just support someone else for President. It sets a very bad precedent because now there is a waiver process. But it is an apolitical one, and one for which you have to apply with the Internal Revenue Service and also with the Pension Benefit Guaranty Corporation. As I said, if it were merely adopting the interest rate relief, we would be granting a 25-percent reduction in the required contribution of all companies in toto in America to their defined benefit pension plans. We are going way beyond that. In the Senate amendment, we are threatening to grant them an additional about $17 billion a year, at least in reductions in required amounts going into pension funds. There is also a provision in the Senate amendment in the managers' package that will allow all multiemployer pension plans--those are union-run plans which span employers--from having to make their full contributions. All of these reductions in required contributions into the pension plans wouldn't be so troublesome but for one fact: In allowing these companies to dig the hole deeper for themselves, it is more likely that they will ultimately default on their pension obligations and turn those obligations over to the Pension Benefit Guaranty Corporation to take advantage of the Government guarantee. It wouldn't be so offensive if it were freezing the Government guarantees. But we are not. There is a no hold harmless provision in this legislation. There are no reforms of pension funding trying to get tough on the companies that have considerably underfunded their pension plans. We are just allowing them to skip required payments into their pension plans. We are allowing the government guarantees to stay in place. What is more, we are allowing the companies with underfunded plans to continue sweetening the benefits for their workers and raising their own pension liabilities while those pension liabilities are all guaranteed by the Federal Government. I know pension funding is something that perhaps makes the eyes of the press glaze over. Not many members of the public understand the importance of this. This is a very roundabout way of transferring liabilities to taxpayers. It is not easy for people to understand. But if I were to make an analogy that the average American could understand about what we are doing here, imagine that you have someone who is behind in their credit card payments. Imagine that you said to that person, you are behind in making your payments on the credit card. You are only making the minimum payment. You are trying to make a minimum payment due each month. You have this huge balance. It is going to take years and years to pay off this deficit of what you owe the credit card company or the bank. Imagine if this person were to have their minimum payments lowered. Imagine that when they are already just barely making the minimum payments, you say: OK, we will even lower your minimum payment. We are doing that here. But in addition, we are going beyond that. We are telling the credit card holder while you are lowering your minimum payments and digging the hole deeper so that you are likely never to get out of debt, we are going to go out and allow you to continue spending and add more to your credit card. Can you imagine a credit card company telling anybody that? That wouldn't be a way to advise a distressed consumer to try to get out of debt. We are doing that and more here today in the Senate. We are not only allowing these companies to quit making their required payments into their pension plans, but we are allowing them to continue spending. We are allowing them, specifically if they are 60-percent funded, to keep sweetening the pension benefits for their employees and digging the hole deeper. That would be not only allowing the credit card holder to keep spending but encouraging the credit card holder to go out while they are behind in the payments on this one credit card and get some more credit cards and run up balances on those credit cards. Obviously, if we pass this legislation we are going to make it hopeless for some companies ever to recover and to fulfill the promises they have made to their pension participants. Right now, the Pension Benefit Guaranty Corporation--the Government corporation that guarantees pension benefits of people in defined pension plans--is in the worst financial condition of its entire history. It has at least a $11.2 billion deficit. Pension plans in America are now thought to be underfunded by at least $350 billion. This legislation would allow that collective underfunding in defined benefit pension plans in America to grow considerably. The House was much more responsible. It only passed the change in interest rate assumptions. It passed the separate version of the bill that had the interest rate change, plus some relief for airlines. The Senate is poised to go much further. I am troubled by that. The administration has issued a threat to veto the legislation. I refer to a letter. This is a Statement of Administration Policy that was issued on January 22. I ask unanimous consent that Statement of Administration Policy on H.R. 3108 be printed in the Record.