Bob Graham

Mr. GRAHAM

Mr. GRAHAM. Recognizing the need for better decision support, the leaders of Miami-Dade County established late last year a team comprised of representatives from the departments of police, fire, emergency management, general services, computer and communications services, seaport, aviation, and administration. They were tasked to work in concert with a consultant and a national laboratory to develop a process for defining, identifying, and evaluating physical and cyberterrorism threats and vulnerabilities; developing a consistent basis for making meaningful comparisons among risks to county assets so that the most important risks can be addressed first; using the structure of the process to develop strategies and associated tactics for mitigating threats and vulnerabilities; and prioritizing mitigation activities so that the biggest gains for the resources spent are implemented first, resulting in the fastest possible reduction in risk for the limited resources available, including not only dollar resources, but the key resources of people and time. The initial work of the team, a pilot project, has been successfully completed, and it has generated considerable interest both in Florida and in Washington.

Mr. GRAHAM. Yes.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, first, I wish to extend my congratulations to the Senator from South Carolina and the Senator from Arizona, who have been working on this issue for many months and have carried the position of the Senate in the conference committee. I commend you for the success we have achieved today and for the battles we both recognize will be required in the future in order to fully realize the goals of this legislation.

Mr. GRAHAM. Mr. President, I am very pleased to rise in support of the Maritime Transportation Security Act of 2002. This legislation will secure one of our Nation's greatest vulnerabilities, our seaports. This bill not only ensures that our ports remain a driving force in the American economy, it also commences the closing of the floodgates of vulnerability to the terrorist threat to American seaports. Mr. President, there is much work that remains to be done. For this legislation to be effective, it must have a predictable and sustained funding source for the agencies tasked with maintaining the security of our maritime borders. It was in December of 2001, almost a year ago, that the Senate unanimously passed a comprehensive seaport security bill. The House of Representatives passed its own version in June of 2002. This legislation has been in conference for 4 months. Valuable time has been passing while an important part of our homeland economy, as well as our homeland security and the Nation's 360 seaports, have remained extremely vulnerable. I am pleased a final agreement has been reached and the bill is completed and it will soon go to the President for his signature. To quote the Florida Ports Council: Seaport security must be addressed in a comprehensive, intelligent, practical manner by the Federal Government--now, not in 2004 or 2006, or 2008. The security of our borders is a national responsibility. No matter how good our State processes and practices are-- without the Federal Government requiring realistic security plans and standards--the public domain will remain at risk. I am pleased we are doing that today and starting to fulfill our Federal responsibilities. We live not only in a democracy but also in a nation that allows its citizens and visitors the freedom to travel throughout our great country. The United States thrives on global trade and global travel. But support for democracy and freedom must go hand-in-hand with strong protection of our maritime borders. Fortunately, our seaports have not yet been attacked. Fortunately, as of today, one of those container cargoes, 16,000 of which arrive at America's seaports every day, has not been used as the means by which a weapon of mass destruction will be delivered within the United States. This means instead of looking at the security of America's seaports through the rearview mirror, as we have been doing since the events affecting airlines and airports as a result of September 11, 2001, we are looking at seaport security through the windshield, albeit a foggy windshield. We not only have a responsibility but an opportunity to take steps to avoid the head-on collision at America's seaports that has not yet occurred. Since September 11, there has been a lot of discussion about connecting the dots, what could have been pieced together, the things we should have seen before that tragic day. And, like 9/11, information about our seaports presents a disturbing array of dots. But from these, there is a clear pattern of vulnerability at our seaports and the cargo containers which they deliver. Many of these dots are available only in classified form, which are not disclosed for national security reasons. But there are many instances of security breaches at seaports that have been publicly disclosed--in open sources--that paint a stunning portrait of our maritime vulnerabilities. Weekly, I read newspaper accounts of stowaways and narcotics arriving in our country, and of security lapses at our ports. I have several articles I would like to bring to the attention of my colleagues, and I ask unanimous consent that they be printed in their entirety in the Record immediately following my remarks.

Mr. GRAHAM. On May 13, 2001, Fox News and the Associated Press reported that 25 Islamic extremists, hidden on commercial freighters as stowaways, illegally entered the United States. These individuals reportedly entered the United States through four seaports in Miami; Port Everglades, Fort Lauderdale; Savannah; and Long Beach. Where have these men gone and, more importantly, what are their intentions? The Washington Times, in a January 22, 2002, article entitled ``Seaports Seen as Terrorist Target,'' reported al-Qaida ``shipped arms and bomb-making materials via Osama bin Laden's covertly owned freighters.'' These explosives were later used to blow up the U.S. embassies in Kenya and Tanzania. What if these ships were making port calls at a port in the United States of America? Further, in a front page article dated February 26, 2002, USA Today reported that in October of 2001, a month after 9/11, port authorities in Italy opened a suspicious container and found an Egyptian-born Canadian person, equipped with a satellite phone, laptop, false credit cards, and security passes for airports in Egypt, Thailand, and Canada. What if this container and person made a successful, undetected entry into the United States? On June 16, 2002, the Washington Post reported that three men captured by CIA and Morrocan authorities told interrogators they escaped Afghanistan and came to Morocco on a mission to use bomb-laden speedboats for suicide attacks on U.S. and British warcrafts in the Strait of Gibraltar. On October 6, 2002, the French-flagged supertanker Limberg was attacked and holed by a small boat packed with explosives, possibly a remote-controlled boat, off the coast of Yemen. This attack is now widely believed to be the work of al-Qaida operatives. Yemen is, of course, the same location as the USS Cole bombing of 2 years earlier. On October 29, 2002, as seen on national television, a 50-foot coastal freighter with 234 Haitians and 2 Dominicans landed close to Miami, in Biscayne Bay, Florida. How did this boat manage to get so close to a major American city? This vessel was not detected by the Coast Guard until the last few hours of its voyage. Finally, less than 2 weeks ago, November 4, 2002, The Houston Chronicle reported 23 stowaways to Honduras who were captured at the port, 16 on the barge and 7 more who had tried to swim ashore. Mr. President, the current assessment from the U.S. intelligence community is that 19 of the 35 State Department-designated foreign terrorist organizations have access to maritime conveyances, or are directly associated with maritime terrorism. Since 1991, there have been 131 maritime attacks. This includes 19 ship hijackings, bombings, armed attacks, or kidnappings in the 4-year period between January 1996 and December of 2000. Clearly, both our seaports and maritime borders and their vulnerability to terrorists remain a primary U.S. security concern. In 1998, I asked former President Bill Clinton to establish a Federal commission to evaluate both the nature and extent of crime in our seaports. I have become aware of the extensive and expanding use of seaports for a variety of criminal activities. In response to this request, President Clinton established the Interagency Commission on Crime and Security in U.S. Seaports on April 27, 1999. The three distinguished cochairs of the commission were Raymond Kelly, then commissioner of the U.S. Customs Service, now head of the New York City police department; James Robinson, then assistant Attorney General; and Clyde Hart, then administrator of the Maritime Administration. In October of 2000, the commission issued its final report. This report outlined many of the common security problems that were unearthed at U.S. seaports. The commission made 20 findings and included recommendations to respond to these threats. Our seaport security bill addresses many of them directly. For example; the Commission reported a ``need for a more comprehensive and definitive statement of the specific federal responsibilities,'' including the ``lead agencies'' of Customs for international cargo and Coast Guard for seaport security. Our seaport security bill provides new authorities for both of these agencies. The Commission also noted that: Comprehensive interagency crime threat assessments * * * currently are not conducted at seaports and that the federal government should establish baseline vulnerability and threat assessments for terrorism at U.S. seaports. The seaport security bill requires the Coast Guard to survey all ports, prioritize them, and then conduct detailed port and vessel type vulnerability assessments. The Commission called for a ``comprehensive initiative to improve cargo import procedures,'' noting that ``vessel manifest information, import and export, is sometimes deficient'' and ``is more easily utilized * * * if it is received in electronic data formats before the arrival of the vessel.'' The seaport security bill requires vessel and cargo data to be submitted in advance and in a format to be prescribed by the Secretary of Transportation. The Commission was concerned that ``no minimum security standards or guidelines exist for seaports and their facilities.'' The seaport security bill would require security standards and provide federal grants for these improvements. These are but a few of the many vital provisions in this seaport security bill. On September 11, 2001, four commercial airliners were hijacked and turned into weapons of mass destruction, crashing into three symbols of American strength. The fourth airliner was destined for yet another symbol of American strength but for the courageous passengers and crew who intervened. We were not able to prevent these hijackings before they happened. After that tragic day, Congress quickly responded and introduced the Aviation Security Act on September 24. It was signed into law on November 19, 2001. This law requires safer cockpits, air marshals, Federal oversight of all the airport security operations, advanced anti-hijacking training for all flight crews, establishment of a security fee, and background checks for flight school students. On September 21, 2001, 10 days after the attack, Congress approved a relief package for the airline industry. This included $5 billion of immediate cash infusion for U.S. air carriers and $10 billion in loan guarantees. We responded because we had been hit. The challenge of this legislation is: Are we prepared to respond before we are assaulted? I believe we are beginning to answer that question in the affirmative with the adoption of this legislation. The threat to our seaports is urgent and real. When a cargo container arrives on our shores, it is quickly loaded into a truck or a train, leaving all Americans, not just those who are located close to a seaport, vulnerable to a security lapse which occurs at the seaport because the seaport is the last point at which that container can reasonably be checked and evaluated to determine if it represents a threat to the American people. While our bill is a step in the right direction, we must fully commit to our seaports as we have to our airports, which includes a steady stream of funding. As my colleagues may be aware, the primary reason this seaport security bill was in conference for 4 months was the inability of Members to reach agreement on how to fund these security measures. So what we are passing today is essentially an authorization bill. We are providing the basic architecture of the security, but the challenge to provide the plumbing and the electrical systems that will bring this architecture to life is yet to be faced. My preference was to pass a bill which would have contained that plumbing and electrical system in the form of user fees, as we have already done for airports and airlines, giving our ports an immediate influx of money to quickly address the security lapses that have been identified. Why is this so important? If we do not have a dedicated stream of user-generated revenue, our commitment to seaport security may be viewed as temporary and piecemeal.

Mr. GRAHAM. I ask the Senator from Arizona for a minute to close.

Mr. GRAHAM. As chairman of the Senate Select Committee on Intelligence, over the past 2 years, I have worked with the committee on a 5-year plan of enhancing technology and human skills within the intelligence community. It is our expectation that these investments will yield rich dividends in the intelligence community, to understand the terrorist threat to our Nation, better inform decisionmakers on policies that can defend against these threats, and take direct action against the terrorists. It should be no different at our Nation's seaports. Investing in security along our maritime borders is as vital as investing in our intelligence capabilities or our Nation's airports. But I am troubled by the prospects. The administration has shown no willingness to request any funding for our seaports. The administration's fiscal year 2002 and 2003 budgets contained no funding for seaport security. To date, all funding for enhancing security at our seaports has been as a result of congressional action on supplemental appropriation bills. Illustrative of this gap between congressional funding and the administration's funding is the fact that only $93 million was available from the Transportation Security Administration for over $700 million of seaport security grant requests. While this funding has aided some ports, comprehensive security improvements for all ports will cost significantly more. Based on a survey of just 52 large ports by the American Association of Port Authorities, the improvement costs totaled over $2.2 billion. In addition, the United States needs a consistent policy on how much of the additional security costs are the responsibility of the Government and how much by industry and its consumers. We need to fairly apply this policy across all parts of the industries and economy. Ultimately, it should be similar to our approach, and response to, the aviation industry. Undoubtedly, funding security improvements at our ports must be a major task and priority for the 108th Congress. Seaports are an important economic engine. They are the major gateway to America for cargo and consumer goods. Annually, the U.S. marine transportation system handles 2 billion tons of freight, 3 billion tons of oil, and 7 million cruise ship passengers. Over 800 ships make more than 22,000 port visits per year in the United States. One terrorist incident at a seaport could impact an entire coast or the entire economy of the United States. The financial impact of the closing of our seaports would be devastating. As reported last September in USA Today and numerous other publications, the closure of 29 seaports on the west coast due to labor issues reportedly cost $1 billion a day. I ask my colleagues, what would happen if we had to close all of our 361 seaports? Factories and plants would quickly be out of parts and be forced to shut down. Commodity hoarding would begin and prices would rise. The stock market would undoubtedly be shaken. Energy and oil prices would rocket upwards. On April 1, 2002, Business Week magazine observed that ``if a disruption at one of the country's 361 ports leads the U.S. Government to shut them down the way it grounded air traffic in September, it would bring some $2 billion a day in seaborne trade to a dead stop and instantly cripple the domestic economy.'' The issue of seaport security is not going away. Foreign trade accounts for over one-fourth of the total U.S. gross domestic product. According to the U.S. Coast Guard, by 2020, one-third of all container ships will be massive vessels termed ``mega-ships,'' oil imports will increase to two-thirds of our consumption, and liquefied natural gas imports will increase by nine-fold. The Customs Service estimates that by 2020 the volume of imported cargo will more than double. While we have passed this important bill, we now have a responsibility to finding funding for these need security improvements. I urge my colleagues to make the security of our ports a priority and to pass, and later fund, this legislation. We must not leave our maritime industry vulnerable to the potential use by a terrorist organization. The possibilities are horrific: The possibility of major loss of life, the possibility of major economic damage, or the possibility of the delivery of a weapon of mass destruction. We have take the first steps forward in aviation. Why would we leave our seaports and the maritime industry behind? The action that we take today is a beginning. For this beginning to realize its promise of substantially enhanced security at America's seaports, within the flood tide of cargo containers that arrive each day, further action is required. Working with the House of Representatives, it is my hope that, early in 2003, we will take the next step, providing a permanent and sufficient funding source for today's legislation. An appropriate place to start the discussion is using the model of airports and aviation security, where funding is provided by the industry and its customers and the general public. The President will recommend in his budget for 2004 what he considers the appropriate level for seaport security. I urge him to be more forthcoming than in the last two budget submissions. With the President's level of general revenue support, the Congress will be in a better position to determine what level of user fee will give Americans assurance of security at our Nation's seaports. We understand the threat and the horrible outcomes from terrorism so much better than 1 year ago. After the terrorist attacks, Congress took quick action to restructure our aviation security program, in order to better protect our country and prevent another attack. We need to strengthen our seaports, with the same intensity demonstrated at our airports. We must guard our maritime borders against obvious weaknesses and their potential use as a terrorist target. Our seaports are a vital national asset. I close by saying we have work to do, and the primary focus of that work is going to be to arrive at a sustainable, reliable funding source for these important security measures. We will have an early indication of what portion of this the President is going to recommend be paid through general tax revenue when we see his budget for the year 2004. This legislation also requires the President, within 6 months of enactment, to submit a funding proposal on a permanent basis to the Congress. It is my hope that funding proposal will use as its starting point what we have already done for the airline industry where we have made some decisions as to how much of the security costs should be borne by general taxpayers and how much should be borne by the users and the industry. It seems to me we should strive to have a parity and balance of allocation of financial responsibility across our transportation systems. If we are committed, as the action today indicates, to providing security for our seaports before they are attacked and will not await a 9/11 to arrive at a city in the United States through a cargo container with a weapon of mass destruction, which 48 hours earlier had come through a seaport, if we are committed to security without having to be awakened through an assault, then we should also be committed to recognize this is not going to be cheap and it is not going to be a temporary commitment. It will be expensive and it will be sustained and we should provide the revenue to meet those realities. Exhibit 1 [From USA Today, Feb. 26, 2002] Shipping Containers Could Hide Threat to U.S. (By Fred Bayles) Charleston, S.C.--The odd noises that came from the 40-foot shipping container at Gioia Tauro, Italy, harbor in October demonstrated the danger facing officials at ports around the world. When port authorities opened the suspect container, they found Amir, Farid Rizk, 43, an Egyptian-born Canadian equipped with satellite phone, laptop, false credit cards and security passes for airports in Egypt, Thailand and Canada. Officials charged Rizk with terrorism but later released him after his lawyers argued he was fleeing religious and legal persecution in Egypt and was not a terrorist. Rizk's choice of transportation highlighted a security problem that has troubled U.S. officials since well before Sept. 11. More than 6 million shipping containers arrive here at Wando Welch yards in Charleston and other U.S. ports annually. Only 2% are inspected. The rest remain sealed as they are shipped throughout the country. It would be easy, some fear, to take a container, stuff it with explosives, a chemical weapon or a nuclear device and inject it into the nation's economic bloodstream. Security experts had thought about the massive flow of unchecked containers before the attacks on New York and Washington. In the November 2000 issue of Foreign Affairs, Coast Guard Cmdr. Stephen Flynn, a security expert with the Council on Foreign Relations, offered this scenario. Suppose, he wrote, Osama bin Laden loaded a biological weapon into a container and shipped it through foreign ports to the USA. The container, unnoticed in the day-to-day bustle of trade, could then be put on a rail car at Long Beach destined for Newark, N.J. Somewhere along the 2,800-mile route, it is detonated. As bad as the destruction such an attack might cause, the chaos that would follow could devastate the nation's economy. The nation's shipping system could shut down, as airports did after Sept. 11. ``The economic damage would be incalculable,'' Flynn says. ``It would accomplish what a terrorist group wants to do, which is to disrupt this country's economic structure.'' So what can be done? Looking inside each of the 6 million containers from abroad would disrupt the flow of goods. Technological solutions, including x-ray machines, are costly, expensive and not infallible. The answer may lie in better surveillance at the container's point of origin. Instead of inspecting every container upon arrival, sophisticated computer and intelligence systems are being established to identify suspicious containers before they leave foreign ports. ``You want to do something that doesn't wait until the container is offloaded here,'' U.S. Customs Commissioner Robert Bonner says. ``The big idea is to think about how to push the border back.'' wando welch In South Carolina, the blur of movement at the port of Charleston's Wando Welch Terminal vividly shows the shipping business's need for speed. Massive cranes lift cargo containers off merchant ships arriving from around the world. The containers are stacked like giant Lego pieces across the 237-acre facility. The activity at this, the nation's third-busiest, container facility is a tribute to the efficiency of the ``intermodal'' transportation system, which makes possible the quick transfer of seaborne containers to railcars and trucks without unloading and reloading their contents. The system touches every facet of the economy. Each state receives goods from an average 15 different ports every day, according to the American Association of Port Authorities. That is why the industry balks at inspecting every container coming into the country. Several members of Congress, including Sen. Charles Schumer, D-N.Y., have proposed such steps. At the Wando yards, the time a Customs inspector needs to examine a single container illustrates the challenge. One container, singled out because its manifest listed a cargo of ``human aids,'' turns out to have been filled with bundles of used clothing bound from Italy to Bolivia. It took the inspector and a civilian crew most of the day to offload and inspect the bundles, then reload the container and send it back to the shipping yards. ``It would be very difficult to search every container without severely disrupting the flow of goods,'' Bonner says. A glimpse of that kind of disruption came in late 1999. The nation's Western rail system slowed dramatically as it adjusted to a merger of two railroads, a booming economy and other factors. The slowdown created havoc for weeks. Christmas items did not arrive to stores on time. Perishable goods rotted. Factories closed because needed parts were delayed. ``It was only temporary, but it created big headaches,'' says John Foertsch, the Southeast operations manager for OOCL (Orient Overseas Container Line), a major container shipper based in Hong Kong. ``It's hard to imagine the chaos that would come if delays like that became the routine.'' technology solutions Some look to technology as a solution. Last summer, Customs agents at busier ports began using drive-through mobile X-ray units that can scan containers as they are driven past a checkpoint, much like luggage through an airport screening station. Sitting in the cab of such a unit on the Charleston docks, Customs Inspector Eddie Basham peers at a computer screen displaying the shadowy interiors of passing containers. ``Tires,'' he says, pointing to a stack of spirals filling one container. On the next, he notices a dark, irregular shape and sends it to the side for inspection. Occasionally, the equipment hits immediate pay dirt. ``There's a few times I've seen people standing in the inside of a container,'' Basham says. Police took the illegal immigrants into custody. Other screening devices are being tested and deployed. In Norfolk, Va., Virginia International Terminals is installing radiation detectors on cranes, which will screen each container as it is offloaded. As of now, Customs agents use pager-sized radiation monitors that warn of excessive radiation as they walk by rows of containers. Some estimates put the cost of equipping all major ports with large scanners at $5 billion. better intelligence Some say the solution would be to inspect all U.S.-bound containers before they leave a foreign port. But the difficulty of doing that may be too great. ``No one can argue against vetting cargo before it is shipped, but you need the political will and resources to do it,'' says John Hyde, general manager for security with Maersk Sealand, one of the world's largest shipping companies. ``When you're talking about putting requirements on other sovereign nations, you can never be sure of what the reaction will be.'' Many in industry and government, argue that there is no need to check each of the thousands of containers that arrive daily. They note that only 1,000 < less than 1% < of the 450,000 shippers who send cargo to the USA, account for nearly 60% of all containers shipped to this country. A majority of containers come from well-known and trusted companies that make regular weekly runs to U.S. ports. ``It is impossible to inspect everything, but you don't need to inspect everything,''Bonner says. ``We are pretty good at being able to sort out what needs to be inspected.'' To that end, the Coast Guard has joined with Customs, the Immigration and Naturalization Service and several intelligence agencies to begin sorting out information about containers before they arrive. After Sept. 11, the Coast Guard initiated the Ship Arrival Notification System, the nation's first centralized database on the movement of cargo ships. Before this system, the Coast Guard captain in charge of security at each port only had to be notified of a shipment 24 hours before a cargo ship was due to arrive. Now that same information arrives 96 hours in advance at the Coast Guard's computer center in West Virginia. Information about the ship, its containers and crew is entered into a database that can be cross-referenced with immigration, FBI and Customs data. The database allows many agencies to track the movement of cargo around the world. Officials hope it will help zero in on unknown shipping companies or a sudden shift in business practices or cargoes that makes no sense. ``If a ship leaves Genoa, Italy with palm oil bound for a port that normally doesn't import palm oil, you might take a closer look,'' says Capt. Tony Regalbutto, the Coast Guard's director of port security. Flynn sees this as the first step to a system that will track individual containers as they are loaded overseas and sent to U.S. ports. ``People have compared this to a needle in a haystack problem,'' he says. ``But if you develop good intelligence about what is a threat and what isn't, you get the information down to a manageable number of targets. ''

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I am pleased to introduce the ``Health Insurance Fairness Act of 2002'' and I am very pleased to have Senator Fitzgerald join me as an original cosponsor. This legislation would prohibit the insurance practice of reunderwriting at renewal, thereby protecting the millions of Americans relying on individual health insurance policies. The need for this legislation was brought to my attention by an excellent April 9, 2002 article in the Wall Street Journal that documented the impact of reunderwriting on a married couple from Florida. Shaneen Wahl of Port Charlotte, FL was diagnosed with breast cancer in 1996. At that time, she and her husband Tom were paying $417 a month for health insurance. In addition to coping with cancer, the Wahls began to face rapidly increasing premiums, and by August 2000 their insurer informed them that their new rate would be $1,881 a month. This premium increase wasn't due to non-payment of premiums or any other action of the Wahls. It was the result of reunderwriting conducted by the Wahl's insurance company. Reunderwriting at renewal is a practice that forces people who have become ill to pay substantial premium increases or lose their health insurance. While most insurers evaluate an individual's medical history only at the outset, some have adopted the practice of reviewing customers' health status annually. The purpose of this review is to determine if the individual has developed a medical condition or has filed claims; if such a determination is made, the company raises the individual's premium. This practice contributes enormously to the instability of health insurance by making it difficult, it not impossible, for people who have paid insurance premiums for years to continue that health insurance at the very time they need it the most. How does it work? Carriers reunderwriting at renewal charge substantially higher renewal premiums to policyholders who have been diagnosed with an illness or had medical claims than they charge other policyholders. The carriers do this by transferring a policyholder to a higher risk class than the policyholder was in when the policy was issued or in some cases by manually adjusting the policyholder's rate based on his or her medical claims. In either case, the individual's premium is based on his or her claims or health status during the policy year. For example, in another case from Florida, Bruce and Wanda Chambers of St. Augustine saw their rates increase from $300 per month to $780 per month in just one year after Wanda was diagnosed with diabetes. Consumers purchase insurance so that they will have access to health care should they become ill, as in the example of Wanda Chambers. If carriers are allowed to increase premium rates based on health status at renewal, consumers face a choice between the very two outcomes they had planned to avoid by purchasing insurance in the first place: they can drop the insurance policy and thus likely forgo access to health care in times of illness, or they can pay the grossly inflated premiums and thus face financial ruin. The practice of reunderwriting at renewal violates the spirit of health insurance guaranteed renewability requirements under state and federal law. In the 1990's, the National Association of Insurance Commissioners, NAIC, developed model laws to prohibit insurance companies from canceling policies once an individual became sick. In 1997, the Health Insurance Portability and Accountability Act, HIPAA, applied this requirement to all health insurance policies subject to HIPAA. As a result, carriers can no longer cancel individuals because of their medical claims. Reunderwriting is a way to circumvent these requirements, and has been justified as a means of holding down premiums, for the healthy. However, a July 17, 2002 memo to all NAIC Members from Steven B. Larsen, Chair of the Health Insurance & Managed Care (B) Committee clarifies that the practice of reunderwriting is illegal under NAIC Model Laws: The committee also noted that the practice is contrary to adopted NAIC policy, and is illegal under NAIC Model Laws governing the individual market. The Small Employer and Individual Health Insurance Availability Model Act (Model #35) provides for adjusted community rating, and health status is not one of the factors that can be used to set rates. The Individual Health Insurance Portability Model Act (Model #37) provides for the use of rating characteristics, and health status is not one of the listed characteristics. More specifically that model also provides that changes in health status after issue, and durational rating, are not to be used in setting premiums for individual policies. Insurance companies should not be allowed to manage health-care costs by targeting individuals for premium increases because an individual was diagnosed with an illness or has had medical claims. Doubling or tripling premiums for only the individuals who have been diagnosed with an illness forces those individuals to drop their policies and is functionally the same as not renewing coverage. Not only is reunderwriting bad for consumers, but it creates a competitive disadvantage to the many reputable insurance companies that agree that this practice is contrary to the public interest and undermines the theory behind insurance. Faced with the practice being used by some companies, the Wall Street Journal has reported that other carriers are ``closely watching'' this practice intending to adopt a similar practice either to avoid a competitive disadvantage or to improve their bottom line. While selective targeting improves the profitability of the reunderwriter, it shifts the responsibility for higher risk people to other insurers or employers or local and state government health programs. The legislation we are introducing today would make health insurance more secure. The legislation would clarify that guaranteed renewal of health insurance means that insurers cannot target individuals for premium increases because the have had claims or a new disease diagnosis. The bill would ensure that individuals will not be priced out of the market for health insurance at the very time that they need it most. The goals of this legislation are simple: 1. To strengthen HIPAA's promise of guaranteed renewable coverage and make private health insurance more secure for millions of Americans, and 2. to hold all insurers accountable to a level playing field of reasonable standards so they can compete fairly without dumping customers when they get sick. The ``Health Insurance Fairness Act'' will help the many millions of people who rely on the individual health insurance market: those that are self-employed, those employed by small businesses unable to get group coverage, early retirees who rely disproportionately on individual health insurance if their COBRA runs out before Medicare begins, and others whose employers don't provide health benefits. I urge my colleagues to cosponsor the ``Health Insurance Fairness Act'' and I thank the Chair.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I am pleased to introduce the ``Health Insurance Fairness Act of 2002'' and I am very pleased to have Senator Fitzgerald join me as an original cosponsor. This legislation would prohibit the insurance practice of reunderwriting at renewal, thereby protecting the millions of Americans relying on individual health insurance policies. The need for this legislation was brought to my attention by an excellent April 9, 2002 article in the Wall Street Journal that documented the impact of reunderwriting on a married couple from Florida. Shaneen Wahl of Port Charlotte, FL was diagnosed with breast cancer in 1996. At that time, she and her husband Tom were paying $417 a month for health insurance. In addition to coping with cancer, the Wahls began to face rapidly increasing premiums, and by August 2000 their insurer informed them that their new rate would be $1,881 a month. This premium increase wasn't due to non-payment of premiums or any other action of the Wahls. It was the result of reunderwriting conducted by the Wahl's insurance company. Reunderwriting at renewal is a practice that forces people who have become ill to pay substantial premium increases or lose their health insurance. While most insurers evaluate an individual's medical history only at the outset, some have adopted the practice of reviewing customers' health status annually. The purpose of this review is to determine if the individual has developed a medical condition or has filed claims; if such a determination is made, the company raises the individual's premium. This practice contributes enormously to the instability of health insurance by making it difficult, it not impossible, for people who have paid insurance premiums for years to continue that health insurance at the very time they need it the most. How does it work? Carriers reunderwriting at renewal charge substantially higher renewal premiums to policyholders who have been diagnosed with an illness or had medical claims than they charge other policyholders. The carriers do this by transferring a policyholder to a higher risk class than the policyholder was in when the policy was issued or in some cases by manually adjusting the policyholder's rate based on his or her medical claims. In either case, the individual's premium is based on his or her claims or health status during the policy year. For example, in another case from Florida, Bruce and Wanda Chambers of St. Augustine saw their rates increase from $300 per month to $780 per month in just one year after Wanda was diagnosed with diabetes. Consumers purchase insurance so that they will have access to health care should they become ill, as in the example of Wanda Chambers. If carriers are allowed to increase premium rates based on health status at renewal, consumers face a choice between the very two outcomes they had planned to avoid by purchasing insurance in the first place: they can drop the insurance policy and thus likely forgo access to health care in times of illness, or they can pay the grossly inflated premiums and thus face financial ruin. The practice of reunderwriting at renewal violates the spirit of health insurance guaranteed renewability requirements under state and federal law. In the 1990's, the National Association of Insurance Commissioners, NAIC, developed model laws to prohibit insurance companies from canceling policies once an individual became sick. In 1997, the Health Insurance Portability and Accountability Act, HIPAA, applied this requirement to all health insurance policies subject to HIPAA. As a result, carriers can no longer cancel individuals because of their medical claims. Reunderwriting is a way to circumvent these requirements, and has been justified as a means of holding down premiums, for the healthy. However, a July 17, 2002 memo to all NAIC Members from Steven B. Larsen, Chair of the Health Insurance & Managed Care (B) Committee clarifies that the practice of reunderwriting is illegal under NAIC Model Laws: The committee also noted that the practice is contrary to adopted NAIC policy, and is illegal under NAIC Model Laws governing the individual market. The Small Employer and Individual Health Insurance Availability Model Act (Model #35) provides for adjusted community rating, and health status is not one of the factors that can be used to set rates. The Individual Health Insurance Portability Model Act (Model #37) provides for the use of rating characteristics, and health status is not one of the listed characteristics. More specifically that model also provides that changes in health status after issue, and durational rating, are not to be used in setting premiums for individual policies. Insurance companies should not be allowed to manage health-care costs by targeting individuals for premium increases because an individual was diagnosed with an illness or has had medical claims. Doubling or tripling premiums for only the individuals who have been diagnosed with an illness forces those individuals to drop their policies and is functionally the same as not renewing coverage. Not only is reunderwriting bad for consumers, but it creates a competitive disadvantage to the many reputable insurance companies that agree that this practice is contrary to the public interest and undermines the theory behind insurance. Faced with the practice being used by some companies, the Wall Street Journal has reported that other carriers are ``closely watching'' this practice intending to adopt a similar practice either to avoid a competitive disadvantage or to improve their bottom line. While selective targeting improves the profitability of the reunderwriter, it shifts the responsibility for higher risk people to other insurers or employers or local and state government health programs. The legislation we are introducing today would make health insurance more secure. The legislation would clarify that guaranteed renewal of health insurance means that insurers cannot target individuals for premium increases because the have had claims or a new disease diagnosis. The bill would ensure that individuals will not be priced out of the market for health insurance at the very time that they need it most. The goals of this legislation are simple: 1. To strengthen HIPAA's promise of guaranteed renewable coverage and make private health insurance more secure for millions of Americans, and 2. to hold all insurers accountable to a level playing field of reasonable standards so they can compete fairly without dumping customers when they get sick. The ``Health Insurance Fairness Act'' will help the many millions of people who rely on the individual health insurance market: those that are self-employed, those employed by small businesses unable to get group coverage, early retirees who rely disproportionately on individual health insurance if their COBRA runs out before Medicare begins, and others whose employers don't provide health benefits. I urge my colleagues to cosponsor the ``Health Insurance Fairness Act'' and I thank the Chair.

Mr. GRAHAM

Mr. GRAHAM. Thank you, Madam President. Madam President, I rise this evening to speak to my colleagues, more importantly to speak to the people of the United States and, especially, my fellow Floridians. In my service in the Senate I have not shied away from authorizing the use of force when I believed it was in our Nation's interests. I voted to use force in the Persian Gulf in 1991. I voted to use force in Bosnia in 1992. I voted to use force in Kosovo in 1999. I have given the President of the United States a presumption of correctness in his assessment of our national security interest. But, Madam President, tonight I am going to vote no on this resolution. The reason is this resolution is too timid. It is too limiting. It is too weak. This resolution fails to recognize the new reality of the era of terrorism. And that reality is that war abroad will, without assertive security actions, increase the prospects of terrorist attacks here at home. In fact, war on Iraq alone leaves Americans more vulnerable to the No. 1 threat facing us today, those international terrorist organizations that have the capability to inflict upon us a repeat of the tragedy of September 11. The resolution I had hoped we would pass would contain what the President has asked for relative to the use of force against Saddam Hussein's regime in Iraq, and more. It also should provide the President all necessary authorities to use force against the international terrorist groups that will probably strike the United States as the regime of Saddam Hussein crumbles. I offered an amendment on this floor yesterday that would have given the President the authorities he needs to deal with the threat posed by the five deadliest terrorist organizations in addition to al-Qaida-- that would gladly join Saddam Hussein in his retaliatory strike. Those five organizations have already killed hundreds of Americans. Those five organizations have ties to countries that could provide them with weapons of mass destruction. Those five organizations have the capability to strike within our homeland. They have recruited, trained, and placed operatives in our hometowns. I argued that the President should have the option to set priorities and choose our targets, and to be able to preempt terrorists before they can order strikes against us in our homeland. Unfortunately, that amendment was rejected. Some said I was incorrect in my contention that the President, as Commander in Chief, lacks the power to expand the war on terrorism beyond al-Qaida. I disagree. But I will not repeat the legal arguments that I made yesterday. But even accepting the fact that others may disagree, how is it in the interest of our Nation's security to leave the question in doubt as to whether the President has the authority to attack these international terrorist organizations that represent such a lethal threat to the people of the United States? There have been some past administrations which have allowed leaders of rogue states to be uncertain as to how America would respond if they used weapons of mass destruction. This administration should not repeat that fundamental error. If we want to deter the world's terrorists and madmen, shouldn't we tell them, in the most explicit terms, what they will face by U.S. retaliation to their action? I also want to restate my conviction that this resolution forces the President to focus our military and intelligence resources on the wrong target. A historical example, which has been used repeatedly in this debate, is the example of the 1930s: that England, France, and other nations, which would eventually join in the world's greatest alliance, slept while Hitler's power grew. They say the equivalent of passing this resolution is to have declared war on Hitler. I disagree with that assessment of what this lesson of history means. In my judgment, passing this resolution tonight will be the equivalent of declaring war on Italy. That is not what we should be doing. We should not be declaring war just on Mussolini's Italy. We should also be declaring war on Hitler's Germany. There are good reasons to consider attacking today's Italy, by which I mean Iraq. Saddam Hussein's regime has chemical and biological weapons and is trying to get nuclear capacity. But the briefings I have received suggest our efforts, for instance, to block him from obtaining necessary nuclear materials have been largely successful, as evidenced by the recent intercept of centrifuge tubes, and that he is years away from having nuclear capability. So why does it make sense to attack this era's Italy and not Germany, especially when by attacking Italy, we are making Germany a more probable adversary? The CIA has warned us that international terrorist organizations will probably use United States action against Iraq as a justification for striking us here in the homeland. You might ask: What does the word ``probably'' mean in intelligence speak. ``Probably'' means there is a 75 percent or greater chance of the event occurring. And the event is that international terrorist organizations will use United States action against Iraq as a justification for striking us here in the homeland. Let me read a declassified portion of a CIA report recently presented to the Senate Select Committee on Intelligence: Baghdad for now appears to be drawing a line short of conducting terrorist attacks with conventional or [chemical and biological weapons] against the United States. Should Saddam conclude that a U.S.-led attack could no longer be deterred, he probably would become much less constrained in adopting terrorist actions. Such terrorism might involve conventional means . . . or [chemical and biological weapons]. Saddam might decide that the extreme step of assisting Islamic terrorists in conducting a [weapon of mass destruction] attack against the United States would be his last chance to exact vengeance by taking a large number of victims with him. In other words, the odds of another strike against the people of the United States by al-Qaida or one of the international terrorist groups goes up when we attack Baghdad. The President should be in the most advantageous position to protect Americans, to launch preemptive strikes and hack off the heads of these snakes. With the resolution before us, we are denying the President that opportunity, and we are sending confusing signals to our people and our allies as to the sincerity of our commitment to the war on terrorism. The American people and our allies gave President Bush their wholehearted support in the war on terrorism after September 11. They cheered our efforts to remove Osama bin Laden and the Taliban government from Afghanistan. A year after we commenced that war, action in Afghanistan has ground to a virtual halt. Osama bin Laden remains at large, and we have not moved aggressively beyond Afghanistan to take on the cells of al-Qaida operatives in other parts of the world. We also know of sanctuaries, training camps where the next generation of terrorists are being trained and that those sanctuaries are going unattacked. With sadness, I predict we will live to regret on this day, October 10, 2002, we stood by, and we allowed those terrorist organizations to continue growing in the shadows. It may be days, weeks, months, or years before they strike Americans again, but they will, and we will have allowed them to grow that capability. If we are going to pass this resolution--and I expect we will--there are several things we should say about the need to protect the American people. Within the region of the Middle East and central Asia, we have a constellation of challenges, threats, and commitments of the United States. We need to use this period of time to begin to reduce the threat environment in that area by active, sustained U.S. diplomacy on two half-century-old disputes: The dispute between Israel and Palestine, and the dispute over Kashmir, the festering sore between two nuclear powers, India and Pakistan. Second, the President a year ago should have ordered all of the law enforcement agencies under his control to design a comprehensive means of determining the number, location, and capability of terrorists who are living among us. But tonight, no one in our government can fully tell us which, when, where, and how terrorist organizations might hurt us. This I consider to be a stunning admission and an unnecessary vulnerability. At this late hour, such action should be of the most urgent priority. This should be done, of course, within the confines of the protections afforded to all American persons by the Constitution of the United States. Third, we should be moving to detain all those who can be legally detained who represent a threat to the United States. Fourth, the President should direct the military forces of our country to prepare to execute a full-fledged war on terrorism. We must complete our mission in Afghanistan and then move to the next targets of al-Qaida cells. Finally, I would advise the President to request of the Congress the authorities he needs to execute the war on terror and to protect Americans. Specifically, this should include the authority to use force against those international terrorist organizations with the greatest capability to kill Americans here at home, with the greatest history of having used their evil intent against Americans, and with the largest number of terrorist operatives located within the United States. Our people need to know their government is doing all it can to keep them safe. Tonight many Americans are anxious and frightened, and they have cause to be. One year ago letters carrying anthrax killed five Americans, including one in my home State, and created great concern. That case has not yet been solved. One year later, here in the Capital region, a sniper is randomly taking lives of innocent people going about their daily activities. Just hours ago, police confirmed the man who was shot last night while pumping gas into his car at a service station is the eighth victim, six of whom are dead. And in today's Washington Post, a front page article has the headline ``Probe Less Cohesive Than Advertised.'' It states: Behind the scenes at the command central, however, interviews with leading investigators suggest that while some aspects of the massive effort are working well, others are fraught with the same turf battles, politics, leaks and confusion that historically have characterized manhunts of this size. Are these acts that we are trying to unravel those of a madman, a mad scientist, a terrorist? The honest answer is that we do not know. In these frightening times, it is irresponsible to add to the anxiety of the American people by going to war with Iraq--without taking the additional steps required to curtail the possibility of more horrors being inflicted upon us here in our homeland. This resolution fails to take those steps. Different people have different opinions of what our national security priorities should be. Clearly, some--including the President-- believe the first priority should be regime change in Baghdad. Others believe our first priority should be to disarm Iraq by removing its weapons of mass destruction. As important as they may be, I have a different view. The United States has many challenges, threats, and commitments to respond to, particularly in the region of the Middle East and central Asia. These include the Israel-Palestine conflict, the India-Pakistan standoff, and the threats posed by weapons of mass destruction. Even if we say the No. 1 issue in the region should be containing weapons of mass destruction--especially nuclear weapons--I frankly do not believe Iraq should be our first concern. We do not know the full capabilities of the State of Israel, although we believe it has the full capacity to defend itself against attacks, or the threat of an attack. We are aware of the significant capacity possessed by India, Pakistan, and Iran. I can say without fear of contradiction that all of these possess substantially greater capabilities and means of delivering nuclear or other weapons of mass destruction than Iraq. Of all the issues we care about, and those issues over which we have some capability to determine the outcome, in my judgment, the No. 1 priority should be the war on terrorism and its threat to the people of the United States in our homeland. Our top targets should be those groups that have the greatest potential to repeat what happened on September 11, killing thousands of Americans. Passing this timid resolution, I fear, will only increase the chances of Americans again being killed. That is not a burden of probability I am prepared to accept. Therefore, I will vote no. I close with the words spoken in one of the darkest periods of the history of the Western World. In 1941, Winston Churchill said: Never, never, never believe any war will be smooth and easy, or that anyone who embarks on the strange voyage can measure the tides and hurricanes he will encounter. The statesman who yields to war fever must realize that once the signal is given, he is no longer the master of policy, but the slave of unforeseeable and uncontrollable events.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today with my friend and colleague from Texas, Mr. Gramm, to introduce the Medicare Competition Acquisition Act of 2002. Today, we are faced with the reality that the Medicare program must be reformed for the 21st Century. In the 37 years since Medicare was created, several medical advances have been achieved. It is time to reap the full benefits of those advances and shift the focus of the Medicare program to one that promotes wellness. For that, a prescription drug benefit is mandatory. It is the single most important reform we can make to Medicare. However, the absence of a prescription drug benefit for America's seniors is not the only archaic aspect of the Medicare program. Congress has required Medicare to use an arbitrary method of payment for certain items and services, which costs the program and its beneficiaries much more than it should. We think America's seniors deserve better. They deserve to pay fair market price for high-quality medical products instead of being subject to an outdated fee schedule that often reflects unreasonably high markups above actual cost. The Medicare Competitive Acquisition Act applies high-quality standards and fiscal discipline to the Medicare program. Under this bill, Medicare will be able to use the same competitive tools the private sector has in place to control costs, while maintaining beneficiary access to quality medical supplies and services. This proposal was included in President Bush's fiscal year 2003 budget, and the Clinton Administration long advocated this fiscally responsible, high quality approach to improve Medicare. Several studies by the United States General Accounting Office (GAO) and the Department of Health and Human Services, HHS, Inspector General indicate that the Medicare program and Medicare beneficiaries have been paying far too much for some medical equipment and supplies. Take pre- fabricated orthotics, for example. The most recent GAO data available indicates that the Medicare allowance for a pre-fabricated, self- adjusting hand/wrist brace is more than 140% higher than its average retail price. For an intermittent urinary catheter, the difference between the Medicare allowance and the average retail price is 93 percent. The Congressional Budget Office estimates that our bill will save Medicare $1.8 billion over 5 years and $6.9 billion over 10 years. This means savings for beneficiaries of $450 million over 5 years and $1.72 billion over 10 years. I was pleased that the Balanced Budget Act of 1997 included a modified version of my competitive bidding proposal. It gave HHS the authority to conduct competitive bidding demonstrations for Medicare Part B items and services other than physician services. The Medicare Competitive Acquisition Act builds upon successful demonstration projects in Polk County, Florida and San Antonio, Texas by allowing the HHS Secretary to establish a competitive bidding system for durable medical equipment and supplies in appropriate parts of the country. I want to thank my colleague from the great State of Georgia, Mr. Cleland, for his leadership on this issue. The Senator not only helped us develop significant beneficiary protections, he worked to ensure flexibility for rural areas. Senator Cleland was also instrumental in our request for a GAO study on the introduction of new and innovative medical equipment and supplies to the Medicare market. The Medicare Competitive Acquisition Act allows the Centers for Medicare and Medicaid Services, CMS, to award contracts to multiple suppliers in each region in order to enhance beneficiary freedom of choice and promote quality among competitors. The number of suppliers selected will be based on product demand, the number of suppliers selected will be based on product demand, the number of suppliers who bid and the service capacity of bidding suppliers. This ensures that the number of suppliers selected will be more than sufficient to supply a given area and that beneficiaries will have access to the products and services they need. CMS will have the authority to replace any winning supplier whose product or service quality deteriorates after the contract is awarded. Small businesses are vital to the success of competitive bidding. In both rounds of the Polk County demonstration, small businesses received 12 of the 16 willing contracts. In the San Antonio demonstration, they received 40 of the 51 winning contracts. To ensure a level playing field in the future, we continue small business protections implemented under the demonstration by CMS. For example, we give suppliers the option to bid for a portion of an expansion area as opposed to having to bid for an entire expansion area. We also allow suppliers to bid for only one or a few product categories in a competitive acquisition area as opposed to having to bid for all of the product categories in a particular area. The introduction of competitive bidding into the Medicare program will not only ensure beneficiary access to high-quality medical equipment and supplies, it will also reduce fraud and abuse. Suppliers who are under sanctions for fraud and abuse will be ineligible to participate in the bidding process. On-site reviews will be conducted prior to awarding contracts, ensuring that the suppliers are valid and operating businesses. Contrary to what the nay-sayers will tell you, competitive bidding for durable medical equipment and suppliers has nothing to do with cutting services to beneficiaries or lowering quality standards. It has everything to do with improving access to high-quality medical equipment for America's seniors in a cost-effective manner. As we search for ways to secure Medicare for the long term, we must take prudent steps to improve the efficiency of the program. Implementation of competitive bidding for certain Part B items and services is one way in which Congress can show that we are serious about preserving the integrity of Medicare. I urge the Senate to support this measure.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, I rise today with my friend and colleague from Texas, Mr. Gramm, to introduce the Medicare Competition Acquisition Act of 2002. Today, we are faced with the reality that the Medicare program must be reformed for the 21st Century. In the 37 years since Medicare was created, several medical advances have been achieved. It is time to reap the full benefits of those advances and shift the focus of the Medicare program to one that promotes wellness. For that, a prescription drug benefit is mandatory. It is the single most important reform we can make to Medicare. However, the absence of a prescription drug benefit for America's seniors is not the only archaic aspect of the Medicare program. Congress has required Medicare to use an arbitrary method of payment for certain items and services, which costs the program and its beneficiaries much more than it should. We think America's seniors deserve better. They deserve to pay fair market price for high-quality medical products instead of being subject to an outdated fee schedule that often reflects unreasonably high markups above actual cost. The Medicare Competitive Acquisition Act applies high-quality standards and fiscal discipline to the Medicare program. Under this bill, Medicare will be able to use the same competitive tools the private sector has in place to control costs, while maintaining beneficiary access to quality medical supplies and services. This proposal was included in President Bush's fiscal year 2003 budget, and the Clinton Administration long advocated this fiscally responsible, high quality approach to improve Medicare. Several studies by the United States General Accounting Office (GAO) and the Department of Health and Human Services, HHS, Inspector General indicate that the Medicare program and Medicare beneficiaries have been paying far too much for some medical equipment and supplies. Take pre- fabricated orthotics, for example. The most recent GAO data available indicates that the Medicare allowance for a pre-fabricated, self- adjusting hand/wrist brace is more than 140% higher than its average retail price. For an intermittent urinary catheter, the difference between the Medicare allowance and the average retail price is 93 percent. The Congressional Budget Office estimates that our bill will save Medicare $1.8 billion over 5 years and $6.9 billion over 10 years. This means savings for beneficiaries of $450 million over 5 years and $1.72 billion over 10 years. I was pleased that the Balanced Budget Act of 1997 included a modified version of my competitive bidding proposal. It gave HHS the authority to conduct competitive bidding demonstrations for Medicare Part B items and services other than physician services. The Medicare Competitive Acquisition Act builds upon successful demonstration projects in Polk County, Florida and San Antonio, Texas by allowing the HHS Secretary to establish a competitive bidding system for durable medical equipment and supplies in appropriate parts of the country. I want to thank my colleague from the great State of Georgia, Mr. Cleland, for his leadership on this issue. The Senator not only helped us develop significant beneficiary protections, he worked to ensure flexibility for rural areas. Senator Cleland was also instrumental in our request for a GAO study on the introduction of new and innovative medical equipment and supplies to the Medicare market. The Medicare Competitive Acquisition Act allows the Centers for Medicare and Medicaid Services, CMS, to award contracts to multiple suppliers in each region in order to enhance beneficiary freedom of choice and promote quality among competitors. The number of suppliers selected will be based on product demand, the number of suppliers selected will be based on product demand, the number of suppliers who bid and the service capacity of bidding suppliers. This ensures that the number of suppliers selected will be more than sufficient to supply a given area and that beneficiaries will have access to the products and services they need. CMS will have the authority to replace any winning supplier whose product or service quality deteriorates after the contract is awarded. Small businesses are vital to the success of competitive bidding. In both rounds of the Polk County demonstration, small businesses received 12 of the 16 willing contracts. In the San Antonio demonstration, they received 40 of the 51 winning contracts. To ensure a level playing field in the future, we continue small business protections implemented under the demonstration by CMS. For example, we give suppliers the option to bid for a portion of an expansion area as opposed to having to bid for an entire expansion area. We also allow suppliers to bid for only one or a few product categories in a competitive acquisition area as opposed to having to bid for all of the product categories in a particular area. The introduction of competitive bidding into the Medicare program will not only ensure beneficiary access to high-quality medical equipment and supplies, it will also reduce fraud and abuse. Suppliers who are under sanctions for fraud and abuse will be ineligible to participate in the bidding process. On-site reviews will be conducted prior to awarding contracts, ensuring that the suppliers are valid and operating businesses. Contrary to what the nay-sayers will tell you, competitive bidding for durable medical equipment and suppliers has nothing to do with cutting services to beneficiaries or lowering quality standards. It has everything to do with improving access to high-quality medical equipment for America's seniors in a cost-effective manner. As we search for ways to secure Medicare for the long term, we must take prudent steps to improve the efficiency of the program. Implementation of competitive bidding for certain Part B items and services is one way in which Congress can show that we are serious about preserving the integrity of Medicare. I urge the Senate to support this measure.

Mr. GRAHAM

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

Mr. GRAHAM. Madam President, I rise in support of an amendment which I have offered which will increase the authority of the President of the United States to use force to protect the people of the United States. This amendment will designate a set of international terrorist organizations for whom the President does not now have the authority to use force as within the range of his authority. There has been a lot of discussion over the past several months about connecting the dots, seeing a pattern out of what might appear to be isolated independent events. It is always easier to do that after the disaster, after September 11, than it is before. I consider us today as standing before the event has occurred, and I think we can begin to see the pattern of the dots today. What are those dots? What is that pattern? First, a new element has been added to our assessment of national security risk. That is the element of what is the risk to Americans in the homeland. When we went to war in Korea, we did not ask the question: What will this mean to our people at home? We did not ask that question in Vietnam. We did not ask that question when we voted together to authorize the President to use force in the Persian Gulf. This is a new phenomenon in the paradigm of American and national security consideration. The second dot is, who poses the greatest risk inside the homeland? In my judgment, it is those nations, organizations, and persons who possess three primary characteristics: One, access to weapons of mass destruction; two, a hatred for the United States; and three, a significant presence of trained operatives within the United States. It is that triumvirate which makes our enemy lethal. The third dot, that we have the opportunity to reduce the risk of that triumvirate. We can do it by rolling up the terrorists here at home, or we can do it by cutting off the support which the terrorists are receiving from abroad. I suggest we ought to be doing both. If we are going to effectively attack over there, it requires we have the resources, a strategy, and the authorization to use the force against our enemy over there. The next dot is a surprising dot. It is essentially a void. Unlike many Members of this Chamber--and I will cite one who just a few moments ago gave a speech in which he implied the President of the United States today has the authority to take on international terrorists who meet these requirements: Access to weapons of mass destruction, hatred of the United States, and a significant presence inside the United States of America. The answer is, no, the President today does not have such authority. In my judgment, the Congress should grant this authority and do so concurrent with the granting to the President his power to use force in Iraq, because it is that act of giving the authority to commence war in Iraq that is going to raise the risk of those terrorists among us attacking. Those are the dots I see. That is the sequence I think the dots lead us to. There is one thing we agree upon, and that is that Saddam Hussein is an evil man. He is a tyrant. He has used chemical and biological weapons on his own people. He has disregarded United Nations resolutions calling for inspections of his capabilities and research and development programs. His forces regularly fire on American and British jet pilots enforcing the no-fly zones in the north and south of his country. And he has the potential to develop and deploy nuclear weapons, a potential that we need to monitor closely. Saddam Hussein lives in a tough neighborhood. It is a neighborhood in which the United States has a number of commitments and threats. The underlying resolution suggests Saddam Hussein is the ultimate bully, the baddest dog in this rough neighborhood, and that taking him out now and for good is in the Nation's highest priority. I respectfully disagree. And in so disagreeing, I am, or at least I was, joined by the President of the United States and the Secretary of Defense. Less than 13 months ago, 9 days after the terrorist attack of September 11, the President declared our top national priority to be a war on terrorism. This is what he said: Our war on terror begins with al-Qaida but it does not end there. It will not end until every terrorist group of global reach has been found, stopped and defeated. In his State of the Union speech on January 29 of this year, President Bush restated our priority: Our nation will continue to be steadfast and patient and persistent in the pursuit of two great objectives. First, we will shut down terrorist camps, disrupt terrorist plans, and bring terrorists to justice. And, second, we must prevent the terrorists and regimes who seek chemical, biological or nuclear weapons from threatening the United States and the world. That is what the President said on January 29. Just Monday of this week, on the anniversary of the commencement of the war in Afghanistan, Secretary of Defense Donald Rumsfeld recommitted himself to the war on terrorism. The Secretary repeated the statement he had made one year earlier: Our objective is to defeat those who use terrorism and those who house or support terrorists. The campaign will be broad, sustained, and we will use every element of American power. The Secretary of Defense proceeded to say: Today, Afghanistan is no longer a safe haven for terrorists, but there is no question that free nations are still under threat. Thousands of terrorists remain at large in dozens of countries. They're seeking weapons of mass destruction that would allow them to kill not only thousands but tens of thousands of innocent people. Our objective in the global war on terror is to prevent another September 11th, or an attack that is far worse, before it happens. The war on terrorism did not begin in Afghanistan. For us, it began in the United States of America on September 11th, 2001. It began and it continues in our homeland. As we assess the many challenges faced by the United States--and Saddam Hussein is clearly among those challenges--we must ask: What is our greatest responsibility? In my opinion, the answer is easy: Securing the peace and safety of the homeland or our great Nation. And what is the most urgent threat to our peace and security? In my judgment, it is that shadowy group of international terrorists who have the capabilities, the materials, conventional and weapons of mass destruction, the trained core of zealots united by their hatred for the United States, and the placement of many of those bombthrowers so they are sleeping among us, waiting for the order to assault. For the better part of 2 years, 19 of those killers took silent refuge in the sanctuary of the United States, silent refuge until they struck us on September 11. Three thousand twenty-five innocent lives later, we have learned the bitter lesson of the power of those who live dual lives in our communities. To the outside they were appearing to be unexceptional, while they were prepared to do the most unimaginable evil. Those who committed mass murder left behind a much larger number of terrorists, continuing their dual existence of duplicity. How many of these are there, Mr. President? What are the skills they possess? What are their plans and intentions? Why are they so driven by hatred? The answer is we know only dimly. Unfortunately, our ability to tear out these weeds from our home garden is limited because the attention we have paid to understanding this enemy next door has been grossly inadequate. The Inspector General at the Department of Justice issued a report just last month, in September. That report concluded: The Federal Bureau of Investigation serves as the Federal Government's principal agency for responding to and investigating terrorism. But the IG report went on: The FBI has never performed a comprehensive, written assessment of the risk of a terrorist threat facing the United States. So we arm for battle with a shield of ignorance at home. Unfortunately, one of the realities of the startup of the proposed Department of Homeland Security is that, for at least a transition period, Americans will be even more vulnerable in the homeland. Agencies such as the Coast Guard, Border Patrol, Immigration Service, which will play a key role in protecting our perimeter defenses, will be distracted as organizational relationships of decades or more are reshuffled. And a final increased vulnerability is the likelihood that, if war starts and intensifies in Iraq, this very conflict thousands of miles away could spark a wake-up call to action from the sanctuaries of the Middle East and Central Asia to the sleepers in your hometown. Mr. President, I refer you to the front-page story in today's Washington Post, which talks about the possibility of counterattacks in the United States after a war commences in Iraq. The first prong of our defense here in the homeland, which is to root out the terrorists among us--both because of the instability of the days through which we are and will be living and our lack of preparation through the quality of intelligence we need--is not a shield that should give us great hope. Thus, the importance of a second strategy for disrupting and decapitating the enemy among us--attacking them at their source, just as we have done with such devastating effectiveness against al-Qaida in Afghanistan. One of the reasons the anticipated second, third, and fourth wave of terrorist acts have not occurred since September 11 is the military assault we began on October 7, 2001, has largely dismantled the command-and-control operations of al-Qaida, making it more difficult for them to support and provide financing and logistics to their large number of operatives in the United States. I believe we need to adopt a similar strategy of disruption and dismantlement. What is it going to take to do so? First, it is going to require the President of the United States have the authority to use that necessary force to dismantle, as he said in his State of the Union speech, the terrorist camps, terrorist plans, and the command-and- control centers of these organizations. Here we come to a point of widespread confusion, and that is the President already has this authority. On Sunday afternoon, a prominent foreign policy spokesman appeared immediately after Senator Shelby and myself on a talk show and, in passing in the hallway, she said, ``I support the position that you have taken that we need to go after these international terrorists, but doesn't the President already have the authority to do so?'' I quickly explained that the answer was no. I think she was stunned at the vulnerability we have and by the limited authority the President has. Our colleague, the Senator from Texas, today in her remarks implied she thought the President of the United States had the authority to attack international terrorism broader than those who are directly linked to the events of September 11. If I might say, the very language of the resolution we are considering today carries the same inference. The language of the resolution states that: Acting pursuant to this resolution is consistent with the United States and other countries continuing to take the necessary actions against international terrorists and terrorist organizations, including those who planned, authorized, committed, or aided in the terrorist attack that occurred on September 11. The fact is the only group the President has authority to use force against is those who planned, authorized, committed, or aided in the terrorist attack that occurred on September 11. The President specifically was denied the authority to take on the other terrorist groups who, in my judgment, represent the greatest threat inside the American homeland today. Let me just give a little bit of history. On September 12, President Bush requested robust authority to launch a full-scale war on terror. He sent to the Congress a proposed resolution which stated: The President is authorized to use all necessary and appropriate force against those nations, organizations, or persons he determines planned, authorized, harbored, committed, or aided in the planning or commission of the attacks against the United States on September 11, 2001, and to deter and preempt any future acts of terrorism or aggression against the United States. That is what the President asked for on September 12, 2001. But Congress demurred. They only granted the President the power to use necessary force related to those nations or organizations and persons which were determined to be connected to the tragedy of September 11. Al-Qaida was not only our bull's-eye, it was the totality of the target. Two days after the Congress gave the President this limited authority, President Bush, on September 20, expanded the scope of the war: In a joint session of Congress, our war on terror begins with al-Qaida, but it does not end there. It will not end until every terrorist group of global reach has been found, stopped, and defeated. From that point until today, Mr. President, the stated mission of the United States in the war on terror has fallen well beyond the authority we have given to the President of the United States to deliver on that mission. The President continues: . . . to be limited to those nations, organizations, and persons who can be indicted as conspirators and participants in September 11. This limited authority to use force has made it possible for America and our allies to crush the Taliban and severely cripple al-Qaida. The amendment I offer would extend that power to the President to use necessary force through the next still vigorous and violent band of terrorists. Against whom would the President by this amendment be given power to use force? The State Department has identified 34 international terrorist organizations, approximately two-thirds of which are in the region of the Middle East and central Asia. They list five, in addition to al-Qaida, that have these characteristics: They currently receive support from a state that possesses weapons of mass destruction; they have a history of hating and killing Americans; and they have the ability today to strike within the United States of America. Who are these groups? I will name them and then talk about the A team: The Abu Nidal organization, Hamas, the Islamic Resistance Movement, the Palestine Islamic Jihad, and the Palestine Liberation Front. Who is the A team? The A team is Hezbollah, ``the party of God.'' Hezbollah was formed in 1982 in response to the Israeli invasion of Lebanon. This organization, which is based primarily in Lebanon and Syria and financed from Iran, is a radical Shi'a group which takes its ideological inspiration from the Iranian revolutions and teachings of Ayatollah Khomeni. Hezbollah formally advocates the ultimate establishment of Islamic rule in Lebanon and liberating all occupied Arab lands, including Jerusalem. It has expressed as a goal the elimination of Israel. Although closely allied with and closely directed by Iran, the group may have conducted operations that were even beyond those approved by the Government of Iran. While Hezbollah does not share the Syrian regime's secular orientation, the group has been a strong tactical ally in helping Syria advance its political objectives in the region. What are some of the activities of Hezbollah? It is known or suspect to have been involved in numerous anti-U.S. terrorist attacks, including the suicide truck bombing of the U.S. Embassy in Beirut in April of 1983; the U.S. Marine barracks in Beirut in October 1983; the U.S. Embassy annex in Beirut in September of 1984; three members of Hezbollah are on the FBI's list of the 22 most wanted terrorists for the hijacking of TWA flight 847 during which a U.S. Navy diver was murdered; elements of the group are responsible for the kidnaping and detention of U.S. and Western hostages. The group also attacked the Israeli Embassy in Argentina in 1992 and is suspect in the 1994 bombing of the Israeli Cultural Center in Buenos Aires, and the Senator from Texas stated, in her judgment, they were also responsible for Khobar Towers. This group receives a substantial amount of financial, training, weapons, explosives, diplomatic, and organizational aid from Iran and receives diplomatic, political, and logistical support from Syria. Hezbollah has a significant presence of its trained merchants of death placed in the United States of America. Mr. President, you will note that several of these organizations gravitate around one axis of evil: Iran. And not surprisingly. Yesterday, October 8, former FBI Director Louis Freeh testified before the joint inquiry on the attacks of September 11 which are being conducted by the House and Senate Intelligence Committee. Mr. Freeh cited the conclusions of the National Commission on Terrorism that: Iran remains the most active state supporter of terrorism. The Iranian Revolutionary Guard Corps and the Ministry of Intelligence and Security have continued to be involved in the planning and execution of terrorist acts. They also provide funding, training, weapons, logistical resources, and guidance to a variety of terrorist groups, including the Lebanese Hezbollah, Hamas, the Palestinian Islamic Jihad, and the Popular Front for the Liberation of Palestine. My amendment says that those five groups should also be brought within the ambit of evil that the President of the United States should be entitled to use force against to protect the security of the people of the United States of America. What strategy should be used against the designated international terrorist groups? The decision will be left to the President. The Congress invested its confidence in the judgment of the President on September 18 of last year when it gave him the power to use force against the Taliban and al-Qaida. If the underlying resolution is adopted, he will have the authority to use force against Iraq. This amendment will give the President the next stage of powers which he will be required to have in order to wage war on terror and to do so to a successful conclusion. The President would have the authority and the subsequent accountability to use these three authorities in whatever sequence and with whatever impact he deems to be in our national interest. In this stage on the war on terror, the President has already fashioned a war plan: To take out the training camps, the incubators from which in the 1990s thousands of youth were given the skills and the determination to be hardened assassins; to attack the terrorists' plans, to disrupt and dismantle. Many of these operations, and particularly the training camps, are flourishing today in the orbit of Iran. We should empower the President to take those acts that are going to be necessary to protect the security of the United States. Director Freeh, in his remarks yesterday, spoke of the need for a full arsenal of weapons to triumph over terrorists. Director Freeh said: We must recognize the limitations inherent in a law enforcement response. As we see at this very moment in history, others, to include Congress, must decide if our national will dictates a fuller response. I am not prepared to say the only response I want against these five organizations that have access to weapons of mass destruction, that have a history of killing Americans and have a capability to do so here at home because of a significant presence of their operatives among us, that we are going to tell the President of the United States that he does not have the authority to attack with force these terrorists groups where they live and to disband and dismantle their capability of continuing to provide support to their agents in the United States. I believe our national will and our obligation to the security of the American people, especially their security on our native soil, demand a fuller response to meet this fuller challenge. I conclude by saying that I am not optimistic about the prospects for this amendment, but I am deeply concerned, and I am deeply saddened. I am concerned in part because I see us making life-and-death decisions without consideration because we do not have access to what might be critical, and I would suggest determinative, information. I believe the national security interests are being put at risk by this information not being available. I am saddened because I fear the action we are going to take will increase the risk at home without increasing our capability to respond to that risk. I have been described as a cautious man. I will accept that label. I do not see the world as a simple set of blacks and whites. I see the world as a complex of grays. That leads to caution. I believe that caution today is to recognize that we are not dealing with one evil, as evil as Saddam Hussein might be. We are dealing with a veritable army of evils. We must be prepared to respond to that army of evils. I believe the step we can take today is to give to the President of the United States the opportunity to exercise his judgment as to whether he believes it would be appropriate to use U.S. force against these five international terrorist groups which represent, in my judgment, the most serious urgent threat to the interests of the United States of America, including a threat to Americans at home. I urge the adoption of this amendment.

Mr. GRAHAM. I will reserve a few moments to close when others who wish to speak on this motion to table have completed their remarks.

Mr. GRAHAM. Mr. President, I appreciate the thoughtful remarks of the Senator from Connecticut and the Senator from Arizona. The Senator from Arizona concluded with the hope that we may soon be working together on expanding our efforts to reach those who threaten us here at home. I only hope we will not have another 3,025 Americans unnecessarily exposed to the risks that I see if we do not supplement this resolution with the immediate authority of the President to use force against those organizations which have access to weapons of mass destruction, which have killed Americans, and which have substantial numbers of operatives inside the United States of America at this hour. I invite anybody to say Iraq doesn't meet those standards. We are not talking about a threat 90 days from now. We are not talking about a threat that may come a year from now if nuclear material is made available. I am talking about a threat that can happen this afternoon. Let us trace the history of what Congress did. The President asked for this authority on September 12, 2001. We denied it. When I was in law school, one read the legislative history to try to arrive at legislative intent. It seems to me, just as a first-year-law legislative interpretation, that probably doesn't mean giving the President authority beyond that which is specifically provided. Therefore, the President of the United States, in my judgment, does not have the authority today to use force against Hezbollah or these other groups. But even beyond the legal limits, let us talk about the pragmatics. The President of the United States in his State of the Union Address on January 29 said our first priority was terrorists--our first priority. And do you know what the first priority of the first priority was? The training camps. Why did he say that? Because those who were responsible said if there was one major mistake we made in the 1990s, it was allowing al-Qaida training camps to be a sanctuary where every year thousands and thousands of young people were converted into hardened assassins. If that is the criticism we are going to have, because in the 1990s we allowed that to go on month after month and year after year, what is going to be our excuse today when similar training camps are in operation in Iran, Syria, and Syrian-controlled areas of Lebanon? And we are not going to give the President of the United States the authority to use force against those camps? It is inconceivable to me. The very fact that the President, recognizing this, has not acted against those camps is, in my judgment, the strongest verification that he doesn't think he has the authority to do so. I believe it is not in our national interest to leave this question ambiguous. We want to deter groups such as Hezbollah from continuing to aid, or to provide aid, comfort, and support to their operatives who are placed in the United States. Until we reach the point that we can domestically, through law enforcement means and domestic intelligence, locate and eradicate those operatives who are in this country, we must pursue as aggressively as possible to cut off their support system. I cannot believe we are saying we are not prepared today to make an unambiguous decision. We don't want to have the Hezbollah going to their lawyers and asking the question, What is the legislative interpretation of what Congress did on September 18, 2001? Does it put us under the gun? I don't want them to have that in their mind. I want them to know, with the clearest method we can write in English and that can be interpreted in all the languages these people speak, that we mean they are under the gun, and they are under the gun now. There has been a lot of discussion about urgency. Why do we need to do things now? Why can't we wait for 60 days? Let me tell you why we cannot afford to wait. We are taking an action by authorizing the President to take action against Saddam Hussein. I will stand first in line to say he is an evil person. But we, by taking that action, according to our own intelligence reports--and, friends, I encourage you to read the classified intelligence reports which are much sharper than what is available in declassified form--we are going to be increasing the threat level against the people of the United States. I think we have a moral and legal obligation to at the same time be taking what reasonable steps we can to confront that increased vulnerability. If you do not like what I am suggesting, if you do not think we ought to give the President authority to use force against groups such as Hezbollah, what do you think we ought to do? Or do you disagree with the premise that we are going to be increasing the threat level inside the United States? If you disagree with that premise, what is the basis upon which your disagreement is predicated? If you reject that, and believe that the American people are not going to be at additional threat, then, frankly, my friends--to use the term--blood is going to be on your hands. I think we are going to be at substantially greater threat. I think there are some things we ought to be doing now. We certainly should be escalating the FBI intelligence and other efforts to root out the terrorists who are among us. But we also ought to be attacking the terrorists where they live because it is on the offensive--not the defensive--in my judgment, that we are going to eventually win this war on terror. My friends, as I said, I am not optimistic about the adoption of this. I recognize there are backroom deals made. This is what people have come together on and locked down on, and say: We are locking down on the principle that we have one evil, Saddam Hussein. He is an enormous, gargantuan force, and that is whom we are going to go after. That, frankly, is an erroneous reading of the world. There are many evils out there, a number of which are substantially more competent, particularly in their ability to attack Americans here at home, than Iraq is likely to be in the foreseeable future. But we are going to say we are going to ignore those and we are going to allow them to continue to fester among us. I do not wish to be part of that decision. I am concerned by those who see only one evil, who believe we must all commit ourselves to the arrangement that has been made by a few who have that view of the world. I urge my colleagues to open there eyes to the much larger array of lethal, more violent foes who are prepared today to assault us here at home. I said in my closing remarks that I was concerned and saddened. I am saddened because I know my colleagues would not knowingly place U.S. lives in unnecessary peril. I am as sure as I have ever been of anything in my life, the peril here in America caused by the action we are about to take could be substantially reduced by giving to the President of the United States the additional powers to send the strongest possible message, and, if necessary, the force to eradicate those who are evil and who have placed evildoers among us, and who are prepared to awaken those evildoers to attack. The responsibility is ours. Thank you, Mr. President.

Mr. GRAHAM

Mr. GRAHAM. Mr. President, point of parliamentary inquiry: What is the business currently pending?

Mr. GRAHAM. Mr. President, I thank the Senator. My purpose is to offer an amendment to the Lieberman amendment which is in the nature of a substitute. I send the amendment to the desk.

Mr. GRAHAM. It will add an additional authority to the President relative to the use of force.

Mr. GRAHAM. It is an amendment to the matter pending before the Senate, yes.

Mr. GRAHAM. I have discussed it with Senator Daschle.

Mr. GRAHAM. I do not know what his views are.

Mr. GRAHAM. I will not debate the amendment.

Mr. GRAHAM. Will the Senator yield for a moment?

Mr. GRAHAM. Mr. President, it was our intention to maintain the amendment in all respects, other than adding the language that begins on page 2 at line 23 and runs through page 3 at line 4. That was our sole intent in offering the amendment in the form that we have done so. If there had been negotiations of which we were unaware that altered the underlying amendment, at the appropriate time it would be my intention to offer an amendment to make it conform to the proposal that adds what yourself and others have currently agreed to.