Bob Graham

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, there are two basic issues addressed in this amendment. First, there are substantial changes in the international tax provisions in this legislation. They are going to cost American taxpayers $37 billion, and the reason is because we are adding to the already significant incentive for American firms to take their jobs overseas. Second, we are going to spend $65 billion to give a blank check to American manufacturing firms in the form of a tax deduction. The amendment would substitute and add $35 billion so we would have $100 billion to be given in the form of a credit against the payroll tax to reduce the form of tax, which is the greatest disincentive to the creation and maintenance of jobs in the United States. This is an amendment which truly justifies the title of this bill, JOBS, and would add the phrase ``in America.''

Mr. GRAHAM of Florida. I ask for a recorded vote.

Mr. GRAHAM of Florida. First, I want to clarify a statement I made at the conclusion of my remarks. The individual tax items I referred to are included in a managers' amendment. They are not part of the amendment that I have offered as a replacement essentially for the legislation. They are not dealt with. Mr. President, we have a very serious issue. I see that we have been joined by the chairman of the Finance Committee, Senator Grassley. I got to know a lot about highways last year. I visited on two or three occasions Ottumwa, IA, which is in the southeast corner of the State. Senator Grassley knows the statistics a lot better than I do. If I misstate them, he can correct me. By the end of World War II, Ottumwa had a population of more than 30,000 people, which was a combination of a strong agricultural economy and a growing number of industrial plants, many of which provided parts for other industries, such as a company that provides parts for Deere Tractor, another Iowa firm. In 2003, the population had slipped to below 25,000, and much of that job loss was due to the fact those plants of 150 to 500 people had picked up and left. Maybe they left for Mexico or for China, but they were not in Ottumwa, IA, anymore. When you talked to people in that town, whether it was the clerk registering you into the motel or the person who was bringing you your dinner, you heard a lot about the pain that was coming from that loss of a job base, the loss of the future, and the loss of the children of Ottumwa, as they began to question whether they had a future there. I don't believe it is the role of the Government to stand up and hold back the tide of normal economic flows. The fact is, capitalism is a very aggressive form of economy. Companies go out of business; companies come into business; companies make decisions as to where they can be the most successful. I don't believe we should socialize our economy in an attempt to avoid that. We are not talking about affirmative socialization. We are talking about, through the Tax Code, what I would call incentivized socialization. We are trying to affect the decision that company in Ottumwa makes by saying it will be more profitable for them to take these 250 jobs and move them out of the United States. This legislation, I am sad to say, adds to those incentives. I don't think that is what we should do in a bill that has as its title ``JOBS.''

Mr. GRAHAM of Florida. How much time do I have remaining?

Mr. GRAHAM of Florida. Mr. President, I first thank my colleagues, Senator Dorgan and Senator Mikulski, who have raised the issue of will it be American jobs the JOBS bill will create. That is a core question which is raised by the amendment I have brought to the Senate. We are about to spend $170 billion over the next 10 years with the stated objective being to create jobs for American men and women. The question is: How effective will this legislation be in achieving that goal? Is it worth $170 billion under these conditions to be spent or is there not a better way to allocate that same amount of money that will have a greater likelihood of actually creating jobs in the United States? I would like to put this into some context. The context is where have we been in the recent past and where are we today in terms of jobs for American men and women. The manufacturing sector of the American economy has lost 2.8 million jobs since January of 2001. It may well be this administration will end up as the first administration in 70 years, since the administration of President Herbert Hoover, to preside over a net decline in private sector employment in the United States. The unemployment rate has increased 36 percent since January of 2001. The number of long-term unemployed has increased 175 percent. There have been policies and expectations advanced to reverse that situation. The President said, for instance, in his 2003 Economic Report that based on the steps Congress had taken since his administration commenced, in the year 2003 there would be 1.9 million new jobs created in America. The actual increase in jobs in America was 100,000. The administration has stated the weak employment situation is the result of a dramatic increase in productivity. They argue this increased productivity has raised our standard of living. There are a lot of Americans out there who have not seen this rising tide of standard of living. Since this administration took office, real earnings growth has slowed dramatically, particularly for those at the lower income scale. Real earnings at the middle of the income distribution rose only two- tenths of 1 percent per year in 2000, 2001, 2002, and 2003. To put this in comparison, this is a marked deterioration from the successes of the 1990s. Between 1996 and 2000, real earnings growth for those in the middle income was 1.7 percent per year. We also find ourselves with another growing deficit, and that is a growing trade deficit. The U.S. trade deficit, the excess of goods and services we buy from others over the amount of goods and services we sell to others, has varied over the years, generally in tandem with the economy. For example, in 1981, we had a slight trade surplus. In 1986, the trade deficit had risen to a then record of 2.8 percent of gross domestic product. Remember that number, in 1986, a record historic trade deficit in the United States of 2.8 percent of gross domestic product. In 1991, our trade deficit had fallen back to a mere two-tenths of 1 percent of our gross domestic product. We see in the last several years, as there has been deterioration in jobs within America, there has also been a deterioration in our international trade balance. For 2003, our trade deficit reached a new record of 5.5 percent of GDP. Compare that with the record of 1986 of 2.8 percent of gross domestic product. I present this information as the context within which to consider the legislation which is before us and the amendment I have offered-- the need for strategic, energetic, and efficient stimulation to our economy, particularly our manufacturing economy and particularly to that part of the manufacturing economy which has been so damaged by the deterioration of our international trade. The current impasse on this JOBS bill which has caused several weeks delay may turn out to be a blessing in disguise. The delay has provided the Senate with an opportunity to reassess the fundamental merits of this legislation and then to consider what might be better alternatives for working men and women in this country. I see this bill, the JOBS Act, as having five goals. The first goal is to meet our obligation under the World Trade Organization by repealing the existing laws, rules, and regulations and, therefore, reverse the retaliatory sanctions which are being imposed by European countries on products of the United States, many of which have nothing to do with the underlying current international tax incentives for American manufacturers. That is goal No. 1. Goal No. 2 is to avoid enacting a provision that makes it more advantageous than it is today for U.S. companies to move jobs abroad. Goal No. 3 is to enact provisions that encourage job creation in the United States of America. Goal No. 4 is to simplify the Tax Code. Goal No. 5 is to minimize extraneous tax matters that detract from the purpose of this legislation--jobs in America. Let me review the degree to which this legislation achieves these five very important goals. Goal No. 1, comply with the adverse WTO ruling. The World Trade Organization, of which the United States is a charter member, has ruled the extraterritorial income tax incentive enacted in 2000 violates the WTO prohibition against export subsidies. The extraterritorial income tax incentive, acronymed ETI, was enacted to replace a similar export- related tax benefit, the foreign sales corporation regime, which also came under fire by the WTO. Under the ETI regime, a taxpayer can exclude a portion of its income related to goods sold, leased, or rented for direct use or consumption or disposition outside the United States. The amount excluded under the ETI law is 15 percent of the net income derived from the transaction. The WTO's ruling is unfortunate because it perpetuates an unfair advantage which the European businesses have in relation to the United States firms selling into that market. Nevertheless, because we rely on the WTO to make sure other countries adhere to international trade rules, we must abide by its decision. It is the rule of trade law. In addition to meeting our trade obligations, we need to enact this bill to rescue those companies and their employees from the punitive tariffs which are currently being imposed on U.S. exports into the European Union. Currently, those tariffs equal 7 percent of the price of a product being exported to Europe. That tariff will increase 1 percent per month for each month we delay in repealing these offending provisions. What is most unfortunate is the companies that had benefited from the ETI provisions which have now been ruled illegal often do not make the products which are now the subject of European sanction and retaliation. Innocent businesses and their employees are caught in this crossfire. The JOBS Act meets this first goal by repealing the ETI provisions in our Tax Code. Repealing these provisions will increase Federal income tax receipts by $45 billion over the next 10 years. Goal No. 2: Avoid exacerbating the current tax incentives for further outsourcing of jobs by U.S. corporations. The JOBS Act does a poor job in meeting this objective. The provisions in title II of the bill, by definition, are designed to lower the tax burden on U.S. companies' foreign operations. The effect of that: To make it even more attractive to move operations and jobs outside the United States to a foreign base of operation. The total cost of the changes we are making in this underlying law, which will have the effect of increasing the incentives to leave the United States, is $37 billion over the next 10 years. As stunning as it is, we are about to spend $37 billion to give additional incentives for firms to move jobs out of the United States. I will provide a couple of examples of how specific provisions will affect U.S. multinational investment decisions. First I will say to anyone who is listening that if they would like to take a nap, this would be a good time to do it because it gets real tough going at this point. Example one, there is a provision in this bill that changes the tax treatment of payments between affiliated foreign companies. The law today is that the U.S. tax on income earned by a foreign subsidiary of a U.S. multinational is deferred until that income is paid to the U.S. parent in the form of a dividend. Dividends paid by one foreign subsidiary to another foreign subsidiary are treated as though they were paid to the U.S. parent and are therefore subject to U.S. tax. The JOBS Act changes this treatment by continuing the deferral of U.S. tax on dividends paid by one foreign subsidiary to another located in a different country. The effect of this legislation will be to make it more attractive for a U.S. multinational to invest excess cash in a foreign subsidiary in any country except the United States of America. Payment to the U.S. parent would trigger the tax, but payment to an affiliated foreign subsidiary would remain tax deferred. An example: If an American firm operating businesses in several foreign countries--let's say one of those was India and another was China--if the Indian subsidiary earned substantial profits and the company was making the decision will I use those profits to reinvest in India, will I use those profits by bringing them back to the United States in the form of a dividend to invest in the United States, or will I move those profits to China, today the last two choices have the same tax implications. U.S. tax will be paid if the money was brought back home or if the money was sent to China. Under this legislation, the only time the tax will be paid is when it comes back to the United States. If the exact same dollars go in the form of a dividend from India to China, there is no tax. We are creating a very substantial new incentive for American companies to use their income earned outside the United States frequently, as Senators Dorgan and Mikulski have just said, to create a platform to export back into the United States. We are increasing the incentive to do so. This bill includes a ``temporary period'' during which dividend payments from foreign affiliates to a U.S. parent receive a substantial reduction in their tax rate. The regular corporate tax rate is 35 percent. It would be reduced for an American corporation which has set up a subsidiary in a foreign country, has earned a profit in that foreign country, is going to send that profit back to the United States. Instead of being subject to the normal tax of 35 percent, they would only be subject to a tax of 5.75 percent. This provision reduces Federal revenues by $3.8 billion over the next 10 years. What are American working men and women going to get for their $3.8 billion? The rationale for this proposal is that reducing the tax rate will encourage U.S. multinational companies to expatriate income held offshore in order to make investments in the United States that will create jobs. Let me just point out one little practical fact. In order to take advantage of this; that is, for a U.S. firm operating outside the United States to be able to repatriate a substantial amount of funds during a narrow window of opportunity, it has to be a firm that has a substantial amount of cash on hand in order to be able to take advantage of that. If they have been investing the profits they have earned offshore to expand their offshore operations, they will have limited means by which to avail themselves of this opportunity. My concern is that what we are really creating is a tax incentive for tax shelters because it is those tax shelters, as opposed to companies that are actively engaged in the production of goods and services, that are the most likely firms to take advantage of this window. They are the least likely firms to create jobs in the United States. Another concern about this temporary window proposal is it will not be very temporary. How many times have we heard in the Senate, when a tax cut has been passed but might not go into effect for several years in the future, and then today someone says, let's reconsider: was that really a wise thing to do, to cut the tax rates beginning in the year 2009? Should we not reevaluate that in the context of our current deficit situation and the war and the other challenges America faces? What is the response to that reasonable question? The response is, of course we should not consider it because if a tax is precluded that is already on the books from staying on the books or going into effect at a future date, do my colleagues know what has just happened? They have raised taxes, and that is the ultimate charge that can be made against an American politician. Imagine what it is going to be like when this temporary window is ready to expire and the same argument is made; if one does not vote for extending this window, preferably if they do not vote for making this window permanent, as the President is urging that we do, taxes have been raised. Now, this is not a fanciful suggestion. In fact, this very bill includes 21 tax provisions which when they were enacted were for a specific time period, which has long since passed. Every year, as we get close to these tax provisions that are about to expire, we pass legislation to extend them for yet a few more years. For instance, in this bill we have a number of items that were intended to be for a specific duration that we are now going to extend substantially into the future. These include items such as the deduction for electric vehicles, deduction for teachers' school expenses--other items which may in and of themselves be worthy. But they are illustrative of the difficulty of ever saying that something which was supposed to be temporary is, in fact, temporary. If extended, the effect of this repatriation proposal will be to create a permanent reduced tax rate for U.S. multinationals' foreign investment, a tax rate which is 85-percent less than the tax rate that same corporation would pay on income earned inside the United States. So we have a dismal failure on goal No. 2, which is to avoid giving any further incentives to U.S. multinationals outsourcing jobs. Goal No. 3 is to encourage the creation of jobs in the United States. The primary provision for this encouragement is the creation of a U.S. job provision in the form of a manufacturers' deduction. As currently constituted, this manufacturers' deduction, which is in this legislation, will reduce Federal revenues by $65 billion over the next 10 years. What are we getting for our $65 billion? The deduction is computed as a percentage of the employer's income from production activities located within the United States. The fact the deduction is based on income, however, creates the perverse effect of rewarding manufacturers that locate at least a portion of their operations in a low-cost jurisdiction outside the United States. When fully phased in, the deduction equals 9 percent of the profit earned from production activities conducted in the United States. To qualify for the deduction, the item must be produced, in whole or a significant part, within the United States. The deduction has some limitations. It is limited to an amount that equals 50 percent of the wages paid by the employer. To the extent that the taxpayer has manufacturing operations outside the United States, the deduction is further reduced by the fraction representing the ratio of the firm's U.S. activity to its worldwide activities. These limitations, which are frequently referred to as haircuts, are supposed to assure that the incentive is targeted at U.S. production. However, they do not always work in that manner. Let me show a couple of charts as to how this provision, the 9-percent manufacturers' deduction, is likely to work in real life. The first chart is a simple explanation of how the deduction is computed. In this example, the firm has all of its production operations located inside the United States. It earns $100 in sales for its products. It incurs costs totaling $70 to produce them. The costs, $70, are distributed as follows: materials cost $40, wages inside the United States cost $27, other wages, $3. That is a total of $70. The company's profit is $30. Its manufacturers' deduction is computed as a percentage of that income. At the fully phased-in rate of 9 percent, the deduction would equal $2.70 to that firm. Let's look at how the manufacturers' deduction is computed if the taxpayer outsources a share of its manufacturing in order to reduce labor costs. Chart No. 2 illustrates the effect of this change. In this example, 80 percent of the firm's manufacturing occurs offshore, which results in a 90-percent reduction in its manufacturing wages. The firm still earns the $100 that it did in the first example; that is $100 on the sale of its product, but its costs are substantially lower than the $70 in the first example. In this case, the materials continue to cost $40, manufacturing wages in the United States have dropped to $5 since a substantial amount of the cost of production, not including materials, has now moved outside the United States to a low-wage area. Foreign manufacturing wages are $7. So what this firm used to pay $27 to get--the manufacturing labor to assemble its products--is now getting it for $12. The other wages in the United States continue at $3. The firm's profit, therefore, is dramatically improved by moving its operation or a substantial portion of its operation outside the United States. It now earns a profit, instead of $30, of $45. Under the general rule, the manufacturers' deduction would be 9 percent of $45, which would be $4.05. However, there is this separate limitation that you cannot have a deduction that is more than half your U.S. wages. In this instance, U.S. wages for manufacturing are $5, other wages paid in the United States are $3, for a total of $8; 50 percent of $8 is $4. So the firm would get a $4 tax deduction as a result of this procedure. The result is this: As a result of moving significant parts of its operation outside the United States, this firm was able to qualify for a greater tax incentive under this bill than they would if they had kept their operation in the United States. They get a $2.70 deduction by keeping the operation in the United States; they get a $4 deduction by moving it offshore. Some of the sponsors of this legislation may argue there is another haircut in these limitations and that is because a firm cannot qualify for the deduction unless the goods are produced ``in whole or in significant part by the taxpayer within the United States.'' They will argue that a firm that utilizes foreign sources to provide 80 percent of the production activity will not meet that standard. We cannot be assured of that because nowhere in this legislation is the term ``in significant part'' defined for most products. In fact, a firm doesn't have to move anything near 80 percent of its production offshore to get the benefit of this deduction. In my example, using the same numbers but modified to reflect one-quarter of production being moved offshore, this would still yield a greater tax incentive than keeping 100 percent of the production in the United States. Let me repeat that. If a firm keeps 75 percent of its production in the United States, moves 25 percent abroad, under this calculation it will get a $3.15 deduction against its U.S. income tax versus if it keeps 100 percent in the United States it will get a $2.70 deduction. Does that make common sense? It was certainly contemplated that some portion of the final product's production could occur outside the United States. Otherwise, the statute would have been drafted without the reference to ``significant part.'' It would have required that all the production be in the United States in order to qualify. It would have been drafted so it applies only to goods solely produced in the United States. My concern is the new deduction created by this legislation will provide U.S. employers with a positive incentive to move a larger amount of their production offshore. The sponsors will also argue the extent of offshore production activity is conducted by a subsidiary of the U.S. taxpayer. The deduction will be reduced proportionately as a result of the haircut. My example, however, does not assume an affiliate of the taxpayer is conducting the offshore activity. In fact, it assumes what is the predominant reality, that manufacturing businesses inside the United States contract with manufacturers outside the United States to provide component parts. So there is no affiliated relationship other than a contract between the U.S. manufacturer and the foreign producer of the products. The haircut--although it is widely cited as a means by which these kinds of abuses will be restrained--does nothing to protect the job of unaffiliated U.S. suppliers. As I mentioned earlier, this new incentive will reduce the revenues of the Federal Government by $65 billion over the next 10 years and will have the perverse effect of actually creating yet another incentive to move jobs out of the United States. As my examples indicate, I don't think this is a piece of legislation that can be defended as spending American taxpayers' dollars in the most efficient manner possible to create jobs in America. There is a better approach. To provide the most effective tax incentive for job creation, we should link the benefits more specifically to the title of this bill, JOBS. Our proposal is to exchange the bill's incentive based on profits with an incentive based on jobs. Our proposal would redirect the $60 billion raised by repealing the ETI and the $37 billion currently directed to the international tax changes and use those funds to create an income tax credit. That credit would be used to partially offset the payroll taxes paid by U.S. manufacturing employers. One of the true disincentives imposed by the Federal Government on job maintenance and creation in the United States is the fact we impose a 7.6 percent tax on the employer for his employees which then becomes the payroll tax that then supports Social Security and Medicare. I am not proposing we do anything to the payments that are made into the Social Security and Medicare trust fund. Rather, what I am suggesting is we take the now almost $100 billion we will have over 10 years, and use it in the form of a credit whereby it incorporates for all of its employees the first $35,000 of earnings, and will be able to deduct a credit which would amount to approximately 20 percent of the payroll taxes paid by the employer, or a 1.66 percentage point against their corporate income tax. The employers who qualify for this new incentive are the same ones who would have benefited under the manufacturers' deduction. The difference is our proposal bases the incentive on American jobs, not on profits. The difference is our proposal does not create the incentive. As this chart indicates, we are creating additional outsourcing of American jobs if we use the almost $100 billion in the manner the underlying legislation directs. It seems to me to be a much better approach to link the benefit to jobs rather than to link the benefit to profits, and one which has a much greater likelihood of achieving the goal of creating jobs in the United States. A fourth goal of this legislation, and one I have been very interested in, is the simplification of the Tax Code. Several years ago I suggested to the Finance Committee attempting to simplify the United States Tax Code, all 17,000 pages of it, at one time is a task no one has the life expectancy, nor do their children nor probably their grandchildren, to see through to accomplishment. Therefore, we ought to break down the Tax Code into its constituent parts and try to simplify each part at a time, in a rational, sequenced basis. I further suggested these international tax rules would be a good place to start. I am pleased to say under the leadership of Chairman Grassley and Ranking Member Baucus, we started on that path. The Finance Committee has established a working group to study our international tax rules with the goal of simplifying. This product is one of the results of that effort at simplification. However, I suggest this legislation misses the mark by a wide range in terms of simplifying the income tax law. In fact, it would add another 378 pages to the income tax law. We are starting with the goal of simplification and we are substantially increasing the quantity and the complexity of the income tax code. Goal No. 5 is to minimize extraneous tax matters that detract from the purpose of this legislation. We are going to spend $170 billion over 10 years to create jobs in America. We ought to be concerned we are spending that $170 billion for that purpose and spending it as effectively as possible. In an effort to conclude action on this legislation and secure the maximum number of votes, there has been an open encouragement to Senators to file amendments to this bill on smaller tax changes they would like to see adopted. I am confident many of these are worthy and could be supported on their merits. But we are never going to have a discussion of their merits because now they are buried in two so-called managers' amendments inside this legislation. Many of them have relatively little or zero relationship to creating jobs in the United States. Let me mention a few of those. There is a tax break for Oldsmobile dealers. I am certain they are facing some distress as General Motors canceled that line of Oldsmobiles. Does it deserve to be in a JOBS bill and carry a cost of $189 million over 10 years? There is capital gains relief for owners of horses. I assume that is good for the owners, and may be good for the horses. It costs $64 million over 10 years. There is a tax break for the makers of distilled spirits. That might make some of our people happier, but whether it will get them a job is less certain. That costs us $484 million over 10 years. There is a tax-exempt bond proposal for purchase of forest land. I happen to think purchase of forest land is probably a good idea, but is it the place to spend $252 million over 10 years to create jobs in America? There are tax credits for costs incurred for railroad track maintenance. Again, it may be a good idea, but it is questionable as to whether $492 million we will spend over the next 10 years will create a requisite number of American jobs. Then there are tax breaks for amounts received under the Student Loan Repayment Program for the National Health Service Corps. That is $54 million over 10 years. In the spirit of full disclosure, the bill includes proposals which myself and my staff have worked with the Finance Committee to include in this legislation. One such proposal delays the implementation of regulations governing the exclusion of income from the international operation of ships and aircraft. That has an $8 million cost over 10 years. Another provision is the extension of the credit for producing electricity from biomass. That lowers Federal tax revenues by $4.2 billion over 10 years. These additional provisions have obviously expanded the cost of the bill and the purpose of the bill. So the amendment I have offered would do essentially the following: One, it would repeal ETI. That is the issue that brought us here in the first place. Second, it would repeal the changes in international tax law, many of which will give further incentives to moving jobs offshore. Third, it will repeal most of the targeted tax cuts. It will then take the money that has been saved from the ETI, from not adopting the 9-percent corporate tax deduction, and from the individual items, and use it to finance a serious effort at reducing the payroll tax cost to the employer and, thereby, reducing a significant disincentive to maintaining and hiring people in jobs in America. I close by describing the choices we are making in this legislation. We are going to spend $170 billion over 10 years, or rounded to $17 billion per year. What could we do with $17 billion if we did not use it in a targeted and effective means to create jobs for U.S. men and women? Well, $17 billion would reduce this year's projected Federal deficit by about 4 percent, not an insignificant amount. The $17 billion would fully fund No Child Left Behind, plus it would fund veterans health care and the FIRE and SAFER grant programs that provide critical assistance to our Nation's first responders. All of those could be purchased for $17 billion. Mr. President, $17 billion would be more than we spend annually on Pell grants, to assure access to higher education for our young people. Now more than ever, we need to make sure the money we spend will achieve the results we seek. I have set forth the reasons why I do not believe the incentives in the underlying bill will protect or will promote U.S. jobs. The proposals in the underlying bill target profits in the hopes that profits will trickle down and create jobs. The amendment Senator Dayton and I have offered is a better approach because it specifically targets U.S. jobs. Firms will get a bigger tax break to the extent they employ more U.S. workers. Since U.S. jobs are the goal of this legislation--U.S. JOBS is the title of this legislation--our approach should be adopted. The working men and women of America will appreciate this action by the Senate.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, I send to the desk an amendment and ask for its consideration.

Mr. GRAHAM of Florida. Mr. President, I will soon be offering an amendment which, it is my understanding, will be debated later today. As I look at the JOBS bill before us, it seems to me that it has several purposes. At least two of those purposes are, one, to repeal the current law which has been found by the World Trade Organization to be in violation of its standards and, as a result, has caused retaliatory tariffs to be applied against certain of our American products. A second objective of the JOBS bill is to encourage the maintenance and creation of jobs in the United States of America. The amendment will strike certain provisions of this proposed law. It will strike the manufacturers' deduction and changes in the international tax law. Then it uses the funds that are released by that action to provide for a manufacturing employers' credit on income tax, based on the payroll tax of those manufacturing employers. In my judgment, this alternative better targets the tax incentive to jobs in the United States of America. The incentives in the underlying bill are based on corporate profits, not American employment, which I believe makes them less efficient, less effective, and significantly less likely to fulfill its title, ``JOBS.'' I will have more to say about this amendment and the concerns we have about the underlying proposal later today when we debate this amendment in detail.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, the face of the American undergraduate is changing, and there is a growing need to reflect this transformation in our Federal education policy. In 2001, 47 percent of all undergraduates were considered non-traditional students. Despite this evolving landscape of higher education, many of our Nation's financial aid policies and student support services only address the financial needs and lifestyle demands of traditional students. Fewer and fewer of today's undergraduates come straight from high school, depend on parental financial support, and enroll as full-time students. Today's colleges and universities are filled with an unprecedented amount of non-traditional students. These students have a variety of responsibilities beyond their education that demand their time, attention, and income. Older scholars are in the unenviable position of having to balance school, work, family responsibilities, and the obligation of meeting the cost of higher education. Recent studies suggest that 39 percent of all undergraduates are 25 years or older and 27 percent have children. Further, 40 percent of undergraduates work full-time and 48 percent attend college part-time. Unfortunately, the needs of many devoted parents and hard working employees who attend college are not adequately supported by federal policy. For this reason, it is no surprise that non-traditional students are less likely than traditional students to complete a bachelors or associates degree. The consequences of our higher education policy failing to address the challenges faced by non-traditional students are great. In the global economy of the 21st century, a quality, accessible education remains the gatekeeper to achieving the American dream of economic self-sufficiency and meaningful employment. Indeed, never before has a college degree been so vital to so many. Today's marketplace demands a well-educated work force. According to the Bureau of Labor Statistics, postsecondary education will be essential for 42 percent of the new jobs created in this decade. Higher education is not only the ticket to a good paying job, it is also an avenue to improved health care, child-care, housing, and nutrition. I am pleased to join Senator Clinton in introducing the Non- Traditional Student Success Act, legislation designed to address the barriers that non-traditional students encounter while pursuing a college education. Escalating college costs are a central obstacle to all students, but can be especially devastating to non-traditional students who often have families to care for. Responding to the rising cost of obtaining a college degree and the declining purchasing power of federal financial assistance, this legislation will help ensure that college is affordable and accessible to non-traditional students. With this goal in mind, our bill will increase the maximum Pell Grant to $11,600 over the next five years and pilot a program that would make this aid available year-round. This provision will ease the financial burden non-traditional students endure and help them complete their degree programs more quickly. Our legislation also addresses a problem many non-traditional students experience, not being able to qualify for a sufficient amount of financial aid due to their less-than-full-time enrollment status. We propose establishing a pilot program to provide more financial aid to students enrolled in a degree program less-than-half-time, students with compressed or alternative schedules, and/or students in distance learning. It is imperative that our financial aid system no longer exists at odds with the needs and course loads of non-traditional students. This measure takes a critical first step towards correcting this situation. Our bill also expands the list of education expenses for the Lifetime Learning tax credit to include not just the costs of tuition and fees but also books, supplies and equipment, childcare and living expenses. Non-traditional students often have more expenses than tuition and fees that must be considered if a college degree is going to be financially possible. A common sense way of making higher education more accessible is to increase the public's awareness of available financial aid, including education tax credits. In 2001, only 21 percent of respondents in a national survey had heard of the education tax credits. Our bill will promote what financial aid programs are available. It is not enough that we improve the affordability of college for non-traditional students without improving student support services that promote retention and academic success among these students. This legislation increases funding for on-campus child-care to help nontraditional students with children. Additionally, we propose an increase in funding for Student Support Service programs, GEAR UP and College Assistance Migrant Programs. These programs provide counseling, mentoring, tutoring and other services to help non-traditional students succeed. I encourage my colleagues to support the Non-Traditional Student Success Act. This legislation contains a variety of common sense provisions that make college more affordable and success more probable for non-traditional students. By supporting the Non-Traditional Student Success Act, you help bring the American dream within reach for a large segment of our Nation's undergraduate population.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, the face of the American undergraduate is changing, and there is a growing need to reflect this transformation in our Federal education policy. In 2001, 47 percent of all undergraduates were considered non-traditional students. Despite this evolving landscape of higher education, many of our Nation's financial aid policies and student support services only address the financial needs and lifestyle demands of traditional students. Fewer and fewer of today's undergraduates come straight from high school, depend on parental financial support, and enroll as full-time students. Today's colleges and universities are filled with an unprecedented amount of non-traditional students. These students have a variety of responsibilities beyond their education that demand their time, attention, and income. Older scholars are in the unenviable position of having to balance school, work, family responsibilities, and the obligation of meeting the cost of higher education. Recent studies suggest that 39 percent of all undergraduates are 25 years or older and 27 percent have children. Further, 40 percent of undergraduates work full-time and 48 percent attend college part-time. Unfortunately, the needs of many devoted parents and hard working employees who attend college are not adequately supported by federal policy. For this reason, it is no surprise that non-traditional students are less likely than traditional students to complete a bachelors or associates degree. The consequences of our higher education policy failing to address the challenges faced by non-traditional students are great. In the global economy of the 21st century, a quality, accessible education remains the gatekeeper to achieving the American dream of economic self-sufficiency and meaningful employment. Indeed, never before has a college degree been so vital to so many. Today's marketplace demands a well-educated work force. According to the Bureau of Labor Statistics, postsecondary education will be essential for 42 percent of the new jobs created in this decade. Higher education is not only the ticket to a good paying job, it is also an avenue to improved health care, child-care, housing, and nutrition. I am pleased to join Senator Clinton in introducing the Non- Traditional Student Success Act, legislation designed to address the barriers that non-traditional students encounter while pursuing a college education. Escalating college costs are a central obstacle to all students, but can be especially devastating to non-traditional students who often have families to care for. Responding to the rising cost of obtaining a college degree and the declining purchasing power of federal financial assistance, this legislation will help ensure that college is affordable and accessible to non-traditional students. With this goal in mind, our bill will increase the maximum Pell Grant to $11,600 over the next five years and pilot a program that would make this aid available year-round. This provision will ease the financial burden non-traditional students endure and help them complete their degree programs more quickly. Our legislation also addresses a problem many non-traditional students experience, not being able to qualify for a sufficient amount of financial aid due to their less-than-full-time enrollment status. We propose establishing a pilot program to provide more financial aid to students enrolled in a degree program less-than-half-time, students with compressed or alternative schedules, and/or students in distance learning. It is imperative that our financial aid system no longer exists at odds with the needs and course loads of non-traditional students. This measure takes a critical first step towards correcting this situation. Our bill also expands the list of education expenses for the Lifetime Learning tax credit to include not just the costs of tuition and fees but also books, supplies and equipment, childcare and living expenses. Non-traditional students often have more expenses than tuition and fees that must be considered if a college degree is going to be financially possible. A common sense way of making higher education more accessible is to increase the public's awareness of available financial aid, including education tax credits. In 2001, only 21 percent of respondents in a national survey had heard of the education tax credits. Our bill will promote what financial aid programs are available. It is not enough that we improve the affordability of college for non-traditional students without improving student support services that promote retention and academic success among these students. This legislation increases funding for on-campus child-care to help nontraditional students with children. Additionally, we propose an increase in funding for Student Support Service programs, GEAR UP and College Assistance Migrant Programs. These programs provide counseling, mentoring, tutoring and other services to help non-traditional students succeed. I encourage my colleagues to support the Non-Traditional Student Success Act. This legislation contains a variety of common sense provisions that make college more affordable and success more probable for non-traditional students. By supporting the Non-Traditional Student Success Act, you help bring the American dream within reach for a large segment of our Nation's undergraduate population.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, I recognize the dedication of the Paralyzed Veterans of America, PVA, and their support of spinal cord injury research. Through their Spinal Cord Research Foundation, PVA support has aided researchers in making huge advances in this crucial field. Last Friday, in conjunction with PVA Awareness Week 2004, three spinal cord injury researchers detailed the contributions PVA has made toward improving treatment for and, hopefully, eventually ending paralysis. Stephen G. Waxman, M.D., Ph.D., professor and chairman of neurology at Yale University, discussed ``Protecting and Repairing the Spinal Cord: Gifts from the Molecular Revolution.'' Among other topics, Dr. Waxman discussed how his lab had created chronic neuropathic pain in a rat, which the lab was then able to successfully ``turn off'' and ``turn on'' through chemical manipulations. Mindy L. Aisen, M.D., the deputy chief research and development officer and rehabilitation research and development service director for the Department of Veterans Affairs, VA, addressed ``Spinal Cord Injury Reasearch: The VA Perspective.'' She spoke about the large scope of VA research, which extends well beyond spinal cord dysfunction. She specifically discussed the diaphragmatic pacer used by Christorpher Reeve, which was invented at the Cleveland VA Medical Center, and she noted the wound healing studies conducted by VA. Alessandro Ghidini, M.D., a specialist in high-risk pregnancies and director of perinatal research for the department of obstetrics and gynecology at Georgetown University Medical Center, spoke about ``Obstetrical Outcomes of Women with Spinal Cord Injury.'' Dr. Ghidini is just beginning a PVA research foundation grant to document the obstetrical experiences of 60 women with spinal cord injuries, and she talked about the main concerns that arise when these two major conditions interact; complications from both can create a number of medical emergencies that healthcare professionals and women with spinal cord injuries must know about in order to carefully and successfully manage them. These medical professionals demonstrated the great strides the PVA Spinal Cord Research Foundation has helped to make in alleviating the hardships of paralysis, and they provided a glimpse into the promising future of spinal cord injury research.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, the people of the United States learned many things from the election of 2000. I believe the most important lesson was that voting equipment should produce a clear paper record of each voter's intentions for use in a manual recount. Americans remember well that the outcome of the 2000 presidential election was determined by whether a ``chad'' was hanging, pregnant, or dimpled. More recently we have found that, despite the passage of election reform legislation in 2002 called the Help America Vote Act, our electoral system is still experiencing difficulties. The 2004 presidential primaries have produced accounts of voting irregularities. This is especially distressing considering another national election is just months away. Voters in several States, including California, Maryland, Georgia and my own State of Florida have experienced problems casting their votes and seeing them accurately counted. On the Tuesday, March 9, 2004, presidential primary in Palm Beach County, FL, the ``oops factor'' again reared its ugly head, casting doubt in the minds of many Floridians about whether or not their votes actually counted. An error on the part of poll workers--pressing the wrong button to activate voting machines--prevented many from voting in the Democratic primary. A technological error in the tabulation of ballots in Bay County, FL showed Congressman Dick Gephardt winning the primary by a 2-to-1 margin. Fortunately, Bay County uses a paper ballot system so they could refer to their paper trail to rectify the error. This is not the first election since 2000 where the value of a paper record has been apparent. Just this past January, victory in a South Florida Republican primary election for a vacant seat in the State legislature was determined by just 12 votes. In that election, 137 blank ballots were cast on electronic voting machines that do not produce a paper record. A candidate requested a manual recount, only to find such a recount impossible without paper records verifying the intent of those 137 voters. In Georgia's Presidential Primary, ``smart cards'' containing ballot information for electronic machines were left unprogrammed. Technical irregularities in Maryland elections prevented at least one voter form voting--and he wrote about it in the Washington Post. These incidents and many others are clear evidence that we need voting machines that produce an individual paper record for all votes cast. While the Help America Vote Act (HAVA) included provisions requiring paper records for manual audits, we have come to find out that voting jurisdictions are not interpreting these provision the way Congress intended. I am pleased to join Senators Clinton and Boxer in introducing the Restore Elector Confidence in Our Representative Democracy Act (RECORD Act). This legislation will ensure that all voting jurisdictions will have machines that produce voter-verifiable paper records, so that they will be as prepared as they can be to count every vote come this November. It is critical that Congress take every possible step to prevent any resemblance between Election Day 2000 and Election Day 2004. Once a month I spend a day working side-by-side with the people of Florida. On Saturday, March 6, 2003, I spent my 399th Workday as an elections worker for the Miami-Dade County Division of Elections. Veteran Supervisor of Elections Connie Kaplan assured me that electronic voting machines are accurate. The things I learned on the job reinforced that assessment. But several voters expressed confusion about the layout of the electronic ballots, and uncertainty about whether or not their votes had been cast. It was clear to me that voters would be more confident that their votes would be counted if there were a paper record of those votes. In light of reported irregularities and security concerns, this voter apprehension is legitimate. In order to be certain about the accuracy and security of computer voting systems we need a paper record to confirm every vote cast. Modern society is replete with electronic machines that provide the most basic services: ATMs, train ticket vending machines, gasoline pay- at-the-pump stations. All of these machines produce paper records. The votes of America's citizens are at least as important as these transactions. People do not and should not blindly trust the accuracy of computer voting technologies. Congress must pass the RECORD Act so that Americans can have confidence that their votes will be counted.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, the people of the United States learned many things from the election of 2000. I believe the most important lesson was that voting equipment should produce a clear paper record of each voter's intentions for use in a manual recount. Americans remember well that the outcome of the 2000 presidential election was determined by whether a ``chad'' was hanging, pregnant, or dimpled. More recently we have found that, despite the passage of election reform legislation in 2002 called the Help America Vote Act, our electoral system is still experiencing difficulties. The 2004 presidential primaries have produced accounts of voting irregularities. This is especially distressing considering another national election is just months away. Voters in several States, including California, Maryland, Georgia and my own State of Florida have experienced problems casting their votes and seeing them accurately counted. On the Tuesday, March 9, 2004, presidential primary in Palm Beach County, FL, the ``oops factor'' again reared its ugly head, casting doubt in the minds of many Floridians about whether or not their votes actually counted. An error on the part of poll workers--pressing the wrong button to activate voting machines--prevented many from voting in the Democratic primary. A technological error in the tabulation of ballots in Bay County, FL showed Congressman Dick Gephardt winning the primary by a 2-to-1 margin. Fortunately, Bay County uses a paper ballot system so they could refer to their paper trail to rectify the error. This is not the first election since 2000 where the value of a paper record has been apparent. Just this past January, victory in a South Florida Republican primary election for a vacant seat in the State legislature was determined by just 12 votes. In that election, 137 blank ballots were cast on electronic voting machines that do not produce a paper record. A candidate requested a manual recount, only to find such a recount impossible without paper records verifying the intent of those 137 voters. In Georgia's Presidential Primary, ``smart cards'' containing ballot information for electronic machines were left unprogrammed. Technical irregularities in Maryland elections prevented at least one voter form voting--and he wrote about it in the Washington Post. These incidents and many others are clear evidence that we need voting machines that produce an individual paper record for all votes cast. While the Help America Vote Act (HAVA) included provisions requiring paper records for manual audits, we have come to find out that voting jurisdictions are not interpreting these provision the way Congress intended. I am pleased to join Senators Clinton and Boxer in introducing the Restore Elector Confidence in Our Representative Democracy Act (RECORD Act). This legislation will ensure that all voting jurisdictions will have machines that produce voter-verifiable paper records, so that they will be as prepared as they can be to count every vote come this November. It is critical that Congress take every possible step to prevent any resemblance between Election Day 2000 and Election Day 2004. Once a month I spend a day working side-by-side with the people of Florida. On Saturday, March 6, 2003, I spent my 399th Workday as an elections worker for the Miami-Dade County Division of Elections. Veteran Supervisor of Elections Connie Kaplan assured me that electronic voting machines are accurate. The things I learned on the job reinforced that assessment. But several voters expressed confusion about the layout of the electronic ballots, and uncertainty about whether or not their votes had been cast. It was clear to me that voters would be more confident that their votes would be counted if there were a paper record of those votes. In light of reported irregularities and security concerns, this voter apprehension is legitimate. In order to be certain about the accuracy and security of computer voting systems we need a paper record to confirm every vote cast. Modern society is replete with electronic machines that provide the most basic services: ATMs, train ticket vending machines, gasoline pay- at-the-pump stations. All of these machines produce paper records. The votes of America's citizens are at least as important as these transactions. People do not and should not blindly trust the accuracy of computer voting technologies. Congress must pass the RECORD Act so that Americans can have confidence that their votes will be counted.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, there is a recurring pattern in this town. An issue comes to our attention. It is red hot. It creates a great deal of controversy. Two months later it is forgotten. My effort tonight is going to be to resurrect one of those issues because I think is it not only extremely important, but it is also urgent that we give it attention. The issue is the administration's cost estimate of the Medicare Modernization and Improvement Act and the circumstances surrounding the failure to release that cost estimate to the Congress. As I said, this is old news, but let me just refresh some people's memories. As early as the summer of 2003, the administration's actuaries, the people who work for the administration in the Department of Health and Human Services, projected that the 10-year cost of the Medicare legislation, which among other things provided a prescription drug benefit, would be $534 billion over a 10-year period. It is also old news that Mr. Rick Foster, Chief Actuary of the Medicare Program, was ordered by the administrator of the Centers for Medicare and Medicaid Services--at that time Mr. Thomas Scully--to withhold critical actuarial data from Congress and that failure to abide by this order might well result in Mr. Foster being fired. What is yet to be news are the reasons for the months' long delay in disclosing that estimate to the American public and to the Congress. It has now been 10 weeks since we found out the Medicare bill that we had represented to us as costing $400 billion over 10 years would actually cost $534 billion, according to the administration's own actuaries--10 weeks. We have had no explanation for the reasons for the delay, despite the following quote by Secretary Thompson, the Secretary of the Department of Health and Human Services, on March 16 of this year. What did the Secretary say? There seems to be a cloud over this department because of this. We have nothing to hide. So I want to make darn sure that everything comes out. Along with other members of the Finance Committee, I have asked the chairman and the ranking member to hold a hearing on the cost estimate and the reasons for its late disclosure. Given his strong track record on Medicare oversight, I am confident these two fine Senators will do so. I want to be clear about a couple of things: One, it is not the cost per se that is troubling to me. In a moment of full disclosure, I voted for a prescription drug benefit that cost more than $400 billion. I voted for a prescription drug benefit that cost more than $534 billion. But I was voting for a prescription drug benefit that would at least provide a reliable Buick-style benefit to our seniors. What has now happened is we have learned that we passed a Yugo-like prescription drug benefit and are now paying Cadillac prices for it. The second thing I wish to be clear about, some of my colleagues have suggested that the only estimate that matters is the Congressional Budget Office because Congress is legally required to rely on the CBO numbers. You may recall, as a youth, reading some Charles Dickens books, including possibly Oliver Twist. In that book, when confronted with a similar argument, Mr. Bumble said: If the law supposed that, the law is an ass, an idiot. Mr. Bumble's perspective on the law aside, it is indeed true that Congress uses CBO numbers as our official scorekeeper, and I am not suggesting that at this point we alter that process. At the same time I don't think anyone would disagree that it is in America's best interest and the best interest of Congress to have as much information as possible before we vote on significant pieces of legislation. That would clearly include the insights of the person most knowledgeable about the likely cost of this program--the actuary of the very department that will have the responsibility for administering the program. In fact, it seems information was deliberate, purposefully withheld from the Congress. That action of withholding was contrary to past practices. Moreover, it appears to directly violate the spirit of the Balanced Budget Act of 1997 which confirmed the independence of the Chief Actuary and the desire of Congress to have access to his relevant cost projections. The fact that the official cost has appropriately been determined by CBO is not the point, nor is the point the fact that there was a difference in the cost estimates between the Congressional Budget Office and the Department's actuaries. We know that different analysts will frequently arrive at different conclusions. The point is this: the enormous magnitude of the difference and the efforts apparently taken by this administration to keep that huge difference hidden from public and congressional scrutiny. That is the point. The point is the Chief Actuary had information that would have been valuable to us, Republicans and Democrats alike, in our deliberations long before we took our vote on the final conferenced version of the Medicare prescription drug legislation. This information was deliberately withheld. The fact is, if the White House had released to the public and the Congress its own actuary's estimate of the cost of this Yugo prescription drug benefit, the legislation would clearly not have passed. The Finance Committee has a particular obligation to investigate this deception. As a member of that committee, I understand we have an obligation to seniors who are depending on an affordable, quality prescription drug benefit. We have an obligation to taxpayers who will be paying for that benefit. We have an obligation to our fellow colleagues to whom we declared, we represented that this plan would not cost more than $400 billion, cross my heart and hope to die. We have an obligation to get answers to these questions: What did the President know regarding the much higher cost estimated by his own actuaries and when did he know it? For someone from Tennessee, that might be a familiar question. If the President did not know that one of his stated priorities was estimated by his actuaries to far exceed the cost ceiling for this Medicare change--$400 billion over 10 years--who within his administration failed to notify him of this extraordinary cost overrun? Third, what actions, if any, were taken by the Department of Health and Human Services, the Office of Management and Budget, or the White House itself to prevent the timely and accurate reporting of information to Congress on the cost of this Medicare bill? Finally, who has the President held accountable for this deception and what sanctions have been imposed? These are ``rational, critical, important to the Congress and the public to know the answers'' questions. One of the immediate impacts we are going to have because of this withholding is that the Congress, the Senate, now the House, have recently passed budget resolutions. These budget resolutions cover fiscal year 2005, which begins October 1 of this year, running through fiscal year 2009. In that budget resolution, as passed by the Senate, the baseline cost of the new Medicare prescription drug provisions and other matters that were included in that legislation is $165 billion over 5 years. The number, as determined by the administration's own Office of the Actuary in the Department of Health and Human Services, is $231 billion. Mr. President, what are we going to do when we face the question of funding this prescription drug benefit--what I suspect to be likely closer to its true cost, $231 billion, as opposed to $165 billion, CBO's number. Are we going to have to have a point of order with 60 votes every time we exceed the clearly inadequate number in order to provide the benefit that we are now running millions of dollars worth of television ads telling the seniors of America they are about to get a new benefit, without any changes in the Medicare Program? The Finance Committee needs to closely examine these different numbers. I suggest a couple of places to start. Approximately 25 percent of the difference between CBO and the actuaries is in one area, and that is what will be the effect of increasing the number of persons who are enrolled in health management organizations. This legislation not only dealt with prescription drugs, but it also substantially increased the funding for HMOs and insurance companies in order to create an atmosphere that would induce new Medicare beneficiaries to change their form of service from fee for service to traditional Medicare and to join an HMO. In fact, the CBO estimated it would cost an additional $14 billion to do that. The administration estimates it will cost $46 billion. You might ask why does it cost more. I thought the purpose of using an HMO for Medicare beneficiaries was it would save money. It was supposed to get people into a more organized health care system; it was supposed to encourage HMOs to provide preventive services so people would not get as sick, and they would have a higher quality of life and less health care costs. Well, I am shocked, and I am certain most Members of Congress are shocked, to find the administration finds it will cost $46 billion more to provide health care services to those persons who are induced by the benefits of this legislation to join an HMO than if they stayed where they were. So one question we need to know is, why are we scaring seniors into HMOs, when this is clearly harmful to the financial structure of the Medicare Program? The second point I hope the Finance Committee will review is the prohibition inserted into this legislation against the administrator of the program and the Secretary of the Department of Health and Human Services, negotiating on behalf of Medicare beneficiaries to get the best possible prices for prescription drugs. We have an almost analogous situation, except the circumstances are reversed. The Secretary of the Veterans' Administration is directed to negotiate for the prescription drugs his largest hospital system in the world provides. Guess what. He has negotiated so well the cost of prescription drugs in a VA hospital is less than half of what it would be if you bought the same drugs at retail at a local drugstore. Can you believe the Congress of the United States has passed a provision that prohibits the head of Health and Human Services from getting the same good prices for our seniors? Let me say, as an aside, we have seen some extremely distressing numbers from the trustees of the Medicare Program. In fact, they released a report within the last 30 days which indicated there has been a 7-year shortening in the term--the years in which Medicare will go insolvent. As recently as last year, it was estimated the program would go insolvent in 2026. In 1 year, they have reduced that to 2019. So we have a system that, we are being told by our best experts, in a little more than 15 years is going to be insolvent. It seems to me there ought to be a sense of urgency to get every possible relief we can to this program so we do not deny the promise that has been made to the American people, to the working men and women, when they reach retirement age. I believe one thing we can do immediately, in addition to reviewing this issue of health maintenance organizations, is to give to the Secretary of HHS and the administrator of the Medicare Program the authority to negotiate for the hospital portion of prescription drugs. We have passed a new prescription drug benefit for outpatients. But since the beginning of Medicare, Medicare has paid for prescription drugs that were dispensed in a hospital setting. We ought to do everything we can, in light of the fact that 100 percent of the trust funds for Medicare goes for part A--the hospital part--to lower the cost of the hospitals. One immediate way we can do it is by assisting the hospitals in the same way VA assists its hospitals, to lower the cost of their prescription drugs. I am hopeful the Finance Committee will hold a hearing on this important issue before the Memorial Day recess. This would give us an opportunity to fully understand the differences between the two estimates, the implications of those differences, and the process by which we learned at such a late date the administration was going to project such an enormous difference. And most important, as a Congress, we need to understand what happened and how the Congress can correct the consequence of this deception. jobs act

Mr. GRAHAM of Florida. Mr. President, I will withhold at the request of the leader.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, yesterday, March 11, 2004, was a solemn day. Two and a half years ago to the day, 19 terrorists hijacked four airliners and crashed them into the World Trade Center, the Pentagon, and a field in rural Pennsylvania. It is fitting that we pause today to remember the nearly 3,000 innocent people who lost their lives that day. It is also fitting that we take a moment to remember the responsibilities that we undertook in the aftermath of those horrible events. We in public office undertook a particularly important obligation, as we vowed to take action to prevent terrorist attacks of that magnitude from happening again. In his speech delivered before a joint session of Congress on September 20, 2001, President Bush put it this way: ``Americans are asking, How will we fight and win this war? We will direct every resource at our command--every means of diplomacy, every tool of intelligence, every instrument of law enforcement, every financial influence, and every necessary weapon of war--to the disruption and to the defeat of the global terror network. Unfortunately, we have not met that commitment. We now know that the terrorist attacks of September 11 were the result of a sophisticated plot that developed over many months and required coordination among a number of individuals. If our national intelligence agencies had been better organized and more focused on the problem of international terrorism, this tragedy would have been avoided. Incredibly, it is now 30 months later, and the basic problems in our national intelligence community that contributed to our vulnerability on 9/11 have not yet been seriously considered, much less resolved. These problems are not a mystery, they are known weaknesses that simply have yet to be fixed. If we in the Congress do not take action to remedy these weaknesses, we will not be able to avoid accountability for the next attack. A series of independent commissions and the Joint Inquiry conducted by the House and Senate Intelligence Committees in 2002 have identified a variety of issues that we must address. They fall into four categories: One, setting priority targets for intelligence collection and analysis. Director of Central Intelligence George Tenet declared war on al- Qaida in 1998, but few in the CIA--and almost no one in the other agencies that make up our Intelligence Community--responded to his clarion call. Our national intelligence agencies continued to focus on states, such as Russia, China, Iran and Iraq. Despite Mr. Tenet's call for action, Osama bin Laden al-Qaida was not even near the top of our intelligence priority list on September 11, 2001. It was not until September 12 that they moved to the top of the list. Part of the problem was that our intelligence community had no formal process for regularly reviewing and updating intelligence priorities to ensure that they accurately reflected the current security environment. Furthermore, it does not appear that the heads of other intelligence agencies looked to the Director of Central Intelligence for leadership and priority-setting. Even though George Tenet may have realized that non-state actors like al-Qaida needed more attention, the importance of these groups was not clear to other members of the intelligence community. The head of the National Security Agency, our Nation's electronic eavesdropping agency, was asked if he knew about Mr. Tenet's declaration of war with al- Qaida. The director of the NSA said that yes, he was aware of Mr. Tenet's statement, but he did not think it applied to him or his organization. Two, providing strong new leadership for the intelligence community. Examples like this make it clear that we need to provide strong new leadership for the intelligence community. 9/11 exposed historic tensions within the Intelligence Community, and between intelligence agencies and law enforcement. We need to empower a Cabinet-level official with the authority to end bureaucratic in-fighting and competition for resources, as well as ensuring the sharing of information among all of those charged with protecting our homeland security--including first responders at the State and local level. In many ways, our national intelligence community has resembled, and still resembles, a collection of independently operating actors, rather than a unified team that works together on counterterrorism and other missions. Before 9/11, there were a number of barriers that prevented information from being shared among various agencies, and while many formal barriers have been removed, many informal ones remain in place. Our joint, bipartisan congressional inquiry revealed that in the months before the September 11 attacks, our national intelligence agencies collected pieces of information that, taken as a whole, could have been used to disrupt al-Qaida's hijacking plot. Unforunately, this information was not shared with all of the right people, and helpful actions were not taken. The CIA was aware that two terrorists associated with al-Qaida had obtained visas for travel to the United States, but it did not share this information with border protection agencies, or with the FBI, which could have kept an eye on these men once they were in the country. The FBI was aware that a man arrested in Minnesota might have been planning a suicide hijacking, but it did not share this information with the Federal Aviation Administration, which could have increased security precautions on domestic flights. Better information sharing between the FBI and CIA, as well as other intelligence agencies, could have increased the intelligence community's overall awareness of terrorist activities. And better information sharing between the intelligence community and all the various agencies who contribute to our homeland security could have helped these agencies move to an appropriate level of alertness. We have an obligation to make sure that better information sharing takes place, and the consequences of failure could be very high. Three, setting priorities for limited resources. A Cabinet-level official with authority over intelligence could also set priorities for limited intelligence resources. The Intelligence Community did not adapt quickly enough after the end of the Cold War, during which we had come to rely more on satellites than on human assets--spies. There was no collective sense of importance within the Intelligence Community, including the Department of Defense, and as a result, investments in research and development-- which were once a priority--suffered slippage. Nearly all intelligence agencies faced significant staff shortages prior to 9/11, and this had a serious impact on their effectiveness. At the Central Intelligence Agency, for example, many critical counterterrorism personnel were required to work long hours without relief. This obviously made these personnel less effective, and had a very negative effect on their morale. Other intelligence agencies, such as the National Security Agency and the Federal Bureau of Investigation, faced similar staffing problems. In particular, these agencies lacked sufficient numbers of analysts and language specialists to support agents working in the field. When agency directors tried to create solutions to these personnel problems, they were often unable to implement them. The lack of clear counterterrorism priorities made it difficult for managers to reassign personnel from other areas. Moving money was almost as difficult as moving people, since intelligence community managers have limited budget authority. Incredibly, these problems are still with us today. While all of our intelligence agencies have increased in hiring and training of counterterrorism personnel, many of them continue to face resource and personnel problems. Even relatively small shifts of resources still must go through a lengthy approval process, and it is not always possible to assign enough people to important areas. Prior to 2001, many CIA officials knew that more agents were needed in Afghanistan, but they were unable to move resources away from other priorities. By giving our intelligence agencies more budget flexibility, we can empower them to address problems further in advance, and begin thinking about solutions, instead of waiting for a crisis to occur before taking any action. Long term planning is also constrained by the process we use for funding our intelligence agencies. Instead of providing them with a sustained, stable source of funding, we insist on giving them relatively small budget allocations, and then increasing this through the use of supplemental appropriations bills. Counterterrorism programs have relied heavily on these supplemental appropriations for several years, and this continues today in spite of repeated claims that we have increased our focus on counterterrorism. If we wish to get the most out of our investment in counterterrorism, we must make it possible for Intelligence Community directors and managers to engage in long term planning, rather than simply jumping from one crisis to the next. Of course, increased flexibility must be accompanied by increased oversight. As hard as it is for most Americans to believe, the Intelligence Community has only a vague idea of how much money it spends on counterterrorism. Most agencies do not regularly examine how much they spend on counterterrorism, and those that do use inconsistent accounting methods--and often base their data on rough estimates. If we do not know how much we are spending on counterterrorism priorities, it will obviously be very hard for us to see if our investment is being spent wisely. A cost-benefit analysis from an independent agency would be very helpful in this regard, but so far there have been no serious efforts to undertake such an effort. Four, establishing a competent domestic counterterrorism capability. Finally, we must begin establishing a competent domestic counterterrorism capability. The FBI has looked at its intelligence-gathering role through the prism of a law-enforcement agency. If asked how many suspected terrorists or terrorist sympathizers are estimated to live in any given major American city, the FBI would respond with the number of open investigative files its field office had there. Americans have to decide what we expect of our domestic intelligence- gathering capability--and how much intrusion into our personal lives we are willing to accept. Then we must make a choice: Can we accomplish our goal with an agency that has a mixed law-enforcement and intelligence-gathering mission, or should we create a separate domestic intelligence-gathering unit such as Great Britain's MI5? For the immediate future, our national security interests are best served by acting to make the FBI as effective as it can be. However, we must also consider our other options and decide if we can do better. The FBI continues to perform its intelligence mission in a commendable fashion, but detecting and disrupting terrorist plots before they can be executed requires a very different approach than apprehending perpetrators of crimes that have already taken place. If we look around the world, we can see that there are many different models for domestic intelligence gathering, and many different models for domestic law enforcement. Here in America we must decide what sort of institution best fit our needs and circumstances, and as these circumstances change, we should not be afraid to make our institutions change as well. This must first begin with a debate over the best possible structure for our domestic intelligence and law enforcement programs. I am sorry to say this debate has not yet taken place. The problems that I have discussed today need to be fixed as soon as possible. Ignoring them will not make them go away. Old habits, differences in agency culture, and bureaucratic inertia are not acceptable excuses for procrastination and delay. If we do not address them quickly and effectively, we will be blind to emerging threats, and we will leave ourselves vulnerable to future attacks. On the other hand, if we can repair these weaknesses then we can give the hard-working men and women of our Intelligence Community the tools they need to help prevent such attacks from taking place. As we reflect on the horrific events that stunned our Nation two and a half years ago, and pay tribute to those who lost their lives, we must recommit ourselves to our responsibility to do everything we can to prevent such events from happening again. If there is another terrorist attack in our country, the American people will look to their elected leaders and ask us what we learned from September 11, and how that information was used to protect them. We must be able to tell both those who lived--and those who died-- that we did everything we could.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, I am very pleased to introduce a resolution to recognize the week of March 7-March 14 as ``National Patient Safety Awareness Week'' with my colleagues and friends Senator Snowe, Senator Gregg, Senator Dodd and Senator Jeffords. We know that patient safety is a paramount health care issue today: a 1998 Institute of Medicine study shocked us with the fact that nearly 100,000 Americans die each year from medical errors in our clinical settings alone, which highlights both the gravity and emotion associated with this complex challenge. Some of us have experienced the tragedy of medical error, either directly or through a family member or friend. We are not unique; estimates show that about one in every 5 Americans has experienced a medical error or has a family member who has experienced a medical error. In addition to the profound emotional cost of these errors, the added burden placed on an already overburdened health care system is equally profound. The cost of medical care provided to correct an error, and the lost wages for those whose recoveries are extended because of medical errors is significant. The Institute of Medicine put a price tag of between $17 and $29 billion per year on the overall costs to our economy and our citizens due to medical errors. We can do better; indeed, we must do better. We can strengthen our efforts to apply proven safety techniques from other sectors and industries that have developed a culture of safety, like the aviation industry. By focusing on system changes, significant progress can be achieved in making our health care system safer. As legislators, we have drafted a range of proposals to address and improve the systems factors that lead to medical errors. As we think about ways to create a safer health care system, we must continue to work with healthcare professionals, patients and their families to ensure our healthcare systems place an absolute premium on the safety of its patients. In this regard, Senator Snowe and I have introduced a bill to reduce medication errors in hospitals and skilled nursing facilities. Other cosponsors of this resolution have supported legislation that would create a voluntary reporting system. As we consider these pieces of legislation, it is important to remember that medical errors are a multifaceted problem to which there are multiple solutions. This resolution addresses another key element in our quest to make our health care system safer: that being to fuel the ``power of partnership'' between patients, families and healthcare professionals. The ``power of partnership'' is the theme of this year's Patient Safety Awareness Week, sponsored by the National Patient Safety Foundation. Our recognition of National Patient Safety Awareness Week is an important addition to our efforts to create a safer health care system by promoting increased patient education and highlighting the importance of partnership between healthcare providers and patients. ``Patient Safety Awareness Week'' deserves the support of the United States Congress, and I urge my colleagues to support this Senate Resolution. While Patient Safety Awareness Week will not solve all the challenges associated with medical errors, it does launch us on a path of progress, and brings us one step closer. Through a bipartisan partnership we can highlight the importance of patient safety and the role of the patient and their families in achieving a safer health care system.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, Senator Clinton and I have been concerned about the status of the nontraditional college student, the adult who comes back to college at 35 or 40 to get some additional skills or, particularly, in these changing economic times, to get a new skill that has economic value. Most of our student financial aid programs are thinking about the 18- year-old student coming directly from high school. As an example, Pell grants do not apply to summer school. Many adults wishing to get through their training as rapidly as possible go year round. There are also some costs that are not recognized in the Pell grant, such as child care. Very few 18-year-olds have a need for child care; lots of 35-year-olds do. One of the key parts of the amendment we were going to offer was to increase the amount of the basic Pell grant to $4,500, which is what Senator Coleman has done with his amendment. So Senator Clinton and I are not going to offer our amendment, since that part has already been accomplished. That represented the overwhelming amount of the cost of this program. Recognize that when we get to the Higher Education Reauthorization Act, or some other appropriate legislation, we will be offering amendments to deal with these aspects of Pell grants that do not respond to the realities of the nontraditional student. We look forward to coming back on this field of battle at the earliest opportunity. We will not offer the amendment.

Mr. GRAHAM of Florida. I thank the Senator. Amendments Nos. 2837, 2838, 2839, and 2733, En Bloc

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. I would like to add a few comments to what has been so eloquently said. There has never been a time in the 500-year relationship between Spain and what is now the United States of America in which there have been stronger bonds of genuine friendship and empathy for each other, particularly at a time of tragedy such as this that exists today. I spoke early today with the Ambassador of Spain to the United States and he described what his country was experiencing as their September 11. Just as they came forward with such effectiveness and genuine remorse when we experienced our tragedy, we share those same feelings toward theirs today. May the bonds of our friendship give strength to both Spanish people and our people as we have experienced the consequences of terrorism on our own soil. Our hopes and our prayers are with our brothers in Spain.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, seven years ago, I introduced the Haitian Refugee Immigration Fairness Act of 1998 (HRIFA). I introduced HRIFA after Congress enacted the Nicaraguan Adjustment and Central American Relief Act (NACARA). NACARA enabled Nicaraguans and Cubans to become permanent residents and permitted many unsuccessful Central American and Eastern European asylum applicants to seek another form of immigration relief. At the time, Haitians were suffering brutal and widespread political persecution by a ruthless dictatorship. Yet lawmakers opted to exclude Haitian asylum seekers from the NACARA legislation. HRIFA became law with bipartisan support and reversed this grave inequity in U.S. immigration law. It allowed Haitians who had fled political turmoil in their country an opportunity to adjust their status like the opportunity we granted to refuges from other countries. The legislation has been beneficial and nearly 11,000 Haitians have adjusted their status and become legal permanent residents of the United States. However HRIFA contained several flaws that undermine the original intent of the legislation. That is why today I am introducing the HRIFA Improvement Act of 2004. I would like to thank my friend Senator Mike DeWine for taking the lead in co-sponsoring this bill and for his continued support and commitment to fairness in our immigration policy. First, this legislation corrects an oversight that disqualified Haitian refugees who entered the country with falsified papers. Some Haitian refugees, like many who have fled repressive governments, used falsified documents to flee their country when it was impossible for them to get travel documents from their dictatorial government. If you look at other immigration legislation, it is clear that the exclusion of Haitian refugees who came here with falsified documents is an oversight. NACARA allowed refugees from a long list of countries, including Guatemala, El Salvador, Romania, Hungary, Bulgaria, and a number of others, to adjust their status to legal permanent residence, even if they entered the country with fraudulent documents. As result of this oversight, many families and up to 5,000 American children face the possible deportation of a spouse, father or mother who has worked for a decade or more to build a life and a family in the United States. There have been media reports, heart-rending stories, of parents facing the choice between forever leaving their American-born children in their safe communities and schools in the United States or taking them back to a strife-torn Haiti where their parents risk political violence and persecution. I ask unanimous consent to include in the Record an Associated Press story from December 29, 2003, called ``Flaw in Law threatens Deportation for Haitian Refugees.'' The piece tells the story of Rigaud Rene, a Haitian political activist now living in Miami. Mr. Rene faces deportation because he fled Haiti in 1994 using doctored documents and is therefore not covered by HRIFA. Since coming here, Mr. Rene has learned English, held down a job and earned his GED degree. He also married and has a one and a half year old American-born son. If Mr. Rene is deported, he will be forced to take his U.S. citizen son with him or leave him here without any means of support. It is a solomonic choice that Mr. Rene should not have to make, especially because his dilemma is the result of a simple oversight in the law. The difference between the way we treat Haitians and the way we treat refugees from other nations is inconsistent and unfair. The elimination of this kind of inconsistency and unfairness was the primary motivation for the passage of HRIFA in 1998. Clearly, the exclusion of Haitians who entered with falsified documents was an oversight that must now be corrected. The second purpose of the Improvement Act is to respond to another legislative oversight that left Haitian children and dependents unprotected from ``aging out'' of HRIFA eligibility. HRIFA allows children and unmarried dependents of approved applicants to adjust to legal permanent residency. However, the Bureau of Citizenship and Immigration Services has taken much longer than was expected to approve the many applicants who had eligible children and dependents when they applied. As a result, many of those who would have been eligible had their parents or guardians been approved earlier have now ``aged out'' of eligibility or gotten married. Currently, these ``aged out'' individuals face the immediate risk of deportation. Their ineligibility is a result solely of administrative delays and is neither their fault nor the intent of HRIFA. The Improvement Act addresses this unforeseen injustice by permitting these individuals to apply for adjustment of status or move to have their cause reopened. Finally, the HRIFA Improvement Act of 2004 also ensures fairness by extending the protection from deportation to applicants under this Act. This is consistent with the protection extended to applicants under the 1998 HRIFA legislation. All those who come to the United States fleeing political persecution and violence deserve to be treated fairly and equally. This country is built on this principle of justice and we should give everyone, regardless of his or her national origin, an equal opportunity. That is what this legislation intends to do.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. Mr. President, seven years ago, I introduced the Haitian Refugee Immigration Fairness Act of 1998 (HRIFA). I introduced HRIFA after Congress enacted the Nicaraguan Adjustment and Central American Relief Act (NACARA). NACARA enabled Nicaraguans and Cubans to become permanent residents and permitted many unsuccessful Central American and Eastern European asylum applicants to seek another form of immigration relief. At the time, Haitians were suffering brutal and widespread political persecution by a ruthless dictatorship. Yet lawmakers opted to exclude Haitian asylum seekers from the NACARA legislation. HRIFA became law with bipartisan support and reversed this grave inequity in U.S. immigration law. It allowed Haitians who had fled political turmoil in their country an opportunity to adjust their status like the opportunity we granted to refuges from other countries. The legislation has been beneficial and nearly 11,000 Haitians have adjusted their status and become legal permanent residents of the United States. However HRIFA contained several flaws that undermine the original intent of the legislation. That is why today I am introducing the HRIFA Improvement Act of 2004. I would like to thank my friend Senator Mike DeWine for taking the lead in co-sponsoring this bill and for his continued support and commitment to fairness in our immigration policy. First, this legislation corrects an oversight that disqualified Haitian refugees who entered the country with falsified papers. Some Haitian refugees, like many who have fled repressive governments, used falsified documents to flee their country when it was impossible for them to get travel documents from their dictatorial government. If you look at other immigration legislation, it is clear that the exclusion of Haitian refugees who came here with falsified documents is an oversight. NACARA allowed refugees from a long list of countries, including Guatemala, El Salvador, Romania, Hungary, Bulgaria, and a number of others, to adjust their status to legal permanent residence, even if they entered the country with fraudulent documents. As result of this oversight, many families and up to 5,000 American children face the possible deportation of a spouse, father or mother who has worked for a decade or more to build a life and a family in the United States. There have been media reports, heart-rending stories, of parents facing the choice between forever leaving their American-born children in their safe communities and schools in the United States or taking them back to a strife-torn Haiti where their parents risk political violence and persecution. I ask unanimous consent to include in the Record an Associated Press story from December 29, 2003, called ``Flaw in Law threatens Deportation for Haitian Refugees.'' The piece tells the story of Rigaud Rene, a Haitian political activist now living in Miami. Mr. Rene faces deportation because he fled Haiti in 1994 using doctored documents and is therefore not covered by HRIFA. Since coming here, Mr. Rene has learned English, held down a job and earned his GED degree. He also married and has a one and a half year old American-born son. If Mr. Rene is deported, he will be forced to take his U.S. citizen son with him or leave him here without any means of support. It is a solomonic choice that Mr. Rene should not have to make, especially because his dilemma is the result of a simple oversight in the law. The difference between the way we treat Haitians and the way we treat refugees from other nations is inconsistent and unfair. The elimination of this kind of inconsistency and unfairness was the primary motivation for the passage of HRIFA in 1998. Clearly, the exclusion of Haitians who entered with falsified documents was an oversight that must now be corrected. The second purpose of the Improvement Act is to respond to another legislative oversight that left Haitian children and dependents unprotected from ``aging out'' of HRIFA eligibility. HRIFA allows children and unmarried dependents of approved applicants to adjust to legal permanent residency. However, the Bureau of Citizenship and Immigration Services has taken much longer than was expected to approve the many applicants who had eligible children and dependents when they applied. As a result, many of those who would have been eligible had their parents or guardians been approved earlier have now ``aged out'' of eligibility or gotten married. Currently, these ``aged out'' individuals face the immediate risk of deportation. Their ineligibility is a result solely of administrative delays and is neither their fault nor the intent of HRIFA. The Improvement Act addresses this unforeseen injustice by permitting these individuals to apply for adjustment of status or move to have their cause reopened. Finally, the HRIFA Improvement Act of 2004 also ensures fairness by extending the protection from deportation to applicants under this Act. This is consistent with the protection extended to applicants under the 1998 HRIFA legislation. All those who come to the United States fleeing political persecution and violence deserve to be treated fairly and equally. This country is built on this principle of justice and we should give everyone, regardless of his or her national origin, an equal opportunity. That is what this legislation intends to do.

Mr. GRAHAM of Florida

Mr. GRAHAM of Florida. My question was not what the totality is, but since the President assumed a substantial additional revenue source for the VA through these enrollment fees and increased copayments, how does the budget resolution propose to fund those items or to provide the replacement revenue that would come from those two items?

Mr. GRAHAM of Florida. Does the resolution, therefore, contain the funds from appropriate sources to offset that which would have been raised had the President's recommendation of the prescription drug copayment increased and the enrollment fee been enacted?

Mr. GRAHAM of Florida. Does that mean the budget is even more out of balance in terms of providing services than the one the President submitted which would have had those increases in out-of-pocket costs?

Mr. GRAHAM of Florida. No. I will yield when I complete my remarks, which will be soon. The amendment my colleagues and I are debating today would provide the VA with the $1.8 million which is necessary to keep the current services in place and would also provide the funds to meet the cost of these wounded returning American service men and women like John so we will be able to honor the commitment we have made to him. It will also provide the funds to continue to meet our long-term care and mental health needs. These numbers were not derived out of smoke. These numbers were derived by an independent budget committee. This is a committee made up of representatives of all the major veterans organizations looking at what is the realistic cost of providing appropriate service. This consortium of veterans organizations has set the bar as well as to how much VA needs will be to treat their patients. This administration has made the war in Iraq and Afghanistan a priority, appropriately so. But at the same time, this administration does not want to provide the resources to meet the health care needs of returning combatants. This war will create a new generation of veterans, and this budget fails to take that into account. This budget has the potential of creating a conflict between generations of veterans. It is asking the current veterans assume a further dilution in their medical services so the newly returning injured combatants will be able to receive the care for which they have been promised. It is up to us in the Congress to see service members and veterans alike receive the benefits they have earned. We can do no less than to meet our duty to their patriotic service. Thank you, Madam President. I would be glad to yield to the Senator from Oklahoma.