Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. I thank the Chair. (The remarks of Mr. Grassley pertaining to the introduction of S. 2762 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. GRASSLEY. Yes.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce legislation to close a loophole under the Caribbean Basin Initiative, CBI, trade preference program which could allow large quantities of Brazilian ethanol to be shipped to the United States duty-free. This loophole allows companies to use the CBI program as a passthrough to get duty- free treatment for Brazilian ethanol. This could end up displacing U.S. production and hurting Iowa's ethanol producers. I want to help make sure that does not happen. Also, when the Caribbean Basin Initiative was enacted during the Reagan administration, the purpose of the program was to encourage trade and development with the region. I support the CBI program. However, I believe that the program should encourage meaningful economic development in the region. Unfortunately, one special interest provision in the statute permits ``wet'' ethanol from Brazil to be shipped to the CBI region and merely dehydrated, thus qualifying for duty-free access to the U.S. market. The dehydration process which occurs in the CBI region is not very complicated. It simply removes a small percentage of water from ``wet'' ethanol, thereby converting it into ``dry'' ethanol. Such ``dry'' ethanol is provided duty-free access to the U.S. market. I do not believe that such simple processing is substantial enough to warrant the benefit of getting duty-free access to the U.S. market. In keeping with the original intent of the CBI, I believe that more meaningful economic activity should occur in the CBI region before a product qualifies for duty-free treatment. My bill would limit the opportunity to exploit this special interest provision. It would introduce a fixed cap on the amount of ethanol that can take advantage of the passthrough provision. The amount of the cap is based on the historical volume of ethanol exports from the CBI region over the past 20 years. Thus, my bill will permit the continued duty-free importation of some ethanol that is simply dehydrated in the CBI region, based on historical trade amounts. However, my bill would put a stop to the unlimited future growth of such duty-free imports. It is my belief that this modification should not impact any of the CBI companies that are currently operating ethanol plants in the region. At the same time, my bill will encourage greater investment and development in the CBI region because ethanol that is produced from scratch in the CBI region, using CBI inputs, will continue to be eligible for duty-free access to the U.S. market under the CBI program. If ethanol is made from scratch in the CBI region then it will qualify for duty-free treatment. In sum, my bill only addresses new investments in dehydration plants, whose sole purpose is to merely dehydrate Brazilian ethanol. Our tariff preference programs should not be granting economic incentives in the form of tariff preferences for such passthrough operations. In my mind, that is not what the CBI program is for, and it is not fair for Iowa's ethanol producers. I ask unanimous consent that the bill be printed in the Congressional Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce legislation to close a loophole under the Caribbean Basin Initiative, CBI, trade preference program which could allow large quantities of Brazilian ethanol to be shipped to the United States duty-free. This loophole allows companies to use the CBI program as a passthrough to get duty- free treatment for Brazilian ethanol. This could end up displacing U.S. production and hurting Iowa's ethanol producers. I want to help make sure that does not happen. Also, when the Caribbean Basin Initiative was enacted during the Reagan administration, the purpose of the program was to encourage trade and development with the region. I support the CBI program. However, I believe that the program should encourage meaningful economic development in the region. Unfortunately, one special interest provision in the statute permits ``wet'' ethanol from Brazil to be shipped to the CBI region and merely dehydrated, thus qualifying for duty-free access to the U.S. market. The dehydration process which occurs in the CBI region is not very complicated. It simply removes a small percentage of water from ``wet'' ethanol, thereby converting it into ``dry'' ethanol. Such ``dry'' ethanol is provided duty-free access to the U.S. market. I do not believe that such simple processing is substantial enough to warrant the benefit of getting duty-free access to the U.S. market. In keeping with the original intent of the CBI, I believe that more meaningful economic activity should occur in the CBI region before a product qualifies for duty-free treatment. My bill would limit the opportunity to exploit this special interest provision. It would introduce a fixed cap on the amount of ethanol that can take advantage of the passthrough provision. The amount of the cap is based on the historical volume of ethanol exports from the CBI region over the past 20 years. Thus, my bill will permit the continued duty-free importation of some ethanol that is simply dehydrated in the CBI region, based on historical trade amounts. However, my bill would put a stop to the unlimited future growth of such duty-free imports. It is my belief that this modification should not impact any of the CBI companies that are currently operating ethanol plants in the region. At the same time, my bill will encourage greater investment and development in the CBI region because ethanol that is produced from scratch in the CBI region, using CBI inputs, will continue to be eligible for duty-free access to the U.S. market under the CBI program. If ethanol is made from scratch in the CBI region then it will qualify for duty-free treatment. In sum, my bill only addresses new investments in dehydration plants, whose sole purpose is to merely dehydrate Brazilian ethanol. Our tariff preference programs should not be granting economic incentives in the form of tariff preferences for such passthrough operations. In my mind, that is not what the CBI program is for, and it is not fair for Iowa's ethanol producers. I ask unanimous consent that the bill be printed in the Congressional Record.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, just yesterday the Senate passed the U.S.-Morocco Free-Trade Agreement Implementation Act by a vote of 85 to 13. This followed on the heels of Senate approval of the U.S.-Australia agreement by a vote of 80 to 16. The Australia bill itself was preceded by renewal and extension of the Africa Growth and Opportunity Act, which passed the Senate by unanimous consent on June 24 of this year. Prior to that, the Senate was able to work out its differences and pass the JOBS Act by a vote of 92 to 5. I will note that each of these bills passed in an election year, a year in which many pundits argued that nothing on trade would get done. Well we proved them wrong. In fact, this has been one of the most active years on trade in the Senate in recent memory. I say, why stop now? We should continue our efforts to open foreign markets to U.S. exports. That is why I am calling on President Bush to send up the Central American Free Trade Agreement at the earliest opportunity. The CAFTA is an important part of our continuing efforts to open foreign markets to U.S. goods and services. This market access is critical if we are going to continue to grow our exports to the world. For my home State of Iowa, the CAFTA brings important new market access opportunities for our soybean, corn, pork and beef as well as Iowa's manufacturers and service providers. Under the current framework, many products from the CAFTA nations get access to our market but we do not get the same access to theirs. The CAFTA will change that. It will level the playing field for U.S. producers so they can compete in this growing market. The CAFTA also sends a strong message to our Latin American neighbors. It shows our strong desire to reach out and form deeper and lasting bonds with the international community, particularly in Latin America. The agreement will help to lock in economic reform and increase transparency in the region. There is no doubt about it. The CAFTA can serve as a cornerstone of economic growth and democracy for the region which will enhance the standard of living for millions of our southern neighbors. A free trade agreement with these nations represents a unique opportunity not only for U.S. farmers, ranchers, businesses and workers, but also for promoting development, security and prosperity in this region. It is a good agreement for the United States and for Central America. I will work closely with President Bush and my Senate colleagues to do all I can to lay the groundwork for a successful vote on CAFTA later this year.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, just over 2 months ago I expressed my interest in seeing both the U.S.-Australia and the U.S.-Morocco free- trade agreements pass the Congress by the August recess. A lot of people resisted this effort, arguing that it would be impossible for both the House and Senate to hold hearings, prepare the legislation, conduct mock mark-ups, report the bills, and pass implementing legislation for two free trade agreements in just two months. While the task was indeed difficult, I am very pleased to say that we are on the verge of achieving my goal today. In just a few moments the U.S. Senate will have an historic opportunity to strengthen our relations with Morocco with the passage of the United States-Morocco Free-Trade Agreement Implementation Act. While nothing is certain, I expect this legislation to pass with strong bipartisan support. Passage of this legislation follows on the heels of a strong Senate vote in favor of the United States-Australia Free-Trade Agreement last week. The Australia bill itself was preceded by renewal and extension of the Africa Growth and Opportunity Act, which passed the Senate by unanimous consent on June 24 of this year. Prior to that, the Senate was able to work out its differences and pass the JOBS Act by a vote of 92 to 5. I will note that each of these bills passed in an election year, a year in which many pundits argued that nothing would get done. I also want to point out the broad bipartisan support which each of these bills received. In my mind, it is that element-- bipartisanship--that is the key to our success. I want to thank my ranking member, Senator Baucus, and the members of the Finance Committee for working with me to bring these bills to fruition. There are a lot of demands placed upon Finance Committee members and their staffs, and I appreciate their hard work and dedication in helping us produce legislation that will receive broad bipartisan support in the Senate. Turning to the bill at hand, passage of the United States-Morocco Free- Trade Agreement Implementation Act will help strengthen our relationship with a long-standing friend and ally of the United States. For over two hundred years, our two nations have enjoyed a strong and mutually beneficial relationship. Today, Morocco is a country in transition. It is a country that recognizes that its long-term economic prosperity lies not in shutting itself off to the world, but in opening up to the world. It is in large part Morocco's willingness to embrace free market and democratic principles that led President Bush to select Morocco as a potential free trade partner. This free-trade agreement will help lock in and hasten reforms that the Moroccan Government embraced on its own initiative. I am confident that this agreement will spur growth and opportunity for Morocco and its people. This trade agreement is also very good for the United States, especially U.S. agriculture. Implementation of the agreement is expected to help advance U.S. agriculture exports to Morocco to unprecedented heights, enabling us to better compete with the European Union, Canada, and South America in the Moroccan market. Many people worked hard to see today's vote become a reality. First and foremost, this would not have happened without the leadership of President George W. Bush. As I have noted before, President Bush is committed to building the U.S. economy by opening the world's markets to U.S. goods and services. The United States-Morocco Free-Trade Agreement is just the latest of his achievements in this regard. The United States Trade Representative, Ambassador Robert B. Zoellick, also merits special recognition and commendation for his efforts in negotiating this agreement. His commitment to expanding U.S. trade opportunities is steadfast, for which I am grateful. I also want to express my thanks to John Veroneau, the general counsel in the Office of United States Trade Representative, Matt Niemeyer, the Assistant U.S. Trade Representative for Congressional Affairs, and Lisa Coen, Deputy Assistant U.S. Trade Representative for Congressional Affairs, for their many efforts to ensure that the committee was fully apprised of developments during the negotiations and their efforts to resolve concerns raised by members as the committee informally considered proposed implementing legislation for this trade agreement. In addition, I thank Michael Smythers, a special assistant to the President working in the White House Office of Legislative Affairs, for his efforts to facilitate our consideration of this implementing legislation. I commend my colleagues on the Finance Committee for their interest in seeing that this trade agreement was concluded and that the implementing legislation was passed without delay. I would like to extend a special thanks to the ranking member of the committee, Senator Baucus. We have worked together over the years to expand trade opportunities for the benefit of U.S. farmers, ranchers, manufacturers, and service workers, and to benefit U.S. consumers. I am quite pleased with the outcome of our current efforts with the imminent passage of this implementing bill today. My trade staff on the Finance Committee worked diligently over the past several weeks on developing the implementing bill and other materials connected with it. My goal was to have this legislation passed prior to the August recess, and they were instrumental in making this happen. Moreover, my trade staff engaged in consultations with officials from the Office of the United States Trade Representative throughout the negotiations, which began way back in January 2003, so this has been a long process for them. I greatly appreciate their hard work. My chief counsel and staff director, Kolan Davis, deserves recognition. His dedication and skills are instrumental in advancing the Finance Committee's agenda. The Chief International Trade Counsel of the Finance Committee, Everett Eissenstat, also deserves special mention. His expertise in trade policy and his ability to juggle multiple trade priorities simultaneously are key to the Committee's success. I would also like to recognize the other members of my trade staff--my two trade counsels, David Johanson and Stephen Schaefer, for their invaluable technical assistance throughout this process. Additionally, the work of Zach Paulsen, Dan Shepherdson, and Tiffany McCullen, is appreciated, for their dedication to the Finance Committee's work and to the people of Iowa. Without the diligence and hard work of my staff, we would not be at the point we are today. Senator Baucus' trade staff also deserves recognition. The Democratic staff director on the Finance Committee, Russ Sullivan, and the deputy staff director, Bill Dauster, worked well with my staff throughout the process. I also appreciate the efforts of Tim Punke, Senator Baucus' Chief International Trade Counsel, as well as Brian Pomper, John Gilliland, Shara Aranoff, Sara Andrews, and Pascal Niedermann. Finally, I would like to thank Polly Craighill of the Office of the Senate Legislative Counsel for the many hours she put into drafting the implementing bill. Without her patience, hard work, and drafting skills, today's vote would not have been possible. I look forward to the signing of this legislation into law by President Bush.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to speak to an issue that is vitally important--hospital safety. For too long, the Federal Government has not had the appropriate oversight authority to assure safety in our Nation's hospitals. I am proud to introduce the Medicare Hospital Accreditation Act, bipartisan legislation that will give the Centers for Medicare and Medicaid Services (CMS) the same oversight capacity over hospital accreditation that it has over all other health care accrediting bodies. The Joint Commission for Accreditation of Health Organizations (JCAHO) is a private, not-for-profit organization. In 1965 Congress granted JCAHO ``deeming authority'' for Medicare certification under Section 1865 of the Social Security Act. This sweeping authority gave hospitals accredited by JCAHO the ability to participate in Medicare with minimal CMS oversight. Since then, JCAHO has accredited most of our Nation's hospitals--over 80 percent in 2002. No other health care accreditation program has had this same statutory exception. Congress gave JCAHO an important role to detect and correct problems that directly affect the lives of patients in hospitals. Congress, CMS and in turn the American people, rely upon JCAHO's work to ensure the quality and safety in our Nation's hospitals. JCAHO's own mission claims to continuously improve the safety and quality of care provided to the public through the provision of health care accreditation. Unfortunately, JCAHO was entrusted with this responsibility without the necessary checks and balances so crucial to a government responsive to the needs of the people it serves. This GAO report is only the most recent evidence showing problems with the Joint Commission. In June of 1990, the GAO found that CMS, which was then called the Health Care Financing Administration (HCFA), needed to reevaluate the criteria used to evaluate the JCAHO's survey process and recommended that HCFA establish a means to detect significant differences between state agency and Joint Commission surveys. In May of 1991, the GAO published a report titled ``Hospitals with Quality-of-Care Problems Need Closer Monitoring'' and recommended that HCFA closely monitor the Joint Commission's follow-up of hospital efforts to correct deficiencies it found related to Medicare conditions of participation. Then in 1999, the Inspector General for the Department of Health & Human Services also raised serious concerns. The IG looked at how well the Joint Commission identified deficiencies in hospitals and found that the Joint Commission's surveys were not likely to identify patterns of deficient care. Today's GAO findings are likewise significant. Over the course of 3 years-- between 2000 and 2002--500 hospitals were surveyed by both JCAHO and by a state survey agency on behalf of CMS. According to the GAO, a comparison of these surveys revealed that the state surveys often found serious deficiencies--serious deficiencies that went overlooked or unnoticed by JCAHO. In fact, the GAO found that out of the 157 hospitals found with serious deficiencies, JCAHO identified only 34. In other words, compared to state surveyors, JCAHO missed hospitals with deficiencies 78 percent of the time. A hospital that prepared and administered drugs in violation of federal and state laws is just one example of a serious deficiency found by a state agency, but missed by JCAHO in its 2000 survey. Serious deficiencies found by state agencies but missed by JCAHO represent a pattern of deficient care--not merely isolated incidents. Unlike isolated incidents, a pattern of deficient care raises grave concerns because of the potential to place dozens of lives in danger, involving for example a floor or entire wing where many hospital patients are receiving their care. Because JCAHO's hospital ``deeming authority'' is statutorily mandated, CMS cannot terminate this authority. Today, we are taking the first step to give CMS the same oversight capability over JCAHO that it has over all other health care accrediting organizations. This legislation will give CMS the authority and responsibility to hold JCAHO accountable and, if necessary, restrict or remove its hospital accreditation authority. It will bring uniformity to the health care accreditation process and will provide a more effective chain-of-command. JCAHO will have to answer to CMS--as it does in other sectors of health care accreditation. The GAO recommends that Congress grant CMS greater oversight over JCAHO's hospital accreditation process. CMS agrees. JCAHO agrees. My colleague from across the aisle and across the Capitol, Congressman Stark--who as we speak is introducing the companion bill in the House of Representatives--agrees with this finding. I urge your support for this much-needed legislation.

Mr. GRASSLEY

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

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate now resume legislative session and that the Senate proceed to the consideration of S. 2677, the Morocco free-trade legislation, as provided under the statute.

Mr. GRASSLEY. Mr. President, I thank the distinguished assistant minority leader for his approval of going ahead on this issue. I thank every Senator on the other side because any Senator on the other side or, for that matter, this side can object to any legislation coming up. Trade legislation is a little more controversial than it used to be. We have had great cooperation from the Democrats in the bipartisan manner it takes to get business done in the Senate on three very important trade agreements, including now this one, the United States-Morocco Free Trade Agreement. Last week we did the United States-Australia Free Trade Agreement, and prior to that the extension and reauthorization of the African Growth and Opportunity Act, which was passed just prior to our previous recess for the Fourth of July. So often in this body the antagonism gets highlighted between Republican and Democrats. I wish to thank all the minority Members for allowing me to move ahead with this legislation. Obviously, since I presented this legislation, I support this bill, S. 2677. It is legislation that implements the United States-Morocco Free Trade Agreement. I happen to believe this agreement marks a solid win for America, and when it comes to trade legislation, when we talk about a solid win, that is in economic terms and that creates jobs in America because America produces, in most instances, more than we can consume, particularly in agriculture but in other areas as well. The United States is 5 percent of the world's population. So if anybody thinks we should not accept goods from overseas and then other countries not let us export, understand that 5 percent of the people of this world, the Americans, when we produce much more than we consume-- and in agriculture that is 40 percent--what they would be saying is that we ought to shut down part of productive America. Obviously, if we shut down part of productive America, we lose jobs. So if we are going to keep enhancing our economy, to increase our standard of living--and that is related to increased productivity--then, obviously, we have to look to the 95 percent of the people of the world who are outside the United States as a market. Other countries, obviously, look to the world for a market. So it is a very competitive market. But the extent to which we reduce trade barriers--and this Morocco agreement is one example of reducing barriers to trade--then we let the marketplace make a decision on where goods go, what goods cost, and the quality of goods. For the most part, consumers of those respective countries, including America, make a determination as to what they want to pay and the quality of product they want. But the marketplace is going to be making that decision. When we have barriers to trade that are set up by governments, then political leaders are making those decisions. Or if it is not political leaders, it is government employees making those decisions. Quite frankly, when government makes decisions, you do not reap the benefits of the efficiency of the marketplace and the efficiency of productivity of the respective workers of the respective countries that you do if the marketplace is making those decisions. Willing buyer, willing seller, setting price, setting quality, setting time of transaction is better than 535 Members of Congress making that decision. All one has to do is look at Russia today. It is much more productive than it was when bureaucrats in Moscow were deciding how many acres of wheat to plant and when to combine those acres, the mature crop. A third of it was left in the field because when 5 o'clock came, they went home. When the American farmer goes out to harvest crops, he stays there until he gets it done, particularly something that is time sensitive, such as the maturing crop of wheat or soybeans. But not the Russian farmer under the Soviet system of command and control. Russia was not exporting grain. Today, Russia is exporting grain. We have to go back to the new economic program of the late 1920s for that to have happened, or you have to go back to the days of the czar for that to have happened in Russia. So the marketplace is the best place to make these decisions, and agreements leveling the playing field, such as this Morocco agreement, are examples of the United States looking to the rest of the world to sell the surplus we manufacture, the surplus we produce, the excess--if you do not want to call it surplus, it is excess--of what we can consume here. When this agreement is implemented, more than 95 percent of bilateral trade will become duty free immediately. According to the Office of the U.S. Trade Representative, this is the best market access package of any U.S. free-trade agreement with a developing country. This will bring important new opportunities for America's manufacturing sector. The agreement will also benefit our service providers with new market opportunities, particularly in key sectors such as engineering, telecommunications, banking, and insurance. U.S. intellectual property rights owners will obtain the benefits of stronger protection for their trademarks, for their copyrights, and for their patents. Any agreement will lead to a more open and transparent trading regime with the implementation of the new transparency procedures for customs administration, new commitments to combat bribery, and strong protections for U.S. investors in the region. Perhaps most importantly for my home State of Iowa, the agreement brings substantial benefits to the U.S. agricultural community. I note firstly that the agreement is comprehensive. No sector is excluded. This is important for the future of our U.S. agriculture. The fact is, when we take a sector off the table during negotiations, our trading partners are bound to do the same. All too often the sector they want excluded is one of our most competitive agricultural products. That means lost sales for America's family farmers. It is very important that we send a strong message to our future trading partners that our country, the United States of America, remains committed to negotiating broad and very comprehensive free- trade agreements. Passage of this agreement moves that ball closer to the goalpost and reaffirms our commitment to negotiating and not being on the sideline. Second, this agreement is sure to advance our agricultural exports in an important and growing region of the market. The recent trend of Argentine and Brazilian corn displacing American corn in the Moroccan market will end. In fact, the International Trade Commission predicts that absent the current tariff, United States corn producers will supply nearly all of Morocco's corn imports in the coming years. The International Trade Commission also estimates that United States exports of soybean meal to Morocco will likely increase substantially under this agreement. With Morocco presently imposing tariffs as high as, believe this, 275 percent on the import of United States beef, the United States is in effect literally shut out of the Moroccan beef market. This will change under this agreement, with the United States gaining new access for our beef going into Morocco. United States exporters are currently at a competitive disadvantage when they try to sell wheat to Morocco. The fact is that competitors of the United States can sell their wheat cheaper. This agreement will change that. This agreement will level the playing field for America's wheat farmers. It is also going to do it for our beef ranchers. An independent study by the American Farm Bureau Federation found that under this agreement--now, this is the American Farm Bureau--the United States agricultural trade surplus with Morocco could reach $382 million by 2015 with Moroccan agricultural exports rising by only $25 million. Thus, under this agreement, U.S. agriculture would see roughly a 10-to-1 gain. Those figures speak louder than words. I have received testimony and letters in support of this agreement from across America's agricultural sector. I concentrate on what we have heard from one Iowa farmer, but also a person who is very much a leader in the Iowa Soybean Association, Ron Heck from Perry, IA. He testified before the Finance Committee, which I chair, that the agreement will not only benefit soybean farmers directly in increased exports to the country of Morocco but also indirectly as they sell their grain to America's beef and poultry farmers who will in turn export these products of beef and poultry to Morocco. When one sells meat, one sells a value-added agricultural product that has created more jobs in America. It is better to sell the beef and the poultry, it brings more wealth to America than sending our raw grain and our raw soybeans overseas. We have the National Corn Growers Association, the International Dairy Food Association, the National Milk Producers Federation, the National Cattlemen's Beef Association, the National Association of Wheat Growers, the National Chicken Council, the Corn Refiners, and the USA Rice Federation, to name a few, that have all written to me in favor of this agreement. The Morocco free trade agreement also contains a preference clause that grants the United States market access provisions that will be at least as good as those granted by Morocco to other countries in any future free trade agreement they may enter into. Finally, the agreement enabled us to tackle tough sanitary and phytosanitary issues which had been acting as a bar to many of our agricultural exports. In my mind, the economic benefits are enough for any Senator to support this agreement. I think my colleagues ought to take into consideration other less tangible reasons to cast their vote as yea. Morocco is a longstanding friend and ally of the United States. In fact, Morocco was the first country to extend diplomatic relations to the United States following our independence. Our two nations first signed a treaty of peace and friendship in 1786, making this the oldest unbroken treaty in the history of the United States foreign relations. Today, Morocco is a valuable ally in the war against terrorism, working with our country to bring peace and stability throughout the Middle East. In short, Morocco has been and still remains a valued friend of our country. I am pleased we will be able to strengthen our friendship with the passage of this free trade agreement. The Morocco free trade agreement marks our third free trade agreement in the Middle East. Although we enjoy strong free trade agreements with Israel and Jordan, the Congress may soon have an opportunity to consider a fourth free trade agreement with Bahrain, another important Middle Eastern country and one that is very helpful to us in a military way. While each free trade agreement is valued in and of itself, these free trade agreements are also steppingstones toward President Bush's broader vision of a Middle East free trade agreement by the year 2013. Today, far too many people in the Middle East are plagued by poverty and lack of education and opportunity. While trade itself will not alleviate every ill, it is a vital tool of development which has been lacking for far too long in that important region of the world. I am confident the passage of this free trade agreement, along with our continued efforts to build a Middle East free trade agreement, can help change that by ushering in a new era of hope and prosperity in that critical part of the world. I yield the floor, and I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to speak to an issue that is vitally important--hospital safety. For too long, the Federal Government has not had the appropriate oversight authority to assure safety in our Nation's hospitals. I am proud to introduce the Medicare Hospital Accreditation Act, bipartisan legislation that will give the Centers for Medicare and Medicaid Services (CMS) the same oversight capacity over hospital accreditation that it has over all other health care accrediting bodies. The Joint Commission for Accreditation of Health Organizations (JCAHO) is a private, not-for-profit organization. In 1965 Congress granted JCAHO ``deeming authority'' for Medicare certification under Section 1865 of the Social Security Act. This sweeping authority gave hospitals accredited by JCAHO the ability to participate in Medicare with minimal CMS oversight. Since then, JCAHO has accredited most of our Nation's hospitals--over 80 percent in 2002. No other health care accreditation program has had this same statutory exception. Congress gave JCAHO an important role to detect and correct problems that directly affect the lives of patients in hospitals. Congress, CMS and in turn the American people, rely upon JCAHO's work to ensure the quality and safety in our Nation's hospitals. JCAHO's own mission claims to continuously improve the safety and quality of care provided to the public through the provision of health care accreditation. Unfortunately, JCAHO was entrusted with this responsibility without the necessary checks and balances so crucial to a government responsive to the needs of the people it serves. This GAO report is only the most recent evidence showing problems with the Joint Commission. In June of 1990, the GAO found that CMS, which was then called the Health Care Financing Administration (HCFA), needed to reevaluate the criteria used to evaluate the JCAHO's survey process and recommended that HCFA establish a means to detect significant differences between state agency and Joint Commission surveys. In May of 1991, the GAO published a report titled ``Hospitals with Quality-of-Care Problems Need Closer Monitoring'' and recommended that HCFA closely monitor the Joint Commission's follow-up of hospital efforts to correct deficiencies it found related to Medicare conditions of participation. Then in 1999, the Inspector General for the Department of Health & Human Services also raised serious concerns. The IG looked at how well the Joint Commission identified deficiencies in hospitals and found that the Joint Commission's surveys were not likely to identify patterns of deficient care. Today's GAO findings are likewise significant. Over the course of 3 years-- between 2000 and 2002--500 hospitals were surveyed by both JCAHO and by a state survey agency on behalf of CMS. According to the GAO, a comparison of these surveys revealed that the state surveys often found serious deficiencies--serious deficiencies that went overlooked or unnoticed by JCAHO. In fact, the GAO found that out of the 157 hospitals found with serious deficiencies, JCAHO identified only 34. In other words, compared to state surveyors, JCAHO missed hospitals with deficiencies 78 percent of the time. A hospital that prepared and administered drugs in violation of federal and state laws is just one example of a serious deficiency found by a state agency, but missed by JCAHO in its 2000 survey. Serious deficiencies found by state agencies but missed by JCAHO represent a pattern of deficient care--not merely isolated incidents. Unlike isolated incidents, a pattern of deficient care raises grave concerns because of the potential to place dozens of lives in danger, involving for example a floor or entire wing where many hospital patients are receiving their care. Because JCAHO's hospital ``deeming authority'' is statutorily mandated, CMS cannot terminate this authority. Today, we are taking the first step to give CMS the same oversight capability over JCAHO that it has over all other health care accrediting organizations. This legislation will give CMS the authority and responsibility to hold JCAHO accountable and, if necessary, restrict or remove its hospital accreditation authority. It will bring uniformity to the health care accreditation process and will provide a more effective chain-of-command. JCAHO will have to answer to CMS--as it does in other sectors of health care accreditation. The GAO recommends that Congress grant CMS greater oversight over JCAHO's hospital accreditation process. CMS agrees. JCAHO agrees. My colleague from across the aisle and across the Capitol, Congressman Stark--who as we speak is introducing the companion bill in the House of Representatives--agrees with this finding. I urge your support for this much-needed legislation.

Mr. GRASSLEY

Mr. GRASSLEY. I yield back time on this side.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY. Mr. President, for staff and Senators who are not on the floor, I call attention to the fact that we are starting the debate on the United States-Australia Free Trade Agreement. We have 3 hours on this side. I have not had many requests for time, and I know that two or three Members want to speak. I urge those Members to come over early to speak because if we can yield back time we do want to do so. I was only going to speak about 7 or 8 minutes. The Senator from Oklahoma wanted to speak 5 minutes. Is there any problem if I give the Senator from Oklahoma 5 minutes right now and then I speak 7 or 8 minutes and then the Senator from North Dakota can have the floor?

Mr. GRASSLEY. I yield 5 minutes to the Senator from Oklahoma.

Mr. GRASSLEY. Mr. President, I move to reconsider the vote.

Mr. GRASSLEY. Mr. President, I am happy to bring to my colleagues the United States-Australia Free Trade Agreement Implementation Act. This is a bill that Congress must pass to actually implement what has been negotiated as the United States-Australia Free Trade Agreement. This is under the process that we call trade promotion authority. This is a process by which Congress, which has the constitutional power to regulate interstate and foreign commerce, has delegated negotiating authority to the President to negotiate certain trade agreements. But because we have that constitutional authority, we cannot give to the President of the United States the authority to change U.S. law as it might be negotiated. So we are now dealing with legislation that changes U.S. law and makes the United States-Australia Free Trade Agreement not a treaty approved just by the Senate of the United States, as we know treaties are, by two-thirds vote, but this is basic law. It has passed the House of Representatives by a majority vote, hopefully it will pass the Senate by a majority vote, and it is to be signed by the President. We are dealing with the constitutional authority of the Congress to regulate foreign and interstate commerce, but understanding that it is not reasonable to expect 535 Members of Congress to deal with foreign countries, we have asked the President to do that for us but under guidelines that we have set down and with Congress having the final authority. We are in the process of exercising that final authority. As is true of almost any agreement, this one might not be perfect. However, I believe it will provide significant benefits to the United States, our economy, and particularly to the economy and the people of my home State of Iowa. During committee consideration of the agreement, we heard from a number of different sectors of the economy which stand to benefit from the agreement. At the top of the list is the U.S. manufacturing sector and all the jobs that exist in that sector that will be stabilized and enhanced as a result of American manufacturing selling a lot more to Australia because certain duties that now are on those products will be gone. Under the agreement, more than 99 percent of U.S. manufacturing exports to Australia will become duty free immediately after this agreement is signed by the President. This is the most significant reduction of manufacturing tariffs ever achieved in any U.S. free-trade agreement. This is very good news for manufacturers such as the Al-jon company of Ottumwa, IA, employing 100 people. Today, about 10 to 15 percent of Al-jon's production is exported. They are confident that with a level playing field they can do even better. This bill helps level that field. During testimony before my committee, John Kneen, chairman of the board of Al-jon, testified that while they have had some success selling in Australia, their exports are currently limited by two factors: First, Australia currently imposes a 5-percent tariff on their exports. And, second, the cost of shipping heavy equipment to Australia is very high. While we cannot do much about the cost of shipping, we surely can eliminate the 5-percent barrier with the enactment of this trade agreement. It is not just the company of Al-jon that will benefit. Mr. Kneen testified that over 19,000 U.S. companies that currently export to Australia are likely to benefit from what he termed the ``instant competitive advantage'' provided by the elimination of these tariff barriers on U.S. manufacturing exports. These companies include other Iowa manufacturers such as John Deere, which has four manufacturing plants in my State. John Deere anticipates increased exports to Australia on account of this free-trade agreement. The U.S. agricultural sector stands to benefit from the agreement as well, as duties on all U.S. farm exports will be eliminated, reducing tariffs on U.S. agricultural exports by over $700 million. Processed food, soybeans, oilseed products, fresh and processed fruits and vegetables, all will benefit from these duty reductions. For U.S. farmers and our ranchers who compete with Australian agriculture, special safeguards and tariff rate quotas are included as part of the agreement to make sure that trade is not only free but fair. The free-trade agreement negotiating process also opened the door to eliminate scientifically unfounded barriers to the importation of U.S. pork and U.S. pork for processing. These are all major Iowa products because we are No. 1 of the 50 States in the production of pork. While Australia made its scientific determination regarding pork outside of the free-trade agreement negotiations, the intensive consultation process that naturally flows from engaging in bilateral trade negotiations helped in the resolution of that very important matter. Dermot Hayes, an economist at Iowa State University, estimates that the elimination of these unfounded barriers could increase U.S. exports of pork to Australia by over $50 million annually. The United States-Australia Committee on Sanitary and Phytosanitary Measures, and the Standing Technical Working Group on Animal and Plant Health Measures, which are established under the FTA, will help to ensure that all Australian standards on United States agricultural imports are based on sound science and are not used as a basis for protectionism. Iowa's service providers will also benefit from new market-access openings in Australia for our service exports. These commitments, along with new, transparent trading rules, should provide a lot of important new market opportunities for Iowa's service exports. And, for the first time, this agreement opens much of Australia's lucrative government procurement market to United States exporters. The government procurement provisions are especially important, as Australia is one of only a few developed countries that are not members of the World Trade Organization Agreement on Government Procurement. In sum, the United States will benefit from the United States- Australia Free Trade Agreement. I urge my colleagues to vote for S. 2610, the United States-Australia Free Trade Agreement Implementation Act. (At the request of Mr. Daschle, the following statement was ordered to be printed in the Record.)

Mr. GRASSLEY. I now ask unanimous consent that the FSC bill be temporarily set aside and I now move to proceed to H.R. 4759, the Australia Free Trade Agreement. I further ask consent that there be 6 hours equally divided between the chairman and ranking member or their designees; provided further that all other provisions of the statute remain applicable to the bill. Further, I ask unanimous consent that following the use or yielding back of the time the Senate proceed to a vote on the passage of H.R. 4759, and immediately following that vote the Senate resume consideration of the FSC bill and proceed to a vote in relation to the DeWine amendment as provided under the order. Finally, I ask unanimous consent that there be 2 minutes equally divided for debate prior to the second vote.

Mr. GRASSLEY. Yes. That would be on the DeWine amendment?

Mr. GRASSLEY. Mr. President, I yield 2 minutes to the Senate majority leader.

Mr. GRASSLEY. Mr. President, I was hoping that the Senator from North Dakota would stay around. First, I support the Australia Free Trade Agreement because it is for the sole purpose that it is in the economic interest of the United States of America. I do it within our constitutional power to regulate interstate and foreign commerce. I do it in the tradition of the last 70 years, since the 1930s, of the United States doing everything it could to lead the rest of the world in the reduction of barriers to trade; to enhance not only the economy of the United States of America but the economy of the entire world. Let no one have any doubt in their mind, this is in the economic interest of the United States and that is the only thing the United States ought to be considering as we consider this legislation. The charge was made that the only reason we are doing this is because of the friendship of Australia and their support in our efforts in Iraq. If I can do something in the economic interest of the United States and at the same time enhance our relationships and show our respect for a friend in the world community of nations, I am not going to back away from doing that, because through almost 100 years of the involvement of the United States in military activity for the promotion of peace and liberty around the world Australia has been an ally on which we could count. Australia is not going to agree to this agreement because they might like the United States of America. Australia is going to look at this and ask: Is it in their economic interest? Now, their administration has already said that it is because it is signed. I do not know whether Congress has acted down in Australia, but nobody is going to be concerned about the economic interests of America except Americans and the elected representatives of America. Nobody is going to be concerned about the economic interests of Australia except the people of Australia and their elected representatives. It just happens that everything does not have to be black and white, that when we do things in public policy and in international trade and in our foreign relations sometimes things can be done to accomplish more than one thing, and it happens that we have an opportunity in this vote today not only to do something in the economic interests of the United States of America but also to enhance our relationship with a friend in the world. From a member of a political party who is always badmouthing our President of the United States because he is engaged in world activities, military activities without seeking enough help from other nations and from the United Nations, I think it is talking out of both sides of your mouth when you condemn us for trying to do something for a nation that has been a friend of ours--in this case, Australia. The other thing I noticed about the debate that just went on is the charts that have been put up all afternoon by people on the other side of the aisle bemoaning the unfavorable balance of trade we have. What do they want to do? Do they want to tell the consumers of America that you cannot buy from anywhere in the world you want? Why do we have the balance of trade we do? It is because the U.S. consumers are king and they can do anything they want to do and they are doing it. They are exercising their economic freedom. They are also exercising the opportunity of the marketplace to buy from what they think is the place to get the best quality for a certain price. That opportunity happens to be enhanced the greater the competition. The freer the trade around the world and the fairer the trade around the world, the more opportunities there are for our consumers to buy whatever they want to buy, of the quality they want, at what they consider a fair price. I don't know that any Member of this Congress who has been complaining about the unfavorable balance of trade has introduced any legislation saying the consumers of America cannot buy this product or that product. Are they going to tell the consumers of North Dakota what they can buy or not buy? Are they going to certify to their people that their judgment as political leaders is better than the judgment of the consumer of America and the marketplace, including the consumer of North Dakota? I don't see them doing that. The other thing is, why do we have an unfavorable balance of trade? One of the reasons is the people of America are not saving as much. But what do we get from the other side of the aisle when it comes to giving the taxpayers of America an opportunity to have more discretionary income? We hear complaints from the other side of the aisle that this side of the aisle is giving too many tax cuts because they happen to believe that 535 Members of Congress are smarter and better able to decide how to spend the money than the 130 million taxpayers of America. I don't believe that. But when taxes are high, there is less discretion for savings, and it impacts negatively upon our balance of trade. The other thing I wonder about, with the other side of the aisle talking about the high trade deficit--one-third of that trade deficit comes from the importation of energy into America, mostly petroleum. We had an energy bill up last November, and that energy bill is defeated by a filibuster on the other side of the aisle. When we want to set an energy policy, so we import less energy, so we reduce our unfavorable balance of trade to some extent, they deliver 13 out of 49 Democrats to break a filibuster. When they want to kill the confirmation of judges who the President appoints, they can deliver 46 out of 49 Democrat votes to kill those judges. But when their own leader votes for a motion to bring about a national energy policy so we are not importing so much energy, so the balance of trade is not so unfavorable, what do we get from the other side? They don't even support their own leader when he says he needs it for his State. So don't complain about the unfavorable balance of trade in America when you espouse policies that tend to make it worse, or question the wisdom of the consumers of America, to put your judgment above the judgment of 280 million people in America, that you know more than they do about what they ought to be doing with their money. Now I want to address whether Congress is giving up constitutional power. I am addressing specifically the accusation that has been made by the Senator from North Dakota, Mr. Conrad, who just finished his remarks. First of all, I have yet to see the memo obtained by Senator Conrad from the Congressional Research Service which he says supports his claim that his amendment could be made constitutional. But in any event, with respect to his argument that one way to implement his amendment in a constitutional fashion would be in the statement of administrative action--and it is on that point that I want to comment-- this is precisely the type of revisionist history that I warned of earlier, yesterday, in our committee meeting. I read from the amendment that he put before the committee: The amendment enhances the consultation requirement in the waiver provisions by adding a requirement in paragraphs 202(c)(4) and 202(d)(5) that the Finance and the Ways and Means Committees must both affirmatively approve a proposed waiver before the USTR can waive the application of a safeguard. This amendment calls for specific changes to two sections of the implementing legislation. How could language added, then, to the statement of administrative action possibly effectuate this amendment, which calls for changes to the implementing bill? The answer is, very clearly it couldn't. But even if it could, this argument ignores the fact that the statement of administrative action is a statement of administrative action, not a statement of congressional action. But the amendment calls for action by two committees of Congress, not for action by the administration. I would like to remind my colleague from North Dakota of the principle of separation of powers. In fact, that principle underlies the Supreme Court Chadha case and is the reason why the amendment as drafted and as voted on by the Finance Committee is unconstitutional. So any argument that the statement of administrative action offered a way to implement the amendment in a constitutional way is without merit. What about the argument that the amendment could have been implemented in a constitutional way if requirements for action by the full Congress and presentation to the President for his signature were added, according to the decision of Chadha? In effect, under this interpretation, the amendment would require additional legislation to be enacted before a beef safeguard measure could be waived. That is the only way you could remain consistent with our Constitution. And it requires a contorted reading of the language of the amendment that was actually introduced and was voted on by the committee that day. But let us assume that a legislative procedure was intended by the amendment, as contorted as that may be. The problem is, such a procedure conflicts with the obligations assumed by the United States in annex 3(a) of the agreement. In sections (b)(4) and (c)(5) of annex 3(a), the United States commits to retain the discretion not to apply a beef safeguard measure. If the President is required to wait for congressional action before granting a waiver, that deprives the administration of the discretion to grant a waiver. Even if the amendment were to be implemented consistent with the U.S. Constitution, it would at the same time be inconsistent with the terms of the agreement. Again, we see this amendment for what it truly is. It was political maneuvering, pure and simple. It was intended to obstruct the process. It was intended to force the administration to explain its rejection of an unconstitutional amendment or, based on these new arguments about constitutionality, the administration would be forced to explain its rejection of an amendment that was inconsistent with the agreement. In either case, the administration's rejection of the amendment would have been used by some to argue that the trade promotion authority process was flawed, that the administration ignored the will of the Finance Committee. They would have also argued that the administration had not done enough to protect the U.S. beef industry from imports, an allegation that is completely without merit if you read the terms of this agreement. Any way that you revise the reading of the amendment, its purpose was to delay formal consideration of the bill and give opponents a political issue to try to exploit. Again, as chairman of the Finance Committee, I did not want to see that happen. I wanted to end the obstructionism, end the political gamesmanship, and end the consideration of an unconstitutional amendment. The majority of the committee voiced their will, and the amended recommendation was not approved. The trade promotion authority process was on and the process moved forward, leading us to the consideration of this very important legislation today, much in the economic interests of our people. Again, I call on my colleagues to recognize the value of the underlying agreement with Australia and to support the implementation bill when we vote on it in a short period of time. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce legislation to fix a loophole in our visa policies that has and could continue to have detrimental consequences on our national security. I have been pressing the Departments of State and Homeland Security for the last year to make changes to visa revocation certificates so that we can question, detain, or deport foreigners who were not supposed to be granted a visa. It was one year ago today that the Senate Judiciary Committee held a hearing on this problem. For example, it is extremely difficult to detain and deport suspected terrorists whose visas have been revoked on terrorism grounds after those persons have set foot on U.S. soil. The difficulty stems from the wording on the revocation certificates, which are issued by the State Department. However, by law, the Department of Homeland Security has policy authority over visa issuance. On June 17, 2003, a GAO report revealed that suspected terrorists can stay in the country after their visas have been revoked on terrorism grounds because of a legal loophole in the wording of revocation papers. This loophole came to light after the GAO found that more than 100 persons were granted visas that were later revoked because there was evidence the persons had terrorism links and associations. I wrote a letter to the Department of State on June 23, 2003, and both the House and Senate Judiciary Committees held hearings on the matter last year. Some of us in Congress expected the government to fix this problem immediately, especially after GAO brought it to the attention of your department and other agencies. Perhaps this expectation was naive. More than a month after the GAO report and the hearings on the matter, I pressed the issue further with Under Secretary Hutchinson during a July 23, 2003 Senate Judiciary Committee hearing. We all recognized that a simple administrative fix, such as re- writing the revocation certificate, would solve the problem. In fact, Assistant Secretary Hutchinson personally pledged to me in July of last year that the Department of Homeland Security would issue regulations to fix it as soon as the Memo of Understanding with the Department of State was finalized. The Memo was signed on September 29, 2003. On May 20 of this year, a member of the Department of Homeland Security confirmed that a regulation was written and being circulated internally. But, here we are--more than a year after the GAO first revealed the loophole--and it appears that the problem still has not been solved. This week, the GAO issued a report that said ``additional actions are needed to eliminate weaknesses in the visa revocation process.'' The GAO recommends that the Secretaries of Homeland Security and State jointly develop a written governmentwide policy that clearly defines roles and responsibilities and sets performance standards for the agencies involved in the visa revocation process. Frankly, I think these Departments have had enough time to consult with each other. Today, I offer a legislative fix. It is amazing to me that such a simple and straightforward solution to such a dangerous and well-known problem continues to languish in the slow-moving bureaucracy. Promises were made, but the promises have not been kept. The visa revocation loophole needs to be fixed.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that Dan Shepherdson, Nic Prenger, Julia Ehrgood, Casey August, and Peter Jordan be granted the privilege of the floor for the duration of the debate on S. 2610, the United States-Australia Free Trade Agreement Implementation Act.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to introduce legislation to fix a loophole in our visa policies that has and could continue to have detrimental consequences on our national security. I have been pressing the Departments of State and Homeland Security for the last year to make changes to visa revocation certificates so that we can question, detain, or deport foreigners who were not supposed to be granted a visa. It was one year ago today that the Senate Judiciary Committee held a hearing on this problem. For example, it is extremely difficult to detain and deport suspected terrorists whose visas have been revoked on terrorism grounds after those persons have set foot on U.S. soil. The difficulty stems from the wording on the revocation certificates, which are issued by the State Department. However, by law, the Department of Homeland Security has policy authority over visa issuance. On June 17, 2003, a GAO report revealed that suspected terrorists can stay in the country after their visas have been revoked on terrorism grounds because of a legal loophole in the wording of revocation papers. This loophole came to light after the GAO found that more than 100 persons were granted visas that were later revoked because there was evidence the persons had terrorism links and associations. I wrote a letter to the Department of State on June 23, 2003, and both the House and Senate Judiciary Committees held hearings on the matter last year. Some of us in Congress expected the government to fix this problem immediately, especially after GAO brought it to the attention of your department and other agencies. Perhaps this expectation was naive. More than a month after the GAO report and the hearings on the matter, I pressed the issue further with Under Secretary Hutchinson during a July 23, 2003 Senate Judiciary Committee hearing. We all recognized that a simple administrative fix, such as re- writing the revocation certificate, would solve the problem. In fact, Assistant Secretary Hutchinson personally pledged to me in July of last year that the Department of Homeland Security would issue regulations to fix it as soon as the Memo of Understanding with the Department of State was finalized. The Memo was signed on September 29, 2003. On May 20 of this year, a member of the Department of Homeland Security confirmed that a regulation was written and being circulated internally. But, here we are--more than a year after the GAO first revealed the loophole--and it appears that the problem still has not been solved. This week, the GAO issued a report that said ``additional actions are needed to eliminate weaknesses in the visa revocation process.'' The GAO recommends that the Secretaries of Homeland Security and State jointly develop a written governmentwide policy that clearly defines roles and responsibilities and sets performance standards for the agencies involved in the visa revocation process. Frankly, I think these Departments have had enough time to consult with each other. Today, I offer a legislative fix. It is amazing to me that such a simple and straightforward solution to such a dangerous and well-known problem continues to languish in the slow-moving bureaucracy. Promises were made, but the promises have not been kept. The visa revocation loophole needs to be fixed.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I wish to take this opportunity to recognize the activities of two American Legion Auxiliary Units in Iowa, the Walter T. Enneberg 358 Auxiliary Unit in St. Ansgar, IA, and Auxiliary Unit 278 in Osage, IA. I thank them for their contributions to their communities. I ask unanimous consent that a newspaper article detailing the activities of the St. Ansgar unit and a summary of the activities of the Osage Unit be printed in the Record.