Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today we begin debate on what the public at large would refer to as a welfare reform bill, a bill that would build upon very major changes that were made after 60 years of the previous welfare legislation that did not accomplish its goals to one now where we have had an opportunity since 1996 to move people from welfare to work. The public at large and sometimes even I refer to this legislation as welfare reform, but our legislation is entitled ``The Personal Responsibility and Individual Development for Everyone Act.'' If you hear us use the acronym P-R-I-D-E, PRIDE, this is the legislation that is before the Senate. I am very happy that we are finally able to consider this legislation. Going back to 1996, after years of debate and even after two vetoes by President Clinton, we finally had a Republican Congress pass, and a Democratic President sign, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. I emphasize that because the issue of welfare is highly charged politically. When you are going to make major changes, as we did in 1996, it takes bipartisanship to accomplish those changes. That bipartisanship was between Democratic President Clinton and a Republican-controlled Congress. The enactment of welfare reform ended the entitlement aspect of welfare, the cash assistance part of it. The impetus for welfare reform was generated by a number of factors, including public sentiment that the welfare system needed overhauling. When campaigning for President, President Clinton promised, in his words, ``to end welfare as we know it.'' For the Republicans, during the campaign for Congress in 1994 when the Contract With America was the watch word of Republicans, welfare reform was a key part of that. So we had a President promising to end welfare as we know it, we had Republicans putting it in their Contract With America, and, finally, after 2 years, the legislation was passed at that time. I would categorize the PRIDE legislation as moving on and fine-tuning that basic underlying legislation which has sunset. The sunset was in the 1996 legislation. When legislation sunsets, it must be reenacted by the Congress of the United States or that part of the code goes off the books. Quite honestly, there are Americans who have needs. There is still need for assistance, but the goal of that assistance is still as it has always been: to move people from welfare to work. In the years leading up to the enactment of welfare reform in 1996, the AFDC roles soared and costs increased. From 1988 through 1992, welfare spending increased by billions of dollars. The welfare system was attributed by many to contributing to a culture of isolation and dependence, persisting from one generation to another. Despite dire predictions to the contrary, the reforms in the 1996 act have produced very positive results. The welfare caseload has dropped dramatically. Between fiscal year 1997 and fiscal year 2002, the average monthly number of welfare recipients fell by 5.8 million or 53 percent of the previous high. Child poverty has also been reduced. Between 1996 and 2001, the national child poverty rate fell by 20 percent. This decline is even more marked for certain groups. We see the African-American children poverty rate dropping from nearly 40 percent to 30 percent, the lowest rate on record. The Hispanic child poverty rate dropped from just slightly over 40 percent to 28 percent, the largest 5-year drop on record. Employment rates of adult recipients has increased. In fiscal year 2001, 27 percent of the adult recipients were employed, rising to about 2.4 times the 1996 employment rate of 11 percent. These reforms all stemmed from a work-first approach that emphasized an adult's attachment to the workforce. I believe we should continue and this legislation does build upon a work-first approach, and yet the need for reform continues. There are key provisions in the 1996 act which have not yielded the desired results. Additionally, there are further reforms which should be enacted, things that we have learned from the 1996 act, and we are fine-tuning the present legislation through this legislation before us. As an example, the 1996 bill envisions a contingency fund which would provide additional matching grants to needy States during economic downturns. However, during the recent recession, the first real test of the contingency fund, no State was able to access the contingency fund. This is because States must raise their own spending considerably during a recession to meet the contingency fund State spending requirements. I am sure it was not the intent of the authors of the 1996 bill to make the contingency fund inaccessible. The PRIDE bill before the Senate includes provisions which would liberalize the contingency fund to make it more accessible to needy States and to help more citizens of their States who have the need. Another example would be the work participation rate. The 1996 welfare reform bill envisioned a participation rate of 50 percent by 2002. However, because of the way the caseload reduction credit has worked, many States have a marginal or even nonexistent work participation requirement, meaning they are meeting the requirements of existing Federal law without putting one more person from the welfare rolls into the payrolls. The fact that the caseload reduction credit has effectively neutralized the work participation rate requirement is then a fundamental flaw in this 1996 law that PRIDE corrects. The PRIDE bill does, in fact, correct this by replacing the caseload reduction credit with an employment credit. To ensure that the credit does not undermine the work participation rate, the credit would have a phased-in cap. Many have advocated that there needs to be a stronger message sent to States on the value of education as a means of getting out of poverty. Some have also indicated the need for increased child care funding, as well as needed improvements to child support and enforcement policies. The PRIDE legislation before the Senate increases opportunities for education, opportunities for training, as well as support for the families by increased funding for child care. Additionally, the PRIDE bill provides child support enhancements with more child support going to families. These reforms are a critical means that help families get off and stay off of welfare. Two of the four purposes of the 1996 welfare act dealt with strengthening two-parent families. So far, very few States have taken the opportunity to develop and to implement innovative programs and policies to address the issues of healthy two-parent marriages, even though the 1996 law is very flexible on how that is to be done-- obviously too flexible from the standpoint of it being a requirement that the State ought to meet. I strongly support marriage promotion activities as a means of improving child well-being. Let nobody in this body or outside this body say there is anything in this language that has anything to do with forcing people into the institution of marriage. Well short of that, this legislation does and should do things to emphasize the importance of people who are in a married relationship, that they are less apt to be on welfare than families who are single parent. This legislation provides funding for healthy marriage promotion activities, as well as research, demonstrations and technical assistance to States in developing effective programs. Thus, while the 1996 act made significant reforms, there remains more that should be done to strengthen the current welfare delivery system. Those reforms are included in the PRIDE bill now before the Senate. Recognizing the improvements that the 1996 reforms made, our Senate Finance Committee began deliberations by working off of current law and improving it with priorities identified by Senators on and off the Finance Committee, as well as ideas that are coming from President Bush's administration. The Senate Finance Committee deliberations in many ways continued the work done in the 107th Congress on the issues of welfare reform. As Members know, the bill that then-Chairman Baucus produced in the second half of the 107th Congress, which went by the acronym WORK bill, was based on the so-called tripartisan agreement at that time. This tripartisan agreement was a series of policy agreements reached by Senators Breaux, Rockefeller, Lincoln, and Jeffords from the Democratic caucus, and Senators Hatch and Snowe from the Republican caucus. These Members, along with then-Chairman Baucus, continued to play strong and important leadership roles on the Finance Committee relative to welfare reform. I had a chance to review the work of the last Congress, which was the tripartisan agreement, and I noted similarities between what the tripartisan group proposed, what the PRIDE Act before us has in it, and also the House-passed bill that passed early last year. That House- passed bill is largely based upon President Bush's proposal for welfare reform. I refer my colleagues to the various charts that I am going to put before them now, which highlight the many areas of common ground between last year's WORK bill and the House bill, and the PRIDE bill by which the present title is before the Senate. Admittedly, not all the details are exactly the same, but as my colleagues will see from these charts, there is a great deal of common ground between these three bills. I think it is important to emphasize the similarities because too often on the Senate floor we have emphasis upon disagreements. This common ground is building upon the bipartisanship that took place in 1996 to move us to the present program. There is common ground regarding keeping what works from the 1996 reform bill. Going down the chart from top to bottom, all three bills maintain the basic block grant, continue the policy of no individual entitlement to assistance, and retain the lifetime 5-year time limit. Both the bill of Senator Baucus, of last session, and the legislation now before the Senate would maintain current sanction policy. The PRIDE bill continues to allow for 12 months of education and training, while the House bill scales that back to 4 months and the bill of Senator Baucus would have increased that to 24 months. Additionally, both the WORK bill and the PRIDE bill would maintain the current list of core work and work readiness activities, although the WORK bill would allow 8 weeks to be spent in job research. Now we have a chart that deals with improving State flexibility. Before I describe what is on this chart, we have had a great deal of emphasis upon letting States use this Federal legislation with some degree of flexibility. Frankly, it is very difficult for us to pour a mold in Washington called welfare reform and have it fit all 50 States exactly the same way. What it might take for the State of Iowa to meet the needs of a welfare family in Waterloo, IA, might be entirely different than in New York City. If you try to solve it in exactly the same way, you are probably going to waste money in New York or Waterloo or you might not accomplish as much in one city for that money as opposed to another. So let Albany, as the capital of New York, or let Des Moines, IA, as the capital of my State--let the legislators there and administrators there fit this to meet their various needs. I want to point, though, to the common ground in terms of improving State flexibility. Again, I am referring to the three proposals: The Senate bill from the last Congress, the Senate bill from this Congress, and the House-passed bill that is now in the Senate for our consideration. All three proposals would allow for adults on assistance, with barriers to work, to engage in activities designed to address those barriers and allow those barrier removal activities to count toward a State work requirement for 3 months, provide for increased access to emergency or contingency funds during an economic downturn, and allow States to use their unobligated balances or carryover funds for any welfare-related purpose. That would include child care, whereas currently States can only use these funds for cash assistance. We give States much more flexibility to meet their needs because they know their needs better than we do. Both the Senate bill of the 107th Congress as well as the Senate bill of the 108th Congress would allow for an additional 3 months of barrier removal activities if combined with work. Both the WORK bill and the PRIDE bill include a provision allowing States to count longer duration postsecondary education towards their work requirement. This is a provision patterned after the State of Maine's Parents as Scholars Program. We also have common ground between these three pieces of legislation on strengthening work requirements and leading people into the world of work. For 60 years we put welfare recipients out of sight, out of mind, out to the edges of society, guaranteeing a life of poverty. What we started doing in 1996, and we intend to continue to do through this legislation, is move people from the world of welfare to the world of work. The motivation behind that is you have to be in the world of work to have a chance to move up the economic ladder. You cannot move up the economic ladder in the world of welfare. But where there are 138 million Americans in the world of work, that is where we need to have as many welfare recipients as we can so they can move out of poverty. No child should be sentenced to a life of poverty, and I think we are showing in the 1996 legislation, which we are now refining, that this helps people move up the economic ladder. At least there is opportunity to move up the economic ladder where there is no opportunity to do that if you are relying on a welfare check. I want to again emphasize there is common ground relative to strengthening the work requirement. All three bills would increase a State's required participation rate, raise the time spent in core or priority activities, as well as assign partial credit for hours below the standard. The PRIDE bill and the House bill would raise the standard hour. The PRIDE bill and the WORK bill would replace the caseload reduction credit with an employment credit based on legislation introduced by the Senator from Arkansas, Mrs. Lincoln. There is common ground on promoting healthy families. All three bills would provide for universal engagement of improved child support provisions, healthy marriage grants, as well as for responsible fatherhood grants. Both the WORK and the PRIDE bills would extend transitional medical assistance for 5 years, with program simplification that was authored by Senator Breaux of Louisiana. It would allow for caregiving for a disabled child to count as work, and would require States to develop presanction review policies. I have worked very hard to make sure that this is a bipartisan product. I have also been continually mindful of concerns raised by Democratic colleagues that they have about this provision. In areas where we differ, I am more than happy to let the Senate work its will, and there are outstanding issues. There are key differences between last year's Senate Finance Committee bill and this year's Senate Finance Committee bill. In my opinion, the most significant ones are the level of child care funding available for States, about which there is going to be an amendment that we are going to be dealing with shortly. Another one would be 24 months versus 12 months of allowable education and training. Another one would be eligibility for legal immigrants, for welfare, Medicaid, and the children's health insurance program. Another one would be continuation of the expired State aid to families of dependent children waiver; and, fifth, the standard hours for calculating a State's work participation rate. I am also aware there are Members who may wish to consider provisions increasing the work requirement by broadening the family's account toward the participation rate as well as increasing the standard hour. Additionally, I have had Members tell me they want to consider amendments requiring States to pose a full check sanction on adults who fail to comply with their self-sufficiency plans. These are all things to which the Senate is entitled, guaranteed, to have a healthy debate on. These are things that will be settled on the floor of the Senate, if people want to pursue these differences of opinion. However, at this point I want to spend some time discussing the issues surrounding the work requirement in PRIDE, specifically the issue of work hours for individuals receiving assistance. I want to clarify, first of all, something for the record. There is no Federal hour requirement on an adult receiving assistance. I want to say that another way. The Federal Government cannot make an individual welfare recipient work 40 hours or 30 hours or 1 hour. Just as there is no longer an individual entitlement to welfare, there is no individual requirement for work hours. As the great baseball leader Casey Stengel used to say, Look it up. There is a Federal requirement on the States to engage welfare clients in a variety of meaningful activities in order to meet a Federal work participation rate, and there are severe penalties on States for failure to meet the Federal work participation rate. Currently, in order for a State to count an adult recipient toward the calculation of that State's work requirement, that adult must be engaged in priority work or work-related activities for at least 30 hours. As you know, the majority of families receiving welfare don't want to be on welfare. A recent study by the Mathematica Policy Research Institute of low-income families in my State revealed that many of those who ask for assistance ``felt that it sacrifices their independence and pride to do so.'' In hearings as well as in townhall meetings in my State of Iowa, adults receiving assistance told me they desire to work. I took at their word Iowans who spoke to me of their desire to work, and that is why I have worked so hard to bring a bill forward that would encourage States to redouble their efforts to engage adults receiving assistance in meaningful activities and better prepare them to enter the world of work. Consider the hypothetical case of Sara, a mom with two kids, who finds herself in a crisis. A victim of domestic abuse, Sara is trying to make a better life for herself and her children. To that end, she moves out of her abuser's home and attempts to find a way to support her family. Lacking a number of basic skills as well as needing some counseling to deal with her history of abuse, Sara presents with a number of challenges and needs welfare to help support her family. Under current law, States have a limited capacity to deal with Sara's issues and have those activities count toward a State work participation rate. Under current law, a State cannot count any domestic violence counseling that may be offered to Sara toward their work participation rate. Sara knows she must work to support her family, so she begins immediately looking for work. She spends 6 weeks looking for a job and finally finds a part-time job as a waitress working 6 hours a day for 4 days a week. She continues to look for a better paying job for an hour a day as well as spending another hour a day in counseling provided to her by her own State. I think many of us would agree that Sara is doing everything she can to try to move toward self-sufficiency and that her State by engaging her in counseling is doing its part as well. However, under current law, because she is only part time and because a State cannot count her job search after 6 weeks, and under current law domestic violence counseling can never count, Sara does not count toward that State's participation rate, regardless of how hard she or the State make the effort for her to be in the work force. In other words, you either meet the 30-hour standard and count or you don't. Currently, the States report that the majority of adults--57 percent--receiving assistance engage in 0 hours of activity. Clearly, it is more difficult for States to work with adults who are not doing anything than to work with an adult working 29 hours and get her engaged in meaningful activities for another 5 hours. It can be argued as well that it is more meaningful to help an adult move from 0 to 20 hours of activity than to move an adult from 29 hours to 34 hours of activity; but under current law, a State has no incentive to work with that particular individual. It doesn't give them credit, to the Federal Government, for doing the State's part under the welfare-to-work law requirements The administration's proposal for welfare reform reauthorization-- last year's Senate bill called the WORK bill and this year's PRIDE bill--allows States to get partial credit for hours below that standard hour requirement. As my colleagues know, the standard hour is when an eligible parent or parents count as ``one family'' for purposes of calculating a State's work participation rate. Partial credit for hours below the standard would give States a very strong incentive to work with adults who may not be ready for full-time employment. I think we can all agree it is better for these adults to be doing something rather than nothing, languishing on welfare rolls until the time limit kicks in and they have to go off assistance, having no skills to go get a job or skills to support their family. I have another chart I would like to bring to your attention. Our PRIDE bill is unique, however, insomuch as the legislation would establish a series of ``tiers'' where partial credit is assigned along with a band of hours. For work or work-readiness activities in the 20-23 hour range, a State may claim credit for an adult with a child age 6 or older counting as .675 of an entire family. For hours of 24-29 range, a State may claim credit for an adult counting as .75 of a family. And for hours in the 30-33 range, a State may claim credit for an adult counting as .875 of a family. The PRIDE bill, consistent with last year's tripartisan proposal, establishes a separate lower standard hour for parents with a child under the age of 6 because of the greater need for attention of that child. However, PRIDE sets a standard hour at 24, whereas the tripartisan proposal would have continued to set the standard hour for a parent with a child under age 6 at 20 hours. States can also capture a modest amount of extra credit for hours above this standard. As a result of these provisions in the PRIDE Act, the Congressional Research Service has calculated that overall, the nationwide work participation rate for States increases from a national average of 29 percent--without waivers--to 41 percent under our PRIDE legislation. There are some States that have very low participation rates. I have included a number of provisions specifically intended to help those States. Additionally, I am willing to work with Members representing those States on measures we can take to assist those States in making improvements in the way services are delivered and clients being engaged in those States. When we talk about the work hours as they relate to the PRIDE bill, I think it is important to bear in mind that the significant hour is not whether it is 34 or 40 or 37, but the significant number of hours is 20 because that is where the partial credit begins. Additionally, when we talk about the hours in the work requirement, the important hour again is not 30 or 40, but the important hour is 24 because that is the threshold for core work activities. Once a client meets the 24-hour threshold for core work activities, States can count unlimited education, counseling, job search, or other barrier-removal activities toward the State's participation rate. So then, we go back to Sara, the young mother to whom I previously referred, who, under current law--even though she was working 24 hours, and in counseling, and even looking for another job--did not count at all toward a State's participation rate and, consequently, would not get much attention from that State--the attention that is needed to improve people's economic growth. Under the legislation before the Senate this year, as opposed to what current law has been since 1996, Sara would have up to 6 months allowed in barrier-removal activities, including domestic violence counseling and substance abuse counseling, that counts toward this State's participation rate, meeting the requirements of Federal law. Once the 6 months are up, she has an additional 12 months that she can spend in education and training. Once those 12 months are up, if she works for 24 hours a week, spends an hour a day, 5 days a week, in domestic-abuse counseling, and looks for a better job for an hour a day, 5 days a week, she then has reached the point where she counts as one family, where the State recognizes her as a very significant individual, where the State, by paying attention to her, is going to get some credit. In other words, under the legislation now before the Senate, Sara does count; whereas, under current law, Sara does not count. During the past 3 years of debate on the issue of welfare reform, I have heard a number of different perspectives on the best approach to take for the next phase of welfare reform. Some have argued the way to go is to increase the time that adults receiving assistance spend engaged in meaningful work activity. The correlation between full-time work and increased earnings is compelling. Some have suggested that increasing the amount of time allowed for education and training is more important than increasing the time spent working. The correlation between increased education and increased earnings, of course, is compelling as well. Others believe that encouraging marriage and reducing out-of-wedlock births would net the best result. Still others have suggested that increasing State flexibility should be an integral part of any reform effort. I firmly believe that when it comes to welfare reform, there is, in fact, no such thing as ``one size fits all.'' While education may be the best approach for some, it may not be for others. Encouraging healthy family formation may be just what one family needs, but perhaps that approach would not be in the best interest of another family under different circumstances. The PRIDE bill takes a blended approach to welfare reform and strives to find balance among all these perspectives. The legislation before the Senate increases the emphasis on work and work-readiness activities, as well as increasing the flexibility for States to engage adults in education and training activities. The PRIDE legislation also provides resources to encourage States to develop innovative family formation programs, while making it clear that participation in those programs must be voluntary, and the program must be developed with domestic violence professionals. I have a chart speaking to the factors that influence poverty rates. This approach is consistent with the latest research; in other words, the approach of flexibility--``one size fits all'' not working. We have a recent policy brief that was released by the Brookings Institution, and it was drafted by Ron Haskins and Isabel Sawhill. It is entitled ``Work and Marriage: The Way to End Poverty and Welfare.'' The authors, using Census data and simple modeling, simulate the effects of various factors on the poverty rate for families with children. The poverty rate for families with children, in 2001, was 13 percent. Now, surely, everyone agrees that a central purpose of welfare reform is the reduction of poverty. As this chart clearly shows, the least effective factor in reducing poverty was to double a family's welfare benefit. The most effective single way to reduce poverty was to work full time. Indeed, according to these authors of the Brookings Institute policy brief: [F]ull-time work eliminates almost half of the poverty experienced by families with children. However, the most effective approach to reducing poverty was a combination of work, marriage, education, and family-size reduction. As colleagues can see from this chart, when the blended approach is adopted, poverty is reduced a staggering 9.3 percent, going from 13 percent down to 3.7 percent. I find these numbers to be quite compelling. I am pleased that they reinforce the approach taken in this legislation before the Senate. I know there are colleagues who have many thoughts on these pieces of legislation, and we are going to have a very lively debate. Amendment No. 2937 Mr. President, I send an amendment to the desk for the Senator from Maine, Ms. Snowe, and ask for its consideration.

Mr. GRASSLEY. I have two unanimous consent requests. The first one deals with tomorrow's business and a vote on the Snowe amendment. I ask unanimous consent that the vote in relation to Snowe amendment No. 2937 regarding childcare occur at 12:15 on Tuesday March 30, provided further that no second degrees be in order to the amendment prior to the vote, with Senator Carper to be recognized for up to 10 minutes prior to the vote, and that the time be counted against any Democrat- controlled time.

Mr. GRASSLEY. Mr. President, I want to respond somewhat to the Senator from Massachusetts. First of all, I hope he understands this is a Monday--not that Monday is not just as important as any other day of the week. But it was announced last week there would be no votes today. His amendment doesn't have anything to do with votes today, but there are a lot of Members not here who ought to have some input when a nongermane amendment comes up. So I object for the reasons of myself as well as others. Also, you can see from the debate of the Senator from Massachusetts that he feels very strongly about the importance of that amendment which he offers on the minimum wage. There is nothing wrong with the issue of the minimum wage coming up. But for this Senator from Iowa, who is chairman of the Senate Finance Committee, with issues I am trying to respond to in a bipartisan way, and to issues that are raised as much from the other side of the aisle as they are from this side of the aisle--I mentioned the FSC/ETI bill of 2 weeks ago. I mentioned the welfare reform bill this week. There is a bipartisan consensus--maybe I should not say consensus--there is an agreement we ought to have the legislation before the Senate and passed. In the face of FSC/ETI, it was responding as much from the other side as this side that that legislation to encourage manufacturing in the United States, to create jobs in the United States ought to pass. When it comes to a vote, it will probably pass 90-10. But the legislation was held up 2 weeks ago by people on the other side of the aisle with nongermane amendments. Now we have welfare reform, sunset last October. We have extended it two or three times since then, so we have to continue the welfare reform programs. There is a consensus we ought to deal with this legislation and get some permanency to our welfare-to-work legislation. What happened? Right out of the box, people from the other side of the aisle--legitimate issues or not--are trying to stop legislation immediately in its tracks that will pass this body by a very wide margin. Have they ever thought maybe some of these pieces of legislation ought to stand on their own rather than hooking them onto bills unrelated to theirs? I don't object to the issue of increasing the minimum wage. What I object to is the constant harassment on the part of people on the other side of the aisle to keeping legislation from moving along very quickly that everybody knows needs to pass. This is just not Republican pieces of legislation dealing with welfare reform. It is just not Republican legislation dealing with encouraging manufacturing and creating jobs in manufacturing in America. These pieces of legislation are doing what the Senate ought to be doing to get things done, working in a bipartisan way. If you work in a bipartisan way to bring legislation to the floor of the Senate, why is the other side of the aisle always trying to slow down that legislation? It seems to me that is what we are dealing with. There are times to deal with pieces of legislation, but not in this way, harassing all the time. I yield the floor.

Mr. GRASSLEY. The Senator from North Dakota wants to speak. First, I ask unanimous consent to speak for 5 minutes before the Senator from North Dakota speaks.

Mr. GRASSLEY. I object.

Mr. GRASSLEY. Reserving the right to object, Mr. President--and I will object--I want to take advantage of this opportunity to say that there are a lot of very important pieces of legislation that we have before this body that are bipartisan that need to be passed. Two weeks ago, we had a bill dealing with outsourcing and the efforts to create manufacturing jobs in America by giving a tax advantage to manufacturers that manufacture here. It is a bipartisan bill, voted out of the Senate Finance Committee with only two dissenting votes, and those were Republican votes. So, overwhelmingly, people on the other side of the aisle know that bill has to pass. But time after time we deal with nongermane amendments that distract from the efforts of this Senate to do things that create jobs in America and, in this particular instance, move people from welfare to work. So I do not think it is wrong for some of us to take exception to the efforts to stall important pieces of legislation getting through this body, and that is why I object.

Mr. GRASSLEY. I object.

Mr. GRASSLEY. I object.

Mr. GRASSLEY. Mr. President, I don't think we have any objection to that. The only speaker I had on this side who wanted to speak was the Senator from Tennessee, Mr. Alexander. He wanted to speak for a little while on the amendment of the Senator from Maine. Other than that, I don't have any requests on this side.

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

Mr. GRASSLEY. I yield the floor.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. GRASSLEY

Mr. GRASSLEY. I ask unanimous consent that the Senate now proceed to a period for morning business with Senators permitted to speak up to 10 minutes each.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, since the tragic events of September 11, we have all strived mightily to ensure that our great homeland is never subjected to a terrorist attack by the evildoers again. But everyday those very evildoers weaken the fabric of our country, their enemy, by flooding our great society with addictive and deadly drugs. While the link between terrorists and drugs has been made countless times publically, we, as a Nation, have yet to attack the problem with an approach that is consistent and successful. On March 13, 2002, Rand Beers, Assistant Secretary for International Narcotics and Law Enforcement Affairs, and Francis Taylor, Ambassador- at-large for Counterterrorism, made the points in joint testimony prepared for a hearing on ``Narco-Terror: The Worldwide Connection Between Drugs and Terror'' held by the Judiciary Committee Subcommittee on Technology, Terrorism and Government Information. Taylor, who delivered the opening testimony, told us that ``relations between drug traffickers and terrorists benefit both.'' ``Drug traffickers benefit from the terrorists' military skills, weapons supply, and access to clandestine organizations. Terrorists gain a source of revenue and expertise in illicit transfer and laundering of proceeds from illicit transactions,'' he said. Taylor listed terrorist groups with known links to drug trafficking around the world--from the South American nations of Colombia, Peru, Bolivia and Paraguay to Afghanistan, which, he said, accounts for more than 70 percent of the world's supply of opiates. Mr. President, we know that 12 of the 25 major terror organizations identified by the State Department in 2002 have ties to drug traffickers and we know that drugs are a major source of funding for these terrorist groups. We know these groups sometimes work as conspirators to carry out their evil purposes. The Lebanese Hezbollah group is increasingly involved in drug trafficking and terrorist organizations in Europe and Southeast Asia also are tied to illicit drugs. The Revolutionary Armed Forces of Colombia, commonly known as the FARC, protects cocaine laboratories and clandestine airstrips in southern Colombia and some FARC units directly control local cocaine base markets. As evidence that terrorist groups cooperate and work together, the Colombian National Police arrested three members of the IRA in July, 2001, who are believed to have used the demilitarized zone to train the FARC in the use of explosives. While we know these connections, we have not taken full advantage of the vast resources and knowledge available to exploit this connection. The link between terrorism and drug trafficking that may take many forms, ranging from facilitation--protection, transportation, and taxation--to direct trafficking by the terrorist organization itself in order to finance its activities. Traffickers and terrorists have many of the same needs in terms of the secret movement of goods, people and money. There are no swans in the sewer, and the relationships between drug traffickers and terrorists benefit both. As Mr. Beers stated, ``Drug traffickers benefit from the terrorists' military skills, weapons supply, and access to clandestine organizations. Terrorists gain a source of revenue and expertise [from drug traffickers] in illicit transfer and laundering of proceeds from illicit transactions.'' Corrupt officials who are influenced by the dirty money of the narco- terrorists make it easier for the groups to get access to fraudulent documents, including passports and travel documents. This allows the terrorists to travel abroad under the stealth and protection of a shadowy network that is virtually undetectable. Terrorists and drug traffickers also use the same methods to hide their illegal profits and conduct fundraising to feed their evil plans. The schemes used by the terrorists for the transferring and laundering of drug money for general criminal purposes are similar to those used to move money to support terrorist activities. The use of ``charities'' and informal networks such as ``hawalas'' are easy and efficient ways to launder money. Yet these are the only methods we know about. Congress is in the process of crafting a budget for the 2005 fiscal year. We have some tough choices ahead of us. But as we move forward, I would urge my colleagues to keep in mind the lessons we have learned in our efforts to go after drug trafficking organizations. First, to be successful, we need the assistance of other nations. Though many countries have been quick to update their regulations, few have the law enforcement structure in place to carry out interdiction. Law enforcement capabilities must improve globally. In addition, communication between law enforcement agencies nationally and internationally, must become seamless in order to rapidly and effectively identify, target and eradicate terrorists and their drug trafficking brothers before they eradicate us. Second, our various law enforcement efforts within the United States must be coordinated. As our efforts to catch drug traffickers have taught us, no one agency has all of the tools, information, resources or skills to get the job done alone. Encouraging interagency cooperation, then, must be a priority. And third, the efforts made at the State and local level to go after drug traffickers are also an important piece of our war on terror. We cannot, should not, and must not, overlook the efforts and expertise of our State and local law enforcement officers. They know best what's going on in their communities and often have the best, most effective approach to stem the flow of crime within their borders. I will say more about the links between drug trafficking and terrorism in the future. But the connection is there and should not be ignored. Whether we discuss the financing or smuggling by terrorists, document fraud or corruption by drug traffickers, the sewer where the individuals bent on these activities dwell needs to be cleaned up. Let's not overlook the other filth in the water just because the sewer rat floats by.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, am I right that we are in morning business?

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

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I think we have a bubbling stew pot of trouble brewing in Afghanistan, and we need to take stronger action action requested by President Karzai, by the way--soon, or much of our effort to root out lawlessness in Afghanistan may be undercut. What am I talking about? Narcotics--particularly about the significant increase in opium production and trafficking in Afghanistan. I am not challenging the significant progress which has been made in the past 2 years. Removing the Taliban and preparing the groundwork for a democratically elected government is no small feat. Working with our allies, we have gathered all of the right ingredients together to build a new Afghanistan that will benefit everyone-- particularly the people of Afghanistan. But the outcome is far from certain, and it doesn't seem as if we are paying enough attention to the danger signs. According to the latest International Narcotics Control Strategy Report, released by the State Department at the beginning of this month, Afghanistan had the potential to produce 2,865 metric tons of opium in 2003. This represents almost two-thirds of the total potential opium production in the world. We know the havoc that drug use creates in a society. We know the corruption that drug trafficking encourages whereever it occurs. Experience has shown us that ignoring drug production and trafficking has only made things worse. These factors alone should be a reason for concern. We should also be concerned about who is profiting from this resurgence. The difference between what the Afghan farmer is getting and what an eightball of heroin is worth on the streets of Paris is astronomical. And I am certain those reaping this enormous profit are not the same individuals who support the Karzai government, or who are happy to see coalition troops there. The profits and instability that follow drug production wherever it occurs should be raising alarms for everyone involved. What is most worrisome, however, is we have seen these ingredients thrown together before, in Colombia. We can go down that same road, or we can take action now, before events boil over into chaos. Earlier this week I spoke on this floor about the connections between drug trafficking and terrorism. The clearest nexus between drug trafficking and terrorism is in Colombia, where there are three major terrorist organizations using drugs to fund their efforts to overthrow the government. The State Department has designated these three groups, the Revolutionary Armed Forces of Colombia, FARC, the National Liberation Army, ELN, and the United Self-Defense Groups of Colombia, AUC, as Foreign Terrorist Organizations. But these terrorist organizations began with more ideological roots, and more localized objectives. Together, these three terrorist organizations have killed thousands of innocents. Three American civilians are currently being held hostage by the FARC, and have not been allowed any contact with the outside world for over a year. For nearly 40 years the FARC have been pressing a pro-Marxist ideology. Similarly, the ELN held a more Maoist philosophy, but also strove for the same revolutionary objective. Initially these efforts were supported by donations from both the Soviet Union and Cuba. But that support ended with the fall of the Soviet Union. While not as old, the AUC began as a series of para-military groups initially funded by the wealthy landlords in Colombia. These groups, initially endorsed by the government, were created because the government was unable to protect these rural landlords from attacks by the guerrillas. But the end of the cold war did not mean an end to the guerrilla activities in Colombia. Instead, all three of these organizations were able to turn to the narcotics trade for funding. Because of this, their membership and the violence associated with each of these organizations has increased dramatically. It is now estimated that these groups receive a significant portion of their operating revenues from narcotics. With that move, much of the ideology and even the pretense of being a guerrilla group disappeared as well. At first, they just provided security and other support to the drug lords and were paid for their services. But that was not enough. Today we know that both the AUC and the FARC fight each other for access to the best smuggling routes into and out of Colombia. They fight the government to protect their drug production and transportation networks. They have also begun reaching out to foreign terrorist organizations as well, using narcotics as currency in exchange for guns and training. Until recently, these terrorist organizations were able to move freely throughout a significant portion of rural Colombia, forcing the displacement of millions of Colombians as they battled the government and each other over drugs and politics. Only after coming to the conclusion that both drug trafficking and terrorism must be addressed equally has there been progress in restoring the control of Colombia to the legitimate government. Fast forward to Afghanistan. Like the FARC, there are groups within Afghanistan, primarily operating in the remote areas of the country, who for ideological reasons would like to overthrow the government. The Taliban is perhaps the best known, but there are others as well. Numerous warlords also operate throughout the countryside, some whom have even had the blessing of the government. The Taliban, like the FARC after the fall of the Soviet Union, need to secure an alternative means of financing their operations if they are to survive. Our success in choking off their traditional funding sources has created this necessity. Opium--like coca for the FARC--is an easy, local, and available opportunity to do exactly that, and will not be a new source of revenue for the Taliban. While the Taliban banned opium production for a period of time when they controlled Afghanistan, they also taxed the trafficking and resulting profits from the sale of stored opium after the ban. Add to this equation some of the many warlords that control various areas of Afghanistan. Some of these warlords even worked with coalition forces to oust the Taliban. But most have no intention of surrendering any of their power or authority to the central government in Kabul, preferring to fight for their own fiefdoms. They have no interest in enforcing edicts from Kabul, or in taking any action that might give the central government additional legitimacy. Profits from opium production and trafficking are a key method for continuing to fund their war clan. These efforts are not as blatant or as well organized as what we have in Colombia today, but the ingredients are there. It is time we start connecting the dots. Today, several thousand U.S. and coalition soldiers are hunting down terrorists. These terrorists are receiving physical and financial support from somewhere. Meanwhile, the Karzai government is working furiously to establish the police, judicial, and military systems necessary to ensure that the people of Afghanistan can equitably govern themselves. But they must overcome the chaos created by 20 years of occupation and civil war. The last thing that they need is a well funded rebellion in their backyard. The Karzai government recognizes the dangers posed by bumper crops of opium. They know the profits being generated by this drug production go not to the Afghani people, but to the few powerful enough to move the opium out of Afghanistan. These drug traffickers flourish in the same kind of lawless environment where terrorists train. We need to start connecting the dots. We cannot continue to separate terrorism and narco-trafficking. I fear that if the United States narcotics policy in Afghanistan does not catch up to that of the Karzai government, we will be facing the same mess that we are working to clean up in Colombia. We have watched this pot before. We need to begin looking at our options now, before it boils over and we have a real mess.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

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

Mr. GRASSLEY. Mr. President, I yield myself such time as I may consume. I want to make very clear that the vote that is coming up, that we call cloture, is an effort to reach finality on this legislation. We won't be able to do it otherwise. So I think it is a very important vote, particularly considering the fact that Europe has put a 5-percent tariff on a lot of agricultural and manufacturing and timber products. We need to think in terms of a 5-percent tariff making a very uneven playing field for American manufacturing and agriculture, if we are going to do business with Europe. I hope each person in the Senate will think of the products they might export to Europe, the extent to which those products now have, already, a 5-percent tariff. Then there is going to be a 1-percent tariff added each succeeding month, up to 17 percent. Think in terms of our inability to export to Europe those products. I have in front of me several pages of items that they have already legally put these tariffs on because we lost the World Trade Organization decision. And pretty soon, when you keep getting a percent added every month, there is going to be a lot of layoffs in these industries because they can't compete. I already met with a group at 9 o'clock this morning that told me with the 5-percent tariff on their products, they are unable to make sales in Europe. That happened to come from the timber and paper industry. I can say that. This legislation, if we pass it, will not only take care of the problem of the tariffs being put on, they will go away when we pass this legislation. So there is no more sanctions, no more penalizing tariffs against American products. Not only that, but we are going to reduce the taxation of manufacturing that is done in the United States by American workers. We are going to reduce the corporate tax on manufacturing here. American corporations that manufacture overseas will not get the benefit from it. Foreign corporations that come to America to set up plants hiring American workers will get the benefit of the lower rate of taxation. So this is tilted very much toward the preservation of jobs. I remind people on the other side of the aisle who have been legitimately wondering when jobs are going to start being created in a very healthy economic climate of 5-percent growth and only .5- and .6- percent unemployment, we are all concerned about that--very healthy recovery, but particularly in manufacturing, not jobs being created the way they would normally happen. This is the opportunity for any Members of the Senate who are concerned about that to help us get cloture and pass this bill so we preserve jobs in manufacturing and we create jobs in manufacturing by emphasizing made in America. I yield the floor.

Mr. GRASSLEY. Mr. President, I send a further amendment to the desk. This amendment is the same as what I previously had withdrawn.

Mr. GRASSLEY. Mr. President, I yield 3 minutes to the Senator from Texas.

Mr. GRASSLEY. OK. I yield it all to the Senator from Kentucky.

Mr. GRASSLEY. Mr. President, I yield myself such time as I may consume. There are over 500 products on this list. There are 500 products on this list on which we know there are sanctions and tariffs from Europe, which will make our products uncompetitive. I thought I would list a few of these and the States these products come from so Senators will know they are voting against jobs in their own States by this process of European sanctions: Precious stones and metals would be affected in New York, New Jersey, Utah; nuclear reactors and boilers, California, Texas, Ohio, Michigan; toys, games, and sports equipment, California, New York, and Wisconsin; electric machinery, California, Massachusetts, Texas; wood products, Minnesota, California, Georgia, Pennsylvania; wood industry residues and animal feed, Louisiana, Florida, Illinois; aluminum, New York, Ohio, Georgia, California; iron and steel, Pennsylvania, Ohio, California; glass and glassware, Ohio, Pennsylvania, New Jersey; leather art, saddlery, handbags, California, New York, Texas; tools, New York, Ohio, Pennsylvania; paper, paperboard, and articles, Georgia, South Carolina, Massachusetts; articles of iron and steel, California, Illinois, Pennsylvania; apparel that is not knit, California, New York, New Jersey; meat and edible meat, Texas, Florida, Illinois, Minnesota; copper, Illinois, Pennsylvania, California; animal or vegetable fats, New York, Texas, California, Louisiana; edible vegetables, California, Washington, Oregon; apparel, knit or crochet, California, New York, North Carolina; oilseeds and grain, California, New York, Oregon; textile art and needlecraft, New York, Illinois, and California; ceramic products, California, Pennsylvania, Illinois; footwear, gaiters, California, Massachusetts, New York; carpets, Georgia, New York, South Carolina; cereal, flour, starch, or milk, California, New York, Illinois; soap, waxes, polish, candles, Ohio, Massachusetts, California; edible fruit and nuts, California, Florida, Washington; products of animal origin, New York, California, Pennsylvania. We can go on and on because there are more that I could give. For one, I hope that every Senator realizes this 5-percent tariff is going to go up 1 percent a month for the next 12 months, adding up to a 17- percent tariff. The extent to which these products are hurt by that 5- percent tariff each month we wait to get this legislation passed, it is going to place more of a burden on American industry, lose more American jobs, and lose an opportunity to create jobs, which this legislation does. I also remind some Members that have asked us to put provisions in this bill, if they vote against cloture, they are voting against these provisions. There is a new homestead provision for rural development providing special assistance for businesses in counties losing population. There is a provision that allows payment under the National Health Service Corps loan repayment program to exempt that payment from taxation. We have provisions in this bill to clean up brownfields. We have provisions in this bill for mortgage revenue bonds. There are 70 Senate cosponsors of this bill. We allow deductions for private mortgage insurance for people struggling to afford a new home. We have extended and enhanced the Liberty Zone bonds for the rebuilding of New York City. We also included $100 million in tax credits to be used on rail infrastructure projects within the New York Liberty Zone. We have bonds for rebuilding school infrastructure. We have some provisions in this bill for Native Americans. These are provisions Members have asked us to accommodate them on in this legislation. Is it worth killing off these important priorities by voting against cloture, not letting us get to finality, not letting us make American industry more competitive, which obviously is going to create jobs, about which we heard so much concern on the part of Members of this body, that we have a healthy recovery of 5-percent growth, only 5.6-percent unemployment, which, historically, is very low unemployment, but still not enough jobs being created? The situation is going to get worse if we do not pass this legislation. I yield the floor and suggest the absence of a quorum. I withhold that request. I yield 5 minutes to the Senator from Kentucky.

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