Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, I come to the floor today to offer legislation to solve a pension funding crisis in our country. The approach incorporated in this bill has been supported in the past by both the American Federation of Labor-Congress of Industrial Organizations and the American business community. As Chairman of the Senate Labor Committee, I must say that these two groups do not often agree and I want to take this historic opportunity to memorialize their agreement. These groups have supported the approach taken by this legislation because it will generate jobs, improve the financial strength of our corporations, and promote capital investment, all at a time when our economy sorely needs a shot in the arm. My colleagues will remember that Congress adopted a temporary fix to the problem raised by the artificially low interest rate set by the 30- year Treasury bond. Pension law relies on that the 30-year Treasury bond, which is no longer being issued, to determine funding levels. A low interest rate means employers must put more cash in their plans to satisfy full funding requirements. That temporary fix, enacted in March 2002, is set to expire at the end of this year. If no action is taken soon, companies will be required to divert billions of dollars from capital investment and job growth in order to satisfy the arbitrary funding rules. For example, General Motors will have to contribute $7 billion if no action is taken by the end of this year. Compounded in businesses across the nation, the total liability adds up to--as the late Carl Sagan used to say--``Billions and Billions.'' Both for collective bargaining and corporate financial planning purposes, a new fix needs to be in place this summer. In a nutshell, the Pension Stability Act, the legislation I am introducing today, does four things. First, it extends the temporary fix for a longer period of time--five years--in order to give Congress time to craft a permanent solution. The five year period is important because businesses and their unions need time to plan ahead and to make commitments that they can live up to. Second, the bill temporarily switches form the out-of-date 30-year Treasury bond as the benchmark rate and adopts for this five-year period a rate based on a high-quality corporate bond index or composite of indices. In shifting to this rate, the legislation assumes that the highest permissible rate of interest is 105 percent of the four-year weighted average of that rate for the first two years--2004 and 2005. For the remaining three years--so as not to permit long term underfunding of pensions--the highest permissible rate of interest drops down to 100 percent of the weighted average. Third, the legislation incorporates a smooth transition from the out- of-date 30-year Treasury Bond rate to the composite rate that will be used for determining funding obligations. No change in the lump sum distribution rate is made for the first two years. Then, in 20 percent increments, the new rate is phased in. My bill does not take the interest rate to 100 percent of the composite rate, as most commentators assert is the appropriate rate. But my bill makes significant progress toward that goal, and gives Congress time to make informed decisions on this important issue that affects very many lives. Finally, the Pension Stability Act acknowledges that reasonable people can differ on the best permanent solution to the pension funding issues. The amendment calls for the creation of an independent commission to consider all of the issues relevant to funding of pensions, and making concrete recommendations to Congress. The goal is to take controversy and politics out of the deliberation. The issues confronting our pension system are too important, and the dollar figures too large, for an internal task force within any administration. Stakeholders in this debate include company financial and human resources officers, stockholders, plan participants and beneficiaries, unions, and financial markets. If they are not included in the process, they are more likely to oppose the proffered solutions. The intent with this legislation is to create a bipartisan commission that includes business, union and pension rights groups. Such a panel would be able to address both the funding issues presented here, including the ``private yield curve'' approach, and evaluate other ideas for revitalizing the defined benefit system. I urge my colleagues to support this amendment.

Mr. GREGG. Mr. President, today I am proud to introduce the Higher Education for Freedom Act. This bill will establish a competitive grant program making funds available to institutions of higher education, centers within such institutions, and associated nonprofit foundations to promote programs focused on the teaching and study of traditional American history and government, and the history and achievements of Western Civilization, at both the graduate and undergraduate level, including those that serve students enrolled in K-12 teacher education programs. Today, more than ever, it is important to preserve and defend our common heritage of freedom and civilization, and to ensure that future generations of Americans understand the importance of traditional American history and the principles of free government on which this Nation was founded. This basic knowledge is not on essential to the full participation of our citizenry in America's civic life, but also to the continued success of the American experiment in self-government, binding together a diverse people into a single Nation with common purposes. However, college students' lack of historical literacy is quite startling, and too few of today's colleges and universities are focused on the task of imparting this crucial knowledge to the next generation. One survey of students at America's top colleges reported that seniors could not identify Valley Forge, words from the Gettysburg Address, or even the basic principles of the U.S. Constitution. Given high-school level American history questions, 81 percent of the seniors would have received a D or F, the report found. One college professor even informed me that her students did not know which side Lee was on during the Civil War, or whether the Russians were allies or enemies in World War II. A student of hers even asked why anyone should care what the Founding Fathers wrote. Thomas Jefferson once wrote, ``If a nation expects to be ignorant-- and free--in a state of civilization, it expects what never was and never will be.'' I believe the time has come for Congress to do something to promote the teaching of traditional American history at the postsecondary level, and I urge my colleagues to support this legislation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. GREGG

Mr. GREGG. No. The sense-of-Congress provision should not be interpreted to encourage the sponsors of the Alaska natural gas transportation project to engage in discriminatory hiring or contracting practices on the basis of a person's labor affiliation or lack of labor affiliation.

Mr. GREGG. I would say to my colleague that he is correct. Further, the provision is neither legally binding nor should it be construed to undermine or conflict with Executive Order 13202.

Mr. GREGG

Mr. GREGG. Mr, President, I rise today in honor of Mont Vernon, NH. This year, while the United States observed the 227th anniversary of our independence, the citizens of Mont Vernon have been planning the celebration of the town's 200th birthday. It is therefore timely and appropriate that we recognize this quintessential American community. From its first settlement in the early 1700s through today, Mont Vernon has represented all that is great about the United States. Although it may not share the industrial or commercial legacy of its sister cities of Nashua or Manchester, the town's impact on our country has been just as vital. This impact is best symbolized by the sacrifices the residents here have made in times of conflict. Fifty men from what was to become Mont Vernon served in the War of Independence; five of them lost their lives. During the Civil War, 35 men enlisted in the Union Army and, tragically, seven of them died. The whole community demonstrated their support for these soldiers and for the cause for which they were fighting by voting at a special town meeting to provide wages and outfits for those men who volunteered to serve. The town's dedication to protecting the ideals of this country was also clear during both World War I and World War II. In the First World War, nine residents fought in that conflict. In the Second World War, twenty-three of them served including Mildred Coggin, Eleanor Carlton and Mary Holt Smith. These three women were nurses whose care of injured soldiers was critical to the war effort. Of course, Mont Vernon continues to stand for those qualities which make New Hampshire such a special place to live: a dedication to public service and the spirit of volunteerism. The town's representatives to the New Hampshire General Court, Timothy Allen, Pam Coughlin and Margaret Hallyburton, are continuing in the path of the town's first elected official to that body, Major William Bradford. The members of the current Board of Selectmen, Mike Fimbel, John Koch and Peter Savage are honorably serving in the tradition the first Board of Selectmen, whose members included John Carlton, Joseph Langdell and Jacob Kendall, set in 1804. So, on this the 200th anniversary of Mont Vernon, we salute its citizens and honor their accomplishments, their love of country and their overwhelming spirit of independence.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today in honor of Winchester, New Hampshire. This great American community is celebrating the 250th anniversary of its founding, and I am proud to recognize this historic event. Over 4,000 people call themselves citizens of Winchester. From the town's incorporation in 1753 through today, they have had an enormous impact on the economic and cultural development of not only New Hampshire but our country as well. Winchester has long been a center for commerce and manufacturing. Companies like the Ashuelot Manufacturing Corporation, Thayer & Turner's Woolen Mill and Robertson Brothers's Paper Mill were early leaders in powering the expansion of the United States. The A.C. Lawrence Leather Company is another notable example of this proud heritage. It made thousands of boots and shoes which our troops needed during World War II. I know there are many residents still living in town who used to work at AC Lawrence at this time and I want to thank them for the vital contributions they made to supporting our troops during that conflict. The town's people have made significant contributions to the security of our country in many other ways. Colonel Samuel Ashley commanded a regiment of soldiers in the American Revolution. Major General Leonard Wood, another Winchester native, became Chief of Staff for the Army just prior to the start of World War I. He was one of the first men to see the war in Europe as a challenge to the American military establishment. In response, he led a crusade for a larger and better prepared armed force. This effort involved an intensive speaking tour throughout the United States and the launching of summer training camps for college students in Pennsylvania, Vermont, North Carolina and Michigan. One can certainly conclude that our victory in World War I was possible in large part because of General Wood's vision. This town has also played an important role in the political history of New Hampshire. Francis Parnell Murphy, elected Governor of the State in 1937, was born here. Today, Tom Magee, Gus Ruth, Bill Kelly, Ken Berthiaume and Brian Moser, the current members of the Board of Selectmen, are carrying on this tradition of public service. These people, and so many others, highlight the rich history for which the people of Winchester can justifiably be proud. As they celebrate the Town's 250th birthday, I am honored to salute this great community.

Mr. GREGG

Mr. GREGG. Mr. President, I do, and I thank the Senator for his work on this bill and the report. The bill (S. 650), as amended, was read the third time and passed as follows:

Mr. GREGG. Mr. President, S. 650 provides FDA the statutory authority to require that new and already marketed drugs and biological products be studied in children in specified circumstances. This authority is intended to work in a complementary fashion with pediatric exclusivity. With regard to already marketed products, S. 650 provides that FDA require pediatric testing only after pediatric exclusivity and the National Institutes of Health grant and contract provisions contained in sections 409I and 499 of the Public Health service Act have failed to produce the necessary studies. However, nothing in S. 650 requires FDA to wait until the voluntary mechanisms have failed or been exhausted before invoking the pediatric studies requirement for new drug applications under section 505 of the Federal Food, drug and Cosmetic Act or biological license applications under section 351 of the Public Health service Act. On the contrary, S. 650 creates the presumption that new drugs and biologics will be studied before approval unless a waiver or deferral is granted.

Mr. GREGG. Mr. President, the purpose of this legislation is to provide FDA with statutory authority to require pediatric studies in specified circumstances. In October 2002, a Federal district court held that existing law did not provide FDA the authority to issue a regulation requiring pediatric studies for drugs marketed to adults but important to children. Although this decision is being appealed, this legislation will provide the agency with definitive statutory authority to require pediatric studies of new and already marketed drugs and biologics in the circumstances specified in the legislation and to enforce any violations of those requirements in Federal court. This has always been the intent of S. 650. After the legislation was marked up in committee, the managers of the bill agreed to amend the language in section 505B(d) to make this intent even clearer. The enforcement mechanism in section 505B(d) provides that if a person fails to submit an assessment described in subsection (a)(2) or a request for approval of a pediatric formulation described in subsection (a) or (b) under the new law, ``the drug or biological product that is the subject of the assessment or request may be considered misbranded solely because of such failure.'' This language confers on the Secretary authority to bring a misbranding action where a violation has occurred. The committee has used the language ``may be considered'' (misbranded) rather than the traditional ``shall be deemed to be'' (misbranded) that is used in other provisions of the Federal Food, Drug and Cosmetic Act in order to emphasized that the Secretary may exercise traditional enforcement discretion in deciding whether to bring such an action. The Committee recognizes that the Secretary retains that discretion under other provisions of current law that use the ``shall'' formulation. Nevertheless, the Committee intends for this authority to be interpreted by the courts and to be implemented by FDA in a manner consistent with the agency's enforcement authorities in current law that use the ``shall'' formulation. As is true with other provisions of current law, once the Secretary decides to initiate an enforcement action under section 505B(d), no formal finding or other proceeding is required. Moreover, it is not necessary for the Secretary to identify any other misbranding authority in the act. The new authority conferred by section 505B(d) is sufficient. For example, the failure of a sponsor to submit pediatric studies in accordance with the requirements of the legislation alone would be a sufficient basis to prosecute an action in federal district court. The managers of the bill have agreed to the extraordinary retroactive application of the provisions of the new research authority in order to avoid even greater potential harm to children through the loss of research and agency resources should assessments, waivers, and deferrals under the Pediatric Rule be considered invalid following the recent district court decision invalidating the rule. This application should not be considered approval of the agency's interpretation of its authority nor disagreement of the court's ruling. In the extraordinary situation at hand, the managers' amendment modifies the effective date provision of the legislation to ensure a seamless transition of the pediatric study requirement from the Pediatric rule to this legislation. The intent is that waivers and deferrals of the study requirement previously granted under the rule be deemed to be in effect under the legislation. A sponsor that received a deferral under the rule would have the original deferral date extended by the number of days between October 17, 2002, and the date of enactment of this legislation. A sponsor that submitted an application in the time period between April 1, 1999, and the date of enactment of this legislation that was not granted a waiver or deferral under the rule would be required to submit pediatric assessments unless granted a waiver by FDA. However, no submission by a sponsor would be due until 12 months after the date of enactment of this legislation or until a date specified by FDA under section 505B(a)(3), whichever is later.

Mr. GREGG. Mr. President, I rise to speak to a managers' amendment to S. 650, the Pediatric Research Equity Act. This amendment makes improvements to the legislation as reported out of the Committee on Health, Education, Labor and Pensions in June. Because these improvements were made after the committee report was filed, this statement is intended to serve as the committee's views on the amended legislation. This statement was shared with the other committee members and has their concurrence.

Mr. GREGG

Mr. GREGG. Mr. President, today in honor of Hinsdale, NH. This great American community is celebrating the 250th anniversary of its founding, and I am proud to recognize this historic event. Over 4,000 people call themselves citizens of Hinsdale. From the town's incorporation in 1753 through today, they have made enormous contributions to not only New Hampshire's economic and cultural heritage but to our country's as well. Colonel Ebenezer Hinsdale, who many consider to be the founder of the town, was described as a ``man for all seasons.'' He was a missionary, a farmer, a soldier and a conservationist long before that term became commonplace. He built Fort Hinsdale and served in the French and Indian Wars. He truly was a man of action. It is therefore appropriate that this community bears his surname because successive generations of residents have continued to build upon the example he set. For example, Charles A. Dana, a Hinsdale native, served as the Assistant Secretary of War during the Civil War and later was the editor of the old New York Sun, one of the most prominent daily newspapers in its day. Another native, Jacob Estey, founded and manufactured the Estey Organ which was a must-have musical instrument in the late 1800's. William Haile became the first Republican Governor of New Hampshire in 1857 when the Republicans were still a fledgling party. Clearly, he must have possessed strong leadership qualities. In addition, Hinsdale can rightly claim to be the birthplace of the automobile. In 1875, George A. Long, then an apprentice in the Holman & Merriman machine shop, built and successfully demonstrated a steam car right in Hinsdale. The first test of his invention, which was described as a boiler set upon a carriage with regular wooden wheels, was scheduled to take place late one night that year to avoid embarrassment. Of course, news of the test leaked out and a curious crowd gathered to watch George Long's car run a few yards then stop. He made improvements in it and he, and his invention, soon became known for running horses and buggies right off the road. He later built a second steam auto with an advanced two-cylinder engine. This auto included adjustable seats for two, rubber tires, two speeds and front wheel brakes. Truly, George Long was a man ahead of his time. All of these people and their stories illustrate the rich heritage for which Hinsdale can rightly be proud. It is my honor to salute the citizens of this great community as they celebrate Hinsdale's 250th birthday.

Mr. GREGG

Mr. GREGG. Mr. President, I rise today to recognize and commend Gary R. Cooper upon his retirement after serving for 20 years as Executive Director of SEARCH, the National Consortium for Justice Information and Statistics. SEARCH is a national organization dedicated to enhancing the use of information and identification technology in law enforcement. SEARCH provides invaluable no-cost technical assistance, training and support to criminal justice agencies all over the country. The organization's members are Governors appointees from each State and their common goal is to ensure that the criminal justice community has access to services that will allow them to use the best technology for communications, information sharing, and criminal identification. SEARCH has been a tremendous asset to our Nation's law enforcement and this is due in no small part to the work of Gary Cooper. Under Gary's leadership over the past 20 years, SEARCH has truly become a leader in encouraging States to participate in national information and identification technology programs. For instance, under Gary's leadership, SEARCH made a profound contribution to the States' effective participation in the Interstate Identification Index and the National Fingerprint File, and the National Crime Information Center 2000 (NCIC 2000) program. Through SEARCH, Gary has also helped to implement policies on the national level. While Gary has headed SEARCH, it has made a profound contribution to the development and implementation of the National Criminal Background Check System. SEARCH also played a pivotal role in the development and enactment of the Crime Identification Technology Act which today creates the legal and funding platform for the Federal /State criminal justice technology partnership. Because of Gary, SEARCH was, and is, the primary State voice in support of the successful and ongoing national adoption of the Interstate Identification Index and Privacy Compact and the development of the Compact Council. At every important moment in the past 20-year history of criminal justice information and identification technology, Gary Cooper has been a courageous leader, an untiring champion and an insightful and influential national voice. On the occasion of his retirement, I thank Gary R. Cooper for all that he has accomplished on behalf of criminal justice in the United States.

Mr. GREGG

Mr. GREGG. Will the Senator yield for a question?

Mr. GREGG. Mr. President, I rise to address this bill. I had hoped to do it earlier in the day but, unfortunately, the managers of the bill were unable to work the time in. I certainly regret taking time out of the schedule, which is obviously crowded. I do think it is important to speak up on the issue of this piece of legislation. This is the most significant piece of spending legislation, and maybe even public policy legislation, outside of an international issue, that I expect I will vote on in my tenure in the Senate. Ironically, when I ran for this job, after serving as Governor of New Hampshire, one of the reasons I sought the job and one of the reasons I wanted to pursue a term in the Senate was that I was concerned about entitlement spending. In fact, during my first few years, I aggressively pursued setting up an entitlement commission to address entitlement spending, which I sponsored with Senator Kempthorne, who came in with me that year, and Senator Coverdell and Senator Bennett, all of whom came in the year I was elected, in a bill to end unfunded mandates, many of which were entitlement oriented. I tried to lead an effort in passing legislation to address reform of the Social Security system. I consider that to be a huge entitlement that we confront. My basic reason for seeking entitlement reform and responsibility was that I was concerned that it not only is what is driving the deficits of our country--which they continue to do--but, more importantly, as the demographics shifted in the Nation and we saw the baby boom generation, which represents a huge population, moving toward retirement, we, as a nation, were going to be placing on our children and our children's children an inordinate burden in the area of taxes in order to support the older generation--my generation--which would be retiring. It is because all the major programs, whether they are Social Security or Medicare, are built on the theory that there is a pyramid out there, that there will always be more people working and a lot more people working than those people who are taking their retirement benefits out of the system. That, of course, is the way it began. Back in 1950, there were 12.5 people working for every person who retired under Social Security. Today, we are down to 3.5 people working for every 1 person retired on Social Security and under Medicare, and that is stressing the system. Unfortunately, when we hit the retirement situation for the baby boom generation, the largest generation in the history of our Nation, the generation born between 1946 and 1955, we go down to two people working for every one person retired. We go from a pyramid to basically a rectangle, and the result is that we will end up putting an inordinate amount of stress on those people who are working to support those folks who are retired. So we need to address thoughtfully any entitlement expansion, to say nothing of the entitlements that are already on the books. That is what brings me to the Chamber today to address this legislation because I believe very strongly that needy senior citizens should have a drug benefit. Clearly, prescription drugs have become the new way to treat disease and maintain public health in our Nation. We have been able to move from a system where you had to have invasive activity in the health care system, where you had to go through surgery, to a system where people can, as result of the keen use of our scientific community, take a pharmaceutical and actually have a better life than if they were to go under the knife, have surgery. This is a revolution, and it is a revolution that is exploding and growing. Biotech activity, the nanotech activity, is only going to lead to more and more and better and better pharmaceuticals coming on the market to help people with their health. It is absolutely unfair, in my opinion, that people who are in a low- income situation, especially retired people who are on a fixed low income, have to choose between their food and their housing and maybe their pharmaceuticals. That is not right in our society, and we can certainly afford to have that addressed. It was my hope as we brought forward a pharmaceutical drug benefit for senior citizens that we would do it in a way that would address low-income seniors. Equally important, it is important that a middle- income senior should not have to spend all their assets for health care as a result of pharmaceutical costs. After a certain amount of spending, there should be catastrophic coverage that kicks in, relieving that person of the full responsibility or a large portion of their responsibility for the pharmaceutical cost. That is the type of structure at which we should be looking. Putting in place this brand new drug benefit, we also have to look at the underlying Medicare system which we all know is fundamentally broken as we look out into the future. When the baby boom generation hits, it simply is not going to work. It is not going to support that generation. That is because it is a 1959 design, an automobile built in the fifties driving on the highways of the year 2000 which, when it gets to 2015, is going to be too old to function effectively. It needs to have put in place forces which are going to cause it to be more efficient, to be more effective in addressing a person's approach to their health care. Those forces have to be basically marketplace oriented. They cannot be price-control oriented. My hope, my goal, my belief was that we would create a drug benefit that would help low-income seniors and, at the same time, give catastrophic coverage, and that would, fundamentally, reform the Medicare system so that we would end up with a more market-oriented system, something that was going to contain costs as we moved into the outyears. What did we get? What is before us today? Essentially, what we have before us today is a drug benefit that will plant a fiscal disease that will afflict our children and our children's children. It is a drug benefit that is going to put in place a fiscal disease that will afflict our children for the next 75 years. By afflict them, I mean that our children and our children's children, under the benefit in this bill, are going to have to pay $6 trillion. That is the estimate. That may be the high end. It is somewhere between $4.6 trillion and $6 trillion. When you get into those numbers, it is pretty hard to get very definitive. That is the burden this drug benefit in this bill puts on our children and our children's children to support my generation which is going to retire and take advantage of it. That is a huge problem because what we are essentially saying to the person who is working in a restaurant or working in a garage or working on a computer line or working as a sales person, who is young and trying to raise a family, is that they are going to have to pay an inordinate amount of tax burden to support people who are retired with this drug benefit. That would not be so bad if the drug benefit was not an income transfer from that person working in that garage, working in that restaurant, or working on that computer line to somebody who is a great deal wealthier than they are potentially. That would not be so bad if it was a transfer from that person to people who are low income or whose assets are about to be wiped out because of a drug expenditure. That is not the way this bill works. The way this bill works is essentially to nationalize the entire drug delivery service for senior citizens to take all the present programs which presently benefit senior citizens for drug benefits--and there are a lot of them; there are a lot of seniors in this country today who already have a drug benefit; something like 76 percent is the estimate--to take a large percentage of those people and move them from their private programs to the public programs. If you retired from a major corporation or even a smaller corporation in this country, it is very likely that in your retirement package, depending on how aggressive your union was or how successful your company was, you received a drug benefit during your retirement. But when this bill passes, the incentive is going to be to take that drug benefit which presently exists in the private sector under some sort of contractual agreement which you had when you retired and move it out of the private sector and throw it on the taxpayers of America. Who are those taxpayers going to be? They are going to be our children and our children's children, people who are working for a living, trying to buy their kids a better education, a better home, better food, or even just a nice car or a night out at the movies. Their ability to do that is going to be undermined if this bill goes forward in its present form because so much will have to flow back to benefit people who already have the benefit in the private sector and are now going to be migrated over to the public sector. Mr. President, $4.5 trillion to $6 trillion is a huge amount of money, a huge burden to put on our children. It is hard to put it in terms that are realistic and are visible when we are talking those type of dollars, but every American child born tonight--and there are a lot of kids being born tonight in America--starts out with a $44,000 debt they have to pay for Medicare for my retirement, for the retirement of everybody in this room, for the retirement of most of the people who are watching who are over the age of 45. They start out with a $44,000 debt. When this bill passes, they will have another $12,000 to $15,000 added to that debt. So before they get through the first night of their life, as a result of this legislation they are going to owe $60,000. It is not fair. It is not right. We are not doing it the correct way. There are ways to do this where the system is not nationalized, where all the people who already have a drug benefit are told there is no incentive for them to keep it. We do not say in the private sector to the people who bought Medigap, to the people who have reached contractual agreements in retirement, to the people who have retained retirement coverage through the private sector, that there is no advantage to them keeping their program or, alternatively, the people who are giving them that program saying they are not going to give it to them anymore, and move those folks onto the public dole, onto the public system. It makes no sense. Then there is the issue of the underlying question of Medicare. Not only is the drug benefit in this bill fundamentally flawed because it migrates huge numbers of people off the private sector and into the public sector, but the underlying purpose of the Medicare effort in this bill is flawed. If we are going to put in place this huge new benefit for seniors, and especially if it is going to be as grand and as pervasive, where we are basically saying to all seniors that they get a benefit here, no matter what their income is--if that is going to be put in place, that ought to at least be coupled with some sort of reform of the underlying Medicare system to try to bring under control those costs which are driving the outyear liability, which will be the tax burden for our children and their children. The estimated outyear cost of Medicare that is unfunded is $13.3 trillion. When the baby-boom generation starts to hit the system in 2008, that is when it really starts to crank up, by the year 2020, 2025, when there will be large retirement populations as a result of this demographic shift, $13.3 trillion of unfunded liability. Unfunded means it is just there. We have to pay it, but nobody has an idea of how they are going to do it. There is no trust fund for it. There is no money out there to do it. So the only way it is going to be done is to raise taxes or to cut the benefit, which is politically probably impossible, so to raise taxes on the young people who are working. There is a third way, however, to do it, and that is to make Medicare a more cost-sensitive, more thoughtful, more efficient system for delivery of health care. Regrettably, under this bill that does not happen. There is a representation that that might happen, something called a PPO, which is supposedly going to create an opportunity for the private sector to come in and compete with the traditional Medicare system. The price control system will have a chance to compete with a marketplace system. That is the thematic statement of the bill. Unfortunately, it is illusory. It will not happen under the bill. CBO says maybe 2 percent of the people will migrate, will move over, to a PPO system. The administration says it is 48 percent. Logic tells us it is not going to fly, because the bill has been structured to defeat the probability a PPO, a marketplace system, will be allowed to work. All the little gimmicks in this bill are aimed at essentially undermining that. Classic was the amendment that we passed earlier, which had been so gerrymandered, which was an effort by Senator Kyl. So what are we told? Well, even though the bill has these fundamental flaws of having a drug benefit that migrates a large number of people out of the private sector into the public sector and essentially causes low-income working Americans who are young to have to support middle-income Americans who are retired and who had a private sector benefit, and even though the bill has this illusory marketplace representation, basically no real reform of Medicare, we are told we should vote for it because it is going to be improved in conference. At least that is what we are being told on our side of the aisle. I do not know what is being said on the other side of the aisle. Maybe they are not getting that same message. We are being told that by the administration. The problem is, we are betting on the come. I mean, this is $6 trillion of unfunded liability we are talking about passing on to our kids. It is massive. If this bill were to pass in its present form, or anything near to its present form, it would fundamentally extinguish the torch which the Republican Party has allegedly--and I thought pretty effectively--carried for years which was the torch of spending responsibility. That is why I came here, as I said when I began my statement. I came to try to do something about controlling the rate of growth of spending in the Federal Government, especially in the area of entitlements. I was told by one of the finest legislators I have ever met in my experience in 20 years in Government--a man named Barber Conable--one time on the floor of the House when I was mumbling about the fact that some bill was coming through that was a little expensive, you have to understand, Judd, all Government moves to the left, and it is just a question of how many engines are on that train--think of it as a train--as it moves to the left, and our job as fiscal conservatives is to limit the number of engines that go on that train. This bill, if it passes in its present form, is going to be all engine, and it is going to undermine our capacity to assure our children they have the opportunity to have the type of lifestyle which we have, because it is going to put a huge and unfair tax burden on them. I yield the floor.

Mr. GREGG. Would the Senator agree that there wasn't, in the original program set up as an insurance program, which you would pay into during your working life under the Part A part of the insurance program, with the concept that when you retired, you would have paid for your health insurance. That is why everyone is covered under it. But is it not also true that under this drug benefit as proposed, nobody will have paid into the Medicare insurance plan for the purposes of this drug program? This drug program will be a new entitlement, and therefore it is reasonable that since it is going to be borne not by the people who worked for it but by the people who are working--it is going to be borne by them rather than the recipients--then it should be set up in a different structure along the lines that are proposed, which is you benefit the low income and you benefit people who have a catastrophic event rather than have a program that puts the benefit out to everyone and forces 37 percent of the population off private insurance plans and on to a public plan.

Mr. GREGG

Mr. GREGG. Mr. President, for the Committee on Health, Education, Labor, and Pensions I report favorably the following nomination list which was printed in the Record on the date indicated, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar that this nomination lie at the Secretary's desk for the information of Senators.

Mr. GREGG

Mr. GREGG. Mr. President, I am pleased today to speak in support of the conference agreement reached by the House of Representatives and the Senate for S. 342, the Keeping Children and Families Safe Act of 2003. This act reauthorizes several programs that are key to protecting our most vulnerable children and families: The child Abuse Prevention and Treatment Act, CAPTA; the Adoption Opportunities Act; The Abandoned Infants Assistance Act; the Family Violence Prevention and Services Act; and the Children's Justice Act. The Keeping Children and Families Safe Act works to reduce child abuse and neglect by encouraging new training and better qualifications for front-line child and family service workers. This legislation also improves links between child protective services, health and mental health agencies, and judicial systems to improve services for at risk children and to mitigate the damaging impact that child abuse and neglect can cause. For children who are removed from their homes as a result of child abuse or neglect, this Act helps to ensure they are placed into safe foster care or adoptive homes. By requiring that criminal background checks are performed on all adults residing in foster homes, this Act helps to prevent further abuse to the child. Through the reauthorization of the Adoption Opportunities Act, this legislation also helps to better facilitate the adoption of children with special needs by working to eliminate interjurisdictional barriers to adoption. Lastly, the Keeping Children and Families Safe Act gives victims of domestic violence greater access to shelters in times of emergency through the reauthorization of the Family Violence Prevention and Services Act. This important legislation responds to some of the most serious needs of children and families. I commend the work of the House of Representatives, who acted earlier today to pass this Conference report. I also thank the ranking member of the Health, Education, Labor, and Pensions Committee Senator Kennedy for his work on this bill, as well as Senators Alexander and Dodd, the chairman and ranking member of the Subcommittee on Children and Families. Protecting our most vulnerable populations is a significant priority and passage of this legislation sends a clear message that Congress is deeply committed to the interests of children and their families. I am very pleased that the House and Senate will send the Keeping Children and Families Safe Act of 2003 to the President for his signature.

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that Senator Gordon Smith of Oregon be added as a cosponsor of the amendment. I reserve the remainder of my time.

Mr. GREGG. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. GREGG. First, I was very impressed with the report the Senator was able to get out of the public domain. It was a report that raised very serious issues. The fact is it appears somebody dropped the ball somewhere in the process. We should have gotten a better return for the taxpayer than we got on this drug. The Senator is approaching an issue which needs to be addressed. I am happy to work with the Senator to try to address it. I cannot say unilaterally I can agree to the terms, but I will work throughout the day and tomorrow and have our staffs work to try to come up with language that gets to the Senator's purpose to make sure, when this research is done by NIH or other Federal entities, that research receives a fair return to the taxpayer. I was rather surprised we did not in that instance. I am happy to work with the Senator. On this amendment, there is an agreement between myself and the other primary sponsors that we will not have second-degree amendments because we worked hard to get to this point.

Mr. GREGG. I appreciate the Senator from Oregon. His issues are legitimate. I certainly hope we can work this out and include it in the bill. It is an appropriate place for it. I now ask unanimous consent, regarding the amendment Senator Schumer, I, Senator Kennedy, and Senator McCain will offer relative to generics, that we have 1 hour of debate equally divided and there be no second degrees and the yeas and nays be considered as ordered on the amendment.

Mr. GREGG. Mr. President, I understand there are some issues as to who is in line and how this is going to proceed. I will simply express what I hope will occur and what I believe is the general understanding, at least amongst a number of Senators, and that is that the next amendment to be offered is a Republican amendment. We have been alternating back and forth. The amendment that would be offered would be the amendment sponsored by myself, Senator Schumer, Senator McCain, and Senator Kennedy, which deals with generic drugs. We would agree to an hour of debate, no second degree, and then a vote on that amendment. I would ask unanimous consent for that now, but I understand there is one Senator from the other side who may have an issue. So we want to wait for that. As long as we are waiting and not doing much, I will talk a little bit about this amendment and then hopefully that will even lessen the time that has to be dedicated to it once we get to it. This amendment which will be brought forward by myself, Senator Schumer, Senator McCain, and Senator Kennedy, is very important legislation. It is not specifically on the Medicare issue but it is certainly specifically on the issue of how we make affordable drugs more available to people in this country by making available to people in this country drugs which are of a generic form which therefore cost less and are more affordable. This has been an issue that has been before the Senate before. It has been debated. As a matter of fact, a bill offered by Senator McCain and Senator Schumer passed the Senate by a rather large vote. I did not support it at the time. However, we have taken the issue back. We have sat down. We have worked very hard with all the different people who are concerned about how we should proceed in this very critical area of getting drugs out to consumers at a more reasonable price, and we have now worked out this understanding with legislation which passed out of the Health, Education, Labor and Pension Committee, which I have the honor to chair and Senator Kennedy is the ranking member. It passed out of that committee unanimously. The reason it passed out unanimously obviously is because after a great deal of consideration we were able to reach an accommodation that works rather well in addressing this issue. The basic theme of this bill is really quite simple. No. 1, we want to make generic drugs more available to consumers on a faster timeframe, which therefore gives them lower cost drugs. At the same time, we want to continue to encourage innovation, especially in our brand-name companies, which are the ones that create the drugs to begin with. Without their creativity and research, we would not have a generic industry because there would not be any underlying drug from which to develop the generic. So we do not want to chill innovation. Rather, we want to accomplish both goals, and to some degree the goals pull at each other. The third thing which I was concerned with was that we not set up a massive atmosphere of litigation, that we not create a minefield of litigation through which people have to pass before they are successful in getting the generics to the market or fight getting the generics to the market, having a definitive decision in both of those areas. This bill does that. It accomplishes those three goals. I think it does as well as can be expected in the context of the different forces pulling at the issue. It builds upon the underlying law, which is the Hatch-Waxman law, which was extraordinarily good legislation put together by Senator Hatch on our side of the aisle and Congressman Waxman across the hallway, which basically created the first attempt at settling out the issue of how generics get to the market in a prompt way while still maintaining innovation. Over the years, Hatch-Waxman, as with much legislation, was put under the microscope of the attorneys and the creative folks who work for various entities involved in this issue. As a result, it developed cracks. We found that in some instances the system was being gamed and in some instances simply misdirected. As a result, it wore down over time and there were corrections that needed to be made. That is what the purpose of this bill is, to correct the problems we saw that were occurring. At the same time we moved this legislation forward, the administration was moving forward with its own initiative in this area dealing with a 30-month stay issue, which is the technical part of this bill. They have now put out a rule in this area. The rule is fairly close to where we end up with the legislation. As a practical matter, the administration could not go as far as they wanted. And when I am talking of the administration, I am speaking of the FDA, the Food and Drug Administration. They could not go as far as they wanted to go because they were restricted by the fact they were working within the framework of regulatory requirements, but because we are working in a legislative atmosphere we can go much further, and we have. We have addressed not only the issue of the 30-month stay, we have addressed the issue of the 180-day questions which were raised. We have addressed the issue of listing, of how we handle the orange book and a variety of other issues, including patent extension, the changing of labels, coloring of pills, and things like that which became an issue of whether they were actually substantive changes or attempts simply to avoid having the generics come to the market. Our bill goes considerably further than the rule the FDA has put in place. In my opinion, it is a very substantive improvement over the proposal which came through this body last year, and although it passed, it never became law. That is why it has garnered very bipartisan support. I note the amendment I am going to be offering is cosponsored. The original sponsors are from last year, Senators Schumer and McCain, who designed this bill, joined by myself and Senator Kennedy, the chairman and the ranking members of the committee, Senator Roberts, Senator Edwards, Senator Collins, Senator Leahy, Senator Johnson, Senator Feingold, Senator Harkin, and Senator Kohl. I know other Members have a deep interest in this bill and will probably want to cosponsor this amendment also. With that being said as an introduction to the issue, hopefully we can move to it as soon as we reach an accommodation with all of those parties who have other issues floating around. I will yield the floor unless the Senator from Oregon has a question?

Mr. GREGG. Mr. President, I will just say this amendment is a good idea. I yield back the remainder of my time.

Mr. GREGG. Mr. President, I ask unanimous consent that Senator Talent be added as a cosponsor of the amendment.

Mr. GREGG. Mr. President, what is the regular order?