Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I think the Senator is correct to say that opponents have a right to feel the way they do, but they do not have a right constitutionally to filibuster a judicial nominee, in my opinion. And they can vote against this nominee if they want to. If they feel that deeply about their points of view, they ought to vote against the nominee, but they should not use some phony fishing expedition request, knowing that no administration can give up these documents because they are the most privileged documents in the Justice Department. And the former Democrat Solicitors General who are alive say that. I talked to the current Solicitor General, and he said there is no way they can give those documents up. It would ruin the work of the people's attorney, the Solicitor General. And they know that. So that is just a phony excuse to be able to try and stop this nominee. By the way, with regard to what the distinguished Senator from Vermont said--he brought up that certain nominees Stephen Breyer, Rosemary Barkett, Richard Paez, and Marsha Berzon were filibustered. Not one of them was filibustered. He brought up they were not confirmed, but they were all confirmed. There has never been a judicial nominee to the circuit court of appeals in this country stopped by a filibuster--never--until this one. And, as far as I am concerned, this one is not going to be stopped either, if we do what is right. And, of course, a cloture vote does not always signify a filibuster. A lot of these cloture votes we have had in the past--that is why I talk in terms of true filibusters versus time management devices used by the majority leader, whoever that may be. In some cases, our own majority leader moved for cloture. So don't give me the argument that this is not the first filibuster. This is the first filibuster, first true filibuster of a circuit court of appeals nominee in history. Now, no Republican has claimed that Lavenski Smith or Julia Smith Gibbons were filibustered, but both of these Bush circuit nominees were subjected to cloture votes last year. So that is just a phony argument. Now, they have so much information on this man there is little or no excuse for not proceeding to a vote. The problem is, they cannot find anything wrong with him. There is so much that is right about Miguel Estrada. And I just cannot quite see some of the arguments that have been given. Mr. President, how much time is left?

Mr. HATCH. Mr. President, how much time remains on the other side?

Mr. HATCH. I am not going to name names on the floor.

Mr. HATCH. Mr. President, I ask for the regular order.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent to have printed in the Record the Rules of Procedure for the Committee on the Judiciary for the 108th Congress.

Mr. HATCH

Mr. HATCH. Mr. President, the National Center for Missing and Exploited Children is a critical component of our Nation's battle against child pornography and child exploitation. It is absolutely dedicated to eradicating these evils, and its members work tirelessly towards this end. The Center deserves more than just kind words for these heroic efforts; Federal funding is necessary for it to continue this good work. Indeed, Congress has tasked the Center with many missions, including maintaining the cyber-tipline that receives reports of on-line child pornography, which the Center forwards to appropriate law enforcement officials. In this, as well as many other areas, the Center forms a valuable partnership with both Federal and State law enforcement officials and prosecutors in redressing a host of crimes against children. The Center's cause is just and its history of performance is excellent. I am pleased to be the lead cosponsor of legislation that will continue to authorize funding for the National Center for Missing and Exploited Children for the next four years. Senator Leahy and I introduced this legislation in the 107th Congress, and our bipartisan effort continues in this new Congress. Our bill again authorizes funding at $20 million per year--twice the previous authorization--in recognition of the severity of the problem and the increased duties the Center has taken on. As the Chairman of the Judiciary Committee, I am confident that this bill will become law very soon. I hope all of my colleagues will join Senator Leahy and me in supporting this bill.

Mr. HATCH

Mr. HATCH. Mr. President, the National Center for Missing and Exploited Children is a critical component of our Nation's battle against child pornography and child exploitation. It is absolutely dedicated to eradicating these evils, and its members work tirelessly towards this end. The Center deserves more than just kind words for these heroic efforts; Federal funding is necessary for it to continue this good work. Indeed, Congress has tasked the Center with many missions, including maintaining the cyber-tipline that receives reports of on-line child pornography, which the Center forwards to appropriate law enforcement officials. In this, as well as many other areas, the Center forms a valuable partnership with both Federal and State law enforcement officials and prosecutors in redressing a host of crimes against children. The Center's cause is just and its history of performance is excellent. I am pleased to be the lead cosponsor of legislation that will continue to authorize funding for the National Center for Missing and Exploited Children for the next four years. Senator Leahy and I introduced this legislation in the 107th Congress, and our bipartisan effort continues in this new Congress. Our bill again authorizes funding at $20 million per year--twice the previous authorization--in recognition of the severity of the problem and the increased duties the Center has taken on. As the Chairman of the Judiciary Committee, I am confident that this bill will become law very soon. I hope all of my colleagues will join Senator Leahy and me in supporting this bill.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce the Tax Court Modernization Act. I am joined in this legislation by my colleague Senator Breaux, and by the Chairman and Ranking Democrat of the Finance Committee, Senator Grassley and Senator Baucus. The United States Tax Court plays an important role in our tax system. However, it has been years since Congress has taken a good hard look at the Tax Court. This bipartisan piece of legislation will improve this Court in a number of ways, and I would like to take a moment to summarize some of its provisions. First, the TCMA would make minor changes in the Tax Court's jurisdiction. These are small changes that will have a big impact on the Court's efficiency. For example, the bill would allow the Tax Court to hire employees on its own, just as other courts do. Currently, the Tax Court is forced to hire through the Executive Branch's Office of Personnel Management, entangling the executive power with the judicial power. Restoring the constitutional separation of powers in the hiring process will increase the independence of the Tax Court. Second, the TCMA would improve the way that Tax Court judges receive retirement benefits and other non-salary benefits. I believe that Tax Court judges should be treated the same way that bankruptcy, Court of Federal Claims, and Article III judges are treated when it comes to fringe benefits. Tax Court judges are often not provided with the same benefits as similarly appointed Article I and Article III judges. For example, Congress allows Article III, bankruptcy, and Court of Federal Claims judges to participate in the Thrift Savings Plan in addition to the Civil Service Retirement System, while Tax Court judges are ineligible to participate in this program. These disparities in the treatment of our Tax Court judges affect the Court's ability to attract and retain seasoned judges, as well as talented employees. I have spent many years observing the Federal judiciary. I have spent many years trying to improve the Judicial Branch of our government and to make it the very finest court system the world has ever known. I look forward to working with my colleagues on the Senate Finance Committee on this important piece of legislation. I urge my colleagues, both on the Finance Committee and in the Senate as a whole, to support this legislation.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce the Tax Court Modernization Act. I am joined in this legislation by my colleague Senator Breaux, and by the Chairman and Ranking Democrat of the Finance Committee, Senator Grassley and Senator Baucus. The United States Tax Court plays an important role in our tax system. However, it has been years since Congress has taken a good hard look at the Tax Court. This bipartisan piece of legislation will improve this Court in a number of ways, and I would like to take a moment to summarize some of its provisions. First, the TCMA would make minor changes in the Tax Court's jurisdiction. These are small changes that will have a big impact on the Court's efficiency. For example, the bill would allow the Tax Court to hire employees on its own, just as other courts do. Currently, the Tax Court is forced to hire through the Executive Branch's Office of Personnel Management, entangling the executive power with the judicial power. Restoring the constitutional separation of powers in the hiring process will increase the independence of the Tax Court. Second, the TCMA would improve the way that Tax Court judges receive retirement benefits and other non-salary benefits. I believe that Tax Court judges should be treated the same way that bankruptcy, Court of Federal Claims, and Article III judges are treated when it comes to fringe benefits. Tax Court judges are often not provided with the same benefits as similarly appointed Article I and Article III judges. For example, Congress allows Article III, bankruptcy, and Court of Federal Claims judges to participate in the Thrift Savings Plan in addition to the Civil Service Retirement System, while Tax Court judges are ineligible to participate in this program. These disparities in the treatment of our Tax Court judges affect the Court's ability to attract and retain seasoned judges, as well as talented employees. I have spent many years observing the Federal judiciary. I have spent many years trying to improve the Judicial Branch of our government and to make it the very finest court system the world has ever known. I look forward to working with my colleagues on the Senate Finance Committee on this important piece of legislation. I urge my colleagues, both on the Finance Committee and in the Senate as a whole, to support this legislation.

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased that the full Senate is considering the nomination of Timothy Tymkovich to the U.S. Court of Appeals for the Tenth Circuit. Timothy Tymkovich, a graduate of Colorado College and the University of Colorado School of Law, has worked as a partner in private practice since 1996 with the firm of Hale Hackstaff Tymkovich, representing clients in matters involving State licensing and regulatory issues. He has also acquired some expertise in State and Federal election issues, and he has represented a variety of political parties and candidates. Since 1997 he has represented Great Outdoors Colorado, a highly successful State program which devotes lottery monies to fund wildlife and land conservation efforts and State recreation programs. Mr. Tymkovich has been a great public servant for the State of Colorado, serving from 1991 to 1996 as the State Solicitor General, where he acted as the chief appellate lawyer for the citizens of Colorado. In that capacity he ably represented the State in State and Federal courts, including the Colorado Supreme Court, the Tenth Circuit Court of Appeals, and the U.S. Supreme Court. He provided legal assistance to the Colorado General Assembly and acted as a liaison to Colorado's congressional delegation. He acted as the Attorney General's delegate to Colorado's judicial selection process. He also worked to reform State criminal, consumer protection and antitrust laws. When he left the office of Solicitor General, the Denver Post editorialized, ``In an age in which lawyers and government workers are often held in low esteem, Tymkovich, a member of both groups, has stood in stark contrast to both stereotypes.'' The Post added, ``Tymkovich has set a high standard of service.'' Mr. Tymkovich is well respected by his peers for his professionalism and commitment to the field of law. He is a member of the prestigious American Law Institute, which selects members on the basis of professional achievement and demonstrated interest in the improvement of the law; the International Society of Barristers, an honor society made up of 650 trial attorneys in the United States and elsewhere; the American Bar Foundation, which is the research arm of the American Bar Association; and the Colorado Bar Foundation. He currently serves as Chair of the Colorado State Board of Ethics, which acts to advise the Colorado governor and executive branch on ethics issues. From 1999 to 2001 he served as counsel to the Columbine Review Commission, which was responsible for reviewing all aspects of the 1999 shootings at Columbine High and making recommendations to the Governor regrading ways to respond to, and even prevent, future assaults of the same type. From 1998 to 2000 he served as Chair to the Colorado Governor's Task Force on Civil Justice Reform, which issued findings on the status of civil justice in Colorado and offered recommendations for improvements. Mr. Tymkovich's nomination has drawn powerful support from all corners. He enjoys the unqualified endorsements of Colorado Senators Campbell and Allard; a number of former Colorado Supreme Court justices, including Justices Erickson, Dubofsky, Neighbors, Rovira, Quinn, and Scott; Colorado Governor Bill Owens; the Colorado Attorney General, Ken Salazar; and Colorado's major newspapers, the Denver Post and the Rocky Mountain News. Significantly Mr. Tymkovich is also supported by former three-term Colorado Governor Roy Romer, who has served as the national vice chair of the Democratic Leadership Council, national co-chairman of the Clinton-Gore `96 campaign, co-chairman of the Democratic National Platform Committee in 1992, and chair of the Democratic Governors' Association in 1991. I firmly believe Mr. Tymkovich will make a great member of the Tenth Circuit. I urge all of my colleagues to vote to confirm this highly qualified nominee. Unfortunately there seems to be confusion about Mr. Tymkovich's record on several fronts. First, some have confused Mr. Tymkovich's advocacy with his personal views. As an advocate for Colorado, Mr. Tymkovich had a duty to defend the laws of Colorado, including Amendment 2. It is entirely unfair and erroneous to state that Mr. Tymkovich has provided his personal views or opinions on these issues. He has not. Second, it has been said that Mr. Tymkovich compared Amendment 2 to prohibitions on cockfighting and other activities. He has not. As he pointed out to Senator Leahy on February 26, he was quoting a Supreme Court opinion for the simple proposition that there is Supreme Court precedent for a moral component as a rational motivation for an electorate. This wasn't Mr. Tymkovich's personal opinion, it was what the Supreme Court has said on this issue. Mr. Tymkovich made this point clear a month ago. I raise these points because some seem to be attempting to reshape Mr. Tymkovich's record on the floor into a form I do not recognize. This man has a distinguished legal career. He is supported by Democrats and Republicans alike. He has served as a successful litigator and he was an excellent Solicitor General for Colorado. Those who know him support him and know he will be a terrific judge. ``special'' rights I would like to respond to the allegation that Mr. Tymkovich views protection for gays and lesbians as providing ``special treatment'' for them. First of all, Mr. Tymkovich's use of the term `'special treatment'' mirrored the terminology used by participants in the political debate over Amendment 2's passage. Second, as part of his job as Solicitor General, Mr. Tymkovich had to defend the provisions of Amendment 2, which was intended to disallow laws recognizing ``minority states,'' ``quota preference,'' ``protected status,'' or ``claim of discrimination'' on the basis of sexual orientation. Never did Mr. Tymkovich in his brief or his law review article argue that homosexuals should not enjoy the Fourteenth Amendment protections available to all. In the Colorado brief before the U.S. Supreme Court, Mr. Tymkovich specifically pointed out, sponsors of the Amendment intended to prevent a new preferred status designation. To quote the brief: ``Individuals would retain precisely the same rights under State and Federal law that they had prior to the enactment of the special protections'' disallowed by Amendment 2, and Through Amendment 2, Colorado has simply defined the package of civil rights available to homosexuals and bisexuals under the Colorado Constitution as no larger than that provided by the Constitution and laws of the United States.'' It is important to note that Mr. Tymkovich's testimony before Congress in 1996 represented the views of the Colorado Attorney General. He was not there to provide his own views; he was there as an official representative of the State. In fact, Mr. Tymkovich noted during his February 12 hearing that he agreed with some of the testimony, while he disagreed with other parts. Thank you, Mr. President. I yield the floor. Mr. President, I suggest the absence of a quorum.

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased today to rise in support of Judge Theresa Lazar Springmann, who has been nominated to the United States District Court for the Northern District of Indiana. Judge Springmann has served on both sides of the bench with distinction. Upon graduation from the University of Notre Dame Law School, Judge Springmann clerked for the Honorable James T. Moody of the United States District Court for the Northern District of Indiana-- the very court she will join upon her confirmation. She then entered private practice as an associate with Spangler, Jennings & Dougherty, P.C., and later became the first woman partner there. During her tenure in private practice, she specialized in insurance defense litigation, automobile liability, contract disputes, unfair competition and trade infringement. She also participated in her firm's pro bono program, accepting at least three cases a year from Legal Services of Northwest Indiana, Inc., in Gary IN. Judge Springmann has made a broad range of contributions to the bar. She was a founding member of the Lake County Bar Association and has served in various leadership roles with this organization. Judge Springmann is also a member of the Federal Bar Association and the Women Lawyers Association. Since 1995, Judge Springmann has served as a United States Magistrate Judge for the Northern District of Indiana. From 2000 to 2002, she served as the Federal Magistrate Judges Association Seventh Circuit Director, where she represented all magistrate judges in the Seventh Circuit in forming policy positions and recommendations to the Administrative Office and Federal Judicial Council on issues concerning magistrate judges. I am confident that Judge Springmann will serve on the bench with integrity, intelligence and fairness.

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased to support Philip P. Simon, who has been nominated to the U.S. District Court for the Northern District of Indiana. Our nominee has had a distinguished legal career. Upon graduation from Indiana University Law School, Mr. Simon joined the law firm of Kirkland & Ellis as an associate, where he focused on general commercial and construction-related litigation, products liability, and employment discrimination and issues. He next began a long career with the United States Attorney's Office, serving first in the Northern District of Indiana, then in the District of Arizona, and finally returning to the Northern District of Indiana, where he currently serves as Chief of the Criminal Division. During his 13 years with the U.S. Attorney's Office, Mr. Simon has handled a variety of issues ranging from routine drug cases to large scale drug distribution rings, public corruption cases, firearms violations, kidnapping, and white collar fraud. Mr. Simon is also a member of the Federal Bar Association, the Illinois State Bar Association, and the Chicago Bar Association. I am confident that Mr. Simon's extensive litigation experience will make him an excellent addition to the Federal bench.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to express my support for the military tax bill that is currently pending before the Senate. First, I would like to commend Senator Grassley, the chairman of the Finance Committee, and Senator Baucus, the committee's ranking Democrat, for their leadership in bringing this legislation to this point. Although this bill has a great deal of support in the Senate and in the House, it has not been an easy process to get it enacted, as the Senate and House each have different versions of the bill. In fact, this legislation was passed in the Senate and in the House last fall in the final days of the 107th Congress. Unfortunately, Congress adjourned before the differences in the bills could be worked out. As we debate this bill today, hundreds of thousands of our military men and women are in harm's way in Iraq, including 3,000 National Guardsmen and reservists from Utah who have been called into active service. These brave individuals are selflessly risking their lives for their country. Most, if not all, of these people are also making big financial sacrifices to serve in the military. While this bill will not come close to compensating our service people for these financial sacrifices, it will bring some basic fairness to their tax lives. The tax provisions in this bill are targeted and modest. They are also very much needed. I urge my colleagues to quickly join me in supporting this bill, and I hope the House will join with us in working out the differences in the two versions of this legislation so that these modest relief measures can be quickly sent to the President and signed into law.

Mr. HATCH

Mr. HATCH. Mr. President, I rise in support of the confirmation of James Selna to the U.S. District Court for the Central District of California. I have had the pleasure to review Mr. Selna's distinguished career and I am confident that he will make a fine Federal judge. Judge Selna graduated Order of the Coif from Stanford Law School in 1970. Upon graduation he joined the prestigious law firm of O'Melveny & Myers, where he maintained a sophisticated commercial practice. Upon becoming a partner in 1978, Judge Selna was involved in many high profile cases, including representing the National Football League in defending antitrust claims. In the period immediately preceding his appointment to the Superior Court, his practice consisted of litigating complex commercial disputes, typically involving high technology issues and companies. While in private practice, Judge Selna provided many hours of pro bono services to various organizations. For example, he has provided hundreds of hours of legal services on behalf of the Newport Harbor Museum in a successful constitutional challenge to Federal funding restrictions in the 1989/1990 appropriation for the Endowment for the Arts. In addition, he has provided legal advice while serving on the board of Phoenix House of Orange County, a nonprofit drug rehabilitation organization. I would like to commend Judge Selna for the many hours he has given to better his community. Since 1998, Judge Selna has served with distinction on the Orange County Superior Court. His judicial experience on the State bench will serve him well in the Federal district court. I urge my colleagues to join me in strong support of Judge Selna's nomination. I yield the floor.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to speak in favor of a bipartisan sense-of-the-Senate amendment that Senator Levin and I are offering. Here is what the amendment does: We ask that it be the sense of the Senate that up to $20 million of any unused travel or other administrative funds designated, but not obligated, for drug interdiction activities be used for a grant program that helps disseminate innovative anti-heroin medications recently approved by the FDA. Not one penny of drug interdiction funds will be taken away; our amendment only asks the Senate to go on record as supporting the use of unobligated drug interdiction travel or administrative funds to help distribute and get out the word on a new class of drug addiction treatments. This amendment builds upon the Drug Addiction Treatment Act that allows qualified doctors the ability to treat a limited number of heroin addicts in an office setting. This sense-of-the-Senate amendment will send a signal to the private sector to invest in developing new drug treatments.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to urge my colleagues to reject the Breaux amendment to the budget resolution that would reduce the size of the President's growth and jobs plan to $350 billion. I think my colleagues all recognize that such a drastic reduction in the size of the growth package would make it most difficult for the Finance Committee to include the Bush proposal to eliminate the taxation on corporate dividends. I know that a number of my colleagues have their doubts about the President's proposal to eliminate the double tax on dividends, and I would like to take a few moments to try to persuade them to support the President's proposal. Today, I will address two aspects of this important issue--how ending this double tax will help today's seniors, and how ending the double tax will impact our Nation's economic future. First, let us talk about how the double taxation of dividends affects older Americans. Our Nation's seniors have spent decades working long, hard hours, scrimping and saving for a well-deserved retirement, only to find that no matter how old they get, the tax man still has them in his sights. Age brings wisdom, but not tax relief. Fifteen or 20 years ago, it was common tax-planning wisdom to defer one's income until the retirement years. Why? Because the tax rate faced by seniors was almost always lower then the tax rate paid during one's working years. Unfortunately, this is generally no longer the case. Millions of senior citizens are now paying taxes at as high or higher a rate in retirement than they did during their working years. This year, I want to help President Bush change all that. The President has a plan for cutting taxes for seniors, and I intend to work with him to put his plan into law. We want to dramatically reduce the marriage penalty for seniors, we want to expand the 10-percent income tax bracket, and we want to speed up all of the rate cuts that are scheduled to be phased in over the next few years. And on top of all that we want to eliminate the double tax on the dividends that seniors receive. This is the right plan for America's seniors. All of the items in the President's plan are good ideas, but as I mentioned, today I would like to put particular focus on ending the double tax on dividends. Over half of all income tax filers over 65 years of age pay tax on dividends, and over one-third of all filers between 55 and 64 have taxable dividends. People saving for retirement, and people close to retirement or working for an early retirement are paying a double tax. Why do we call this tax on dividends a double tax? This is because under current law, a corporation hands over more than a third of its profits to the Federal Government in taxes, and then when investors get their share of those profits in the form of dividends, we demand that investors have to pay regular income tax on those very same dividends. As President Bush keeps reminding us, taking income once is fair, but taxing it twice is not. By the time State taxes are factored in, the combined Federal and State tax rate can exceed 71 percent. This is wrong, and it distorts the economy and correcting it will give many benefits to taxpayers and to the Nation as a whole. We need to remember that this is not a question of rich versus poor. Older Americans with modest incomes receive substantial stock dividends. In fact, more than half of tax filers over the age of 65 earning between $30,000 and $40,000 per year receive taxable dividend income: 50.9 percent, to be exact. And because our Nation's senior citizens have been so thrifty during their lives, these dividend payments are very often sizable. Elderly Americans who receive dividends and earn between $30,000 and $40,000 per year in total income receive an average of $2,008 every year of that income as taxable dividends. Even retirees who earn $15,000 to $30,000 per year receive substantial dividends. Forth-four percent of the elderly in this category receive dividends, and these Americans have to pay a double tax on over $1,400 a year in dividends. Older Americans across the income spectrum pay a double tax on their dividends, and it is time to end it. This will be a great boon to our Nation's elderly who have worked and saved throughout their lives for their retirement. Now, I would like to turn to our Nation's economic future. A few weeks ago, Chairman Greespan came up to Capitol Hill and told us that ending the double tax dividends was good tax policy, but he wanted us to do it in a fiscally responsible manner. Now, think it is fiscally responsible to end the double tax on dividends. I have no doubt that the static revenue estimate for the President's proposal is far too high. Over my 27 years in the Senate, I have seen time and time again that tax cuts turned out to cost a lot less than the official estimates. We saw it on the capital gains tax cut and we have seen it in other tax cuts too. And with a policy that is as good for the economy's long-run health as ending the double tax, I am confident that the official revenue estimates are going to be far worse than usual. This tax cut is going to change the way America does business, and it will increase savings and capital formation. This is not just my opinion. The Heritage Foundation has used a mainstream economic model to look at how ending the double tax is likely to help the economy. They conclude that ending the double tax will be revenue-neutral by year 9. So even if Congress lets spending grow at the projected rate, this proposal is an 8-year investment in our economy's longrun health, and then it starts to pay for itself. Now I would like to see spending grow slower than the projected rate, so that we can balance the budget faster and so we can increase the size of the private sector, but even if Congress fails to slow down spending, this is still good longrun tax policy. If people think that ending the double tax on dividends will blow a permanent hole in the budget, they are living in a world of pure static-model fantasy. In addition, I should point out that the Heritage economic model completely ignored the long-term structural reforms that this tax cut will bring about, reforms that will reduce the risk of future corporate bankruptcies. I am going to discuss those reforms in just a moment. So I believe that those 9-year-break-even estimates should be treated as a worst case scenario. That is why I believe that ending the double tax on dividends is fiscally responsible. I have already addressed how this will help middle-income retirees. Now I would like to delve into why I am convinced this is good for our economy's future. On this issue, I would like to quote Chairman Greenspan. This is what the Federal Reserve Chairman said a few weeks ago: I have always supported the elimination of the double taxation of dividends because I think it is a major factor restraining flexibility in our economy . . . and moving in the direction of improving flexibility has very large long- term payoffs. Flexibility is an issue that Mr. Greenspan has emphasized a lot lately. He has reminded us, again and again, that our Government should do everything it can to make our economy as flexible as possible. Why does he want a flexible economy? This is what he said, and I quote: ``The more flexible an economy, the greater its ability to self-correct in response to inevitable . . . disturbances, thus reducing the size'' of recessions. In plain English, he believes that if our economy is more flexible, then we will have smaller recessions, and less unemployment. Further, Chairman Greenspan believes that Congress can do something about this. Congress can make the economy more flexible if we enact good policies, and we can make the economy less flexible if we enact bad policies. He said, and I quote, ``We should be placing special emphasis on searching for policies that will engineer still greater economic flexibility and [we should be] dismantling policies that contribute to unnecessary rigidity.'' And as the Chairman said, the double tax on dividends is a source of rigidity. You might ask: How is cutting taxes supposed to make our economy more flexible? Ending the double tax on dividends helps in two major ways: It cuts the risk of bankruptcy and it helps to make sure that investment funds flow to the right companies. Let me address these in order. Why is it America's corporations load up on debt financing, despite the fact that high debt levels increase the risk of bankruptcy? Because our Nation's tax laws have always given them massive financial incentives to do just that. The reason is simple. When a corporation pays interest to bondholders, that payment is taxed once--at the shareholder level. But when it pays dividends to stockholders, that payment is taxed twice--to both the corporation and the shareholder. As leading finance scholars Richard Brealey and Stewart Myers write: ``[T]he . . . United States tax system clearly favors debt over equity financing.'' If you tax stock payments twice but you only tax debt payments once, it is clear what companies are going to do--they will finance most of their business by borrowing. By loading up on tax deductible bonds and bank loans rather than issuing new shares of stock, corporations, increase their chance of going bankrupt. We have seen this play out with WorldCom, with US Air, and most recently United Airlines. The media's refrain is always the same: ``Today, a Fortune 500 company, burdened with debt, filed for protection from its creditors.'' Our Tax Code should not encourage this behavior. When corporations load up on debt, they commit too much of their cash flow to making interest payments, and the threat of bankruptcy becomes all too real. Once we change this policy, businesses will find that they have people lined up out the door to buy stocks that pay dividends. When companies see the clamor for dividend-paying stocks, they will have a much stronger incentive to pay for new projects and new factories by issuing new shares of stock rather than running to the bank for a loan. And then if times get tough, businesses will not be as likely to declare bankruptcy and head to Federal court for a painful reorganization. Instead, many companies will be able to cut their dividend to shareholders, and continue business more or less as usual. Lower dividends are bad news for shareholders, to be sure; but it will spare society the pain of bankruptcy. Ending the double tax on dividends will not end the business cycle, but it will make it easier to recover from a recession. Bankruptcies spread the pain of recession over months and years, and it can destroy sound companies that made the mistake of overpromising to banks and bondholders. This will not end bankruptcy, but it will prevent a few big ones now and then. And this is not some untested pie-in-the-sky theory. All but two of our major trading partners give some kind of relief from the double tax on dividends. And the two countries that do not give relief--Ireland and Switzerland--already have much lower corporate tax rates than we do, so their double tax problem is not as bad as ours. The mere fact that other countries are doing something does not prove that it is the right thing for the United States. What we want to know is, will our Nation get real, widespread benefits when we get rid of the double tax? Here we have to look at history. New Zealand used to have a double tax on dividends, but they got rid of it in 1988. And what happened when they did that? When New Zealand completely eliminated the double tax on dividends, corporate debt levels fell, just as you would expect. Ending the double tax on dividends cut corporate debt levels in New Zealand, and ending the double tax on dividends will cut debt levels here, too. And our economy will be safer for it. The Bush proposal to eliminate the double taxation of dividends will have a very positive effect on the economy, on seniors, on the tax system, and on taxpayers in general. I urge my colleagues to reject the Breaux amendment on the budget resolution, so that the Finance Committee can accommodate the dividends proposal in the tax bill we will be putting together in a few weeks.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce legislation designed to clarify and enhance the charitable contribution tax deduction for donations of excess book inventory for educational purposes. This proposal would simplify a complex area of the current law and eliminate significant roadblocks that now stand in the way of businesses with excess book inventory to donating those books to schools, libraries, and literacy programs, where they are much needed. Unfortunately, our current tax law contains a major flaw when it comes to the donation of books that are excess inventory for publishers or booksellers. The tax benefits for donating such books to schools or libraries are often no greater than those of sending the books to the landfill. And, since it is generally cheaper and faster for a company to simply send the books to the dump, rather than go through the trouble and cost of finding donees, and of packing, storing, and shipping the books, it often ends up being more cost effective and easier for companies to truck the books to a landfill or recycling center. While there are provisions in the current law where a larger deduction is available for the donation of excess books, many companies have found that the complexity and uncertainty of dealing with the requirements, regulations, and possible Internal Revenue Service challenges of the higher deduction serve as a real disincentive to making a contribution. This is a sad situation, when one considers that many, if not most, of these books would be warmly welcomed by schools, libraries, and literacy programs. The heart of the problem is that under the current law, the higher deduction requires that the donated books be used only for the care of the needy, the sick, or infants. This requirement makes it difficult for schools to qualify as donees and also frequently prohibits libraries and adult literacy programs from receiving such deductions. This is because these schools, libraries, and literacy programs often serve those who are not needy or are over the age of 18. Further complicating the issue, the valuation of donated book inventory has been the subject of ongoing disputes between taxpayers and the IRS. The tax code should not contain obstacles that provide disincentives to charitable donations of books that can enhance learning. The bill I am introducing today addresses the obstacles of donating excess book inventory by providing a simple and clear rule whereby any donation of book inventory to a qualified school, library, or literacy program is eligible for the enhanced deduction. This means that booksellers and publishers would receive a higher tax benefit for donating the books rather than throwing them away and would thus be encouraged to go to the extra trouble and expense of seeking out qualified donees and making the contributions. My home State of Utah, like the rest of the Nation, has a problem with illiteracy. According to the National Institute for Literacy, between 21 and 23 percent of the adult population of the United States, about 44 million people, are only at Level 1 literacy, meaning they can read a little but not well enough to fill out an application, read a food label, or read a simple story to a child. Another 25 to 28 percent of the adult population, or between 45 and 50 million people, are estimated to be at Level 2 literacy, meaning they can usually can perform more complex tasks such as comparing, contrasting, or integrating pieces of information but usually not higher level reading and problem-solving skills. Literacy experts tell us that adults with skills at Levels 1 and 2 lack a sufficient foundation of basic skills to function successfully in our society. While this bill is not a cure-all for the tragedy of illiteracy, it will increase access to books, both for adults and for children. Our tax code should not encourage the destruction of perfectly good books while schools, libraries, and literacy programs go begging for them. The Senate is already on record in unanimous support of this bill. During the floor debate on the Economic Growth and Tax Relief Reconciliation Act of 2001, I offered this proposal as an amendment, which was accepted without opposition. Unfortunately, the provision was dropped in the conference with the House. Moreover, the Finance Committee has also approved this provision, having included it in S. 476, the CARE Act, which is currently pending on the Senate calendar. The Joint Committee on Taxation estimates this provision would decrease revenues to the Treasury by $283 million over a ten-year period. This estimate helps demonstrate the extent of the value of the books that are currently being discarded that could be utilized to help America's adults and children. I hope our colleagues will join us in supporting this bill. It is wrong for our tax code to encourage book publishers to send books to the landfill instead of to the library. Let's correct this problem. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I am pleased to stand here and support our young men and women in the Middle East and the efforts they are making to defend our Nation and, of course, defend against terrorism and to end the intolerant behavior and leadership of Saddam Hussein. Last night we began a war that will end Saddam Hussein's threat to his own people, to the Middle East, and to this country. It was a time we chose, and a historic moment for the United States, the Middle East, and the world. Today, as we vote in support of S. Res. 95, our prayers go with our brave soldiers, marines, airmen, and sailors. I am proud to say that this includes over 3,000 of my fellow Utahns. Every attempt was made to find a diplomatic way to disarm Iraq, to make Iraq comply with commitments it began to violate shortly after the first gulf war in 1991. And so, in many ways, the war with Iraq never ended in 1991. A condition of ending the conflict was full and transparent disarmament, and Saddam Hussein has never--never--complied with that condition. Iraq never complied, over a decade of insistence by the international community, over a decade of frustrated inspections regimes, over a decade of resolutions by the United Nations, all of which have been ignored by Iraq. All of them. Throughout this time, the United States has worked with the United Nations. We supported all 17 resolutions. We supported not just what was written, but was intended. We supported not just the words, but the actions they demanded. We wanted resolutions with resolve. As I said, I believe this administration made every attempt to find a solution without resorting to force. Every attempt, that is, except a commitment to perpetuating the dangerous belief that force would never be an option. Another nation, France, declared that it would veto any resolution requiring the use of force now. That nation did so, arguing it rejected the ``logic of war.'' I have read the history of Saddam Hussein and his dictatorship in Iraq. I have concluded that Saddam Hussein has never--never-- changed his behavior unless confronted with the threat of force. For France to reject the ``logic of war'' in trying to compel Saddam Hussein's disarmament, it was willfully ignoring this fundamental fact of Saddam Hussein. France is ignoring history; it is ignoring logic. President Bush said on Monday night that ``we are now acting because the risks of inaction would be far greater.'' I support the President, and I support this rationale. In Saddam Hussein's Iraq, there remain unaccounted vast amounts of chemical and biological weapons. This is a fact documented, not by some hawks in or out of the U.S. Government but by the international community. In Saddam Hussein, there is a long and established history of association with, and support for, terrorists. All those within reach of a television or newspaper saw, within the past weeks, Palestinian terrorist groups doling out Saddam's largesse. Saddam has trained terrorists, funded suicide operations, and allowed members of al-Qaida to live in his tightly controlled Iraq. Some opponents of the President's policy have suggested that he failed to make the case that Saddam Hussein caused the attacks on September 11. These critics are disingenuous: The administration has never made this claim. It has asserted, and I believe them, that elements of al-Qaida have been in Iraq since September 11. As we learn more, I also believe that the history of al-Qaida will reveal a long association with Saddam Hussein's Iraq, going back years, and being developed in Iraq, Sudan and Pakistan. I have said this before. Association is not causation, I know. But when it comes to regimes hiding weapons of mass destruction and harboring terrorist organizations dedicated to our doom, I say this: Association is reason enough for alarm, reason enough for action. The President said it clearly last on Monday night: Responding to such enemies only after they have struck first is not self-defense, it is suicide. I commend his administration for searching for every possible solution short of war. That this was not possible does not mean they did not work earnestly and assiduously to avoid conflict. The effort does not guarantee the result. It does not guarantee support of the U.N. Security Council. On that Security Council, China would rather see a nuclear Korean peninsula than a passive U.S. presence in South Korea. I have seen how Russia would rather see genocide in the Balkans--and Chechnya--than NATO success there. France would rather reject the ``logic of war'' in responding to a dictator who has never been motivated by anything other than the threat of force. These countries have their own self-interest, whether we like it or not. They stand down when outlaw regimes stand defiant with their illicit weapons of mass murder. I thank God for the patience, wisdom and courage of this administration. I believe I join all my colleagues as we offer our thoughts and prayers for the members of the American military, their families, our allies, and the people of Iraq, who will soon be free of a despicable, murderous regime that has kept the world fearful for far too long. And last night, I prayed to God that our mission in Iraq is blessed with providence and His protection. To our brave military I say: Godspeed and safe home.

Mr. HATCH

Mr. HATCH. Mr. President, I rise to speak about my cosponsorship, with Senator Lieberman, of the bipartisan Biological, Chemical, and Radiological Weapons Countermeasures Research Act of 2003. Senator Lieberman and I also offered similar legislation, S. 3148, in the 107th Congress. I think that when our colleagues, the administration, academic biomedical researchers, patient advocacy organizations, and the general public study the ambitious set of incentives contained in the Lieberman-Hatch bill, they will conclude that this measure can materially improve our national security. If adopted, this legislation will allow the families of Utah and in our sister states across America to live with a greater measure of safety. Although this is a complex piece of legislation, its goal is simple. The Lieberman-Hatch bill will establish a unique public-private sector relationship that will result in stimulating the private sector to increase its scope and pace of research and development activities for a wide range of medical products intended to deter and respond to acts of biological, chemical, or radiological terrorism. Senator Lieberman and I believe that the best way to discourage and prevent acts of bioterrorism is to be able to demonstrate our capacity to develop, produce, and distribute biological, chemical, and radiological weapons countermeasures. In short, if our medicine chest is full and we show the world that we have the ability to rapidly discover new countermeasures, we will decrease the likelihood of ever having to deploy these countermeasures in the first place. For example, in the last 18 months we have made great strides in ramping up production of, and our capacity to distribute, smallpox vaccine. In fact, few, in any, countries could respond more effectively than the United States to the introduction of smallpox. Our enemies in Baghdad and those hiding in mountains of Afghanistan might do more harm to themselves and their neighbors if a worldwide smallpox outbreak occurs. Unfortunately, there are dozens, and perhaps many more, biological and chemical threats for which we have no adequate response. As well, this latest outbreak of antibiotic- and antiviral-resistant pneumonia points out the need to develop responses to new public health threats whether they are spread intentionally or naturally. This bill tries to create a new paradigm for the development of vital bioterrorism countermeasures that could also serve as a model for stimulating private sector drug discovery activities in other important areas such as cancer, heart disease, and infectious and rare diseases. Senator Lieberman and I praise the work that has already been done to help our nation meet this new type of threat. Senators Byrd, Stevens, Specter, and Harkin made available a substantial amount of new resources immediately in the aftermath of the September 11th and the October, 2001 anthrax attacks. Last year, Senators Gregg, Kennedy, and Frist led the effort to pass important bioterrorism legislation to improve the public health infrastructure so that our country can better respond to public health emergencies. The Bush administration is currently working closely with Congress on the Project BioShield program. We salute these efforts. We are pleased that the Administration is now embracing the concept of a guaranteed market that was part of last year's Lieberman-Hatch bill, S. 3148. We urge the Administration and Congress to adopt other critical features of Lieberman-Hatch. The Lieberman-Hatch bill is a bold attempt to move the ball closer to the goal line. Our bill attempts to complement all the previous efforts to build up the capacity for public sector responses with a set of incentives designed to unleash the creative genius and substantial resources of the private sector actors within our Nation's biomedical research enterprise. Let me quickly summarize the major features of the bill. The Department of Homeland Security sets the countermeasures research agenda so that firms know beforehand the research targets. Interested companies register with DHS and become obligated to report their activities and subject their plants to inspection. The legislation allows a participating company seeking to fund eligible research to elect from among four types of tax incentives. First, we provide for the establishment of R&D limited partnerships. Second, we create the authority for qualified firms to issue a new class of stock that would be subject to no capital gains tax. Third, we create a new tax credit to help fund the research. Fourth, we allow for a special tax credit for research conducted at non-profit and academic research institutions. Anyone familiar with the current dismal financial state of affairs within the biotechnology industry will understand the attraction of these tax provisions. Many struggling firms might find it prudent to explore the benefits of adjusting their research portfolios to include countermeasure research and development. The legislation authorizes funding for a program whereby companies successfully developing countermeasures that secure FDA approval can be guaranteed a market at a pre-negotiated price and pre-negotiated quantities. Our legislation also contains some fundamental revisions in pharmaceutical intellectual property laws. As author of the Drug Price Competition and Patent Term Restoration Act of 1984, I hold these provisions near and dear. Essentially, the bill adopts a policy of day-for-day patent term restoration for each day lost during FDA review. Under the current provisions of the 1984 Hatch-Waxman law, no patent may be restored by more than five years and then only if the effective patent term does not exceed 14 years regardless of whether the FDA review takes longer than five years. The legislation also grants a ten year period of marketing exclusivity for any approved countermeasure, regardless of a product's patent status. This means that FDA could not approve a competitor product until that period expires. This provision operates in parallel with patent protections and serves as a floor time period during which generic versions of the pioneer countermeasure product could enter the market. Current U.S. law only provides for a five year marketing exclusivity period while most European Union countries and Japan already provide a ten year marketing exclusivity period. The Lieberman-Hatch bill also allows certain types of biotechnology companies, specifically those with less than $750 million in paid-in capital, to extend any patent by two years if the firms successfully develop a countermeasure. I can tell you that these substantial changes in the area of intellectual property will get a positive reaction in corporate boardrooms; resources will flow in the direction of products eligible for these new intellectual property protections and products will be developed to help our country respond to bioterrorist threats. In addition to the guaranteed market provisions, targeted tax breaks, and intellectual property incentives, the Lieberman-Hatch legislation also contains liability provisions; accelerated FDA approval procedures, and a limited antitrust exemption. In summary, the Lieberman-Hatch bill contains an array of incentives designed to spur a robust response from the private pharmaceutical sector. If we are going to increase our ability to defend the American homeland, we need to be certain that both the public and private sectors' are fully engaged. That is exactly what our bill will help accomplish by unleashing the energy and resources of those private sector firms engaged in biomedical research and development. I urge all of my colleagues and others with an interest in homeland security to study the bipartisan Lieberman-Hatch Biological, Chemical, and Radiological Weapons Countermeasures Research Act of 2003. I believe that when our legislation is examined, it will attract broad and strong bipartisan support. Let me close by commending my friend from Connecticut, Senator Joe Lieberman, for his vision, energy, and leadership in this critically important area. I would also like to commend the efforts of our bipartisan group of partners in the House, Congressmen Tom Davis, Cal Dooley, Curt Weldon, and Norm Dicks.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce the Pioneer National Historic Trails Studies Act. This bill would require the National Park Service to study the Pony Express, the Oregon, the California, and the Mormon National Historic Trails and make recommendations to Congress on possible additions to these trails that were used by the early pioneers of the West. For various reasons, early settlers often used routes to arrive in the West which were variations of the main routes now recognized as National Historic Trails. These routes were used by large numbers of westward pioneers. Since the enactment of the National Trails System Act in 1968, support has been building to broaden the law to include alternate routes that branch off the main trails. The Pioneer National Historic Trails Studies Act allows for the feasibility study and designation of side trails and variant routes taken by pioneers otherwise associated with the main trails. These trails are the highways of our history. They are central to the great story of the West. But unfortunately, because of the confining ``point to point'' wording now found in the Trails Act, many crucial parts of the story are not being told. Not every pioneer embarked on his journey from Omaha or Independence, and not every great or tragic event took place along the main routes. To the contrary, tens of thousands of settlers set out from other places, and many of the memorable, if not most important, events occurred along historical side roads and alternate routes that were chosen because of inclement weather, lack of water, and conflicts with Native American tribes, among other reasons. Since the original passage of the National Trails System Act, the Park Service has conducted endless hours of research, and now has a more accurate picture of the story of our Western pioneers. There has been a great deal of support shown by State and local communities which want to broaden the act to include this new knowledge. However, the Park Service has determined that legislation is required to do this. The Pioneer National Historic Trails Studies Act will enable the Park Service to identify those routes most worthy of being included in our trails system. This legislation will highlight our Western history, and it will do so without any infringement of the rights of private property owners. Mr. President, I thank the Senate for the opportunity to address this important issue today, and I urge my colleagues to support this legislation.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce legislation designed to clarify and enhance the charitable contribution tax deduction for donations of excess book inventory for educational purposes. This proposal would simplify a complex area of the current law and eliminate significant roadblocks that now stand in the way of businesses with excess book inventory to donating those books to schools, libraries, and literacy programs, where they are much needed. Unfortunately, our current tax law contains a major flaw when it comes to the donation of books that are excess inventory for publishers or booksellers. The tax benefits for donating such books to schools or libraries are often no greater than those of sending the books to the landfill. And, since it is generally cheaper and faster for a company to simply send the books to the dump, rather than go through the trouble and cost of finding donees, and of packing, storing, and shipping the books, it often ends up being more cost effective and easier for companies to truck the books to a landfill or recycling center. While there are provisions in the current law where a larger deduction is available for the donation of excess books, many companies have found that the complexity and uncertainty of dealing with the requirements, regulations, and possible Internal Revenue Service challenges of the higher deduction serve as a real disincentive to making a contribution. This is a sad situation, when one considers that many, if not most, of these books would be warmly welcomed by schools, libraries, and literacy programs. The heart of the problem is that under the current law, the higher deduction requires that the donated books be used only for the care of the needy, the sick, or infants. This requirement makes it difficult for schools to qualify as donees and also frequently prohibits libraries and adult literacy programs from receiving such deductions. This is because these schools, libraries, and literacy programs often serve those who are not needy or are over the age of 18. Further complicating the issue, the valuation of donated book inventory has been the subject of ongoing disputes between taxpayers and the IRS. The tax code should not contain obstacles that provide disincentives to charitable donations of books that can enhance learning. The bill I am introducing today addresses the obstacles of donating excess book inventory by providing a simple and clear rule whereby any donation of book inventory to a qualified school, library, or literacy program is eligible for the enhanced deduction. This means that booksellers and publishers would receive a higher tax benefit for donating the books rather than throwing them away and would thus be encouraged to go to the extra trouble and expense of seeking out qualified donees and making the contributions. My home State of Utah, like the rest of the Nation, has a problem with illiteracy. According to the National Institute for Literacy, between 21 and 23 percent of the adult population of the United States, about 44 million people, are only at Level 1 literacy, meaning they can read a little but not well enough to fill out an application, read a food label, or read a simple story to a child. Another 25 to 28 percent of the adult population, or between 45 and 50 million people, are estimated to be at Level 2 literacy, meaning they can usually can perform more complex tasks such as comparing, contrasting, or integrating pieces of information but usually not higher level reading and problem-solving skills. Literacy experts tell us that adults with skills at Levels 1 and 2 lack a sufficient foundation of basic skills to function successfully in our society. While this bill is not a cure-all for the tragedy of illiteracy, it will increase access to books, both for adults and for children. Our tax code should not encourage the destruction of perfectly good books while schools, libraries, and literacy programs go begging for them. The Senate is already on record in unanimous support of this bill. During the floor debate on the Economic Growth and Tax Relief Reconciliation Act of 2001, I offered this proposal as an amendment, which was accepted without opposition. Unfortunately, the provision was dropped in the conference with the House. Moreover, the Finance Committee has also approved this provision, having included it in S. 476, the CARE Act, which is currently pending on the Senate calendar. The Joint Committee on Taxation estimates this provision would decrease revenues to the Treasury by $283 million over a ten-year period. This estimate helps demonstrate the extent of the value of the books that are currently being discarded that could be utilized to help America's adults and children. I hope our colleagues will join us in supporting this bill. It is wrong for our tax code to encourage book publishers to send books to the landfill instead of to the library. Let's correct this problem. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I am very pleased to join with my friend and colleague Senator Baucus and a majority of our Finance Committee colleagues from both sides of the aisle today in introducing legislation that would permanently extend and improve the research tax credit. The 1990s were a great period in American economic history because American workers became more productive. This increase in productivity allowed the economy to continue to grow faster than almost anyone thought possible. Throughout the 1990s, doomsayers said that we had reached the economy's speed limit, but we just kept growing. How did this happen? The Congressional Budget Office, Federal Reserve Chairman Alan Greenspan, and dozens of leading economists have all heralded the increase in our productivity as a key to those economic good times. A major reason for this increase in productivity, is the flowering of new ideas through research and development. Restoring and increasing that growth is what our bill today is all about. But why do we need a research tax credit? Are not profitable new ideas their own reward? Is not the promise of future profits from new drug discoveries and new manufacturing techniques its own incentive? Will not companies do large amounts of R&D on their own, without any special tax incentives? Yes, of course, they will. But they clearly will not do enough. This is because cutting-edge research and development has spillover effects that reach far beyond the company that makes the investment. When companies invent new ideas and new production techniques, those inventions last forever, and help people in the United States and throughout the world. But the company that invests in R&D will only be able to make a sizable profit on its invention for a few years at most. That is because either the patent will expire, or other companies will imitate the new technique and cut the inventor's hoped-for profits. Now, I am all in favor of vigorous competition--it keeps our companies strong and efficient. But we have to recognize that competition means that innovators will receive only a fraction of the benefits of their innovation. Once the imitators pop up and competition increases, we know that profits will fall, prices will fall, and the benefits of innovation, thankfully, will get passed on to consumers. We need innovation, and fortunately, we have a strong, proven tax incentive that can encourage that innovation. The benefits of innovation reach far beyond the company that invents them. That is why we need to give companies incentives to do more innovation. I believe the best way to ensure that private-sector investment in research and development continues at the healthy rate needed to fuel productivity gains in the future is to improve and permanently extend the research credit. This tax provision is a proven and a cost- effective incentive to increase private-sector R&D spending. Studies have shown that the research tax credit significantly increases research and development expenditures. The marginal effect of one dollar of the research credit creates approximately one dollar of additional private research and development spending over the short-run and as much as two dollars of extra R&D spending over the long-run. That, is a good deal for the American taxpayer. One of the greatest strengths of the research credit has always been that it gave good incentives for more innovation. This year's proposal to extend the credit is no exception. This year, we have added a third way to qualify for the credit, an elective ``alternative simplified credit.'' We propose to base this new alternative credit on how much a company has increased its R&D spending compared to the last three years. Companies will average their R&D spending over the previous three years, and cut that number in half. For every dollar they spend over that amount, they get a 12 percent tax credit. If they spend less than that amount, they get no credit at all. This is why this credit is so effective--it gives benefits to companies that do more, and gives no benefits to companies that do less. That is good tax policy, and good growth policy. Once again, I want to ask my colleagues to make this credit permanent. I think we all know that this credit is going to be extended, again and again, every few years. It takes time and energy for my colleagues to revisit this issue every few years. Can we not just, once and for all, make this provision permanent? We know this is good policy, and it is one of the most effective tax incentives in the code. As I stated earlier, even under today's permanently temporary credit, every dollar of tax credit is estimated to increase R&D spending by one dollar in the short run and by up to two dollars in the long run. And if we make this permanent, those incentives will only improve. As it stands, companies have to take account of the fact that Congress could allow the credit lapse for a few months, as it did a number of years ago. So companies hedge their bets, they spend a little less on R&D, and our economy suffers as a result. By contrast, permanence helps planning. The sooner we make this permanent, the sooner companies can begin to enlarge and expand their research and development units, and the sooner their innovations will strengthen economic growth. A permanent extension of this credit may seem costly in terms of lost revenue. However, when you consider the value that this investment will create for our economy, it is a bargain. In fact, one study estimates that a permanent research credit would result in our Gross Domestic Product increasing by $10 billion after five years and by $31 billion after 20 years. By making our workers more productive, this credit will also increase wages. That is because study after study shows an iron-clad link between worker productivity and worker wages. Findings from a study conducted by Coopers & Lybrand show that workers in every state will benefit from higher wages if the research tax credit is made permanent. Payroll increases as a result of gains in productivity stemming from the credit have been estimated to exceed $60 billion over the next 12 years. My home State of Utah is a good example of how State economies benefit from the research tax credit. Utah is home to a large number of firms that invest a high percentage of their revenue on research and development. In Utah, five percent of the workers--51,000 people--work in the research-intensive high technology sector. That includes over 10,000 people working just to design computer systems, and over 6,000 producing medical equipment. And there is a lot of R&D taking place outside of Utah's high tech sector. Just to give one example, more than 7,000 people work in Utah's chemical industry, and workers in that industry benefit from research and development taking place in Utah and throughout the country. Aerospace and the drug and pharmaceutical industries are two more examples of big Utah employer groups that reap the benefits of R&D. And even in the midst of my state's currently weak job market, two industries that increased employment in 2002 were the medical equipment and the scientific research and development services industries. So, the point I want to make is not that Utah needs to do all of the research in order to reap the benefits of that research. Instead, the point I want to make is that workers in my state will become more productive and earn higher wages both when they invent new ideas, and when they use new ideas, wherever those new ideas come from. I want Utah companies to be able to buy better manufacturing equipment, more reliable electronics, and have access to more efficient quality control techniques. The workers who use new inventions will get just as many benefits as workers who create those new inventions. And the evidence clearly shows, that the research credit will increase creation. In short, there are tens of thousands of employees working in Utah's thousands of technology based companies, with tens of thousands more working in other sectors that engage in R&D. Beyond that, practically all of Utah's hundreds of thousands of workers benefit from higher productivity coming from the innovations that researchers both inside and outside of Utah produce. Research and development is clearly the lifeblood of our economy. During the ten times in the past 20 years that Congress has extended the research credit for a short time, the ostensible reason has been a lack of revenue. The excuse we give to constituents is that we didn't have the money to extend the bill permanently. Ironically, it costs at least as much in terms of lost revenue, in the long run, to enact short-term extensions as it does to extend it permanently. A permanent research credit has wide support in both the Senate and the House. A few years ago, this body passed by a vote of 98-1 an amendment that would have permanently extended the credit. Unfortunately, all amendments were ultimately stripped from the underlying bill. Moreover, the permanent extension of the credit is a major provision in President Bush's tax plan, and was supported by both former President Clinton and by Al Gore. Again in 2001, this body voted to include a permanent research credit in the President's tax plan. In conclusion, making the research tax credit permanent will increase the growth rate of our economy. It will mean more and better jobs for American workers. Making the tax credit permanent will speed economic growth. And new technology resulting from American research and development will continue to improve the standard of living for every person in the U.S. and around the world. I look forward to working with my colleagues on the Finance Committee and in the Senate as a whole to create a permanent, improved research and development tax credit. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I am very pleased to join with my friend and colleague Senator Baucus and a majority of our Finance Committee colleagues from both sides of the aisle today in introducing legislation that would permanently extend and improve the research tax credit. The 1990s were a great period in American economic history because American workers became more productive. This increase in productivity allowed the economy to continue to grow faster than almost anyone thought possible. Throughout the 1990s, doomsayers said that we had reached the economy's speed limit, but we just kept growing. How did this happen? The Congressional Budget Office, Federal Reserve Chairman Alan Greenspan, and dozens of leading economists have all heralded the increase in our productivity as a key to those economic good times. A major reason for this increase in productivity, is the flowering of new ideas through research and development. Restoring and increasing that growth is what our bill today is all about. But why do we need a research tax credit? Are not profitable new ideas their own reward? Is not the promise of future profits from new drug discoveries and new manufacturing techniques its own incentive? Will not companies do large amounts of R&D on their own, without any special tax incentives? Yes, of course, they will. But they clearly will not do enough. This is because cutting-edge research and development has spillover effects that reach far beyond the company that makes the investment. When companies invent new ideas and new production techniques, those inventions last forever, and help people in the United States and throughout the world. But the company that invests in R&D will only be able to make a sizable profit on its invention for a few years at most. That is because either the patent will expire, or other companies will imitate the new technique and cut the inventor's hoped-for profits. Now, I am all in favor of vigorous competition--it keeps our companies strong and efficient. But we have to recognize that competition means that innovators will receive only a fraction of the benefits of their innovation. Once the imitators pop up and competition increases, we know that profits will fall, prices will fall, and the benefits of innovation, thankfully, will get passed on to consumers. We need innovation, and fortunately, we have a strong, proven tax incentive that can encourage that innovation. The benefits of innovation reach far beyond the company that invents them. That is why we need to give companies incentives to do more innovation. I believe the best way to ensure that private-sector investment in research and development continues at the healthy rate needed to fuel productivity gains in the future is to improve and permanently extend the research credit. This tax provision is a proven and a cost- effective incentive to increase private-sector R&D spending. Studies have shown that the research tax credit significantly increases research and development expenditures. The marginal effect of one dollar of the research credit creates approximately one dollar of additional private research and development spending over the short-run and as much as two dollars of extra R&D spending over the long-run. That, is a good deal for the American taxpayer. One of the greatest strengths of the research credit has always been that it gave good incentives for more innovation. This year's proposal to extend the credit is no exception. This year, we have added a third way to qualify for the credit, an elective ``alternative simplified credit.'' We propose to base this new alternative credit on how much a company has increased its R&D spending compared to the last three years. Companies will average their R&D spending over the previous three years, and cut that number in half. For every dollar they spend over that amount, they get a 12 percent tax credit. If they spend less than that amount, they get no credit at all. This is why this credit is so effective--it gives benefits to companies that do more, and gives no benefits to companies that do less. That is good tax policy, and good growth policy. Once again, I want to ask my colleagues to make this credit permanent. I think we all know that this credit is going to be extended, again and again, every few years. It takes time and energy for my colleagues to revisit this issue every few years. Can we not just, once and for all, make this provision permanent? We know this is good policy, and it is one of the most effective tax incentives in the code. As I stated earlier, even under today's permanently temporary credit, every dollar of tax credit is estimated to increase R&D spending by one dollar in the short run and by up to two dollars in the long run. And if we make this permanent, those incentives will only improve. As it stands, companies have to take account of the fact that Congress could allow the credit lapse for a few months, as it did a number of years ago. So companies hedge their bets, they spend a little less on R&D, and our economy suffers as a result. By contrast, permanence helps planning. The sooner we make this permanent, the sooner companies can begin to enlarge and expand their research and development units, and the sooner their innovations will strengthen economic growth. A permanent extension of this credit may seem costly in terms of lost revenue. However, when you consider the value that this investment will create for our economy, it is a bargain. In fact, one study estimates that a permanent research credit would result in our Gross Domestic Product increasing by $10 billion after five years and by $31 billion after 20 years. By making our workers more productive, this credit will also increase wages. That is because study after study shows an iron-clad link between worker productivity and worker wages. Findings from a study conducted by Coopers & Lybrand show that workers in every state will benefit from higher wages if the research tax credit is made permanent. Payroll increases as a result of gains in productivity stemming from the credit have been estimated to exceed $60 billion over the next 12 years. My home State of Utah is a good example of how State economies benefit from the research tax credit. Utah is home to a large number of firms that invest a high percentage of their revenue on research and development. In Utah, five percent of the workers--51,000 people--work in the research-intensive high technology sector. That includes over 10,000 people working just to design computer systems, and over 6,000 producing medical equipment. And there is a lot of R&D taking place outside of Utah's high tech sector. Just to give one example, more than 7,000 people work in Utah's chemical industry, and workers in that industry benefit from research and development taking place in Utah and throughout the country. Aerospace and the drug and pharmaceutical industries are two more examples of big Utah employer groups that reap the benefits of R&D. And even in the midst of my state's currently weak job market, two industries that increased employment in 2002 were the medical equipment and the scientific research and development services industries. So, the point I want to make is not that Utah needs to do all of the research in order to reap the benefits of that research. Instead, the point I want to make is that workers in my state will become more productive and earn higher wages both when they invent new ideas, and when they use new ideas, wherever those new ideas come from. I want Utah companies to be able to buy better manufacturing equipment, more reliable electronics, and have access to more efficient quality control techniques. The workers who use new inventions will get just as many benefits as workers who create those new inventions. And the evidence clearly shows, that the research credit will increase creation. In short, there are tens of thousands of employees working in Utah's thousands of technology based companies, with tens of thousands more working in other sectors that engage in R&D. Beyond that, practically all of Utah's hundreds of thousands of workers benefit from higher productivity coming from the innovations that researchers both inside and outside of Utah produce. Research and development is clearly the lifeblood of our economy. During the ten times in the past 20 years that Congress has extended the research credit for a short time, the ostensible reason has been a lack of revenue. The excuse we give to constituents is that we didn't have the money to extend the bill permanently. Ironically, it costs at least as much in terms of lost revenue, in the long run, to enact short-term extensions as it does to extend it permanently. A permanent research credit has wide support in both the Senate and the House. A few years ago, this body passed by a vote of 98-1 an amendment that would have permanently extended the credit. Unfortunately, all amendments were ultimately stripped from the underlying bill. Moreover, the permanent extension of the credit is a major provision in President Bush's tax plan, and was supported by both former President Clinton and by Al Gore. Again in 2001, this body voted to include a permanent research credit in the President's tax plan. In conclusion, making the research tax credit permanent will increase the growth rate of our economy. It will mean more and better jobs for American workers. Making the tax credit permanent will speed economic growth. And new technology resulting from American research and development will continue to improve the standard of living for every person in the U.S. and around the world. I look forward to working with my colleagues on the Finance Committee and in the Senate as a whole to create a permanent, improved research and development tax credit. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent that the time I use be charged against the resolution.

Mr. HATCH

Mr. HATCH. Mr. President, it is disturbing to me that much of the debate regarding the nomination of Miguel Estrada to the U.S. Court of Appeals for the D.C. Circuit has focused on previous nominations considered by this Senate. In particular, the nominations of Judge Richard Paez and Judge Marsh Berzon, who now sit on the Ninth Circuit Court of Appeals, have been raised over and over again by Senators opposed to Mr. Estrada. The discussion of previous nominations is troubling for a number of reasons. First, Judge Paez and Judge Berzon were confirmed by the Senate. They were not subjected to a filibuster as is the case for Miguel Estrada. Second, on a personal level, it is disappointing to me that these two judges should be used as examples of alleged Republican obstructionism, when I worked hard for their confirmation, argued against delay, and supported their nominations. To continue to inject prior nominations into the Estrada debate indicates to me that the opposition is more interested in some sort of retribution for misperceived wrongs rather than fulfilling the Senate's constitutional duty of advice and consent. I have heard it stated on the Senate floor, referencing the so-called filibuster of Judge Paez, ``what goes around comes around.'' I certainly hope that it is not the case that the refusal to give a vote to Miguel Estrada is some sort of payback. The distinguished Minority Leader described the Senate's responsibility very well nearly three years ago as we were concluding debate on the nominations of Judge Paez and Judge Berzon. He stated on March 9, 2000, `` . . . [T]here is a time and a place for us to consider any nominee and, once having done so, we need to get on with it.'' I agree with the Democratic leader. We have considered the nomination of Mr. Estrada and now we need to get on with the vote--up or down, as Senators choose to cast their vote. Senator Daschle continued, ``I do not know who is going to be President next. I do not know who is going to be in the majority in the next Congress. But let's just assume that the roles are reversed . . . and we have a Republican President--which I do not think is going to happen. Do we want to pay back our colleagues for having made these people wait as long as they have? . . . I do not want to hear about that in this body. There is going to be no payback. . . . Will we have votes and vote against nominees on the basis of whatever we choose? Absolutely.'' So again, as the Democratic leader stated, Senators are free to vote against the nominee on the basis of whatever they choose, but let us have a vote. Now, as Chairman of the Judiciary Committee, I worked hard for the ultimate confirmation of Judge Paez and Judge Berzon. Nevertheless, there were some significant difficulties with their nominations which took time to resolve. I agree that they took too much time. However, these nominees did receive a vote, they were confirmed, and they now sit on the Ninth Circuit. These two nominees were not filibustered as Mr. Estrada is now being filibustered. It is true that cloture motions were filed on the nominations. Let me emphasize that it was the Republican Leader who filed a cloture petition, so there would be limited debate and a vote up or down. Furthermore, those cloture motions passed by wide margins, 86-13 in the case of Judge Berzon, and 85-14 in the case of Judge Paez. The record is clear that a true filibuster did not occur with regard to these nominations. Following the cloture votes, the Majority Leader, Senator Lott, made the following comments: ``As you know, cloture was just invoked on two Ninth Circuit judges. I still hope we have not set a precedent. I don't believe we have because it was such an overwhelming vote to invoke cloture and stop the filibuster. We should not be having filibusters on judicial nominations and having to move to cloture. But we had to, and it was an overwhelming vote.'' Senator Leahy's response to the Majority Leader's statement is noteworthy. He said: ``I was struck by the comments of the distinguished leader in saying we should not have the precedents of filibusters and requiring cloture. I commend him for supporting the cloture motion and moving this forward so we would not have that precedent.'' As I have said, the confirmations of Judge Paez and Judge Berzon were not without delay. There was considerable opposition to their nominations. But that delay did not amount to anything sort of a filibuster of these nominees. The debate on both Judge Paez and Judge Berszon took place on March 7, 8 and 9 under time agreements. The final day of debate, when they were confirmed, was 4\1/2\ hours total. The Republican leadership did file cloture to get time agreements and to ensure a final vote on these two nominees of President Clinton. I have asked for similar treatment for Miguel Estrada--a time agreement and an up or down vote but this has been denied repeatedly. So the record is clear that this was not a true filibuster. There was limited debate with time agreements. Cloture was filed as a floor management tool and was overwhelmingly approved. The nominees did receive an up or down vote both were confirmed. Let's give Miguel Estrada that same courtesy. Now with regard to the nominations of Judge Paez and Judge Berzon, I do not want to rehash the debate on these nominees, but I do want to put their confirmation into some perspective, since my Democratic colleagues keep bringing them up. Judge Paez's opponents were very concerned about statements he made in 1995, while a sitting federal district judge, regarding two California ballot initiatives--Proposition 187 to limit public assistance to illegal immigrants, and Proposition 209 to end racial and gender preferences in California. Legitimate questions were raised concerning whether his comments were consistent with the Judicial Canon governing judges' extra-judicial activities. There was genuine concern about these remarks on matters that would likely be the subject of litigation. Many of my colleagues viewed this as evidence of his inability to render fair decisions on these issues. A second area of concern regarding Judge Paez involved what some saw as his activist views of the judiciary. Judge Paez had stated, ``I appreciate the need for courts to act when they must when the issue has been generated as a result of the failure of the political process to resolve a certain political question. There is no choice but for the courts to resolve a question that perhaps ideally and preferably should be resolved through the legislative process.'' Now, this statement did raise concerns that Judge Paez would use his position to legislate from the bench. A third issue regarding Judge Paez was his rulings in certain cases. In particular, there was legitimate concern over the judge's role in two cases related to illegal fundraising during the 1996 presidential campaign--those of John Huang and Maria Hsia. You may recall Ms. Hsia was associated with fundraising and money laundering through Buddhist nuns, while Mr. Huang was associated with illegal campaign fundraising, mostly from foreign sources. Judge Paez was assigned to both of these cases. In the case of John Huang, Judge Paez accepted a very lenient plea agreement. Mr. Huang pled guilty to a felony charge of conspiracy to violate Federal election law and was sentenced to no jail time. He was ordered to pay a $10,000 fine and was required to serve 500 hours of community service. Many of my colleagues found it suspicious that Judge Paez would be assigned to both of these cases. There was criticism about the handling of these cases. At a minimum, there was concern about the propriety of his involvement in these cases, which pointed back to the Clinton-Gore campaign. Despite all the concerns regarding the involvement of Judge Paez in these cases, my own view was there was no reasonable basis to further delay the vote on Judge Paez. I was vigorous in my call for an independent prosecutor to investigate all alleged illegalities in the 1996 campaign. However, I also did not believe Judge Paez was implicated and I pressed forward with his nomination. I am asking the same treatment for Miguel Estrada--give him a vote. There were also questions over Judge Paez's ruling on a Los Angeles city ordinance prohibiting aggressive panhandling at specified public places and passed in response to the death of a young man who refused to give a panhandler 25 cents. Judge Paez found the ordinance unconstitutional under the California constitution because the law constituted ``content-based discrimination.'' The Supreme Court of California, asked by the Ninth Circuit Court of Appeals to rule on the holding, held that the Los Angeles ordinance was constitutional and valid. Another troubling case was a decision issued by Judge Paez in 1997, John Doe I v. Unocal, in which he ruled that American companies can be held liable for human rights abuses committed by foreign governments or overseas companies owned by the foreign governments with which they do business. These cases, and others, persuaded many of my colleagues that Judge Paez was well out of the mainstream. With regard to Judge Berzon, I voted for her confirmation, finding her to have the intellect, integrity, and impartiality to serve as a Federal judge. Those opposed to Judge Berzon pointed out that her entire legal experience was in one narrow field--labor law. Her opponents also pointed out that she had been very vocal in the expression of her political views, with membership and leadership in several organizations that many considered activist. The fact remains that, regardless of the opposition and careful scrutiny of these nominees, both Judge Berzon and Judge Paez each were given an up or down vote. In the case of Judge Paez, he was confirmed by a vote of 59-39. Judge Berzon was confirmed by a vote of 64-34. Miguel Estrada deserves the same courtesy. If Senators are opposed, let them vote no. But to refuse a vote is unfair to the nominee, harmful to the Senate, and destructive to the notion of an independent judiciary.