Orrin Hatch

Mr. HATCH

Mr. HATCH. The wiretapping provision is a broad investigational authority. It is not limited just to terrorism, but, currently, terrorism is not included in that authority. It is one of the defects in our system. All we are trying to do is get it included so we can find these people, and we can do it. Even so, before being granted wiretapping authority, you have to make a case, before a Federal judge, that you have probable cause to believe that the subject of the wire- tapping order has committed a serious criminal offense.

Mr. HATCH. I move to reconsider the vote.

Mr. HATCH. Mr. President, I commend the distinguished Senator from Iowa for his work on this amendment. I am very pleased to join with him in this amendment. As a former chairman of the Judiciary Committee and the current ranking member, I commend the good senator from Iowa for preparing an amendment that demonstrates America's inherent principles of justice and fairness for Americans of all backgrounds. American values require that we choose our enemies specifically and never do so by ethnic or racial identities. That is just the way our country is. Yet the incidents my distinguished friend from Iowa has recounted, of which I am aware, really indicate there are people out there who fail to recognize that there are wonderful Arab Americans and people of the Islamic faith who are just as patriotic and just as devoted to our country as anybody in this body, and there is little or no excuse for the kind of prejudice we have seen. The purpose of this sense-of-the-Senate resolution is to have the Senate on record to let people know that we do not believe in prejudicial activities against any American citizen. All Americans should be free from discrimination, including Arab Americans and persons of the Islamic faith. We all know decent, dedicated and patriotic people among the Arab- American and Muslim communities of our country. These people, in the finest tradition of the immigrant contribution to the American tapestry, have made and are making contributions in their communities and to our country. We all know how important it is for us to stand together against tyranny and prejudice. We all know that it is important for the Members of the Senate to be on record against these type of prejudicial activities. We oppose terrorists, not ethnic groups. We oppose the people who have done these horrendous, horrific acts, not U.S. citizens who are devoted to our country and who are just as horrified as any and all other Americans. We are going to do something about these terrorists. I believe that soon we will have sufficient identifications to be able to take very strong action against those who have committed these atrocities and against those who are harboring those who commit these types of atrocities. And the whole world, I believe, will be with us. It would be a tragedy if we as Americans commit acts of discrimination and violence against fellow Americans who may hold beliefs that are different from other fellow Americans or who may be ethnically different from other Americans. It would be a tragedy if we allow this to continue. It is important for all of us to embrace each other, to stand together against tyranny, to stand together against terrorism throughout this world, and some of the most vociferous antagonists of terrorism are Arab Americans and members of the Islamic faith. I know that my fellow Americans are all outraged at the events of last Tuesday. No one has an edge on outrage. No one, it seems to me, is more pure than anybody else when it comes to this. But it is simply unacceptable, immoral and illegal to take it out on people who are honorable, decent U.S. citizens or on people who support us throughout the rest of the world and especially in the Middle East as well. I commend my colleague for his initiative. He is doing the Senate and the country an important service. I consider it an honor to cosponsor this resolution with my dear friend, Senator Harkin and I hope everybody will vote aye on this particular sense-of-the-Senate resolution. Mr. President, I yield my remaining time to the distinguished Senator from Pennsylvania.

Mr. HATCH. I send an amendment to the desk on behalf of Senators.

Mr. HATCH. I ask unanimous consent reading of the amendment be dispensed with.

Mr. HATCH. Mr. President, we are all interested in moving forward to support this funding bill, and we broke through the barrier where this is the last pending amendment. We are also even more concerned that the Government have the right tools to hunt down and find the cowardly terrorists who wreaked such havoc 2 days ago. For this reason, I believe it is important to make available important tools to those investigating this and related matters. This amendment, in my opinion, is critical and should pass this evening. I have been working with my colleagues, Senators Feinstein, Kyl, and Schumer, on a package of reforms that can aid these investigations. I will highlight a few of the provisions to this bill. As the tragic events of this week have shown, one of the most essential tasks our Federal Government faces in the post-cold-war era is that of protecting our Nation and our citizens from the unprovoked acts of terrorism. In the aftermath of Tuesday's devastating attacks on the World Trade Center and the Pentagon, we, as lawmakers, must take every step possible to ensure, in addition to adequate financial resources, that the law enforcement community has the proper investigative tools at its disposal to track down the participants in this evil conspiracy and to bring them to justice. One of the most effective investigative tools at the disposal of law enforcement agencies is the ability to go to a Federal judge and get wiretapping authority. It is critical in matters such as this. That is the ability to intercept oral or electronic conversations involving the subject of a criminal investigation. The legislative scheme that provides this authority, and at the same time protects the individual liberties of American citizens to be secure against unwarranted government surveillance, is referred to in the criminal code as Title III. Among the many protections inherent in Title III is that only the investigations of certain criminal offenses, those judged to be sufficiently serious to warrant the use of this potent crime-fighting weapon, are eligible for wiretapping orders. The law lays out a number of crimes deemed by Congress to be serious enough to warrant allowing the FBI to intercept electronic and oral communications. Title III currently allows interception of communications in connection with the investigation of such crimes as mail fraud, wire fraud, and the interstate transportation of stolen property. Inexplicably, however, the Federal terrorism statutes are not currently included in Title III. I have been complaining about this for a long time and this is the time to correct it. Let me repeat that. Title III currently allows interceptions of communications in connection with the investigation of such crimes as mail fraud, wire fraud, and the interstate transportation of stolen property--important issues.

Mr. HATCH

Mr. HATCH. Mr. President, 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 text of the bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, yesterday was one of the bloodiest days in American peacetime history. When suicide terrorists attacked New York and Washington, DC, they attacked our whole country. The horror we witnessed yesterday when we saw New York's proud skyline shattered will be with us forever. Few Americans will remain untouched by the mass graves of our citizens that we will now have in downtown New York, in the Pennsylvania countryside, and, of course, at our Pentagon. These terrorists killed innocent Americans from every part of our country. We were so saddened to learn that Mary Alice Wahlstrom and her daughter, Carolyn Beug, of Kaysville, UT, were struck down by this senseless violence. Mary Alice's husband of 52 years, Norman, described Mary Alice as the ``happiest lady you'll meet.'' As one of the ``kids,'' she joined with her only daughter to help her twin 18-year old granddaughters settle in at art school on the East Coast. In this time of grief, we join Norman, her four sons, and eighteen grandchildren in hoping that our love and faith will continue to sustain each of us during this tragedy. We also were devastated to hear of the loss of Barbara Olson, who perished on the plane hijacked to the Pentagon. Barbara was one of the bright lights among conservative commentators and legal experts, and her passing will most certainly leave a void not easily filled. My deepest condolences go to her husband, Ted, our Solicitor General, at this terrible, terrible time. I called him yesterday. He was devastated. This is a terrible time for him and all of us. Many of us were equally grief-struck to learn that Lisa Raines, was on board American Airlines Flight 77. Lisa, although only 42, was a senior officer of Genzyme Corporation. In Congress, we recognized Lisa for her incredible talent, intelligence, integrity and energy. She was seen a key leader in the biotechnology industry and one of the most effective biotechnology leaders with whom I have worked. My staff and I will miss her terribly. We share in her family's sorrow and extend our prayers and deepest sympathy to Lisa's husband, Steve Push. The grief all Americans feel today is barely speakable. I, for one, cannot express in words the sorrow I feel for the thousands of families profoundly shattered by the acts of war perpetrated against us yesterday by the cowards. I commend my colleagues who have spoken so eloquently at such a great moment of national tragedy. As many of my colleagues have noted, our grief is leavened by the countless stories of sacrifice and heroism. News reports yesterday from New York said that approximately 50 percent of New York's first responders to the attacks on the Twin Towers are missing. These were the policemen, firemen and emergency personnel who rushed to the buildings and entered them in a race against collapse--a race that they lost. I hope that every American who sees a fireman or a policeman today thinks of the sacrifice that these everyday individuals are prepared to make for the good of our society, for the good of ourselves every day. There is no calamity America will withstand that will not be met with, and overwhelmed by, the decency, courage and selflessness of Americans coming to the aid of their own. It will be years before we can collect all of these stories and I expect, we never will, because it is impossible to measure the courage and bravery of Americans. As John says in the Bible, ``Greater love hath no man than this; that a man lay down his life for his friends.'' I also commend my colleagues for their unanimous support for the administration of President George W. Bush. Americans are not partisan when we are to face a common foe, nor are their representatives. We will face this foe together, and together we will prevail. At this moment, we do not know definitely or definitively who is the perpetrator of this calculated, coordinated and devastating attack on American's citizens, symbols, economy and government. And it is up for the administration to determine when they want to announce the perpetrator. I suspect that when that announcement comes, our retaliation will already be underway. The administration knows that they have the complete, unwavering support of this Senator, as the resolution we passed this afternoon will record the support of this body for the administration as it prepares its response to this act of war. President Bush was absolutely correct last night when he said that we would make no distinction between the terrorists who committed these attacks and the countries that harbor them. We have reached the end of ambivalence when it comes to dealing with terrorism. And while we may have a difficult battle before us, the United States will prevail, and the world of freedom-loving people will benefit. My colleagues know that I have focused a great deal of time on the Osama bin Laden through the years, who is widely believed to be the major perpetrator of this attack. While the United States government has made no official determination over the mastermind behind yesterday's barbarisms, we have previously determined that bin Laden is an armed and active threat against this country and its interests--and he has been for over a decade. We will have plenty of time to discuss policy in the coming days and weeks, but I say today that the threat of Osama bin Laden and his cohorts must be eliminated. And his protectors--the Taliban regime of Afghanistan, which has become a front for the violent, anti-American internationalist jihad movement that the vast majority of the Afghan people reject--must be removed from power. The government of Pakistan, a country with whom we have had many constructive relations in the past, must fully cooperate with us on these goals from this day on. I am very grateful for the expressions of support we have heard from around the world. But I am extremely troubled by the reports I have read and watched of some communities celebrating this attack against the U.S. The United States was attacked yesterday and thousands of our citizens perished. Now is the time that we note where the rest of the world stands, and I assure you that I will forever appreciate all of the support we receive from our allies and friends around the world--as I believe American policymakers must take note of all of those who offer rhetorical or other support for the attackers on America. The U.S. Congress will, I know, provide all of the support and resources the administration needs to respond to this act of war, so that we can pursue the perpetrators, eliminate them where we need to and bring them to justice where we can. I commend my colleagues for this resolution. Elaine and I offer our prayers for the victims and their families, as well as the thousands of brave rescue workers, including Utah's Urban Search and Rescue team. The team consists of fire department personnel from Salt Lake City and County. Our prayers go to the members of our armed forces--the greatest defenders of freedom a nation has ever known. And our prayers go to President Bush and his administration, who are dedicated to peace and must now respond to war. May God bless America.

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. I am pleased to be joined in this effort by my good friends and colleagues Senators Baucus and Dodd. This proposal would simplify a complex area of the current law and eliminate significant roadblocks that now stand in the way of corporations 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 we are 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. The Joint Committee on Taxation estimates this provision to decrease revenues to the Treasury by $246 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 rise today to introduce legislation designed to clarify and enhance the charitable contribution tax deduction for donations of excess book inventory for educational purposes. I am pleased to be joined in this effort by my good friends and colleagues Senators Baucus and Dodd. This proposal would simplify a complex area of the current law and eliminate significant roadblocks that now stand in the way of corporations 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 we are 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. The Joint Committee on Taxation estimates this provision to decrease revenues to the Treasury by $246 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 rise today in opposition to Senator McCain's amendment to S. 1216, the appropriations bill for VA HUD. This amendment would remove badly needed resources for many communities throughout the country and specifically in Sevier County in my home State of Utah. It furthermore seeks to overturn the carefully crafted work performed by the Senate Appropriations Committee when putting together this bill. I understand that legislating oftentimes means making difficult decisions, but the cuts proposed by Senator McCain go too far and would hurt too many. I urge my colleagues to vote to table this amendment.

Mr. HATCH. Mr. President, Senator Schumer's amendment would, if accepted, waste $15 million in taxpayer money on a program that has proved to be a failure. This amendment has more to do with partisan politics than sound public policy. In my view, we should not spend even one red cent of taxpayer money for such purposes. Housing, Urban and Development Secretary Mel Martinez was right to terminate the gun buyback program. And he did so for a single, sound reason: such programs do not reduce crime. I will cite just a few of the conclusions reached by those who have examined these programs. First, ``overall crime was not significantly reduced in the 17-month period following the [Baltimore] buyback program.'' Report to the Congress by the Comptroller General of the United States, Handgun Control: Effectiveness and Costs, 2/6/78. In addition, gun buyback programs may encourage gun thefts, with the Government serving, in effect, as a reliable fence for the stolen guns. Such programs also give offenders a profitable way to dispose of weapons used in crimes. Dr. Philip J. Cook, criminologist at Duke University. Finally, another study found that ``[1992] Seattle buy-back program failed to reduce significantly the frequency of firearms injuries, deaths, or crimes.'' Callahan, et al., ``Money for Guns: Evaluation of the Seattle Gun Buy-Back Program,'' Public Health Reports, July-August 1994. Thus, this debate should not be about gun politics. It should be about our responsibility to spend the taxpayers' money wisely. If the supporters of this amendment truly care about public safety, we should spend the $15 million dollars on hiring additional police officers to patrol high-crime public housing areas.

Mr. HATCH

Mr. HATCH. Madam President, I rise today to introduce legislation to clarify and expand the expenses qualifying for the orphan drug tax credit. I am pleased to be joined in this legislation by Senators Kennedy and Jeffords. As the original sponsor of the legislation authorizing the orphan drug program, and a leader in the Senate in our successful effort in 1996 to make the tax credit permanent, I am here today to ask my colleagues to support a needed improvement to the Orphan Drug Tax Credit. This improvement would make the tax credit even more effective in advancing the development of treatments for life-threatening rare diseases and conditions. The Orphan Drug Tax Credit provides tax incentives to companies that develop treatments for diseases affecting fewer than 200,000 people, a population typically too small to provide a natural impetus for the private sector to take the necessary risks to develop a remedy that may never be profitable. The diseases covered under the credit include: ALS, Lou Gehrig's disease; cerebral palsy; cystic fibrosis; epilepsy; Gaucher's disease; Hunington disease; sickle cell disease; and system lupus erythematosus, Lupus. More than 20 million Americans suffer from these rare diseases. The Orphan Drug Tax Credit has been very successful. For example, in the case of multiple sclerosis, 6 years ago there was no treatment for any type of the disease, only for its symptoms. Thanks in large part to this law, there are now three products on the market to treat the disease. Unfortunately, the design of the credit includes a flaw that limits its effectiveness. The bill we are introducing today would correct this problem. Under the current Orphan Drug Tax Credit, a 50 percent is available for expenses related to human clinical testing of drugs that are designated as meeting the statutory definition of an ``orphan'' by the Food and Drug Administration, FDA. Qualifying expenses are those paid or incurred after the date on which the drug is designated as a potential treatment for a rare disease or disorder. The problem is that qualified expenses incurred during the time it takes the FDA to officially designate the drug as an ``orphan'' are not eligible for the credit. Unfortunately, the FDA approval process can take from two months to more than a year. In some cases, companies developing these potentially life-saving drugs are left with a difficult decision, delay the start of the clinical trials until the designation is received, or go ahead and start the trials without the designation, but forego the benefits of tax credit that is so crucial to offsetting the high cost of developing these drugs. Neither choice is in the best interest of the 20 million Americans who are waiting and hoping for a cure for their disorder. The bill we are introducing today would solve this problem by simply providing that qualifying expenses include those incurred after the date on which the company files an application with the FDA for designation of the drug as a potential treatment for a rare disease or disorder. The credit's availability for these pre-designation expenses, however, is conditioned upon the FDA actually making the designation. Thus, under this change, the designation must still first be granted before the credit could be claimed. But, once the designation is granted, the credit could be claimed for both the clinical testing expenses incurred between the filing of the application and the designation date, as well as for those incurred after the designation date. It is important to note that this change will also simplify the current law. In fact, this change was recommended earlier this year by the staff of the Joint Committee on Taxation in its study of recommendations to simplify the Federal tax system. The bill would also make one other change designed to help Americans suffering from rare diseases. It would provide that the FDA publish on a monthly basis a list of applications for orphan drug designations. This provision will allow rare disease patients early access to information about proposed clinical trials and will help the industry locate research subjects for their studies. The Orphan Drug Tax Credit enjoys wide bipartisan support, and rightly so. It is a tax incentive that works. Now, we have a chance to make it work even better. The tax clarification in this bill was passed in both the Senate twice in the 106th Congress, once in H.R. 2488, the Financial Freedom Act of 1999, which was vetoed by President Clinton for unrelated reasons, and again in H.R. 4577, the Department of Labor, Health and Human Services, and Education and Related Agencies Appropriations Act, 2001, which passed on July 10, 2000. I urge my colleagues to support this legislation and I ask unanimous consent that the text of bill be printed in the Record.

Mr. HATCH. Madam President, I rise in support of the 21st Century Department of Justice Appropriations Authorization Act, which Senator Leahy and I have introduced today. Senator Leahy and I have been working for several years to pass a Department of Justice reauthorization bill, and I can say that it is once again a major priority of the Judiciary Committee this session. I want to emphasize to my colleagues how important it is that the Senate consider and pass this legislation to reauthorize the Department of Justice this year. It is simply inexcusable that over two decades have lapsed since Congress has passed a general authorization bill for the Department of Justice. It is in my view a matter of significant concern when any major cabinet department goes for such a long period of time without congressional reauthorization. Absence of reauthorization encourages administrative drift and permits important policy decisions to be made ad hoc through the adoption of appropriations bills or special purpose legislation. Moreover, our failure to reauthorize has also placed the undue burden on the appropriations committees in both houses to act as both authorizers and appropriators. This legislation will end the piecemeal funding of important programs and responsibilities which affect the day-to-day lives of all Americans. The Department of Justice's main duty is to provide justice to all Americans, certainly of central importance to our national life. It has the primary responsibility for the enforcement of our Nation's laws. Through its divisions and agencies including the FBI and DEA, it investigates and prosecutes violations of Federal criminal laws, protects the civil rights of our citizens, enforces the antitrust laws, and represents every department and agency of the United States government in litigation. Increasingly, its mission is international as well, protecting the interests of the United States and its people from growing threats of trans-national crime and international terrorism. Additionally, among the Department's key duties is providing much needed assistance and advice to State and local law enforcement. The vast importance of the Department's role is demonstrated by the growth of its budget in the last two decades. In FY 1979, the Department of Justice's budget was just $2.538 billion. In contrast, the Department of Justice's budget now exceeds $24 billion and it employs more than 125,000 people. Such a vast department requires Congress' full attention. Yet, it is fair to say that Congress has been less than vigilant in its job of overseeing the Department of Justice. Let me be clear that I am not advocating that we micro-manage the Department of Justice. I have full confidence in Attorney General Ashcroft and the thousands of employees who competently manage the Department daily. However, we cannot continue to neglect our responsibility to oversee closely this Department that so profoundly affects the lives of all Americans. The authorizations contained in the 1979 reauthorization act, the last Justice Department authorization bill that Congress passed, are hopelessly out of date and have been amended, patched, and tweaked by Congress every year since. The lack of a comprehensive authorization has needlessly increased the administrative burden on the Department of Justice by causing them to perform operations inefficiently or to delay implementation of programs until specific authorization is legislated. This bill authorizes and consolidates a host of appropriations authorities and makes them permanent. These authorities are essential to the administration of the Department of Justice and accomplishment of its mission. I want to take a moment to highlight some of the more important provisions of this bill. Title I of the bill authorizes appropriations for the major components of the Department for FY 2002. Among these authorizations are funding for the Drug Enforcement Administration to combat the trafficking of illegal drugs, the Immigration and Nationalization Service to enforce our country's immigration laws, and the Federal Bureau of Investigation to protect against cybercrime and terrorism. The authorization levels reflect the President's budget in all but two areas. First, the bill increases the President's request for the Department's Inspector General by $10 million. This increase is warranted because the IG's office has been cut severely over the last several years and the need for effective oversight, particularly over the FBI, is essential. Second, the bill increases by $10 million the request for the Computer Crime and Intellectual Property Section within the Department. With the number and severity of computer crimes growing dramatically each year, this increase will enhance the Department's ability to investigate and prosecute computer related crimes, such as software counterfeiting crimes and denial of service attacks. Additionally, this bill codifies the Attorney General's recent order that extended the authority of the Inspector General's Office to oversee the programs and operations of the FBI and to investigate allegations of wrongdoing within the Bureau. The bill also directs the Attorney General to submit a report and recommendation to Congress to determine whether to establish an Office of Inspector General for the FBI or an office of Deputy Inspector General for the FBI, which would be responsible for supervising independent oversight of the programs and operations of the FBI. While I am confident that the FBI's new Director, Robert Mueller, has the knowledge and ability to correct some of the bureaucratic and managerial problems the FBI has experienced, I agree with the Attorney General that FBI should be subject to the oversight of the IG. I look forward to the Attorney General's report, and I am sure it will provide guidance as to whether additional measures are warranted to ensure the effective operation of the Bureau. Finally, the bill establishes a Violence Against Women Office, VAWO, within the Justice Department, which will be headed by a presidentially appointed and Senate confirmed Director. The bill enumerates the duties and responsibilities of the Director and requires the Attorney General to ensure that the Office is staffed adequately. The Director, in part, will serve as a special counsel to the Attorney General on issues related to violence against women, provide information to the President, the Congress, State and local governments, and the general public, and maintain a liaison with the judicial branches of federal and State governments. Establishing this office bespeaks our commitment to reducing violent crimes against women. This bill is a step in the right direction. It will undoubtedly revive Congress's role and interest in overseeing the Department of Justice. The Judiciary Committee has redoubled its efforts and plans to vote the Department of Justice reauthorization bill out of Committee soon after we return from the August recess. It is a highly important and overdue piece of legislation that deserves our immediate attention, and I am confident that it will receive the support of my colleagues and be enacted this year.

Mr. HATCH

Mr. HATCH. Mr. President, I am also pleased that we will vote on a nominee who is extremely well-qualified to serve in the important positions of a circuit judge. The judicial nominee is William Jay Riley, who has been nominated for the Eighth Circuit Court of Appeals. Mr. Riley graduated in 1972 from Nebraska Law School, where he was Editor in Chief of the Nebraska Law Review and was Order of the Coif. After graduation, he served as a law clerk for the court to which he has now been nominated before entering private practice. Mr. Riley will be a fine addition to the Eighth Circuit Court of Appeals. I have examined the records of this nominee, and I support him without reservation. I urge all of my colleagues to vote to confirm Mr. Riley.

Mr. HATCH. Madam President, I am very pleased that the Senate will vote today on the confirmation of three excellent nominees for high office. The nomination of Robert Mueller to be FBI Director is particularly significant. I consider the FBI to be one of the most important agencies of the Government, and the post of FBI Director to be one of the most consequential in the world. The FBI Director is trusted to command huge resources that touch the lives of people around the globe. He is charged with protecting the most important resource in America-- our people. And the Director holds a term--10 years--that exceeds that of any elected Federal representative. The Director thus has great power and great insulation from the popular will--a combination that requires this body to be especially vigilant in its confirmation review. But after examining Bob Mueller's record, meeting with him privately, listening to many people who know him, and questioning him at the Judiciary Committee hearing earlier this week, I am extremely confident that President Bush has chosen the right person for this position. Mr. Mueller has the judgment, integrity and dedication to purpose that will make him an excellent FBI Director. I will mention two things about Mr. Mueller that particularly strike me on his long list of professional accomplishments. The first is his military record. For his service as a Marine during the Vietnam war, Mr. Mueller was awarded the Bronze Star, 2 Navy Commendation Medals, the Purple Heart, and the Vietnamese Cross of Gallantry. The second particularly notable item is that in 1995, after 2 years as a senior partner in the distinguished firm of Hale and Dorr, Mr. Mueller left to become a regular, line prosecutor in the homicide section of the District of Columbia's U.S. Attorney's Office. This was after he had served as the head of the Criminal Section in the Department of Justice and in other high offices. This speaks volumes about Mr. Mueller's character, values, and commitment to public service. Of course, Mr. Mueller will need to muster all his skill and experience to execute his new assignment. He will step into the FBI at a time of some disruption caused by several high-profile embarrassments. But he will have the inheritance of former Director Louis Freeh's tremendous work, and he will be supported by the Bush administration and Attorney General Ashcroft in particular. I hope he has support from Congress as well. We should be careful to act in ways that encourage positive change at the FBI and avoid distracting the bureau from its mission. I again applaud President Bush for his choice of Bob Mueller to be FBI Director. I have every confidence that he will prove to be an excellent leader and a force for positive change at the FBI. Madam President, I urge my colleagues to vote to confirm the President's nominee, Mr. Mueller.

Mr. HATCH. Madam President, Sarah Hart is an outstanding choice to be Director of the National Institute of Justice. She is an accomplished litigator who understands criminal justice issues. As a prosecutor in Philadelphia for 7 years, she assembled an impressive record of trial victories. And her subsequent experience litigating consent decrees made her an expert in issues related to the administration of criminal justice systems. Throughout her career, Ms. Hart has focused on the rights of victims of crime. I am pleased to support Ms. Hart's nomination, and I urge my colleagues to vote in favor of her confirmation.

Mr. HATCH

Mr. HATCH. Madam President, I am pleased that today the Senate confirmed William Riley to be a judge on the Eighth Circuit Court of Appeals. This confirmation brings the total of judicial confirmations for the year to four. Even if we include today's confirmation vote in the total for the month of July, I want to note for the record that this is significantly fewer judges than were confirmed during most of the months of July during my tenure as Chairman of the Judiciary Committee, even though we had a Democratic President and a Republican Senate during those years. Here is the number of judges confirmed during the months of July when I was chairman: July 1995--11 judges confirmed. July 1996--16 judges confirmed. July 1997--3 judges confirmed. July 1998--6 judges confirmed. July 1999--4 judges confirmed. July 2000--5 judges confirmed.

Mr. HATCH

Mr. HATCH. Madam President, I wish to thank my colleagues, Senators Schumer, Breaux, Landrieu, and Lieberman for co-sponsoring my resolution designating this Saturday, the centennial of a great American legend's birthday, ``Louis Armstrong Day.'' Thanks to the wonders of technology, we can all continue to appreciate the genius of Louis Armstrong's music. It is music that uplifts the spirit, and that has inspired countless musicians and fans for nearly a century. There are millions of people around the world who love Louis Armstrong's music. And, thanks to the wonders of technology, there are millions more who have never heard his music who someday will, and their lives will be uplifted. From the perspective of this Louis Armstrong fan, they've all got something to look forward to.

Mr. HATCH

Mr. HATCH. Madam President, I rise today to introduce legislation aimed at benefitting a very special group of persons--illegal alien children who are long-term residents of the United States. This legislation, known as the ``DREAM Act,'' would allow children who have been brought to the United States through no volition of their own the opportunity to fulfill their dreams, to secure a college degree and legal status. The purpose of the DREAM Act is to ensure that we leave no child behind, regardless of his or her legal status in the United States or their parents' illegal status. By law, undocumented alien children are entitled to a subsidized education through high school. In fact, an estimated 50,000 to 70,000 such students graduate from high schools throughout the country each year. Many of these students are thereafter interested in bettering themselves and their families by securing higher education. Generally, admittance to college is not a problem. However, the cost of attending college and the lack of any mechanism by which undocumented aliens students may obtain legal status in the United States prevents these children from having a meaningful opportunity to obtain a college degree. The DREAM Act would 1. aid undocumented alien children in their financial efforts to attend college, and 2. provide adjustment of status to undocumented alien children who secure a degree of higher education. Presently, the law penalizes States that grant a post-secondary benefit, such as in-state tuition, to an undocumented student unless the state also provides that same benefit to out-of-state students. I believe that the decision of a State to grant any such benefit to an undocumented individual residing in the same rests with the State alone. Accordingly, I am opposed to that aforementioned provision of law. The bill I introduce today, the DREAM Act, proposes to repeal that section of the law. Second, I propose that we offer undocumented alien children the opportunity to earn permanent residency in the United States in conjunction with earning either a 4 or 2-year college degree. Under the DREAM Act, an alien who has continuously resided in the United States for 5 years, is a person of good moral character, has not been convicted of certain offenses, and has been admitted to a qualified institute of higher education may adjust his or her status to that of conditional permanent resident. Thereafter, the student has 6 or 4 years to graduate from a qualified 4 or 2-year institution, respectively. Upon graduation and a demonstration that the student has remained a person of good moral character, has maintained his or her continuous physical presence in the United States, and has not become removable based on criminal convictions or security grounds, the conditions of the student's status are removed and that student becomes a full-fledged permanent resident. I recognize that there are significant differences between the DREAM Act and other legislation that has been recently introduced. However, I look forward to working with members of this body to ensure that the American dream is extended to these children. I therefore strongly urge my colleagues to support this bill and thereby provide hope and opportunity to hundreds of thousands of deserving alien children nationwide. I ask unanimous consent that the text of the bill be included following my remarks.

Mr. HATCH

Mr. HATCH. Mr. President, as we prepare to go into our August recess, I suggest we go out on a good note: I am today introducing a resolution designating this Saturday, August 4, 2001 as ``Louis Armstrong Day.'' Louis Armstrong always said he was born on the Fourth of July, 1900. Friends and fans alike accepted this without question. It was, after all, a perfect birthday for an American musical legend; it was a perfect day for a man who created a music that was, in my opinion, thoroughly American. But then, years after that great jazzman's death in New York City in 1971, a researcher discovered Louis Armstrong's baptismal certificate, the standard notice of birth in New Orleans, that showed that Louis Armstrong actually was born on August 4, 1901. That means, that this Saturday is the centennial of the birth of one of America's greatest artistic icons. All across the country this week and this summer there have been Louis Armstrong celebrations. Generations of Americans, of all races and backgrounds and from all walks of life, have loved and continue to love the music of Louis Armstrong, and I am happy to consider myself one of his millions of fans. Louis Armstrong's art is deep from the roots of America's musical traditions, at the same time as being one of the most innovative styles in the history of music. In my opinion, his music is transcendent, brilliant and, above all, joyful. Music encompasses many mysteries, and, like art in general, one of those mysteries is how joy can be created in circumstances that are less than joyful. Louis Armstrong was born very poor, in New Orleans in 1901. The man who would be honored by presidents and kings around the world scrounged in garbage cans for food when he was a youth. He was an African-American whose life spanned the 20th century, with all of its degradations, discriminations and poverty that so many African- Americans suffered. It is always inexcusable that such circumstances could exist and do still exist in American society. It is nothing short of inspirational when human dignity survives these circumstances and transcends them. That was the life of Louis Armstrong. It was an American life. I would like to quote the social and music critic Stanley Crouch, who wrote earlier this month in the New York Daily News: As an improviser who worked in the collective context of the jazz band, Armstrong represented the freedom of the individual to make decisions that enhance the collective effort, which is the democratic ideal. Our country is built on the belief that we can be free and empathetic enough for both the individual and the mass to make decisions that improve our circumstances. Just as the improvising jazz musician can dramatically reinterpret a song he or she once recorded another way, we Americans revisit issues and remake our policies when we think we can improve on our previous interpretations. So when Armstrong revolutionized American music in the 1920s, he was giving our political system a sound that transcended politics, color, sex, region, religion and class. Instrumentalists, singers, composers and dancers all understood that there was something in what Armstrong did with the music that could apply to them. Like the Wright Brothers, he opened up the sky, and anybody who developed the skill to fly was welcome to take the risk of leaving the safety of the ground. The propulsion Armstrong used to lift the music became known as swing. It was a particularly American lilt in the rhythm. That lilt had no precedent in all world music. It was a new way of phrasing the endless potential for individual interpretation. One could call it the sound of the pursuit of happiness. That is why it was so charismatic and why it influenced so many, in and out of jazz--from Duke Ellington to Bing Crosby to Charlie Parker to Elvis Presley to Wynton Marsalis. Mr. President, Stanley Crouch says it better than I ever could: ``One could call it the sound of the pursuit of happiness.'' In recent years, some have viewed Louis Armstrong from a fairly simplistic perspective. Some suggested he was too acquiescent to racism, a charge many of his fans find unwarranted. He was famous for criticizing President Eisenhower for his delays in desegregating the schools of Little Rock, Arkansas, in the 1950s. Hundreds of hours of audiotaped recordings of conversations of Louis Armstrong have recently been opened at the Louis Armstrong Archives at Queens College in Flushing, New York, and researchers who have heard them indicate that Louis Armstrong was indignant and enraged at the shame of racism in this country. Others suggest that his music was also simplistic, referring to songs titled ``Jeepers, Creepers,'' ``Gone Fishin','' ``When You're Smiling,'' ``That Lucky Old Sun,'' ``Rockin' Chair,'' did not have the sophistication of serious music. Those critics, just aren't listening, in my opinion. They don't hear a trumpet sound that was honed over decades and has not been replicated. They don't hear a voice tempered by years of performance and musically tuned and timed to perfection. I am certainly not a serious music critic. I'll just quote Louis Armstrong, when he was asked what kind of music he listened to: ``There are two kinds of music,'' he said. ``Good music and bad music--I listen to the good music!'' I agree with Louis Armstrong! As most of my colleagues know, I also grew up in modest circumstances. But in addition to love, support and faith my parents gave me, which could not have a price put on them, they gave me something else intangible: A love of music. When we were young, my parents scraped together money for piano lessons for my siblings and me, and later even for violin lessons. As you can see, I became a Senator! My parents also sacrificed to save what was then a phenomenal sum: $18.75 for a student season pass in the cheap seats for the Pittsburgh Symphony Orchestra. I went to every concert I could, and it was there that I first learned of the uplifting experience of music, an appreciation I am grateful to have had all of my life. Louis Armstrong's music uplifted people. Is it no coincidence that his music was adored on the other side of the Iron Curtain? That millions around the world, on all continents, would flock to hear him on his tours? No, that is no coincidence. That is the power of music in general, and the genius of Louis Armstrong in particular. Louis Armstrong's music remains loved today by millions around the world, and I think virtually every jazz performer has credited Louis Armstrong for some level of inspiration. One of America's greatest contemporary jazz trumpeters, Mr. Wynton Marsalis, was quoted in last Sunday's Deseret News saying that Louis Armstrong ``is the one who taught all of us how to play. He taught the whole world about jazz.'' My resolution today, which I am pleased to have co-sponsored by Senators Schumer, Breaux and Lieberman, recognizes the brilliance of this great American's artistic contribution. This Saturday, on the occasion of the centennial of his birth, I hope we all have a moment to pause in joy and gratitude for the uplifting experience of Louis Armstrong's music. I know that, for me, when I think of the life and work of Louis Armstrong, I say to myself: What a Wonderful World. S. Res. 146 Whereas Louis Armstrong's artistic contribution as an instrumentalist, vocalist, arranger, and bandleader is one of the most significant contributions in 20th century American music; Whereas Louis Armstrong's thousands of performances and hundreds of recordings created a permanent body of musical work defining American music in the 20th century, from which musicians continue to draw inspiration; Whereas Louis Armstrong and his bandmates served as international ambassadors of goodwill for the United States, entertaining and uplifting millions of people of all races around the world; Whereas Louis Armstrong is one of the most well-known, respected, and beloved African-Americans of the 20th century; Whereas Louis Armstrong was born to a poor family in New Orleans on August 4, 1901 and died in New York City on July 6, 1971 having been feted by kings and presidents throughout the world as one of our Nation's greatest musicians; and Whereas August 4, 2001 is the centennial of Louis Armstrong's birth: Now, therefore, be it Resolved, That the Senate-- (1) designates August 4, 2001, as ``Louis Armstrong Day''; and (2) requests that the President issue a proclamation calling upon the people of the United States to observe the day with appropriate ceremonies and activities.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce the Mortgage Cancellation Act of 2001. This bill would fix a flaw in the tax code that unfairly harms homeowners who sell their home at a loss. Today, our Nation has achieved an amazing 67.5 percent rate of homeownership, the highest rate in our history. It is notable that in recent years, the largest category of first-time homebuyers has been comprised of immigrants and minorities. This is a great success story. Homeownership is still the most important form of wealth accumulation in our society. From time to time, however, the value of housing in a whole market goes down through no fault of the homeowner. A plant closes, environmental degradations are found nearby, a regional economic slump hits hard. This happened during the 1980s in the oil patch and in Southern California and New England at the beginning of the 1990s. A general housing market downturn can be devastating to what is very often a family's largest asset. Unfortunately, a loss in value to the family home may not be the worst of it. Sometimes when people must sell their homes during a downturn, they get a nasty surprise from the tax law. For example, suppose Keith and Mary Turner purchased a home for $120,000 with a five percent down payment and a mortgage of $114,000. Four years later, the local housing market experiences a downturn. While the market is down, the Turners must sell the home because Keith was laid off and has accepted a job in another city. The house sells for $105,000. However, the Turners still owe $112,000 on their mortgage. They are $7,000 short on what they owe on the mortgage, but have no equity and received no cash. Often, homeowners who must sell their home at a loss are able to negotiate with their mortgage holder to forgive all or part of the mortgage balance that exceeds the selling price. However, under current tax law, the amount forgiven is taxable income to the seller, taxed at ordinary rates. In the case of the Turner family, the mortgage holder agreed to forgive the $7,000 excess of the mortgage balance over the sales price. However, under current law, this means the Turners will have to recognize this $7,000 as taxable income at a time when they can least afford it. This is true even though the family suffered a $15,000 loss on the sale of the home. I find this predicament both ironic and unfair. If this same family, under better circumstances, had been able to sell their house for $150,000 instead of $105,000, then they would owe nothing in tax on the gain under current tax law because gains on a principal residence are tax-exempt up to $500,000. I believe that this discrepancy creates a tax inequity that begs for relief. It is simply unfair to tax people right at the time they have had a serious loss and have no cash with which to pay the tax. The bill I introduce today, the Mortgage Cancellation Relief Act, will relieve this unfair tax burden so that in the case where the lender forgives part of the mortgage, there will be no taxable event. Who are the people that are most vulnerable to this mortgage forgiveness tax dilemma? Unfortunately, people who have a very small amount of equity in their homes are most likely to experience this problem. Today, about 4.6 million households have low equity in their homes. Of those, about 2 million have no equity in their homes, which is defined as less than 10 percent of the value of the home. In a housing value downturn, these people would be wiped out first if they had to sell. Sixty-seven percent of these low-equity owners are first-time homebuyers, and 26 percent of them have less than $30,000 of annual family income. The median value of their homes is $70,000, while the median value of all homes nationally is $108,000. More than half of these low equity owners live in the South or in the West. I want to emphasize that now is the time to correct this inequity. Today, the National Association of Realtors reports that there are no markets that are in the woeful condition of having homes lose value. Still, in our slowing economy, families are vulnerable. Because today's real estate market is strong, now is the optimal time to correct this fundamental unfairness. The bill applies only to the circumstance in which a lender actually forgives some portion of a mortgage debt and is not intended to be an insurance policy against economic loss. My bill provides safeguards against abuse and will help families at a time when they are most in need of relief. The estimated revenue effect of this bill is not large. The Joint Committee on Taxation last year estimated that this correction would result in a loss to the Treasury of only about $27 million over five years and $64 million over ten years. Again, it is important to note that if we wait to correct this problem until it becomes more widespread, and thus more expensive, it will be much more difficult to find the necessary offset. I hope my colleagues will take a close look at this small, but important, bill, and join me in sponsoring it and pushing for its inclusion in the next appropriate tax cut bill the Senate considers. I ask unanimous consent that a copy of the bill be printed in the Record.

Mr. HATCH. Mr. President, I rise today with my co-sponsor, Senator Feinstein, to introduce legislation that will help a very special cadre of Americans, a group of Americans that, over 50 years ago, paid a very dear price on behalf of our country. The incredible sacrifice made by these Americans has never properly been acknowledged, and it is high time that they receive some measure of compensation for that sacrifice. On April 9, 1942, Allied forces in the Philippines surrendered the Bataan Peninsula to the Japanese. Ten to twelve thousand American soldiers were forced to march some 60 miles in broiling heat in a deadly trek known as the Bataan Death March. Following a lengthy internment under horrific conditions, thousands of POWs were shipped to Japan in the holds of freighters known as ``Hell Ships.'' Once in Japan, the survivors of the Bataan Death March were joined by hundreds of other American POWs, POWs who had been captured by the Japanese in actions throughout the Pacific theater of war, at Corregidor, at Guam, at Wake Islands, and at countless other battlegrounds. After arriving in Japan, many of the American POWs were forced into slave labor for private Japanese steel mills and other private companies until the end of the war. During their internment, the American POWs were subjected to torture, and to the withholding of food and medical treatment, in violation of international conventions relating to the protection of prisoners of war. More than 50 years have passed since the atrocities occurred, yet our veterans are still waiting for accountability and justice. Unfortunately, global political and security needs of the time often overshadowed their legitimate claims for justice, and these former POWs were once again asked to sacrifice for their country. Following the end of the war, for example, our government instructed many of the POWs held by Japan not to discuss their experiences and treatment. Some were even asked to sign non-disclosure agreements. Consequently, many Americans remain unaware of the atrocities that took place and the suffering our POWs endured. Finally, after more than 50 years, a new effort is underway to seek compensation for the POWs from the private Japanese companies which profited from their labor. Let me say at the outset, that this is not a dispute with the Japanese people and these are not claims against the Japanese government. Rather, these are private claims against the private Japanese companies that profited from the slave labor of our American soldiers who they held as prisoners. These are the same types of claims raised by survivors of the Holocaust against the private German corporations who forced them into labor. Here in the Senate, we have been doing what we can to help these former prisoners of war. In June of last year, the Senate Judiciary Committee held a hearing on the claims being made by the former American POWs against the private Japanese companies, to determine whether the executive branch had been doing everything in its power to secure justice for these valiant men. In the fall of last year, with the invaluable assistance of Senator Feinstein, we were able to pass legislation declassifying thousands of Japanese Imperial Army records held by the U.S. government, to assist the POW's in the pursuit of their claims. We can do even more. Recently, the State of California passed legislation extending the statute of limitations, under state law, to allow the POWs to bring monetary claims against the Japanese corporations that unlawfully employed them. Other States are contemplating such legislation. The bill we are introducing today makes clear that any claims brought in state court, and subsequently removed to Federal court, will still have the benefit of the extended statute of limitations enacted by the state legislatures. The legislators in California, and other States, have recognized the fairness of the allowing these claims to proceed for a decision on the merits. In light of the tangled history of this issue, including the role played by the U.S. government in discouraging these valiant men from pursuing their just claims, it is simply unfair to deny these men their day in court because their claims have supposedly grown stale. These claims are not stale in their ability to inspire admiration for the men who survived this ordeal. These claims are not stale in their ability to inspire indignation against the corporations who flouted international standards of decency. The statute of limitations should not be permitted to cut off these claims before they can be heard on the merits. Today's bill does nothing more than ensure that these valiant men receive their fair day in court. I hope my fellow Senators will join with me, and with Senator Feinstein, on this important legislation. These heroes of World War II have waited too long for a just resolution of their claims.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce the Mortgage Cancellation Act of 2001. This bill would fix a flaw in the tax code that unfairly harms homeowners who sell their home at a loss. Today, our Nation has achieved an amazing 67.5 percent rate of homeownership, the highest rate in our history. It is notable that in recent years, the largest category of first-time homebuyers has been comprised of immigrants and minorities. This is a great success story. Homeownership is still the most important form of wealth accumulation in our society. From time to time, however, the value of housing in a whole market goes down through no fault of the homeowner. A plant closes, environmental degradations are found nearby, a regional economic slump hits hard. This happened during the 1980s in the oil patch and in Southern California and New England at the beginning of the 1990s. A general housing market downturn can be devastating to what is very often a family's largest asset. Unfortunately, a loss in value to the family home may not be the worst of it. Sometimes when people must sell their homes during a downturn, they get a nasty surprise from the tax law. For example, suppose Keith and Mary Turner purchased a home for $120,000 with a five percent down payment and a mortgage of $114,000. Four years later, the local housing market experiences a downturn. While the market is down, the Turners must sell the home because Keith was laid off and has accepted a job in another city. The house sells for $105,000. However, the Turners still owe $112,000 on their mortgage. They are $7,000 short on what they owe on the mortgage, but have no equity and received no cash. Often, homeowners who must sell their home at a loss are able to negotiate with their mortgage holder to forgive all or part of the mortgage balance that exceeds the selling price. However, under current tax law, the amount forgiven is taxable income to the seller, taxed at ordinary rates. In the case of the Turner family, the mortgage holder agreed to forgive the $7,000 excess of the mortgage balance over the sales price. However, under current law, this means the Turners will have to recognize this $7,000 as taxable income at a time when they can least afford it. This is true even though the family suffered a $15,000 loss on the sale of the home. I find this predicament both ironic and unfair. If this same family, under better circumstances, had been able to sell their house for $150,000 instead of $105,000, then they would owe nothing in tax on the gain under current tax law because gains on a principal residence are tax-exempt up to $500,000. I believe that this discrepancy creates a tax inequity that begs for relief. It is simply unfair to tax people right at the time they have had a serious loss and have no cash with which to pay the tax. The bill I introduce today, the Mortgage Cancellation Relief Act, will relieve this unfair tax burden so that in the case where the lender forgives part of the mortgage, there will be no taxable event. Who are the people that are most vulnerable to this mortgage forgiveness tax dilemma? Unfortunately, people who have a very small amount of equity in their homes are most likely to experience this problem. Today, about 4.6 million households have low equity in their homes. Of those, about 2 million have no equity in their homes, which is defined as less than 10 percent of the value of the home. In a housing value downturn, these people would be wiped out first if they had to sell. Sixty-seven percent of these low-equity owners are first-time homebuyers, and 26 percent of them have less than $30,000 of annual family income. The median value of their homes is $70,000, while the median value of all homes nationally is $108,000. More than half of these low equity owners live in the South or in the West. I want to emphasize that now is the time to correct this inequity. Today, the National Association of Realtors reports that there are no markets that are in the woeful condition of having homes lose value. Still, in our slowing economy, families are vulnerable. Because today's real estate market is strong, now is the optimal time to correct this fundamental unfairness. The bill applies only to the circumstance in which a lender actually forgives some portion of a mortgage debt and is not intended to be an insurance policy against economic loss. My bill provides safeguards against abuse and will help families at a time when they are most in need of relief. The estimated revenue effect of this bill is not large. The Joint Committee on Taxation last year estimated that this correction would result in a loss to the Treasury of only about $27 million over five years and $64 million over ten years. Again, it is important to note that if we wait to correct this problem until it becomes more widespread, and thus more expensive, it will be much more difficult to find the necessary offset. I hope my colleagues will take a close look at this small, but important, bill, and join me in sponsoring it and pushing for its inclusion in the next appropriate tax cut bill the Senate considers. I ask unanimous consent that a copy of the bill be printed in the Record.