J. Kerrey

Mr. KERREY

Mr. KERREY. Well, their bill does not have across-the-board tax cuts. There has been a debate going on between the Vice President and the Governor of Texas as to whether or not there should be an across-the- board tax cut of $1.6 trillion that the Governor of Texas wants to do, on top of $1.1 trillion of payroll tax cuts, and hundreds of billions of dollars of spending as well. I said the other day, it reminds me of voodoo economics II. I do not think he would be proposing this, which is essentially the failed policies of the past. We tried that once before. President Bush, in 1990, broke from the failed policies of that. I heard the Senator from Arizona earlier talk about the budget caps that were in the 1990 budget agreement. That started us on the road of eliminating our deficits. But he has an across-the-board tax cut. He is criticizing the Vice President for targeting tax cuts, and it seems our friends on the other side of the aisle are saying the Vice President is right, we should have a targeted tax cut. I wonder if my friend from Iowa has also experienced, when you are having discussions, there are some things Democrats bring to the argument, bring to the discussion. I wonder, as I look at this tax bill, if any of the people, the Republicans who are part of this thing, ever asked the question: Now that we are going to target tax cuts, is it fair? Are we being fair here? Are we targeting it to the right group of people? It seems to me, as I look at least at the early analysis, that that question couldn't have been asked.

Mr. KERREY. I heard the Governor of Texas say he does not like the Vice President's tax cut proposal because it is targeted. Doesn't it seem that the tax cut proposal that is being brought to us--though it might be hard for my friends on the other side of the aisle to state that they are saying the Vice President is right--is not an across-the- board tax cut, this is a targeted tax cut? Will my friend from Iowa agree they seem to be saying we should have a targeted tax cut?

Mr. KERREY. I wonder if the Senator would agree with that.

Mr. KERREY. The Senator from Iowa has been around here a couple years longer than I have. I wonder if the Senator would agree with me. My experience is that all 100 people in this Senate--every single one of them--are trying to do the best job they can. They have different points of views. The Republicans bring certain things to the arguments sometimes that Democrats don't bring, and Democrats bring things that Republicans don't bring from time to time.

Mr. KERREY. I would just like to ask the Senator a question. If the Senator wouldn't mind yielding, I think we can do this almost as a colloquy.

Mr. KERREY. I wonder if the Senator from Iowa would yield for a second question.

Mr. KERREY

Mr. KERREY. Mr. President, we often use the tax code as a tool to reward certain taxpayer behaviors. Today, I am pleased to introduce a bill that would reward the behavior of individuals or groups who step forward to help finance the digital transmission conversions of the 348 public television stations across the United States. Mr. President, public television is an extremely important public good, which brings creative, non-commercial TV programming of the highest quality to citizens in all 50 states, Puerto Rico, the U.S. Virgin Islands, Guam and American Samoa. Public television is available to 99 percent of American homes--and serves nearly 100 million people each week. Throughout the U.S., 171 noncommercial, educational licensees operate 348 PBS member stations. Of the 171 licensees, 87 (51%) are community organizations, 55 (32%) are colleges or universities, 21 (12%) are state authorities and 8 (5%) are local educational or municipal authorities. As my colleagues may remember, regulations promulgated by the FCC, pursuant to the Telecommunications Act of 1996, require all public television stations to convert their analog transmission equipment and systems to digital transmission by May 1, 2003. This is a very expensive--though important--Federal government mandate. The mandate is particularly burdensome for public television stations because, as non- profit entities, they rely primarily on the charitable donations of their viewers for financial sustenance. In some states, all of the public television transmission equipment is operated and managed by an umbrella organization. In Nebraska, for example, Nebraska Educational Telecommunications (NET) operates nine transmitters and seventeen translators across the state. The cost of simultaneously replacing all of this equipment in a large, but sparsely populated, state is particularly burdensome. I have been working with public broadcasters in the State of Nebraska to reduce the financial burden imposed by this government mandate. The legislation I am introducing today is the product of our discussions. This legislation will provide a tax credit to individuals or groups that provide funding for the purchase or construction of qualified conversion equipment for a qualified public TV digital conversion project. Qualified conversion equipment would include: transmission towers, transmission equipment, production equipment (including cameras, recorders, software and editing systems), retransmission equipment, and transformers. The proposed tax credit is equal to the full cost of the conversion equipment, but the taxpayer will be limited to \1/6\th of the credit each year over a six-year period. The individuals or groups who fund these conversions would not be able to charge rents for use of the equipment or claim depreciation for the equipment--the tax credit would be the sole benefit. I am confident that citizens and groups across the United States would take advantage of this tax credit for the benefit of their local public television stations. While time is running out for action on this legislation during the 106th Congress, I am hopeful that the 107th Congress will work together with the next Administration to alleviate the financial burden on public television stations through the enactment of this legislation.

Mr. KERREY

Mr. KERREY. If I could respond to say the Senator from New Mexico and any of my colleagues who are uncomfortable and wish I would not do this, if I had not done this the last 6 or 7 years, it is the fault of the Senator from New Mexico. You and Senator Nunn came repeatedly to the floor, I think, in 1990, 1991, 1992, and 1993. I think in 1990, 1991, and 1992 I voted against you, but in 1993 the light bulb came on. It takes me a while to learn, I say to my friend from New Mexico, but I appreciate very much your leadership on these issues.

Mr. KERREY. Mr. President, at Pier 12 in the Norfolk Navy Base, along with the Presiding Officer in Norfolk, VA, I joined 10,000 others to mourn and to pay our respects to the families of 17 U.S. Navy sailors who were killed or who are missing following the explosion that ripped into the portside of U.S.S. Cole as she was preparing to set anchor in the Yemen Port of Aden. It was one week ago today at fifteen past midnight that a routine port call became a violent killing of 17 Americans, the wounding of 34 more, and the disabling of a billion dollar destroyer. In attendance at the ceremony to honor those lost on the Cole were many Members of Congress, Attorney General Janet Reno, National Security Adviser Sandy Berger, the Secretaries of Defense and the Navy, and the uniformed commanders of the Navy and the Marine Corps. In a gesture of Yemen's cooperation, their Ambassador to the United States, Abdulwahab A. al-Hajjri, was also present. As I sat and listened to the powerful words of President Clinton, Secretary of Defense Cohen, Chairman of the Joint Chiefs Shelton, and others, I looked at the solemn faces of the Naval officers and enlisted men who stood on the decks of the aircraft carrier U.S.S. Dwight D. Eisenhower and two of the Cole's sister ships, the destroyers Ross and McFaul and wondered how long the unity we felt would last? How long would the moving stories of the lives of these 17 young Americans bind us together? Their stories define what makes America such a unique place. President Clinton captured it perfectly: In the names and faces of those we lost and mourn, the world sees our nation's greatest strength. People in uniform rooted in every race, creed and region on the face of the earth, yet bound together by a common commitment to freedom and a common pride in being American. They were bound together by other common characteristics. Sixteen were enlisted men and women; the lone officer was an ensign who had served more than a decade in the enlisted ranks. None were college graduates, though many saw the Navy as a means to that end. They were from small towns and Navy towns, the places where patriotism burns bright and crowds still form to remember on Memorial Day and Veterans Day. I watched young widows and brothers and fathers cry without restraint or shame when President Clinton read the rollcall of the fallen heros. Sadness gripped me as once more I thought of lives that ended too soon knowing their dreams would not now come true. Chief of Naval Operations Admiral Clark appropriately reminded us that risk is a part of all sailors' lives. When going out to sea, there is never certainty of a joyous homecoming. Death is a frequent visitor in Navy households. Loss is never a complete surprise. However, in this instance it was not the unpredictable ways of the ocean or the violence of a storm that ended these American lives. No, in this instance the killer was a highly sophisticated, high-explosive device set and detonated by as yet unknown villains. There were words from our leaders that addressed the anger we feel in the aftermath of this tragedy. From President Clinton: ``To those who attacked them we say: you will not find a safe harbor. We will find you, and justice will prevail.'' From Secretary of Defense Cohen: ``This is an act of pure evil.'' And from General Shelton: ``They should never forget that America's memory is long and our reach longer.'' Yet, this desire for vengeance is as misplaced as it is understandable. Vengeance is one of the things a terrorist hopes to provoke. Such acts of vengeance--especially when carried out by the United States of America--are bound to provoke sympathy for our enemies. If we are to give meaning to the sacrifice of these men and women, we must take care not to allow the bitter feelings to govern our action. While we await the results of a combined U.S.-Yemeni effort to find out who was responsible for this attack, let me challenge the idea that the attack on the Cole was a pure act of terrorism or criminal action. In my opinion it is not. In my opinion, it is a part of a military strategy designed to defeat the United States as we attempt to accomplish a serious and vital mission. This is the third in a series of violent attacks on the United States dating back to the car bombing of Khobar Towers in Saudi Arabia at 10 pm, on Tuesday, June 25, 1996, that killed 19 United States Air Force Airmen and wounded hundreds more. The second attack occurred on August 7, 1998, when U.S. Embassies in Dar es-Salam, Tanzania, and Nairobi, Kenya were bombed. These attacks wounded more than 5,000 and killed 224, including twelve Americans who were killed in the Nairobi blast. I believe all three of these incidents should be considered as connected to our containment policy against Saddam Hussein's Iraq. The Cole was heading for the Persian Gulf to enforce an embargo that was authorized by the United Nations Security Council following the end of the Gulf War in 1991. In order to evaluate this incident and put it in its larger context, I had to re-learn the details of the action of Gulf War and its aftermath. The Gulf War began on August 8, 1990, when United States aircraft, their pilots, and their crews arrived in Saudi Arabia. Two days earlier the Saudi King Fahd had asked Secretary of Defense Cheney for help. Saudi Arabia was afraid that Iraq's August 2 invasion of Kuwait would continue south. Without our help they could not defend themselves. Desert Shield--a military operation planned to protect Saudi Arabia--began. At that time, General Norman Schwarzkopf was Commander-in-Chief of Southern Command. On September 8, 1990, he ordered Army planners to begin designing a ground offensive to liberate Kuwait. His instructions from President Bush were to plan for success. We were not going to repeat the mistakes of the Vietnam War. On November 8th, President Bush announced that a decision had been made to double the size of our forces in Saudi Arabia. On November 29, the UN Security Council voted to authorize the use of ``all means necessary'' to drive Iraq from occupied Kuwait. On January 12, 1991, Congress authorized the President to use American forces in the Desert Storm campaign. The campaign began at 2:38 AM on January 17 with Apache helicopters equipped with anti-tank ordnance. The next day Iraq launched Scud missiles against Israel. The first U.S. air attacks, flown out of Turkey, were launched and were continued until February 24 when the ground war began. The ground war was executed with swift precision and was ended at 8 AM on February 28 when a cease fire was declared. The purpose of the Gulf War--to liberate the people of Kuwait--had been accomplished in an impressive and exhilarating display of U.S. power and ability to assemble an alliance of like-minded nations. Afterwards, Iraq was weakened but still led by Saddam Hussein. In their weakened state, they agreed to allow unprecedented inspections of their country to ensure they did not possess the capability of producing weapons of mass destruction. The United Nations Security Council voted unanimously to impose an economic embargo on Iraq until the inspections verified that Iraq's chemical, biological, and nuclear programs were destroyed. Contrary to popular belief, the military strategy to deal with Iraq did not end with the February 28, 1991, cease fire. It has continued ever since with considerable cost and risk to U.S. forces. In addition to the embargo, the United States and British pilots have maintained no-fly zones in northern and southern Iraq designed to protect the Kurds and Shia from becoming victims of Saddam Hussein's wrath. The purpose of both the embargo and the no-fly zones is to ``contain'' Iraq so that Saddam Hussein does not become a threat in the region again. Unfortunately, this containment object was doomed from the beginning. And while we have begun to change our policy from containment to replacement of the dictator, change has been too slow. The slowness and uncertainty of change has increased the risk for every military person who receives orders to carry out some part of the containment mission. There are three reasons to abandon the containment policy and aggressively pursue the replacement of Saddam Hussein with a democratically elected government. First, it has not worked; Saddam Hussein has violated the spirit and intent of UN Security Council Resolutions. Second, he is a growing threat to our allies in the region. Third, he is a growing threat to the liberty and freedom of 20 million people living in Iraq. As to the first reason, under the terms of paragraph Eight (8) of United Nations Security Council Resolution 687 which passed on April 3, 1991, Iraq accepted the destruction, removal, or rendering harmless of its chemical, biological, and nuclear weapons program. Under the terms of paragraph Nine (9), Iraq was to submit to the Secretary-General ``within fifteen days of the adoption of the present resolution, a declaration of the locations, amounts and types of all items specified in paragraph 8 and agree to urgent, on-site inspection'' as specified in the resolution. From the get-go, Saddam Hussein began to violate this resolution. Over the past decade, he has slowly but surely moved to a point where today no weapons inspectors are allowed inside his country. As a consequence, he has been able to re-build much of his previous capability and is once again able to harass his neighbors. All knowledgeable observers view Iraq's threat to the region as becoming larger not smaller. As to the third reason--his treatment of his own people--there is no worse violator of human rights than Saddam Hussein. The people of Iraq are terrorized almost constantly into compliance with his policies. His jails are among the worst in the world. His appeal for ending sanctions on account of the damage the embargo is doing to his people rings hollow as the food and medicine purchased under the Oil-for-Food Program goes undistributed. Desperately needed supplies sitting in Iraqi warehouses while construction continues on lavish new palaces demonstrates that Saddam Hussein has no real interest in the welfare of his people. Rather, he maintains their misery as means to make political points. If these reasons do not persuade, consider what happened in the other two cases when the United States was attacked. In 1996 we sent an FBI team to Saudia Arabia to investigate Khobar Towers. The investigation led to improving security on other embassies but no other action was taken. In time we have forgotten Khobar. In 1998 following the attack on our embassies in East Africa we sent Tomahawk missiles to bomb a chemical factory in Khartoum, Sudan, and Osama Bin Laden's training compound in Afghanistan. Neither had the decisive impact we sought and may--in the case of Sudan--have been counterproductive. For all these reasons, I hope we will direct the anger and desire for vengeance we feel away from Yemen and towards Saddam Hussein. I hope we will begin to plan a military strategy with our allies that will lead to his removal and replacement with a democratically elected government. This would allow us to end our northern and southern no-fly zone operations, remove our forces from Saudi Arabia, and cease the naval patrols of the Persian Gulf. I can think of no more fitting tribute to the 17 sailors lost on-board the Cole than completing our mission and helping the Iraqi people achieve freedom and democracy. Mr. President, I yield the floor.

Mr. KERREY. I thank the Senator. Mr. President, I revise my unanimous consent to ask unanimous consent to speak for up to 10 minutes under Senator Dorgan's time.

Mr. KERREY. Mr. President, I ask unanimous consent to speak as if in morning business for 10 minutes.

Mr. KERREY. Mr. President, what is the order of business?

Mr. KERREY

Mr. KERREY. Mr. President, many of the things we do in the Senate involve making investments in America's future. Investments in research through the National Science Foundation or investments in infrastructure development through the Department of Transportation reap great rewards for the citizens of tomorrow. Today, I am pleased to be joined by Senators Santorum, Moynihan, Grassley, and Breaux in introducing a piece of legislation that represents a remarkable new investment in the financial security of future generations of Americans. This proposal, called KidSave, aims to give every American a stake in the growth of the American economy, to help all Americans accumulate wealth and assets, and to teach all Americans firsthand the value of savings and compounding interest. Not only will this legislation promote savings and investments across all income levels, but it will also help to close the growing wealth gap. One of the discoveries I have made in researching this idea is that the most important variable in compounding interest rates is time. The earlier you start, the more wealth you build. One of the poster children for understanding the value of compounding interest is Osceola McCarty. Osceola was a Hattiesburg, Mississippi, washerwoman, who after more than seven decades of low-wage work donated $150,000 to the University of Southern Mississippi--wealth she had built by saving a little bit of money over a long period of time. Wealth has also empowered the Federal employees I talk to in the halls of the Senate, who are excited about their ability to participate in their government Thrift Savings Plan, TSP, and who talk more knowledgeably than me about index funds and the difference between a stock and bond. These employees, and other workers across the country who are able to participate in employer-sponsored pension plans and IRAs, feel more confident about their own futures and their own retirement security. They are confident that they won't face poverty in their final years. Our KidSave proposal will gave that same sense of confidence and pride in one's future to all future generations of Americans. How does KidSave work? The KidSave program would use part of the surplus to provide each newborn child with a $2,000 KidSave retirement savings loan to jumpstart his or her retirement savings. Each KidSave loan will be deposited into a qualified KidSave account. The KidSave program will be administered by the Thrift Savings Plan, TSP, Board. Future KidSave loans will be adjusted for inflation, CPI, beginning in 2008. Parents and grandparents will be able to add $500 per year to each KidSave account for each child under the age of 19. A KidSave loan recipient--with no additional account contributions-- can expect to generate future retirement savings of $250,000 by the age of 67 (assuming an 8 percent rate of return). Furthermore, since KidSave accounts are personal property, they can be willed on to an heir as part of an estate. How will these KidSave loans be financed? Our legislation uses Social Security surpluses to finance the loans in the early years of the program. But, as older KidSavers begin to repay their KidSave loans, the program will virtually become self-funded, as the loan repayment revenues are used to fund the KidSave loans of a new generation. Since the $2,000 KidSave loan is--just that--a loan, KidSavers are expected to pay back the loan amount at the CPI inflated rate starting at age 30. The KidSave loan repayment mechanism is designed in such a way to allow future KidSavers to pay back 20 percent of the loan each year for five years, beginning at the age of 30. In the rare event that an individual's KidSave account may perform poorly, no individual will have to pay more than 20 percent of his total account value back in any given year. Building upon existing investment structures in the Federal government, KidSave accounts will be managed and administered through the Federal employees' Thrift Savings Plan (TSP). Investment options will be determined by the TSP Board. KidSave account holders and guardians will have the same flexibility in changing their investment distributions as current TSP participants. As I noted earlier in my remarks, one goal of this proposal is to close the growing wealth gap. Despite all of the glowing media reports about the booming American economy, most of the economic gains of the last decade have gone to families who have owned financial assets. Ed Wolff, the wealth data guru, has reported that the wealthiest 10 percent of households enjoyed 85 percent of the stock market gains between 1989 and 1998. Since 1989, the share of wealth held by the top 1 percent of households grew from 37 percent to 39 percent, while the net worth of the bottom 40 percent of households dropped from .9 percent to .2 percent. An editorial by the Progressive Policy Institute has called this proposal a democratization of the ownership of financial assets''. I think they've hit the nail on the head. This proposal will create universal access to the tools of wealth creation and asset accumulation. It will make future workers less dependent on the Federal government for their retirement income security. This proposal is also aimed at improving the personal savings rate in the United States. In fact, unlike other spending programs, KidSave loans will not only generate wealth, but also improve national and personal savings rates. It has been widely reported that the personal savings rate has been in a long and steady decline in the U.S.--according to the Bureau of Economic Analysis, it has dropped from 11 percent in 1981 to 2 percent in 1999. Many workers are spending beyond their means, accumulating more and more consumer debt, while others simply can't afford to save because of high payroll tax rates and low wages. Many of these same workers are relying on Social Security to be their sole or primary source of income at retirement. But the co-sponsors of this bill recognize that a Social Security retirement check isn't enough to live on. The average Social Security check in Nebraska is $766 a month. Nationwide, eighteen percent of beneficiaries have no other source of income. Another 12 percent rely on Social Security for more than 90 percent of their income, and nearly two-thirds overall derive more than half their income from that small check. For many of them, it's not enough. Our proposal is based on the idea that retirees need both income and wealth. And Mr. President, that opportunity to hold assets and create wealth is an opportunity we can open today to every baby born in America. Guaranteed. I urge my colleagues to support this legislation.

Mr. KERREY

Mr. KERREY. Mr. President, many of the things we do in the Senate involve making investments in America's future. Investments in research through the National Science Foundation or investments in infrastructure development through the Department of Transportation reap great rewards for the citizens of tomorrow. Today, I am pleased to be joined by Senators Santorum, Moynihan, Grassley, and Breaux in introducing a piece of legislation that represents a remarkable new investment in the financial security of future generations of Americans. This proposal, called KidSave, aims to give every American a stake in the growth of the American economy, to help all Americans accumulate wealth and assets, and to teach all Americans firsthand the value of savings and compounding interest. Not only will this legislation promote savings and investments across all income levels, but it will also help to close the growing wealth gap. One of the discoveries I have made in researching this idea is that the most important variable in compounding interest rates is time. The earlier you start, the more wealth you build. One of the poster children for understanding the value of compounding interest is Osceola McCarty. Osceola was a Hattiesburg, Mississippi, washerwoman, who after more than seven decades of low-wage work donated $150,000 to the University of Southern Mississippi--wealth she had built by saving a little bit of money over a long period of time. Wealth has also empowered the Federal employees I talk to in the halls of the Senate, who are excited about their ability to participate in their government Thrift Savings Plan, TSP, and who talk more knowledgeably than me about index funds and the difference between a stock and bond. These employees, and other workers across the country who are able to participate in employer-sponsored pension plans and IRAs, feel more confident about their own futures and their own retirement security. They are confident that they won't face poverty in their final years. Our KidSave proposal will gave that same sense of confidence and pride in one's future to all future generations of Americans. How does KidSave work? The KidSave program would use part of the surplus to provide each newborn child with a $2,000 KidSave retirement savings loan to jumpstart his or her retirement savings. Each KidSave loan will be deposited into a qualified KidSave account. The KidSave program will be administered by the Thrift Savings Plan, TSP, Board. Future KidSave loans will be adjusted for inflation, CPI, beginning in 2008. Parents and grandparents will be able to add $500 per year to each KidSave account for each child under the age of 19. A KidSave loan recipient--with no additional account contributions-- can expect to generate future retirement savings of $250,000 by the age of 67 (assuming an 8 percent rate of return). Furthermore, since KidSave accounts are personal property, they can be willed on to an heir as part of an estate. How will these KidSave loans be financed? Our legislation uses Social Security surpluses to finance the loans in the early years of the program. But, as older KidSavers begin to repay their KidSave loans, the program will virtually become self-funded, as the loan repayment revenues are used to fund the KidSave loans of a new generation. Since the $2,000 KidSave loan is--just that--a loan, KidSavers are expected to pay back the loan amount at the CPI inflated rate starting at age 30. The KidSave loan repayment mechanism is designed in such a way to allow future KidSavers to pay back 20 percent of the loan each year for five years, beginning at the age of 30. In the rare event that an individual's KidSave account may perform poorly, no individual will have to pay more than 20 percent of his total account value back in any given year. Building upon existing investment structures in the Federal government, KidSave accounts will be managed and administered through the Federal employees' Thrift Savings Plan (TSP). Investment options will be determined by the TSP Board. KidSave account holders and guardians will have the same flexibility in changing their investment distributions as current TSP participants. As I noted earlier in my remarks, one goal of this proposal is to close the growing wealth gap. Despite all of the glowing media reports about the booming American economy, most of the economic gains of the last decade have gone to families who have owned financial assets. Ed Wolff, the wealth data guru, has reported that the wealthiest 10 percent of households enjoyed 85 percent of the stock market gains between 1989 and 1998. Since 1989, the share of wealth held by the top 1 percent of households grew from 37 percent to 39 percent, while the net worth of the bottom 40 percent of households dropped from .9 percent to .2 percent. An editorial by the Progressive Policy Institute has called this proposal a democratization of the ownership of financial assets''. I think they've hit the nail on the head. This proposal will create universal access to the tools of wealth creation and asset accumulation. It will make future workers less dependent on the Federal government for their retirement income security. This proposal is also aimed at improving the personal savings rate in the United States. In fact, unlike other spending programs, KidSave loans will not only generate wealth, but also improve national and personal savings rates. It has been widely reported that the personal savings rate has been in a long and steady decline in the U.S.--according to the Bureau of Economic Analysis, it has dropped from 11 percent in 1981 to 2 percent in 1999. Many workers are spending beyond their means, accumulating more and more consumer debt, while others simply can't afford to save because of high payroll tax rates and low wages. Many of these same workers are relying on Social Security to be their sole or primary source of income at retirement. But the co-sponsors of this bill recognize that a Social Security retirement check isn't enough to live on. The average Social Security check in Nebraska is $766 a month. Nationwide, eighteen percent of beneficiaries have no other source of income. Another 12 percent rely on Social Security for more than 90 percent of their income, and nearly two-thirds overall derive more than half their income from that small check. For many of them, it's not enough. Our proposal is based on the idea that retirees need both income and wealth. And Mr. President, that opportunity to hold assets and create wealth is an opportunity we can open today to every baby born in America. Guaranteed. I urge my colleagues to support this legislation.

Mr. KERREY

Mr. KERREY. Mr. President, I say to the chairman and ranking member, I am not going to make any additional arguments on the specifics. I want to make some closing comments. I am prepared to yield back time and go to the vote. I don't know where they are, but I will start talking so they understand that is where I am. The Senator from Texas made an effort to establish his bona fides and did a very good job referencing his father, who was a career military officer. In my closing, I need to do a little subtracting in my bona fides. I have received the Medal of Honor, as was mentioned several times. The Senator from Texas said he was not there that night and does not know what happened. When I saw the citation, I didn't know if I was there that night. I didn't receive the Medal of Honor because of my heroism. I received it because of many men out there, heroic beyond me, who did not have a witness or had a witness who did not like them or could not write or something got lost in the food chain, as some of these sometimes do. I am a recipient for others, and I do not say that in any sense of false modesty at all. I say it sincerely and genuinely. I understand Reserve officers, which I am, and career officers are substantially different. I praise the chairman and the ranking member of the Armed Services Committee and all the members of the Armed Services Committee, some of whom already spoke, for their efforts to make certain we take care of the men and women who volunteer and say: I will make a life career. I do not want anything I said previously to subtract from the enormous respect and admiration I have for them. Indeed, many times I have been moved to tears to see the risks the men and women who wear the uniform of the Army, Air Force, Navy, Marine Corps, and Coast Guard take for all of us, and we have a painful example of it today in sailors who are trying to keep an embargo in place on Iraq. We started that embargo many years ago, and we take it for granted. All of a sudden, we have 5 dead, 10 missing, and another 30 or so who are injured executing a mission. My guess is many of those people in question are lifers, as we call them, people who have made a life commitment. I appreciate very much the chairman making an effort. It may be he is right, that he has a provision here that ought to be done. I tried to argue as to why I think it goes beyond. He is the chairman of this committee. Senator Levin spent a lot of time on it. I supported them almost every time in the past when they tried to get benefits in line with what we need in order to recruit and retain. I do not want anything I said previous to this to be interpreted by anybody either on this floor or out in America that I have any disrespect at all for the commitment that men and women make when they say: I will make a life career. Again, I will use the observation of the Senator from Texas that you can support this provision and still say at some point you have to say no. We all understand that. We are asked to spend the taxpayers' money on many things, and you need a method by which at some point you say no. You can't say yes to everything. There are a lot of things I would like to spend money on, but there is a limit, and you have to figure out what that limit is. For years we had a Budget Act. For years we had budget caps. The Senator from New Mexico is right. It used to be, not that long ago, when you came down to the floor and there was a motion to waive the Budget Act, that was a tough vote. It was tough to waive the Budget Act. All of a sudden, it is not anymore. It used to be a mechanism that enabled us to have the fiscal discipline. I am proud of many things in which I had the opportunity to participate. One of them is the opportunity to help get rid of the fiscal deficit over the last 12 years. The only way that was possible was for us to have a mechanism by which we could look at a friend, look somebody in the eye who deserves to have more spending, and say: No, I just can't do it. At this moment, we are poised to spend far beyond what we intended when this year started. I hope colleagues will vote against the motion to waive the Budget Act and send this bill back to conference and say to the House Members: We cannot get it in because we have to say no, and we have to reassert the fiscal discipline that got us to where we are today. Mr. President, I am prepared to yield back my time.

Mr. KERREY. Mr. President, I make a point of order the pending Defense authorization conference report violates section 302(f) of the Congressional Budget Act of 1974.

Mr. KERREY. Mr. President, the 106th Congress appears to be heading towards an ending which will be regarded by many as an orgy of spending. Over the past 12 years when I was approached by citizens who sought additional spending I would invariably reference the spending caps contained in the Budget Act as a way to encourage restraint. But this year, the total spending contained in thirteen FY2001 appropriations bills will be $100 billion over the original spending caps. By drastically increasing the spending baseline, we are adding more than $1 trillion in additional spending over the next ten years. This additional spending is in excess of one dollar of every ten dollars in total U.S. Gross Domestic Product which we propose to collect in taxes and spend. This will be done with nary a debate about the wisdom of our actions. In addition, there are active discussions under way about spending more to ``fix'' the changes we made in the 1997 Balanced Budget Act, to cut taxes, and to create a prescription drug benefit for seniors. Before we go any further, we need to step back and take a look at the choices we are making about the budget surplus. The Defense authorization conference report is our first opportunity to do so. Contained in this bill is an authorization that drastically expands the health care entitlement of military retirees over the age of 65--a provision that costs more than was allocated to the Armed Services Committee under current law. The cost of this provision violates our budget rules because it mandates $60 billion in new mandatory spending beyond what is authorized in our budget resolution. Because this provision violates the Budget Act, at least 60 Senators must vote to ignore the budget resolution. While fully I expect 60 Senators will vote to do just that, I hope the debate this afternoon provides us with a better perspective on what we are about to do with the people's money. The provision we are debating about increases health care spending on 1.2 million military retirees and will cost, according to CBO, $60 billion over the next 10 years. But this number is deceiving. By 2010, the annual cost will be nearly $10 billion. I think we have a duty to ask ourselves what problem are we attempting to solve at an eventual annual cost of $10 billion? The provision in the conference report would allow military retirees to remain in TriCare when they turn 65 and would allow these retirees to continue to receive health care provided by the Department of Defense. Currently, when military retirees turn 65, they must transition from a more generous health insurance program called TRICARE to a less generous program called Medicare where co-payments and deductibles are higher. By changing the law, we will in essence be providing a subsidy for military retiree health insurance coverage that contains no deductibles or co-payments and a generous prescription drug benefit. Imagine the cost if we did the same for all Medicare beneficiaries. I oppose the provision both for policy and budgetary reasons. First, the rhetoric in support of this spending exaggerates the promise that was made to the men and women who volunteered and served in our Armed Forces. Worse, it undermines and reduces the value of the motivation of millions who volunteered with no expectation or desire of being repaid with taxpayer-financed benefits. Our motivation was that it was our duty, and that the service would be good for the nation and for us. In my case, I got a bargain and I do not like the feeling I get when I hear former comrades-in-arms claim they are entitled to some benefit on account of their service. A second objection to this provision is that it is in essence an admission that Medicare is an inadequate program whose coverage is unacceptably poor. Military retirees are not the only former employees in America who must transition from health care provided in the work place to Medicare. You could probably find millions of current Medicare beneficiaries who would stand in line to have their co-payments and deductibles paid as this provision will do for military retirees. If we grant this benefit to military retirees, how soon do you think it will be before non-military retirees will be asking Congress to do the same for them? My third objection is based upon considering the source of the money we will use to pay this subsidy. The source of the money will, of course, be individual and corporate income taxes. Please don't tell me the government is paying for this. That is a euphemism used by politicians and military retirees alike to hide the truth: we will be collecting individual income taxes from millions of working families who cannot afford to buy health insurance in order to subsidize the purchase of Medigap coverage for millions who could afford to pay their premiums. Unfortunately--as is often the case--beneficiaries of this income transfer are better organized and better informed than those who will be paying the bills. As a consequence, there will likely be 60 votes to waive the budget point of order. I doubt there would be 60 votes if the transfer of funds was in the opposite direction: from those who have health insurance to those who do not. My final objection is that the extension of this benefit conflicts with the need we have to invest in our current forces: their salaries, their training, their equipment, and their benefits. Every dollar we commit to increased spending on the mandatory side of our budget--which currently represents two-thirds of total spending--comes at the expense of appropriated spending, defense and non-defense alike. It is very possible that this business of breaking the budget caps may become a habit. If that's the case, then the conflict between mandatory and discretionary spending may become moot. That's the good news. The bad news is, if this happens we will have spent our way back into fiscal deficits. Under the budget law that governs our spending, we should be spending no more than $540 billion on defense and non-defense appropriations. The budget resolution enacted by Congress earlier this year allowed for $600 billion in spending. The appropriations bills we are trying to finish will contain at least $40 billion more. Most Members of Congress are aware--even if most Americans are not-- that we cannot do this under the law. To appropriate $640 billion, 60 Senators will have to vote to waive our own budget act to lift the spending caps or to waive the imposition of $100 billion sequester of all defense and non-defense appropriated accounts. My fear is that we will likely take this action as a consequence of our desire to get out of town quickly. We will have minimal debate and will hope that the American people do not notice what we have done until after the election. However, if we were to have an actual debate on this issue, I believe there would be at least two positive outcomes beyond informing the American people of what we are doing. First, domestic spending levels dictated by our budget act are too low. Second, in less than ten years, the pressure of mandatory spending, even presuming lower interest costs, will become enormous. Mr. President, I do not expect to win this vote given the margin of victory when it was considered in the Senate earlier this year. Therefore, I will not take more of my colleague's time with further arguments against this provision. Instead, I want to present a case for increasing defense and non-defense spending, but against the willy- nilly process which will lead to the greatest expansion of domestic spending since Lyndon Johnson was President. After I make this case, I will briefly describe the looming problem of mandatory spending. The good news on spending is that a synergistic combination of federal fiscal discipline and economic growth has shrunk domestic spending as a percentage of total U.S. income to its lowest levels since the middle 1970s. Ten years ago, total Federal spending consumed 22 percent of U.S. GDP. This year, federal spending will be 18 percent of our GDP. According to CBO, if current law is unchanged, total spending will fall to 16 percent in ten years, the lowest percentage of our income since the Eisenhower administration. In current dollars, each 10 percent of GDP represents nearly $1 trillion. It is a tremendous amount of money that causes the people of most other nations on this earth to shake their heads and wonder at our good fortune. Leaving $4 trillion in the economy over the next 10 years for private sector purchases and investments adds a lot of constructive steam to our economy. This fact gets too little attention when we are debating how to sustain our current economic recovery. Mr. President, this is why we need to stop and to consider what we are doing before we quietly agree to spend $1 trillion beyond the original discretionary spending caps. We would be better-served if we made this decision to increase the caps with a coherent and holistic debate about how to invest the surplus. A spending strategy that would increase the productivity of our work force by increasing the percentage of college graduates, and by increasing the number of high school graduates who have the necessary technical training to succeed in the American economy. A thoughtful debate on our spending strategy would no doubt also lead to higher spending levels on early childhood education and adult education. A thoughtful debate on our spending strategy would no doubt recognize the need to invest in our non-human infrastructure of roads, research, sewer and water. And a thoughtful debate on our spending strategy would no doubt contain safeguards to make certain that we do not throw good money after bad. Instead, we are going to commit ourselves to dramatic increases in discretionary and mandatory spending without any unifying motivation beyond the desire to satisfy short term political considerations. To be clear, Mr. President, I do not believe most of these considerations are bad or unseemly. Most can be justified. But we need a larger purpose than just trying to get out of town. On the mandatory side of the spending equation we have allowed the heady talk of surpluses as far as the eye can see to prevent us from seeing the wave of baby boomers that will begin to become eligible for taxpayer subsidized health and retirement benefits in less than 9 years. In less time than our most senior colleagues have served in the Senate, the ratio of American workers being taxed to pay the benefits for those who are eligible will shrink from 3 workers per retiree to 2 workers per retiree. If we continue to vote for more and more spending--as a percentage of our income--on Americans over the age of 65 and less and less on Americans under the age of 18 we will create two terrible problems: workers who do not have the skills to earn the money needed to support their families and a collective working population whose total income is smaller than needed to avoid higher payroll taxes. And yet that is exactly what we are doing with this provision in the Defense authorization conference. We obligate another $60 billion of tax revenue to reduce the burden of buying Medigap insurance. Just this year, a majority of the Senate has voted for a prescription drug benefit, an end to the Social Security earnings test, a decrease in the income tax of Social Security income, and this military retiree provision. Together, these mandatory spending items will cost the American taxpayer more than $500 billion over the next ten years. These spending levels may in fact be justified and affordable. However, they could also end up squeezing our domestic spending further as a percent of GDP. Because entitlement spending programs are locked into law, because those who favor these benefits are well organized and easily provoked come election time, they tend to be protected from spending cuts forever. I ask my colleagues to consider how many votes there would be for a proposal to waive the budget act in order to spend $60 billion more on our children to improve the quality of their health, their education, their lives. How many votes would there be for such a proposition? Less than 60, I assure you. Mr. President, I regret the proposed expansion of tax payer subsidization of military retirees' health benefits will not take place in the context of a more thorough debate of current and future Federal spending. In my view, it would be far less likely that this entitlement expansion would occur if we understood how it will add to the problems created by rapidly growing mandatory spending that begins again just as the full cost of this new benefit kicks in. And it would be far more likely that if we did vote for such an expansion we and the American people would understand the future consequences of our actions. Mr. President, let me say, I regret this may be my last speech on the Senate floor and that it be a speech against extending additional benefits to my fellow veterans or, stated another way, which I think needs to be thought about as we do this, asking other taxpayers to pay some things that I currently pay for myself by asking them to subsidize me even more for the service. I am military retired, let me fully disclose to my colleagues. I will benefit from this provision regardless of what my income is, regardless of what my need is. I say to you, I am personally offended by some of the rhetoric around this. I did not volunteer for the U.S. Navy in order to get anything. And you take away the most important value that I have from my service: I served; I volunteered. You did not have to buy that. You did not have to give me a health care benefit. If you want to give me a health care benefit, give it to me, but please do not say you owe it to me. You may decide it is necessary, but I got more from my service than my country got from me. I am the one who benefited from my service. And I am much less likely to benefit if all of a sudden I become a mercenary. You would owe me money because what this bill does is it says that when our veterans reach age 65, Medicare is not good enough; Medicare will not be good enough for the 1.3 million veterans over the age of 65 who are military retirees; it is not good enough. We are going to buy their Medigap insurance. Oh, no, Medigap isn't good enough. It has to have a prescription benefit in it. That is what this does. It asks one group of taxpayers to pay the Medigap insurance for another group of Americans who say Medicare is not good enough. Look, I know it is a hot issue. I have received lots of phone calls already from people who say: Gee, Kerrey is down here trying to stop this. I do not expect to get more than 40 votes. I hope there aren't 60 votes to waive the Budget Act. I say to my colleagues, nothing would send a better signal from this Congress right now than for us to say that we will not waive the Budget Act--that we will not waive the Budget Act. We are not getting much leadership down at the other end of Pennsylvania Avenue. And there is a spending orgy going on. We are going to have another vote to waive the Budget Act on appropriations. The cap, prior to the budget resolution, was $540 billion. The budget resolution raises it to $600 billion. We all sort of privately know it is going to be $640 billion or $645 billion. That is $100 billion over the previous cap. That is $1 trillion over 10 years. There is a meeting going on amongst Senate Democrats on the Finance Committee, talking to Secretary Summers about a tax cut package. There are lots of discussions going on about putting more money back in, as a consequence of the BBA of 1997, for health care providers. I do not know what it all adds up to, but I will tell you, I have never been in a situation where I took a phone call from somebody who said: Senator, this only costs $60 billion over 10 years--it only costs $60 billion over 10 years. That is what I am getting from people right now. So I think we would send a very important signal, right now, saying that we will not waive the Budget Act, we will not waive the Budget Act that has created the fiscal discipline that enabled us to get to where we are today. I think it would send a very important signal. I understand that you would have to take this thing back to conference tell the House Members we are coming back next week anyway. Isn't it worth $60 billion to spend a little more time to get this thing right? Let me get into the substance of this. I think it is important for us to send a signal that we will not waive the Budget Act to spend only $60 billion over the next 10 years. Let me make the case against the provision. First of all, I reiterate, you don't owe me any additional benefits. This Nation doesn't owe me anything. I will make that case, and I will make it repeatedly because I have heard an awful lot of rhetoric here that implies that I am a mercenary. I am a better person because of my service. I learned from my service. I believe I am a part of a nation as a consequence of my service. I wasn't just in the Navy; I was in the U.S. Navy. It has enriched me. It has benefited me. You didn't have to pay me to get me to do it. I did it as a consequence of believing that it was my duty. I thought I was going to be the one who came out ahead, and I have. Please, in the rhetoric you are using to describe why this is necessary, don't tell me it was a promise. I am one of the beneficiaries of this language, and I wasn't promised any benefit when I signed up. If you want to give it to me, fine, but please don't tell me that you owe it to me. Secondly, it is important for us to do some sort of evaluation of need. The last time I checked, I didn't see an awful lot of military retirees out there foraging in the alley for food. We need to do some sort of evaluation of need. Remember, we are taking $60 billion over the next 10 years from one group of Americans, and we are going to pay for the Medigap insurance, including a prescription drug benefit, for another group of Americans. I don't know how many Americans we are going to tax who are out there right now saying, I don't have enough income to pay for my health insurance, but there are a number who are. They are sitting out there, hard-working families, paying their bills, who are an important part of our country as well, who are an important part of our society. We are not saying to them, you are entitled to Medigap insurance. We are not saying to them, you are entitled to a prescription drug benefit. What you are entitled to is to pay somebody else's bills. Remember, the Government doesn't pay for anything. All we do is collect the money and pay the bills for somebody else. We are obligating $60 billion over 10. In the tenth year, this thing is knocking on the door of being $10 billion a year at the very moment--which is my third point--at the very moment when we have this unprecedented baby boom generation that begins to retire. I know this surplus goes as far as the eye can see. I understand that it has gotten more difficult to say no to people as a consequence of that; the fiscal discipline is lucid. But we are not going to change this demographic boom that is heading our way. It is not going to be altered. There aren't enough H-1B visas we can issue to immigrate our way out of this problem. We aren't going to have three people working who we tax to pay the retirement and health care benefits of those who aren't working. We are only going to have two. We are going to have two workers per retiree. You don't get to pick Warren Buffet and Bill Gates to tax. You tax an average. As a consequence of taxing that average, we are going to have a very difficult time paying the bills. Everybody who has examined this says that is the case. It is true that right now, under the previous CBO evaluation, we have stabilized the cost of mandatory programs, but not for long. We are going to be right back off to the races again starting in 2009. Our Federal Government, unless we exhibit some restraint, is going to become an ATM machine. We are going to be collecting money from one group of taxpayers and shipping it on to another group of taxpayers. The reason it is a problem can be seen in the way our authorizers had to deal with this. They didn't want this money to come out of Defense appropriations. They didn't want it to come out of readiness accounts. They didn't want it to come out of our ability to be able to recruit, to train, and equip our forces. No. They want to protect that. So they push it all over into mandatory. Well, you can only push it so far. I am sure the chairman of the Budget Committee will say at some point you have a limited amount of money you can extract from the U.S. economy. If you have a limited amount of money and you have mandatory programs going, it is going to eventually put pressure on appropriated accounts. The paradox, in my view--not shared by all--is that we probably are underinvesting right now in things that will increase productivity and will increase the strength of our economy. It is a paradox because we are going to be taxing the very people in whom we are underinvesting because we don't have a sufficient amount of resources in the appropriated accounts. As I said, on the basis of policy, I think on the basis of fiscal discipline, on several other bases I could talk about, this sounds good. Again, I understand the pressure. Nobody organizes better than Americans over the age of 65 in order to get something they think they are entitled to. In a relatively short period of time, I have generated well over 75 phone calls, including one misguided human being who said he was going to do everything in his power to make sure that my Medal of Honor was taken away from me. Well, more power to him; have at it. It is not likely. I am not offended by that. It is just an indication of the intensity of people's feelings, to which they are entitled. They don't tell us where we are going to get the money. The Government is going to pay for it; that is as far as they will go. Let the Government pay for it. The Government--I say again, for emphasis--doesn't pay for anything. It collects. It taxes one group of people in order to pay the benefits for another. That is what we are doing. You have a very difficult time, either on the basis of promise or on the basis of need, making the case that this group of Americans needs to have us pay their Medigap insurance, including a prescription drug benefit. I hope my colleagues, at this moment when we seem to have lost our fiscal discipline, will come to the floor and say: I might have, under normal circumstances, liked to be able to help these military retirees, but we have to stand up and say, no, we are going down a road where, when the smoke clears, we are going to find ourselves looking pretty foolish for having spent all the money or committed all the money that we have done. I hope my colleagues, even those who might say they like this benefit, will not vote to waive the Budget Act. The Budget Act has given us the discipline that enabled us to get this far. To sort of willy-nilly come down here and say, fine, my phone is ringing off the hook, I will not be able to stand up to that, I have to say, yes. The Budget Act allowed us to turn to our citizens and say, we have to be disciplined. It gave me, for 12 years, a method by which I could say, look, I support what you are doing, but we don't have the money. We have to say no sometimes to things we want to spend money on. I hope my colleagues will come to the floor and muster the will to vote no on waiving this Budget Act.

Mr. KERREY. I am pleased to, Mr. President. First of all, I am a retired Naval officer for medical reasons. The Senator is quite right; there is a difference between the reason I signed up, how I did it as a reserve officer, and somebody who signs up for 20 years. No question, that is true. I don't mean to imply there isn't a difference; there is a significant difference. When I hear people describing what this benefit does, that we are only talking about people who are in 20 years, the rhetoric is far afield on this. I feel like I can't go home and talk to friends and neighbors and say I am getting one more thing from my Government here. I am just telling you that I don't feel as if this country owes me anything. I want my colleagues, especially those who didn't have any military service, to know that. I have gotten more out of it than my Nation got. You say, well, somebody who has been in 20 years should be promised health care. There are employees we promised health care to. I say this to the Senator from Virginia: Medicare is health care. What do you say to somebody who has been in the workforce who says, ``My employer promised me health care, and I get to be 65 and I have to have Medicare.'' Do we say we are going to pick that up as well? That will be the next thing knocking on our door.

Mr. KERREY. Are we going to pay the Medigap insurance for every single Medicare beneficiary?

Mr. KERREY. I don't disagree, but to fix Medicare by saying there will not be copayments or deductibles, I don't think there is anybody on the floor who would argue that eliminating copayments and deductibles is the way to save money in health care. Quite the opposite. The argument on the other side of the aisle--joined by me in 1997--is we should go in the opposite direction. This eliminates copayments and deductibles.

Mr. KERREY. I can imagine.

Mr. KERREY. Mr. President, will the Senator yield?

Mr. KERREY. It will take 30 seconds to respond. On that basis, my Government owes me a lot of travel. They promised me I was going to see the world. All I saw was Vietnam, right? So I go to OCS for, they told me 16 weeks; it was 18 weeks. Guess what they said. ``We lied to you. Big deal.'' We have a lot of promises we have to keep if we are going to fulfill every promise made at every recruiting office in the United States. Come on, this is about deciding how much we can afford. There is a limit. I know the chairman understands there is a limit. There is a point beyond which one can't go. Are we going to do long-term care? Are we going to promise to pay for that? There are lots of things we can pay for and say we have an obligation. The question before us is, Are we going to waive the Budget Act? This Defense conference authorization requires $60 billion worth of spending beyond the budget resolution. That is the question, not do you like what this is. You may like this particular provision. But I am telling you, with just a couple of days left in this Congress, we are on a spending orgy. I am having people saying to me: Don't worry about waiving the budget resolution on appropriations; don't worry about waiving the budget resolution on Defense authorization; don't worry, we have to get out of town. Well, we are going to get out of town having done an awful lot of damage if we take that attitude.

Mr. KERREY. I yield.

Mr. KERREY

Mr. KERREY. Mr. President, I rise to comment on the legislation pending before the Senate on Permanent Normal Trade Relations with China. I support this bill not only because it is in the best interest of American farmers, businesses, and consumers; but also because passage of PNTR is the best way for America to have a positive influence on China's domestic policies, including policies affecting basic human rights. I believe that this bill has been characterized by many of my esteemed colleagues as something that it is not--a reward to China despite its poor human rights record. Surely, we do not agree with the treatment of China's citizens, just as surely as we do not agree with so many other practices of the Chinese government. However, it is important to remember that China will become a member of the WTO no matter how we vote. If the Congress were to vote against Permanent Normal Trade Relations, many of our trading partners will receive the myriad benefits of trading with China, while our farmers, our businesses, . . . our citizens would be excluded. Furthermore, the interest we have in promoting human rights protection in China is not defeated with the passing of this bill. The Congress has used its annual review of Normal Trade Relations to push China to become more democratic, to treat its citizens with basic decency, and to discourage Chinese participation in the proliferation of weapons of mass destruction. We now have the opportunity to assist our allies in bringing China into the world trading community. And by bringing China further into the global community, the real beneficiaries of PNTR, and eventual membership in the WTO, will be the Chinese people. The Chinese people will benefit from the new economic opportunities created by increased trade. The Chinese people will benefit from the spread of the rule of law, from increased governmental transparency, and from the economic freedom which will come as a consequence of China's membership in the WTO. Finally, passage of PNTR will make it much more likely that the Chinese people will have the opportunity to do what so many Chinese-Americans have done in the United States. By harnessing the power of individual innovation and by starting businesses, the Chinese people will be able to generate new wealth and new opportunities for themselves and their children. While the rewards of membership are evident, let us not overlook the responsibilities that come with membership in that community-- particularly the responsibilities that come with membership in the WTO. What better way to promote democracy in China, a nation that has long lacked a strong rule of law, than to encourage its participation in institutions, like the WTO, with strong dispute resolution mechanisms. Membership in the WTO will cause China to reexamine its legal infrastructure. Violating WTO agreements brings real consequences--the imposition of trade sanctions. This is a historic opportunity. We will soon be voting on one of the most important bills ever debated in this body. I will support Permanent Normal Trade Relations for China and I hope that my colleagues will recognize this bill's importance, and give it their support. Let me remind my colleagues that granting PNTR is not a reward for China, it is a reward for US farmers, businesses, and consumers. Passage of PNTR would allow the US to take advantage of the concessions agreed to by China in the bilateral agreement during its accession process. Tariffs for US goods will be drastically reduced.