John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, how much time do I have?

Mr. KERRY. I yield 10 minutes to the distinguished manager of the bill.

Mr. KERRY. I yield myself a moment that I need, and then I will yield to my colleague. Mr. President, I thank the Senator from Washington for her support and for her comments and her understanding of the implications of this debate. Let me point out to colleagues--and I emphasize--this does not change McCain-Feingold at all, No. 1. It embraces everything that is in McCain-Feingold. No. 2, it is purely voluntary. But, importantly, colleagues should note, 23 States in this country already have some form of public funding. In the last few years, several States--Maine, Vermont, Massachusetts, I think Arizona--have moved to embrace something called Clean Elections, which have an even lower threshold than what I am supporting today. I support the Clean Elections. Senator Wellstone and I have been advocates of it. But what we are coming in with is something that has broader bipartisan support, where businesses across the country--350 major business leaders and corporations--say: We have had enough of this other system. Here is a way we think is fair that encourages small contributions, encourages citizen participation, and provides some measure of public funding. So I think the trend with the public in America is to move in this direction. I think that further counters the idea that this is somehow an old idea. This is passing in States, and inevitably it is going to continue as a grassroots State movement where, once again, Washington, unless we change, is going to be not leading but following the American people. How much time would the Senator from Connecticut like?

Mr. KERRY. Mr. President, I listened with interest to my colleague from Kentucky. I listened to him label this as an idea from the past. I am interested in that because it always struck me that the idea of the past was the perception of corruption of the Congress. The idea that ought to be passed is the notion that unlimited funds and unlimited amounts of money in our system corrupt and corrode the system. If you were to ask the American people what they would like to see be the idea of the past, they would resoundingly, overwhelmingly tell you, as they have in every indication in the country, that they want us separated from these large sums of money. It is no surprise my opponent comes to the floor and derides the concept of public funding as some sort of thing from the past which doesn't command a lot of votes. I understand that. I know we are not coming to the floor from a great position of strength. But we have to start from somewhere again on this effort. We once passed it in the Senate, and we passed it once because it was the right thing to do and it was a good idea. I believe that the judgment made by those Senators who were then here is not now out of date; it is not now outmoded; it is not a judgment of the past. It was sound thinking. Once again, this body will one day come to understand that we need to separate ourselves from this money. Senator McCain above all set a standard for making clear that this is an idea of now, not of the past. My colleague does not even support campaign finance reform. He doesn't think McCain-Feingold ought to pass, let alone this amendment. It is no surprise he comes to the floor derisive about the concept of some level of public money being used to separate the politicians from the perceptions that cloud this institution. My colleague from Kentucky brought an amendment a few years ago, with other people, I believe, to terminate the funding process of the Presidential races. Guess what. He lost. The Senate said we want to continue to have our Presidential races funded the way they are, even if it means that a fringe candidate such as a Lyndon LaRouche may get a couple of million dollars to run for office. That is the price in America of having a system that is free from special interests. That is the price. The fact is, none of us can choose and pick who the candidates are. My colleague from Kentucky just acknowledged he does not know how this bill is structured. Maybe it would help him if he understood to some degree that it is structured in a way that not just anybody can run under this bill. You do not get the public funding unless you raise some money, and you can only raise some money if you have some kind of base of support. You only get some funding for the larger numbers of people you can entice to support you. So presumably there is a reflection in how much money you would ultimately get that is a reflection of what kind of candidate you are--whether you come with legitimacy or you do not come with legitimacy; otherwise, you are not going to get much. Second, contrary to what my friend from Kentucky said, we do not mandate this on anybody. If you do not want to do this, you do not have to do this. If you are more content to go out and raise millions of dollars from all the interests, go do it. This system is only for those who choose to live by the limits. But the one differential would be involved if some multimillionaire is running against you, or someone wants to go out and court all the other interests and get $50,000, $150,000 at a whack, and have ads run that are completely outside of what even the 1974 election reforms tried to achieve. We are driving through the largest loophole we have ever seen in this process. I regret to say that began in 1996--not before. But the fact is, we have ads run under the guise of being issue ads that everybody knows are directed to either tear down someone's character or argue against their election. They are completely outside the mainstream of the election, except to the degree that they have a profound impact on it. What we are really talking about is whether or not you want to have a voluntary system where, if somebody is spending those extraordinary amounts of money, you get to raise an additional amount by virtue of the public system. I do not expect somebody who does not believe in any kind of campaign finance reform, who thinks we ought to have more money in the system, not less, and who equates money exclusively with the determination of elections and power--I do not expect that person to support or like this amendment. I guarantee that over a period of time, as Americans continue to be disenchanted, as Senator McCain's campaign so aptly showed--and the reason Senator McCain's so aptly showed it is that what he did was he connected the dots for people. People want prescription drugs in Medicare. People want health maintenance organizations to be accountable to them. They want to know a doctor will make a medical decision about their potential illness or real illness if they have one. What Senator McCain did was show them the reason they do not get a lot of these things that they want is that the money manages to completely cloud the issues and real choices. Americans are subjected to this cacophony of funding which, frankly, crowds out even the voices of the candidates themselves in many cases. That is what this is about, a voluntary system giving people choice, allowing them to make up their own minds. What are my colleagues so afraid of? What are they afraid of? That another candidate might have the voluntary choice to decide to do this? They don't have to do it. What are they afraid of? There is far more taxpayers' dollars spent and wasted as a result of the campaign system we have today than this system would cost any American. Senator McCain always talks about an aircraft carrier being built that the Navy did not ask for. That aircraft carrier alone would fund 10 years of election cycles under this bill--that one alone. How many different examples are there of things that get passed because of the money in politics, not because the voice of the American people asked for it? He talks about the $3 checkoff. Yes, he is right. The $3 checkoff has diminished. But has anybody in America seen an advertisement asking them to participate? Has anyone in America had any kind of public input suggesting to them that if they were to check off, they could have a system that is perception-corruption free? The answer is no. We do not advertise. We do not ask accountants to suggest to their clients that they ought to check it off. There has been no effort whatsoever to try to bring Americans into the process of participation. I will tell you, for most Americans who look at the system the way it is today, it is no wonder they do not check it off because they have no sense of the connection of that system to the potential that they would be participating in something that actually works and that is free and clear from the kind of cloud they see today. I know the Senator from Washington wants to speak. How much time would the Senator like? Mr. President, I yield 5 minutes to the Senator from Washington.

Mr. KERRY. Mr. President, I thank the Senator from Delaware for his comments. As he said, he started this crusade back when he was elected in 1972. We had a high water mark in the Senate when we actually passed it. We also had 49 votes at one point in time. We know we are not at that high water mark today for a lot of different reasons. It is very interesting what the Senator just said about businesspeople. I cited the types of businesspeople who support this-- major executives of major companies in the country. Here is what they said when they announced it: As business leaders, we are . . . concerned about the effects of the campaign finance system on the economy and business. . . . A vibrant economy and well functioning business system will not remain viable in an environment of real or perceived corruption, which will corrode confidence in government and business. . . . In addition, the pressures on businesses to contribute to campaigns because their competitors do so will increase. We wish to compete in the marketplace, not in the political arena. I applaud these business leaders for recognizing the truth that a lot of the opponents of reform refuse to acknowledge. The fact is that even the Supreme Court in the cases we so often cite--Buckley v. Valeo, Colorado, and others, all of those cases--talks about the legitimate right of Congress to try to curb the perception of corruption which they acknowledge on the Supreme Court is a component of trying to have good campaign finance reform. What they have deemed to be constitutional, they have deemed to be constitutional partly making the judgment that it was necessary to combat that concept of corruption. Moreover, I point out to my colleagues, sometimes we all know Congress does not do what the American people think it should do or want it to do, but the American people want us to put together a better system. A national survey conducted by the Mellman Group in April last year found that by a margin of 68 percent to 19 percent, voters favored a proposal that eliminates private contributions, sets spending limits, and gives qualifying candidates a grant from a publicly financed election fund. In other words, every time the Congress votes against public funding, the Congress is explicitly denying what the majority of the American people want, which is the capacity to separate the people they elect from the fundraising process. That same survey found that 59 percent of voters agree that we need to make major changes to the way we finance elections. But perhaps the most telling statistic was the fact that overwhelming majorities think special interest contributions affect the voting behavior of Members of Congress. Eighty-seven percent of voters believe that money impacts Members of Congress, with 56 percent expressing the belief that it affects Members a lot. We ought to want to do something to eliminate that perception and to restore people's confidence in this institution. Mr. President, I reserve the remainder of my time.

Mr. KERRY. I yield 5 minutes to the Senator from Delaware.

Mr. KERRY. Mr. President, how much time remains on our side?

Mr. KERRY. Mr. President, this amendment is one that I think Senator Biden, Senator Cantwell, Senator Wellstone, and I understand is not going to pass today. I hate to say that. I regret to say that. But it is a vote that we ought to have in the Senate. It is a vote that, in our judgment, represents the best of what could be achieved in the context of campaign finance reform. It is steps beyond Senator McCain and Senator Feingold, both of whom, I might add, have great sympathy for it notwithstanding the fact that they know, if it were to pass, you would have a very different mix in terms of what they began with as sort of a legislative agreement, if you will. I know Senator Feingold is a strong supporter nevertheless. What we are proposing is something the Senate has visited before. We have voted on this before. In fact, the Senate in 1994 passed, by a vote of 52-46, a campaign reform bill. It never got out of the Senate in 1994. This particular one fell victim to the House of Representatives and to the delay of the schedule. Nevertheless, it reflected the willingness of colleagues in the Senate to embrace a partial funding by the public, a partial match funding in order to reduce the dependency of politicians on going out and becoming supplicants in their search for funds. This is, in effect, translating to the Senate races the same principle that has been in place and has been used, even through the current election for President of the United States, in our national elections. It is a partial funding, a match, if you will, that seeks to address the extraordinary amounts of money that are in our campaigns today. We bring this particular amendment because this effort of campaign finance reform is not just to create a regulation on how much money you can raise in a particular request from a particular person, not just an effort to put limits on. There is a larger purpose that brings us here. That purpose is to undo the appearance of impropriety that comes with the linkage of money to the fact of getting elected, the act of getting elected. Most people in the Senate who have been here for awhile have watched colleagues sometimes squirm with discomfort because questions have been raised about those linkages. We have had investigations, both of the Senate, of the Ethics Committee, and of outside groups, that have often been pointed at the way in which we are forced to raise money. I think most people in any honest assessment would be prepared to say when somebody sitting on a particular committee has to go out and raise money from people who have business before that committee, or when someone in the Senate has to ask for money from people who have legislative interests in front of them on which they will vote, there is almost an automatic cloud. It is not something we define for ourselves, it is something that is defined by the system itself. It is there whether we like it or not. I do not think there is one of us in the Senate who has not been asked at one time or another: Gee, did those people who contributed to you somehow have an influence on the way you voted? For most people in the public, it is a natural connection. If people see the milk industry, or the insurance industry, or the banking industry, or the farmers, or the truckers--you could name any group. I am not being pejorative in naming any of those I named. Name any interest in America that conglomerates its money, and then look at the people who are elected, and you have an automatic connection, like it or not, of the money and the election process. When you measure the fact that most of America does not contribute, most of America does not have the money to contribute--we have one-half of 1 percent of the people in this country who give the $1,000 donations. I think all of the soft money in this country was given by about 800 people in the last election cycle. Think of that--800 Americans out of 280 million giving tens of millions of dollars to affect the political process. Most of the average citizens sit there and say: I can only afford $10, or maybe I can afford $15 or $20 or $50. But they know; they sort of say to themselves: Boy, my $50 is not going to do much to alter the impact of $50,000 from some big, large interest, et cetera. They feel powerless and they turn off the system. They go away. They look at the system and they say: It doesn't represent me. I don't know how many of my colleagues have stopped to ask, but why is it that a majority of the Senate is made up of millionaires? Are we representative of the United States of America as a group? The answer is no. But most people cannot afford to run for office, particularly for the Senate. So the question is, Do we have the guts, do we have the courage to come here and fight for real campaign finance reform that affords a more even playing field? Is it a perfect playing field? The answer is no. We do not do that. And I understand that. But we can try to make it fair so a lot of people can get involved in the process. Let me share with my colleagues this idea that we are submitting to the Senate today comes from a group of business leaders. This is not an idea that has been created by some sort of interest group that might arouse the normal suspicions of those who oppose campaign finance reform. This idea has been put together by a group called the Committee for Economic Development. Over 300 business leaders have endorsed this proposal. They include top executives of Sara Lee, Nortel Networks, State Farm, Motorola, Bear Stearns, American Management Systems, Hasbro, MGM Mirage, Guardsmark, Kaiser Permanente, Prudential, Saloman Smith Barney. They also include retired chairs or CEOs of AlliedSignal, Bank of America, GTE, International Paper, Union Pacific, General Foods, Monsanto, Time, CBS, Fannie Mae, Dow Chemical, and B.F. Goodrich. I suppose the question might be asked, Why would past CEOs, why would corporate chieftains, why would corporations themselves be so interested in supporting a campaign finance mechanism that includes some public funding? The reason is, these are the corporate entities that keep getting asked to contribute and contribute and contribute, that keep feeling as if they are dragged into a process that they themselves know is not in the best interests of the democracy of our country. We are supposed to be, as Senator Byrd reminded us in our caucus a few minutes ago, a republic. A republic means we are people who represent the people who elect us--not the money that puts us here, the people who elect us. The question is, Are we prepared to pass a campaign finance reform regime that distances us, to the maximum degree possible, from the fundraising and connects us, to the maximum degree possible, to the people who elect us? That is the purpose of this particular amendment. This amendment is voluntary. I emphasize, it is voluntary. There is no mandate that anybody in the country has to follow this particular way of campaign financing. So there is no constitutional challenge here. You can choose to go in and live by a limit that you are given as a matching amount of money. I want to explain exactly how it works. We want to encourage the small donor to participate in America again. We want to emphasize that it is the smaller contribution that is the most important contribution. So what we do is provide a matching amount of money doubled by the Federal Treasury for those small contributions up to $200. That means if somebody contributes anywhere up to $200 to a candidate, they would get up to $400 in a matching amount of money. And they would agree to live by a specific formula limit for each State in the country. That formula is: $1 million, plus 50 cents, times the number of voters in that particular State. We did an analysis of the last two election cycles. When you compare the amounts that would be provided to candidates under this formula, it demonstrates that in only three races in the last cycle would you not have had enough money under this formula to be able to meet what happened in those races. The spending limit formula in 23 States would have provided candidates with more money than they had to go out and hock the system in order to be able to run. In an additional seven States, the formula would have brought candidates within $500,000 of the average amount that was spent in the last Senate election in that State. Given what we have already passed in McCain-Feingold with respect to lowest unit charges, in effect, this formula would allow people to be able to spend more, if not the same, because they would be able to get more media buy for the dollars spent; and that result would be that they would be, in fact, greatly advantaged by this kind of formula. What they also allow them to do is: If a candidate is not able to raise up to their limit, we allow the parties, through their hard money contributions, to be able to make up the difference to that candidate, much as they do today through the section 441(a)(d) contributions. The virtue of this particular approach is that it does the most that we believe we can do to separate candidates from the fundraising process, to reduce the capacity of people to question the large contributions. We would still allow contributions up to the amounts of McCain-Feingold. So if that amount remains $1,000 in the primary and $1,000 in the general election, you can still raise it, but you only get credit for the first $200 toward your match. That means you would be encouraged to go out and bring people into the system for low-donor- amounts of contributions. In every other regard we stay with McCain-Feingold. We want to see the ban on the soft money. We want to see the increased scrutiny, increased transparency, but we are trying to provide people with an ability to avoid the extraordinary arms race of fundraising that takes place in this country and to begin to restore every American's confidence that we are not in hock to the interests that support the campaigns. There is a reason for having to do that. I remember when I was chairman of the Democratic Senatorial Campaign Committee in 1988. As Chairman, I refused to take soft money back in 1988. We did not take any soft money in the committee. That was the last year the campaign committee did not take soft money because they could not in order to compete. From that time until now, we have seen this extraordinary growth in the amount of soft money being raised, so that there was almost $\1/2\ billion of soft money in last year's campaigns. Think about that--an extraordinary amount. But for 1992, the Republican Party raised $164 million in hard money, $45 million in soft money. In 1996, the $164 million jumped to $278 million in hard money; and it went from $45 million to $120 million in soft money. And this year, it went from the $278 million to $447 million in hard money; and the $120 million went up to $244 million in soft money. This is so far outside of inflation or any legitimate costs with respect to campaigning, it is insulting. The only way we are going to end that is to put in place a system where we bring Americans back into the process of contributing smaller amounts of money. It is interesting that corporate contributions outnumbered the amount of small and union contributions by 15 to 1. Americans are currently looking at a political system that is effectively a corporately subsidized, corporately supported system. If you were the leader of any corporation in America--there are a few who are making a different decision--some of them have decided spontaneously they are simply not going to contribute, but unfortunately, an awful lot of them still decide: I can't be left behind, I can't suffer the vagaries of the system unless I can weigh in, unless I get sufficient access. So most of them, answerable to their board of directors and their shareholders, as a result, play the system as hard as they can. Most of them will also tell you privately, they pray and hope the Senate will have the courage to change that system because they don't like it any more than many of us do. The one thing we are going to hear from the opponents--and you can hear it right now--we have politics that are really good right now in using little phrases: ``It is not the Government's money; it is your money. You deserve a refund.'' That is a quick, easy hit. People get applause. Everybody feels good and they forget about the fact that there are a whole lot of other issues. We are going to hear them say: Gee whiz, politicians shouldn't depend on the public treasury to run for office. They are going to say this is welfare for politicians, ``welfare for politicians'' because somehow the Federal Government contributes. Ronald Reagan was elected using this Federal money. George Bush, in 1988, was elected using this money. Even the current President Bush was elected using Federal money. Bob Dole ran for President using Federal money. Countless numbers of candidates have run using Federal money. It is not welfare for politicians. What it is is protection for politicians. That is what they want. They are afraid of a system that allows the average American to have a full voice. They are afraid of a system which requires them to go out and do anything except play sweetheart with a whole bunch of givers who give them big amounts of money so they can just swamp the average person who wants to run for office. The fact is, if you analyze the amount of Federal dollars that are wasted and spent only because those interests are able to get the laws they want and ride roughshod over a broader consumer interest, there are billions upon billions of dollars that are spent as a result of the current system. What this represents is liberty money for people in this country, freedom, the ability to be able to cut the cord of the system we have today and free themselves to be able to go out and have a fair system in which Americans can have confidence. Most Americans, if they were presented with that argument fair and square, would say: That is precisely what I want. I am willing to pay a $400, $500 amount to cover the cost of elections in this country in order to guarantee that people are free from the kind of special interest process today. Moreover, you might see a lot more of your Senator and your Congressman because they wouldn't have to travel all around the country on weekends and weeknights to raise money from fundraisers in States everywhere other than their own. It doesn't make sense. That is what this is an effort to try to achieve. I hope my colleagues will think hard about it. Fifty-two Members of the Senate in 1994 voted for a bill that had a partial component of public funding in it. Many people have acknowledged that ultimately this is the only way for us to free ourselves from the current system. While we can't deal with the primaries, that is too expensive and it doesn't work. What we do is set up a structure where in the general election, there is a clear ability of people to spend a limited amount of money, commensurate with the amounts of money and in some cases more than even the amounts they spend today. I yield 15 minutes to the Senator from Delaware.

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

Mr. KERRY. Mr. President, I send an amendment to the desk on behalf of myself, Senator Biden, Senator Wellstone, and Senator Cantwell. I ask for its immediate consideration.

Mr. KERRY. Mr. President, let me just comment before I introduce an amendment and start the process of the clock. With respect to the question of how this issue finishes, I hope the leader on the other side, and those who oppose this, will not move back from what I think was an understanding by most people who entered into that agreement that we were in fact going to have an opportunity to come to final resolution on this bill. Obviously, if we are deprived of that, then I suspect many of us are going to try to find every opportunity the Senate presents us over the course of the next months. There is a long schedule yet ahead of us. It would be a waste of the time of the Senate and an insult to the process to somehow try to sidestep an appropriate, complete, and total resolution, having invested the time we have in the last days. I think everybody has moved in good faith in an effort to present the amendments that represent bona fide efforts to improve campaign finance. But I certainly will join with a number of other colleagues, I am confident, if there is some sidestepping procedural effort to deprive us of the appropriate voting conclusion. We will tie up the Senate, I am confident, for some period of time in an effort to try to resolve it. Amendment No. 148

Mr. KERRY

Mr. KERRY. Mr. President, I thank the ranking member of the Rules Committee. I join my colleagues in opposing the Hagel amendment, and I do so reluctantly on a personal level, but not on a substantive level. I have enjoyed working with the Senator from Nebraska on many issues. I respect and like him. I regret to say that the amendment he brings to the floor today is simply not reform. I should say that again and again and again. It is not reform. It is not reform. You don't have reform when you are institutionalizing for the first time in history the capacity of soft money to play a significant role in the political process, when the McCain-Feingold goal and objective, which I support, is to eliminate altogether the capacity of soft money to play the role that it does in our politics. So it goes in the exact opposite direction. I will come back to that in a moment because I want to discuss for a moment where we find ourselves in this debate and really underscore the stakes in this debate at this time. Last night, I voted with Senator Wellstone, together with other colleagues who believe very deeply in a bright-line test and in the capacity to have a constitutional method by which we even the playing field. I regret that some people who oppose the bill also chose to vote with Senator Wellstone because they saw it, conceivably, as a means of confusing reform and creating mischief in the overall resolution of this issue which Senator Feingold and Senator McCain have brought before the Senate. Let me make it clear to my colleagues, to the press, to the public, and to people who care about campaign finance reform, the next few votes that we have on this bill are not just votes on amendments, in my judgment; they are votes on campaign finance reform. They are votes on McCain-Feingold itself. There will be a vote on the so-called severability issue which, for those who don't follow these debates that closely, means that if one issue is found to be unconstitutional, we don't want the whole bill to fall. So we say that a particular component of the bill will be severable from the other components of the bill, so that the bill will still stand, so that the reforms we put in on soft money, or the reforms we put in on reporting, or the reforms we put in on the amounts of money that can be contributed, would still stand even if some other effort to have reform may fall because it doesn't pass constitutional muster. Now, opponents of this bill, specifically for the purpose of defeating McCain-Feingold, specifically for the purpose of creating mischief, will come to the floor and say: We don't want any severability. The whole bill should fall if one component of it is found unconstitutional, which defeats the very purpose of trying to put to a test a new concept of what might or might not pass constitutional muster. It is not unusual in the Senate for legislators, many of whom are lawyers, to make a judgment in which they believe they have created a test that might, in fact, be different from something that previously failed constitutional tests. And so, as in this bill, we are trying to find a way to create a playing field that is fair, Mr. President. Fair. Many people in the Senate legitimately believe that it is not fair to have a limitation on corporations and unions, but then push all the money into a whole series of unregulated entities that will become completely campaign oriented and, in effect, take campaigning out of the hands of the candidates themselves. They won't be regulated at all, while everybody else is regulated. That is what Senator Wellstone and I and others were trying to achieve last night--a fairness in the playing field. I understand why Senator Feingold and Senator McCain object to that. I completely understand it. They want fairness. They understand that that is important to the playing field, but they have tried to cobble together a fragile coalition here that can hold together and pass campaign finance reform. Some people suggest they would not be part of that fragile coalition if indeed they were to embrace this other notion of a fair playing field. However, the Senate is the Senate. It is a place to deliberate, a place for people to come forward and put their ideas, legislatively, before the judgment of our colleagues. Last night, the Senate worked its will, albeit, as in any legislative situation, with some mischief by some people who seek to defeat this. But we are in a no worse position today than we were before that amendment passed last night, because if we defeat the notion that this should be non-severable, we can still go out of the U.S. Senate with legislation and we still can put this properly to test before the Supreme Court, which is, after all, the business of our country. That is the way it works. Congress passes something, and the Supreme Court decides whether or not it is, in fact, going to meet constitutional muster. That said, I believe it is vital for us to proceed forward on these next votes with an understanding of what is at stake. The Hagel amendment would gut McCain-Feingold. Effectively, the vote we will have this morning will be a test of whether or not people support the notion of real campaign finance reform and of moving forward. Let me say a few words about why the amendment Senator Hagel has offered really breaches faith with the concept of reform itself. The Hagel amendment imposes a so-called cap on soft money contributions of $60,000. That would be the first time in history the Congress put its stamp of approval on corporate and union treasury funds being used in connection with Federal elections. The Hagel amendment would legitimize soft money, literally reversing an almost century-long effort to have a ban on corporate contributions and the nearly 60-year ban on labor contributions. That is what is at stake in this vote on the Hagel amendment. The Hagel amendment would institutionalize a loophole that was not created by Congress, but a loophole that was created by the Federal Election Commission. Worse--if there is a worse--than just putting Congress' seal of approval on soft money is the impact the amendment would have on the role of money in elections. What we are seeking to do in the Senate today is reduce the impact of money on our elections. I will later today be proposing an amendment that I know is not going to be adopted, but it is an amendment on which the Senate ought to vote, which is the best way to really separate politicians from the money. I will talk about how we will do that later. It is a partial public funding method, not unlike what we do for the President of the United States. George Bush, who ran for President, did not adhere to it in the primaries, but in the general election he took public money. He sits in the White House today partly because public funding supported him. Ronald Reagan took public money. President Bush's father, George Bush, took public money. They were sufficiently supportive of that system to be President of the United States, and we believe it is the cleanest way ultimately to separate politicians from the money. That is also what we are trying to do in the McCain-Feingold bill. It does not go as far as some would like to go, but it may be the furthest we can go, given the mix in the Senate today. It seeks to reduce the role of influence of money in the American political process. The Hagel amendment would actually undo that and reverse it. It would enable a couple to contribute $120,000 per year, $240,000 per election cycle, to the political parties. In the end, the Hagel amendment would allow a couple to give more than $500,000--half a million dollars--per election cycle to the political parties in soft money and hard money combined. We have heard the statistics. Less than one-half of 1 percent of the American population give even at the $1,000 level. Let me repeat that. Less than one-half of 1 percent of all Americans give even at the $1,000 level, and here is the Hagel amendment which seeks to have the Senate put its stamp of approval on the rich, and only the rich, being able to influence American politics by putting $500,000 per couple into the political system. That increases the clout of people with money, and it reduces the influence and capacity of the average American to have an equal weight in our political process. Looked at another way, the amendment would allow five senior executives from a company to give $60,000 per year for a total of $300,000 of soft money annually. That could be combined with an additional $60,000 straight from the corporate treasury. That is hardly the way to get money out of politics. Even with its attempted cap of soft money, the Hagel amendment leaves open a gaping loophole through which unmonitored soft money can still flow. It does nothing to stop the State parties from raising and spending unlimited soft money contributions on behalf of Federal candidates. It is absolute fantasy to believe the State parties are not, as a result of that, going to become a pure conduit for the money that flows in six-figure contributions from the corporations or the labor unions or the wealthiest individuals. It simply moves in the wrong direction. It codifies forever something we have restricted and prevented. It is the opposite of reform. It undoes McCain-Feingold, and I urge my colleagues to keep this reform train on its tracks. We need to complete the task, and we must turn away these efforts to overburden this bill or to directly assault its fundamental provisions. I yield back whatever time remains to the manager.

Mr. KERRY

Mr. KERRY. Mr. President, I speak today in strong support of S. 395, the Independent Office of Advocacy Act. Chairman of the Senate Committee on Small Business, Kit Bond, and I introduced this legislation to help ensure the Small Business Administration's Office of Advocacy has the necessary autonomy to remain an independent voice for America's small businesses. I would like to thank the Chairman and his staff for working with me and my staff to make the necessary changes to this legislation to garner bipartisan support in Committee, where it passed 18-0. This legislation is similar to a bill introduced by Chairman Bond, which I supported, during the 106th Congress. While this legislation received strong support in the Senate Committee on Small Business and on the floor of the Senate, the House did not take any action. I am hopeful that this legislation will be enacted during the 107th Congress. Mr. President, the Independent Office of Advocacy Act rewrites the law that created the Small Business Administration's Office of Advocacy to allow for increased autonomy. It reaffirms the Office's statutory and financial independence by preventing the President from firing the advocate without 30 days prior notice to Congress and by creating a separate authorization for the office from that of SBAs. It also states that the Chief Counsel shall be appointed without regard to political affiliation, and shall not have served in the Administration for a period of 5 years prior to the date of appointment. The legislation also makes women-owned businesses an equal priority of the Office of Advocacy by adding women-owned business to the primary functions of the Office of Advocacy, wherever minority owned business appears. It also adds new reporting requirements and additional functions to the Office of Advocacy with regard to enforcement of the Small Business Regulatory Enforcement Fairness Act SBREFA. The provisions regarding SBREFA are already a part of existing law in Chapter 6 Title 5 of United States Code, and will now, rightly, be added to the statute establishing the Office of Advocacy. But at its heart, this legislation will allow the Office of Advocacy to better represent small business interests before Congress, Federal agencies, and the Federal Government without fear of reprisal for disagreeing with the position of the current administration. For those of my colleagues without an intimate knowledge of the important role the Office of Advocacy and its Chief Counsel play in protecting and promoting America's small businesses, I will briefly elaborate its important functions and achievements. From studying the role of small business in the U.S. economy, to promoting small business exports, to lightening the regulatory burden of small businesses through the Regulatory Flexibility Act, RFA, and the Small Business Regulatory Enforcement Fairness Act, the Office of Advocacy has a wide scope of authority and responsibility. The U.S. Congress created the Office of Advocacy, headed by a Chief Counsel to be appointed by the President from the private sector and confirmed by the Senate, in June of 1976. The rationale was to give small businesses a louder voice in the councils of government. Each year, the Office of Advocacy works to facilitate meetings for small business people with congressional staff and executive branch officials, and convenes ad hoc issue-specific meetings to discuss small business concerns. It has published numerous reports, compiled vast amounts of data and successfully lightened the regulatory burden on America's small businesses. In the area of contracting, the Office of Advocacy developed PRO-Net, a database of small businesses used by contracting officers to find small businesses interested in selling to the Federal Government. The U.S. Congress, the administration and, of course, small businesses, have all benefitted from the work of the Office of Advocacy. For example, between 1998 and 2000, regulatory changes supported by the Office of Advocacy saved small businesses around $20 billion in annual and one-time compliance costs. Small businesses remain the backbone of the U.S. economy, accounting for 99 percent of all employees, providing 75 percent of all net new jobs, and accounting for 51 percent of private-sector output. In fact, and this may surprise some of my colleagues, small businesses employ 38 percent of high-tech workers, an increasingly important sector in our economy. Small businesses have also taken the lead in moving people from welfare to work and an increasing number of women and minorities are turning to small business ownership as a means to gain economic self- sufficiency. Put simply, small businesses represent what is best in the United States economy, providing innovation, competition and entrepreneurship. Their interests are vast, their activities divergent, and the difficulties they face to stay in business are numerous. To provide the necessary support to help them, SBA's Office of Advocacy needs our support. The responsibility and authority given the Office of Advocacy and the Chief Counsel are crucial to their ability to be an effective independent voice in the Federal Government for small businesses. When the Senate Committee on Small Business held a Roundtable meeting about the Office of Advocacy with small business concerns on April 21, 1999, every person in the room was concerned about the present and future state of affairs for the Office of Advocacy. These small businesses asked us to do everything we could to protect and strengthen this important office. I believe this legislation accomplishes this important goal. I have always been a strong supporter of the Office of Advocacy and I urge my colleagues to support this important legislation.

Mr. KERRY

Mr. KERRY. Mr. President, today we are considering S. 295, the Small Business Energy Emergency Relief Act of 2001. I have waited weeks to bring this bill before the Senate, and so I am very pleased that we are voting on this bill today. I introduced this bill to address the significant price increases of heating fuels and electricity and the adverse impact those prices are having on our more than 24 million small businesses, small farmers included, and the self-employed. The support for this bill reflects how much small businesses in our States from Massachusetts on the east coast to California on the west coast--are feeling the sting of high heating and electricity bills. I thank my colleagues who are cosponsors. Senators Lieberman, Snowe, Bingaman, Landrieu, Johnson, Domenici, Levin, Wellstone, Jeffords, Harkin, Schumer, Clinton, Kohl, Edwards, Leahy, Baucus, Collins, Dodd, Bob Smith, Chafee, Bayh, Kennedy, Inouye, Daschle, Bond, Jack Reed, Corzine, Torricelli, Akaka, Cantwell, Murray, Cleland, Enzi, and Specter. I also thank Congressman Tom Udall of New Mexico for introducing the companion bill to this legislation, H.R. 1010, on March 13th. As so many of my colleagues know, in addition to electricity, many small businesses are dependent upon heating oil, propane, kerosene or natural gas. They are dependent either because they sell or distribute the product, because they use it to heat their facilities, or because they use it as part of their business. The significant and unforseen rise in the price of these fuels over the past two years, compounded by cold snaps and slowed economic conditions this winter, threatens their economic viability. According to the Department of Energy, the cost of heating oil nationally climbed 72 percent from February 1999 to February 2000, the cost of natural gas climbed 27 percent from September 1999 to September 2000 and 59 percent over the past year, and the cost of propane climbed 54 percent from January 2000 to January 2001. As I said when I introduced this bill on February 8, the financial falter or failure of small businesses has the potential to extend far beyond the businesses themselves, and we must do what we can to mitigate any damage. Jobs alone give us enough reason to get involved and minimize the number of small business disruptions or failures because they provide more than 50 percent of private-sector jobs. My bill, the Small Business Energy Emergency Relief Act of 2001, would provide emergency relief, through affordable, low-interest Small Business Administration Economic Injury Disaster Loans, EIDLs, and loans through the Department of Agriculture's Emergency Loan program, to small businesses and small farms that have suffered direct economic injury, or are likely to suffer direct economic injury, from the significant increases in the prices of four heating fuels heating oil, propane, kerosene, and natural gas or electricity. Initially, this legislation covered four heating fuels, addressing the needs of both urban and rural small businesses. However, I listened to and worked closely with colleagues on both sides of the aisle to address their concerns. Consequently, we made the following changes, some of which I completely support and consider real improvements to the bill and good public policy, and some of which I don't entirely agree with but have accepted in the spirit of compromise. Let me go through the changes. I have already mentioned some of them in describing the basic legislation. I incorporated a proposal by Senators Boxer and Feinstein to include electric energy in the scope of the bill. I agree with this. There are more and more small businesses around the country being hurt by the spike in electricity prices, and I think they too should have access to affordable loans to help them through these difficult times. I incorporated a proposal by Senators Kohl and Harkin to extend similar disaster loan assistance for these purposes to small farms and small agricultural producers through the Department of Agriculture's Emergency Loan program. I agree with this, and I am glad we found a way to help small farms. I incorporated a proposal by Senator Levin to allow the loan proceeds from the SBA disaster loans to be used for small businesses to convert their systems from using heating fuels to using renewable or alternative energy sources. This assistance was also supposed to be available to small farms and small agribusinesses through the USDA's emergency loans, but members of the Agricultural Committee objected. It's unfortunate that this assistance won't be available to small farms because I think we should encourage all industries to use renewable energy. I incorporated a proposal by Senator Enzi to expand Senator Levin's amendment by including ``co-generation'' in the list of renewable or alternative energy sources. The addition of ``co-generation'' is to allow small businesses to invest in co-generation capacity to enhance efficiency and, as a result, reduce fuel consumption, save money and reduce pollution. I have some concerns about the addition of ``co- generation.'' First, it changes the scope of the Levin amendment by adding an efficiency technology to a list of what are largely renewable energy technologies. Second, ``co-generation'' is a broad term that can include different fuels, different technologies, and result in varying levels of efficiency gains. Because the bill does not establish specific performance standards for efficiency gains resulting from co- generation, I will watch closely over the coming two years to learn who participates and what kind of efficiency gains result, and to consider changes to the provision. It is my expectation that the program will only assist projects that will reduce energy consumption and pollution below business-as-usual levels. Third, while the bill is absolutely clear on this point, I want to reiterate that nothing in the bill exempts small businesses that participate in this program from compliance with all local, state and Federal permitting requirements, and public health and environmental standards. Senator Enzi hopes that this language will help facilities add co-generation capacity, increase efficiency, save fuel, save money and reduce pollution, and I can support that goal. I want to thank my friend from Wyoming for working with me on his amendment, recognizing my concerns and finding acceptable language. I also incorporated a proposal by Senator Bond to sunset the program after two years, and a study of the program's usage to help Congress assess the merits of reauthorization. I preferred to establish a permanent program because, based on past experiences, I firmly believe our energy problems will persist for more than two years and the assistance should be available to small businesses when they really need it rather than waiting for Congress to act again. However, Senator Bond and I try very hard to work in a bi-partisan fashion, so I have agreed to the two-year sunset date with every intention of reauthorizing this program if it proves successful in helping small businesses. I would like to add that I expect the SBA, when it reports to our Committee on the program, to include as much information as possible about loans approved for small businesses to convert their energy systems to use co-generation or urban waste. The purpose of Senator Levin's proposal was to encourage less pollution and less fossil fuel consumption, not more, which I fully support, and I plan to monitor any relevant projects. Lastly, I would like to comment on the Congressional Budget Office's cost estimate of this bill, which will be published today. While I understand that CBO uses very conservative assumptions in its estimates in general, I question its cost estimate of this particular bill. I do agree with CBO that this program is genuinely needed and that small businesses in many parts of the country will apply for these loans. However, I question the assumption that the number of economic injury loans SBA makes will jump from the current level of 1,000 per year to 10,000 per year. If they do, it will only reinforce the need for this assistance, and not be an argument for opposing this program, but the projection seems on the high side. And I disagree with CBO's assertion that ``many borrowers are likely to rely on such loans to invest in physical assets that could help cover the cost of energy bills.'' The legislation does allow small businesses to use the proceeds of SBA economic injury disaster loans for converting their systems to alternative or renewable energy sources, but they are not eligible for a loan unless they have also suffered significant economic injury due to the significant increase in energy prices and can't meet their financial obligations. While the loan proceeds may be used for such purposes if they convert to renewable or alternative energy systems, I believe the primary use of the loan proceeds will be to provide small businesses with working capital to meet their increased financial obligations. CBO's assumption, which I believe to be misguided, drives up the cost estimate of this program. I thank my colleagues for their input and cooperation. I believe it made the Small Business and Farm Energy Relief Emergency Act a better bill for those who need the assistance. This legislation will help those who have nowhere else to turn. We've got the tools at the SBA and USDA to assist them, and I believe it's more than justified, if not obligatory, to use disaster loan programs to help these small businesses. Further, by providing assistance in the form of loans which are repaid to the Treasury, we help reduce the Federal emergency and disaster costs, compared to other forms of disaster assistance, such as grants. I urge my colleagues to support this legislation. SBA's programs make recovery affordable for small business owners, and with the right support, can help mitigate the cost of significant economic disruption in your states caused when affected small businesses falter or fail, leading to job lay-offs and unstable tax bases. I also ask our friends in the House to act quickly and to support this legislation. Again, I thank Congressman Tom Udall for his leadership on this issue in the House, and I thank his colleagues Congresswoman Sue Kelly, Congresswoman Grace Napolitano, and Congressman Mark Udall for their early support of this legislation.

Mr. KERRY

Mr. KERRY. Mr. President, I am disturbed by the Bush Administration's announcement last week that he will eliminate the American Bar Association's essential role in reviewing and providing advice on the qualifications of potential judges before those nominations are sent to the Senate for confirmation. For the past 53 years the American Bar Association has played a critical role in the judicial nominations process by evaluating potential candidates, first for the Senate in 1948, and then in 1952 for President Dwight D. Eisenhower and his eight successors, Democrat and Republican. The ABA's 15-member Standing Committee on Federal Judiciary has examined the candidates' experience and legal writings and then confidentially interviewed judges and lawyers who have worked with the candidates in order to assess their professional reputation. President Eisenhower's motivation for seeking the ABA's recommendations is precisely the reason I am disturbed by the Bush Administration's move to skewer the ABA's role in screening new judges: President Eisenhower sought to insulate the judicial nomination process from political pressures by inviting the American Bar Association to give him ratings of candidates' professional qualifications. Over the years the ABA's assessments of judicial nominees have been invaluable, and I for one do not support the Bush Administration's retreat from injecting more, not less, information about the competency, temperament, and integrity of the potential judges into the nominations process. Until this year, the bar association has been given advance word from the administration on potential judges. The ABA's special team of lawyers has been able to analyze the candidates' career, assess their professional reputation, and rate the prospective nominees as qualified, well qualified, or not qualified. This process is totally confidential and enables the colleagues of nominees to answer the questions fairly and honestly. The White House's decision not to release the names of potential judges to the ABA before they are announced to the public is a tragedy. The nomination process will be severely impaired by President Bush's decision. With this move, the President has lost the opportunity to learn as much as possible about nominees early on in the nominations process. What I fear most and what I believe will happen is that public confidence in the judicial nominations process will fade. And I'd point out, that confidence in the judicial system and in the objectivity of the court is imperative in the wake of the 5-4 Supreme Court ruling that determined the outcome of the last Presidential election. I would expect President Bush to work diligently to disabuse the country of the notion that the law is a subset of politics, not serve to reinforce that impression. It is my belief that President Bush's decision signals a retreat from impartiality in the judicial nomination process. No longer will the President be troubled with the objective recommendations of the ABA, but will be free to nominate whichever candidates pass political muster. The ABA vetting process is important to reassure the public that selecting judges for the federal bench is not just the work of a small inner-circle of politicians and advisors who are looking for a person of a certain political persuasion. The White House legal team has already interviewed nearly 60 lawyers for new judgeships and has done so without consulting the ABA. Most of the interviews undertaken so far have been for the 29 vacancies on the courts of appeal, which as you know Mr. President, is the level just below the Supreme Court. I don't want to return to the days before the ABA was brought into the process to make it more fair and objective, but I fear that's exactly where we have ended up.

Mr. KERRY

Mr. KERRY. Reserving the right to object, Mr. President, I would like to ascertain how much time remains and how much time might be available.

Mr. KERRY. Mr. President, I thank my colleague. The impact of this amendment and the fundamental unfairness of it are so obvious and so patently clear. What this tries to achieve doesn't necessitate a raising of voices or even an angry response, although I think there are plenty of Members who feel offended by what it seeks to do. The purpose of this McCain-Feingold legislation is to try to create a fair playing field. ``Fair'' is not a word we hear a lot applied to the standards which our colleagues on the other side seem to seek in this. But ``fair'' means you try to achieve parity to the best degree possible between both sides' potential supporters, those who give to us. What is extraordinary to me is what is being sought here is effectively the silencing of the capacity of organized labor to be able to participate with a fig leaf, a pretense about corporate responsibility and shareholder obligations. There is nothing in the terminology of the legislation in the way it has been set forth that actually creates any equality at all between shareholders and union members who, I might add, are a completely different concept altogether. After all, I think it is understood there are certain laws that apply to unions--to union participation, the Beck law, to the rights of union members, to union democracy, election of leaders, the way in which they participate--which are completely different from the role of shareholders and the way shareholders participate. More importantly, look at the basic numbers. Corporations outspent unions in political activities in the last election 15-1. Even if you accept the argument of some Republicans that unions tend to predominantly be supportive of Democrats, which might incidentally illicit some thinking on their part about why it is that happens, but with ergonomics in the past week and other attacks, I think we can understand that differential, but even if you were to split the corporate contributions--because some corporations do, indeed, also give to Democrats--and you took only 8-1 or 7-1, you are looking at a level of expenditure that so far outstrips the participation of unions that the real objection of some of our colleagues is not the money; it is the fact that people, voters, actually go out and get engaged in the system in a way that shareholders don't. What they are trying to do is legislatively strip away the capacity of those people to be able to participate to the full extent of our democratic process. The Supreme Court of the United States made it clear in Communication Workers of America v. Beck--in the Beck decision--when it said that unions can't, over the objection of a dues-paying nonmember employee, spend funds collected from those activities unrelated to collective bargaining. They cannot use that money in politics already. That decision has been properly codified in this legislation by Senators McCain and Feingold. Here we are codifying Beck and restricting the capacity of the nonmember employee, dues-paying employee. What the legislation seeks to do in reading several sections of it, sections (B), (C), and (D) of section 1, is show it is specifically targeted to internal and external communications relating to specific candidates. That is the kind of communication that takes place in the union. It doesn't take place among shareholders. Internal disbursements, to operate and solicit contributions-- likewise, not a shareholder participation. Voter registration drive, et cetera. What it specifically seeks to do is restrain those activities which our colleagues don't like because they are participating in the process, and it doesn't achieve parity with the corporate sector--and, I might add, places a burden on the corporate process, which is absolutely not workable. I don't see how it is possible for corporations to make the kinds of divisions that are called upon in this legislation. It would require a constant tracking of new shareholders, a constant recalculation of their ownership stakes. Shares are traded daily on the stock market. Corporations would have to collect and process spending authorization from those daily changing shareholders. And, finally, the corporations would have to pay additional dividends or other financial benefits to shareholders who refuse to authorize corporate and political legislative spending. It is completely unworkable on the corporate side, but it is not meant to be workable. It is clearly meant to be a restraint on the capacity of a voluntary association under the Constitution to be able to participate in the electoral process in a way not denied to any number of other groups in our country. I think our colleagues ought to join together because this is an amendment calculated to try to undo the McCain-Feingold concept, and particularly calculated to establish a playing field that is not level.

Mr. KERRY. I thank the Chair and hope my colleagues will support this voluntary opportunity that the Senator from Minnesota offers.

Mr. KERRY. I thank the Chair. Mr. President, let me begin my comments by making it as clear as I can that I am a strong supporter of the McCain-Feingold legislation. I have had the pleasure of working with both of them through the years on campaign finance reform. I want McCain-Feingold to pass the Senate and ultimately be signed into law. But let me also make it equally as clear to my colleagues and all Americans who are focused on and care about this issue that what we might achieve, if we pass McCain-Feingold, is only a small step towards what we ought to be trying to do in this Congress. The fact is that even if we pass McCain-Feingold, all that we would have achieved is a reduction--it is not all, but it is significant and it is important--in the soft money flow to our campaigns through either corporate contributions or private contributions. Nothing in McCain-Feingold is going to restrain the arms race of fundraising in the United States. Nothing in McCain-Feingold is going to restrain ultimately the dependency of people in Congress to have to go out and ask people for significant amounts of money in total-- because of amounts of money that you can give Federally--hard money up to the $25,000, which may well be lifted in the course of this debate-- people who have $20,000, $25,000, or $15,000 to make in a contribution will have far more capacity to be able to affect Federal campaigns than the average American citizen. I do not know if my colleagues are aware of this, but almost all of the soft money that was contributed in the last election cycle for both parties came from about 800 people. Obviously, those 800 people have the capacity to be able to put up larger Federal contributions or match Federal dollar contributions. What the Congress ought to be doing and what we ought to be focused on is how to put the greatest distance between each of us in the fundraising and create the greatest proximity between each of us and the people who vote for us or who are asked to vote for us. The Senator from Kentucky said earlier in this debate that this amendment by Senator Wellstone, myself, and Senator Cantwell is a bad idea because it would tell the States how to run a Federal election, or it would take our campaigns--I think was the language--and prevent the States from somehow living by the rules that the Federal Government has set up or espouses. Nothing, again, could be further from the truth. First of all, it is not our campaign. It is the voters' campaign. This election belongs to the voters of each of our States. How presumptuous of us to stand here and say we should deny the voters of our States the right to elect us the way they might like to elect us. Moreover, this amendment is purely voluntary. No Member of Congress is compelled to go with the system even if a State requires it. So it is really only a half preemption. It is a way of saying to those 24 States--almost half the States in the Union; among them the State of the Senator from Kentucky. They have already adopted some form of public financing. Every one of those States has decided they do not want special interests governing the elections. They want to reduce the election process to the simplest connection between candidate and voter. I am pleased to say that ever since I ran in 1984--the first time for the Senate--I have been able, thus far, to run without taking the larger conglomerate funds, the PAC money funds. I think I am the only Member of the Senate who has been elected three times without taking PAC money. I am proud of that. That is not because PACs are inherently evil or a bad part of the process. I think it is fine under the Constitution for people to come together and give money jointly through a PAC. The problem is, when it is conglomerated the way it is, in the amounts that it is, it leaves our fellow citizens with the perception that the system is up for grabs; that the money is what controls the elections of our country. Senator John McCain, in the course of his Presidential campaign, elicited from his countrymen and women a great sympathy for that notion. Part of what propelled that campaign was people's conviction they do not get to control what happens in the Senate and the House of Representatives, but the large money has more control over what happens here than their conglomerate votes they express on election day. What the Wellstone-Kerry-Cantwell amendment seeks to do is simply give a choice to States. If you are a conservative and you believe in States rights, here is the ultimate States rights amendment because what we are saying is that a State has the right to offer to its candidates a different way of getting elected. And if the candidate for Federal office wants to take advantage of that, they may. It does not require you, there is no mandate, any person in the Senate who wants to go out and rely on their amounts of money they can raise can do so. But it gives to the State the right to put that as an offering to those who run. Why is it that we should stand here and take ownership of the campaign away from the people who elect us, and deny them the right to say they would like to see the races for the House and the Senate run by the same standard that we run our race for Governor and for our local legislature? As I said earlier, nothing in McCain-Feingold will ultimately resolve the terrible problem of Senators having to raise extraordinary sums of money. The reason for that is we are still going to have to go out and raise tens of millions of dollars, except it will be without soft money; it will be so-called hard money. Let me say to my colleagues, they will still--each of them--be completely subject to the same kinds of questions that exist today about the linkage of money and politics. The only way we will ultimately divorce ourselves from that perception which leads most Americans to believe that this whole thing is somehow out of their reach and out of their control, and that it is gamed and they cannot really make a difference--the only way you will affect that, ultimately, is to adopt some form of public financing. I know the votes are not here today. I know too many of my colleagues are comfortable with the status quo. I know we cannot win that vote in the Senate today. But that does not mean we should not put it in the debate. And it does not mean we should not require a vote because the real test of whether or not people want our democracy to work is whether or not we are going to do the most we can, in a most reasonable way, to separate ourselves from the fundraising that is so suspect and that taints the entire system. I respectfully suggest to my colleagues that a voluntary system--once again, purely voluntary; no challenge to the first amendment at all; no mandate whatsoever; no constitutional issue --simply a voluntary system that would allow a candidate to go for matching money, in the same way that we do in the Presidential race, and have done for years--and, I might add, contrary to what the Senator from Kentucky said, with great success--even President George W. Bush in the general election took the public funding. He ran for President of the United States with public money. Bob Dole ran for President of the United States with public money. President George Bush first ran with public money. President Ronald Reagan ran with public money. Why is it that if it is good enough to elect a President of the United States, it should not at least be voluntarily available to those who run for the Senate? The reason is too many of my colleagues know that might put the opposition on an equal footing with them. Too many of my colleagues are comfortable with the system where they can use the incumbency to raise the large amounts of money and not allow for a fair playing field that enhances the democracy of this country. That is why the Senate has more than 50-percent membership of millionaires--because most people in this country cannot afford to run for the Senate. That is how our democracy in this country is, in fact, distorted. We do not have a true representation in the so-called upper body of America because too many people cannot even begin to think about running for office in this country. Last time I ran in the State of Massachusetts, the Governor of the State, a Republican, joined with me in putting a limit on what we would spend. We voluntarily agreed to no independent expenditures. We voluntarily agreed to no soft money. We voluntarily agreed on a total limit of how much we would spend in our campaign on the ground and in the media. The result of that was, we had nine 1-hour televised debates. And in the course of those nine 1-hour televised debates--in the course of all the free media--the people in the State were able to hear a debate about Social Security, a debate about Medicare, a debate about health care, a debate about the economy; and they ultimately made a decision. I say to my colleagues, I warrant that 95 percent or 100 percent of the dollars we spent on paid advertising--which were equal amounts--was a complete wash, a mishmash that ultimately did not affect the outcome. We are hocking the Congress of the United States to our fundraising efforts in order to be able to run paid advertisements that result, generally speaking, in a clouding of the issues, not a shedding of light to people about what these issues are really about. The only way to stop having Americans ask about the influence of money is to adopt the greatest division between us and the influence of the money. And that will come through some form of public financing. I will be speaking more about this in the next few days. I will be offering an amendment to this bill that tries to go further than what we currently have on the table. I know the reason Senators McCain and Feingold have settled where they are is because this is the best chance we have for the votes we have today. But that does not mean the Senate should not be called on to debate and vote on an issue that ultimately will be the only way out of this morass that we find ourselves in. I think my time has expired.

Mr. KERRY. Mr. President, 12 minutes.

Mr. KERRY. Mr. President, could I suggest perhaps we allow the Senator from Washington to begin speaking and arrange the time?

Mr. KERRY. Mr. President, I ask unanimous consent that, after the Senator from Washington, I be permitted to speak for 10 minutes and we have the vote at the conclusion of that amount of time, and allowing for the time for the use of the Senator from Kentucky as the manager on his side.

Mr. KERRY. Could I ask for 12 minutes?

Mr. KERRY. How much time remains on our side?

Mr. KERRY

Mr. KERRY. Mr. President, the Bankruptcy Reform bill we are voting on today has a valid, uncontroversial and necessary purpose. It is intended to curb bankruptcy abuse and ensure that those who can afford to pay their debts, do pay their debts. And I would say to you, Mr. President, if this were--all about those goals--if this were a debate about personal responsibility--there would be a very different dialogue in the United States Senate and it would have given us a very different bill than the one we're voting on today. But Mr. President the bill we are voting on is seriously flawed and will harm innocent debtors who are genuinely in need of the protections and ``fresh start'' that bankruptcy procedures are intended to provide. It is for that reason that I must vote against this bill. During the 106th Congress, I voted in favor of the Senate bankruptcy bill, because I believe that we need to reform the system and curb abuse. I had some serious reservations about that bill and had hoped that many of the concerns I had at that time would be addressed in conference. Unfortunately the conference bill, like the bill we are voting on today, did not target only those who abuse the bankruptcy system. What we needed during the 106th Congress, and what we need now, is bankruptcy reform that does not lump together those who need the protections of bankruptcy with those who abuse the system. We must absolutely prevent the abuse of the bankruptcy system by the millionaires whom we know have received the protections of the bankruptcy system despite their ability to repay their debts. But even beyond the flagrant, high profile abuse of the bankruptcy system that we have read about in the papers, we must also be sure that every consumer acts responsibly and does not charge meals, vacations and clothes that he can't afford, only to turn to the bankruptcy system to bail him out of his debt. At the same time, we must not forget that a fresh start in bankruptcy serves a valuable purpose for many individuals who truly need its protections. When an individual gets into financial trouble because, for example, she has catastrophic, unforeseen medical expenses, it is better for her, for her creditors and even for society as a whole if she is given the opportunity to have her debts discharged and is given a fresh start. The alternative is that the innocent but unlucky debtor may have as much as 25 percent of her wages garnished by her creditors. Most people live paycheck to paycheck and would be put in serious financial trouble if their paychecks were reduced by that much. In those circumstances, consumers have no choice but to cut back on other, important expenses. They stop paying for their auto insurance and health insurance. They deplete any savings they might have and stop contributing to their retirement accounts. This is a perverse result that doesn't benefit anyone and certainly should not be the outcome of our efforts to reform the bankruptcy system. As you know, this bill implements a means-testing system that would create a presumption that a Chapter 7 bankruptcy, or fresh start bankruptcy, should be dismissed or converted to a Chapter 13 reorganization if a certain financial formula is satisfied. The means test applies an IRS standard to determine whether a case should be dismissed or converted. The IRS standard is inflexible, and it provides no room for a bankruptcy judge to determine whether the circumstances that led to the debtor's financial situation warrant treatment under Chapter 7. A father with a sick child is treated the same way as a reckless spender who ran up his credit cards on luxury items. Judges should have some discretion to distinguish those situations and exempt from means-testing debtors who, due to circumstances beyond their control, have come to the court to ask for the protection bankruptcy is intended to provide. The purpose of the means test is to ensure that more individuals file in Chapter 13 and therefore pay off more of their debts. That sounds like a laudable goal. But it is likely to fail. Simply because more people are forced into Chapter 13 plans does not mean that they will be able to successfully complete those plans. Even under the current system, only a third of those who file for Chapter 13 successfully complete their plans. Simply funneling more individuals into Chapter 13 does not in any way guarantee that more debts will be paid off. Finally, the means test imposes financial disclosure requirements that put significant burdens on all debtors, not just the ten percent or fewer whom experts say abuse the system. Under the means test, everyone who files for bankruptcy must engage in more preparation, more paperwork and more attorney and other expenses prior to filing for bankruptcy, leaving fewer assets to distribute to creditors. A narrowly targeted reform bill designed to reduce abuse of the system would have provided bankruptcy judges with the discretion to dismiss or convert a case to Chapter 7, but would not have mandated it. It would have provided creditors the opportunity to ask for a dismissal or conversion, but would not have put the burden on every filer to prove that he or she deserves the protections of Chapter 7. This bill simply fails to take that reasonable, targeted approach toward curbing abuse. In its attempt to thwart abuse of the system, the bill we are voting will also result in some innocent debtors losing their rented homes and apartments. Current bankruptcy law allows individuals in bankruptcy to remain in their apartments as long as they keep paying their rent while the bankruptcy is pending, and as long as they repay any unpaid rent. A landlord must go to the bankruptcy court for permission to evict tenants who have filed for bankruptcy. There is no question that some tenants will abuse this provision, and withhold rent while gambling on the fact that the time and expense of going to bankruptcy court will prevent the landlord from getting permission to evict the tenant. This bill, which allows landlords to evict debtors without going to bankruptcy court, punishes the innocent tenant who is paying his rent while it attempts to get at those who abuse the system. And once again, the answer lies in more narrowly targeting reform. We simply need to make it easier and less expensive for a landlord to evict a tenant when that tenant has failed to pay his rent. It is not necessary, nor is it good public policy, to allow a landlord to evict a tenant who is paying rent and who will pay back any debts owed. Perhaps one of the most disturbing parts of the bill is its impact on children. The bill's supporters claim that by moving child support claims from seventh to first priority in Chapter 7 cases, the bill ``puts child support first.'' What they don't say is that this provision is virtually meaningless and will help very few children. The reason is because few debtors in Chapter 7 have any assets to distribute to priority unsecured creditors, such as credit card companies, after secured creditors receive the value of their collateral. Therefore, this change would affect only the smallest number of cases. In addition, by forcing more debtors to file Chapter 13, more debt, including credit card debt, will have to be repaid. The result is that banks and credit card companies will be in direct competition with single parents trying to collect child support after bankruptcy. Once again, Mr. President, a bill that claims to reform the system may actually make it worse for those most in need. While this bill puts more burdens on the innocent debtor, it does not place more responsibility on the creditors who provide the consumers with the opportunity to take on increasing amounts of debt. A simple provision requiring credit card bills to state the length of time it would take and the interest that would be paid on the current debt if only the monthly minimum was paid would have provided real reform. Such a provision would have provided valuable information to consumers, and given them the tools they need to decide whether they can afford to take on any new debt. This bill, however, fails to include such a balanced reform provision. Instead, it includes an inadequate disclosure provision that would free 80% of all banks from any disclosure responsibility and place the burden of disclosure on the Federal Reserve for two years. After that time, it is unclear whether and how the consumer disclosure requirements would be maintained. This bill is not only detrimental to consumers, but it also hurts our small businesses. This effort to reform our bankruptcy laws will make it more difficult for entrepreneurs to start a small business and impose additional regulations and reporting requirements on small businesses who file for bankruptcy. I believe we must do everything possible to ensure the viability of small businesses and to assist in fostering entrepreneurship in our economy. It has been the Congress's long-held belief that regulatory and procedural burdens should be lowered for small business wherever possible. However, the Bankruptcy Reform Act fails to meet this challenge. Instead, this legislation promotes additional red tape and a government bureaucracy that we have worked to reduce for small business. Specifically, the provisions included in the Bankruptcy Reform Act impose new technical and burdensome reporting requirements for small businesses who file for bankruptcy that are more stringent on small businesses than they are on big business. Further, the bill will provide creditors with greatly enhanced powers to force small businesses to liquidate their assets. Any big business would have difficulty complying with these new burdensome reporting requirements. But think of the difficulties an entrepreneur or a mom and pop grocery store will have in complying with this dizzying array of new and complex reporting and other requirements. These small businesses are the most likely to need, but least likely to be able to afford, the assistance of a lawyer or an accountant to comply with these new taxing requirements. That is why during the consideration of this bill I offered an amendment to strike the small business provisions which will make it easier for creditors to force liquidations of small business during the bankruptcy process. Unfortunately, that amendment was not adopted. A limited number of provisions do help small businesses and family fishing businesses. The amendments that I offered last year to extend the reorganization plan filing and confirmation deadlines for small business are included in this bill along with a provision to include small businesses in the creditors committee. Those amendments help small businesses, but they cannot compensate for the greater burdens this bill imposes. Additionally, I am pleased that an amendment sponsored by Senator Collins and I which will extend Chapter 12 bankruptcy protections to our family fishermen has been included in the bill. Mr. President, small, family-owned fishing businesses are in serious trouble. Severe environmental factors such as coastal pollution, warmer oceans and changing currents have resulted in severely depleted fish stocks around the country. We are making progress in rebuilding stocks, however, the cost of this progress has been a steep decline in the amount of fishing allowed in Georges Bank and the Gulf of Maine. This in turn has made it much more difficult for fishermen in Massachusetts and Maine to maintain profitable businesses. This amendment Senator Collins and I sponsored will ensure that fishermen have the flexibility under Chapter 12 of the bankruptcy code to wait out the rebuilding of our commercial fish stocks without back- tracking on our conservation gains to date. It will help preserve the rich New England fishing heritage in Massachusetts without wiping out the fiercely independent small-boat fishermen. Despite those provisions, which I do believe improve the system, overall this bill does not provide for real bankruptcy reform. Mr. President, sponsors of this bill say it is necessary because we are in the midst of a ``bankruptcy crisis.'' There has been widespread and justifiable concern over the increase in consumer bankruptcies during the 1990s. There were more than 1.4 million bankruptcy filings in 1998. However, personal bankruptcy filings have fallen steadily since then, down to 1.3 million in 1999 and to 1.2 million last year. That is fewer bankruptcies per capita than there were at the time the bankruptcy bill was first introduced. I cannot help but think that had we enacted bankruptcy reform in 1998, the sponsors of the bill would have been taking credit for this downturn in bankruptcies. But without congressional intervention, bankruptcies have been on the decline. The reason, Mr. President, is simple. Lenders are profit- maximizing institutions which select their own credit criteria. If there is an increase in personal bankruptcies, credit card companies simply won't offer their cards to consumers who don't have the means to pay. The free-market thus corrects any upswing in bankruptcy. Although the free market will correct the over-extension of credit to those who can least afford it, the market will not address the small percentage of bankruptcy filers who abuse the system. We need legislation for that. But that legislation should be targeted; it should be narrowly crafted; and it should avoid punishing those who truly need and deserve bankruptcy protection. This bill does not do that, and I must vote against it.