John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, this has been a volatile time for our financial system and our economy. Hopefully, we will be able to agree on a short-term stimulus relief that will help families who are suffering and states meet their financial obligations. Next, we need to create new jobs by updating our infrastructure to help respond to the current challenges to our economy. I believe a first-rate American rail system is a critical part of the efforts to create jobs and expand our economy. It will also help make our air cleaner, ease traffic congestion, save families' money and time, and lessen our dependence on foreign oil. That is why today, Senator Specter and I are introducing the High- Speed Rail for America Act of 2008. Senators Lautenberg, Inouye, Brown, Stabenow, Feinstein, Dodd, Casey, Lieberman, Whitehouse, Clinton, Schumer, Snowe, and Menendez are cosponsors. This legislation provides a bold new vision of how we approach transportation policy to expand our economy and keep up with changes in our society. The High-Speed Rail for America Act of 2008 builds upon the Passenger Rail Investment and Improvement Act of 2008 which reauthorizes Amtrak and authorizes $1.5 billion over a five-year period to finance the construction and equipment for 11 highspeed rail corridors. I want to thank Senator Lautenberg for his leadership on reauthorizing Amtrak and making investment in high-speed rail a priority. Today, Amtrak's Acela train on the Northeast Corridor is capable of reaching 150 miles per hour. However, due to a lack of infrastructure improvements, the Acela train only travels at 150 miles per hour on an 18-mile stretch in Rhode Island and a 10-mile stretch in Massachusetts. We must make appropriate improvements to our railroad tracks and bridges to allow high speed rail to work properly. While the U.S. is investing heavily in other forms of transportation, our investment in world class rail is dwarfed by other countries. For example, Germany's federal government gives its states $8.9 billion a year for rail projects, France spends twenty times more per capita on rail than the U.S., and the Ministry of Railways in China invested $19.6 billion in rail in the first half of 2008 alone. That is why we need to provide a constant source of funding for investment in high- speed rail. The High-Speed Rail for America Act of 2008 will take our outdated and underfunded passenger rail system and transform it into a world class system. The High-Speed Rail for America Act of 2008 builds on the authorization of highspeed rail grants by providing billions of dollars in both tax exempt and tax credit bonds. It provides assistance for rail projects of various speeds. The bill creates the Office of High- Speed Passenger Rail to oversee the development of high-speed rail and provides a consistent source of funding. This office will ensure that we have the leadership to keep this mission on track. High-speed rail is often the fastest and most reliable way to get from downtown to downtown between most cities 100-500 miles apart. High-speed rail can save up to an hour per trip when compared to air travel and reduces trip time by more than 50 percent compared to driving. The legislation provides $8 billion over a 6-year period for tax-exempt bonds which finance high-speed rail projects which reach a speed of at least 110 miles per hour. This speed is often most practical for corridors of less than 100 miles or for less travelled routes which cannot justify the investment into world class high-speed rail traveling at 150 miles per hour. The High-Speed Rail for America Act of 2008 also creates a new category of tax-credit bonds: qualified rail bonds. There are two types: super high-speed intercity rail facility bond and rail infrastructure bond. Super high-speed rail intercity facility bonds will encourage the development of true high-speed rail. The legislation provides $10 billion for these bonds over a six-year period. Rail projects that reach a speed of at least 150 miles per hour will be eligible for these bonds. This would help finance projects including the proposed California corridor and make needed improvements to the Northeast corridor. Rail infrastructure bonds will fund projects approved by the U.S. Department of Transportation and be part of a State's official rail plan. The High-Speed Rail for America Act of 2008 provides $5.4 billion over a 6-year period for this type of bond. The Federal Rail Administration has already designated ten rail corridors that these bonds could help fund, including connecting the cities of the Midwest through Chicago, connecting the cities of the Northwest, connecting the major cities within Texas and Florida, and connecting all the cities up and down the East Coast. These are projects that are ready to go, but they need a source of financing. The need for a bold shift in the way we approach transportation is clear. Traffic congestion continues to worsen in cities across the country, creating a $78 billion drain on the U.S. economy with 4.2 billion lost man hours of work and 2.8 billion gallons of wasted fuel. Last year, domestic flight delays cost the economy $41 billion and consumed about 740 million additional gallons of jet fuel waiting on the ground. Passenger rail reduces congestion and is an effective alternative to highway and air transportation. Americans want alternatives--and we can deliver them. We must focus on making the transportation sector part of the solution to global climate change. The transportation sector accounts for approximately one-third of U.S. CO2 emissions--and automobiles make up 60 percent of that. Public transportation is an essential part of the solution to global warming. According to the American Public Transportation Association, public transportation reduces CO2 emissions by 37 million metric tons annually and saves the average American household over $6,000 annually. The demand for alternative forms of transportation is only growing. The number of people riding Amtrak surged by more than 13 percent in July 2008 from a year earlier--the most passengers carried in any month during Amtrak's 37 year history. Amtrak ridership set an all-time record for fiscal year 2008, achieving growth of 11 percent. As we look towards economic stimulus legislation next year, we must rethink the approach we have taken towards mobility in this country. Countries around the world have realized the benefits of high-speed rail and continue to build out their systems as we fall farther and farther behind. For far too long, we have not made adequate investment in our infrastructure. We cannot let this pattern continue. We have all heard the skeptics and cynics dismiss the idea of high- speed rail for decades, but due to high energy prices, increased passenger rail ridership, and the need to reduce greenhouse gasses, the time is ripe for a big change. Not only will this change create a modern and reliable transportation network in the Untied States, it will provide tens of thousands of good new jobs and help stimulate the sluggish economy. I pledge to continue fighting for the development of a modern high- speed rail system connecting the major cities across America, and I ask all my colleagues to support making this vision a reality.

Mr. KERRY

Mr. KERRY. Mr. President, this has been a volatile time for our financial system and our economy. Hopefully, we will be able to agree on a short-term stimulus relief that will help families who are suffering and states meet their financial obligations. Next, we need to create new jobs by updating our infrastructure to help respond to the current challenges to our economy. I believe a first-rate American rail system is a critical part of the efforts to create jobs and expand our economy. It will also help make our air cleaner, ease traffic congestion, save families' money and time, and lessen our dependence on foreign oil. That is why today, Senator Specter and I are introducing the High- Speed Rail for America Act of 2008. Senators Lautenberg, Inouye, Brown, Stabenow, Feinstein, Dodd, Casey, Lieberman, Whitehouse, Clinton, Schumer, Snowe, and Menendez are cosponsors. This legislation provides a bold new vision of how we approach transportation policy to expand our economy and keep up with changes in our society. The High-Speed Rail for America Act of 2008 builds upon the Passenger Rail Investment and Improvement Act of 2008 which reauthorizes Amtrak and authorizes $1.5 billion over a five-year period to finance the construction and equipment for 11 highspeed rail corridors. I want to thank Senator Lautenberg for his leadership on reauthorizing Amtrak and making investment in high-speed rail a priority. Today, Amtrak's Acela train on the Northeast Corridor is capable of reaching 150 miles per hour. However, due to a lack of infrastructure improvements, the Acela train only travels at 150 miles per hour on an 18-mile stretch in Rhode Island and a 10-mile stretch in Massachusetts. We must make appropriate improvements to our railroad tracks and bridges to allow high speed rail to work properly. While the U.S. is investing heavily in other forms of transportation, our investment in world class rail is dwarfed by other countries. For example, Germany's federal government gives its states $8.9 billion a year for rail projects, France spends twenty times more per capita on rail than the U.S., and the Ministry of Railways in China invested $19.6 billion in rail in the first half of 2008 alone. That is why we need to provide a constant source of funding for investment in high- speed rail. The High-Speed Rail for America Act of 2008 will take our outdated and underfunded passenger rail system and transform it into a world class system. The High-Speed Rail for America Act of 2008 builds on the authorization of highspeed rail grants by providing billions of dollars in both tax exempt and tax credit bonds. It provides assistance for rail projects of various speeds. The bill creates the Office of High- Speed Passenger Rail to oversee the development of high-speed rail and provides a consistent source of funding. This office will ensure that we have the leadership to keep this mission on track. High-speed rail is often the fastest and most reliable way to get from downtown to downtown between most cities 100-500 miles apart. High-speed rail can save up to an hour per trip when compared to air travel and reduces trip time by more than 50 percent compared to driving. The legislation provides $8 billion over a 6-year period for tax-exempt bonds which finance high-speed rail projects which reach a speed of at least 110 miles per hour. This speed is often most practical for corridors of less than 100 miles or for less travelled routes which cannot justify the investment into world class high-speed rail traveling at 150 miles per hour. The High-Speed Rail for America Act of 2008 also creates a new category of tax-credit bonds: qualified rail bonds. There are two types: super high-speed intercity rail facility bond and rail infrastructure bond. Super high-speed rail intercity facility bonds will encourage the development of true high-speed rail. The legislation provides $10 billion for these bonds over a six-year period. Rail projects that reach a speed of at least 150 miles per hour will be eligible for these bonds. This would help finance projects including the proposed California corridor and make needed improvements to the Northeast corridor. Rail infrastructure bonds will fund projects approved by the U.S. Department of Transportation and be part of a State's official rail plan. The High-Speed Rail for America Act of 2008 provides $5.4 billion over a 6-year period for this type of bond. The Federal Rail Administration has already designated ten rail corridors that these bonds could help fund, including connecting the cities of the Midwest through Chicago, connecting the cities of the Northwest, connecting the major cities within Texas and Florida, and connecting all the cities up and down the East Coast. These are projects that are ready to go, but they need a source of financing. The need for a bold shift in the way we approach transportation is clear. Traffic congestion continues to worsen in cities across the country, creating a $78 billion drain on the U.S. economy with 4.2 billion lost man hours of work and 2.8 billion gallons of wasted fuel. Last year, domestic flight delays cost the economy $41 billion and consumed about 740 million additional gallons of jet fuel waiting on the ground. Passenger rail reduces congestion and is an effective alternative to highway and air transportation. Americans want alternatives--and we can deliver them. We must focus on making the transportation sector part of the solution to global climate change. The transportation sector accounts for approximately one-third of U.S. CO2 emissions--and automobiles make up 60 percent of that. Public transportation is an essential part of the solution to global warming. According to the American Public Transportation Association, public transportation reduces CO2 emissions by 37 million metric tons annually and saves the average American household over $6,000 annually. The demand for alternative forms of transportation is only growing. The number of people riding Amtrak surged by more than 13 percent in July 2008 from a year earlier--the most passengers carried in any month during Amtrak's 37 year history. Amtrak ridership set an all-time record for fiscal year 2008, achieving growth of 11 percent. As we look towards economic stimulus legislation next year, we must rethink the approach we have taken towards mobility in this country. Countries around the world have realized the benefits of high-speed rail and continue to build out their systems as we fall farther and farther behind. For far too long, we have not made adequate investment in our infrastructure. We cannot let this pattern continue. We have all heard the skeptics and cynics dismiss the idea of high- speed rail for decades, but due to high energy prices, increased passenger rail ridership, and the need to reduce greenhouse gasses, the time is ripe for a big change. Not only will this change create a modern and reliable transportation network in the Untied States, it will provide tens of thousands of good new jobs and help stimulate the sluggish economy. I pledge to continue fighting for the development of a modern high- speed rail system connecting the major cities across America, and I ask all my colleagues to support making this vision a reality.

Mr. KERRY

Mr. KERRY. Mr. President, to protect and defend the economic health of our Nation and the security of the systems on which our prosperity depends, I am pleased that the Senate passed the Emergency Economic Stabilization Act last night. I call upon my colleagues in the House of Representatives to pass this legislation as soon as possible because I believe it will help restore confidence in our capital markets and our financial institutions. It will help our Nation avert serious economic dislocation that could have been the cost of inaction I want to take this opportunity to thank Majority Leader Reid, Senate Banking Committee Chairman Dodd and Senate Finance Committee Chairman Baucus for their efforts to include critical modifications to the proposed plan by Treasury Secretary Paulson and Federal Reserve Chairman Bernanke. This legislation we are considering today includes provisions that will protect the taxpayer, limit executive compensation, provide critically needed assistance to homeowners, and provide strong congressional and judicial review procedures. Without their efforts, I do not believe we would have been able to pass this critically needed legislation. Our Nation is facing its greatest economic crisis since the Great Depression. A series of financial institution failures and frozen credit markets have imperiled our economy. We need to take immediate action to restore confidence and help stop this threat and stabilize our financial system. Every American family is concerned about the economic situation we face. They are already facing rising gas prices, food prices, health care costs and college tuition. Many are wondering: How will bailing out Wall Street firms help me? The answer is we have to bail out Wall Street to protect Main Street. This will not be done without great expense to the taxpayers. However, I strongly believe that taking quick and decisive action is not only our best option it may be our only option. As we consider this extraordinary commitment on the part of the American taxpayer, we have to ask ourselves: What is the price of inaction? The ripple effect of the collapse of Wall Street's major financial institutions could develop into an economic disaster sweeping across the country. The stark reality is that without massive Federal assistance, our financial system could collapse. Small businesses would be unable to obtain financing and jobs would vanish. Families would be unable to borrow for new homes or to send their children to college. Retirement funds could plummet. Those are the stakes. The Emergency Economic Stabilization Act will provide up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets from financial institutions. Instead of giving all the funds at once, as requested by Secretary Paulson, the legislation gives the Treasury only $250 billon immediately. The bill requires the President to certify that the additional $450 billion are required subject to congressional disapproval. It requires the Treasury to modify mortgage loans whenever possible to help keep families in their homes. It requires companies that sell bad assets to the Government to give taxpayers the opportunity to share in their future growth. This will help offset the costs of this program. Finally, it includes meaningful limits on both executive compensation and ``golden parachutes''. This will help insure that not one dime of taxpayer funds will be used to pay the salary of CEOs who have abused the public trust and played a role in developing the economic crisis we face. American families must have confidence that the deposits they have in our banks are safe. Thanks to measures put in place during the Great Depression, deposits of up to $100,000 are guaranteed by the Federal Government. I am pleased this legislation temporarily raises the FDIC limit to $250,000. I think it will help small businesses, make our banking system more secure, and help restore public confidence in our financial system. The Emergency Economic Stabilization Act of 2008 also contains an important provision that will help hundreds of community banks throughout the country. Prior to the Federal Housing Finance Agency placing Fannie Mae and Freddie Mac into conservatorship, many banks had invested in Fannie Mae and Freddie Mac preferred stock. Unfortunately, the value of these shares was essentially eliminated due to the Government's action. These investments--standard means for the banking industry and the Government-Sponsored enterprises to provide and raise capital--have always been viewed as a conservative investment by financial institutions. These investments provided capital to Fannie and Freddie, and thus indirectly benefited the economy by helping Fannie and Freddie provide liquidity to the secondary mortgage market. Unfortunately, losses on these shares will have significant tax consequences for these banks, which will translate into fewer loans being made across the Nation. Section 301 of the legislation provides targeted tax relief for all banks holding Fannie Mae and Freddie Mac preferred stock by allowing institutions to treat the losses on these securities as ordinary losses for tax purposes. This temporary change will provide a vital tax reduction against ordinary income and preserve a portion of the capital lost due to the Government's actions with regards to the Government- sponsored enterprises. The bill is designed to give all banks--especially community banks-- regardless of size or organizational structure, ordinary tax relief for these holdings. I encourage the Secretary of the Treasury to work with Congress and the banking industry to ensure that all institutions have access to this relief. We have no guarantee that this program will fix this acute crisis. What we do know is that if Government does not step in to provide funding, we could hasten an economic meltdown. After this plan is enacted into law, we must take bold action to revamp our regulatory practices, fix the derivatives market, offer an additional economic stimulus for businesses, provide liquidity for small businesses and provide real assistance to families bearing the weight of the crisis. This will be a long process. I believe the moment has come to rethink the trend over the past generation toward deregulation of our financial institutions and capital markets. You can see it in the excessive use of derivatives to manage risk. You can see it in the reckless use of leverage by some financial institutions to finance ever riskier and more lucrative financial products. You can see it in our housing markets, where the concept of risk became our greatest undervalued asset. You can see it in the failure to require Fannie Mae and Freddie Mac to set aside the appropriate capital reserves. You can see it in the outrageous salaries that so many CEOs of troubled companies have earned in recent years which can be tied directly to the strategies they adopted that showed no respect for the risks they were taking with other people's money or to our Nation's economic future. This was a perfect storm: irresponsible lending, irresponsible borrowing and a lack of basic oversight and effective regulation put millions of families in homes they could not afford. Too many Americans took unreasonable risks to buy a home when markets were booming. Too many financial institutions lowered their lending standards but didn't plan appropriately for increased risk. At the same time, some borrowers inflated their incomes and misrepresented themselves in order to buy expensive homes that they could not afford. In 1994, I supported the Home Ownership and Equity Protection Act which gave the Federal Reserve the authority to prohibit unfair and deceptive lending practices. It took the Federal Reserve 14 years to implement regulations to stop abusive and deceptive practices which helped cause the housing crisis. Since 2000, I have been concerned about predatory lending and have supported legislation to stop the excesses that these lenders have too often hoodwinked homeowners into accepting. It stopped companies from imposing high-cost mortgages, included critical consumer disclosures, required creditors to assess the consumer's ability to pay, prohibited prepayment fees and penalties. This could have stopped many of the excesses we are paying for today from occurring in the first place. Unfortunately, this legislation did not receive any support from the other side. The damage has been staggering. Five million homeowners are either in default or in foreclosure and 10,000 more join them in foreclosure every day. Some economists warn that the spike in foreclosures could lower home values by 30 percent--when even a 10 percent decline takes $2 trillion in wealth from American homeowners. The loans financing these homes are now frozen on the balance sheets of banks and other financial institutions, preventing them from providing new loans. Today we are living the consequences: an economy teetering on the edge. It is obvious to every American that we need greater regulation of our mortgage markets and our lending practices. We must eliminate the unfair and deceptive practices that helped cause our current economic difficulties immediately. Another crucial ingredient in today's crisis is the use of complex financial derivatives. These complex financial maneuvers--hidden from the view of most Americans--have quietly become a crucial part of managing risk in our economy. In May, the Bank for International Settlements estimated that the total value of derivative contracts was approximately $600 trillion. To put this speculation in context: that is 200 times larger than the Federal budget. Derivatives are essentially bets on future economic behavior: financial contracts which can gain or lose value as the price of some underlying commodity, financial indicator or other variable changes. Unfortunately their rise to prominence in our economy was not matched with an increase in regulation or transparency. Warren Buffett has previously called derivatives ``. . . financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.'' The continuing uncertainty over derivatives has helped to bring about the recent freeze in our credit markets. For example, Bear Stearns was deeply involved in the financial derivatives markets. The Federal Reserve eventually provided up to $30 billion and convinced JP Morgan to purchase Bear Stearns because they feared its sudden collapse would produce a tidal wave of defaults around the globe. Also, since Lehman Brothers filed for bankruptcy, financial institutions and corporations have been unsure how to process and cover its derivatives and credit default swaps. Congress must consider and pass legislation to reform and manage derivatives. We must learn from the current crisis and develop safeguards that ensure that the failure of a financial institution which holds derivatives does not cause a freeze in our credit markets. The housing crisis also triggered a reassessment of other financial risks, including leveraged loans taken out by financial institutions to increase profits. This approach allows institutions to take much larger market positions which increases their profits but also increases their risk. In 2004, the Securities and Exchange Commission relaxed capital rules for investment banks which allowed these firms to increase their risks during good economic times. Unfortunately, some financial institutions were reckless in their use of leverage. Published reports say Merrill Lynch borrowed an astounding 44 times the size of its capital to increase profits. If you borrow 44 times your capital and your investments increase only 1 percent you have actually made a 44 percent profit. Unfortunately, the reverse is also true. Think about it: If you have $1 and you use it to borrow and invest $44, common sense tells you that if things go wrong, you will be in a world of trouble. Well, that is exactly what happened. These risky investments caught up to Merrill Lynch. They were bought out by Bank of America after facing bankruptcy earlier this month. We need to dramatically increase our oversight of all financial institutions and increase capital standards to insure companies like Merrill Lynch and Lehman Brothers can never again impact the U.S. financial system due to their risky business plans. The government sponsored entities, GSEs, particularly Fannie Mae and Freddie Mac and the FHA have played a critical role in expanding homeownership. However, like too many financial institutions, these organizations included subprime mortgage debt in their portfolios but didn't plan appropriately for the increased risk they had incurred. The Congress and the Bush administration also failed to require Fannie Mae and Freddie Mac to increase their capital requirements to adjust to the increased risks. As a result, the Bush administration was forced to put both Fannie Mae and Freddie Mac into conservatorship earlier this month at a cost of approximately $200 billion to the taxpayers. Back in 2004, I said that I expressed concern about governance and accounting problems at Freddie Mac and that I would support legislation that provides for strong, effective supervision and regulation of government-sponsored enterprises within a framework that assures their safety and soundness. During the 109th Congress, the Bush administration blocked the enactment of bipartisan legislation to reform Fannie Mae and Freddie Mac. Going forward, in order to stop the increasing numbers of foreclosures, we need the GSEs to continue their mission, within appropriate capital constraints, to help stabilize the mortgage markets. Executive compensation is another area that we need to address. We have all read about the outrageous salaries that many of the CEOs of troubled companies have earned over the past few years. Some have increased their pay by increasing the risks their companies take. I am pleased that Chairman Baucus of the Senate Finance Committee is pushing for changes in the Treasury proposal to prevent excessive compensation and golden parachutes for executives who sell troubled assets under the Treasury program. CEOs, who abused the public trust and played a role in developing the current economic crisis and are now asking to be bailed out, will not be able to receive severance packages or excessive salaries. Taxpayers will not subsidize their excessive salaries. When you add it all up, the financial crisis is a result of failures over the past generation to provide appropriate regulation and supervision of the financial services industry. Over the past 8 years, however, what was effectively a trend toward deregulation turned into a stampede. The Bush administration and others in Congress have consistently railed against oversight and accountability during the last 8 years; now taxpayers are forced to clean up this administration's mess. So I urge my colleagues in the House of Representatives to come together to support the Emergency Economic Stabilization Act that will help protect our vital national interest in the continued health of our economy. Next, we need to come together as a nation to help those who have been hurt by the economic crisis and to finally respond to the structural problems that have brought us to this point.

Mr. KERRY

Mr. KERRY. Mr. President, Senator Ensign and I would like to engage in a brief colloquy with the distinguished chairman and ranking member of the Finance Committee, Senators Baucus and Grassley, regarding legislation we have sponsored to fix an archaic provision in the Tax Code that adversely affects employees and businesses across the country. Under a little-noticed provision added in 1989, cell phones, blackberries, and similar devices are treated as ``listed property.'' As a result, employees must keep detailed records of all calls made on their employer-issued cell phones--indicating whether they are personal or business-related--or have the value of the phone and phone service included as taxable income. The current law provision was added at a time when cell phones were considered a luxury item. Now, they are a common and necessary part of conducting everyday business. Imposing strict substantiation requirements on the business use of cell phones and blackberries is burdensome and highly impractical given their frequent use in a fast- paced global environment. To protect tens of thousands of employees and their employers from potential audits and tax liability, we should pass legislation as soon as possible next year to fix this problem.

Mr. KERRY. Senator Ensign and I want to thank the distinguished chairman and ranking member of the Finance Committee for their willingness to work with us to address this important problem.

Mr. KERRY

Mr. KERRY. Mr. President, on behalf of Senator Snowe and myself, I rise today to express our concern that the Small Business Administration has taken steps to hide from public view the details of one of the largest lending scandals in that agency's history. As chairman and ranking member of the Senate Committee on Small Business and Entrepreneurship, we take our oversight role of the SBA seriously, and we believe that transparency is vital to a well-functioning government. On July 11, 2007, the SBA's Office of Inspector General issued a report on the agency's oversight of Business Loan Center, LLC, otherwise known as BLX. That report was not made publicly available until October of the same year, in a heavily redacted form. BLX was one of SBA's largest 7(a) lenders when the $76 million in fraudulent loans it made was exposed in January 2007. An OIG investigation regarding allegations of the fraudulent loans helped lead to the arrest of a BLX executive vice president and 18 other individuals, who were not BLX employees. OIG followed up the investigation by releasing the report on SBA's oversight of BLX. Despite the obvious need for more, not less, transparency of SBA's oversight activities, when the report was made publicly available in October of that year, it was heavily redacted and virtually useless to the public in trying to determine what the SBA is doing to address the multimillion dollar loan fraud that took place under its watch. To further underscore the damage that took place, it is important to note that, in the time that has elapsed since the report was issued, BLX--now called Ciena Capital has declared bankruptcy. According to the company, it will continue to manage its assets as a ``debtor in possession'' under the jurisdiction of the bankruptcy court. However, we are still concerned that the former BLX will not fulfill its obligations to the SBA and the American taxpayer, in turn. Even so, as detailed in hearings on SBA lender oversight, our committee remains very concerned by the number and breadth of the redactions of the BLX report. At the lender oversight hearing on November 13, 2007, then SBA Administrator Steven Preston promised to work with the committee to make more of the report publicly available. To date, there has been no agreement on a meaningful release of redacted material. In the context of conducting oversight, it has become apparent to the committee that the OIG did not exercise independent authority on what was redacted and instead let the agency it was investigating dictate that large sections of the report be redacted. This is contrary to the usual process that occurs with SBA OIG reports. Of the 15 reports that the OIG has released this year, there have been none with a volume of redactions even close to those in the BLX report. Of the 30 reports OIG issued in 2007, only 3 reports have a comparable amount of text redacted and those are all reports regarding agency information security. In this statement, I will bring to light the OIG's first three recommendations to the SBA and a summary of the SBA's comments on the recommendations, which were redacted in the publicly released report. There is nothing in this material that should have been withheld. In fact, on August 3, 2008, the New York Times reported in an article that revealed the substance of the three redacted recommendations that ``With the American taxpayer assuming responsibility for all manner of bad loans made by reckless lenders, it's puzzling that a scathing 2007 audit of the Small Business Administration's oversight of one of its top private lenders remains hidden from view.'' Additionally, even if there had been a reason to withhold this information, the public interest would outweigh that. Given the crisis in the credit market, it is more important than ever that the public have confidence that SBA can handle its lender oversight responsibilities. The redacted portion is a recommendation on how to go forward in improving SBA's lender oversight and is illustrative of a process that broke down in this instance and needlessly made information confidential without due consideration. According to both the SBA's Office of General Counsel and the OIG, the SBA followed a preemptive Freedom of Information Act process when preparing for the public release of the BLX report. At its heart, the FOIA is a disclosure statute, with certain outlined exemptions. Indeed, although FOIA responsiveness has been problematic at best under the Bush administration, it has at least recognized FOIA's importance on paper as a tool to increase accountability of Government. As is stated in former Attorney General John Ashcroft's FOIA memo of October 12, 2001, which set the policy standard for FOIA compliance for the Administration: ``It is only through a well-informed citizenry that the leaders of our nation remain accountable to the governed and the American people can be assured that neither fraud nor government waste is concealed.'' Unfortunately, discussions with the OIG and OGC make clear that neither office fully evaluated each redaction with the above-mentioned guidance in mind. The OIG faced a large number of requested redactions from the OGC and, rather than challenge the OGC on them, simply decided to release the report with SBA's huge number of requested redactions intact. The OGC expressed surprise the OIG did not push back more on their requested redactions and seemed to have clearly acted on the instinct to ask for more redactions they expected to have made. The end result was a report that did nothing to increase transparency of Government and was virtually useless to the public. As I mentioned earlier, the treatment of this report is in stark contrast to that of other OIG reports, which tend to have few redactions. Indeed, the followup report on lender oversight that was released by OIG in May 2008 had comparatively few redactions. However, in the BLX report, the redactions were so severe that the OIG felt compelled to write a summary as a cover page because the extensive redactions made the report difficult to understand. Without question, the nature of this report also contributed to the number of redactions, since it concentrated on SBA's oversight of one company. Even so, a more thorough process would have undoubtedly resulted in far fewer redactions being made to the public version of this report. That said, Senator Snowe and I would like to see the OIG write reports in a manner that allows for the maximum availability of information for the public whenever possible. The redacted passages that the committee is making public, in accordance with both Senate and committee rules, are those that the committee believes will be the most useful to the public and that were redacted under privileges that, given the passages themselves, are outweighed by the public good that can be gained by their disclosure. The SBA asserted that the first three recommendations and the summary paragraph in its response should be redacted due to the ``deliberative process privilege,'' and for the first recommendation they also included the bank examination FOIA exemption and privilege. The deliberative process privilege is exemption (b)(5) of the FOIA and covers ``inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.'' It traditionally covers the advice, recommendations and subjective evaluation that agency staff make in the performance of their duties. In this case, the public can see from the release of this information how the SBA and its OIG were interacting in the investigation of SBA's failed oversight of BLX, a lender making Government-backed loans. Regarding the ``bank examination'' FOIA exemption (b)(8) and privilege claim, that exemption only pertained to a portion of recommendation No. 1, for which SBA indicated it believed it could approve the release of an unredacted version. SBA claims that the deliberative process privilege exemption applies because the OIG is a part of the agency. However, we believe that applying the exemption to the OIG--which is an independent office created within the SBA by law to conduct and supervise audits, inspections, and investigations relating to SBA programs and supporting operations; and to detect and prevent waste, fraud, and abuse--in the blanket manner SBA has done has the potential to render the OIG useless. If the deliberative process privilege exemption is as broad as SBA asserts, then the recommendations in the reports that preceded this one, as well as the two recommendations in the BLX report it did not redact, should have also been redacted. If that were the case, there would be virtually no use in having an OIG. We are very concerned that the SBA's actions in redacting key information and recommendations in the BLX could undermine the future authority and efficacy of the OIG. The OIG is an independent office created within the SBA by law to conduct and supervise audits, inspections, and investigations relating to SBA programs and supporting operations; to detect and prevent waste, fraud, and abuse; and to promote economy, efficiency, and effectiveness in the administration and management of SBA programs. According to the SBA Web site, the SBA inspector general ``keeps the SBA Administrator and the Congress fully informed of any problems, recommends corrective actions, and monitors progress in the implementation of such actions.'' To resolve this situation, the committee has engaged in staff discussions with OIG and OGC with the intention of coming to an agreement with the OGC on additional portions of the report that could be released. However, OGC has simply not been responsive. Even when made aware of the committee's concern about the adequacy of its response, in subsequent followup by the committee, OGC did not address critical issues and did not agree to make any new releases of information. It also continued asserting Executive Privilege which, as the committee has previously pointed out, must be, and has not been, asserted by the President personally. Therefore, to put an end to this matter, the committee is putting on the record some information that was withheld to serve as an example of a process gone wrong that prevented accountability in Government by keeping from the public information about the oversight capabilities of an agency that, though comparatively small, can have a huge impact on our economy. BLX made over $76 million in fraudulent Government-backed loans despite SBA's oversight of their lending activities. More transparency, not less, is called for to explain to the American people what happened and how it will be prevented in the future. Without objection, I ask to have the redacted portion of the OIG's recommendations printed in the Record.

Mr. KERRY

Mr. KERRY. Madam President, I am still trying to process the statement of my good friend, Senator Graham, about everything he learned in the liquor store. I know him well enough to know he learned a lot more than that, and he practices it well. He promised me to sit down and define precisely what he did learn. I listened carefully to a lot of our colleagues. Obviously, there is an extraordinary amount of anger here, and that anger runs deep all across the country, and it ought to run deep. It is hard to convey to some of our fellow citizens the degree to which a lot of us share that anger. There is a stunning trail here of lack of accountability, of arrogance in the marketplace that literally built a kind of Ponzi scheme, a house of cards, out of greed. There is a stunning trail of ignored advice to people in positions of responsibility who could have done things. And there is a shocking trail of regulators who are in position, who have the authority, and who didn't use that authority. All of this we know as we come here tonight. But the fact is, there are bigger stakes, and none of us has the luxury of standing around here sort of being angry and being frustrated. The truth is there is the potential of our financial system literally collapsing. That is not because Wall Street needs to be picked up and ``bailed out.'' It is because the liquidity crisis is preventing every-day businesses, community banks in local communities, small businesses that need to have working capital to make the purchase of the orders they need to fill. Everything is frozen. People are losing their earnest money on homes because the banks are not fulfilling the obligation. They are scared to lend. Cars are not being sold. It runs all the way down into the economy. The stark reality is if we don't act tonight, if we don't act immediately, and if we don't act with strength, that whole system can come grinding to a halt and many more people are going to be hurt to a far greater degree--savings accounts wiped out, retirement accounts wiped out, the ability to be able to retire when they expect it, sending kids to college, paying off college loans--a whole host of things. It is ugly that we are here. This is a distasteful vote. None of us likes this vote, but the fact is we have a responsibility to put our country, our economy, our security, and our strength ahead of all of those dislikes and do the responsible thing today. I want to say that I believe the Senate has acted responsibly in this effort on a bipartisan basis. I salute what Senator Dodd, Senator Baucus, working with us on the Finance Committee, and Senator Gregg, Senator Corker, and others on the Republican side have done to be responsible to bring the bill together. The fact is that more than 65 percent of the banks have significantly tightened their lending standards for small businesses. What happens is, one of the reasons it is important to take the FDIC funding up to $250,000 is some people are looking at their banks locally and they are scared, so they move money to another bank which has an impact on the bank that doesn't have any relationship to the real strength of the bank but then weakens it. By raising that amount, we are going to give confidence to community banks, midsize banks, and others. The banks pay for that insurance, incidentally. It is not exactly a gift from the Government. The insurance is paid for. Every day approximately 10,000 more homes are going into foreclosure; 5 million homeowners, 1 in 11 homes are either in default or foreclosure. It is the highest level since 1979. And this legislation we are going to pass tonight is going to help keep the mortgage credit flowing to keep people in their homes on a readjusted basis, something many of us have been fighting for some period of time. In addition, it is going to help families get student loans so they can continue to help their kids get through college and build the economy in the future. Let me emphasize, this is not the original plan that was sent to us by the administration.

Mr. KERRY. Can I get 1 additional minute?

Mr. KERRY. We have strengthened this so significantly through the efforts of Senator Dodd and others. There is an executive compensation limitation, contrary to what the Senator from Florida said. Executives are not going to walk away with millions of dollars. There is an effort to help homeowners. There is accountability with an inspector general. There is judicial review. Significantly in this effort the American taxpayer is going to take ownership of these assets at a lower cost. And when the economy comes back, which it will, those assets are going to rise in value, and the American taxpayers are going to recoup this. I was on the Banking Committee back when we did the 1990 RTC. We saw this happen when we took good loans, separated them from bad loans, and restored confidence in the banking system. Once again I say to my colleagues, this is not about party, this is not about politics. This is a vote--we don't always get them here--that is absolutely strictly about our country and our future. I hope the Senate is resoundingly going to pass this legislation tonight.

Mr. KERRY

Mr. KERRY. Mr. President, today I am introducing the Compensation Fairness Act of 2008 to tighten the rules for the amount of compensation that is deductible as an ordinary and necessary business expense. The recent financial crisis has brought the issue of executive compensation to the forefront. We have all read about the outrageous salaries that many of the chief executive officers of troubled companies have earned over the past few years. Some have increased their pay by increasing the risks their companies take. According to Equilar, a compensation research firm, the CEOs of the 10 largest financial services firms in a survey of 200 companies with revenues of at least $6.5 billion were awarded a combined total of $320 million last year, even though the firms reported mortgage-related losses that totaled $55 billion and that wiped out more than $200 billion in shareholder value. That is unacceptable. It is not just the financial industry where executive pay has become excessive. For 2006, the CEOs of large U.S. companies averaged $10.8 million in total compensation, more than 364 times the pay of the average U.S. worker. We can learn from what led us to the current situation and one way to make CEOs more accountable is to limit the taxpayer subsidy for executive compensation. I am pleased that the bailout legislation places limits on the executive compensation of the firms that participate in the Treasury program. I commend Chairmen Dodd and Baucus for their efforts for to place limits on executive compensation part of the solution. However, I believe that executive compensation for all public companies should be reexamined. Under current law, the allowable deduction for the compensation of the top five highly paid individuals, including the CEO and the chief financial officer, CFO, is limited to $1 million per year. This limitation does not include commissions and performance-based pay. I am concerned that these exceptions have weakened the effectiveness of the limitation and encourage performance-based pay arrangements which could cause executives to manipulate earnings. The Compensation Fairness Act of 2008 would make several changes to the limitation on deduction for compensation. It would repeal the exceptions for commission and performance-based pay. Under current law, an employee that is covered by the limitation has to be an employee the last day of the year. The legislation would change this to make a covered employee one who is employed at any time during the year. This legislation would retain the $1 million limitation and index it for inflation. The Compensation Fairness Act of 2008 would not limit the amount of salary an executive can receive, but it would just limit the tax subsidy. Taxpayers should not have to bear the cost of excessive compensation. Warren Buffett, one of the most successful businessmen of all time, has annual salary of $100,000. Limiting the deduction of executive compensation is just one part of addressing compensation. Earlier this Congress, the Senate passed legislation which would limit the amount of compensation that can be deferred to $1 million. Senator Obama has introduced legislation that I cosponsored and the House has passed which would require annual shareholder approval of a public company's executive compensation plan. Once we address the current crisis, we need to have a serious debate on executive compensation and the deductibility of compensation should be part of the conversation. I urge my colleagues to consider changing the current tax treatment of compensation.

Mr. KERRY

Mr. KERRY. Mr. President, today I am introducing the Compensation Fairness Act of 2008 to tighten the rules for the amount of compensation that is deductible as an ordinary and necessary business expense. The recent financial crisis has brought the issue of executive compensation to the forefront. We have all read about the outrageous salaries that many of the chief executive officers of troubled companies have earned over the past few years. Some have increased their pay by increasing the risks their companies take. According to Equilar, a compensation research firm, the CEOs of the 10 largest financial services firms in a survey of 200 companies with revenues of at least $6.5 billion were awarded a combined total of $320 million last year, even though the firms reported mortgage-related losses that totaled $55 billion and that wiped out more than $200 billion in shareholder value. That is unacceptable. It is not just the financial industry where executive pay has become excessive. For 2006, the CEOs of large U.S. companies averaged $10.8 million in total compensation, more than 364 times the pay of the average U.S. worker. We can learn from what led us to the current situation and one way to make CEOs more accountable is to limit the taxpayer subsidy for executive compensation. I am pleased that the bailout legislation places limits on the executive compensation of the firms that participate in the Treasury program. I commend Chairmen Dodd and Baucus for their efforts for to place limits on executive compensation part of the solution. However, I believe that executive compensation for all public companies should be reexamined. Under current law, the allowable deduction for the compensation of the top five highly paid individuals, including the CEO and the chief financial officer, CFO, is limited to $1 million per year. This limitation does not include commissions and performance-based pay. I am concerned that these exceptions have weakened the effectiveness of the limitation and encourage performance-based pay arrangements which could cause executives to manipulate earnings. The Compensation Fairness Act of 2008 would make several changes to the limitation on deduction for compensation. It would repeal the exceptions for commission and performance-based pay. Under current law, an employee that is covered by the limitation has to be an employee the last day of the year. The legislation would change this to make a covered employee one who is employed at any time during the year. This legislation would retain the $1 million limitation and index it for inflation. The Compensation Fairness Act of 2008 would not limit the amount of salary an executive can receive, but it would just limit the tax subsidy. Taxpayers should not have to bear the cost of excessive compensation. Warren Buffett, one of the most successful businessmen of all time, has annual salary of $100,000. Limiting the deduction of executive compensation is just one part of addressing compensation. Earlier this Congress, the Senate passed legislation which would limit the amount of compensation that can be deferred to $1 million. Senator Obama has introduced legislation that I cosponsored and the House has passed which would require annual shareholder approval of a public company's executive compensation plan. Once we address the current crisis, we need to have a serious debate on executive compensation and the deductibility of compensation should be part of the conversation. I urge my colleagues to consider changing the current tax treatment of compensation.

Mr. KERRY

Mr. KERRY. Mr. President, it is a privilege to speak today about my good friend and colleague, John Warner, who it has been an honor to serve with in the Senate for almost 25 years. At age 17, John enlisted in the Navy to serve our country during World War II. After that, he attended Washington and Lee University on the GI bill and went on to study law at the University of Virginia. In 1950, he interrupted his legal education to deploy to Korea as a marine, eventually attaining the rank of captain before receiving his law degree in 1953. Sixteen years later, John was appointed Under Secretary of the Navy, and in 1972 rose to become Secretary of the Navy. In 1978, the people of Virginia elected him their Senator, and he has represented them and the rest of our country with courage and dedication for over 30 years. In particular, John has fought relentlessly for our men and women in uniform in his leadership role as chairman and ranking member of the Armed Services Committee. He has always had a special place in his heart for our country's veterans. His background as a sailor, marine, and Navy Secretary gave him the experience and insight needed to address extraordinarily complicated and wide-ranging issues of vital importance to our country's defense. Today he is recognized by all as one of our country's foremost experts on national security matters, and someone whose record of bipartisanship is simply unmatched. That is a legend's biography, and through it courses the public virtues of service, patriotism, grace and high-mindedness in a way few have seen, but I know many will read about. On a personal note, one of my fondest memories of John was of a debate between us that occurred on the Senate floor. It was late one night in June 2006, and I had proposed a resolution setting a deadline on our combat presence in Iraq that wasn't a popular position at that time. I was clearly outnumbered, and the debate became heated and personal. In fact, my plan received only 13 votes, and Senator Warner wasn't one of them. But even in times of disagreement, John had no trouble rising above partisan bickering in service of a higher purpose. In the best traditions and practices of the Senate, he rose to speak and engaged me in a respectful and substantive dialogue on a controversial issue that calmed the Senate chamber and I hope informed the American public. I want to close by saying that I, the people of Virginia and this country are grateful for John's distinguished service and will miss him dearly. I wish him and his family my very best and look forward to continuing to receive his wise counsel in the years ahead. Chuck Hagel Mr. President, for the past 12 years, I have had the privilege of serving in the Senate with my friend Chuck Hagel. Upon his retirement from the Senate, I wanted to take a moment to tell him how much he will be dearly missed. Chuck Hagel will be missed not just by his colleagues in the Senate, but also by those Americans for whom he is dedicated his career to fight while serving in Washington, DC. Although we sit on opposite sides of the aisle, I have found myself standing with Senator Hagel on numerous occasions. Just in the past couple of years, we have fought for increased pay for our troops, establishing a center dedicated to the rehabilitation, treatment, and research of servicemembers blinded in combat, and advocating for additional mental health care resources for servicemembers returning from combat. Because of Senator Hagel's dedication to stand up for those who have fought for our country, we have a modernized GI bill. We have a GI bill that more accurately reflects the sacrifices that our men and women in uniform are making. A modernized benefits package that will cover the majority of tuition costs for our returning servicemembers, and I was proud to stand with him in that effort as well. His service to our country has been truly admirable. Senator Hagel has had a truly remarkable career representing the State of Nebraska. I thank him for his service to our country. I wish him the best in his future endeavors. John Warner

Mr. KERRY

Mr. KERRY. Mr. President, I would like to take a moment to discuss an important medical condition that, in my opinion, is in need of increased attention. Brain aneurysm is defined by the National Institute of Neurological Disorders and Stroke, NINDS, as, ``the dilation, bulging, or ballooning-out of part of the wall of an artery in the brain.'' Nationwide, there are 27,000 patients who each year have a ruptured aneurysm. But an estimated 6 million Americans currently live with an unruptured brain aneurysm. In Massachusetts alone, more than 1,000 cases of brain aneurysm are treated annually. With few symptoms, brain aneurysm is a condition that can strike without warning and have a devastating impact on individual lives and families in our country and abroad. I applaud the efforts of the medical profession, research institutes such as the National Inistututes of Health, NIH, and nonprofit organizations and groups such as the Brain Aneurysm Foundation who work tirelessly to combat brain aneurysm. Such work is critical to increasing the medical research and education that will lead to breakthroughs in the diagnosis and treatment of this devastating condition. During the month of September, conferences and meetings are taking place across the country to raise brain aneurysm awareness. I want to recognize Massachusetts as one of several States which have declared the month of September as ``Brain Aneurysm Awareness Month.'' Such declarations show that States across the country understand the importance of raising awareness of this condition and are taking the time to highlight the need for additional education. I support these efforts and look forward to Congress working in a similar fashion in the near future.

Mr. KERRY

Mr. KERRY. Mr. President, today I introduced a piece of legislation that working on for over 10 years, the Workplace Religious Freedom Act. Religious pluralism is a source of strength for this country. It always has been. That is why I support the Workplace Religious Freedom Act or WRFA, as I have ever since I first introduced it back in 1996. My personal involvement with this issue goes back to two Catholic women working at a dog-racing track in Raynham, Massachusetts. They were fired from their jobs because they refused to work on Christmas Eve. They felt it was against their religion to do business that night. We need to pass WRFA to make it clear that here in America, living out your faith is not a reason to lose your job. The bill is designed to protect people just like those two women: workers suffering from on-the-job discrimination because of their religious beliefs and practices. It requires employers to make a reasonable accommodation for an employee's religious practice or observance, such as time off or dress. It protects, within reason, time off for religious observances. And it protects Yarmulkes, Hijabs, Turbans, Mormon garments--all the distinctive marks of our religious practices. All the things that everyone should be proud of and nobody should ever be forced to hide. All of us should have the freedom to abide by and to express our religious beliefs--they are crucial to our individual and communal identities, and collectively, they are a crucial part of our national identity as a diverse and tolerant country. Writing religious freedom into law is by necessity a balancing act between universal values--such as religious tolerance and equal treatment--with the particulars that each of our faiths demand of us. Just as religious scholars wonder whether God can create an indestructible rock and then destroy it, scholars of religious pluralism have to answer a similar riddle: does a pluralism that's based on tolerance, tolerate intolerance? Squaring this circle will always be a balancing act. Religious freedom in America doesn't mean the absolute right to impose your religion on others. With WRFA we have achieved that balance by protecting not only religious practices in the workplace but also by protecting those that don't share the same faith or choose not to practice at work. I find that if you look at the vast, vast majority of actual cases, protecting religious freedom turns out to be a matter of common sense. Consider the case of Jack Rosenberg, a 35-year-old Hasidic Jew from Rockland County, New York. Jack signed up for the Coast Guard and passed his training, only to .discover that he wasn't allowed to wear his yarmulke. ``As soon as I got sworn in and got ready to put on the uniform,'' Mr. Rosenberg said, ``the commander came to me and said it's going to be a problem.'' As Mr. Rosenberg said, ``If my religion requires it, ``there's not a choice.'' I agree: No American should raise his or religion with an employer and be told: ``it's going to be a problem.'' I am proud to say that the Coast Guard changed their regulations to allow for religious headgear. We fought for Jack Rosenberg and we won. Another case involves a server at a Red Robin restaurant who belongs to the ancient Egyptian Kemetic religion, which doesn't allow him to hide his religious tattoos. Red Robin fired him for a wrist tattoo less than a quarter-inch wide. In the end, he won in court and Red Robin agreed to train managers to better understand religious discrimination. This isn't about litigation. It is about protecting the right of free expression and ensuring that religious people feel comfortable in the workplace. We must never leave anyone with the idea that practicing one's religion and being American are in conflict. That is fundamental to how we live as Americans, and I will fight to make sure that our laws governing religious freedom are worthy of our values.

Mr. KERRY

Mr. KERRY. Mr. President, today I introduced a piece of legislation that working on for over 10 years, the Workplace Religious Freedom Act. Religious pluralism is a source of strength for this country. It always has been. That is why I support the Workplace Religious Freedom Act or WRFA, as I have ever since I first introduced it back in 1996. My personal involvement with this issue goes back to two Catholic women working at a dog-racing track in Raynham, Massachusetts. They were fired from their jobs because they refused to work on Christmas Eve. They felt it was against their religion to do business that night. We need to pass WRFA to make it clear that here in America, living out your faith is not a reason to lose your job. The bill is designed to protect people just like those two women: workers suffering from on-the-job discrimination because of their religious beliefs and practices. It requires employers to make a reasonable accommodation for an employee's religious practice or observance, such as time off or dress. It protects, within reason, time off for religious observances. And it protects Yarmulkes, Hijabs, Turbans, Mormon garments--all the distinctive marks of our religious practices. All the things that everyone should be proud of and nobody should ever be forced to hide. All of us should have the freedom to abide by and to express our religious beliefs--they are crucial to our individual and communal identities, and collectively, they are a crucial part of our national identity as a diverse and tolerant country. Writing religious freedom into law is by necessity a balancing act between universal values--such as religious tolerance and equal treatment--with the particulars that each of our faiths demand of us. Just as religious scholars wonder whether God can create an indestructible rock and then destroy it, scholars of religious pluralism have to answer a similar riddle: does a pluralism that's based on tolerance, tolerate intolerance? Squaring this circle will always be a balancing act. Religious freedom in America doesn't mean the absolute right to impose your religion on others. With WRFA we have achieved that balance by protecting not only religious practices in the workplace but also by protecting those that don't share the same faith or choose not to practice at work. I find that if you look at the vast, vast majority of actual cases, protecting religious freedom turns out to be a matter of common sense. Consider the case of Jack Rosenberg, a 35-year-old Hasidic Jew from Rockland County, New York. Jack signed up for the Coast Guard and passed his training, only to .discover that he wasn't allowed to wear his yarmulke. ``As soon as I got sworn in and got ready to put on the uniform,'' Mr. Rosenberg said, ``the commander came to me and said it's going to be a problem.'' As Mr. Rosenberg said, ``If my religion requires it, ``there's not a choice.'' I agree: No American should raise his or religion with an employer and be told: ``it's going to be a problem.'' I am proud to say that the Coast Guard changed their regulations to allow for religious headgear. We fought for Jack Rosenberg and we won. Another case involves a server at a Red Robin restaurant who belongs to the ancient Egyptian Kemetic religion, which doesn't allow him to hide his religious tattoos. Red Robin fired him for a wrist tattoo less than a quarter-inch wide. In the end, he won in court and Red Robin agreed to train managers to better understand religious discrimination. This isn't about litigation. It is about protecting the right of free expression and ensuring that religious people feel comfortable in the workplace. We must never leave anyone with the idea that practicing one's religion and being American are in conflict. That is fundamental to how we live as Americans, and I will fight to make sure that our laws governing religious freedom are worthy of our values.

Mr. KERRY

Mr. KERRY. Mr. President, over the past several days the Federal Government has been called upon to bail out some of America's largest financial companies. While I recognize that swift action must be taken to prevent the collapse of our Nation's major financial institutions, like many other Americans, I believe we also should come to the aid of our Nation's small businesses, which are also imperiled by this financial crisis. Today the problems facing small firms and the banks that typically lend to them are not unlike those being faced by corporate America-- firms simply cannot access the capital they need to keep their small businesses afloat in the wake of this economic crisis. Although the Small Business Administration's loan programs were designed to reach these marginalized borrowers, there is ample evidence that the programs are failing to do so at this critical juncture. Last year, the SBA's 7(a) and 504 loan guarantee programs combined to provide over 100,000 American small businesses with essential financing, and they injected approximately $20 billion into our local businesses and communities. As a result of the financial crisis, 7(a) loans are down about 30 percent in terms of the number of loans made, and down about 11 percent in terms of dollars. Meanwhile, the number of 504 loans has decreased about 16 percent and they are down approximately 15 percent in terms of dollars loaned for fiscal year 2008. But these are more than just statistics; they are stark indications that the SBA's loan programs are not reaching enough of the small businesses that are now struggling to obtain affordable credit. The recent drop in SBA lending paints a picture of small business borrowers and lenders caught in a vicious cycle driven by the financial crises of the past year. On the lender side of the equation, struggling banks have become so concerned with risk that they have virtually cut off conventional small business borrowing, even to well-qualified firms. On the borrower side, the banks' extremely tight lending practices are preventing loans--SBA loans in particular--from serving small businesses that need capital to survive the current economic crisis. That is why I am introducing the Small Business Lending Market Stabilization Act of 2008--which will jump start SBA lending, helping thousands of American small businesses receive the financing they need to survive the current financial crisis. In April, as Chairman of the Senate Committee on Small Business and Entrepreneurship, I held a hearing to learn why the SBA loan programs were not reaching small businesses that were being squeezed out of the conventional loan markets by the credit crunch. Although the Administration refused to admit it at the time, virtually every other witness at the hearing told me that the SBA's increased fees played a significant role. The bill I have introduced today will address that problem by temporarily eliminating the fees that the SBA charges to borrowers, lenders, and ``Certified Development Companies'' for the 7(a) and 504 loan guarantee programs. This will immediately reduce the cost of capital for SBA borrowers. With lower monthly loan payments, more money will be placed into the hands of small business owners-- money that will allow them to continue purchasing inventory and equipment. At the same time, the fee relief will also reduce the cost of lending for SBA's partners in the private sector, allowing them to make more small business loans through the programs. The bill also includes several provisions that will expand the universe of small businesses that can access the SBA's loan programs. For instance, one measure will permit certain borrowers to refinance a limited amount of their preexisting debt through a new 504 loan. This adjustment will allow 504 loans to reach small business owners who want to refinance their company's existing debt, but have been turned down by conventional lenders. The bill also contains measures that will give lenders greater flexibility in making SBA loans. One provision would allow the SBA to use ``weighted average rates'' when pooling loans for sale on the secondary market, making the secondary markets for SBA loans more efficient and improving liquidity among participating banks. Another provision would provide greater flexibility by directing the SBA to give lenders at least one alternative interest rate to the Wall Street prime rate, which will help reduce interest rate typically charged on 7(a) loans. In short, the bill I am introducing today will provide much needed support for America's small businesses, helping them break free from the vicious cycle caused by the crisis in our financial markets. I will continue to work with my colleagues on both sides of the aisle to ensure that the massive Wall Street bailout proposal we have been asked to approve contains adequate protections for taxpayers. But I also urge my colleagues to join me in supporting this bill, which will provide a lifeline to hundreds of thousands of American small businesses along Main Street.

Mr. KERRY

Mr. KERRY. Mr. President, over the past several days the Federal Government has been called upon to bail out some of America's largest financial companies. While I recognize that swift action must be taken to prevent the collapse of our Nation's major financial institutions, like many other Americans, I believe we also should come to the aid of our Nation's small businesses, which are also imperiled by this financial crisis. Today the problems facing small firms and the banks that typically lend to them are not unlike those being faced by corporate America-- firms simply cannot access the capital they need to keep their small businesses afloat in the wake of this economic crisis. Although the Small Business Administration's loan programs were designed to reach these marginalized borrowers, there is ample evidence that the programs are failing to do so at this critical juncture. Last year, the SBA's 7(a) and 504 loan guarantee programs combined to provide over 100,000 American small businesses with essential financing, and they injected approximately $20 billion into our local businesses and communities. As a result of the financial crisis, 7(a) loans are down about 30 percent in terms of the number of loans made, and down about 11 percent in terms of dollars. Meanwhile, the number of 504 loans has decreased about 16 percent and they are down approximately 15 percent in terms of dollars loaned for fiscal year 2008. But these are more than just statistics; they are stark indications that the SBA's loan programs are not reaching enough of the small businesses that are now struggling to obtain affordable credit. The recent drop in SBA lending paints a picture of small business borrowers and lenders caught in a vicious cycle driven by the financial crises of the past year. On the lender side of the equation, struggling banks have become so concerned with risk that they have virtually cut off conventional small business borrowing, even to well-qualified firms. On the borrower side, the banks' extremely tight lending practices are preventing loans--SBA loans in particular--from serving small businesses that need capital to survive the current economic crisis. That is why I am introducing the Small Business Lending Market Stabilization Act of 2008--which will jump start SBA lending, helping thousands of American small businesses receive the financing they need to survive the current financial crisis. In April, as Chairman of the Senate Committee on Small Business and Entrepreneurship, I held a hearing to learn why the SBA loan programs were not reaching small businesses that were being squeezed out of the conventional loan markets by the credit crunch. Although the Administration refused to admit it at the time, virtually every other witness at the hearing told me that the SBA's increased fees played a significant role. The bill I have introduced today will address that problem by temporarily eliminating the fees that the SBA charges to borrowers, lenders, and ``Certified Development Companies'' for the 7(a) and 504 loan guarantee programs. This will immediately reduce the cost of capital for SBA borrowers. With lower monthly loan payments, more money will be placed into the hands of small business owners-- money that will allow them to continue purchasing inventory and equipment. At the same time, the fee relief will also reduce the cost of lending for SBA's partners in the private sector, allowing them to make more small business loans through the programs. The bill also includes several provisions that will expand the universe of small businesses that can access the SBA's loan programs. For instance, one measure will permit certain borrowers to refinance a limited amount of their preexisting debt through a new 504 loan. This adjustment will allow 504 loans to reach small business owners who want to refinance their company's existing debt, but have been turned down by conventional lenders. The bill also contains measures that will give lenders greater flexibility in making SBA loans. One provision would allow the SBA to use ``weighted average rates'' when pooling loans for sale on the secondary market, making the secondary markets for SBA loans more efficient and improving liquidity among participating banks. Another provision would provide greater flexibility by directing the SBA to give lenders at least one alternative interest rate to the Wall Street prime rate, which will help reduce interest rate typically charged on 7(a) loans. In short, the bill I am introducing today will provide much needed support for America's small businesses, helping them break free from the vicious cycle caused by the crisis in our financial markets. I will continue to work with my colleagues on both sides of the aisle to ensure that the massive Wall Street bailout proposal we have been asked to approve contains adequate protections for taxpayers. But I also urge my colleagues to join me in supporting this bill, which will provide a lifeline to hundreds of thousands of American small businesses along Main Street.

Mr. KERRY

Mr. KERRY. Mr. President, I want to say a few words about the FAA's Disadvantaged Business Enterprise, DBE, Program and the Airport Concessions Disadvantaged Business Enterprise, ACDBE, Program. As we are all aware, case law over the past decade has made clear that Federal race-conscious programs are subject to strict constitutional scrutiny to ensure that programs serve a compelling governmental interest and are narrowly tailored to address that interest. Gender- conscious programs must meet heightened scrutiny to ensure that there is an exceedingly persuasive justification for the program. Still, under any reading of constitutional law, race- and gender-conscious programs are clearly permitted to remedy current discrimination and the present-day effects of past discrimination where there is a strong basis in evidence that such discrimination exists. As the Commerce Committee is aware, discrimination in business practices continues to be a serious problem. There are countless disparity studies and examinations of this topic and for that reason we have made only minor changes to the DBE and ACDBE program over time. Taken as a whole, the quantitative and qualitative evidence clearly suggests that discrimination remains a serious problem in our Nation. I serve both as a member of the Commerce Committee and as chairman of the Senate Small Business Committee. In these roles, I have the opportunity to review enormous amounts of information about discrimination against women and minority entrepreneurs throughout our economy and across our Nation. While we have made very real progress over the time that I have been in the Senate, there is no doubt that a lot of work remains to be done. Programs such as the DBE and ACDBE programs are making an important difference by offering real opportunities to companies that otherwise might not ever get a chance to compete. These programs are critically important in airport-related industries as well as in other areas of Federal contracting. The statistics are telling. On May 22, 2007, I held a hearing in the Small Business Committee addressing the effectiveness of SBA's programs for minority businesses. One economist who testified, Dr. Jon Wainwright, presented a number of troubling statistics to the committee. For instance, he explained that according to the most recent economic census data available, while African Americans constitute 12.7 percent of the population, they own only 5.3 percent of businesses and those businesses account for only 1 percent of business sales and receipts. Latinos are 13.4 percent of the population, but only 7 percent of businesses and 2.5 percent of business sales and receipts. Dr. Wainwright also noted that Asian and Pacific Islanders own 5 percent of businesses but earned only 3.8 percent of business sales and receipts and Native Americans constituted .9 percent of the business population but earned only .3 percent of business sales and receipts. For women the numbers are also shocking: women constitute 50.9 percent of the population but own only 28.9 percent of businesses and receive only 10.7 percent of business sales and receipts. Dr. Wainwright went on to explain that these disparities in business ownership and earnings exist in all 50 States and the District of Columbia and that similar outcomes had been evident in all previous versions of this same survey over the past 35 years. He also stated that he had conducted further analyses to determine whether the types of disparities he had observed were caused by discrimination or some other factor. He explained that he had conducted regression analyses to account for geography, industry, labor market status, age, and education among other factors. Even when this regression analysis was conducted, the disparities remained large, negative, and statistically significant for African Americans, Hispanics, Asian/Pacific Islander Americans, Native Americans, and women suggesting that race and gender discrimination are the cause. Also troubling were Dr. Wainwright's comments on small business finance issues. We know that credit is the lifeblood of entrepreneurship, but it turns out that minority business owners are far more likely to be denied credit than nonminority owners. Dr. Wainwright explained that these findings held up even when regression analyses were conducted to adjust for a number of balance sheet, credit history, and other characteristics. And Dr. Wainwright found that women were also likely to face some discrimination in credit markets. Dr. Wainwright was only one witness at the May 22 hearing and there were several others whose testimony was equally compelling. The fact is that discrimination remains a very serious problem in Federal contracting markets across this country. More recently, on September 11, 2008, our committee held another hearing on discrimination against minority- and women-owned businesses which focused on discrimination in access to capital. During the hearing we heard testimony from several witnesses about the serious barriers that minority- and women-owned businesses confront when attempting to obtain capital to start up, grow, and flourish. In the context of the FAA extension bill before us today, I want to specifically highlight the testimony of Don O'Bannon who is the current chair of the Airport Minority Advisory Council or AMAC. Mr. O'Bannon explained that, in his experience, access to capital is an enormous hurdle for minority- and women-owned businesses in airport-related industries. He gave us specific real-life examples of firms that had attempted to obtain both venture capital and more conventional debt capital and encountered extraordinary barriers due to discrimination that compromised their ability to grow and succeed. Of course, there are many other sources of information about discrimination in contracting. Literally hundreds of disparity studies have been conducted around the country that contain compelling statistical data about discrimination in the public and private marketplaces related to airport-related contracting. Just a few of the studies that have been conducted recently and include airport-related data were put into the record by Mr. O'Bannon during our recent hearing. These include: ``Race, Sex and Business Enterprise: Evidence from Denver, CO,'' NERA Economic Consulting, May 5, 2006; ``Dallas/Fort Worth International Airport Board Disparity Study Final Report,'' MGT of America, October 17, 2000; ``The City of Phoenix, Minority-, Women- Owned and Small Business Enterprise Program Update Study: Final Report,'' MGT of America, April 21, 2005; ``Race, Sex and Business Enterprise: Evidence from the State of Maryland,'' NERA Economic Consulting, March 8, 2006; ``Final Report: Broward County Small Disadvantaged Business Enterprise (SDBE) Disparity Study,'' MGT of America, Inc., April 3, 2001; and ``Final Report for Development and Revision of Small, Minority and Women Business Enterprise Program, Nashville International Airport, (BNA),'' Griffin and Strong, PC, September 19, 2007. There are hundreds of additional studies, including many relevant studies that cover entities other than airports but that analyze the same industries and enterprise populations that do airport- related work. But the statistics can only tell part of the story. Overlooked aspects of disparity studies are the sections that address anecdotal evidence. These are the accounts that individual business people give about the challenges they confront in doing business. When you read these studies, it quickly becomes clear that discrimination remains a problem at literally every stage of the business process. It is harder for women and minority entrepreneurs to start companies. They often are denied credit even when they have the same creditworthiness of male, nonminority entrepreneurs. And because of past discrimination, minority entrepreneurs often do not have access to family wealth. As one African-American contractor reported in a study about discrimination in the state of Massachusetts: Now I go to the bank--again I've been in business for 28 years, I've been very successful at times--I go to the bank and say ``Okay. I need a $250,000 line of credit.'' I walk out of there with $50,000. A [White] gentleman that used to work with me was a former partner of mine, left, went to the same bank, and walked away with $1.2 million. Okay? Now he walked away because his house is not mortgaged. So he has equity that they can touch to go back if he doesn't make payments. They are looking at me and saying, ``He's already leveraged himself. He doesn't have anything that I can touch.'' So they don't want to give me any money. And not that the fact of my business--my business is very solid. It's just they won't give it to me because I started with nothing and I've taken everything I've had and put it into the businesses. They still think I'm worth nothing. That's . . . discrimination . . . which is where minorities and women who start from scratch and build their businesses up, that's where we get hurt. That's where it comes back to backfire, because we don't have that same leverage that somebody who either inherited a business or had family that gave them land or some sort of inheritance that they got some money. That is from ``Race, Sex and Business Enterprise: Evidence from the Commonwealth of Massachusetts,'' Volume 1, NERA Economic Consulting, at 218-219. Even once minorities and women manage to start up a business they face serious discrimination in every stage of the contracting process. Sometimes that discrimination comes in the form of explicit gender or racial harassment. In a study dealing with the State of Texas, one Hispanic-American woman business owner related the following story: Some [of my male colleagues] do not want to work with a woman. They feel they are wasting their time. [On one occasion] a guy took me to check on a project, and when he got out of his truck, he wanted me to touch him. I said, ``Come on, let's get back to work.'' I had to be very strong with him. There are not many women builders in the residential construction industry either. That is from ``Update of the State of Texas Disparity Study,'' Mason Tillman Associates, Ltd., January 2007, at 9-8. Another Hispanic-American woman contractor in Texas explained that sometimes the discrimination is not so direct, but it is still unmistakable. She stated: As a young woman, there have been several occasions where I was told that if I really wanted an award, there were other ways I could get it. This was not said directly to me, it was implied [by] a White male [manager] at a [State] university. That is from ``Update of the State of Texas Disparity Study,'' Mason Tillman Associates, Ltd., January 2007, at 9-8. Sometimes the harassment rises to the level of threats of violence against a business owner or their property. In the NERA Commonwealth of Massachusetts study, one African-American businessman even gave an account of a threat to blow up his truck. That is from ``Race, Sex and Business Enterprise: Evidence from the Commonwealth of Massachusetts, Volume 1,'' NERA Economic Consulting, at 219. Even when discrimination does not involve explicit harassment or threats, it still poses barriers to minority and women business owners. Unfortunately, the ``old boy network'' continues to be a problem in many industries. An analysis of the experiences of business owners in a study of contracting by the airport in Nashville, TN, demonstrates that discrimination not only hurts minority- and women-owned businesses, but it can also drive up the price of doing business: [One business owner] said his firm has tried to get in on airport work and, in one instance, partnered with a much more experienced firm to get into one particular area of construction only to find that ``a couple of firms had a lock on it''. According to [this firm], it is hard to get jobs because people tend to use the same companies. [The business owner] said he believes that subcontractors tell ``their'' bidders where to come in with their numbers and they tell them where they can make up the difference on the project and how to pursue change orders. By the end of a project, his competitors have been paid more than his original estimate, which was rejected for being too high. That is from ``Final Report for Development and Revision of Small, Minority and Women Business Enterprise Program, Nashville International Airport,'' BNA, Griffin and Strong, PC, September 19, 2007, at 163. Another business owner in Nashville was explicit about the informal networks that impose barriers on minority businesses and the need for programs like the DBE and ACDBE program to address these impediments. The study stated: According to [one business owner], the airport made a mistake in disbanding SMWBE requirements because there are still a lot of ``good old boys'' playing golf and the like. Having a diversity manager helps ``level the playing field'' and provides ``checks and balances''. That is from ``Final Report for Development and Revision of Small, Minority and Women Business Enterprise Program, Nashville International Airport,'' BNA, Griffin and Strong, PC, September 19, 2007, at 164. Another point that these studies make clear is that discrimination against business owners is something that is experienced by all minority groups and women. It is not limited to only some groups. One study summarized its analysis of anecdotal evidence as follows: Nineteen percent of the respondents indicated that they had experienced discrimination because of race, ethnicity, or gender on one or more occasions (three percent very often, 10 percent sometimes, and six percent seldom). Forty percent reported they had not experienced discrimination. The fact that 19 percent of respondents reported experiencing discrimination on at least an occasional basis suggests that discrimination is not confined to isolated incidents. The 19 percent that experienced discrimination account for 63 surveyed respondents categorized as follows: 22 African Americans, 17 Hispanic Americans, 16 non-minority females, two Asian Americans, two non-minority males, and one Native American. Three people reported discriminatory incidents but did not indicate their demographic background. That is from ``Final Report: Broward County Small Disadvantaged Business Enterprise (SDBE) Disparity Study,'' MGT of America, Inc., April 3, 2001, at 6-30. These examples I have given are but a few from the voluminous body of research about race and gender discrimination in business. The evidence is troubling and should cause all of us to redouble our efforts to ensure that we do everything we can to eliminate the barriers confronted by women and minority business owners. The DBE and ACDBE program are indispensable tools in this effort.

Mr. KERRY

Mr. KERRY. Mr. President, today it is my great pleasure to honor the incredible achievement, tradition, and performance of the American Sail Training Association, ASTA. This educational nonprofit corporation has allowed young participants from across the country to build character through sail training and to represent the United States around the world with distinction and good spirit. I am proud of the dedicated trainers who have taught young sailors to persevere in international adventures on brigantines, schooners, slops, and other vessels. I commend the efforts of the ASTA to provide such exciting and educational opportunities for youth, and I look forward to the coming Tall Ships Atlantic Challenge 2009.

Mr. KERRY

Mr. KERRY. Mr. President, today I would like to speak about the new markets tax credit, NMTC--a vital development financing tool for low- income communities that is set to expire at end of this year unless Congress takes action. The NMTC was signed into law 8 years ago in order to attract private investment to economically distressed communities by offering a modest Federal tax credit as an incentive for investors. Since its inception, this program has proven remarkably effective. According to the Treasury Department, as of the first of July, the NMTC has been responsible for $11 billion of new investment in economically distressed communities across the country, including $600 million for community development entities based in Massachusetts. A January 2007 General Accountability Office report indicates that 88 percent of NMTC investors would not have made a particular investment in a low income community without the credit, and 69 percent had never made such an investment prior to working with the NMTC. The NMTC program has successfully generated private investment in low-income communities. Community development entities, CDEs, that administer the program funds are frequently involved with communities with poverty rates higher than 30 percent and unemployment rates significantly greater than the national average. This program, by merging public and private investments, is infusing these communities with the resources to begin new businesses, create new jobs, build new homes, and jumpstart their economies. In Massachusetts, six community development entities have been awarded credit allocations. One such entity in Massachusetts, the Rockland Trust Company, is a commercial bank that has been serving Cape Cod, southeastern Massachusetts, and Rhode Island for over 100 years. In an effort to serve areas with high employment and low income, Rockland Trust applied for an NMTC allocation to expand its capacity to offer financing products that could effectively serve these communities. Since 2004, the Rockland Trust has received $75 million in credits, which have been used to finance 70 different non-real estate and real estate business loans ranging in size from $50,000 to $8 million. The NMTC loans made by Rockland Trust have been instrumental in financing the acquisition and redevelopment of over 2.1 million square feet of real estate and thus far have contributed to the creation of over 1,200 jobs. The Massachusetts Housing Investments Corporation, MHIC, based in Boston, is another entity putting the tax credit to work in Massachusetts. MHIC has used the credit to finance a range of commercial and industrial real estate projects, large and small, that would not have been possible without the financing brought in by the credit. One such project, the Holyoke Health Center, HHC, is a federally qualified health center located in a community of 40,000 with a poverty rate of 27 percent and the highest per capita mortality rate and rate of teen births in the United States. After many unsuccessful attempts to obtain financing for its expansion, the Holyoke Health Center approached MHIC and within months the project was approved, achieved closing, and began construction. MHIC helped finance the largest investment ever made in Holyoke, and created a financing structure that has become a national model for other community health care expansion projects nationwide. The new state-of-the-art Holyoke facility houses primary care and laboratory services, an on-site pharmacy, a dental clinic, counseling services, a day care facility accommodating 100 preschool children. The project created 210 construction related jobs as well as 239 permanent jobs principally for Holyoke residents. I am a strong supporter of NMTC because I have seen it work in Massachusetts and I believe in its potential to revitalize communities and businesses that are too often left out of the mainstream market. I encourage my colleagues to join me in strong support of the extension of the NMTC.

Mr. KERRY

Mr. KERRY. Mr. President, I would like to inform Members that the Committee on Small Business and Entrepreneurship will hold a hearing entitled ``Business Start-up Hurdles in Underserved Communities: Access to Venture Capital and Entrepreneurship Training,'' on Thursday, September 11, 2008 at 10 a.m., in room 428A of the Russell Senate Office Building.

Mr. KERRY

Mr. KERRY. Mr. President, education is at the core of America's basic promise--that all Americans should be able to make the most of their potential. Every young person should graduate from high school, and every young person who works hard and wants to go to college should be able to afford it. And all Americans should be able to get the skills they need to succeed throughout their lives. Today, I am supporting the Higher Education Opportunity Act conference report because it will advance key reforms that will address the soaring price of a college education and remove obstacles that make it harder for qualified students to attend college. This legislation is an important step forward for students and their families. It will help reduce their college costs and will help expand the future growth of our economy. This legislation would not have been possible without the leadership of Senator Edward M. Kennedy who has tirelessly dedicated his time in the Senate to helping children and their families gain increased access to education. It is another victory for Senator Kennedy, whose record of achievement in the Senate has helped benefit the lives of virtually every man, woman and child in the country. As we adopt this legislation, I want Senator Kennedy to know that we miss him, that we are thinking of him as he recovers from his illness and we congratulate him on this important accomplishment. The Higher Education Opportunity Act will hold colleges more accountable for increasing costs and will simplify the federal financial aid application process. The legislation will make textbook costs more manageable for students by helping them plan for textbook expenses in advance of each semester. It will increase college aid and support programs for veterans and military families. This legislation will ensure equal college opportunities and fair learning environments for students with disabilities. It includes new measures to curb unethical practices in the student loan industry, increasing federal grant aid to our neediest students, and strengthen college pipeline programs. The Higher Education Reauthorization Act will help ensure that all Americans can make the most of their God-given talents. Educating our children is a key part of ensuring a strong economy in the future. It will help make college affordable for all and expand lifelong learning. I urge my colleagues to support this legislation.

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to introduce the SBIR/STTR Reauthorization Act of 2008. This bill reauthorizes the Small Business Innovation Research and Small Business Technology Transfer programs for 14 years each and makes several improvements to the programs that will allow them to work better for small business, while continuing to make an important contribution to our country's innovation economy. When the SBIR program was originally conceived in the late 1970s and early 80s, it was in response to serious concerns that the United States was falling behind its competitors in the global economy because of a failure to innovate. At that time, as remains the case today, the lion's share of our federal research and development budget was going to large businesses and to universities that, while doing important work, simply were not doing the type of high-risk, high-reward research that drives innovation and keeps us on the technological cutting edge. It was found that small businesses were fastest and most effective not only at generating new technologies but at doing so in cost-effective ways; however, they were receiving a disproportionately low share of Federal R&D dollars, as also remains the case today. The SBIR program, therefore, was designed in 1982 to harness the innovative capacity of America's small businesses to meet the needs of our federal agencies and to help grow small, high-tech firms that, in turn, grow local economies all across the Nation. The STTR program was originally created as a pilot program in 1992 to stimulate partnerships between small businesses and non-profit research institutions, such as universities. Today, our country once again stands at a turning point, and competition from all across the globe, from Europe to Far East Asia, makes it more important than ever that we continue to innovate and to push the boundaries in sectors across the whole range of the spectrum, from defense technologies to energy efficiency to biotechnology. This bill ensures that small businesses can be confident that the SBIR and STTR programs will be there for them years down the line and that these highly successful programs can continue to help our federal agencies meet their needs and help maintain our role as a world leader in innovations. In order to provide more small businesses with access to the SBIR and STTR programs, the bill increases the allocation for the SBIR program and doubles the allocation for the STTR program. This will allow for more technologies to be developed through these programs, technologies such as a machine that uses lasers and computer cameras to sort and inspect bullets at a much finer level than the human eye can manage, developed through an SBIR grant by a small business in Michigan, a therapeutic drug to treat chronic inflammatory disease, developed by a Montana SBIR recipient, and a nerve gas protection system, developed by an SBIR company in Massachusetts. This is not to mention the tangible benefit that these additional dollars for the SBIR and STTR programs will have in the way of business growth, job creation, and economic development, since, according to the National Academy of Sciences, more than one in ten SBIR award recipients start their company simply because of their having received an award. Our committee has a long history of working together in a bipartisan way to pass legislation, and I am pleased to have worked closely with my ranking member, Senator Snowe, on this bill. I am also pleased that we have been able to incorporate provisions to address the priorities of a number of other Senators on the committee, including language from Senator Lieberman to address the National Academies' concerns about the lack of data and evaluation at NIH and to encourage innovation at NIH to accelerate the development of treatments and cures, language from Senator Landrieu regarding the FAST program to increase the participation of rural small businesses by making the matching requirement from rural states more affordable, a provision from Senator Coleman that creates a pilot program to encourage innovative small businesses to provide opportunities to college students studying science, technology, engineering, and math, and a provision from Senator Cardin to clarify that small businesses with Cooperative Research and Development Agreement, CRADA, with Federal labs can still participate in the SBIR program. I want to thank all those involved for their hard work on this legislation. I urge my colleagues to support this bill when it comes before the full Senate.

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to introduce the SBIR/STTR Reauthorization Act of 2008. This bill reauthorizes the Small Business Innovation Research and Small Business Technology Transfer programs for 14 years each and makes several improvements to the programs that will allow them to work better for small business, while continuing to make an important contribution to our country's innovation economy. When the SBIR program was originally conceived in the late 1970s and early 80s, it was in response to serious concerns that the United States was falling behind its competitors in the global economy because of a failure to innovate. At that time, as remains the case today, the lion's share of our federal research and development budget was going to large businesses and to universities that, while doing important work, simply were not doing the type of high-risk, high-reward research that drives innovation and keeps us on the technological cutting edge. It was found that small businesses were fastest and most effective not only at generating new technologies but at doing so in cost-effective ways; however, they were receiving a disproportionately low share of Federal R&D dollars, as also remains the case today. The SBIR program, therefore, was designed in 1982 to harness the innovative capacity of America's small businesses to meet the needs of our federal agencies and to help grow small, high-tech firms that, in turn, grow local economies all across the Nation. The STTR program was originally created as a pilot program in 1992 to stimulate partnerships between small businesses and non-profit research institutions, such as universities. Today, our country once again stands at a turning point, and competition from all across the globe, from Europe to Far East Asia, makes it more important than ever that we continue to innovate and to push the boundaries in sectors across the whole range of the spectrum, from defense technologies to energy efficiency to biotechnology. This bill ensures that small businesses can be confident that the SBIR and STTR programs will be there for them years down the line and that these highly successful programs can continue to help our federal agencies meet their needs and help maintain our role as a world leader in innovations. In order to provide more small businesses with access to the SBIR and STTR programs, the bill increases the allocation for the SBIR program and doubles the allocation for the STTR program. This will allow for more technologies to be developed through these programs, technologies such as a machine that uses lasers and computer cameras to sort and inspect bullets at a much finer level than the human eye can manage, developed through an SBIR grant by a small business in Michigan, a therapeutic drug to treat chronic inflammatory disease, developed by a Montana SBIR recipient, and a nerve gas protection system, developed by an SBIR company in Massachusetts. This is not to mention the tangible benefit that these additional dollars for the SBIR and STTR programs will have in the way of business growth, job creation, and economic development, since, according to the National Academy of Sciences, more than one in ten SBIR award recipients start their company simply because of their having received an award. Our committee has a long history of working together in a bipartisan way to pass legislation, and I am pleased to have worked closely with my ranking member, Senator Snowe, on this bill. I am also pleased that we have been able to incorporate provisions to address the priorities of a number of other Senators on the committee, including language from Senator Lieberman to address the National Academies' concerns about the lack of data and evaluation at NIH and to encourage innovation at NIH to accelerate the development of treatments and cures, language from Senator Landrieu regarding the FAST program to increase the participation of rural small businesses by making the matching requirement from rural states more affordable, a provision from Senator Coleman that creates a pilot program to encourage innovative small businesses to provide opportunities to college students studying science, technology, engineering, and math, and a provision from Senator Cardin to clarify that small businesses with Cooperative Research and Development Agreement, CRADA, with Federal labs can still participate in the SBIR program. I want to thank all those involved for their hard work on this legislation. I urge my colleagues to support this bill when it comes before the full Senate.

Mr. KERRY

Mr. KERRY. Mr. President, I would like to inform the Members that the Committee on Small Business and Entrepreneurship will hold a public markup of a bill to reauthorize the Small Business Innovation Research program on Wednesday, July 30, 2008, beginning at 10 a.m. in room 428A of the Russell Senate Office Building.