John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, first of all, I thank the Senator from Louisiana. She has been terrific to work with on this issue, but, more important, she is absolutely tenacious with respect to the recovery issues in her State. I think she has offered tremendous leadership in the Senate on a constant basis. On almost every bill that comes through, she has fought to find a way to assist with the recovery. It has been a pleasure to work with her. I know she has to go to another meeting. I am pleased to join with her in introducing this legislation today. Senator Landrieu has tried to spread the word that New Orleans has plenty to offer, that people should not be scared away by negative press reports but instead be looking for opportunities to help rebuild one of our greatest cities. According to the U.S. Chamber of Commerce, more than 125,000 small and medium sized businesses were disrupted or destroyed by the hurricanes. It's been seven months since the Gulf was hit by the hurricanes, and it is time to take a look at the long-term needs of businesses in the region if we are going to truly foster an economic recovery. It is well known, the SBA's disaster loan program has done an abysmal job of getting out capital to businesses and homeowners over the past seven months, still with almost 80,000 applications to be processed out of 400,000 applications submitted. To help clear out the backlog, this bill enlists the agency's private-sector lending partners to help process loans. They are experienced SBA lenders, and in exchange for their expertise, SBA would pay them a fee to process loans. This is much faster than building a separate infrastructure of lenders, losing time to train them, when the experience and infrastructure already exists. Along with the American Bankers Associations, we urged the SBA back in November to enlist the agency's private-sector lending partners to help process loans. SBA refused, saying they had a better idea. That idea failed. With this bill, SBA can increase processing, get small businesses their loans faster, and local lenders can participate in the recovery of their communities. We also identified a need for export assistance. There is an interesting phenomenon occurring right now as a result of Katrina. Companies from around the globe, having witnessed the tragedy of New Orleans, are trying to reach out to businesses along the Gulf Coast. For companies that had already established relationships overseas, this has meant big bucks. Many smaller businesses, however, don't have those relationships and are struggling to take advantage of these new international opportunities. The U.S. Export Assistance Centers, or USEACs, are ready and willing to help, and they are a tremendous resource for businesses looking to branch into foreign markets. But the problem is that the Small Business administration doesn't have an employee in the New Orleans USEAC to help direct businesses to the financing programs that they need. Senator Landrieu and I recognize that this is because the SBA's international trade resources are stretched too thinly, so we are authorizing extra funds for the SBA to use in hiring an employee for the New Orleans USEAC. Shortly after Hurricane Katrina hit, Small Business Development Centers across the country decided to devote all the funds in the portability grant program, which is designed to help communities recover after suffering significant job losses, to helping the Gulf Coast SBDCs. Not only did the SBDC community sacrifice money to help their colleagues in the Gulf, they tried to volunteer employees and other resources. Unfortunately, the good intentions of the SBDC network were stopped by legal technicalities. Limitations on the amount of money a State could get for a portability grant and restrictions on SBDC employees working outside of their State hampered recovery efforts. Senator Landrieu and I were disturbed to hear of these problems, and with our legislation today we will correct these problems so that bureaucracy isn't preventing the Gulf Coast recovery. This bill also focuses on contracting opportunities for small businesses. The full participation of this Nation's small businesses, particularly those in and around the affected region, in the rebuilding effort is essential to the long-term success of the region's economy. New Orleans, in particular, was a city built on a foundation of small business and they will be the driving force behind its rebuilding. Unfortunately, not enough is being done to ensure this participation. Just last week, I sent a letter to FEMA about their failure to award approximately $1.5 billion in relief, recovery, and rebuilding contracts to small businesses. They told Senator Landrieu and me, and the other members of the Small Business Committee in November that they would award those contracts by February 1. We were disappointed that it would be another four months to get those funds to small businesses that desperately needed the work, but we were even more appalled when the deadline came and went, with no action from FEMA. Thus, this legislation has a number of provisions to help small businesses in the disaster areas compete for Federal contracts in the short term and in any future disaster recovery effort. This bill would make the declared disaster areas an Historically Underutilized Business Zone (HUBZone). This would give a preference to small businesses in the disaster zone when they bid on Federal contracts. To help jumpstart the local economies affected by Hurricanes Katrina and Rita and Wilma, the bill requires the Federal Government to award 30 percent of prime contracts and 40 percent of subcontract dollars spent on disaster relief, recovery or reconstruction in the four affected States to be awarded to small businesses. Small businesses performing work in the area are more likely to turn over Federal dollars in the local economy, reinvigorating the local economy. The provision also includes a requirement of a weekly small business utilization report from the Gulf Coast region. The bill includes a change to the Stafford Act, requiring that 10 percent of immediate disaster recovery contracts, such as debris removal, distribution of supplies, and reconstruction are awarded to firms located in or near an area designated as a federal disaster area by the President. This will put more local people back to work and help a region's economic recovery after a disaster. This legislation will increase access for small businesses seeking contracting opportunities but limited by their ability to get bonded. Expanding access to bonding will increase small business participation, but will also protect the Federal Government from significant cost overruns and lack of performance in a contract. Mr. President, 43 percent of businesses that close following a disaster never reopen, and an additional 29 percent of businesses close down permanently within two years of a natural disaster. It's been seven months, but we still have a chance to make a difference and mitigate bankruptcies and foster the startup and growth of new small businesses to rebuild the Gulf region. I hope that my colleagues and the administration will give this bill consideration and not repeat the past months of obstruction that have hurt local small businesses and homeowners. It is inexcusable that the bipartisan bill we put forward with Senators Snowe and Vitter in September has been stalled. I thank my colleague Senator Landrieu for her leadership and look forward to traveling with her soon to Louisiana to visit with businesses and families that still need our help.

Mr. KERRY

Mr. KERRY. Mr. President, today the Senate failed to live up to its responsibility to keep faith with the American people and change the way business is done in Washington. I oppose the lobbying reform bill because it does not go far enough to effectively change the way business is done in Washington. It is not enough to reform the earmarking process. It is not enough to ban gifts and meals from lobbyists. It is not enough to rein in pay- to-play schemes like the Republican K Street project. Changing the rules does no good if we have ineffective enforcement and fundamental reform is needed. It is not reform if business as usual continues and the fox is left guarding the chicken coop. We need an outside entity, whether a congressional inspector general, as I proposed, or an ethics commission, as Senator Obama proposed, or an Office of Public Integrity as Senators Collins and Lieberman proposed, to police Congressional ethics violations. It is wrong that the Senate failed to establish an Office of Public Integrity. Some of my colleagues apparently are fine with the status quo. I couldn't disagree more strongly. We need an independent entity to ensure Members act ethically. We need an independent entity to ensure that no one changes the rules as they play the game as the House tried to do just last year. We need an independent entity to ensure that violations are investigated and that offenders are punished. Without such an independent entity, this attempt at ethics reform runs the risk of not being considered real or serious. The fact is that Congress has not been able to effectively investigate or appropriately punish its Members for ethical violations. Last year, House Republican leaders were forced to rescind their attempts to change their Ethics Committee rules to protect former House majority leader Tom DeLay from further ethics investigations. The House Ethics Committee never sanctioned Randy ``Duke'' Cunningham, and neither the House nor the Senate Ethics Committees has opened an investigation into the Jack Abramoff scandal. We can tinker with disclosure and gift rules all we want, but until we get tough on enforcement, no significant change will happen. A few weeks ago, former Representative ``Duke'' Cunningham received the longest prison sentence ever imposed on a former Member of Congress. His crime? Collecting $2.4 million in homes, yachts, antique furnishings, and other bribes--including a Rolls-Royce--from defense contractors. This disgraceful conduct--beyond comprehension for me and most of my colleagues--earned him 8 years and 4 months in a Federal prison and orders to pay the Government $1.8 million in penalties and $1.85 million in ill-gotten gains. What is almost as shocking as Duke Cunningham's bribes is that under today's rules, the American taxpayer is still paying for his congressional pension--a pension worth approximately $40,000 per year. Under today's rules, Duke Cunningham will collect his pension--paid for by the American taxpayers--while he sits in jail for violating the law and ethics as a Congressman. That is simply unacceptable. And it has got to change. That is why Senator Salazar and I introduced the Congressional Pension Accountability Act and attempted to offer as an amendment to the lobbying reform bill. Our amendment would have denied Federal pensions to Members of Congress who are convicted of white-collar crimes such as bribery--Members who perform acts like Randy ``Duke'' Cunningham. As elected representatives, we must hold ourselves and all those who represent the Federal Government to the highest ethical standards. The principle is a simple one: Public servants who abuse the public trust and are convicted of ethics crimes should not collect taxpayer-financed pensions. Right now, only a conviction for a crime against the United States, such as treason or espionage, will cost a Member of Congress their pension. There is no reason the law should not be changed to ensure that Congress does not reward unethical behavior. But because debate on the lobbying reform bill was unnecessarily limited, I was prevented from offering my amendment to prevent Duke Cunningham and other Members who violate the law from collecting their pensions. There are other important issues that the lobbying reform bill fails to address. For example, although the bill bans gifts and meals from lobbyists, it does not apply to the organizations that employ the lobbyists. Nor does it apply to lobbyists paying for parties to ``honor'' or ``recognize'' Members. And although the bill increases the amount of time that Members and senior executive branch officials are prohibited from making lobbying contacts and conducting lobbying activities from 1 to 2 years, it does include organizing and directing a lobbying campaign in the prohibited activities. Thus, a former Member or senior executive branch official cannot make contact directly, but they can direct partners or employees in a lobbying strategy. The bill does not include any restrictions on lobbyists soliciting and organizing fundraisers or serving as treasurers on officeholder committees, nor does it prohibit special interest groups from paying for and organizing congressional travel junkets. These are serious problems with this lobbying reform legislation. It simply does not go far enough to have a real impact on the way business is done in Washington. And, frankly, it is not surprising given the limited amount of floor debate we had on the bill and the number of important amendments that were never offered or debated because we were rushed to a cloture vote. I am disappointed that we could not take advantage of this unique moment in history and enact serious lobbying reform. I am voting against this package because the American people deserve a strong reform bill and this does not meet that test.

Mr. KERRY

Mr. KERRY. Mr. President, earlier today, my colleague from Alabama, Senator Sessions, alleged that I have a ``hold'' on the Intelligence Authorization Act. Nothing could be further from the truth. I know that in the heat of debate on the Senate floor, words can sometimes come out faster than a Member might intend, so I harbor no ill will toward my colleague. But in the interest of accuracy, I wish to set the record straight. Last autumn, many of us were shocked to read allegations in the press of secret clandestine prisons operated around the world by the CIA as part of the war on terror. Congress has a responsibility to perform oversight in all things, including the intelligence community's conduct in the war on terror. In discussing this amendment last fall, I said, and I repeat today, no one is passing judgment on whether these alleged facilities should be closed. We are simply saying that Congress--and specifically the duly established intelligence committees of the House and Senate--need to know what is going on. On November 10, 2005, I offered an amendment to the National Defense Authorization Act requiring the Director of National Intelligence to provide a secret report to the Intelligence Committees of the House and Senate on the operation, past or present, of these alleged facilities. It would also have required a report on the planned disposition of those allegedly held at these facilities and a determination as to whether interrogation techniques at these facilities were consistent with U.S. obligations under the Geneva Convention and the Convention against Torture. In debating this amendment, I was delighted to work with my colleague, Senator Roberts, the chairman of the Senate Select Committee on Intelligence, and his vice chairman, Senator Rockefeller, to perfect the text of the amendment so they could support it. It passed with overwhelming bipartisan support by a vote of 82 to 9. About 1 month later, the House of Representative voted 228 to 187 to urge House-Senate negotiators to include the amendment in their conference report. The House Armed Services Committee, however, was concerned that the amendment was beyond the scope of their jurisdiction and the provision was stripped out in conference. I turned then to the Intelligence Authorization Act and again worked with Senator Roberts and Senator Rockefeller to prepare the amendment anew for inclusion in that legislation. The amendment was identical to the provision passed previously in the Senate and endorsed by the House and was cleared by Senator Roberts for passage by unanimous consent. But someone objected to the unanimous consent request to pass this vital bill by voice vote. Since that time, the legislation has lingered because someone doesn't want a vote on this amendment or the amendments offered by my colleague from Massachusetts, Senator Kennedy. I know my friend from Alabama voted against my amendment when it was on the floor in November. I am sure he would vote against it again. We can agree to disagree on this issue, but his assertion that I have placed a hold on the intelligence bill is simply not true.

Mr. KERRY

Mr. KERRY. Mr. President, I cannot support this budget resolution. It closely mirrors the President's budget which projects the largest deficit in history for 2006 $423 billion. We are on an unsustainable path. We cannot continue year after year to pass budget resolutions that increase the deficit, rather than put us on a course of fiscal responsibility. Not only should we be concerned about growing deficits, we should be concerned about the debt. Under this budget, the deficit will increase to $371 billion for 2006, and the debt will increase by $654 billion a year. The Senate has just passed a $781 billion increase in the debt ceiling, the fourth largest debt limit increase in our Nation's history. This is the fourth time that the Bush administration has requested an increase in the debt. These increases now total $3 trillion. The service on the debt alone for this year is $220 billion. This money could be put to better use. With the approaching retirement of the baby boomers, we should not be increasing the debt. The budget being debated today is not based in reality. It leaves out the full 10 year numbers. Without these numbers, the budget hides the full cost of making the 2001 and 2003 tax cuts permanent. The budget does not include funding for the ongoing war costs beyond 2007. Relief from the individual alternative minimum tax, AMT, is only addressed for 2006. It does not include the President's Social Security privatization proposal. This budget is incomplete. If the missing items were added back, the debt would increase every year by more than $600 billion. The deficit and debt will continue to explode because the budget will continue a course of spending more than the amount of revenue raised. It is not right to vote on budget that is incomplete. In his budget, the President only chose to address the AMT for 1 year--2006--and chose not to address it for the current budget year. The administration's budget deliberately leaves out a more permanent solution for the AMT for two reasons: first, the AMT would add additional costs to the budget; and second, the AMT masks the true costs of the 2001 and 2003 tax cuts. This budget resolution follows the administration's lead. It chooses to only address the AMT for 2006 and to extend tax provisions that do not expire until the end of 2010. The budget does not address the 23 million families that will be impacted by the AMT in 2007, but the budget makes sure that the tax cuts that are skewed to those making more than $1 million are extended through 2011. This budget continues the repeated pattern of choosing tax cuts for the wealthy rather than investing in our future. The tax cuts going to those who on average earn over $1 million a year cost $41 billion for a single year. In contrast, the President's budget cuts education by $2.2 billion--the biggest cut ever for education. This budget shortchanges veterans. There are reductions in law enforcement, firefighter grants, and essential air services. These are just a few of the many examples how the budget's priorities are misguided. The budget does not adequately address healthcare. Access to quality, affordable health care continues to be a challenge for most Americans and the Bush budget only exacerbates the problems. And what about the uninsured? There is nothing in this budget to help them. Sure, there are some recycled, stale proposals the administration has been trying to advance for 5 years now but nothing really new. Nothing that will help any families gain access to coverage that is quality, affordable, comprehensive care. It's high time we have a real debate and discussion in the Congress on real reforms necessary to address the health needs of our nation. The budget resolution assumes the deep cuts and unprecedented fees for the Small Business Administration, SBA. The administration's request of $624 million is insufficient to meet the needs of small businesses in this country that need access to capital, counseling and Federal contracts. By the SBA's own calculation, the request is $18 million less than what was available to the Agency last year when congressional initiatives and disaster supplemental appropriations are excluded. I proposed an amendment to increase the funding shortfall by $151 million and it was offset by closing abusive corporate tax loopholes. Unfortunately, this amendment did not garner bipartisan support. However, we were able to reach a bipartisan agreement that would increase SBA funding by $130 million. This budget is another example of how the Republican controlled Congress continues to misuse the reconciliation process. The reconciliation process was designed to make it easier to pass difficult legislation that would provide fiscal discipline. It is now being used to ram through tax cuts and pet priorities that do not have the support of 60 Senators. I am vigorously opposed to the inclusion in the budget of assumed revenues and a reconciliation instruction for the Energy and Natural Resources Committee linked to opening the Arctic National Wildlife Refuge to oil and gas leasing and development. I object to the inclusion of drilling in the refuge for two primary reasons. First, it is irresponsible to base our budget on the highly speculative projection of lease revenues from the Coastal Plain. Second, I oppose using the reconciliation process to open the Arctic Refuge to drilling because it would limit consideration of this highly controversial issue. The reconciliation process is being used to address only one Senate committee's jurisdiction, and is clearly intended to authorize oil and gas leasing in the Arctic Refuge. This underscores that the real objective of the process is not deficit reduction, but rather to circumvent normal Senate process and procedure with respect to this controversial subject. On the whole this budget reflects no new ideas and recycles bad policies. This budget fails to address reality, and I therefore cannot support it.

Mr. KERRY

Mr. KERRY. Mr. President, for several years members of this Chamber have worked to reduce the age that retired members of the National Guard and Reserve can receive their retirement pay from 60 to 55. Senator Corzine offered such legislation in the first session of this Congress, and I was delighted to co-sponsor it. With Senator Corzine's departure from the Senate for the New Jersey State House, we have reassembled the body of co-sponsors and are introducing this legislation again to signal our continued commitment to addressing this issue. The issue is simple. If you join the active duty Army at age 18 and serve 20 years on active duty, retiring at age 38, you are immediately eligible to receive retirement pay. If you join the National Guard or Reserves, you may retire after 20 years, but you must wait until age 60 to begin collecting retirement pay. A 38-year-old veteran of the Guard and Reserves must wait 22 years to see any of their retirement pay. To be sure, everyone recognizes the difference between service in the active component and the reserve component in peace time. But since September 11, 2001, as we are reminded almost daily, we have been a Nation at war. Our National Guard and Reserves have been fully engaged in the War against al Qaeda and the War in Iraq. As of last week, nearly 120,000 reservists were mobilized, including 1,230 troops from my home state of Massachusetts. And sadly, almost 600 members of the Guard and Reserves have made the ultimate sacrifice for this country. We can never fully express our Nation's gratitude for their service and sacrifice, but we can try to make benefits and compensation more worthy of the commitment and service shown by America's citizen soldiers. That's exactly what the legislation I introduce today seeks to accomplish. I'm delighted to be joined in this effort by Senators Dayton, Durbin, Johnson, Lautenberg, Mikulski, Menendez, and Reid. It is no secret that our all volunteer force is stretched. Recruiting numbers have sagged under the anxieties and concerns of a nation at war. Retention has remained healthy to date, but as the nation approaches its 5th year of war, we must be proactive in seeking to support those who have already done so much for us. Reducing the age at which members of the Guard and Reserves can receive their retirement pay can help make continued service more attractive, retaining those in whom America has already invested so much. We are asking for more from our National Guard and Reserve members than ever before. In turn we should be providing them with what they deserve and have certainly earned. This legislation would be a small step in the right direction to honor the service of these Americans and to ensure their continued strength. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, for several years members of this Chamber have worked to reduce the age that retired members of the National Guard and Reserve can receive their retirement pay from 60 to 55. Senator Corzine offered such legislation in the first session of this Congress, and I was delighted to co-sponsor it. With Senator Corzine's departure from the Senate for the New Jersey State House, we have reassembled the body of co-sponsors and are introducing this legislation again to signal our continued commitment to addressing this issue. The issue is simple. If you join the active duty Army at age 18 and serve 20 years on active duty, retiring at age 38, you are immediately eligible to receive retirement pay. If you join the National Guard or Reserves, you may retire after 20 years, but you must wait until age 60 to begin collecting retirement pay. A 38-year-old veteran of the Guard and Reserves must wait 22 years to see any of their retirement pay. To be sure, everyone recognizes the difference between service in the active component and the reserve component in peace time. But since September 11, 2001, as we are reminded almost daily, we have been a Nation at war. Our National Guard and Reserves have been fully engaged in the War against al Qaeda and the War in Iraq. As of last week, nearly 120,000 reservists were mobilized, including 1,230 troops from my home state of Massachusetts. And sadly, almost 600 members of the Guard and Reserves have made the ultimate sacrifice for this country. We can never fully express our Nation's gratitude for their service and sacrifice, but we can try to make benefits and compensation more worthy of the commitment and service shown by America's citizen soldiers. That's exactly what the legislation I introduce today seeks to accomplish. I'm delighted to be joined in this effort by Senators Dayton, Durbin, Johnson, Lautenberg, Mikulski, Menendez, and Reid. It is no secret that our all volunteer force is stretched. Recruiting numbers have sagged under the anxieties and concerns of a nation at war. Retention has remained healthy to date, but as the nation approaches its 5th year of war, we must be proactive in seeking to support those who have already done so much for us. Reducing the age at which members of the Guard and Reserves can receive their retirement pay can help make continued service more attractive, retaining those in whom America has already invested so much. We are asking for more from our National Guard and Reserve members than ever before. In turn we should be providing them with what they deserve and have certainly earned. This legislation would be a small step in the right direction to honor the service of these Americans and to ensure their continued strength. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, the President's budget proposal includes a concept to increase TRICARE--this is the DOD, Department of Defense, health care program--fees and copayments for military retirees under the age of 65 and for their dependents. All of us recognize there is this spiraling cost to health care. I understand that. And it affects everything we are doing in the country. The Department of Defense is, needless to say, no different. It has those increases. But the answer is not found in tripling the fees for retired officers, doubling them for senior enlisted retirees, and demanding more from every military retiree under the age of 65 who uses the health care system, when you look at the other costs that are already going up for all of those folks. Most importantly, there are a series of better ways that have been recommended to bring down the cost of health care for those retirees. So you do not have to go immediately to fees and copayments in order to solve the problem of the increase in costs. In successive budget requests, the Bush administration has asked for increased fees and copayments for veterans health care, which is increasingly shifting the burden of that care from some veterans on to others, and it is driving some veterans out of the system altogether, which is, obviously, not fair. My amendment will restore the funding for TRICARE so that military retirees are not saddled with these increased costs and fees. We pay for it by closing a number of tax loopholes. I think by doing so, we keep faith with people who have served our country for 20 years or more. They did not ask to change the terms of their commitment to the military when things got tough, and I do not think we should be ignoring and changing our commitment to them now. Mr. President, I yield back such time as may remain. I suggest the absence of a quorum.

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

Mr. KERRY. Mr. President, I am grateful to both of the managers and appreciate the courtesy. Amendment No. 3143 Mr. President, I have an amendment which I send to the desk and ask for its appropriate consideration in the line of votes, as we decide on that later.

Mr. KERRY. Mr. President, the Bush budget triples the fees for officers who are retired under the age of 65 who put in their 20 years of service, and doubles the fees and copays for senior enlisted folks, again, after their 20 years of service to the country. There are several other ways to cover the costs of increased health care under TRICARE. We could stimulate the use of lower cost mail-order pharmacies. We could negotiate with drug manufacturers who secure discounts under TRICARE, which we don't do. You don't have to take it out of the hide of the retirees themselves. We pay for this. It is paid for by closing a number of tax loopholes and it is fully paid for so we do not have to raise copays on retirees who put in 20 years of service in uniform.

Mr. KERRY. Mr. President, I am deeply disappointed that this budget resolution assumes deep cuts and unprecedented fees for the Small Business Administration, the SBA. The administration's request of $624 million is insufficient to meet the needs of small businesses in this country that need access to capital, counseling, and Federal contracts. By the SBA's own calculation, the request is $18 million less than what was available to the Agency last year when congressional initiatives and disaster supplementals are excluded. If this budget is adopted, the Agency will have been cut more than 37 percent since 2001. In context, that means it will have suffered the largest cuts of all 24 Federal agencies. To address this shortfall, I introduced S.A. 3072 to increase SBA's fiscal year 2007 budget of $624 million by $151 million, for a total of $775 million. The amendment would have paid for this increased spending by closing abusive corporate tax loopholes and would, among other things, have prevented the administration from increasing the cost of disaster loans, from imposing a new fee on SBA's largest loan and venture capital programs, from eliminating the SBA's microloan programs, and from weakening business assistance to women, minorities, veterans, Native Americans, and those trying to cut through redtape to contract with the Federal Government. This budget resolution comes after 5 years of drastic budget cuts which have eroded SBA's core programs and left the Agency with one of the worst morale problems in the Federal Government. SBA's largest lending program, the 7(a) program, is now more expensive than ever for small business borrowers and lenders, and the administration is proposing to add new ``administrative fees'' for larger 7(a) loans, 504 loans, and SBIC or venture capital deals. These fees are the first time the SBA has attempted to pass along administrative costs to lenders and small business borrowers, but the administration is pushing for them because they will generate $7 million in savings. We are told that some 7(a) borrowers will pay $625 more per loan, some 504 borrowers will pay $1,625 per loan, and the majority of companies that get an SBIC investment will pay $45,000 more. This is in addition to the excessive fees these small business borrowers already pay to cover the loan subsidy cost. This would set a bad precedent. To prevent the administration from imposing a new fee on small business borrowers, my amendment provided $7 million to the SBA's budget for next year to offset this proposal. Deep budget cuts for SBA have also meant less transparency and accountability when it comes to the oversight of small business contracting. After pressure from our Committee on Small Business and Entrepreneurship, the SBA hired additional procurement center representatives, PCRs--the Government officials responsible for monitoring the bundling of large contracts and for helping small businesses cut through redtape to compete for Federal contracts--now bringing the number of PCRs nationwide up to 58. But many of these are not full-time PCRs. To avoid further reports of contracting abuses, large businesses receiving small business contracts, and Federal agencies missing their small business goals, my amendment provided $10 million for 100 additional PCRs to ensure robust contracting oversight throughout the Nation. For the fifth year in a row, this budget continues on the path of providing unrealistic funding by cutting critical programs, such as the Small Business Development Centers or SBDCs, Women's Business Centers and SCORE, forcing SBA's counseling partners to spend fewer hours with clients because the Federal matching grant isn't keeping pace with inflation or demand. Despite the budget's failure to account for inflation costs, these programs continue to play an integral role in helping entrepreneurs from underrepresented communities. These cuts, when combined with 5 years of budget cuts for the SBA as a whole, would leave the SBA ill-prepared to meet the demands of the growing entrepreneurial sector. I strongly oppose flat funding these resources for small businesses and so proposed an additional $23 million in my amendment to bring Small Business Development Centers from the outdated $87.1 funding level to $110 million, proposed $4.95 million to bring SCORE funding to $7 million, and $4.7 million to bring the Women's Business Centers to a level of $16.5 million. All of this pales in comparison to the mismanagement of the response to recovery of the gulf coast region. The SBA's disaster loan program, essential to the recovery of business owners, homeowners, and renters after a disaster, almost ran out of money twice in February. Instead of getting their fiscal house in order like every American family must do, the President now proposes to raise the cost of disaster loans and no longer guarantee our most vulnerable borrowers fixed interest rates. Although they could still have up to 30 years to pay off a loan, if they don't pay it off in 5 years, the interest rate will go up. Instead of telling us how this will help disaster victims, we are told this will save the SBA an estimated $41 million. We should not be saving money on the backs of disaster victims. Instead, we should help them to rebuild their homes and businesses. To prevent raising disaster loan interest rates, my amendment provided $41 million to the SBA's budget for next year. The $151 million in my amendment would have provided real money to our appropriators and to small business programs in desperate need of funding. Unfortunately, this amendment did not garner bipartisan support. While I am disappointed with this outcome, I am pleased that we were able to work out a bipartisan compromise with Senator Snowe, the chair of the Small Business Committee. Our compromise, S.A. 3134, would increase the SBA fiscal year 2007 budget by $130 million, and although it would not add any additional funds to the budget resolution, it is a bipartisan effort to address many of the issues that my amendment 3072 attempted to address. There is bipartisan support for the 7(j) technical assistance program and the HUBZONE Program, which Senator Bond from Missouri worked hard to put in place and I joined with him in cosponsoring it when he was chairman for SBDCs and SCORE and Women's Business Centers; for the Microloan Program and microloan technical assistance, both of which the President has tried to eliminate for several years now. We all support U.S. Export Assistance Centers and Veterans Business Development, Small Business Innovation Research, and Small Business Technology Transfer Program. While I would have liked to have seen higher funding levels for the PRIME and New Markets Venture Capital Program, I am glad that our amendment reflects continued funding for these vital programs. We made a strong bipartisan statement that minority lending numbers must be increased, with about $1 million more toward Native-American outreach. And we agreed to reject the proposals to raise the cost of disaster loans and to impose a new fee on the lending and venture capital programs. Overall, amendment 3134 is sending an important signal to all that there is broad bipartisan support to increase funding for these vital small business programs. Mr. President, I thank my colleagues, Senators Landrieu, Lieberman, Levin, Nelson of Florida, Vitter, and Coleman for joining us to cosponsor this amendment, the entire Senate for agreeing to the amendment, and Senators Conrad and Gregg for their help in putting together a more realistic budget for small businesses.

Mr. KERRY. Mr. President, I ask unanimous consent my modification be accepted at the desk.

Mr. KERRY

Mr. KERRY. Mr. President, about 16 months ago, we debated an $800 billion increase in the debt limit. At the time, this was the Bush administration's third request to increase the debt limit for a grand total of $2.2 trillion. During this debate, I discussed how in less than four-years, a 20-year $5.6 trillion budget surplus was turned into a $2.4 trillion deficit. I thought at the time the fiscal outlook could not get much worse and the budget situation would have to improve. Unfortunately, I was wrong. Since the last debate on increasing the debt ceiling, the administration has not submitted budgets that would put us on a path towards deficit reduction. As part of last year's budget resolution, Congress passed legislation that would reduce spending by almost $40 billion. Many of these cuts will impact those that have the least. Now Congress is in the process of wrapping up a $70 billion tax bill. When you combine the spending and the tax bill, the numbers do not add up to put us on a path towards deficit reduction. The combined total increases the deficit and increases the debt. The Bush administration's budget for fiscal year 2007 includes more of the same and the fiscal situation even gets worse. The administration estimates that the deficit for 2006 will be $423 billion, the largest in history. The projected surplus of $5.6 trillion that this administration inherited will now turn into a $3.3 trillion deficit, a reversal of $8.9 trillion. The repeated pattern of deficits and irresponsible budgets necessitate another increase in the debt limit. Today we have before us an increase of $781 billion, which will bring the total to $3 trillion under this administration's watch. If the President's budget is adopted, the debt is expected to reach $8.6 trillion at the end of this year. Under this budget, with alternative minimum tax reform and ongoing war costs added in, the debt will explode to $12 trillion by 2011. We cannot continue on this unsustainable path. Yesterday, Senator Conrad offered an amendment to the budget resolution to restore the original pay-as-you-go-rule that led us on a path to a balanced budget, projected surpluses, and expectations of paying down the debt. These pay-go rules simply require new mandatory spending and new tax cuts to be offset. The current pay-go rule has a glaring loophole. Tax and spending increases that are provided in the budget resolution are exempted. This rule does not promote fiscal responsibility. A prime example of this is the tax and spending reconciliation instructions included in last year's budget resolution. These bills will increase the deficit by $30 billion. Repeatedly, efforts to restore pay-go have been defeated and these efforts were defeated once again yesterday. In the context of today's debate, I do not know how anyone could oppose an amendment to restore these rules. Without strong pay-go rules, we will be back here in a year debating another increase in the debt limit. We have a fundamental obligation to restore fiscal responsibility rather than merely voting to raise the debt limit as if there was an endless credit card at the expense of the American people. Americans struggle every day to balance their own budgets. Across this country, I have heard how families struggle to keep up with the rising costs of health care, tuition, and gasoline. Median household income has declined by $1,669 or 3.6 percent after inflation. Americans are sitting around their kitchen tables trying to figure out how to pay their bills. They do not have a magic credit card with no limit. Congress should play by the same rules. We need to be responsible and think about future generations. We made tough choices during the 1990s in order to dig ourselves out of a hole, and now we are back in an even deeper hole. We need to face the consequences. The interest payments on the debt alone are staggering and depriving of us choices that we need to make for the long term investment of our country. This debt will affect our children and grandchildren. Each individual's share of the public debt is over $16,000 and a family of four's share is a staggering $64,533. The interest on the debt for this year alone is over $220 billion and according to the administration's budget it will grow to $322 billion in 2011. Just think of how this money could be put to better use. It could be used to help uninsured Americans with the rising cost of health care. We cannot afford expensive interest payments and ever- increasing debt with the retirement of the baby boomers on the horizon. Not only is the amount of debt a problem, I am also concerned about the amount of debt that is foreign held, almost $2.2 trillion. Japan holds the most, $685 billion. China holds $258 billion. Even the Caribbean banking centers hold $111 billion. Over 51 percent of the public debt is held by foreign investors. Sixty percent of the foreign debt is held by official foreign investors. It is dangerous for our Government and our standard of living to be dependent on foreign capital. If foreign investors decided to stop financing our borrowing habits, it could have a spiraling impact on our economy. If those investors began to withdraw their capital, our financial markets would plummet and interest rates would climb. This would filter down to American families. Homes, education, and cars would become more expensive. Debt is more than a financial liability it--weakens our security, our diplomacy, and our trade policy. The negligence of our borrow and spend policies leaves us vulnerable to the priorities of foreign creditors. How do you go to a country that holds so much of your debt while your economy is closely linked to theirs and make an argument about nuclear proliferation, human rights, democratization, or other issues that are of importance and great consequence to our country? We need to make economic opportunity and fiscal responsibility a common goal. We need to live by rules that give the debt limit meaning. I will not support a borrow and spend economic policy that has no limits. There are better alternatives.

Mr. KERRY

Mr. KERRY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KERRY. Mr. President, I ask unanimous consent that I be permitted to proceed for 10 minutes as in morning business.

Mr. KERRY. Mr. President, today, we learned of the unbelievably tragic passing of a remarkably courageous, strong, and dedicated woman, Dana Reeve. Most Americans knew Dana as the wife of Christopher Reeve, and most Americans new Christopher as Superman and, as this unbelievable figure, capable of overcoming so many obstacles. I think the whole Nation was shocked and touched when they learned that Dana, not too long after the loss of Chris, herself was battling lung cancer. She was always ebullient and strong in that effort. At times, she was filled with doubt about her kids and the future, as anyone would be, but always unbelievably courageous. She was a passionate advocate after Chris passed away, and even before. She was, herself, an accomplished actress and singer, appearing off Broadway and on Broadway. She was, above all, a loving mother and a stunningly supportive and nurturing wife. Through her very selfless effort to be part of Chris's life in gigantic ways, bigger than most people could describe, after his accident, she became an inspiration to millions of Americans. This is no way for anybody who was touched by that family to adequately express our shock and our sorrow to her immediate family--to Will, age 13, and her stepchildren, Matthew and Alexandra, and to her friends, who were with her until the end. Dana was always a crusader, but with Chris's accident, she became an even more tireless, passionate crusader for the particular promise of medical research into stem cell treatments. After Chris's paralysis, she and Chris together created the Christopher Reeve Foundation, which has raised and distributed over $55 million in research grants, much of it aimed at speeding the development of stem cell treatments. I can remember visiting Chris at his home in New York. He had this elaborate exercise setup, which he went through, I think, almost every day, or whenever possible, always keeping his muscles as alive and growing as possible under the circumstances, with the belief that he was going to walk again. Dana believed in him and she believed in that possibility. Together with Chris she was deeply involved in the fight for increases in medical research funding, and she was an active advocate for the rights of the disabled. Many of my colleagues in the Senate had the opportunity to get to know her or talk with both she and Chris in the course of that advocacy. After Chris's death in 2004, Dana courageously kept up the battle to advance medical research. She became the chairwoman of the foundation, picking up where Chris had left off. She was responsible for developing the foundation's Christopher and Dana Reeve Paralysis Resource Center and for a program that has now distributed more than $8 million for projects that improved the daily lives of people with paralysis. In October of 2004, I was particularly honored and moved to be joined by Dana on the campaign trail in Ohio. I cannot tell you how incredible it was that within 2 weeks of Chris passing away--less than 2 weeks-- Dana took the time, found the strength and courage and the sense of purpose somewhere, which she described to me as coming directly from Chris himself, to come out on the trail and fight for what he had been fighting. I will never forget the grace and the strength that she showed that day, and even a glow that she exuded in her love for Chris and her passion about the issue. Let me share, if I may, a few of the words that she spoke that day which I found so moving, but I also find important for all of us to focus on today. She said: Chris struggled for 9\1/2\ years, but it was essential to him that every day bring some kind of forward progress, either personally or globally. Despite the enormous challenges he faced each morning, he awoke with focused determination and a remarkable zest for life. Chris was able to keep going because he had the support of his loved ones, a dedicated nursing staff, the belief of his fans, and members of the disabled community, and because he had hope--hope that one day science would restore some of his function. Chris actively participated in clinical trials. He was on a strict exercise regimen and was recently in a clinical trial right here in Ohio to breathe on his own. Chris could breathe off his ventilator for hours at a time, thanks to science, and scientists taking bold steps. Chris understood that all journeys begin with a single step, and to take that first step one needs hope. His vision of walking again, his belief that he would reach this goal for himself and others in his lifetime was essential to the way that he conducted his life. Dana went on to describe that while Chris led the crusade for research, she in turn put her energy into improving the quality of life for people who were living with diseases, inspired by individuals who could still benefit from research. She talked about how right there in Ohio, where we stood that day, the Christopher Reeve Paralysis Foundation had funded a number of items that kept people healthy and active despite the challenge of living with a disability. She did all of this because both she and Chris imagined living in a world where politics would never get in the way of hope. Dana shared that vision and she worked tirelessly to help achieve it. Today, the whole country will again remember this couple. They will remember them together and their dedication to furthering stem cell research. Here in the Senate, we have an opportunity to honor their memories and that work by fighting to advance stem cell research. We can do it. Mindful of all the ethical considerations that we understand, there is a way to do it and to respect life. We have the opportunity to take the steps that Dana and Chris would have been so thrilled to see, worked so hard to achieve, to finally see a stem cell bill passed through the Senate. In the end, none of their efforts, nor their lives were about policy. It was about hope and it was about values. It is about honoring their lives now that we should set about that task. They shared an unquenchable belief in the genius of America when we put our minds to it. They drew strength from the talent and dedication of the scientists they met and, in turn, they inspired them to go out and do even more. Chris stunned doctors by regaining some sensation in over 70 percent of his body and moving most of his joints, which people said he would never do. He did that because of science. Dana and Chris never lost faith that America and American science was the greatest hope for humanity. That is a faith that all of us should share for Chris and Dana and the millions of people who believe in the possibilities of this remarkable time and our remarkable country. A lot of people ask, How can we do that? The answer is simple. How can we commit ourselves to anything less? So to Will, Matthew, Alexandra, and Dana and Chris's friends and families, colleagues and supporters, I say the best thing we can do to complete their journey is by doing our best in ours. If we do that, we will give even greater meaning to two remarkable lives. I yield the floor.

Mr. KERRY

Mr. KERRY. Mr. President. I am pleased to introduce legislation today that establishes a constitutional line item veto, which would allow the President to reduce pork barrel spending and save taxpayers billions of dollars. Congress has an opportunity this week in our debate on lobbying reform to take ethics reform seriously and take action to rid the federal budget of special interest projects. Giving the President the ability to target projects placed in the budget at the last minute at the request of a single lawmaker is a step in the right direction and a critical move toward needed transparency. It is no secret that President Bush and I do not agree on many policy matters, but I fully support giving him this line item veto authority and I applaud the President's comments earlier today. I hope that Congress immediately takes up and passes this legislation, and I hope that President Bush will be able to use this new veto authority soon to get tough on wasteful spending. Under the Republican-led House and Senate, pork-barrel spending has skyrocketed. Nearly $30 billion a year is being spent on projects that have never even been debated. For fiscal year 2005, appropriators added 13,997 projects into the 13 appropriations bills, an increase of 31 percent over last year's total of 10,656. In the last two years, the total number of projects has increased by 49.5 percent. The cost of these projects in fiscal year 2005 was $27.3 billion, or 19 percent more than last year's total of $22.9 billion. Billions of taxpayer dollars are being wasted on things like research to enhance the flavor of roasted peanuts and the infamous ``bridge to nowhere.'' We have the largest deficit in American history and Congress and the President must take action to get spending under control. In 1996, the Congress passed and President Clinton signed into law the ``Line Item Veto Act'', P.L. 104-130. Two years later, however, in Clinton v. City of New York the Supreme Court concluded that the method used to give the President line item veto authority was unconstitutional. The Court noted that presidents may only sign or veto entire acts of Congress. The Constitution does not authorize them to enact, to amend, or to repeal statutes. We can restore the line item veto and be consistent with the Constitution. The key difference between what I am proposing and what the Supreme Court struck down is the legal effect of the President's actions. The ``Line Item Veto Act'' allowed the President to cancel provisions in their entirety, but the Supreme Court rejected this arrangement. The Line Item Veto Act of 2006 is different. It will empower the President to suspend provisions until the Congress decides to approve or disapprove of that suspension with an up or down vote. The provisions are not cancelled out of the legislation. I believe this change addresses the Supreme Court's concerns. I agree with President Bush's comments earlier today, it is indeed `time to bring this important tool of fiscal discipline to Washington, D.C.' I look forward to working with my colleagues on both sides of the aisle to pass the Line Item Veto Act and I look forward to President Bush using this authority to reign in pork-barrel spending.

Mr. KERRY

Mr. KERRY. Mr. President, over the course of this week, the Senate has had a series of votes on the PATRIOT Act conference report as well as on a bill amending the conference report introduced by Senators Sununu, Craig, Murkowski, and Hagel. Last December, I voted against cloture on the PATRIOT Act reauthorization conference report. I did not cast that vote because I oppose reauthorizing the PATRIOT Act--I supported the PATRIOT Act then just as I do now. I voted against cloture on the conference report because I believed that it did not adequately protect our civil rights and liberties. Supporters of the conference report believed that you had to choose between two extremes: taking a tough stand on terror and protecting our fundamental constitutional rights. I thought you could accomplish both at the same time. On February 28, 2006, I voted against cloture on the Sununu compromise bill, S. 2271, vote No. 22, because of procedural measures taken by the majority to prevent Senator Feingold--or any other Senator--from offering amendments. Senator Feingold's four proposed amendments would have improved the Sununu compromise and addressed more of the concerns I had with the conference report. They would have, No. 1, ensured that section 215 orders to produce sensitive library, medical, and other business records would be limited to individuals who had some connection to terrorism; No. 2, ensured that judicial review of section 215 gag orders and National Security Letter, NSL, gag orders is meaningful; No. 3, sunsetted the NSL authorities after 4 years; and No. 4, required notification of sneak-and-peek search warrants within 7 days of the search rather than within 30 days. I believe that each of these amendments would have improved both the Sununu compromise bill and the conference report. Regardless of whether my colleagues agree with me on that, I believe the Senate should have been given the opportunity to vote on them. On March 1, 2006, the Senate conducted a series of votes, both procedural and substantive on the Sununu compromise bill and the PATRIOT Act conference report. I voted to support the Sununu compromise. I also voted to proceed to the motion to reconsider the conference report, to proceed to the conference report, and to invoke cloture on the conference report because, in my view, the Sununu compromise and the conference report come as a package deal. I support the two taken together, and for that reason, I also voted for the conference report today. I support the Sununu compromise bill because it makes some important improvements to the PATRIOT Act. First, it allows judicial review of a section 215 nondisclosure order 1 year after its receipt. Section 215 of the PATRIOT Act allows the Government to obtain business records, including library, medical, and gun records among other things. Under the conference report, recipients of these section 215 orders were subject to an automatic permanent nondisclosure order which would have prevented them from bringing any court challenge. Under the compromise, a section 215 nondisclosure order is now subject to judicial review. Second, the conference report would have required recipients of National Security Letters, NSL, to identify their attorneys to the FBI. NSLs allow the Government to obtain, without a warrant, subscriber records and other data from telephone companies and Internet providers. The compromise removes that requirement so that recipients of NSL orders can seek legal advice without having to inform the FBI. Third, the compromise clarifies that the Government cannot issue NSLs to libraries unless the libraries provide ``electronic communications services'' as defined by the statute. Thus, libraries functioning in their traditional roles, including providing Internet access, are not covered. Even though this legislation does not address all of my concerns with the conference report, these compromise provisions are steps in the right direction and will be important components of the PATRIOT Act. I am proud to support this legislative package and am pleased we have reauthorized and improved the PATRIOT Act. I believe there is still more work to be done and will work with my colleagues; such as Senator Feingold and Senator Specter, on further improvements. For example, in a perfect world the PATRIOT Act would provide for more meaningful judicial review of section 215 gag orders as well as NSL gag orders. There is no reason to have a conclusive presumption against recipients--one that can only be overcome by a showing of Government bad faith. Nor is there any reason to prohibit judicial review of those gag orders until a full year has passed. They should be immediately reviewable, and, if there are any presumptions, they should be in favor of the privacy rights being invaded rather than the Government doing the invading. In a perfect world, the Patriot Act would require the subjects of section 215 business record disclosures to have some link to suspected terrorists. As I mentioned earlier, section 215 is expansive, and it allows the Government to obtain very sensitive, personal records. Simply requiring those records to be relevant to an authorized intelligence investigation, as the conference report does, is simply not enough. This standard will not prevent Government fishing expeditions. And, in a perfect world, the PATRIOT Act would have required the Government to notify victims of sneak-and-peek searches--unannounced and secret entries into the homes of Americans--within 7 days as the original Senate bill did. The 30- to 60-day timeframe is simply too long. People have a right to know when the Government has been in their house, searching through their things. Thus, I understand why some of my colleagues are disappointed with the compromise. They say that it does not go as far as the original Senate bill which was passed by unanimous consent, and they are right. But the fact is that the compromise does improve the original conference report. I believe the compromise was the product of good faith negotiations. It is not a perfect bill, but it is a step in the right direction. And I will continue to work with my colleagues so that we can create a more even balanced PATRIOT Act.

Mr. KERRY

Mr. KERRY. Mr. President, today I am submitting a concurrent resolution establishing an independent Congressional Inspector General to investigate ethics violations in the Senate and the House of Representatives. Every Member of Congress must be held to the highest ethical standards. Those who violate the public trust must be held accountable for their actions. Unfortunately, our current system does not measure up. Too often, Congress has been unable or unwilling to effectively investigate or appropriately punish those Members who commit serious ethical violations. In December 2005, an NBC/Wall Street Journal poll showed that just five percent of Americans believe all Members of Congress are honest and trustworthy. The same poll showed that most Americans believe that most Members of Congress are dishonest and are not trustworthy. This is simply unacceptable. We have to restore the faith of the American people in the Congress. Thus, I am submitting a resolution to establish an independent Congressional Inspector General with the authority to investigate and punish violations of the ethics rules by Members of Congress, Congressional staff and the Capitol Police. The Congressional Inspector General will make a preliminary investigation into all ethical misconduct allegations to determine whether there is probable cause that a full investigation is warranted. The Congressional Inspector General has expansive authority to investigate ethics allegations, including improper conduct that may reflect upon the Senate or House of Representatives, significant violations of law, violations of the Senate Code of Official Conduct or the ethics rules of the House of Representatives, and violations of Congressional rules or regulations relating to the conduct of Members in their performance of official duties. If a full investigation is warranted, a public report will be developed for the House and Senate Ethics Committees or the Justice Department describing any credible evidence of improper conduct or a violation of law. To insure that this new ethics process is not abused, anyone who knowingly files a false ethics complaint will be subject to a $10,000 fine or the costs incurred by the investigation, whichever is greater. They could also be subject to up to one year in prison and will be banned from making further complaints. The Congressional Inspector General will not be able to accept new charges filed 30 days prior to a primary election for which the Member of Congress in question is a candidate or 60 days prior to a general election for which the Member of Congress is a candidate. The Congressional Inspector General will also provide periodic reports to Congress on how to update our ethics laws and how to improve the investigation and enforcement of current ethics laws. Finally, it would release an annual report of violations by Members of Congress and Congressional staff. I also strongly support other legislation to develop independent oversight of the Congressional ethics process including the Congressional Ethics Enforcement Commission Act of 2006 that was introduced by Senator Obama earlier this year. I look forward to working with my colleagues to develop ethics reform legislation in the upcoming months. We need to change the way business is done in Washington. We must convince the American people that our government responds to the needs of our people, not to special interests. This resolution will help restore the faith of the American people in their government. Together we can work to change our government for the better.

Mr. KERRY

Mr. KERRY. Mr. President, the Small Business Administration's disaster loan program is facing another shutdown this month unless Congress passes a bill to provide the program with more funding. A shutdown of this program would further slow the recovery of the gulf, where hundreds of thousands of business owners and homeowners have been waiting months for the administration to process and disburse loans to help them pay their bills and start rebuilding their businesses and homes. As of this week, according to the SBA's data, out of more than 60,000 loans approved for businesses and homeowners, only 23,000 have been partially or fully disbursed. And out of the almost 375,000 applications received, 190,000 are still waiting to be processed. The families and businesses waiting should not be subjected to yet another roadblock to assistance through the disaster loan program. The mismanagement of the SBA's disaster loan program has been well- documented on national news programs like CNN and in major papers like the Washington Post and USA Today. The Committee on Small Business and Entrepreneurship has held two hearings on the matter. Adding to the problems, the SBA was not paying attention to the books and didn't realize it was making larger loans and spending more than it had estimated. This lack of oversight brought the program to the brink of shutting down. When the President's budget was released on February 6, the SBA discovered it only had enough money to make it to February 13. Instead of being forthcoming about the problem when the SBA and its financial team came up to brief the oversight Committee on SBA's budget and financial standing, they were silent. Luckily, as has been the pattern since President Bush has been in office, the Congress stepped in to pass emergency legislation to keep one of SBA's small business programs up and running. Specifically, Congress approved a last-minute request from the administration to reprogram $100 million from SBA's disaster administrative funds into the account for disaster loans. Unfortunately, not only did SBA wait until the last minute to seek assistance, but the assistance it sought was not enough to keep the program running long--just enough to keep the program running from February 14 to maybe the end of the month. To make it through the year, the SBA needs an estimated $1.3 billion. Demonstrating yet another lapse in judgment, the administration did not plan to seek the entire amount to avoid another shutdown but instead decided to take a piecemeal approach. Their plan was to ask now for enough money to make it through July and then later in the year to seek the rest of the needed funding. I disagreed with this approach and urged the President and Senator Majority Leader Frist to request the entire funding at one time and to move the funding measure as a freestanding bill so that it could pass before the Congress breaks for the Presidents Day recess. Waiting until Congress comes back on February 28 would be too risky given that SBA only has the $100 million it requested to keep going. Given all that is at stake for the families and businesses in the gulf, I am very glad that today, before we recess, the Senate is considering H.R. 4745, a bill to provide funding to the SBA's disaster loan program. I am glad that Congress has come to the administration's rescue to pass another emergency bill, one that is freestanding. I only wish the bill provided the full $1.3 billion instead of $712 million. This will only keep the program running through April. However, the House has already recessed, so we are not in the position to add more funding at this time. I hope this bill gives some peace of mind to those in the gulf waiting for help, and I hope that when we come back we can be just as swift in approving a final measure to fully fund the disaster loan program. In closing, I ask unanimous consent that letters from me and my colleagues to President Bush and Majority Leader Frist be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, on August 29, 2005, Hurricane Katrina tore through the gulf coast States leaving in its wake death and destruction that none of us will soon forget. In the immediate aftermath, graphic images of people struggling to escape the flooding in New Orleans and digging through the rubble of their homes in Mississippi and Alabama filled our television sets and newspapers. People were outraged at the Government's response. They volunteered their time to aid in rescues. They donated their money to help the victims. But many soon moved on. The problems faced by the residents of the gulf coast, however, have not gone away. Rebuilding is underway, but it will take years. We cannot forget the work that still needs to be done or the people who are still struggling. That is why I am so impressed with a new volunteer initiative called Katrina on the Ground. Katrina on the Ground, or KOTG, will bring together students from across the country to help rebuild the hurricane-ravaged cities of Mobile, AL, Biloxi, MS, and New Orleans, LA, during their spring break vacations. Each student will provide at least one week of assistance in the region after receiving a day of training in Selma, AL. This is a stunning commitment of time and energy given that many students spend their spring breaks at the beach or on vacation. Choosing the 21st Century Youth Leadership camp in Selma, AL, as a training site was not a coincidence. Selma, as we all know, is where Dr. Martin Luther King, Jr. led his last great march in 1965--the march that led to the Voting Rights Act of 1965. KOTG's founders hope to build on the spirit of the civil rights movement, invigorating a new generation of leaders to effect change. As Kevin Powell, one of the founders points out, ``There has been nothing like this since the student-led anti-apartheid movement of the 1980s or . . . the student sit-ins and freedom rides of the 1960s.'' A student army, 500 to 700 strong, sends a powerful message to residents of the gulf coast and the rest of the Nation that we care and we have not forgotten. I commend these students, KOTG's partner organizations, and its founders KOTG for their creativity, their compassion, and their commitment to public service. KOTG gives us hope for the future and demonstrates that the leaders of tomorrow are already here, ready, and willing to face the toughest challenges of our time.

Mr. KERRY

Mr. KERRY. Mr. President, less than 2 weeks ago we debated the importance of addressing the individual alternative minimum tax, AMT. Without congressional action, this year 17 million families will be impacted by the AMT. And this problem is growing. Without a permanent solution to the AMT, as many as 30 million families will be impacted by it in 2010. We all seem to agree that the alternative minimum tax needs to be addressed, but we differ on how big a priority it should be. Very recently, 73 Members of this body voted to address the AMT before addressing tax cuts that do not expire until the end of 2008. This sense of the Senate specifically stated that ``protecting middle class families from the alternative minimum tax should be a higher priority for Congress in 2006 than extending a tax cut that does not expire until the end of 2008.'' Some of my colleagues believe we can address both the AMT and extend the capital gains and dividends tax cut, but I am concerned this will be difficult to do within the confines of a $70 billion tax bill. The House has made their position clear that they would rather address AMT outside the reconciliation tax bill. This is troubling because it would likely result in a total of over $100 billion in tax relief that is not paid for. We cannot afford another costly debt-financed tax cut. The Senate-passed bill does include some revenue offsets, but I do not expect the conference report to include any revenue offsets. Not less than a week after we debated the alternative minimum tax, the administration's budget submitted to Congress for fiscal year 2007 failed to adequately address the AMT. Once again, the budget makes the 2001 and 2003 tax cuts permanent but ignores the looming problem of the AMT. The President only chose to address the AMT for 1 year--2006. He chose not to address it for fiscal year 2007. In addition, the relief provided in the budget for 2006 is not as generous as the AMT relief in the Senate-passed bill. Under the budget proposal, an additional 1.2 million families would be impacted by the AMT. The Senate-passed bill prevents additional taxpayers from being impacted by the AMT. The budget deliberately leaves out a more permanent solution for the AMT for two reasons. First, the AMT would add additional costs to the budget. Second, the AMT masks the true costs of the 2001 and 2003 tax cuts. Back during the debate on the Economic Growth and Tax Relief Reconciliation Act of 2001, I offered an amendment that would have exempted taxpayers with incomes of $100,000 or less from the AMT. The reason I offered this amendment was that I was concerned about the impact of the AMT on families who were never meant to be affected by it. In 1998, we began to notice that something was happening that was unintended--the AMT was beginning to encroach on middle class taxpayers. At that time, the AMT was expected to impact over 17 million taxpayers in 2010. The AMT problem resulted because the regular tax system is indexed for inflation, while the personal exemptions, standard, deduction, and AMT are not. Under the AMT, exemption amounts and the tax brackets remain constant. This has the perverse consequence of punishing taxpayers for the mere fact that their incomes rose due to inflation. The AMT has another perverse consequence. It punishes families for having children. The more children a family has, the lower the income necessary to trigger the AMT. For example, if no action is taken in 2006, a family with four children with an income of $58,500 would be subject to the AMT while a family with one child would have to make $72,000 to be affected. As we debated the Economic Growth and Tax Relief Reconciliation Act of 2001, I stressed the fact that the legislation would result in more individuals being impacted by the AMT and that not addressing the AMT hid the real cost of the tax cuts. This holds true today. Revenue estimates show us that it would be cheaper to address the AMT if the tax cuts were repealed than if the tax cuts were made permanent. A choice was made in 2001 to provide more tax cuts to those with incomes of over a million dollars rather than addressing a looming tax problem for the middle class. The Economic Growth and Tax Relief Reconciliation Act of 2001 did include a small adjustment to the AMT, but it was not enough. We knew at the time that the number of taxpayers subject to the AMT would continue to rise steadily. The combination of lower tax cuts and a minor adjustment to the AMT would cause the AMT to explode. The amendment that I offered would have simply exempted those with incomes of less than $100,000 from the AMT and it was offset by decreasing the amount that the top rate would be reduced. It would have reduced the top rate to 37 percent instead of 35 percent. This amendment was not a panacea to the AMT, but we would not be in the situation that we are today because the amendment would have countered the interaction between the tax cuts and the AMT by exempting middle class taxpayers. The Joint Committee on Taxation estimated that the amendment would have prevented 18 million taxpayers from being impacted by the AMT. Each year that we wait to address the AMT, more taxpayers are impacted and the cost of addressing it increases. We missed an opportunity in 2001 to address the AMT. Repeatedly, the AMT has been pushed aside to give priority to making the tax cuts for the wealthiest Americans permanent. So often we hear that the bulk of the tax cuts assist the average American family. This is ironic because by 2010, the AMT will take back 21.5 percent of the promised tax breaks for individuals making between $75,000 and $100,000 per year and 47 percent from individuals making between $100,000 and $200,000. However, households with annual income over $1,000,000 will only lose 9.2 percent of the tax cuts. Once again today, we have the opportunity to choose to help hard- working families or very wealthy investors. We can choose to protect 17 million middle class families by voting for the motion offered by my colleague, Senator Menendez. Not addressing the AMT this year would result in tax increases as large as $3,640. The other choice is to extend the capital gains and dividends rate cuts that go to households with income over $1 million. Over 50 percent of the benefit goes to these households that make up only 0.2 percent of all households. These tax cuts do not expire until the end of 2008. Last week, the Senate Finance Committee heard from Treasury Secretary Snow that the capital gains and dividends tax cut helps individuals with income of less than $50,000. I believe that he was trying to make the argument that more middle class taxpayers would benefit from the capital gains tax relief than from AMT relief. I disagree. The important statistics to look at are the percentage of income that is capital gains and dividends and the amount of the tax cut. In 2009, those making over $1 million would receive an average tax cut of $32,000 and those with incomes below $50,000 would receive an average tax cut of $11. IRS income tax data for 2003, which is the most recent data, shows that capital gains and dividends income accounts for nearly one-third of all income for millionaires. For those making less than $100,000, capital gains and dividends income accounts for 1.4 percent of total income and it is even less for those with incomes of $50,000. I urge my colleagues to choose hard-working families. We can reexamine the issue of capital gains and dividends tax cuts once we have our fiscal house in order. The budget that was sent to Congress last week projects the largest deficit in history for fiscal year 2006. In times of deficits, we have to carefully choose our priorities. It is time for Congress to address the AMT which has turned into the family tax.

Mr. KERRY

Mr. KERRY. Mr. President, along with Senator Salazar, I am introducing the Congressional Pension Accountability Act, to deny Federal pensions to members of Congress who are convicted of white collar crimes such as bribery. I strongly believe that Members of Congress must be held to the highest ethical standards. This year, the Senate is expected to consider legislation to reform our ethics laws. This is in response to a series of scandals that have exposed Washington lobbyists and unfortunately even a Member of Congress who used undue and improper influence to represent special interests in their dealings with the Federal Government. Last year, the now infamous Washington lobbyist Jack Abramoff pleaded guilty to conspiracy, mail fraud and tax evasion charges in a plea agreement. The Justice Department is currently investigating his attempts to influence Federal Government policy in both Congress and the Executive Branch. In the largest bribery case in the Congress since the 1980s, Representative Randy ``Duke'' Cunningham recently resigned from the House of Representatives after pleading guilty in Federal court to receiving $2.4 million in bribes from military contractors and evading more than $1 million in taxes. In a plea agreement, former Representative Cunningham admitted to a pattern of bribery lasting close to five years, with Federal contractors giving him Persian rugs, a Rolls-Royce, antique furniture, paying travel and hotel expenses, use of a yacht and a lavish graduation party for his daughter. As elected representatives, we must hold ourselves and all those who represent the Federal Government to the highest ethical standards. The principle is a simple one: public servants who abuse the public trust and are convicted of ethics crimes should not collect taxpayer financed pensions. Under current law, former Representative Cunningham and others convicted of serious ethics abuses will receive a Congressional pension of approximately $40,000 per year--paid for by American taxpayers. Only a conviction for a crime against the United States, such as treason or espionage, will cost a Member of Congress their pension. This law must be changed to ensure that Congress does not reward unethical behavior. The Congressional Pension Accountability Act will bar Members of Congress from receiving taxpayer-funded retirement benefits after they have been convicted of bribery or other serious ethics offenses. Together we can significantly improve our government by changing the way business is done in Washington. I believe this legislation will help ensure that our government once again responds to the needs of our people, not special interests.

Mr. KERRY

Mr. KERRY. Mr. President, along with Senator Salazar, I am introducing the Congressional Pension Accountability Act, to deny Federal pensions to members of Congress who are convicted of white collar crimes such as bribery. I strongly believe that Members of Congress must be held to the highest ethical standards. This year, the Senate is expected to consider legislation to reform our ethics laws. This is in response to a series of scandals that have exposed Washington lobbyists and unfortunately even a Member of Congress who used undue and improper influence to represent special interests in their dealings with the Federal Government. Last year, the now infamous Washington lobbyist Jack Abramoff pleaded guilty to conspiracy, mail fraud and tax evasion charges in a plea agreement. The Justice Department is currently investigating his attempts to influence Federal Government policy in both Congress and the Executive Branch. In the largest bribery case in the Congress since the 1980s, Representative Randy ``Duke'' Cunningham recently resigned from the House of Representatives after pleading guilty in Federal court to receiving $2.4 million in bribes from military contractors and evading more than $1 million in taxes. In a plea agreement, former Representative Cunningham admitted to a pattern of bribery lasting close to five years, with Federal contractors giving him Persian rugs, a Rolls-Royce, antique furniture, paying travel and hotel expenses, use of a yacht and a lavish graduation party for his daughter. As elected representatives, we must hold ourselves and all those who represent the Federal Government to the highest ethical standards. The principle is a simple one: public servants who abuse the public trust and are convicted of ethics crimes should not collect taxpayer financed pensions. Under current law, former Representative Cunningham and others convicted of serious ethics abuses will receive a Congressional pension of approximately $40,000 per year--paid for by American taxpayers. Only a conviction for a crime against the United States, such as treason or espionage, will cost a Member of Congress their pension. This law must be changed to ensure that Congress does not reward unethical behavior. The Congressional Pension Accountability Act will bar Members of Congress from receiving taxpayer-funded retirement benefits after they have been convicted of bribery or other serious ethics offenses. Together we can significantly improve our government by changing the way business is done in Washington. I believe this legislation will help ensure that our government once again responds to the needs of our people, not special interests.

Mr. KERRY

Mr. KERRY. Mr. President, thank you very much. I thank the distinguished manager. Mr. President, we don't know at this point what is going to happen in terms of the parliamentary procedure. So I am not sure whether the Senator from New Jersey is going to have the opportunity, which I know he wants, to be able to propose an amendment with respect to the AMT. My hope is that he will be able to because I think it is absolutely critical that the Senate address this issue. I wish to speak for a few minutes about the amendments that the Senator from New Jersey will submit and why I support them and why I think it is so important. There is no rationale--no economic rationale, no social rationale, political rationale--for addressing tax issues that expire in 2009 before we take care of the individual alternative minimum tax issue that affects people today. There is no common sense behind saying we are going to address a tax issue with respect to 3 or 4 years from now when we have an enormous number of American families who are going to be negatively impacted by the alternative minimum tax. It is almost inexplicable that the House bill chooses capital gains and dividend relief over preventing 19 million families from having to pay AMT. Let me make it clear that I have supported a reduction in the capital gains tax on any number of occasions. In fact, I wrote it with Senator Bumpers back in 1993. We drafted a targeted capital gains tax reduction that passed the Senate. It got caught up in the complicated rulemaking process. It didn't work as effectively as it might because of the rules, not the concept. Ultimately, I have supported a reduction in capital gains. But to suggest that we ought to now make it permanent, when we see the gap growing wider and wider between the ``haves'' and ``have nots,'' when we realize that what we are talking about in this tax reduction is providing those Americans who earn more than $1 million a year about $32,000 worth of tax relief next year alone, while people earning less than $50,000 a year will get about $20 each. It doesn't make sense, on any measurement of fairness or common sense about how we are trying to expand the economic pie for all Americans, particularly when you look at the data about the numbers of American families who are being squeezed and squeezed when having a hard time. Median wages have not gone up--they have gone down about 2 percent over the last few years for average Americans. But public college tuition has gone up about 57 percent. Since 2000, private college tuition has gone up something like 32 percent. Families are paying higher health care costs. All of us know, as the President reminded us last night in the State of the Union Message, gasoline prices are killing people at the pump. A lot of workers are seeing whatever gains they might have tried to save get taken away just trying to get to and from work. We are struggling with this gap, which is growing. Yet the priority of the House of Representatives is to give the wealthiest people in America yet another break while many Americans are going to be pushed into the alternative minimum tax regime. You shouldn't even call it the alternative minimum tax. You ought to call it the family tax because that is what it is. The taxpayers get hit by the alternative minimum tax according to where they live and because they have children. If you live in a certain State--take a State with a relatively high standard of living and a fair amount of public contribution, such as Massachusetts or California or some other State, New York, Connecticut. In those States, the only thing you can do to not pay this tax is to not start a family. If you start a family and have children, the tax cuts end. You wind up being hit harder. We are literally punishing Americans for having children and building families. The more children you have, the more you are impacted by the alternative minimum tax at a lower income level. It doesn't make sense. If no action is taken on the alternative minimum tax, a family with three children with an income of $63,000 would be impacted by the AMT, and a family with six children with an income of $50,000 would be even more impacted by the AMT. In May, we heard testimony from the Urban Institute about how the AMT was once upon a time a class tax, but it is soon becoming a mass tax because more and more taxpayers, mostly because they are having children, will be forced to pay it. Nina Olson, the taxpayer advocate who works every day on practical implications of what we do, has repeatedly testified about the complexities and the inequities of the AMT. She said sarcastically the AMT punishes taxpayers for such classic tax avoidance behavior as having children or living in a high-tax State. If you look at his history of the AMT, you can tell that it really does need reform. The individual AMT was created in 1969. It was created in 1969 to address 155 individual taxpayers in America whose incomes exceeded $200,000 a year, who paid no Federal income tax at all in 1969. That is why this tax was created. You had high-income people paying no income tax, and 155 people were the target of this effort. But now it has grown from 155 taxpayers in 1969 to 1 million in 1999, to almost 29 million by the year 2010. It now affects families with incomes well below $200,000 a year. By the end of the decade, repealing the alternative minimum tax will cost more than repealing the regular income tax. Unfortunately, we can't end this today. Obviously, we can't do that. But we can do a lot more than what is in the House reconciliation bill. The House tax reconciliation bill includes a provision that extends taxation of capital gains and dividends at a lower rate through 2010; whereas, the alternative minimum relief expired at the end of 2005, and it needs to be addressed. The capital gains and dividends provision doesn't expire until 2008. The amendment before the Senate--provided Senator Menendez is given the opportunity to provide it--is going to strike the extension of capital gains and dividends at a lower rate. That provision has a cost of $20 billion over 5 years and a $50 billion cost over 10 years. The budget resolution has been drafted in a way that hides the cost of the capital gains and dividend cuts by putting most of the expenses outside of the 5-year budget window, and it will actually cost more than twice as much as is stated. One rationale for cutting the tax on capital gains and individual dividend income is that it stimulates investment. That has not held true, and the record does not show that is, in fact, what happened. If you talk to people on Wall Street, they will tell you point blank, No. 1, they are concerned about the deficit, and No. 2, they believe that their behavior is not going to be affected. It is a great windfall for them. They will all tell you that if they get an extra $100,000 in their pocket, at their income levels, they can do something with it. But it will not affect the fundamental investment decisions that they are going to make anyway. The fact is that the stock market, as we all know during the 1990s, did a lot better than it is doing today when it had a higher capital gains rate, notwithstanding the fact that we lowered it at that time. We have a choice, a very straightforward choice: Either help the wealthiest investors in America or you can help hard-working families. It is that simple. That is exactly what this choice is about. I hope a majority of the folks believe--that we ought to be helping those families that most need the help today. It is a simple matter of priority. It is a simple matter of fairness, and it is common sense with respect to our economy and the money we want to put into the pockets of Americans so they can go out and pay their bills, continue to purchase, and drive our economy. I want the tax bill to reward work first and wealth second. This can be done by making the alternative minimum tax relief a priority over capital gains and dividend tax relief. The fact is that Congress has an opportunity to stop punishing taxpayers because of where they live, because they move from one State to another for work or for school, or because they decide to start a family. Those are not the reasons on which you ought to base a tax on in our country. We have an important opportunity to take a step to deal with this. It is my hope that we will do so. I yield whatever time may remain.