John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, the Coast Guard Authorization Act authorizes nearly $15 billion in funding for the Coast Guard to carry out its mission for 2 years. This represents a significant increase in funding over previous years, and will go far to support an agency that has both civilian and homeland security responsibilities. The bill also includes funding for the Deepwater program, funding for port security measures, provisions aimed at preventing oil spills and helping fishermen, and protections for marine resources. Let me begin by discussing the authorization included in the bill. The fiscal year 2005 budget authorization is 4 percent higher than what the President has requested. This difference represents $327 million, and the authorization itself is a $700 million increase over what the Congress appropriated for the current fiscal year. The funding increases in the bill will help the Coast Guard meet all of its missions. The Coast Guard has stretched its resources dramatically since September 11, and traditional missions such as enforcement of fishing and marine resource laws as well as search and rescue missions are still below pre-September 11 levels. This legislation includes over $700 million for both fiscal year 2004 and fiscal year 2005 for the Coast Guard's Deepwater program, well over the $500 million in fiscal year 2004 and the $678 million in fiscal year 2005 requested by the President. Deepwater is an important program that will allow the Coast Guard to purchase new ships, planes, and navigation equipment and integrate those resources into its existing infrastructure. This legislation also addresses security at our ports. Unfortunately, many of our Nation's ports and waterways remain vulnerable to terrorist attacks. Implementation of the Maritime Transportation Security Act is expected to take years. Therefore, it is important that the Coast Guard, the main Federal agency charged with port security, have adequate resources to meet current homeland security responsibilities. The bill includes $70 million to assess port security plans as well as $100 million for expenses that the Coast Guard incurs when the Government issues homeland security alerts. The bill also authorizes $36 million for three new maritime safety and security teams, MSSTs. The MSSTs have already become a vital security force for many of the Nation's busiest ports. Major port cities such as New York, Boston, and Los Angeles have benefitted from the deployment of MSSTs, and I am pleased that this legislation will allow other ports to receive the same level of protection. The bill also includes $40 million for the automatic identification system, AIS. Mandated by the Maritime Transportation Security Act, the AIS will allow the Coast Guard to track and monitor certain vessels that could pose a threat to port security. It is essential that this system operates at full capacity. The fiscal year 2005 authorizations include an overall 10-percent increase for operating expenses and general capital costs to ensure that port security priorities continue to be funded at appropriate levels. I am pleased that the bill includes a number of environmental provisions, aid for fishermen affected by oilspills, and protections for living marine resources. In response to last year's oilspill in Buzzards Bay, MA, we included in this bill a provision that requires the Coast Guard to study the feasibility of speeding up the deadline for companies to start using double-hull tankers to transport oil. Also in the bill is a mandate for the Coast Guard to issue a report outlining the cost and benefits of requiring vessels to have electronic navigational equipment on board. In addition, to ameliorate the effects of oilspills on fishermen, we added language to the bill that will allow fishermen to receive loans from the oilspill liability trust funding during the period immediately following an oilspill. The bill also addresses the issue of ship strikes of one of the most endangered whales in the world--the North Atlantic right whale. There are only about 300 individuals left in this entire species, and ship strikes are the No. 1 cause of mortality. While lobstermen and other fishermen in the Northeast have shouldered significant regulatory requirements to avoid entanglement of these whales in fishing gear, no actions have been taken to address the risks from ship strikes. The bill would require the Coast Guard to undertake studies to examine options for minimizing vessel strikes of North Atlantic right whales in accessing ports where this is an issue. In addition to these studies, the bill would require the Coast Guard to submit a report to Congress on the effectiveness and costs of such measures. In conclusion, we have crafted a balanced bill that will benefit the Coast Guard and enhance our domestic security. The Congress has a responsibility to oversee the Coast guard and provide it with direction and resources. With this bill, we have met that responsibility. I urge my colleagues to support it. Mr. President, I would like to acknowledge the hard work of Senator McCain, Senator Hollings, and Senator Snowe in helping to draft this legislation. I respect and appreciate their dedication to these issues. Thank you.

Mr. KERRY

Mr. KERRY. Mr. President, I want to make a few comments about H.R. 3915 that will be considered by the Senate today. This bill contains two temporary extensions of authority. One that is general, keeping the Small Business Administration and its programs operating through April 2, 2004, and another that is specific to the SBA's 504 Loan Guarantee Program, keeping it operational through May 21, 2004. I support this bill, and am relieved the 504 Loan Guarantee Program will not lose its authority to keep making loans to small businesses that are growing, creating jobs and helping our communities. However, there are other serious problems concerning the SBA's 7(a) Loan Guarantee Program and Women's Business Centers that are urgent and should be addressed before the Senate recesses tonight for a week. I introduced a bill earlier this week, S. 2186, the SBA Emergency Authorization Extension Act of 2004, which sets forth workable solutions for those issues. At that time I urged my colleagues to take immediate action and consider it. Senator Snowe also introduced a bill this week, S. 2196, which addressed the 7(a) Loan Guarantee Program funding shortfall, which I support and would have supported as an amendment to this extension. Like the small business community, I am disappointed that the bigger solution for small business lending is being delayed another couple of weeks. Some people think a couple of weeks can do no harm. But in the 7(a) Loan Guarantee Program, small businesses caught in the middle of the administration's funding schemes might not make it. And the funding problems will fester because it will operate at a more expensive cost than if we enacted the temporary program changes that the lending and small business communities support and are strongly urging the Congress to adopt. Two weeks could mean about half a billion in lending. I disagree with the administration's tactics and I hope that during this next brief extension they will work with the Senate and House committees to pass program changes that resolve these issues fairly, effectively and expeditiously. Their plan does not work and the small business and lending communities are opposed to it. We need a plan that does. I look forward to working with my colleagues to resolve this as soon as possible.

Mr. KERRY

Mr. KERRY. Mr. President, I join Mr. Bingaman in offering an amendment to the fiscal year 2005 budget resolution that helps small businesses by restoring, and in some cases reasonably increasing above fiscal year 2004 appropriated levels, funding cuts proposed by President Bush for the Small Business Administration. The President's budget requests 15 percent less in funding for the SBA than requested last year, while promising more assistance in lending and counseling. For example, the budget request claims to save taxpayers $100 million by cutting all funding for the SBA's largest small business lending program, while at the same time claiming to increasing access to loans by 30 percent. Sound familiar? It should. The President proposed eliminating all funding for these small business loans his first year in office, that time shifting the more than $100 million in funding to borrowers and lenders by increasing fees, fees that the General Accounting Office exposed as excessive for 8 years. The administration wanted to overcharge them even more. We in Congress rejected it. This time the President has proposed paying for it through accounting and program gimmicks that are unworkable and the small business community and small business lenders have rejected. We are all in favor of more efficient and cost-effective government, but the SBA's 7(a) loan program does not need fixing. It already is structured to provide long-term loans to small business at a cost of about 1 percent. That is one Federal dollar generating $99, an excellent bang for the buck! This valuable resource just needs reasonable funding. The problems over the past four years have all been created by unreasonable budgets, propped up by funding schemes that never materialize and create unnecessary instability in the delivery of capital for small businesses. Today we are trying to address the needs of small businesses next year, fiscal year 2005, to prevent the same funding crises that we have experienced in the SBA small business loans year after year. If the President's fiscal year 2005 Budget for the SBA is adopted, there will be zero funding for the SBA's largest loan program, which provides about 40 percent of all long-term capital to small businesses in this country; termination of all micro-entrepreneur loans and complementary business training; termination of ten of 20 small business counseling and development programs, including assistance to Native Americans and Women's Business Centers. For the SBA's counseling and business development programs, this is the most damaging budget the President has proposed in four years. Cuts to or inadequate funding of these programs are routinely attributed to vague and unfounded claims of duplication. Such claims mistake a common mission of training and counseling for duplication, ignoring the reality that small businesses vary greatly and have different needs. Just as it would be ineffective to have only one type of loan or venture capital financing structure for 23 million small businesses in this country, it would be ineffective to water down specialized management and training programs to impose counseling and training assistance, most are grant programs that have cost-sharing components with state and local entities, such as matching grants, so they leverage more for the small businesses than the face value of the Federal grant. Without funding, budget gimmicks will force borrowers to face higher fees or lack of access to affordable capital; high interest credit card loans; higher bankruptcies because they go into business with inordinately high debt or can't get counseling to survive the rough times. At worst, because the most damaging budget gimmick attacks the small businesses' source of more than 40 percent of long-term loans, it is very possible that, together with the overall cuts, the Agency would be little more than an insurance agency for cookie-cutter loans made by a handful of large banks in only a fraction of the states and areas now served, or closing its doors within a couple of years. This amendment also takes a step in the right direction for restoring funding to the New Markets Venture Capital initiative that was rescinded in the fiscal year 2003 Omnibus Appropriations bill: $10.5 million for guaranteed debentures, and $13.75 million in grants for NMVC technical assistance. That money was reserved for a second round of funding, and our Committee had an agreement with the SBA that it would offer that round in the fall of 2002. However, as companies spent significant money and time to begin preparing proposals, SBA broke the agreement and did not issue a solicitation for the second round of funding. Because the $24.25 million reserved for a second round of funding was not obligated, it was available to be rescinded and it was rescinded as part of the fiscal year 2003 appropriations process. New markets venture capital is important for developing public-private partnerships to invest in areas with high unemployment where the private sector rarely invests. This amendment helps restore some of the critically needed New Markets Venture Capital funds. The amendment I am offering with Mr. Bingaman takes a reasonable approach. In general, the $171 million paid for in this amendment restores funding to programs that are critical to small business development and job creation in our towns and cities. The $171 million results from: Adding $101m to the 7(a) Loan Program (zero-funded). Adding $3m to the Microloan Program (terminated). Adding $25m to the Microloan Technical Assistance Program (terminated). Adding $8m to the Program for Investment in Microentrepreneurs (PRIME) (terminated). Adding $2m to Native American Outreach Program (terminated). Adding $3.5m to Export Assistance Centers Program (terminated). Adding $3m to the Small Business Innovation Research (SBIR) FAST Program (terminated). Adding $1m to the Small Business Innovation Research (SBIR) Rural Outreach Program (terminated). Adding $2m to the New Markets Venture Capital Program (zero-funded) Adding $3m to the New Markets Technical Assistance Grants Program (zero-funded). Adding $1.5m to the Women's Business Centers Program (increases funding to $13.5m). Adding $17m to the Small Business Development Centers (increases funding to $105m). Adding $500k to the 7(j)/8(a) Programs (increases funding to $2m). Adding $250k to the Veterans' Outreach Program (increases funding to $1m). Adding $250k to Small Disadvantaged Business Program (increases funding to $1.75m) Americans need jobs. And many who have them are scared of losing them. Adequately funding public-private partnerships of the SBA is one of the fastest ways to fuel the economy, creating businesses, creating jobs, and improving the innovation of this country. I ask my colleagues to vote for this amendment. amendment no. 2759

Mr. KERRY

Mr. KERRY. Mr. President, earlier this week I introduced a bill, S. 2186, to keep the SBA, its two largest lending programs, the 504 and 7(a) Loan Guarantee Programs, and the Women's Business Centers up and running through the remainder of this year, September 30, 2004. I ask that these letters of support be printed in the Record. One letter is from Mary Kay Hamm of Linden International based in Wayne, Pennsylvania, and the other is from Tjuana C. Byrd, an attorney in Little Rock, Arkansas, who is a member of the National Association of Women Business Owners. I thank them and the many other small business associations that have helped us find solutions, demonstrating great cooperation in a difficult position, to help small businesses. The letters follow: Linden International, Wayne, PA. Hon. John Kerry, Ranking Member, Senate Committee on Small Business and Entrepreneurship, Russell Senate Office Building, Washington, DC. Dear Senator Kerry: I would greatly appreciate your support of the 7a program ``rescue''. I favor the following to help me and many other small businesses rebound and re-grow: 1. Allow piggyback loans, and charge a 0.50 percent lender fee. 2. Raise lender fees by 0.10 percent. 3. For loans under $150,000, have lenders pay the SBA the 0.25 percent fee that the lender now keeps for themselves. We all are keening for help to re-establish ourselves and assure a firm foundation for the future of small businesses in the US. Sincere thanks, Very truly yours, Mary Kay Hamm, President and CEO.

Mr. KERRY

Mr. KERRY. Madam President, yesterday I introduced a bill, S. 2186, to keep the SBA, its two largest lending programs, the 504 and 7(a) Loan Guarantee Programs, and the Women's Business Centers up and running through the remainder of this year, September 30, 2004. I ask unanimous consent that a letter of support from the trade association of 7(a) lenders, the National Association of Government Guaranteed Lenders, be printed in the Record. Along with NAGGL, I thank the American Bankers Association, the Independent Community Bankers of America, U.S. Chamber of Commerce, and the many other small business associations, that have helped us find solutions, demonstrating great cooperation in a difficult position, to help small businesses.

Mr. KERRY

Mr. KERRY. Mr. President, today I introduce legislation that keeps the Small Business Administration and its financing and counseling assistance available to small businesses. Small businesses need us to act now to keep critical assistance available to our Nation's biggest job creators. There should not be any objections to this bill. It has broad support in the small business and the lending communities. The lending provisions of the bill have the support of small borrowers that testified before Congress over the past few weeks and the support of a coalition of small business trade associations, including the trade associations of 504 lenders and of 7(a) lenders, the American Bankers Association and the Independent Community Bankers Association, as well as the National Small Business Alliance and the U.S. Chamber of Commerce, and the women's business center provisions have the support of women's trade associations such as Women Impacting Public Policy and the Association of Women's Business Centers. This bill authorizes the SBA and most of its programs through the May 15, 2004, which will allow time for the House to complete its work on the SBA's 3-year reauthorization bill, passed by the Senate in September 2003. In addition, this bill addresses several urgent issues that are critical to keep SBA programs operating and helping small businesses across the country. Let me outline these for you. The first provision authorizes the continued operation of the SBA's 504 loan guarantee program for the rest of fiscal year 2004. Unless we act, the authority to operate this program will expire on March 15, next Monday, and small businesses in need of financing for fixed assets will be turned away. These loans are for growing small businesses that need loans with long repayment terms and fixed interest rates to afford a new building or perhaps land to expand their business and their workforce, or equipment to improve or increase production. The lenders who make these loans serve a unique role in our economy--they develop economic opportunities where conventional lenders are not willing to take a risk. They are not a shy group, and care deeply about the communities where they live. I am sure most, if not all, Senators have received numerous calls and communications from them over the past few weeks. It is my hope that extending authorization will provide some stability to the industry so that they continue to fund our growing businesses, and then in the near future, the House will consider our more comprehensive SBA reauthorization legislation, bill number S. 1375, that we passed in September, to enact other important 504 program improvements that are supported by the small business community. This loan program requires no appropriations because it is funded entirely by fees that borrowers and lenders pay. The second provision keeps open the doors of our most experienced and successful Women's Business Centers, again without added cost to the Treasury. This bill contains a small adjustment to the Women's Business Center program that updates the current funding formula. The adjustment changes the portion of funding allowed for women's business centers in the sustainability part of the program to keep up with the increasing number of centers that will need funding this fiscal year. In short, this change directs the SBA to reserve 48 percent of the appropriated funds for the sustainability centers, instead of 30 percent, which will give the most experienced centers the greatest opportunity to receive sustainability funding, while still allowing for new centers and protecting existing ones. Currently there are 88 women's business centers. Of these, 35 are in the initial grant program and 53 will have graduated to the sustainability part of the program. These sustainability centers make up more than half of the total women's business centers, but under the current funding formula are only allotted 30 percent of the funds. Without the change to 48 percent, all grants to sustainability centers could be cut in half--or worse, 23 experienced centers could lose funding completely. Cutting funding for these, our most efficient and successful centers, would not only be detrimental to the centers themselves, but also to the women they serve, to their local communities, to their states, and to the national economy. As the author of the Women's Business Centers Sustainability Act of 1999, I can tell you that when the bill was signed into law, it was Congress's intent to protect the established and successful infrastructure of worth, performing centers. The law was designed to allow all graduating Women's Business Centers that meet certain performance standards to receive continued funding under sustainability grants. This approach allows for new centers to be established--but not by penalizing those that have already demonstrated their worth. It was our intention to continue helping the most productive and well-equipped women's business centers, knowing that demand for such services was rapidly growing. Today, with women-owned businesses opening at one-and-a-half times the rate of all privately held firms, the demand and need for women's business centers is even greater. Until Congress makes permanent the Women's Business Center Sustainability Pilot program, as intended in Senate-passed legislation, an extension of authority and increase in sustainability funds is vital--not only to the centers themselves, but to the women's business community and to the millions of workers employed by women-owned businesses around the country. The importance of the women's business centers to small business owners in communities across this country cannot be overstated. Take for instance the story of Melanie Marsden and Shannon Lawler, who recently opened A Better Place to Be Day Spa in Charlestown, MA. While working on a business plan last summer, the two hopeful entrepreneurs happened across the website of the Center for Women and Enterprise (CWE), a women's business center in Boston. Having just signed a lease and with a target opening for their spa quickly approaching, Melanie and Shannon were looking for help, and quick. At first, the process seemed overwhelming, but the experts at CWE were able to guide Melanie and Shannon through the complicated process--from business plan to long-term financing and management. CWE helped Melanie and Shannon open A Better Place to Be Day Spa and already see a steady stream of clients pass through their doors. Without CWE, Melanie and Shannon believe that they would not have opened their business on time, or at all. Last year alone, women's business centers like CWE helped over 100,000 entrepreneurs just like Melanie and Shannon with their small business needs. The majority of these women have few resources and little access to business development assistance, and without the women's business centers, they might have none. As I have said on more than one occasion, women business owners do not get the recognition they deserve for the contribution to our economy: Eighteen million Americans would be without jobs today if it weren't for these entrepreneurs who had the courage and the vision to strike out on their own. For 19 years, as a member of the Senate Committee on Small Business and Entrepreneurship, I have worked to increase the opportunities for these enterprising women, leading to greater earning power, financial independence and asset accumulation. For these women, in addition to the challenge and experience of running their own business, it means having a bank account, buying a home, sending their children to college, and being in control of their own future. I want to again express my sincere and continuing support for the growing community of women entrepreneurs across the Nation and for the invaluable programs through which the SBA provides women business owners with the tools they need to succeed. For years, I have fought for increased funding for SBA assistance that helps women entrepreneurs, including measures that have sustained and expanded the Women's Business Centers, and give women entrepreneurs their deserved representation within the Federal procurement process. The third provision makes temporary changes to the SBA's largest loan program, the so-called 7(a) program, in order to compensate for the administration's budget gimmicks and program mismanagement that caused a substantial shortage in funding. This shortage led to a temporary shutdown of the program in January, followed by lending restrictions that created serious financial hardships for small businesses and reduced access to affordable capital for small businesses in general. For the remainder of fiscal year 2004, a coalition of 7(a) lenders and small business groups have worked with Congress to come up with some limited fees, paid by lenders and not borrowers, that will increase the amount of lending available. That extra funding will increase from $9.5 billion to more than $11 billion the amount of loan guarantees available to small businesses. With more funding, Congress expects the SBA to lift the loan cap size of $750,000 and other restrictions, give priority in processing and approval to eligible small businesses that have been shut out this year, and require the SBA to renew export working capital loans to eligible small businesses. Of course, these changes would not be necessary if the administration had either requested adequate funding in its budget or used its authority to reprogram money to compensate for the shortfall. It also could have sent up a request for supplemental funding. On three different occasions, I wrote to the administration urging these actions, with the support of Senators Levin, Harkin, Lieberman, Landrieu, Edwards, Cantwell, Bayh, and Pryor, urging any of these solutions, but the administration refused to act. Instead, the insufficient funding was compounded by mismanagement and the program was completely shutdown from January 6 to January 14. When the administration reopened the program, it was with extreme restrictions. The restrictions were aimed at keeping the demand for the loans down without regard to their effect on the small businesses the Agency is intended to serve. Small businesses appealed to the administration and our committees for help because they were caught in the middle. For example, one company in Pennsylvania has a $1 million export working capital loan that needs to be renewed, but it can't because one of SBA's restrictions does not allow loans of more than $750,000. At risk is the home of one of the owners because it is part of the collateral securing the existing loan. This company is qualified; it's just trapped by the SBA's restrictions. With your help in passing this bill immediately, we can do the right thing for these small business owners and others who played by the rules. There is no cost to the Treasury in enacting these provisions. Last, the fourth provision, addresses an urgent need for some firms in New York needing disaster loan assistance. Many have said we should wait until we address other SBA legislation in the next 60 days. However, hundreds of jobs are at stake and these businesses do not have 2 months. This language is included at the bipartisan request of the House Small Business Committee leadership. Their staffs worked closely with the SBA to develop this language, which is acceptable to all of them. In addition to the support of House Committee Chairman Don Manzullo and Ranking Member Nydia Velazquez, this provision is also supported by Congresswoman Sue Kelly and Senator Charles Schumer. All four provisions address circumstances that require immediate action. Let me remind everyone: Without this legislation, the SBA's loan program for growing businesses, commonly referred to as the 504 Loan Guarantee Program, would shut down next Monday, March 15, 2004. Without this legislation, the future of counseling and training for women starting and growing their businesses, through the most established SBA's Women's Business Centers, would be compromised. Without this legislation, small businesses with their homes and life savings at stake may face financial and personal devastation because of program mismanagement. Without this legislation, small business disaster victims may go out of business. Mr. President, I ask unanimous consent that the text of the bill and two letters relating to programs affected by this legislation be printed in the Record. I thank my colleagues for their support of small businesses and for considering immediate passage of this important small business bill.

Mr. KERRY

Mr. KERRY. Mr. President, today I introduce legislation that keeps the Small Business Administration and its financing and counseling assistance available to small businesses. Small businesses need us to act now to keep critical assistance available to our Nation's biggest job creators. There should not be any objections to this bill. It has broad support in the small business and the lending communities. The lending provisions of the bill have the support of small borrowers that testified before Congress over the past few weeks and the support of a coalition of small business trade associations, including the trade associations of 504 lenders and of 7(a) lenders, the American Bankers Association and the Independent Community Bankers Association, as well as the National Small Business Alliance and the U.S. Chamber of Commerce, and the women's business center provisions have the support of women's trade associations such as Women Impacting Public Policy and the Association of Women's Business Centers. This bill authorizes the SBA and most of its programs through the May 15, 2004, which will allow time for the House to complete its work on the SBA's 3-year reauthorization bill, passed by the Senate in September 2003. In addition, this bill addresses several urgent issues that are critical to keep SBA programs operating and helping small businesses across the country. Let me outline these for you. The first provision authorizes the continued operation of the SBA's 504 loan guarantee program for the rest of fiscal year 2004. Unless we act, the authority to operate this program will expire on March 15, next Monday, and small businesses in need of financing for fixed assets will be turned away. These loans are for growing small businesses that need loans with long repayment terms and fixed interest rates to afford a new building or perhaps land to expand their business and their workforce, or equipment to improve or increase production. The lenders who make these loans serve a unique role in our economy--they develop economic opportunities where conventional lenders are not willing to take a risk. They are not a shy group, and care deeply about the communities where they live. I am sure most, if not all, Senators have received numerous calls and communications from them over the past few weeks. It is my hope that extending authorization will provide some stability to the industry so that they continue to fund our growing businesses, and then in the near future, the House will consider our more comprehensive SBA reauthorization legislation, bill number S. 1375, that we passed in September, to enact other important 504 program improvements that are supported by the small business community. This loan program requires no appropriations because it is funded entirely by fees that borrowers and lenders pay. The second provision keeps open the doors of our most experienced and successful Women's Business Centers, again without added cost to the Treasury. This bill contains a small adjustment to the Women's Business Center program that updates the current funding formula. The adjustment changes the portion of funding allowed for women's business centers in the sustainability part of the program to keep up with the increasing number of centers that will need funding this fiscal year. In short, this change directs the SBA to reserve 48 percent of the appropriated funds for the sustainability centers, instead of 30 percent, which will give the most experienced centers the greatest opportunity to receive sustainability funding, while still allowing for new centers and protecting existing ones. Currently there are 88 women's business centers. Of these, 35 are in the initial grant program and 53 will have graduated to the sustainability part of the program. These sustainability centers make up more than half of the total women's business centers, but under the current funding formula are only allotted 30 percent of the funds. Without the change to 48 percent, all grants to sustainability centers could be cut in half--or worse, 23 experienced centers could lose funding completely. Cutting funding for these, our most efficient and successful centers, would not only be detrimental to the centers themselves, but also to the women they serve, to their local communities, to their states, and to the national economy. As the author of the Women's Business Centers Sustainability Act of 1999, I can tell you that when the bill was signed into law, it was Congress's intent to protect the established and successful infrastructure of worth, performing centers. The law was designed to allow all graduating Women's Business Centers that meet certain performance standards to receive continued funding under sustainability grants. This approach allows for new centers to be established--but not by penalizing those that have already demonstrated their worth. It was our intention to continue helping the most productive and well-equipped women's business centers, knowing that demand for such services was rapidly growing. Today, with women-owned businesses opening at one-and-a-half times the rate of all privately held firms, the demand and need for women's business centers is even greater. Until Congress makes permanent the Women's Business Center Sustainability Pilot program, as intended in Senate-passed legislation, an extension of authority and increase in sustainability funds is vital--not only to the centers themselves, but to the women's business community and to the millions of workers employed by women-owned businesses around the country. The importance of the women's business centers to small business owners in communities across this country cannot be overstated. Take for instance the story of Melanie Marsden and Shannon Lawler, who recently opened A Better Place to Be Day Spa in Charlestown, MA. While working on a business plan last summer, the two hopeful entrepreneurs happened across the website of the Center for Women and Enterprise (CWE), a women's business center in Boston. Having just signed a lease and with a target opening for their spa quickly approaching, Melanie and Shannon were looking for help, and quick. At first, the process seemed overwhelming, but the experts at CWE were able to guide Melanie and Shannon through the complicated process--from business plan to long-term financing and management. CWE helped Melanie and Shannon open A Better Place to Be Day Spa and already see a steady stream of clients pass through their doors. Without CWE, Melanie and Shannon believe that they would not have opened their business on time, or at all. Last year alone, women's business centers like CWE helped over 100,000 entrepreneurs just like Melanie and Shannon with their small business needs. The majority of these women have few resources and little access to business development assistance, and without the women's business centers, they might have none. As I have said on more than one occasion, women business owners do not get the recognition they deserve for the contribution to our economy: Eighteen million Americans would be without jobs today if it weren't for these entrepreneurs who had the courage and the vision to strike out on their own. For 19 years, as a member of the Senate Committee on Small Business and Entrepreneurship, I have worked to increase the opportunities for these enterprising women, leading to greater earning power, financial independence and asset accumulation. For these women, in addition to the challenge and experience of running their own business, it means having a bank account, buying a home, sending their children to college, and being in control of their own future. I want to again express my sincere and continuing support for the growing community of women entrepreneurs across the Nation and for the invaluable programs through which the SBA provides women business owners with the tools they need to succeed. For years, I have fought for increased funding for SBA assistance that helps women entrepreneurs, including measures that have sustained and expanded the Women's Business Centers, and give women entrepreneurs their deserved representation within the Federal procurement process. The third provision makes temporary changes to the SBA's largest loan program, the so-called 7(a) program, in order to compensate for the administration's budget gimmicks and program mismanagement that caused a substantial shortage in funding. This shortage led to a temporary shutdown of the program in January, followed by lending restrictions that created serious financial hardships for small businesses and reduced access to affordable capital for small businesses in general. For the remainder of fiscal year 2004, a coalition of 7(a) lenders and small business groups have worked with Congress to come up with some limited fees, paid by lenders and not borrowers, that will increase the amount of lending available. That extra funding will increase from $9.5 billion to more than $11 billion the amount of loan guarantees available to small businesses. With more funding, Congress expects the SBA to lift the loan cap size of $750,000 and other restrictions, give priority in processing and approval to eligible small businesses that have been shut out this year, and require the SBA to renew export working capital loans to eligible small businesses. Of course, these changes would not be necessary if the administration had either requested adequate funding in its budget or used its authority to reprogram money to compensate for the shortfall. It also could have sent up a request for supplemental funding. On three different occasions, I wrote to the administration urging these actions, with the support of Senators Levin, Harkin, Lieberman, Landrieu, Edwards, Cantwell, Bayh, and Pryor, urging any of these solutions, but the administration refused to act. Instead, the insufficient funding was compounded by mismanagement and the program was completely shutdown from January 6 to January 14. When the administration reopened the program, it was with extreme restrictions. The restrictions were aimed at keeping the demand for the loans down without regard to their effect on the small businesses the Agency is intended to serve. Small businesses appealed to the administration and our committees for help because they were caught in the middle. For example, one company in Pennsylvania has a $1 million export working capital loan that needs to be renewed, but it can't because one of SBA's restrictions does not allow loans of more than $750,000. At risk is the home of one of the owners because it is part of the collateral securing the existing loan. This company is qualified; it's just trapped by the SBA's restrictions. With your help in passing this bill immediately, we can do the right thing for these small business owners and others who played by the rules. There is no cost to the Treasury in enacting these provisions. Last, the fourth provision, addresses an urgent need for some firms in New York needing disaster loan assistance. Many have said we should wait until we address other SBA legislation in the next 60 days. However, hundreds of jobs are at stake and these businesses do not have 2 months. This language is included at the bipartisan request of the House Small Business Committee leadership. Their staffs worked closely with the SBA to develop this language, which is acceptable to all of them. In addition to the support of House Committee Chairman Don Manzullo and Ranking Member Nydia Velazquez, this provision is also supported by Congresswoman Sue Kelly and Senator Charles Schumer. All four provisions address circumstances that require immediate action. Let me remind everyone: Without this legislation, the SBA's loan program for growing businesses, commonly referred to as the 504 Loan Guarantee Program, would shut down next Monday, March 15, 2004. Without this legislation, the future of counseling and training for women starting and growing their businesses, through the most established SBA's Women's Business Centers, would be compromised. Without this legislation, small businesses with their homes and life savings at stake may face financial and personal devastation because of program mismanagement. Without this legislation, small business disaster victims may go out of business. Mr. President, I ask unanimous consent that two letters relating to programs affected by this legislation be printed in the Record. I thank my colleagues for their support of small businesses and for considering immediate passage of this important small business bill.

Mr. KERRY

Mr. KERRY. Mr. President, today I introduce legislation that keeps the Small Business Administration and its financing and counseling assistance available to small businesses. Small businesses need us to act now to keep critical assistance available to our Nation's biggest job creators. There should not be any objections to this bill. It has broad support in the small business and the lending communities. The lending provisions of the bill have the support of small borrowers that testified before Congress over the past few weeks and the support of a coalition of small business trade associations, including the trade associations of 504 lenders and of 7(a) lenders, the American Bankers Association and the Independent Community Bankers Association, as well as the National Small Business Alliance and the U.S. Chamber of Commerce, and the women's business center provisions have the support of women's trade associations such as Women Impacting Public Policy and the Association of Women's Business Centers. This bill authorizes the SBA and most of its programs through the May 15, 2004, which will allow time for the House to complete its work on the SBA's 3-year reauthorization bill, passed by the Senate in September 2003. In addition, this bill addresses several urgent issues that are critical to keep SBA programs operating and helping small businesses across the country. Let me outline these for you. The first provision authorizes the continued operation of the SBA's 504 loan guarantee program for the rest of fiscal year 2004. Unless we act, the authority to operate this program will expire on March 15, next Monday, and small businesses in need of financing for fixed assets will be turned away. These loans are for growing small businesses that need loans with long repayment terms and fixed interest rates to afford a new building or perhaps land to expand their business and their workforce, or equipment to improve or increase production. The lenders who make these loans serve a unique role in our economy--they develop economic opportunities where conventional lenders are not willing to take a risk. They are not a shy group, and care deeply about the communities where they live. I am sure most, if not all, Senators have received numerous calls and communications from them over the past few weeks. It is my hope that extending authorization will provide some stability to the industry so that they continue to fund our growing businesses, and then in the near future, the House will consider our more comprehensive SBA reauthorization legislation, bill number S. 1375, that we passed in September, to enact other important 504 program improvements that are supported by the small business community. This loan program requires no appropriations because it is funded entirely by fees that borrowers and lenders pay. The second provision keeps open the doors of our most experienced and successful Women's Business Centers, again without added cost to the Treasury. This bill contains a small adjustment to the Women's Business Center program that updates the current funding formula. The adjustment changes the portion of funding allowed for women's business centers in the sustainability part of the program to keep up with the increasing number of centers that will need funding this fiscal year. In short, this change directs the SBA to reserve 48 percent of the appropriated funds for the sustainability centers, instead of 30 percent, which will give the most experienced centers the greatest opportunity to receive sustainability funding, while still allowing for new centers and protecting existing ones. Currently there are 88 women's business centers. Of these, 35 are in the initial grant program and 53 will have graduated to the sustainability part of the program. These sustainability centers make up more than half of the total women's business centers, but under the current funding formula are only allotted 30 percent of the funds. Without the change to 48 percent, all grants to sustainability centers could be cut in half--or worse, 23 experienced centers could lose funding completely. Cutting funding for these, our most efficient and successful centers, would not only be detrimental to the centers themselves, but also to the women they serve, to their local communities, to their states, and to the national economy. As the author of the Women's Business Centers Sustainability Act of 1999, I can tell you that when the bill was signed into law, it was Congress's intent to protect the established and successful infrastructure of worth, performing centers. The law was designed to allow all graduating Women's Business Centers that meet certain performance standards to receive continued funding under sustainability grants. This approach allows for new centers to be established--but not by penalizing those that have already demonstrated their worth. It was our intention to continue helping the most productive and well-equipped women's business centers, knowing that demand for such services was rapidly growing. Today, with women-owned businesses opening at one-and-a-half times the rate of all privately held firms, the demand and need for women's business centers is even greater. Until Congress makes permanent the Women's Business Center Sustainability Pilot program, as intended in Senate-passed legislation, an extension of authority and increase in sustainability funds is vital--not only to the centers themselves, but to the women's business community and to the millions of workers employed by women-owned businesses around the country. The importance of the women's business centers to small business owners in communities across this country cannot be overstated. Take for instance the story of Melanie Marsden and Shannon Lawler, who recently opened A Better Place to Be Day Spa in Charlestown, MA. While working on a business plan last summer, the two hopeful entrepreneurs happened across the website of the Center for Women and Enterprise (CWE), a women's business center in Boston. Having just signed a lease and with a target opening for their spa quickly approaching, Melanie and Shannon were looking for help, and quick. At first, the process seemed overwhelming, but the experts at CWE were able to guide Melanie and Shannon through the complicated process--from business plan to long-term financing and management. CWE helped Melanie and Shannon open A Better Place to Be Day Spa and already see a steady stream of clients pass through their doors. Without CWE, Melanie and Shannon believe that they would not have opened their business on time, or at all. Last year alone, women's business centers like CWE helped over 100,000 entrepreneurs just like Melanie and Shannon with their small business needs. The majority of these women have few resources and little access to business development assistance, and without the women's business centers, they might have none. As I have said on more than one occasion, women business owners do not get the recognition they deserve for the contribution to our economy: Eighteen million Americans would be without jobs today if it weren't for these entrepreneurs who had the courage and the vision to strike out on their own. For 19 years, as a member of the Senate Committee on Small Business and Entrepreneurship, I have worked to increase the opportunities for these enterprising women, leading to greater earning power, financial independence and asset accumulation. For these women, in addition to the challenge and experience of running their own business, it means having a bank account, buying a home, sending their children to college, and being in control of their own future. I want to again express my sincere and continuing support for the growing community of women entrepreneurs across the Nation and for the invaluable programs through which the SBA provides women business owners with the tools they need to succeed. For years, I have fought for increased funding for SBA assistance that helps women entrepreneurs, including measures that have sustained and expanded the Women's Business Centers, and give women entrepreneurs their deserved representation within the Federal procurement process. The third provision makes temporary changes to the SBA's largest loan program, the so-called 7(a) program, in order to compensate for the administration's budget gimmicks and program mismanagement that caused a substantial shortage in funding. This shortage led to a temporary shutdown of the program in January, followed by lending restrictions that created serious financial hardships for small businesses and reduced access to affordable capital for small businesses in general. For the remainder of fiscal year 2004, a coalition of 7(a) lenders and small business groups have worked with Congress to come up with some limited fees, paid by lenders and not borrowers, that will increase the amount of lending available. That extra funding will increase from $9.5 billion to more than $11 billion the amount of loan guarantees available to small businesses. With more funding, Congress expects the SBA to lift the loan cap size of $750,000 and other restrictions, give priority in processing and approval to eligible small businesses that have been shut out this year, and require the SBA to renew export working capital loans to eligible small businesses. Of course, these changes would not be necessary if the administration had either requested adequate funding in its budget or used its authority to reprogram money to compensate for the shortfall. It also could have sent up a request for supplemental funding. On three different occasions, I wrote to the administration urging these actions, with the support of Senators Levin, Harkin, Lieberman, Landrieu, Edwards, Cantwell, Bayh, and Pryor, urging any of these solutions, but the administration refused to act. Instead, the insufficient funding was compounded by mismanagement and the program was completely shutdown from January 6 to January 14. When the administration reopened the program, it was with extreme restrictions. The restrictions were aimed at keeping the demand for the loans down without regard to their effect on the small businesses the Agency is intended to serve. Small businesses appealed to the administration and our committees for help because they were caught in the middle. For example, one company in Pennsylvania has a $1 million export working capital loan that needs to be renewed, but it can't because one of SBA's restrictions does not allow loans of more than $750,000. At risk is the home of one of the owners because it is part of the collateral securing the existing loan. This company is qualified; it's just trapped by the SBA's restrictions. With your help in passing this bill immediately, we can do the right thing for these small business owners and others who played by the rules. There is no cost to the Treasury in enacting these provisions. Last, the fourth provision, addresses an urgent need for some firms in New York needing disaster loan assistance. Many have said we should wait until we address other SBA legislation in the next 60 days. However, hundreds of jobs are at stake and these businesses do not have 2 months. This language is included at the bipartisan request of the House Small Business Committee leadership. Their staffs worked closely with the SBA to develop this language, which is acceptable to all of them. In addition to the support of House Committee Chairman Don Manzullo and Ranking Member Nydia Velazquez, this provision is also supported by Congresswoman Sue Kelly and Senator Charles Schumer. All four provisions address circumstances that require immediate action. Let me remind everyone: Without this legislation, the SBA's loan program for growing businesses, commonly referred to as the 504 Loan Guarantee Program, would shut down next Monday, March 15, 2004. Without this legislation, the future of counseling and training for women starting and growing their businesses, through the most established SBA's Women's Business Centers, would be compromised. Without this legislation, small businesses with their homes and life savings at stake may face financial and personal devastation because of program mismanagement. Without this legislation, small business disaster victims may go out of business. Mr. President, I ask unanimous consent that two letters relating to programs affected by this legislation be printed in the Record. I thank my colleagues for their support of small businesses and for considering immediate passage of this important small business bill.

Mr. KERRY

Mr. KERRY. I thank the distinguished leader. President Bush needs to tell America's police officers why he is not standing on their side. Today George Bush will celebrate the anniversary of the creation of the Department of Homeland Security, and I am glad the President joined us in that effort. But it will take more than a big, new bureaucracy to make America safer. Today airport screeners are being cut, air marshals are not getting trained, fire departments only have enough radios for about 50 percent of the firefighters, and almost two-thirds of our firehouses are shortchanged. The COPS funds have been eliminated in order to fund the President's tax cuts for the wealthiest few. By taking cops off our streets with one hand, and allowing military-style assault weapons back on them with the other, this President is jeopardizing the safety of our communities. It is wrong to do so, to pay for more tax breaks for billionaires and pay back more favors to a special interest lobbying group. Let me just say one word quickly about the overall issue of liability itself. I am not for, and I do not think any reasonable person is for, a gun manufacturer being held liable for a murder that takes place in the life of America, unfortunately too often. But what we do know is about 1.2 percent or so of gun dealers and wholesalers are responsible for about 57 percent of the weapons that wind up in the hands of criminals. There are many ``straw'' transactions that take place in situations where manufacturers know who the problem dealers are. To not have a wanton-and-reckless-conduct standard for liability is to avoid responsibility; it is to allow people to look the other way, as they have in the past, when we demand responsible actions in the communities of America. I believe American gun owners are right to act responsibly and to live by common sense, and I am proud to stand with those gun owners today. I hope President Bush, the NRA leadership, and other lobby groups will reverse course and join the millions of Americans who know gun rights and gun responsibilities are mainstream American values, and that is what we should vote for in the Senate. I thank the leader for the extra time.

Mr. KERRY. Mr. President, the issue before the Senate today can really be summed up in one word: Responsibility. I first started hunting with my cousins when I was a kid, and I still enjoy hunting today. I believe strongly in the second amendment. I believe in the right to bear arms as it has been interpreted in our country. But I also believe that with our rights come fundamental, commonsense responsibilities. The right to bear arms is a right that should be protected for law-abiding Americans who want to protect themselves and their families. There is, however, no right to place military-style assault weapons into the hands of terrorists and/or criminals who wish to cause American families harm. There is no right to have access to the weapons of war in the streets of America. For those who want to wield those weapons, we have a place for them. It is the U.S. military. And we welcome them. If we do not act today to continue the ban on these deadly weapons, then our families in America, our police officers in America, are more threatened than they ought to be. For 10 years, the assault weapons ban has stopped fugitives, rapists, and murderers from purchasing weapons such as AK-47s. And for 10 years, not one honest, responsible American has had their guns taken away because of this law. It is interesting that a few months ago I was actually hunting in Iowa with the sheriff and with some of his deputies. As we walked through a field with the dogs, hunting pheasant, he pointed out a house in back of me, a house they had raided only a few weeks earlier, where meth and crack were being sold. On the morning when they went in to arrest this alleged criminal, there was an assault weapon on the floor lying beside that individual. That sheriff and others across this country do not believe we should be selling these weapons or allowing them to be more easily available to criminals in our country. That is why gun owners across America support renewing the assault weapons ban. They support also closing the gun show loophole so that gun shows can continue uninterrupted without being magnets for criminals and/or terrorists who try to get around the law. If there is a gun show loophole, a terrorist could simply go to one State, go into the gun show, buy a gun without the kind of ground check normal in the process, leave that gun show, travel to another State, and engage in either criminal or terrorist activity or both. Let's be honest about what we are facing today. The opposition to this commonsense gun safety law is being driven by the powerful NRA special interest leadership and by lobbyists in Washington. I don't believe this is the voice of responsible gun owners across America. Gun owners in America want to defend their families, and I believe the NRA leadership is defending the indefensible. There is a gap between America's ``Field & Stream'' gun owners and the NRA's ``Soldier of Fortune'' leaders. When he ran for President in 2000, President Bush promised the American people he would work to renew the assault weapons ban. But now, under pressure, he is walking away from that commitment, as he has from so many other promises--from education, to the environment, to the economy. This President says he will sign this giveaway to the gun industry, but he is refusing to sign the assault weapons ban he told America he would support. I believe gun owners have a responsibility, and so does the President of the United States--a responsibility to keep his word, a responsibility to do what he says he will do, a responsibility to protect Americans from danger, and to provide for the common defense. There is a reason every major law enforcement and police group in America supports this ban. They know no police officer should ever have to face the prospect of being outgunned by the military-style assault weapons. No American citizen should have to live in fear of being gunned down by snipers, gang members, or even terrorists who wield assault weapons.

Mr. KERRY

Mr. KERRY. Mr. President, backed by the heartiest fans in the world, the New England Patriots are once again the greatest football team in the Nation. I want to join so many others in commending the Patriots for their marvelous and miraculous season, in which the team overcame injuries and a slow start to end up with a fifteen-game winning streak and a second Super Bowl championship in three years. From the wise stewardship of Bob Kraft and Bill Belichick to the Tom Brady-led offense and the Ty Law-led defense, the Patriots are a team in the fullest sense of the word. Congratulations also to the Carolina Panthers, who mad Super Bowl XXXVIII one of the most memorable season- ending games in U.S. professional sports history. (At the request of Mr. Daschle, the following statement was ordered to be printed in the Record.)

Mr. KERRY

Mr. KERRY. Mr. President, today the Senate passed critical pension funding reform legislation that will protect millions of American workers from losing their defined benefit pension plans. Although only a temporary solution, the Pension Funding Equity Act is essential to prevent companies from having to freeze or terminate their defined benefit pension plans because of outdated rules that determine how their pension plan liabilities are calculated. Defined benefit pension plans are an essential component of retirement security for over half of America's working men and women. Unfortunately, trends show a decline in the use of defined benefit pension plans, with only one quarter as many companies providing defined benefit plans today as did 20 years ago. Since 2003, 3.3 million Americans having lost their pension coverage. The volatility in the stock market in the last few years--in which Americans lost billions in retirement assets--leaves little doubt that we must do more to reverse the decline in the use of defined benefit pension plans and expand the retirement security of defined benefit pension plans to more Americans. The Pension Funding Equity Act is an important step towards addressing this challenge. In the last 3 years, companies that provide defined benefit pension plans to their employees have come under extreme financial stress due to the sluggish economy and changes in the interest rate that determines their pension plan liability. The Pension Funding Equity Act of 2003 provides much needed relief to help these companies maintain retirement benefits for their employees as the country works towards economic recovery. This legislation provides a temporary 2-year period of funding relief by updating the interest rate that companies must use when calculating the liabilities of their pension plans. A more accurate mix of long-term corporate bond rates will replace the now defunct 30-year Treasury rate in the calculation of pension plan liabilities. In addition to protecting the defined benefit plans of American workers, the Pension Funding Equity Act is expected to provide $16 billion in additional savings to companies, which will facilitate job creation by freeing up funds for additional wages and hiring. I applaud the passage of the Pension Funding Equity Act and look forward to working with my colleagues in crafting a long-term solution to improve and expand our pension system.

Mr. KERRY

Mr. KERRY. Mr. President, it is the responsibility of the military departments to ``organize, train, and equip,'' the armed forces of the United States. Yet, reports indicate that nearly a quarter of the 130,000 U.S. troops in Iraq still wait for the latest ``Interceptor'' body armor, which is a Kevlar vest with ``small-arms protective inserts''--boron carbide ceramic plates--that protect critical organs from weapons fired by assault rifles like the Ak-47s favored by Iraqi insurgents. While the Congress has taken measures to provide the latest personal protective gear to all U.S. forces in Iraq and Afghanistan, over the last several months we have heard alarming reports of family members scurrying to buy bullet-proof vests to send to their loved ones in Iraq. Military families are patriotic and selfless. Their devotion is no less than that of those serving in harm's way. They have more than enough to worry about, let alone whether or not they can find and buy the gear that might save their child's life. This is the responsibility of the Department of Defense, plain and simple. There is no excuse for their failure. On November 19, 2003, acting-Secretary of the Army Les Brownlee admitted to Congress that the administration failed to provide basic equipment, like body armor, to all of our forces in Iraq because, as he put it, ``Events since the end of major combat operations in Iraq have differed from our expectations and have combined to cause problems.'' The Washington Post reported recently that, ``Going into the war in Iraq, the Army decided to outfit only dismounted combat soldiers with the plated vests, which cost about $1,500 each. But when Iraqi insurgents began ambushing convoys and killing clerks as well as combat troops, controversy erupted.'' I ask unanimous consent that the full text of this article be included in the Record. Stories abound of family members, fathers and mothers, wives, and others paying for personal body armor out of their own pockets and shipping the much needed equipment to Iraq. Consider the case of Mimi McCreary of Victorville, CA, whose son Olaf received his bullet-proof vest not from his reserve unit, but from his colleagues on the Clinton, SC, police department. Or consider the 120 members of the National Guard from Marin County, CA, who were unsure of when their body armor would be made available. Instead of letting their neighbors go off to war, the men and women of law enforcement in Marin County donated more than 60 vests so that they would have ``at least some protection.'' Or consider Army Specialist Richard Murphy of Sciota, PA, whose parents, Susan and Joe Werfelman, purchased the ceramic plates missing from their son's vest. According to Murphy's step-father, he ``called us frantically three or four times on this . . . We said, ``If the Army is not going to protect him, we've got to do it.'' We owe Mr. and Mrs. Werfelman and Mrs. McCreary and every other military family an incredible debt of gratitude. They raised children who believe in this country and are risking all in service to it. The last thing we should ask of them now is to take money out of their own pockets to buy the gear their kids should have had in the first place. But that's exactly what poor planning has led to. The legislation I introduce today with Senator Kennedy requires the Department of Defense to reimburse family members who paid money out of their own pockets to provide the personal body armor that the government failed to provide our troops. Lives and blood will always be the cost of war. But it is a dereliction of duty to send anyone into harm's way without basic protective gear, and it is disgusting for family members to have to take this burden of outfitting their loved ones for war. This grateful Nation must make right by those family members and reimburse their expenses in providing these materials to their sons and daughters, husbands and wives. Let families send pictures and letters from home. The Department of Defense should provide the gear.

Mr. KERRY

Mr. KERRY. Mr. President, it is the responsibility of the military departments to ``organize, train, and equip,'' the armed forces of the United States. Yet, reports indicate that nearly a quarter of the 130,000 U.S. troops in Iraq still wait for the latest ``Interceptor'' body armor, which is a Kevlar vest with ``small-arms protective inserts''--boron carbide ceramic plates--that protect critical organs from weapons fired by assault rifles like the Ak-47s favored by Iraqi insurgents. While the Congress has taken measures to provide the latest personal protective gear to all U.S. forces in Iraq and Afghanistan, over the last several months we have heard alarming reports of family members scurrying to buy bullet-proof vests to send to their loved ones in Iraq. Military families are patriotic and selfless. Their devotion is no less than that of those serving in harm's way. They have more than enough to worry about, let alone whether or not they can find and buy the gear that might save their child's life. This is the responsibility of the Department of Defense, plain and simple. There is no excuse for their failure. On November 19, 2003, acting-Secretary of the Army Les Brownlee admitted to Congress that the administration failed to provide basic equipment, like body armor, to all of our forces in Iraq because, as he put it, ``Events since the end of major combat operations in Iraq have differed from our expectations and have combined to cause problems.'' The Washington Post reported recently that, ``Going into the war in Iraq, the Army decided to outfit only dismounted combat soldiers with the plated vests, which cost about $1,500 each. But when Iraqi insurgents began ambushing convoys and killing clerks as well as combat troops, controversy erupted.'' I ask unanimous consent that the full text of this article be included in the Record. Stories abound of family members, fathers and mothers, wives, and others paying for personal body armor out of their own pockets and shipping the much needed equipment to Iraq. Consider the case of Mimi McCreary of Victorville, CA, whose son Olaf received his bullet-proof vest not from his reserve unit, but from his colleagues on the Clinton, SC, police department. Or consider the 120 members of the National Guard from Marin County, CA, who were unsure of when their body armor would be made available. Instead of letting their neighbors go off to war, the men and women of law enforcement in Marin County donated more than 60 vests so that they would have ``at least some protection.'' Or consider Army Specialist Richard Murphy of Sciota, PA, whose parents, Susan and Joe Werfelman, purchased the ceramic plates missing from their son's vest. According to Murphy's step-father, he ``called us frantically three or four times on this . . . We said, ``If the Army is not going to protect him, we've got to do it.'' We owe Mr. and Mrs. Werfelman and Mrs. McCreary and every other military family an incredible debt of gratitude. They raised children who believe in this country and are risking all in service to it. The last thing we should ask of them now is to take money out of their own pockets to buy the gear their kids should have had in the first place. But that's exactly what poor planning has led to. The legislation I introduce today with Senator Kennedy requires the Department of Defense to reimburse family members who paid money out of their own pockets to provide the personal body armor that the government failed to provide our troops. Lives and blood will always be the cost of war. But it is a dereliction of duty to send anyone into harm's way without basic protective gear, and it is disgusting for family members to have to take this burden of outfitting their loved ones for war. This grateful Nation must make right by those family members and reimburse their expenses in providing these materials to their sons and daughters, husbands and wives. Let families send pictures and letters from home. The Department of Defense should provide the gear.

Mr. KERRY

Mr. KERRY. Mr. President, as the world's largest economy, I believe the United States must have the fairest, most transparent and efficient financial markets in the world. Our financial services companies must live up to the highest standards of accountability. This is critical to ensure that the United States remains strong, competitive and safe in the global economy. Unfortunately, recent reports of late trading and market timing have brought into question whether mutual fund companies have lived up to the highest standards of accountability. They have also shown that the Bush Administration failed to provide effective oversight and examination of mutual fund companies, while poorly enforcing our securities laws. The inaction of the Bush Administration has dangerously eroded the trust and confidence of the American people in mutual funds and may have allowed mutual fund companies and big investors to engage in fraudulent behavior against individuals and pension funds. New York and Massachusetts regulators have uncovered a scheme in which some of America's top mutual fund companies let big investors profit illegally at the expense of small investors with so-called ``late trades'' and ``market timing.'' The scam appears to be widespread. Today, roughly half of all American households own mutual funds either directly or through a retirement account or pension fund. It's been reported that as much as one quarter of mutual fund companies may be involved in late trading and market timing and that such schemes may cost investors as much as $5 billion annually. In a late trade, big investors purchase mutual fund shares after the close of the market but at the closing price, allowing them to take advantage of late-breaking financial news. A mutual fund manager might allow a big investor to buy shares in a technology fund at the 4 p.m. close price after learning at 5 p.m. that a major technology company has reported unexpectedly strong earnings. The investor is almost guaranteed a profit when the market opens the following day and share prices climb. In return for this illegal access, the big investor might pledge to continue to invest in the fund. Market timing exploits the unique way that mutual funds set their prices. While it is not illegal, most mutual fund companies assure investors that they discourage such practices and that they are working to prevent fund timing. Under a market timing trade, big investors trade in and out of certain mutual funds in order to exploit the inefficient way mutual funds price their shares and ensure a profit. In 2002, individuals who invested in mutual funds paid approximately $70 billion in advisory and management fees, an average of more than $700 per investor. There is a significant disparity between the rate of advisory fees charged to mutual fund investors and the rate paid by institutional investors, even though they provide the similar services. Currently, mutual fund managers are under no obligation to negotiate advisory and management fees that are in the best interest of their shareholders. In some instances, mutual fund managers has a financial relationship with the contractor which receives a no-bid contract from the same mutual fund. In a September 2003 complaint, New York Attorney General Spitzer alleged that Canary Capital Partners, a New Jersey hedge fund, engaged in illegal and unethical trading in mutual funds, such as late trading and market timing. After the New York State complaint, the SEC ordered a preliminary investigation, which found that half of the 88 mutual fund companies and brokerage firms had arrangements to make market- timing trades. These arrangements occurred even though about half of the fund companies have policies specifically barring market timing. Other investigations of mutual fund companies have begun, and it appears as though many mutual fund companies have been involved directly or indirectly in late trading and market-timing schemes. I am very concerned that the actions of the SEC in response to the State investigations of late trading and market timing have been inadequate and show a bias in favor of mutual fund companies at the expense of small investors. For example, earlier this year the SEC conducted a four-month investigation of Putnam Investments' record keeping, internal controls, and ability to comply with Federal securities laws. During that review, a Putnam employee informed the SEC that the company had failed to stop improper market-timing trades. Despite the tip, SEC examiners did not identify any problems with market timing in its report on Putnam. The Putnam employee, after being rejected by the SEC, brought the same information to the Massachusetts Secretary of State's office, which began an investigation. Only after the Commonwealth of Massachusetts began an investigation did the SEC begin its own investigation of market timing at Putnam. In October, both the Commonwealth of Massachusetts and the SEC charged Putnam with securities fraud, only months after the SEC gave Putnam a clean bill of health. Only a few weeks later, Putnam reached a partial settlement of the securities fraud charges with the SEC which did not include the Commonwealth of Massachusetts. Under the settlement, Putnam agrees to make restitution only for losses to investors attributable to excessive short-term and market-timing trading by its employees and to make structural reforms. Under the agreement, Putnam neither admitted nor denied wrongdoing and the SEC still has not investigated whether outside investors were engaged in market-timing activities. New York Attorney General Eliot Spitzer said that Putnam's agreement with the SEC does not address crucial issues involving restitution to fund holders, fees and penalties. William Galvin, the Massachusetts Secretary of State said that the agreement clearly demonstrates that the SEC is more interested in protecting the mutual fund industry than the average investor. These actions by the SEC highlight a fundamental problem in the Bush Administration's hands-off approach to regulating financial markets and the danger it poses to small investors and the national economy. Compounding this danger and lack of responsible leadership, President Bush has repeatedly nominated individuals to important economic positions notable for their corporate sympathies. The President selected a lobbyist for financial deregulation as the chief regulator of the federal mortgage lender Freddie Mac. His first SEC chairman was an accounting industry who was forced to resign in a storm of public outrage over his lenient treatment of his former business. Even after the accounting scandals that felled Enron and WorldCom, it was last year's Democratic Senate that pushed to enact an historic corporate reform law and the President who joined the effort only once its passage was all but ensured. It was state attorneys general who exposed dubious conflicts of interest at brokerage houses. And when energy companies gauged ratepayers in the West through questionable trades, the Administration sat on its hands for months. The message from the White House to the regulatory agencies, in actions if not words, is don't ask and don't tell when it comes to protecting investors and consumers. Justice demands that we fully prosecute Wall Street insiders that steal from Americans saving for retirement, education or simply a brighter future. And we can only hope to revive our economy if we restore investor confidence in the markets so that capital flows to business growth and job creation. To stop the erosion of trust in our financial markets and to help restore the American investor's faith in the mutual fund industry, I am introducing the Mutual Fund Investor Protection Act to update federal securities laws to curb late-trading and market-timing abuses and institute new limits on mutual fund fees paid by investors. The actions by the SEC show that it is incapable of protecting investors from securities fraud by mutual fund companies and will not prosecute this type of fraud to the full extent of the law. Therefore, we must take the day-to-day oversight of mutual funds away from the SEC and develop a new Mutual Fund Oversight Board to provide oversight, examination and enforcement of mutual funds. This new board will be similar to the Public Company Accounting Oversight Board developed in the Sarbanes-Oxley Act. It will be charged with identifying potential problems in the mutual fund industry and ensuring that fund boards are actively addressing these problems--before they spread. It would promulgate guidance regarding current regulatory issues and best practices regarding how to deal with them, and it would examine mutual funds to ensure that they are taking necessary steps to protect shareholders. The Board itself would determine how to provide an adequate and reliable source of funding for its investigations. I believe that every investor has the right to know how much their mutual fund takes away from their investment to pay for advisory, management, and investment service fees. Under this legislation, each investor will receive in their statement a regular accounting as to what types of fees they are paying to invest in their mutual fund. This will help investors shop around and find the mutual funds that have the lowest fees. Mutual funds will have to respond to the changing marketplace and only charge fees that are absolutely necessary to the management of the fund. Also, this legislation requires mutual fund managers to negotiate fee contracts that are reasonable and in their investors' best interest and to report on any significant or material business or professional relationship with companies that the mutual fund provides contracts. Finally, the bill requires each mutual fund to hire a compliance officer to ensure that the mutual fund complies with all relevant laws and makes sure that they provide any information on scams to the independent mutual fund directors to stop abuse. Taken together, these provisions will help investors by making it much more difficult for mutual funds to charge unreasonable and unnecessary fees. Today, mutual funds are valued once a day, called the Net Asset Value or NAV, usually at 4 p.m. EST, when the New York market closes. The bill will require that all mutual fund companies receive an order prior to the time the fund sets a share price or NAV for an investor to receive that day's price. This will make it much more difficult for big investors to use brokers to send in trades after the 4 p.m. deadline. We should include late-trading laws as an offense under the Racketeer Influenced and Corrupt Organization (RICO) provisions of the criminal code. First used to prosecute the Mob, RICO should now be used to stop and punish organized crime on Wall Street. This will help limit mutual fund employees and big investors from attempting to defraud small investors. It will also help investors who lose money due to late- trading schemes to recover treble damages, costs and attorneys' fees. The SEC recently found that many mutual fund companies and brokerage firms had arrangements with big investors allowing them to make market- timing trades even though these fund companies have policies specifically barring market timing. My legislation bars mutual fund employees from engaging in market timing trades. It requires each mutual fund prospectus to explicitly disclose market-timing policies and procedures to stop abuse. Then, it increases penalties for mutual funds which do not follow their own policies and procedures to limit abuse. In order to help stop mutual fund abuse, this legislation increases the penalties and jail time for current securities laws including: defrauding the offer or sale of securities, failing to keep current and appropriate records of brokerage transactions, and not selling or redeeming fund shares at a price based on current Net Asset Value (NAV). These changes will make criminals think twice before committing violations of securities laws. The proceeds of the additional fines collected by this legislation will be put into a fund to assist the victims of their crimes. Today, individual mutual funds are effectively dominated by their advisers. My legislation strengthens the influence of independent directors on fund boards by requiring that independent directors comprise at least three-quarters of the board. It will also require mutual funds to have an independent chairman with the authority and ability to demand and receive all information from the fund advisory and management companies. This will increase the voice investors have in fund management and limit mutual fund abuses. By developing a new structure to provide appropriate oversight and enforcement mechanisms to fight abuse in the mutual fund industry, this legislation restores the confidence of investors in mutual funds. Ultimately, investor confidence will increase investment and enhance economic growth. I ask all my colleagues to support this legislation.

Mr. KERRY

Mr. KERRY. Mr. President, as the world's largest economy, I believe the United States must have the fairest, most transparent and efficient financial markets in the world. Our financial services companies must live up to the highest standards of accountability. This is critical to ensure that the United States remains strong, competitive and safe in the global economy. Unfortunately, recent reports of late trading and market timing have brought into question whether mutual fund companies have lived up to the highest standards of accountability. They have also shown that the Bush Administration failed to provide effective oversight and examination of mutual fund companies, while poorly enforcing our securities laws. The inaction of the Bush Administration has dangerously eroded the trust and confidence of the American people in mutual funds and may have allowed mutual fund companies and big investors to engage in fraudulent behavior against individuals and pension funds. New York and Massachusetts regulators have uncovered a scheme in which some of America's top mutual fund companies let big investors profit illegally at the expense of small investors with so-called ``late trades'' and ``market timing.'' The scam appears to be widespread. Today, roughly half of all American households own mutual funds either directly or through a retirement account or pension fund. It's been reported that as much as one quarter of mutual fund companies may be involved in late trading and market timing and that such schemes may cost investors as much as $5 billion annually. In a late trade, big investors purchase mutual fund shares after the close of the market but at the closing price, allowing them to take advantage of late-breaking financial news. A mutual fund manager might allow a big investor to buy shares in a technology fund at the 4 p.m. close price after learning at 5 p.m. that a major technology company has reported unexpectedly strong earnings. The investor is almost guaranteed a profit when the market opens the following day and share prices climb. In return for this illegal access, the big investor might pledge to continue to invest in the fund. Market timing exploits the unique way that mutual funds set their prices. While it is not illegal, most mutual fund companies assure investors that they discourage such practices and that they are working to prevent fund timing. Under a market timing trade, big investors trade in and out of certain mutual funds in order to exploit the inefficient way mutual funds price their shares and ensure a profit. In 2002, individuals who invested in mutual funds paid approximately $70 billion in advisory and management fees, an average of more than $700 per investor. There is a significant disparity between the rate of advisory fees charged to mutual fund investors and the rate paid by institutional investors, even though they provide the similar services. Currently, mutual fund managers are under no obligation to negotiate advisory and management fees that are in the best interest of their shareholders. In some instances, mutual fund managers has a financial relationship with the contractor which receives a no-bid contract from the same mutual fund. In a September 2003 complaint, New York Attorney General Spitzer alleged that Canary Capital Partners, a New Jersey hedge fund, engaged in illegal and unethical trading in mutual funds, such as late trading and market timing. After the New York State complaint, the SEC ordered a preliminary investigation, which found that half of the 88 mutual fund companies and brokerage firms had arrangements to make market- timing trades. These arrangements occurred even though about half of the fund companies have policies specifically barring market timing. Other investigations of mutual fund companies have begun, and it appears as though many mutual fund companies have been involved directly or indirectly in late trading and market-timing schemes. I am very concerned that the actions of the SEC in response to the State investigations of late trading and market timing have been inadequate and show a bias in favor of mutual fund companies at the expense of small investors. For example, earlier this year the SEC conducted a four-month investigation of Putnam Investments' record keeping, internal controls, and ability to comply with Federal securities laws. During that review, a Putnam employee informed the SEC that the company had failed to stop improper market-timing trades. Despite the tip, SEC examiners did not identify any problems with market timing in its report on Putnam. The Putnam employee, after being rejected by the SEC, brought the same information to the Massachusetts Secretary of State's office, which began an investigation. Only after the Commonwealth of Massachusetts began an investigation did the SEC begin its own investigation of market timing at Putnam. In October, both the Commonwealth of Massachusetts and the SEC charged Putnam with securities fraud, only months after the SEC gave Putnam a clean bill of health. Only a few weeks later, Putnam reached a partial settlement of the securities fraud charges with the SEC which did not include the Commonwealth of Massachusetts. Under the settlement, Putnam agrees to make restitution only for losses to investors attributable to excessive short-term and market-timing trading by its employees and to make structural reforms. Under the agreement, Putnam neither admitted nor denied wrongdoing and the SEC still has not investigated whether outside investors were engaged in market-timing activities. New York Attorney General Eliot Spitzer said that Putnam's agreement with the SEC does not address crucial issues involving restitution to fund holders, fees and penalties. William Galvin, the Massachusetts Secretary of State said that the agreement clearly demonstrates that the SEC is more interested in protecting the mutual fund industry than the average investor. These actions by the SEC highlight a fundamental problem in the Bush Administration's hands-off approach to regulating financial markets and the danger it poses to small investors and the national economy. Compounding this danger and lack of responsible leadership, President Bush has repeatedly nominated individuals to important economic positions notable for their corporate sympathies. The President selected a lobbyist for financial deregulation as the chief regulator of the federal mortgage lender Freddie Mac. His first SEC chairman was an accounting industry who was forced to resign in a storm of public outrage over his lenient treatment of his former business. Even after the accounting scandals that felled Enron and WorldCom, it was last year's Democratic Senate that pushed to enact an historic corporate reform law and the President who joined the effort only once its passage was all but ensured. It was state attorneys general who exposed dubious conflicts of interest at brokerage houses. And when energy companies gauged ratepayers in the West through questionable trades, the Administration sat on its hands for months. The message from the White House to the regulatory agencies, in actions if not words, is don't ask and don't tell when it comes to protecting investors and consumers. Justice demands that we fully prosecute Wall Street insiders that steal from Americans saving for retirement, education or simply a brighter future. And we can only hope to revive our economy if we restore investor confidence in the markets so that capital flows to business growth and job creation. To stop the erosion of trust in our financial markets and to help restore the American investor's faith in the mutual fund industry, I am introducing the Mutual Fund Investor Protection Act to update federal securities laws to curb late-trading and market-timing abuses and institute new limits on mutual fund fees paid by investors. The actions by the SEC show that it is incapable of protecting investors from securities fraud by mutual fund companies and will not prosecute this type of fraud to the full extent of the law. Therefore, we must take the day-to-day oversight of mutual funds away from the SEC and develop a new Mutual Fund Oversight Board to provide oversight, examination and enforcement of mutual funds. This new board will be similar to the Public Company Accounting Oversight Board developed in the Sarbanes-Oxley Act. It will be charged with identifying potential problems in the mutual fund industry and ensuring that fund boards are actively addressing these problems--before they spread. It would promulgate guidance regarding current regulatory issues and best practices regarding how to deal with them, and it would examine mutual funds to ensure that they are taking necessary steps to protect shareholders. The Board itself would determine how to provide an adequate and reliable source of funding for its investigations. I believe that every investor has the right to know how much their mutual fund takes away from their investment to pay for advisory, management, and investment service fees. Under this legislation, each investor will receive in their statement a regular accounting as to what types of fees they are paying to invest in their mutual fund. This will help investors shop around and find the mutual funds that have the lowest fees. Mutual funds will have to respond to the changing marketplace and only charge fees that are absolutely necessary to the management of the fund. Also, this legislation requires mutual fund managers to negotiate fee contracts that are reasonable and in their investors' best interest and to report on any significant or material business or professional relationship with companies that the mutual fund provides contracts. Finally, the bill requires each mutual fund to hire a compliance officer to ensure that the mutual fund complies with all relevant laws and makes sure that they provide any information on scams to the independent mutual fund directors to stop abuse. Taken together, these provisions will help investors by making it much more difficult for mutual funds to charge unreasonable and unnecessary fees. Today, mutual funds are valued once a day, called the Net Asset Value or NAV, usually at 4 p.m. EST, when the New York market closes. The bill will require that all mutual fund companies receive an order prior to the time the fund sets a share price or NAV for an investor to receive that day's price. This will make it much more difficult for big investors to use brokers to send in trades after the 4 p.m. deadline. We should include late-trading laws as an offense under the Racketeer Influenced and Corrupt Organization (RICO) provisions of the criminal code. First used to prosecute the Mob, RICO should now be used to stop and punish organized crime on Wall Street. This will help limit mutual fund employees and big investors from attempting to defraud small investors. It will also help investors who lose money due to late- trading schemes to recover treble damages, costs and attorneys' fees. The SEC recently found that many mutual fund companies and brokerage firms had arrangements with big investors allowing them to make market- timing trades even though these fund companies have policies specifically barring market timing. My legislation bars mutual fund employees from engaging in market timing trades. It requires each mutual fund prospectus to explicitly disclose market-timing policies and procedures to stop abuse. Then, it increases penalties for mutual funds which do not follow their own policies and procedures to limit abuse. In order to help stop mutual fund abuse, this legislation increases the penalties and jail time for current securities laws including: defrauding the offer or sale of securities, failing to keep current and appropriate records of brokerage transactions, and not selling or redeeming fund shares at a price based on current Net Asset Value (NAV). These changes will make criminals think twice before committing violations of securities laws. The proceeds of the additional fines collected by this legislation will be put into a fund to assist the victims of their crimes. Today, individual mutual funds are effectively dominated by their advisers. My legislation strengthens the influence of independent directors on fund boards by requiring that independent directors comprise at least three-quarters of the board. It will also require mutual funds to have an independent chairman with the authority and ability to demand and receive all information from the fund advisory and management companies. This will increase the voice investors have in fund management and limit mutual fund abuses. By developing a new structure to provide appropriate oversight and enforcement mechanisms to fight abuse in the mutual fund industry, this legislation restores the confidence of investors in mutual funds. Ultimately, investor confidence will increase investment and enhance economic growth. I ask all my colleagues to support this legislation.

Mr. KERRY

Mr. KERRY. Mr. President, the Senator from Montana just admitted the case. He said it is much less than that. He is arguing over fewer people being hurt, not whether any are going to be hurt. The question is, Why are people going to be hurt? How many people know there is going to be $25 billion raised in new revenue directly out of the pocket of senior citizens because we are going to increase the cost for the traditional Medicare coverage for doctor and hospital visits? This is following right in the wake of the Energy bill. Same deal. You pick up the newspapers and you see a headline: Drug companies win in battle over prescription drugs. Who do you think lost if the drug companies won? The senior citizens. There will be $139 billion or $125 billion, depending on which you read, of windfall profits to the drug companies. Why are the drug stocks going up the way they are? The difference between Medicare administrative costs, which are 2 percent, and drug company administrative costs, which are 15 to 20 percent, are now going to run roughshod over seniors who are going to be paying the additional administrative costs, and they are not going to get the benefit of lower cost drugs. There is nothing in this legislation that lowers the cost of prescription drugs. Indeed, it is the opposite. By pushing seniors off Medicare into HMOs and giving them the tough choice that if they were to stay where they have the ability to, they are going to pay more, they are going to be picking up the additional cost. This is going to be like catastrophic insurance in the 1980s when they pass legislation they think is good and seniors find out how complicated it is and how much more they are paying, which is exactly why it has been set for 2006 for implementation. It took us 11 months to put the entire Medicare Program in place. Why can't we put a prescription drug benefit in place 2 months from now or 3 months from now? Why does it have to be 2006 after the 2004 election? This is one of the greatest giveaways that I have seen in this city in a long time. We are not even going to allow Medicare to negotiate lower bulk prices. The State of Maine is allowed to do that. We have veterans who are allowed to do that. We have veterans in this country for whom the VA, in an almost unanimously adopted amendment in this body, can go out and do bulk purchasing. And we are not going to allow Medicare to bulk purchase and lower the prices. We should vote no. This is wrong. It is a giveaway. It is a special interest bonanza.

Mr. KERRY. I thank the Chair. Mr. President, the real test of this bill, in the final analysis, is what it is really going to do for the senior population of the country. I know the arguments have been made forcefully that it is going to take $400 billion and give seniors something. But the test is not whether we are going to give them something, the test is whether or not we are going to do more harm than good. I believe when we measure the overall impact of this legislation on seniors and on the overall Medicare system, the bottom line is this does more harm than good. That is why I believe the Senate should stop the bill where it is. Obviously, we would like to pass a prescription drug benefit. All of us want that. This bill could be better. It could be better by being closer to what was sent out of the Senate which had the support of my colleague, Senator Kennedy, and others because it did more good than harm. But this bill moves in the wrong direction because while it was in the conference with the House, it was loaded up with major giveaways to the drug companies, insurance companies, and has put some measures in such as the restraint on the ability of the Federal Government to even negotiate for bulk purchases and thereby lower costs, which is an extraordinary reduction in the ability of the Government to try to constrain the costs overall of prescription drugs. These are the reasons I think this bill does more harm than good: No. 1, the prescription drug benefit for many is not affordable, it is not comprehensive, and it is not guaranteed. There are holes in coverage and complex rules. The coverage gaps remain too high, and seniors are still charged premiums even after their benefits shut down in the so-called donut hole. Seniors are not assured a Government fallback plan with a set national premium. So if there are places where you don't have HMOs or there are other problems, they are going to have increases in their premiums under Medicare. It seems we ought to have a fallback with some sort of fixed price that will be affordable. At least 3 million seniors are projected to lose their gold-plated retiree prescription drug plan and be forced into a lesser benefit under the Medicare plan. The bill fails to adequately fix protections for low-income seniors and people with disabilities who currently rely on both Medicare and Medicaid for their coverage. That could cause as many as 6 million people to pay more money for fewer benefits. For seniors who think this bill is only designed to give them new benefits, they are going to be shocked to find that this legislation actually raises $25 billion in new revenue directly out of the pockets of senior citizens by increasing the costs for traditional Medicare coverage of doctor and hospital visits. They will also be surprised to find out that while we are in such a rush to pass this bill, the benefit is not actually going to come to them until 2006. In the meantime, seniors get a disingenuous discount card. Most of them have four or five of the cards today anyway with the same amount of reduction, and it will give them no more discount than any of those handful of cards available to them in the marketplace now. The question ought to be asked: Why are we not beginning a Medicare prescription drug benefit until 2006? It took 11 months to put the entire Medicare Program in place. Are we telling seniors we can't, in the age of computers, put a prescription drug benefit in place in a matter of months? Why 2006? We all understand why. It has to do with the private companies and their taking time to ramp up, the amount of money they are going to get, and the unaffordability today. One of the biggest failures of this bill is its silence on controlling the rising prices of prescription drugs. Without an effective means to restrain double-digit drug price increases, this bill does nothing to protect seniors from ever-growing out-of-pocket costs. When they are pushed off Medicare into HMOs and the HMOs raise the prices, seniors are going to be screaming about the increased cost of prescription drugs. This bill prohibits the Government, as I mentioned earlier, from using its bulk purchasing power to negotiate volume discounts for Medicare prescription drugs. That doesn't make sense. In the State of Maine, they have done that with good results. It is interesting, they were taken to the Supreme Court and challenged in their right to do that, and the Supreme Court upheld their right to do that. As a consequence, they are able to provide more affordable prescription drugs to their citizens. This bill is more about shifting medical costs to beneficiaries than actually reining in prescription drug costs. In the name of private competition and to prevent the Federal Government from running the program, the Republicans came up with an unprecedented $12 billion slush fund to entice private plans to participate in this risky market. On top of giving them extra payments to participate, the bill does nothing to require that those private plans operate efficiently. The Medicare Program in its entirety now spends only 2 percent of its total expenditures on administration. By contrast, many of the health plans in the private market often commit as much as 15 to 20 percent of their expenditures to administration. So every dollar that goes to administrative costs is a dollar not available to improve benefits for Medicare beneficiaries. Smart stewards of taxpayer funds ought to demand that private plans be more efficient if they want to participate. So this bill is not just about adding a prescription drug benefit to Medicare, it is also a bill that represents an ideological excess by some who want to force the traditional Medicare Program down the path to privatization. Under this bill, 7 million seniors will be given this choice: pay more for Medicare and get forced into an HMO, give up on choosing your own doctor and hospital or watch your bills skyrocket. This so-called premium support provision is, in my judgment, irresponsible and unfair. The so-called cost containment provisions add insult to injury. By essentially placing a cap on future Medicare spending, this bill is going to attempt to force future Congresses to reconcile Medicare spending growth by cutting benefits, raising premiums, or increasing the payroll tax. I think that is unacceptable. In addition, this bill squanders another $6 billion on tax breaks for wealthy people, and that is going to have an impact in harming Medicare. The reason is that when a tax-free, high-deductible, catastrophic health policy, known as a health savings account, is created, it is principally going to be used by those who have the money who can afford it. The result is it is going to undermine traditional Medicare by cherry-picking the healthiest people and the wealthiest seniors out of the risk pool, thereby raising premiums by as much as 60 percent for those who are left behind. In the end, we have to ask ourselves who wins and who loses in this bill. I think I have shown how seniors lose. So who wins? Well, insurance companies, pharmaceutical companies, lobbyists, and special interests of every stripe: A $125 billion to $139 billion bonanza, and the stock market confirms it. My hope is we will go back to the table and come up with a measure closer to what the Senate originally did.

Mr. KERRY

Mr. KERRY. Mr. President, I believe we ought to reject this Medicare bill. When I look at it carefully--which has been hard because there has not been a lot of time--it is clear it is a cruel hoax for seniors and a cynical giveaway to drug companies and to the insurance industry. Even as we speak, there are lobbyists scurrying around Capitol Hill working feverishly to pass a bill that has already driven up the stock of those corporations I have mentioned, the insurance industry and drug companies across the country. The rise in that stock tells the story about the windfall profits that come with this bill. With the help of President Bush, they produced a Medicare bill that lines the pockets of the powerful moneyed interests and it leaves America's seniors out in the cold. This bill is less about prescription drug benefits and more about a prescription to benefit large drug companies. America's seniors deserve better. As I have traveled around the country and heard from countless numbers of seniors about their health care needs, they repeat again and again how they need and they want more affordable prescription drugs. ``More affordable'' are key words when measured against this bill. They need and want a quality Medicare plan--I emphasize Medicare plan--that lets seniors choose their own doctors, their own hospitals, and provides prescription drug coverage. I have met seniors across the country who have cut their medication, they have cut the dosage in half, because they cannot afford their prescription drugs. I met a woman the other day who could not even afford to start her prescription drugs because the initial bill was $100 and she did not have the cash. I met people in small businesses who have seen their health care premiums more than double because drug prices are rising so fast. And I met seniors in New Hampshire and elsewhere who have no idea how they are going to possibly pay their rent and cover the prescription drugs they need. When we break past the advertising bought and paid for by the special interests to sell this bill as something it is not, we will notice that America's seniors are outraged by what they have seen already about this legislation. I was at a forum the other day sponsored by AARP, and when it was mentioned what was happening in the bill, seniors booed their own leadership in the AARP. It is no wonder AARP members are tearing up or burning their cards. For Senators who are planning to vote for this bill, I ask a very straightforward question: How are you going to explain to seniors that Congress stuck them with a Medicare plan that forces those seniors into HMOs? How are you going to explain to seniors that this plan will stick them with a raw deal that raises premiums for those who do not want to go into an HMO by $56 to $200 a month? What do you say to the 2 or 3 million seniors who are actually going to lose quality retiree prescription drug coverage under this bill and they are going to get something much worse? We have to, in future years, add a real prescription drug benefit to Medicare in order to make seniors' lives better. By now accepting a phony drug benefit, Congress literally risks making it worse for those seniors. How do you explain to seniors that Congress was not willing to let them buy cheaper prescription drugs from Canada, but Congress was willing to hand the pharmaceutical companies new windfall profits of more than $139 billion? How are you going to explain this bill could only be passed in the House under the cloak of darkness in the early morning hours, and only then by stretching the rules of the House beyond almost anything in history? And that the Senate then jammed through a 700-page bill with only 3 days of debate, giving seniors very little chance to understand what is involved in the biggest and most dangerous change ever made to Medicare? I ask those Senators who are planning to support this bill why they think it is worthy to hold a prescription drug benefit hostage to a back-door deal to privatize Medicare, a deal that will help lobbyists, help powerful Washington interests and other interests around the country and help pharmaceutical companies but will literally make the lives of a lot of our seniors worse off than they are today? Seniors need relief from inflated prescription drug prices, and they need it now. Nearly 40 percent of Medicare beneficiaries report having no prescription drug coverage. Yet the average amount they have to pay out of their own pocket for prescription drugs is going to more than double between the years 2000 and 2006. It is on track to be $1,400 the year this bill is scheduled to go into effect. If you deduct the amount of money given by this bill from the amount seniors will be paying on average out of pocket, the benefit to most seniors in this country for being pushed into an HMO will not be worth the cost. Congress ought to be demanding more. We ought to be demanding a real deal for seniors, a Medicare bill that does what it says instead of this phony bait-and-switch legislation. We ought to go back to the drawing board and pass a real Medicare prescription drug benefit. This bill does more harm than it does good. Seniors are not guaranteed that the price of their plan is not going to skyrocket. This bill prohibits the Government from even negotiating discounts for Medicare prescription drugs. It prohibits the Government from doing that. It denies the opportunity for seniors to import reasonable drugs from Canada and other industrialized countries. How extraordinary that the acolytes of free trade are closing down the ability of Americans to exercise free trade and import a product from another country at a lower price. This bill is really about President Bush passing the buck on prescription drug coverage and passing the bucks from seniors to the pharmaceutical industry. And this bill is being pushed through Congress without adequate debate and exposure to the public light, with too many backroom deals, and with blatant contempt for the public interest. The Republicans could not win a legitimate victory in the House, so they held the vote open for an unprecedented 3 hours of special interest lobbying, of almost $900 million of giveaways in exchange for votes, so they could get enough people to switch over to their side. President Bush twisted arms, twisted facts, until he finally managed to get the vote. Time and again, the President chooses to get cozy with the lobbyists. We saw it on the Energy bill. We have read it in the newspapers in the last weeks about who gained and who lost on any particular debate each day in the debate over this bill. This administration's motto ought to be: Leave no special interest behind. This Medicare bill lays that record bare for all Americans to see. The President goes around the country at a furious pace, fundraising at record levels. He has a group of insiders who provide his campaign with a minimum of $100,000 of campaign cash. They have a name. They are called ``rangers'' and ``pioneers.'' Well, it should come as no surprise to Americans, and particularly to seniors, that 24 ``rangers'' and ``pioneers'' are executives or lobbyists for the very companies that will benefit from this Medicare bill, and they are getting a good return on their money. This bill makes it easier for the big drug companies to gouge seniors and jack up health care costs so that top executives can walk away with millions. I am all for people who work hard to make a living, and I want people to be able to get rich in America. But when the drug companies' CEOs are making $40 million a year while the seniors they sell to are choosing between their medicine and their mortgage, I do not consider that just plain old free enterprise; I consider that plain old greed. This bill smooths the way for even higher drug company profits. In the past 6 months, drug companies, HMOs, and other powerful industries have spent $139 million in lobbying Congress to give them what they want. Now they have gotten a bill that will give them an estimated $139 billion over the next 8 years. A thousandfold return on an investment is not bad. You can say what you want about President Bush, but it is clear that his powerful campaign contributors got what they paid for. And it is easy to see why they make so much profit, given this bill, which does nothing to control the rising prices of prescription drugs, nothing to control the rising prices. Without an effective means to restrain double-digit price increases, this bill does nothing to protect seniors from ever-growing out-of- pocket costs. Someone needs to explain why we are in such a rush to do this. Is someone concerned that the more this cynical bill is exposed, the less likely seniors will be to accept it? What harm would be done if the Nation took some time to look carefully at what is in this bill? This plan does not kick in until 2006 anyway. So it is not as if seniors are going to get the relief they deserve at the stroke of a Presidential signing ceremony--no indeed. For the next 2 years, seniors are going to get a discount drug card to give them a 15-percent discount. Well, it does not take an act of Congress to do that. Ask any senior today, and he or she will show you about three or five cards they already carry in their wallets to get a discount on drugs. Seniors deserve and expect more than a discount card with $400 billion on the table. If we were really crafting a drug benefit and allowing the Government to institute cost-saving measures in order to tame out-of-control prices, we could deliver a benefit sooner than 2006. The Government ought to be ready to do this within a matter of months. The entire Medicare plan was set up in 11 months. Now that it is already set up, in the age of computers, are we saying we could not deliver a prescription drug benefit in a matter of months? Why are we waiting until 2006? I will tell you why. It is for the private, for-profit companies that need to lure people into the market. And it is going to take them time to warm up to the plan. We are waiting for 2006 for those companies. This bill sets aside a $12 billion slush fund for the Secretary of Health and Human Services to entice private HMO-style plans to come into the market in order to offer prescription drug plans to seniors. Larded up financial inducements are needed to attract these plans to the market because the risk is so high. Insuring seniors for drugs usually makes about as much sense as trying to sell a homeowner's policy to someone whose house is burning down. In other words, you are going to lose money. But in the name of ``private competition,'' and to prevent the Federal Government from running this program, this is what they came up with: a great big cookie jar from which to dole out public dollars to private companies to get them to do what we could do less expensively and at less cost to seniors. On top of giving them extra payments to participate, the bill does nothing to require that private plans actually operate efficiently. The Medicare Program, in its entirety, now spends only 2 percent of total expenditures on administration. By contrast, many health plans in the private market often commit as much as 15 to 20 percent of their expenditures to administration. So every dollar that goes to administrative costs is a dollar not available to improve benefits for Medicare beneficiaries. I think smart stewards of taxpayer dollars ought to demand that private plans be more efficient if they want to participate. Instead, they are being rewarded from the slush fund and given advantages that only their lobbying influence could get written into law. In addition, this bill squanders another $6 billion on tax breaks for wealthy Americans that is going to harm Medicare. The legislation would create a tax-free, high-deductible catastrophic health policy known as health savings accounts. That account will undermine the traditional Medicare Program because it will result in cherry-picking. The healthiest and the wealthiest seniors will come out of the risk pool where they share the risk of coverage, and that will result in raising the premiums for everyone else--for the poorer and the sicker--and it will raise those premiums by as much as 60 percent. The so-called cost containment provisions in the bill add insult to injury by essentially placing a cap on Medicare spending. This bill would attempt to force future Congresses to reconcile Medicare spending growth by cutting benefits, raising premiums, or increasing the payroll tax. I believe that is unacceptable. So what do America's seniors get from this bill? More than 2 million seniors who have good drug coverage now, through retiree health plans, are going to lose it. About 6\1/2\ million low- income seniors--the very people we need to help the most--could get less drug coverage than they have now. That is a raw deal for seniors. Under this bill, 7 million seniors will be given this choice: Pay more for Medicare and get forced into an HMO, give up on choosing your own doctor and hospital, or watch your bills skyrocket. That is the choice for seniors. The name of this provision in the bill is called premium support, but like Clear Skies, which means dirtier air, or Healthy Forests, which means cutting down the trees, it is an innocent-sounding name for a plan that could raise Medicare premiums from about $60 to thousands of dollars. It breaks the compact of Medicare. In fact, what it really means is the beginning of the end of Medicare as we know it. Those are not my words, those are the proud boasts of the author of this bill, House Ways and Means chairman, Bill Thomas. He said: To those who say that it would end Medicare as we know it, our answer is, we certainly hope so. It is not surprising that Newt Gingrich is supporting this deal because he long wanted Medicare to ``wither on the vine.'' Most Americans and most Democrats have a different hope, that Medicare remain secure and strong. I intend to fight with everything I have to make that happen. We need a real-world, affordable Medicare prescription drug benefit for seniors, a plan that won't force seniors into an HMO, that won't undermine the coverage for seniors who are already getting help today, that will be run by Medicare instead of an insurance company in search of a buck, and that will send a real benefit to every senior, no matter whether the costs are average or high. That is a real deal for America's seniors. But as I said before, right now this bill is a bad deal for seniors and they know it. They know that this bill provides the skimpiest of benefits, with holes in coverage and complex rules. The coverage gaps remain too high, and seniors are still charged premiums even after their benefits shut down in the so-called donut hole. I think we ought to go back to the drawing board. They know this bill does not adequately protect them with a guaranteed government fallback with a national premium. Until this bill stops slanting all the advantages toward the HMOs and private companies, I believe we have to vote it down. I believe seniors deserve a guaranteed Government fallback plan. Seniors know that this bill will jack up the out-of-pocket costs in order to visit doctors and hospitals. This is supposed to be a bill to add a prescription drug benefit, but along the way beneficiaries got stuck holding the bill for an additional $25 billion in increased out- of-pocket costs from means testing the Part B premium and increasing the deductible and indexing it to inflation. This revenue raiser isn't done in order to improve Medicare but to give sweet deals, slush funds, and tax accounts to corporations and to the rich. It is wrong. We should vote it down. I believe the proponents know that this bill fails to fix protections for low-income seniors--certainly low-income seniors know that across the country--and people with disabilities that currently rely on both Medicare and Medicaid for their coverage and should be defeated. They know it and you know it. This is not a good deal for seniors. This week in November of 1945, Harry Truman sent to Congress a proposal for health care for Americans. He said: Millions of our citizens do not now have a full measure of opportunity to achieve and to enjoy good health. And the time has now arrived for action to help them attain that opportunity and to help them get that protection. But powerful interests mobilized 1945 on Capitol Hill and defeated health care for Americans, Harry Truman's proposal, and especially for our seniors. It was almost 20 years later that a young American President took up Harry Truman's cause and called for health care for America's seniors. This week in November of 1963, the House of Representatives was considering John Kennedy's Medicare proposal. The same powerful interests were swarming through this building, but there was a spirit of hope and possibility. Now those who support this bill are breaking the promise of Truman and Kennedy that was fulfilled under President Lyndon Johnson. This has been tried before. This week in November of 1995, 30 years after Medicare became law, Speaker Newt Gingrich and his ideological allies shut our Government down for the first time ever in order to achieve their radical objective of tearing down Medicare. Millions of seniors would have been harmed by those cuts, but we stood up and we stopped Newt Gingrich because President Bill Clinton and others stood their ground and defended Medicare. I believe we need to stand our ground today and stand on principle again. This bill will hurt seniors more than it will help them. We should pass a bill that offers a real prescription drug benefit under Medicare. We need to rebuild Medicare, not sell it out to the highest bidders. Medicare is one of the best Federal programs we have. I don't believe it is time to shred it. It is time to strengthen it. This Congress and President Bush will be held accountable by America's seniors and American history for the decision we make now. I believe we ought to give seniors a real deal, a prescription drug benefit under Medicare that works for them, and not a phony prescription drug benefit that provides benefits only for the most powerful special interests that stand in their way. I yield the floor.

Mr. KERRY

Mr. KERRY. Mr. President, as this is National Employer Support of the Guard and Reserve Week, it seems an appropriate time to speak on the honorable Americans serving in our National Guard and Reserve. To fight our wars and to meet our military responsibilities, the United States supplements its regular, standing military with a capable band of citizen soldiers, reservists who serve nobly and continue to make the ultimate sacrifice for this country. At present, there are about 165,000 national guardsmen and reservists on active duty--more than half of the 300,000 called to active duty since September 11. They serve admirably around the world, performing critical wartime functions in Iraq, Afghanistan, and elsewhere. This country does not go into battle without members of the National Guard and Reserve, and we should be grateful for their service. Instead of gratitude, members of the Guard and Reserve find the Bush administration's military agenda leaving them behind. In addition, earlier this year, the Republican majority in the U.S. House of Representatives sought to cut reservist pay by 40 percent for normal peacetime training requirements. The Republican majority in the U.S. Senate blocked efforts to extend health care benefits to Guard and Reserve members. Just this month, the Republican majority in Congress voted against legislation by Senator Durbin that would have provided supplemental income for Federal employees who are called up to active duty. These efforts are wrong and demonstrate the misplaced priorities of the Republican Party. To make matters worse, the Bush administration recently announced that it would require thousands of National Guard and Army Reserve troops to extend their tours of duty up for an additional six months. This extension will cause significant economic difficulties for the reservists, their families, their employers, and our national economy. Beyond the hardship of leaving their families, their homes and their regular employment, more than one-third of military reservists and National Guard members face a pay cut when they're called for active duty. Many of these reservists have families who depend upon that paycheck and can least afford a substantial reduction in pay. The United States Chamber of Commerce estimates that 70 percent of military reservists called to active duty work in small- or medium-size companies. The continued activation of military reservists to serve in Iraq and the broader war on terrorism has imposed a tremendous burden on many of our country's small businesses. Too many of these businesses, when their employees are asked to leave their jobs and serve the Nation, are unable to continue operating successfully-- resulting in severe financial difficulty and even bankruptcy. Large businesses have the resources to provide supplemental income to reservist employees called up for active duty and to replace them with a temporary employee. However, many small businesses are unable to provide this assistance or temporarily cover the reservist's duties. The Federal Government has an obligation to help small businesses weather the loss of an employee to a call-up and a duty to protect small business employees and their families from suffering a pay cut to serve our Nation. It is imperative that we help families of reservists maintain their standard of living while their loved one protects our country abroad. That is why I have proposed creating a Small Business Military Reservist Tax Credit, which does two things. First, it provides an immediate Federal income tax credit to any small business to help with the cost of temporarily replacing a reservist employee that has been called up to active duty. Second, it provides a tax credit to small businesses that pay any difference in salary for an employee who is called up. This tax credit is worth up to $12,000 to any small business and up to $20,000 for small manufacturers. It is common knowledge that small businesses continue to be our most effective tool at creating new jobs and spurring economic growth nationwide. Small businesses employ over 50 percent of the Nation's work force. Across the country, small businesses are currently creating 75 percent of new jobs. Furthermore, many of these small businesses provide quality goods and services that are a vital link in the supply chain for national defense. Many of these small companies need immediate help to keep their business going while their employees encounter tremendous personal sacrifice in service of our country. This assistance will immediately help struggling entrepreneurs keep their small businesses running during the loss of an employee to temporary military service. It will also help the families of military reservists cope with the financial burden of their absence. In this way we ensure that we preserve our great tradition of citizen soldiers at such a critical time in the Nation's history. In his speech designating this week National Employer Support of the Guard and Reserve Week, President Bush recognized several large businesses for their support of the Guard and Reserve. I, too, commend these big corporations for their support of our reservists and guardsmen, but the President has again showed that he doesn't understand the plight of our military reservists and their smaller employers. The fact is big businesses, like those the President recently honored, aren't going out of business if one of their reservist employees is called up. Small businesses may. My legislation provides a real solution--helping small businesses maintain productivity and helping make up the difference for reservists who face pay cuts when they're deployed--not just a pat on the back that this week provides. I urge the President and all of my colleagues to support my proposal.

Mr. KERRY

Mr. KERRY. Mr. President, the relationship between the active and reserve components in the United States military is known as the ``total-force'' concept. Active duty units cannot fight wars without the support and participation of units from the National Guard and Reserve. It is this aspect of the all volunteer military that distinguishes the American armed forces from the praetorian armies of old and links the broader public, intimately, to the costs and sacrifices of war. The men and women of the American military continue to preform magnificently. They are executing difficult missions in distant lands around the globe. There are more than 130,000 troops in Iraq, 30,000 in Kuwait, 37,000 in Korea, and 10,000 in Afghanistan. At this moment, more than 164,000 national guardsmen and reservists are on active duty, and the Pentagon has recently announced two more rounds of activation, increasing that number by another 58,000 troops. With more than 60 percent of the Army's active combat strength deployed or preparing to deploy, the men and women of the National Guard and Reserves are essential to our efforts in the war on terrorism and the stabilization of Iraq and Afghanistan. These deployed ``weekend warriors'' are much more than part-time soldiers; they are full-time war-fighters serving alongside active duty units, performing the same missions, facing the same dangers, paying the same bloody price. Despite this fact, the equipment of the National Guard and Reserves has been substandard when compared to the equipment available to members of the active units for far too long. This peace-time nuisance is a mortal danger in war. It is inexcusable that any U.S. units, whether active or reserve, would deploy to a combat zone without the latest equipment and technology. But we have heard concerns about National Guard and Reserve units lacking the latest gear or technology: helicopters lacking basic defense systems; Humvees without the additional armor needed to protect their occupants; and inadequate supplies of personal body armor. It is a dereliction of duty to send anyone into harm's way without basic protective gear. The Concurrent Resolution submit today, expresses our concern for the welfare and security of all the men and women of the United states military, whether they serve in the active duty military, the National Guard, or the reserves. If this is to truly be a ``total-force,'' then we must also commit ourselves to equipping it as such. The courageous, young men and women of our armed forces deserve no less.

Mr. KERRY

Mr. KERRY. Mr. President, today, as the ranking Democrat of the Committee on Small Business and Entrepreneurship, I join the committee's chair, Senator Olympia Snowe, in introducing a bill to extend for 4 months--through March 15, 2004--the authority to operate the Small Business Administration's programs. It is our hope that it can be expeditiously considered by the Senate. Enacting this bill before Congress adjourns for the holidays is critical in order to continue making accessible to small businesses the many needed resources, from long-term loans to technical and contracting assistance, of the SBA. Among those that would be in jeopardy of closing are the agency's loans for growing businesses through what's more commonly referred to as the 504 loan program, certain established Women's Business Centers, the contracting program to assist minority-owned small businesses, the program to provide surety bonds to small contractors through so-called ``preferred sureties'' and one of the agency's venture capital programs. The agency's 504 program is more important than ever to our small businesses and the economy. The need could not be clearer, with demand for loans up 25 percent in both the number of loans made and the total dollar amount in loans made. As the year came to a close, these loans pumped more than $3 billion into our local economies through thousands of small businesses. Remarkably, making these loans available to small businesses costs the taxpayers nothing because the borrowers, lenders and certified development companies cover costs of the program through fees. While it requires no appropriations to guarantee these loans, continuation of the program depends upon the ability of the lenders to charge fees, which must be specifically permitted by Congress. This program is extremely successful and should absolutely continue. I believe I speak for many when I say that the Congress wants the lending community to continue devoting resources to 504 loans, keeping this affordable financing available to small businesses. We fully intend to provide authorization for 3 years when the SBA's comprehensive reauthorization bill is enacted in early 2004. I feel just as strongly about the importance of continuing the SBA's venture capital programs. Specifically, we need to make clear that the amount of fees that can be charged to participating securities venture capital firms is increased from 1.38 percent to 1.46 percent. Venture capital has been very scarce over the past few years, and this program has been responsible for more than 50 percent of the number of deals made in this country. In spite of the industry's rough times, the committee is supportive of the Small Business Investment Company programs and wants to see more successes like Staples and Callaway golf lead the way in their industries and create jobs. Extending the Women's Business Center Sustainability pilot program-- which is made permanent in both the House and Senate SBA reauthorization bills--is tremendously important to the 86,000 women business owners across the Nation who use the entrepreneurial development assistance each year. Without the continuation of the agency's authority to operate pilot programs, it is possible that the Small Business Administration could misinterpret Congress's strong support for this pilot and discontinue funding 55 centers in over 40 states, closing over half of the most experienced and active women's business centers. In 1999, when I authored the Women's Business Center Sustainability pilot program, it was my intention to continue the most productive and well-equipped women's business centers, knowing that demand for such services was rapidly growing. Today, with women-owned businesses opening at one-and-a-half times the rate of all privately held firms, the need for women's business centers is even greater. Until Congress makes permanent the Women's Business Center Sustainability Pilot program, as intended in already passed legislation, an extension of authority is vital--not only to the centers themselves, but to the women's business community and to the 18 million workers employed by women-owned businesses around the country. We also need to ensure the continuation of the agency's contracting assistance. One type of assistance in particular is the Small and Disadvantaged Businesses, SDB, Certification program. It was created to assist small businesses through government contracting, access to capital, management and technical assistance, and export assistance. The program was originally implemented to help Federal agencies reach a 5 percent goal of utilization of these essential businesses incurred to address discrimination and under-utilization of certain firms in Federal contracting. The positive implications of this program have grown beyond the expectations of even the authors of the original legislation. By supporting these socially and economically disadvantaged businesses, the Federal Government has helped these entrepreneurs revitalize neighborhoods, create jobs, and encourages real, measurable economic growth. The program has shown to be a resounding success, however, a great deal of work still needs to be done. Moreover, the Federal Government has failed to meet the 23 percent government-wide goal for small business utilization in Federal procurement. Agencies have continually failed to meet the goals for socially and economically disadvantaged, women owned businesses, service disabled veteran owned, and HUBZone firms, all of which contribute to the overall 23 percent goal. Part of the problem faced by small businesses participating in these programs and by those attempting to enforce small business utilization goals is the perception that these goals are intended to be a maximum set-aside for small firms. They are not. They are minimum thresholds. The continuation of the SDB program throughout the government will help Federal agencies continue to utilize these small businesses and continue to foster business development and in much needed sectors of the economy. I would like to make clear that this bill is not intended to interfere with any program, pilot program or authority that has a longer authorization, like the Small Business Innovation and Small Business Technology Transfer programs. If there are any doubts about our intentions, the bill is structured to keep all programs, pilots and initiatives operating that could have expired between September 30, 2003, and March 15, 2003, and to keep them operating as on September 30. I commend our committee, and the leadership of our chair, Senator Snowe, for deliberating and passing our comprehensive reauthorization bill in July and look forward to working with our colleagues in the House to pass a final bill in early 2004.

Mr. KERRY

Mr. KERRY. Mr. President, I come to the floor today to introduce three bills to address the growing needs of small manufacturers, to stimulate the manufacturing sector of our economy, and to put back to work the millions of American workers in the manufacturing sector that have lost their jobs in the past 3 years. The three comprehensive bills are: the Manufacturing Assistance, Development and Education (MADE) in America Act, the Enhance Domestic Manufacturing and Worker Assistance Act, and the Manufacturing Jobs Production Act. It's no secret that during the past 3 years, manufacturing employment in the United States has declined from 17.3 million to 14.6 million jobs. This loss of manufacturing jobs represents a loss of more than one in every seven such jobs. Over the past 3 years, the United States has lost an average of 80,000 manufacturing jobs a month. The States that rely the most on their manufacturing sector have suffered the most during the past 3 years. Indiana has lost 67,000 manufacturing jobs, California--297,000, Ohio--152,000, Illinois--126,000, Michigan-- 127,000, Pennsylvania--133,000, South Carolina--55,200, and North Carolina--145,300. Even in my home State of Massachusetts, we have lost approximately 80,000 manufacturing jobs since January 2001. The loss of manufacturing jobs is of great concern because the manufacturing sector is more important than any other sector in supporting overall economic growth, technological innovation, and a high standard of living for Americans. Over the past 10 years, manufacturers have performed nearly 60 percent of research and development in the United States and have paid over one-third of all corporate tax payments to State and local governments. Further, replacing manufacturing jobs with service sector jobs will not help stabilize the American economy. According to a University of Michigan study, 6.5 spin-off jobs are created as a result of every new job created in manufacturing. Service sector jobs simply cannot generate that type of economic activity. The benefits of manufacturing can also be found in national salary averages. In 2001, salaries and benefits averaged $54,000 in the manufacturing sector, while the average salary and benefits package in the private sector overall was only $45,600. In 1955, manufacturing jobs were 30.5 percent of all U.S. employment, today they make up just 14 percent. The manufacturing decline has been marked by a relocation of factories abroad along with reduced exports and increased imports of manufactured goods. Both large and small companies have been affected and a continued shrinking of the manufacturing base may shift the manufacturing innovation process to other global centers and most certainly result in a decline in U.S. living standards. As a member of the Finance and Commerce committees and ranking member of the Senate Committee on Small Business and Entrepreneurship, I have been fighting for the creation of new manufacturing jobs during debate over the President's tax cuts, and I will continue to do so in the months ahead. President Bush has done nothing to address the loss of manufacturing jobs, and many communities across the country are suffering because of it, as more and more plants close and more and more jobs move overseas. This administration is indifferent to these changes, and the pain being felt in million of American households, and that's unacceptable. In fact, indifferent may be too kind a word. The Bush administration has been downright cruel to working Americans, pursuing billions of tax cuts for the most well-off in our society as their only economic policy, while millions of hard-working Americans have lost their jobs and will be left with the bill from this administration's reckless fiscal policies. In fact, you could argue that the manufacturing jobs picture is actually worse than the hard numbers tell us. While many estimates show that 2.5 million manufacturing jobs have been lost since President Bush took office, in previous postwar recoveries, manufacturing employment had recovered by this point in the business cycle and risen by more than 5 percent. Under the Bush presidency, manufacturing employment has continued to deteriorate steadily, falling so far by 8 percent. Morgan Stanley's respected economists tell us that the difference represents 2.1 million additional manufacturing jobs. More supply-side, trickle-down, ideologically driven tax cuts are not going to turn this around. Congress needs to take action and pass some policies that are meaningful to people, and will actually create jobs, and soon. The President and his followers insist that his tax cuts are starting to work, basing their claims on a couple of months where the overall job creation numbers were positive. But the truth is that the meager job gains of the last three months have done little to lift most parts of the economy because nearly 80 percent of those small gains have come in just three sectors: government, temporary staffing, and education and health services. Manufacturing is not yet on the mend, and people who are finding new jobs are finding jobs at lower pay. We need to take action. Small-business owners have made it clear to me, to Congress, and to the administration what actions are needed to reinvigorate the manufacturing sector. Unlike the Bush administration, which has ignored these requests for help, Congress must have the courage to make the tough decisions and not simply pander to wealthy Americans and giant corporations with unbalanced tax cuts. The Nation's gross domestic product may be temporarily up, but manufacturing jobs are still way down. To get those jobs back, and to continue competing on the international stage, our manufacturers, particularly our small manufacturers, need adequate representation and leadership at all levels of government, here and abroad. They need a well-educated, highly skilled, productive labor force; Federal contracting and subcontracting opportunities; greater access to capital; foreign patent protection; trade adjustment, global marketing, and entrepreneurial development assistance; and responsible, targeted tax credits. This legislation addresses those needs, while the President's tax cuts continue to undercut them. Mr. President, we often receive complaints that the Federal and State small business programs duplicate, rather than complement, each other. While the SBA has stated that it has sufficient systems and programs in place to address the concerns of manufacturers, statistics on small manufacturers, as well as the business owners themselves, prove otherwise. Many state that accessing these programs is often confusing and difficult because they are fragmented, spread out and not tailored to bridge gaps found between State and Federal assistance programs. To address these problems, my bill will create the National Office for the Development of Small Manufacturers at the Small Business Administration, led by an associate administrator. This new office will be responsible for coordinating and strengthening existing programs, as well as establishing new SBA programs to address the needs of small manufacturers and to promote programs throughout the Federal Government that assist small- and medium-size manufacturers. While the President has established a ``new'' manufacturing czar at the Department of Commerce, this action is seen as lateral movement and does nothing to assist those manufacturers that are suffering the most, the Nation's small business manufacturers. Once established, the National Office for the Development of Small Manufacturers will be responsible for implementing a Manufacturing Corps through block grants to each State that will address the skilled worker crisis in this country by promoting technical education pertinent to the manufacturing sector. First, the Manufacturing Corps would help current manufacturing workers improve their skill set and advance their technical abilities. Each State's grant would ultimately provide small manufacturers with more highly skilled workers--something that the industry has posed as a global competitive disadvantage--and allow the unemployed and those in declining industries to make the pivotal move back to work or to other manufacturing sectors, respectively. Second, the Manufacturing Corps would help small manufacturers fill their skilled labor needs by encouraging college and university students studying engineering, computers, and other high-tech fields to work in the small manufacturing sector by offering to repay a portion of their student loans if they do so for a specified period of time. Similar to incentives for students going into the nonprofit or government work, the government would repay the loans of those who commit to working for a small manufacturer for 4 years following graduation if their annual employment compensation does not exceed $60,000. Third, the Manufacturing Corps would establish a vocational and technology training for students at the high school level to prepare students who are not planning to attend college directly after graduation to enter the manufacturing sector. As in woodshop or auto shop courses, high school students will learn the technical skills to become effective, skilled manufacturing employees, such as machinists or metal workers. Additionally, schools providing such assistance would partner with community manufacturers to address their skilled worker needs and to provide employment opportunities for students after graduation. Another duty charged to the National Office for the Development of Small Manufacturers is to create a government-wide ``One Stop Small Manufacturing Shop'' for small manufacturers. This online web portal will serve as the single point of contact for information on entrepreneurial development assistance, access to capital, specific outreach programs, contracting opportunities, and R&D projects. We already have successful programs that can be used as a prototype for the web page such as the National Industrial Manufacturing Assistance Program's Web site at the Office of Industrial Technologies at the Department of Energy. The greatest challenge to small businesses, as with all businesses, is the ability to obtain contracts. The BusinessLINC program within the SBA has been proven, since its inception, to successfully match small businesses with potential clients. The teaming model has created thousands of jobs and millions of dollars in contracts. The BusinessLINC-M program will also team small businesses with non- governmental organizations that can have a direct impact on their bottom-line through contracting or mentoring. There is a great potential for the BusinessLINC-M program to match suppliers with distributors, offer contracting and subcontracting opportunities, which directly benefits the local economy while allowing access to vendors in the distributors' backyards. The National Office for the Development of Small Manufacturers will create a similar program to foster symbiotic partnerships between small and large businesses to spur contracting opportunities. This BusinessLINC-M program would instead match up small manufacturers with larger firms that could utilize their products, creating subcontracting opportunities and a stronger supply chain. Finally, the National Office for the Development of Small Manufacturers will develop a manufacturing mentor-protege program to focus on improving the management practices, domestic and foreign marketing abilities, efficiency, and product development of small manufacturers by pairing them with larger, more experienced manufacturers that would provide such guidance. One of the first things we can do to help small manufacturers is to tailor the SBA's loan and venture capital programs so that they offer small manufacturers affordable, long-term financing in amounts that are truly appropriate for them. This legislation will assist small businesses with fixed-asset costs, working capital, loan dollars to help them export what they have produced in the United States, and venture capital investments to spur expansion and growth. To provide that capital, we have increased the loan amounts available to small manufacturers, increased venture leverage, and allowed refinancing of certain existing business debt. The maximum 504 loan, for equipment and property, will be raised from $1 million to $4 million, the maximum microloan will be raised from $35,000 to $50,000, and the gross loan amount for 7(a) working capital loans will increase from $1 million to $4 million for small manufacturers. Investors should be encouraged to devote more of their money to the fastest growing small manufacturers. The SBIC program can provide that venture capital money. Under this bill, if SBICs invest 50 percent in small manufacturers, then a single fund can leverage $150 million instead of $115 million and a manager with several SBICs can leverage $185 million from the SBA. The legislation also restores and increases funding to establish additional New Markets Venture Capital firms and increases the SBA's leverage against private funds raised in the New Markets Venture Capital program from 150 percent to 200 percent so these venture capital firms can invest more in small manufacturers. For growing small businesses using the loans from the 504 program to buy new equipment or buildings, we raise the limit for lenders so that they must create or retain one job for every $100,000 loaned to manufacturers. This is in place of the $35,000 that is currently in place. For non-manufacturers, it will be raised to $50,000. For manufacturers, the costs of retaining jobs are higher, and we want these jobs to be good living wages and not the $3 per hour or lower that exists in some countries. After a natural disaster, the already slumping manufacturing industry faces an even greater challenge in returning business to normal and affording the costs of repair. Recognizing that they face these problems, the MADE in America Act changes several provisions to the SBA's disaster loan program. It increases the maximum loan size from $1.5 million to $5 million; allows small manufacturers to consolidate debt by refinancing not just existing disaster loans but any outstanding business loan; waives the principal and interest payments for 6 months; authorizes the administration to waive unreasonable size limitations; and prohibits the SBA from selling all disaster loans to other creditors. Disaster loans, at the most, have an interest rate of 4 percent and terms of up to 30 years. This low rate and long term keeps manufacturers' payments down as well as their debt, particularly when they refinance their more expensive business loans. To help small manufacturers and small R&D firms, we need to reduce trade barriers, so that they are able to sell their products and technologies in other countries. Small-business owners commonly cited the expense required to secure foreign patent protection as a significant barrier to their ability to operate in international markets. Part of encouraging the spread of their innovations into other countries is decreasing their vulnerability to big foreign corporations that can take their ideas when they try to sell their products around the world. Our small businesses need patent protection. However, the costs associated with filing such patents are often prohibitively expensive. For example, Mr. Clifford Hoyt, who is vice president and chief technology officer of Cambridge Research and Instrumentation, testified on June 21, 2001, as part of the Committee's hearing on reauthorization of the STTR program that cost of ``patent protection in Europe is $20,000.'' Information from the American Intellectual Property Law Association's meeting shows that the costs of foreign patents range from $7,200 in Canada to $27,200 in Japan. Those costs include fees for filing, examination, translation and attorneys. With this legislation, to address the intellectual property problem for small exporters, I propose enacting a variation of a bill I introduced 2 years ago. The MADE in America Act would establish a self- sustaining grant fund to help small manufacturers and R&D firms pay for the cost associated with foreign patent protection. Each company would be limited to one grant and, in order to be eligible for the grant, it must have already filed for patent protection in the United States. Both of these provisions are designed to ensure, to the extent possible, that companies apply for assistance for their most promising technology and therefore are in the best position to return money to the grant fund when their patented technology becomes profitable. By giving the companies only one shot at a grant to protect and make money from their technologies, it forces them to select the one most likely to succeed and have sales. At the same time, requiring companies to have already filed for patent protection in the United States prior to seeking a foreign patent grant is a gauge of the company's confidence in the commercial potential of its technology. Ultimately, the goal is to create a self-sustaining grant fund. To do so, in return for the grants, each recipient would be obligated to pay 5 percent of its related export sales or licensing fees to the fund, to be known as the ``Small Business Foreign Patent Protection Grant Fund.'' To maintain a reasonable incentive for the small businesses, the total amount recipients would be required to pay would be capped at four times the amount of the grant, which for a $25,000 grant would be $100,000. When I first introduced this bill a couple of years ago, the grants were limited to companies that participate in the SBA's SBIR and STTR programs. However, this bill opens the grant funding to all small firms, while reserving 50 percent of the money for SBIR and STTR firms through the first three quarters to each year. Intellectual property protection is critical to these small firms that have a great product or invention, and keeping these innovations in the hands of American firms is important to the U.S. economy. Mr. President, today I am also introducing the Enhance Domestic Manufacturing and Worker Assistance Act. America's manufacturing decline and the associated loss of good, stable manufacturing jobs has been marked by a relocation of factories abroad along with reduced exports and increased imports of manufactured goods. This legislation will respond to the manufacturing crisis in two ways. The proposal recognizes the harmful impact that trade has on small manufacturers and provides assistance to those workers, companies and communities that have suffered through Trade Adjustment Assistance programs. The proposal also provides critical assistance to U.S. domestic manufacturers to ensure that they adjust to the global economy and remain competitive in the 21st century. First of all, for those workers, businesses and communities that have been harmed by trade, my bill assists them by reauthorizing our Trade Adjustment Assistance programs for workers and business firms. The bill includes elements of an innovative program to assist similarly situated communities. Recognizing that entire communities experience economic displacement, this proposal will assist harmed communities in exploring new avenues of economic development and job creation. Combined, these programs will assist hundreds of mostly small- and medium-sized manufacturing and agricultural companies that experience loss of jobs and sales due to import competition and other adverse consequences of trade. For example, TAA for workers provides income support, job search and worker relation assistance for affected workers. Next, my legislation will enhance two programs that have proven effective in assisting domestic manufacturing firms. For example, the bill will strengthen the very effective Manufacturing Extension Partnership program. This program assists struggling small- and medium- size manufacturers to modernize, increase productivity, cut waste, achieve higher profits, and compete in the demanding global market. With increased funding, the MEP program can expand its program reach and decrease the fees paid by small manufacturers to access the assistance. It is exactly this type of program that will make American manufacturers competitive again, allowing them to maintain existing jobs and create additional high-skilled and high-paying jobs in the United States. In addition, my legislation increases funding for the Advanced Technology Partnership program. This very important program fosters public-private partnerships to accelerate the development of innovative technologies and bridges the gap between the research lab and the market place. The program has been very effective in accelerating the development of innovative technologies that promise significant commercial payoffs and widespread benefits for the Nation. Unfortunately, the Bush administration has sought to eliminate this program, at a time when technological change is faster than ever before and small manufacturers must be technologically competitive. Strengthening the MEP and ATP programs will go a long way in assisting small domestic manufacturers as they attempt to regain market share lost to international competition and recover from the resulting devastating job losses. Finally, this bill will also create an ``Office of Small Business'' within the Office of the United States Trade Representative that will focus on the issues affecting small- and medium-size manufacturers as they relate to our international trade policy. This proposal is very similar to a proposal that I offered with Senator Olympia Snowe in the 107th Congress. Small manufacturers are directly impacted by our trade policies--often adversely--yet they do not have a seat at the table and lack the ability to effectively express their concerns. The establishment of this office will ensure that issues important to small manufacturers are taken into consideration as our Nation's trade policy is carried out in the future and will assist small businesses in export promotion and trade compliance. The final piece of my legislation plan to enhance U.S. manufacturing is my bill titled the ``Manufacturing Job Production Act.'' The bill has four components, all of which are fiscally responsible. None of them will by themselves completely make up for the jobs lost during this administration, but they will each do their part in stimulating new job creation and new investment in manufacturing firms. The first component of my plan is a Temporary Manufacturing Job Creation Tax Credit. It is a similar proposal to one I introduced earlier this year, when we were debating the President's third major tax cut in 3 years. My idea is straightforward: Any domestic manufacturer would receive an income tax credit based on a percentage of the net increase in taxable Social Security payroll linked to new manufacturing/production jobs, comparing total applicable payroll for one year to the previous year, adjusted for inflation. The credit would apply only to domestic production/manufacturing jobs created in 2004 and 2005, and it would include jobs created in U.S. territories, and those created by foreign-owned companies in the United States or its territories. Unlike many of the administration's tax cuts, which carry huge costs at the vague promise of a positive economic result, my idea is outcome- based because it only costs money if it actually works. Plus, it has a built-in safety valve to prevent abuse, because it prevents firms from receiving tax credits if they create new manufacturing jobs while simultaneously laying off other workers, and it stops companies from tilting the benefits to high-salary workers because these salaries are already above the Social Security payroll tax cap. By comparing payroll taxes paid over a whole year, it also provides an incentive for firms to hire new workers and keep them on payroll and makes the calculation simple for businesses. It also provides an employment stimulus for U.S. companies with subsidiaries or manufacturing facilities on U.S. possessions, such as Puerto Rico. My proposal would be in place for 2 years, and the Joint Committee on Taxation estimates that it would cost less than $4 billion. Surely we could pass this proposal and offset its modest cost by finally closing some of the Enron tax loopholes or passing the corporate inversion proposals that have previously passed this body unanimously, only to be opposed by the House. I think the percentage of Americans that would support that tradeoff would be upwards of 80 percent. Paying for this proposal by closing tax loopholes for wealthy corporation makes perfect sense. It will help our economy grow and help slow the flow of manufacturing jobs overseas. The second element of may plan expands upon a capital gains provision that I have included in other legislation. Section 4 of S. 842, my small business tax stimulus bill, provides that there shall be no capital gains tax applied to new equity investments in small businesses with gross sales under $100 million, if the investments are held for at least 4 years. The zero capital gains tax applies to businesses involved in certain ``critical technologies'' as well as specialized Small Business Investment Companies, or SSBICs. For the Manufacturing Job Production Act, this capital gains proposal is expanded to include new equity investments in small manufacturing firms. Such a proposal should generate new investments in manufacturing, particularly small manufacturing companies that have been so damaged by recent economic trends. And like the job creation credit, it only costs significant money if it has the desired effect. That factor alone makes it far preferable to the Republican ``throw it and see if it sticks'' tax cut strategy. The third part of my manufacturing plan is a revised BRIDGE Act, designed to give a little extra boost to small manufacturers. The BRIDGE Act stands for Business Retained Income During Growth and Expansion. It will help ensure that rapidly expanding, entrepreneurial businesses have access to the capital they need to continue creating jobs and stimulating the economy. Each year, the United States economy generates 600,000 to 800,000 new businesses. Most new business start small and stay small--but some evolve into fast-growth companies with the capacity to propel the economy forward. These fast-growing companies create the most new jobs, yet access to financing--particularly in the current economic environment, but also when the economy is strong--presents a pivotal challenge to them. A typical startup may open its doors with a combination of personal savings, credit card borrowing, and family lending. Once a business has grown past a certain size--say, when sales reach $10 million or more--the company is better able to attract external financing at a reasonable cost. However, there are many companies in a middle range, including many small manufacturers, which desperately need additional financing in the range of $250,000 to $1 million. These companies face a severe credit crunch that limits their growth and the number of new jobs they can create. I believe that if congress does anything to assist small manufacturers, it should take steps to ease the credit crunch for those climbing the economic ladder from small- to medium-size enterprise, thereby generating new ones. The BRIDGE Act addresses this financing gap. As ranking member of the Committee on Small Business and Entrepreneurship, I have been the leading voice for this idea in the Senate, and it is something worth trying. Like my other proposals for tax relief for small manufacturers, it only generates cost to taxpayers if it actually works. The BRIDGE Act is simple. It would allow a fast-growing business with less than $10 million in sales to temporarily defer up to $250,000 of its Federal income tax liability, but only if the money is reinvested in the company. The 2-year deferral would be repayable wit interest over a 4-year period. For small manufacturers, the maximum tax deferral would be $400,000, and the payback period would be extended to a maximum of 6 years. Thus, the act will free up new investment capital for growing companies by allowing them to use a portion of their Federal tax liability for self-financing. Its revenue cost is minimal-- in fact, if the program is implemented temporarily, as in my bill, it actually raises a small amount in the 10-year budget window--since the deferred taxes are paid back with interest. The fourth and final component of my tax relief plan for small manufacturers is to make permanent the increase in Section 179 small business expensing that was passed earlier this year as part of the President's third tax cut. However, this increase is set to expire at the end of 2005. While the recent increase does not help the smallest of small businesses, it can be helpful to small manufacturers who purchase more expensive equipment. It is one element of the various Bush tax cuts that deserves to be made permanent. My proposal would permanently increase the annual expensing limit to $100,000. Mr. President, we may not have all the answers here in the Congress. Some of these trends in manufacturing employment have taken a long time to develop, and we won't be able to turn them around overnight. But at least we shouldn't ignore the changes and act as if more tax cuts will solve the problem. My manufacturing tax plan contains four reasonable, responsible components--and most will cost money only if they are actually effective. It's time for this administration to get its head out of the sand and start proposing job-creating strategies that will actually work. Mr. President, nearly 3 million Americans, all across this Nation, have lost their jobs since 2000. We need to act now, with a comprehensive strategy that not only incorporates tax cuts but also includes real job training, business development, capital access, and levels the playing field for U.S. manufacturers. I believe this legislation addresses many of the concerns of the small business community and will take a significant step towards reversing the current trend of economic decline and job loss in the manufacturing sector. I ask unanimous consent that the text of the MADE in America Act, the Enhance Domestic Manufacturing and Worker Assistance Act, and the Manufacturing Jobs Production Act be printed in the Record, and I urge all of my colleagues to support these bills.

Mr. KERRY

Mr. KERRY. Mr. President, I would like to take this opportunity to express my appreciation to Chairman Bond and Senator Mikulski for their hard work in developing the Senate fiscal year 2004 VA-HUD and Independent Agencies appropriations bill. Considering the low authorization level for this important bill, they have done an excellent job maintaining priorities in Veterans health care, the environment and housing. It is vital that the full Senate-passed amount for Veterans healthcare be maintained in conference so that we don't lose more ground in caring for those who have borne the battle. However, it is obvious that additional resources are critically needed for many programs in these areas if they are to work as intended. Understanding the difficult authorization level facing this committee, I would still like to express my strong support for additional funding for YouthBuild in the fiscal year 2004 VA-HUD and Independent Agencies conference report. Despite the repeated support of over 57 of our Senate colleagues for a funding level of $90 million, and despite the President's Budget request and House-passed level of $65 million, the Senate bill could only provide $60 million for a program that has proven its value and that is crucial to the lives of many young people. At the same time, 1,400 YouthBuild participants who are building housing for homeless and low-income people have lost access to AmeriCorps education awards due to the cutbacks in AmeriCorps. Each year, YouthBuild receives strong bipartisan support because the program works. Eighty-five percent of students who complete the YouthBuild program either secure a job--at an average wage of more than $7.60 per hour--or go on to postsecondary education. The program's success rate is especially notable since YouthBuild serves an at-risk population, 80 percent of whom have previously dropped out of high school. YouthBuild is a uniquely comprehensive program that offers at-risk youth an immediately productive role rebuilding their communities. Along with attending basic education classes for 50 percent of the program time, students receive job skills training in the well-paid construction field, personal counseling from respected mentors, a supportive peer group with positive values, and experience in community leadership and civic engagement. To date, 25,000 YouthBuild students have built over 10,000 units of affordable housing. Despite its obvious success, YouthBuild is losing ground with more than 30 sites that have closed due to lack of funds since 1996. Most of the remaining programs enroll 25 percent fewer students than they did in 1997. In 2001, 56 experienced YouthBuild sites that qualified for funding from HUD did not receive it solely due to a lack of funding. Only two local programs have been funded continuously since 1994. During the House-Senate conference, I hope that the Senate will yield to the House and provide $65 million for YouthBuild as the President has requested and the House of Representatives has provided. This is the least we can do. We must continue to fight to open the doors of opportunity and service to America's youth by supporting YouthBuild.

Mr. KERRY

Mr. KERRY. Mr. President, I oppose the nomination of MG Robert T. Clark to the rank of lieutenant general. The facts surrounding his conduct, prior to and after the murder of PFC Barry Winchell, raise questions about his leadership and judgment that have not been answered to my satisfaction. The Inspector General of the Army, while clearing Major General Clark of fostering a hostile environment at Fort Campbell, raised serious issues about discipline at the base. Furthermore, some of Major General Clark's actions after Private Winchell's murder raise legitimate questions about his fitness for higher command. In the immediate aftermath of the murder, for example, a public affairs officer at the base issued a statement describing the murder as a ``physical altercation in a post barracks.'' This gross distortion of the facts was not corrected. In fact, Private Winchell had been asleep at the time his murderer struck, goaded on by other soldiers. General Clark took no steps to correct this claim in public, and later defended his action as in keeping with his mandate not to prejudice the ongoing investigation. Regrettably, these actions leave the appearance of a general officer who did not want the negative attention that would result from a hate crime under his command. General Officers are rightly held to incredibly high standards of conduct, and they should be. The men and women under their command are worthy of no less. In this case, Major General Clark appears to have come up short, as evidenced by the Senate Armed Services Committee's failure to pass this nomination unanimously. Instead of clarity, the nomination process has left us with lingering concerns about the general's fitness for higher command. Mr. President, I recognize and appreciate Major General Clark's long service in the Armed Forces of our country. But there remain too many legitimate questions about his leadership and judgment stemming from his command of the 101st Airborne at the time of Private Winchell's murder to confirm his nomination to the rank of lieutenant general.