John Kerry

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 am pleased to introduce today the ``Call Center Consumer's Right to Know Act.'' This legislation is in response to the mounting evidence showing that U.S. corporations are rapidly shifting hundreds of thousands high-tech and service sector jobs abroad. Labor officials, business leaders, economists, elected officials and ordinary Americans are concerned that this bleeding of American jobs will further slow our economy. In addition to the more than 2 million manufacturing jobs that have been lost since 2000, some have indicated that we may also be witnessing the largest out-sourcing of non-manufacturing jobs in the history of the U.S. economy. The statistics are staggering. In the month of July 2003 alone, between 25,000 and 30,000 jobs were outsourced to India. According to the Bureau of Labor Statistics, roughly one in ten jobs held by Americans in 2001 are now at risk to be outsourced abroad. These jobs are not specific to one sector or a select few companies, but span a broad array of services, including customer call service centers, payroll and other back-office related activities, stock market research for financial firms, medical transcription services, legal online database research and data analysis for consulting firms. In addition, firms involved with software services and business process outsourcing are rapidly expanding to a host of different countries, including India, the Philippines, Malaysia, China, Russia, Israel, and Ireland. In addition to rapid service sector job losses, consumers are concerned with the growing threat of identity theft. So far, efforts to stem this tide and keep up with the technological advancements that enable these crimes have done little to allay concerns. This trend becomes all the more alarming when millions of calls involving personal financial transactions are routed beyond our borders, where they are not protected by our laws and law enforcement. Aside from the very serious concerns related to identify theft, there is also a consumer awareness element of this problem, as very few Americans are aware that the person on the other end of the telephone line is in another country. Americans should have full information about the outsourcing of call center jobs when they decide who they will purchase their products and services from. The ``Call Center Consumer's Right to Know Act'' is a simple and straightforward answer to the challenges posed by these unprecedented service sector job losses and growing risks of identity theft. The bill simply requires call center representatives to disclose their physical location at the beginning of each phone call. Consumers will therefore have important information about who is providing the services in question and the level of risk involved in proceeding with their transaction by phone. This legislation will help American consumers make informed choices about who is providing the services they purchase, and at the same time, addresses the growing problem of U.S. corporations moving hundreds of thousands of service sector jobs abroad. Furthermore, my bill will go a long way to restoring consumer confidence in the booming call center market and help provide a measure of security for telephone and Internet consumer transactions. There can be no doubt that the outsourcing of these important American service sector jobs abroad has played a part in the jobless, or what some call the ``job-loss'' economic recovery of 2003. It is predicted that future outsourcing of service sector jobs may provide more costly to the US. economy than the loss of American manufacturing jobs we are witnessing today. Unfortunately, the economics that produced this trend are unlikely to change without a concerted effort to both provide companies with an incentive to keep their jobs in American and promote consumer awareness of the services they unknowingly purchase from other countries. This is precisely what the Call Center Consumer's Right to Know Act seeks to accomplish. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, I would like the record to reflect my opposition to the Vision 100--Century of Flight conference report. The final bill does not include any prohibition against privatizing the air traffic control system, an issue that has serious safety and national security implications. I voted in favor of the Lautenberg amendment in June and will oppose ending debate today because passage of this bill without language protecting ATC from privatization will make our aviation system less secure and more vulnerable to terrorist attacks. After the September 11 attacks it was obvious that the Federal Government needed to assume a greater role in aviation security. Although we passed legislation that made baggage and passenger screening a federal responsibility--legislation that the administration supported--the President signed an executive order that designated air traffic control as a ``commercially competitive'' enterprise. This is a strange dichotomy. The President seems to believe that, in the realm of aviation security, airport security and air traffic control are mutually exclusive. I fail to see how these issues are mutually exclusive and am disturbed at the administration's efforts to undermine the protections that were originally included in both the House and Senate bills. Mr. President, if this bill passes without a prohibition on privatization, the executive order signed by the President will stand and he will be able to contract out the Nation's ATC to the lowest bidder. I cannot imagine a worse policy for our Nation. This work should only be performed by well trained and experienced Federal workers. These men and women perform a valuable service to their country and their jobs should not be shipped out to a private entity. I urge my colleagues to oppose this bill.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to introduce today the ``Call Center Consumer's Right to Know Act.'' This legislation is in response to the mounting evidence showing that U.S. corporations are rapidly shifting hundreds of thousands high-tech and service sector jobs abroad. Labor officials, business leaders, economists, elected officials and ordinary Americans are concerned that this bleeding of American jobs will further slow our economy. In addition to the more than 2 million manufacturing jobs that have been lost since 2000, some have indicated that we may also be witnessing the largest out-sourcing of non-manufacturing jobs in the history of the U.S. economy. The statistics are staggering. In the month of July 2003 alone, between 25,000 and 30,000 jobs were outsourced to India. According to the Bureau of Labor Statistics, roughly one in ten jobs held by Americans in 2001 are now at risk to be outsourced abroad. These jobs are not specific to one sector or a select few companies, but span a broad array of services, including customer call service centers, payroll and other back-office related activities, stock market research for financial firms, medical transcription services, legal online database research and data analysis for consulting firms. In addition, firms involved with software services and business process outsourcing are rapidly expanding to a host of different countries, including India, the Philippines, Malaysia, China, Russia, Israel, and Ireland. In addition to rapid service sector job losses, consumers are concerned with the growing threat of identity theft. So far, efforts to stem this tide and keep up with the technological advancements that enable these crimes have done little to allay concerns. This trend becomes all the more alarming when millions of calls involving personal financial transactions are routed beyond our borders, where they are not protected by our laws and law enforcement. Aside from the very serious concerns related to identify theft, there is also a consumer awareness element of this problem, as very few Americans are aware that the person on the other end of the telephone line is in another country. Americans should have full information about the outsourcing of call center jobs when they decide who they will purchase their products and services from. The ``Call Center Consumer's Right to Know Act'' is a simple and straightforward answer to the challenges posed by these unprecedented service sector job losses and growing risks of identity theft. The bill simply requires call center representatives to disclose their physical location at the beginning of each phone call. Consumers will therefore have important information about who is providing the services in question and the level of risk involved in proceeding with their transaction by phone. This legislation will help American consumers make informed choices about who is providing the services they purchase, and at the same time, addresses the growing problem of U.S. corporations moving hundreds of thousands of service sector jobs abroad. Furthermore, my bill will go a long way to restoring consumer confidence in the booming call center market and help provide a measure of security for telephone and Internet consumer transactions. There can be no doubt that the outsourcing of these important American service sector jobs abroad has played a part in the jobless, or what some call the ``job-loss'' economic recovery of 2003. It is predicted that future outsourcing of service sector jobs may provide more costly to the US. economy than the loss of American manufacturing jobs we are witnessing today. Unfortunately, the economics that produced this trend are unlikely to change without a concerted effort to both provide companies with an incentive to keep their jobs in American and promote consumer awareness of the services they unknowingly purchase from other countries. This is precisely what the Call Center Consumer's Right to Know Act seeks to accomplish. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, while I support the enactment of the Syria Accountability Act, I am disappointed this legislation does not contain any provisions to stop the scourge of money laundering from Syria and Lebanon. Recently published reports state that $3 billion from Saddam Hussein's Iraqi regime are currently being held in Syrian-controlled banks in Syria and Lebanon and that these funds may have been used to finance attacks on American forces in Iraq. If these allegations are proven correct, then the actions by the government of Syria are intolerable and unacceptable and demand a strong response by the United States government to insure that funds stolen from the Iraqi people are not used to help insurgents attack American forces and destabilize Iraq. Unfortunately, Syria and Lebanon have had a long history of being involved in terrorism and money laundering. The Secretary of State has designated Syria as a state whose government repeatedly provided support for acts of international terrorism and has provided designated foreign terrorist organizations, such as Hamas and Hizballah, with sanctuary. The State Department in its March 2003 International Narcotics Control Strategy Report--INCSR--has classified Syria as a country to be monitored for potential money laundering. Lebanon remains one of the more sophisticated and well-capitalized banking sectors in the Middle East. With its tradition of bank secrecy, the extensive use of foreign currency, the influx of remittances from expatriated workers, and a lack of financial accountability and enforcement, Lebanon has developed a financial environment conducive to laundering the financial proceeds of international crimes such as narcotics, counterfeiting and smuggling. The International Narcotics Control Strategy Report--INCSR--has designated Lebanon as a jurisdiction of primary money laundering concern. The Financial Crime Enforcement Network--FinCEN--has conducted an analysis of the Suspicious Activity Reporting System--SAR--related to Lebanon for the period of January 2002 through October 2003. The FinCEN analysis has revealed 286 SARs that could be linked to transactions associated with suspicious or fraudulent wire transfer activities between Lebanon and other countries. Many of these transactions were structured in an attempt to avoid reporting requirements. Two of the reports indicate possible terrorist activities. The United States has the largest and most accessible economic marketplace in the world. Foreign financial institutions and jurisdictions must have unfettered access to markets to effectively work within the international economic system. In 2000, I introduced legislation that became Section 311 of the USA PATRIOT Act which provides the federal government with the authority to leverage the power of United States financial markets to force countries like Syria and Lebanon to reform and enforce their counter- money laundering and counter-terrorist financing laws. Section 311 provides the Secretary of the Treasury with measures that are graduated, discretionary, and targeted, focusing on international transactions involving criminal proceeds, while allowing legitimate international commerce to continue unimpeded. Earlier this year, I sent a letter to President Bush asking him to direct the Secretary of the Treasury to identify both Syria and Lebanon as primary money laundering concerns under the authority provided in Section 311. I also asked that U.S. financial institutions be required to provide enhanced scrutiny of financial transactions from Syria and Lebanon to ensure funds linked to international terrorists do not originate from or pass through financial institutions in those countries on their way to the United States I also call on the President to develop an international strategy to stop the laundering of funds from Syria and Lebanon within the framework of the Financial Action Task Force--FATF, the European Union, the G-8, and other multilateral forums. I strongly believe that the United States must take any and all necessary measures to stop international terrorist organizations--such as Hamas and Hizballah--and former members of the Iraqi government who may be residing in Syria, Lebanon, and other countries in the area from supporting terrorist activities in Iraq and elsewhere. If the United States is to lead the world in the fight against terror, we must effectively use our own laws to cut off the flow of laundered funds from terrorist groups through the international financial system. The measured use of Section 311 authority against Syria and Lebanon provides the United States an opportunity to demonstrate leadership in the fight against international terrorism and money laundering. We cannot afford to fail in this endeavor.

Mr. KERRY

Mr. KERRY. Mr. President, rebuilding Iraq is critical to peace and stability in the Mideast and to help win the war on terrorism. Today, American families and American cities are also hurting and I believe they deserve the same assistance we are providing for families and cities in Iraq. While keeping our commitments abroad, we must not neglect our homeland. Today, President Bush signed into law an $87 billion supplemental appropriations bill that includes $20.3 billion for reconstructing Iraq and to assist Iraqi families. I opposed this legislation because I do not believe this plan is the most effective way to protect American soldiers and to advance our interests. Providing assistance to help rebuild Iraq is the right thing to do; however, we must also provide equal consideration and equal funding to resolve America's domestic problems. That is why I am introducing the American Parity Act to ensure that any additional spending for Iraq's postwar reconstruction plan is balanced dollar-for-dollar with new investments in education, health care, transportation, housing, social services and public safety needs across the United States. President Bush's economic approach has left State and city governments facing billions in budget deficits forced lay offs, education cuts, Medicaid cuts, reductions in critical social service programs and tax increases. State and city governments need our help to protect their public services, rebuild America's roads and bridges, and ensure resources are available to help unemployed and impoverished Americans. My legislation will authorize payments to States and cities to assist them with their social service and infrastructure needs in the same amount as provided for relief and reconstruction in Iraq. Local governments will receive at least one-third of the total funds authorized. These funds will be used to help America's children, seniors, and struggling families who depend upon affordable health care, quality education and public transportation programs that are facing massive cuts in order to balance state and local budgets across the Nation. These funds will assist in the development of our economy and create jobs. Health insurance has become too expensive. Double-digit increases in health care premiums make it hard for Americans and businesses alike to afford health care. Today, more than 44 million Americans have no health insurance. More than ever, these Americans need access to Medicaid and other health care programs that help with the high cost of prescription drugs. However, many of these programs are endangered by state and local budget cuts. The American Parity Act will help State and local governments continue to provide health care assistance. In our changing global economy, every American needs access to quality schools and advanced skills to succeed in our rapidly changing economy. In order for our American business to grow, we need workers to be more innovative and more productive than those of our competitors. My legislation will help cities provide additional resources to improve educational programs, modernize and rebuild crumbling schools, reduce class size, improve special education and help pay teachers. Our Nation is facing an affordable housing crisis. Recent changes in the housing market have limited the availability of affordable rental housing across the country and have dramatically increased the cost of those that remain. In 2001, more than 14 million families spent over half of their income on housing. This bill will provide funding so that states and cities produce housing for working families. We must show the same commitment to rebuilding Main Street as we have shown in rebuilding Iraq. American citizens deserve access to the same benefits and services we are so nobly providing to the people of Iraq. The American Parity Act will help States and cities cope with their current fiscal crisis and help ease potential cuts in programs critical to the most vulnerable in our Nation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, rebuilding Iraq is critical to peace and stability in the Mideast and to help win the war on terrorism. Today, American families and American cities are also hurting and I believe they deserve the same assistance we are providing for families and cities in Iraq. While keeping our commitments abroad, we must not neglect our homeland. Today, President Bush signed into law an $87 billion supplemental appropriations bill that includes $20.3 billion for reconstructing Iraq and to assist Iraqi families. I opposed this legislation because I do not believe this plan is the most effective way to protect American soldiers and to advance our interests. Providing assistance to help rebuild Iraq is the right thing to do; however, we must also provide equal consideration and equal funding to resolve America's domestic problems. That is why I am introducing the American Parity Act to ensure that any additional spending for Iraq's postwar reconstruction plan is balanced dollar-for-dollar with new investments in education, health care, transportation, housing, social services and public safety needs across the United States. President Bush's economic approach has left State and city governments facing billions in budget deficits forced lay offs, education cuts, Medicaid cuts, reductions in critical social service programs and tax increases. State and city governments need our help to protect their public services, rebuild America's roads and bridges, and ensure resources are available to help unemployed and impoverished Americans. My legislation will authorize payments to States and cities to assist them with their social service and infrastructure needs in the same amount as provided for relief and reconstruction in Iraq. Local governments will receive at least one-third of the total funds authorized. These funds will be used to help America's children, seniors, and struggling families who depend upon affordable health care, quality education and public transportation programs that are facing massive cuts in order to balance state and local budgets across the Nation. These funds will assist in the development of our economy and create jobs. Health insurance has become too expensive. Double-digit increases in health care premiums make it hard for Americans and businesses alike to afford health care. Today, more than 44 million Americans have no health insurance. More than ever, these Americans need access to Medicaid and other health care programs that help with the high cost of prescription drugs. However, many of these programs are endangered by state and local budget cuts. The American Parity Act will help State and local governments continue to provide health care assistance. In our changing global economy, every American needs access to quality schools and advanced skills to succeed in our rapidly changing economy. In order for our American business to grow, we need workers to be more innovative and more productive than those of our competitors. My legislation will help cities provide additional resources to improve educational programs, modernize and rebuild crumbling schools, reduce class size, improve special education and help pay teachers. Our Nation is facing an affordable housing crisis. Recent changes in the housing market have limited the availability of affordable rental housing across the country and have dramatically increased the cost of those that remain. In 2001, more than 14 million families spent over half of their income on housing. This bill will provide funding so that states and cities produce housing for working families. We must show the same commitment to rebuilding Main Street as we have shown in rebuilding Iraq. American citizens deserve access to the same benefits and services we are so nobly providing to the people of Iraq. The American Parity Act will help States and cities cope with their current fiscal crisis and help ease potential cuts in programs critical to the most vulnerable in our Nation. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, today I submit into the Record a statement regarding my position on an amendment offered by Senators Leahy and Snowe to the agriculture appropriations bill. Their bipartisan amendment was aimed at preventing the USDA from using funds from working lands incentive programs to pay for the technical assistance costs of the Conservation Reserve Program. Although I supported the amendment from Senators Leahy and Snowe, I believe it underscores the urgent need to prioritize conservation funding and ensure that all conservation programs authorized in the 2002 farm bill, from the Grassland Reserve Program to the Conservation Reserve Program, receive full funding. Robbing one important program to pay for another does not help us achieve our collective goal of improving conservation on farmlands and in rural communities.

Mr. KERRY

Mr. KERRY. Mr. President, I would like to take this opportunity to express my appreciation for the efforts of Chairman Bennett and Senator Kohl for their work in developing the Fiscal Year 2004 Senate Agriculture Appropriations bill. Their work is especially noteworthy because of the difficult authorization level set by the Budget Resolution. I would like to express my support for the comments made by Senator Kennedy regarding the Center of Marine Phytoremediation Technologies at Northeastern University. The Center has developed a proposal which I believe is an important opportunity to develop new technologies and help eliminate pollutants from fish aquaculture. This research can help the marine life in our oceans and eliminate pollutants from the seafood we enjoy. It is my hope that Senator Kennedy and I could work with the Manager's of this legislation to make sure that these important programs receive funding in the Fiscal Year 2004 Agriculture appropriations conference report.

Mr. KERRY. Mr. President, I again express my appreciation to Chairman Bennett and Senator Kohl for their assistance in developing the Fiscal Year 2004 Senate Agriculture Appropriations bill and their ongoing assistance to the Cranberry farmers in Massachusetts who are facing economic difficulties. I would like to express my support for the comments made by Senator Kennedy regarding funding for Cranberry research in the Fiscal Year 2004 Agriculture appropriations conference report. This important research will develop new technologies to help improve yields of cranberry bogs and help these farmers maintain their livelihood. I look forward to working with the Managers of this legislation to make sure this program receives funding in the Conference Report. I appreciate the Managers' attention to this matter. Mr. Kohl. Since Wisconsin is also one of the top-producing cranberry states in the country, I recognize the need to support innovative research within this industry. I will continue to work with Senator Kennedy and Senator Kerry on this issue, and I will do what I can to be of assistance. Funding for Seafood Safety

Mr. KERRY

Mr. KERRY. Mr. President, today I will clarify my position on an amendment offered by Senators Feingold and Brownback to the Energy Bill. Their bipartisan amendment was aimed at protecting small businesses and consumers from efforts to roll back regulations governing utility holding companies. I was absent for the vote, number 315, and at the time, was announced as an ``aye'' in favor of a motion to table the amendment. Through no fault of the distinguished Senator from Nevada who announced my vote, if I had been here, I would have voted ``nay,'' and supported the amendment which would have required the Federal Energy Regulatory Commission to issue rules ensuring that small businesses can stay competitive with deregulated holding companies. The amendment also would have ensured that these holding companies do not damage the financial standing of small businesses or pass the costs of bad investments to consumers. Senator Feingold and Senator Brownback were correct. This amendment is just good public policy and would have protected small contractors against big utilities. I appreciate their hard work and dedication to this important issue.

Mr. KERRY

Mr. KERRY. Madam President, I rise today in memory of my dear friend and colleague, Senator Paul Wellstone. A year ago today, the Senate--indeed, the Nation--suffered the tragic passing of Senator Wellstone. With his loss, his efforts to establish full mental health parity were cut short. It is now time to build on Senator Wellstone's historic achievements in this policy area and put an end to the discrimination faced by individuals with mental illness once and for all. I was a proud cosponsor of the landmark Mental Health Parity Act, which Congress passed in 1996 at Senator Wellstone's urging. This law establishes parity for annual and lifetime dollar limit coverage for mental health treatment. While its enactment marked an important victory in the fight to provide greater mental health treatment benefits, it is time to take the additional steps needed to truly provide mental health parity for all Americans. The Senator Paul Wellstone Mental Health Equitable Treatment Act of 2003 (S. 486) requires health insurance coverage to provide equal coverage of mental health benefits as it does for medical and surgical benefits. This legislation will improve access to care for individuals who are living with mental illness by closing the loopholes used by insurance companies to limit coverage. I am a proud cosponsor of this important legislation. It should be the law. I call on Senate leadership to bring this bill up for a vote without delay as a fitting tribute to the memory of Senator Wellstone. I also urge the Senate to address the current discrimination in Medicare that seriously restricts seniors' access to mental health benefits. Under Medicare, seniors and people with disabilities pay a 20 percent copayment for all Part B services except for mental health care services, for which patients are assessed a 50 percent copayment. In other words, when seniors visit a cardiologist for heart disease, an endocrinologist for diabetes treatment, or an oncologist for cancer treatment, they pay a 20 percent copayment for the cost of the visit. If, however, a senior citizen or a person with disabilities seeks treatment for a debilitating and possibly life threatening mental illness, they pay for half of the cost of care out of their own pockets. Consequently, Medicare beneficiaries, many of whom are on fixed incomes, face an insurmountable barrier in seeking treatment that could substantially improve or prolong their lives because of a discriminatory policy that treats mental health services and medical services differently. We need to put an end to what is essentially discrimination by diagnosis. I, along with my colleague Senator Snowe, introduced legislation that phases down the 50 percent copayment for mental health care services to 20 percent over 6 years. This legislation, entitled the Medicare Mental Health Copayment Equity Act (S. 853), will establish parity in the Medicare program and improve access to care for our senior and disabled beneficiaries living with mental illnesses. In the memory of my dear friend, Senator Wellstone, I urge my colleagues to consider this legislation, in addition to the Senator Paul Wellstone Mental Health Equitable Treatment Act of 2003. Together, these two bills will eliminate the stigma of mental heath and establish mental health parity in both the private and public sectors. I ask for your support and hope that together we can fulfill Senator Wellstone's passionate vision by ending mental health discrimination for all individuals.

Mr. KERRY

Mr. KERRY. Mr. President, I rise to introduce legislation that is designed to eliminate tariffs on certain tuna products imported into the United States from member nations of the Association of Southeast Asian Nations (ASEAN). ASEAN is a force for stability and development in Southeast Asia and pursuit of cooperative economic policies is critical to the relationship. The ASEAN nations include countries such as the Philippines, Thailand, Indonesia and Malaysia that are valuable trading partners and important friends and allies in the ongoing fight against world terrorism. Several of the ASEAN nations import processed tuna imported into the United States. This includes pouch tuna, which is a relatively new product that uses an innovative process to vacuum pack tuna into easy to use and environmentally friendly airtight pouches for commercial and retail sale. A few creative companies, including Jana Brands, Inc. of Natick, Massachusetts, pioneered pouch tuna in the United States. Tuna imported from the ASEAN nations is subject to higher tariffs upon entry into the United States. A provision was included in the Trade Act of 2002 that gives duty-free treatment to pouch but not canned tuna imported from the beneficiary countries of the Andean Trade Promotion and Drug Eradication Act. I understand that the Andean Pact preferences are intended to increase production and trade with the United States in certain products and wean their economies away from any dependence on the production of crops used to make illegal drugs. I support the rationale behind the Andean Pact but it is also true that duty free treatment for pouch tuna imported from Andean countries puts pouch tuna imported from ASEAN member nations at a competitive disadvantage. To restore fair trade and to benefit U.S. consumers and workers, I am introducing the ``Fair Trade in Pouch Tuna Act of 2003''. This bill provides limited duty free treatment for tuna packed in airtight pouches imported from ASEAN nations that meet internationally recognized labor standards and environmental protections. The legislation requires that these imports come only from ASEAN nations that provide and enforce recognized worker rights and environmental protections. This legislation is just the first step. I look forward to working with the many parties that may be interested in this issue to craft a successful proposal.

Mr. KERRY

Mr. KERRY. Today, Senators regrettably voted to increase their pay for the fifth year in a row. Next year, as a result of today's action, most of our salaries will be $3,400 higher than they are this year. While I have supported the congressional pay raise in the past, I cannot in good conscience support it this year. It simply sends the wrong signal to the millions of Americans who are unemployed, or who have taken jobs that pay far less than their previous jobs in order to make ends meet. There are millions of people out there who may not be unemployed, as the formal statistics count them, but they are surely underemployed working part-time instead of full-time, taking a low- paying hourly job just to have some money coming in, or taking a new job that pays them substantially less than their last job. According to the Labor Department, nearly 5 million people who want full-time jobs have settled for part-time work, an increase of 30 percent in 3 years. In September, despite the fact that the economy created 57,000 new jobs, the percentage of the population with full-time jobs actually declined, and the number of people unemployed for 27 weeks or more increased. In fact, just today, on the very day that the pay increase passed the Senate, a cover story in the newspaper USA Today explained how millions of people across America are having to take what the paper called ``survival jobs.'' A recent report in the Wall Street Journal said that more than 50 percent of Americans who took new jobs last year took a pay cut. Some of my colleagues may call these ``new jobs,'' arguing that it shows the President's three successive tax cuts are starting to work. I don't know what economy they are looking at, but where I come from, when a $50,000 a year worker finds a new job that pays her $30,000, the statistics may count this as a new job, but try telling this American that tax cuts have made her ``better off.'' I don't think it's worth mortgaging our financial future by borrowing record amounts in order to create new jobs that pay Americans less than they made before. And I don't think that we should be getting a pay raise when so many hard- working Americans are getting pay cuts. In conclusion, it's simply the wrong time for us to take this action, and I do not support it.

Mr. KERRY

Mr. KERRY. Mr. President, I rise to introduce legislation that is designed to eliminate tariffs on certain tuna products imported into the United States from member nations of the Association of Southeast Asian Nations (ASEAN). ASEAN is a force for stability and development in Southeast Asia and pursuit of cooperative economic policies is critical to the relationship. The ASEAN nations include countries such as the Philippines, Thailand, Indonesia and Malaysia that are valuable trading partners and important friends and allies in the ongoing fight against world terrorism. Several of the ASEAN nations import processed tuna imported into the United States. This includes pouch tuna, which is a relatively new product that uses an innovative process to vacuum pack tuna into easy to use and environmentally friendly airtight pouches for commercial and retail sale. A few creative companies, including Jana Brands, Inc. of Natick, Massachusetts, pioneered pouch tuna in the United States. Tuna imported from the ASEAN nations is subject to higher tariffs upon entry into the United States. A provision was included in the Trade Act of 2002 that gives duty-free treatment to pouch but not canned tuna imported from the beneficiary countries of the Andean Trade Promotion and Drug Eradication Act. I understand that the Andean Pact preferences are intended to increase production and trade with the United States in certain products and wean their economies away from any dependence on the production of crops used to make illegal drugs. I support the rationale behind the Andean Pact but it is also true that duty free treatment for pouch tuna imported from Andean countries puts pouch tuna imported from ASEAN member nations at a competitive disadvantage. To restore fair trade and to benefit U.S. consumers and workers, I am introducing the ``Fair Trade in Pouch Tuna Act of 2003''. This bill provides limited duty free treatment for tuna packed in airtight pouches imported from ASEAN nations that meet internationally recognized labor standards and environmental protections. The legislation requires that these imports come only from ASEAN nations that provide and enforce recognized worker rights and environmental protections. This legislation is just the first step. I look forward to working with the many parties that may be interested in this issue to craft a successful proposal.

Mr. KERRY

Mr. KERRY. Mr. President, I come to the floor today to pay tribute to Jackie Robinson--a great ballplayer, great leader and a great American. Most Americans know of Jackie Robinson's baseball greatness. He was the 1947 Rookie of the Year; the National League Most Valuable Player in 1949; he lead the Dodgers to six pennants and one World Series; he batted over 300 for his career; and he was elected to the Hall of Fame in 1962. But there is, of course, far more to the story of Jackie Robinson than talent and success on the baseball diamond. Jackie Robinson was born in 1919 in Cairo, GA. He was the grandson of a slave and son of a sharecropper. As a boy, he moved with his family to Pasadena, CA. Jackie was born a competitor and excelled at sports from a young age. His talents earned him a scholarship to UCLA, where he lettered in football, basketball, baseball, and track--and he was heralded as one of the best-all-around athletes in the country. After college, Robinson was drafted into the Army. He rose to the rank of second lieutenant, and along the way he fought for equality and against injustice. Robinson and his good friend, the boxer Joe Louis, opened an Officer Candidate School to black soldiers. When Robinson was ordered to sit in the back of a bus at Fort Hood, TX, he refused and was court-martialed. Robinson stood his ground at the court martial, and for his bravery he was exonerated when the order was ruled a violation of Army regulations. After the Army, Robinson signed to play for 2 years in the Negro Baseball League for the Kansas City Monarchs. Then in 1947, Robinson signed with the Brooklyn Dodgers to become the first African-American to play in the major leagues. It's hard to imagine the personal courage this demanded of Robinson. Branch Rickey, the president of the Dodgers, said that, ``Robinson was the target of racial epithets and flying cleats, of hate letters and death threats, of pitchers throwing at his head and legs, and catchers spitting on his shoes.'' But for all the hatred and ignorance Robinson faced, he responded with strength. Roger Kahn captured that strength in Boys of Summer when he wrote that Robinson ``bore the burden of a pioneer and the weight made him stronger. If one can be certain of anything in baseball, it is that we shall not look upon his like again.'' Today, it is hard to understand the significance of Robinson signing in the majors. It happened before our military was desegregated, before the civil rights marches in the South, and before the historic ruling in Brown v. the Board of Education. Robinson engaged America in a constructive conversation about race even before other great leaders like Martin Luther King. Indeed, King once said that his great crusade for racial justice would not have been possible if not for Jackie Robinson. Robinson's skill, demeanor and fortitude made him one of the most popular people in America, and he used his fame to encourage the fair treatment of all people. His ideas and principles influenced John F. Kennedy and Dwight Eisenhower. After retiring from professional baseball in 1957, he dedicated himself to fighting for equality and justice. He was a leader with the NAACP, chairing its Freedom Fund Drive in 1957, and was awarded its highest achievement award. Jackie and his wife, Rachel, began annual concerts to benefit civil rights and voter registration drives in the South. In 1964, Jackie helped create a minority-owned commercial bank based in Harlem, New York, called the Freedom National Bank. He also started the Jackie Robinson Construction Company to build low-income housing. On October 15, 1972, Jackie Robinson attended a World Series Game that commemorated the 25th anniversary of the breaking of the color line in baseball. At the game, as he had done in the past, Jackie called for more opportunities for black Americans. Unfortunately, Jackie passed away only 9 days--later and today--56 years after Jackie signed with the Brooklyn Dodgers--we have yet to achieve the opportunity for all he so desired. Jackie Robinson once said that, ``a life is not important, except in the impact it has on other lives.'' Jackie Robinson not only impacted lives, he impacted the very spirit of our country. He was more than a sports hero--he was an American hero. And it is time for Congress to recognize his heroic contributions to the Nation by awarding him the Congressional Gold Medal. The Congressional Gold Medal is the highest expression of congressional appreciation and has been bestowed on great leaders like George Washington, Winston Churchill and Rosa Parks. I cannot think of a more deserving person to join this distinguished group than Jackie Robinson. As I close my remarks, I thank the Boston Red Sox and Larry Luchino and George Mitrovich for helping with this legislation. I also thank Senator McCain for joining as our lead cosponsor and Representative Richard Neal for passing this legislation through the House of Representatives.

Mr. KERRY

Mr. KERRY. Mr. President, I have said many times, and I will say it again, it is critical that we succeed in Iraq. But it is equally important that we do the job the right way--the way that best protects our troops on the ground, enhances our security, and shields the American taxpayer from undue burden. President Bush's approach fails this test. I support our troops in Iraq--and their mission. I believe we must do our part to reconstruct Iraq and make it a force for peace and stability in the region. I am prepared to spend whatever it takes to win the peace. But I want to spend that money responsibly and effectively--pursuant to a strategy that will maximize our prospects for success through greater internationalization and burden sharing and provide the transparency and accountability that American taxpayers expect and deserve when we spend their hard-earned money. I want to be sure that the financial costs are distributed, in the spirit of shared sacrifice, among those Americans who can best afford to pay. Unfortunately, the President and his advisers disagree. I cannot vote for the President's $87 billion request because his is not the most effective way to protect American soldiers and to advance our interests. Simple common sense tells us that we need more countries sharing the burden and more troops on the ground providing security. We need a fairer way to pay the bill. I had hoped that the Administration would prepare for building the peace in Iraq as well as it prepared for fighting the war. But that was not the case. Over eager to rush to war, the administration failed to plan adequately or effectively for the peace. American forces are being targeted daily by remnants of Saddam Hussein's Ba'athist regime, newly arrived terrorists hoping to capitalize on anti-American sentiment, or a combination of both. The attacks are becoming more lethal and more sophisticated, and increasingly the attackers are going for high profile targets associated with us or our allies. But the administration played down or, worse yet, ignored the likelihood of this kind of resistance when planning for the postwar period. It low-balled the number of forces that would be needed to seize the alleged WMD sites for which we fought the war, to protect the infrastructure needed for reconstruction, or to contain civil unrest. It failed to put together a meaningful military coalition to help us meet these needs. The administration underestimated the magnitude of the reconstruction task and, as we now know, misrepresented the ease with which oil would flow for rebuilding. It refused to tell the American people up front the long-term costs of winning the peace. And it refused, until recently, to ask the international community to join us in this very difficult endeavor. This administration's brazen go-it-alone policy has placed our soldiers at unnecessary risk and our hopes for success in jeopardy. It has turned American liberators into occupiers in the eyes of many Iraqis. It has created a terrorist presence in Iraq where none previously existed and made Iraq a recruiting poster for terrorists of the future. It has undermined the legitimacy of our efforts at home, abroad, and in Iraq. And it has left Iraqis wondering when they will get their country back. We cannot continue on this course. The stakes are too high--for our troops, for the Iraqi people, for the region, and for American security. A year ago when we were debating the use of force resolution for Iraq, I said: ``If we do go to war with Iraq, we have an obligation to the Iraqi people, and to other nations in the region, to help create an Iraq that is a force for stability and openness in the region.'' That obligation is upon us. We are now committed--as a result of our military victory and postwar occupation to building a democratic Iraq that is reasonably secure and economically viable. Our credibility and our interests demand that we succeed. Successful reconstruction of Iraq is critical to peace and stability in the Mideast and to the security of Israel, our closest ally in that volatile region. We cannot allow Iraq to become a failed state or let the Ba'athists return to turn their wrath once again on innocent Iraqis. We must not allow Iraq to be fragmented into mini-states, warring with one another and further destabilizing the region. Nor can Iraq be dominated by Iran or any other state in the region. Success in Iraq is also crucial to our war on terrorism. The terrorist violence which has emerged in the wake of our military victory in Iraq poses a major challenge, but it is one we must meet. Iraq cannot become a terrorist sanctuary like Afghanistan, either as a platform for al-Qaida or Israeli-directed violence. It is imperative that we succeed in Iraq, but to do so, we have to tackle the challenge of rebuilding Iraq an effective way, not the Bush administration's failed way. We need a detailed plan, including fixed timetables and costs, for establishing civil, economic and political security in Iraq. We need to internationalize both the military and civilian sides of the occupation and build a coalition that will provide tangible assistance in terms of boots on the ground and money in the coffers for Iraqi reconstruction. Only in this way will we reduce the risk to American service members and alleviate some of the financial burden on the American taxpayer for reconstruction. We have to give the United Nations a clearly defined, central role in the reconstruction of Iraq and in the process of establishing a new Iraqi Government, and we must provide the necessary security so that U.N. personnel will go back to Iraq. The United Nations is not perfect, but it has far more experience and capacity in these areas than the Pentagon and the Coalition Provisional Authority. The process of reconstructing Iraq and its political system must be an international process--not an American process. Only then will it have legitimacy in the eyes of the Iraqi people and the world. We have to involve Iraqis more in the process of rebuilding their country and assure them through concrete steps that political power and responsibility will be transferred to them as quickly as possible. The administration, albeit belatedly, has recognized that we need help in Iraq. The resolution adopted this week by the U.N. Security Council is a step in the right direction. It will provide greater international legitimacy to our efforts in Iraq. It does require that the Iraqi Governing Council lay out by December 15 of this year a timetable and program for the drafting of a constitution and national elections, but this resolution does not fundamentally change the lines of authority and responsibility for the reconstruction and governance of Iraq. It is really more show than substance. Whether it will gain meaningful international support for our efforts in Iraq remains to be seen but the prospects do not look good. Already three of our allies who voted for it--Russia, France and Germany--have indicated that they will not provide troops or funds to support our efforts. And Pakistan, which had been expected to provide troops once a resolution was passed, has now declined. If he is serious about generating funds and troops for the operation in Iraq, President Bush must see this resolution as the beginning of a process of diplomacy--not the end. The President is asking us to give him $87 billion for Iraq. As we decide whether or not to vote for this package, there are some fundamental questions each of us should be asking. First, what is it for? Much of it some $66 billion is for our troops on the ground. Another $20 billion is supposed to be for reconstruction of basic services, such as water, sewer, and electricity, and for training Iraqi security forces. It also includes $82 million to protect Iraq's 36 miles of coast line, new prisons at a cost of $50,000 per bed, a witness protection program at a cost of $1 million per family, nearly $3 million for pickup trucks at a cost of $33,000 each, $2 million for museums and memorials, and a whopping $9 million for a state-of-the-art postal service. I could go on, but the point is obvious: This supplemental is padded with requests that go far beyond Iraq's emergency needs. Second, who reaps the benefit of this $20 billion for reconstruction? On one level, of course, it is the Iraqi people. But let's not fool ourselves. Halliburton and other select American companies with close, high-level connections to the Bush administration are getting the lion's share of the contracts funded by this money. No one can object to giving contracts to American firms, but those contracts ought to be offered on a competitive, open bid basis. And at a minimum, these firms should be required to seek subcontractors from outside of the United States including Iraqi companies where feasible. Opening and internationalizing the contracting process would provide much-needed transparency and give others in the international community a stake in the success of the reconstruction process. Third, what is the plan for spending the $20 billion? We don't really know because the administration has only given us a set of goals and vague timetables--not a detailed plan. The President wants us to give him $87 billion on faith. His administration has failed miserably in anticipating the risks to our troops, planning for the peace, and building international support for our effort. Why should we trust him now? Fourth, how does President Bush intend to pay for rebuilding Iraq? He wants to saddle future generations of American taxpayers with the bill by adding to the Federal deficit. This is fundamentally unfair. There is a better way--the one Senator Biden and I offered when we proposed that the tax cuts for the wealthiest Americans be repealed. At a time when men and women in uniform are sacrificing for our interests in Iraq, it is only fair to ask those Americans who can afford it to do their fair share, but President Bush's refusal to accept this approach betrays the spirit of shared sacrifice that has made our nation great. Fifth, what is the urgency for rushing forward with such a large proposal now? There isn't one. Ambassador Bremer, the head of the Coalition Provisional Authority, has told us that his funds for reconstruction will last until the end of the year. Whether or not Iraq can absorb $20 billion over the next year is another question. The World Bank recently estimated that Iraq could absorb only $5.2 billion in reconstruction funds for next year. Instead of rushing to complete this bill, the administration should be doing more of the hard work of diplomacy to generate contributions from other countries and to generate a more accurate assessment of what Iraq's real needs are over the next year. Finally, it is incumbent upon us to ask what needs at home are underfunded? The answer is: plenty, including health care, education and homeland security. The President must be held accountable and he must change course. While he may still salvage success in Iraq, the question we must ask is: at what cost--in terms of dollars and lives? We should do this the right way. We can win the peace in Iraq but we cannot--and should not-- do it alone. Our troops on the ground deserve a strategy that will take the target off their backs and bring them home more quickly. The American people deserve a strategy that decreases the bill, pays our costs fairly, and makes America safer. We must have a new approach, one that maximizes international cooperation and burden sharing and minimizes the risk of failure. If the President adopts that new approach, I will gladly support any proposal that funds it.

Mr. KERRY

Mr. KERRY. Mr. President, 6 months ago, President Bush took the country to war with Iraq, without the support of key allies other than Britain, without the support of the international community at large. We didn't need international support to win the war. We all knew that our brave fighting men and women would defeat Saddam Hussein's forces easily. But we did--and we do--need the international community to help us win the peace--a painfully obvious truth that this administration has steadfastly refused to accept. As long as Iraqis see us as occupiers rather than liberators, our troops will remain at increased risk and our efforts to rebuild Iraq's economy and political system will be suspect. The process of reconstructing Iraq and creating a new Iraqi government must be an international process--not an American process. Only then will it gain full legitimacy in the eyes of the Iraqi people and the world. The Bush administration's brazen go-it-alone policy has placed the burden and the bill for rebuilding Iraq almost solely on the shoulders of the American people. They don't deserve it, and they don't want it. We need an immediate change of course. For months I have been urging the administration to bring the United Nations and the international community into the process of rebuilding Iraq's economy and political system. The United Nations must be given a clearly defined, central role in the reconstruction of Iraq and in the process of establishing a new Iraqi government. U.N. Secretary General Kofi Annan has been very clear: he will not send U.N. personnel back to Iraq--and risk their lives--without improvements in the security situation and an unambiguous U.N. role with clear lines of authority. In my view, the best way to achieve this is to transfer the authority over reconstruction and governance to the United Nations. The United Nations is not perfect but it has far more experience and capacity in these areas than the Pentagon and the Coalition Provisional Authority. Finally, the Iraqi people must be assured that political power and responsibility for reconstruction will be transferred to them quickly. The administration's resolution, which the Security Council passed today, is long overdue. It will provide a modicum of international legitimacy which is essential to our success in Iraq. And it does require that the Iraqi Governing Council lay out by December 15 of this year a timetable and program for the drafting of a constitution and national elections. But this resolution does not fundamentally change the lines of authority and responsibility for the reconstruction and governance of Iraq. It is really more show than substance. The resolution will not gain meaningful international support for our efforts in Iraq. After months of dismissing and ridiculing the international community, the Bush administration will not gain tangible support for our efforts in Iraq--that is, boots on the ground and money in the coffers at this month's donor conference--as a result of this resolution. In simply terms, the Security Council resolution adopted today is not the triumph of diplomacy, but rather the beginning of a much-needed process to bring real international support to our effort. We in the Congress have a responsibility to push the administration to advance the diplomatic effort and not rest content with a fig leaf resolution that hides what remains an American occupation in Iraq. The amendment that Senator Byrd is offering, which I am pleased to cosponsor, seeks to do just that. It requires the President to certify that the U.N. resolution provides tangible international contributions, including substantial troop and financial contributions from other countries. In addition, it requires the administration to certify that reconstruction activities are being implemented in accordance with a new detailed plan to be submitted to the Congress no later than March 1 of next year. This is a good amendment. It sends a clear message to the administration: You need a real, detailed plan for reconstruction Iraq and you need to do the hard work of diplomacy to internationalize the military and civilian sides of the operation to reduce the risks to our soldiers on the ground and take some of the financial burden off the American taxpayer. I urge my colleagues to support it.

Mr. KERRY

Mr. KERRY. Mr. President, it is high time we have a strong genetic information protection law on the books. The Senate bill I am voicing support for today is a step in the right direction. However, while I am pleased to join a bipartisan effort to pass S. 1053, the Genetics Information Nondiscrimination Act, I hold out hope that the enforcement provisions in the bill can be strengthened prior to final passage. The House of Representatives will soon be conducting hearings on the unanimously-passed Senate legislation and will be working to craft their own version of the law. I sincerely hope that the House works to strengthen--not weaken the bill. One area where the bill can be strengthened is to give some real teeth to the enforcement protections. If our goal of limiting discrimination based on genetic information is to be realized, we must work to ensure that those whom we seek to protect can truly use this law to guard against discriminatory actions.

Mr. KERRY

Mr. KERRY. It is simply not unfair to ask those earning the most, those who are the most fortunate, those who are the most talented, the hard-working Americans who are earning more than $300,000, not as a matter of any kind of targeting except for the fact they are the best off and have the greatest ability, to make this sacrifice without a negative impact on their lifestyle, on their choices, on their quality of life. This is a time for sacrifice. I believe it is appropriate for us to ask that in order to promote a free Iraq, in order to reduce the burden being placed on future generations of Americans, in order to reduce the burden placed on the middle class today, in order to have the least negative impact on our economy, the least negative impact on long-term interest rates, the least crowding out of borrowing by adding to the debt and crowding out private borrowing in the marketplace by public borrowing, the least negative impact on perceptions, the best way for America to deal with this problem of misinformation, this problem of promises broken is to turn to those the President seeks most to give the biggest breaks to most frequently and ask them to share the burden. I hope my colleagues will do that, recognizing the sacrifice being made on a daily basis by 130,000 of our troops who live and die by what we do in the Senate and the House, in the Congress in Washington. I thank the Chair.

Mr. KERRY. Isn't it accurate that because it was a subchapter S corporation all of the deductions also flowed through to you? Isn't it accurate? All the deductions flowed through you?

Mr. KERRY. Madam President, thank you very much. I will proceed until such time as the unanimous consent request is put into effect. I listened carefully to the comments of the Senator from Delaware, and obviously the Senator from Utah. I think the comments of the Senator from Utah do not really change the equation at all because the real question here is, Why is America being asked to pay this $87 billion? What is the context within which the average citizen of America, the average taxpayer is now being told, Whoops, we have a whole different situation here. We have to pay $87 billion in addition to the $79 billion Americans have already invested in the war to date. Most Americans think this is sort of the bill for the war. It is not. We are well over $160 billion or $170 billion already once you add the $87 billion, and most people believe it is going to go beyond that. The question is, What is the fair distribution of this burden in the overall context of our economy to the average taxpayer of America? Is it right for President Bush and for the Republicans to be asking America to give an enormous tax cut to the wealthiest of Americans and spend the $87 billion, which also adds to the deficit for this year? No one will come to the Senate and say the $500 billion deficit we are facing next year is going to be wiped out by growth in the economy when we are not even adding jobs in the growth to the economy today. I yield to the Senator.

Mr. KERRY. Mr. President, will the Senator yield for a question?

Mr. KERRY. The question we ought to be asking is, What is the right thing to do that is in keeping with the values of America? We have the worst economy we have had, the worst jobs economy since Herbert Hoover was President of the United States; 3.1 million Americans have lost their jobs, 2.7 million manufacturing jobs have been lost. All across America, people are watching outsourcing taking place as jobs are going to China, India, and other countries. They are not being replaced. We just picked up the newspapers a couple of days ago and saw that 2 million Americans have lost their health insurance retirement, it has been blown away for countless numbers of Americans. Health care has been lost for 2 million Americans. Governors across the country are raising taxes and cutting services. Infrastructure investments are being deferred. What the Republicans and the President are asking is that we take another $87 billion and still keep a tax cut for the wealthiest people in our country who are doing the best, who are already the most comfortable, who are perfectly prepared to do their part to sacrifice, to contribute, not to grow the deficit--indeed, to relieve some of the financial pressure of this country, literally, to make things more fair in America. What this is about is called fundamental fairness. Fairness. It is not about class warfare. This is not about redistribution. Is it fair in America to suggest that you can add to the deficit--which it will this year--to suggest all of the figures of this administration, which have been wrong, can be wiped away on the backs of the average American so that the wealthiest people in the country can keep their tax cut? That is the question. It is a pretty simple fundamental question. If others want to come to the Senate and defend the notion, it is absolutely OK to be misled, to have major players in the administration tell us, it is only going to cost $50 billion; it will come out of the Iraqi oil; don't worry about it. And every one of those promises have been wiped away and left in tatters across this country. Americans are angry about this. What is the Senate going to do? Stand here and defend the proposition that America in its current fiscal condition can support a tax cut for the wealthiest Americans at the expense of common sense and fairness? That is what this vote is about. That is what this choice is about. It also is about the fundamental realities of how we got here. Last spring, our fighting men and women swept across the battlefields of Iraq. There is not anyone in the Senate who is not proud of what they accomplished in military terms. Thanks to their courage and their skills, Saddam Hussein and his henchmen are scattered and that brutal regime is no more. But in the aftermath of that military victory, just as many Members predicted, in the absence of building a coalition, in the absence of doing the diplomacy, in the absence of showing patience and maturity, in the absence of living up to our highest values and standards about how we take a nation to war, we are now in danger of losing the peace. The clearest symbol of that danger is the target on the backs of young American men and women in Iraq. Today, soldiers in Baghdad fear getting shot simply going out and getting a drink of water. A squad at a checkpoint has to worry whether a station wagon coming at them is a mobile bomb. And troops moving in convoy take RPGs and improvised explosive devices, and we pick up the papers each day and hear the news about three, two, one more young American life lost because we failed to plan to win the peace adequately, we failed to put in place the greatest protection possible for these troops, which is what they are owed. Now we know Iraq's infrastructure needs to be rebuilt and we face the challenge of forging a new government and giving it legitimacy under circumstances that were entirely predictable and entirely ignored by this administration. We were told by this administration, in their confidence--and, may I add, in their arrogance--that the Iraqis would see us as liberators. They see us as occupiers--again, something many predicted absent the effort to try to globalize our effort. They see us as a foreign power ruling over their country, preventing self-determination, not providing it. We were told to expect elections and quick transition to self- governance. But now we know those elections may be many months away at best. None of this was planned or predicted by the President or his war counsel. Eager to rush to war, the administration played down or, worse, ignored the likelihood of resistance. It lowballed the number of forces that would be needed to seize the alleged WMD sites, for which the war was fought, to protect the infrastructure, and underestimated the magnitude of the reconstruction task and the ease with which oil would flow for rebuilding. It refused to tell the American people upfront the long-term costs of winning the peace. I remember the distinguished former President pro tempore and leader of the Democrats, the Senator from West Virginia, asking that question penetratingly, repeatedly. Yet those figures given have proven to be false or completely underballed. It refused to tell the American people those long-term costs, and it refused to do the work, to ask the international community to join us in this effort. It was bad enough to go it alone in the war, but it is inexcusable and incomprehensible that we choose to go it alone in the peace. One of the reasons we are facing $87 billion is that the administration has stiff-armed the United Nations and has not been willing to bring other nations to this cause through the deftness of their diplomacy, the skill of their diplomacy. Last year, President Bush had three decisive opportunities to reduce this $87 billion bill. That first opportunity came when we authorized force. That authorization sent a strong signal about the intentions of the Congress to be united in holding Saddam Hussein accountable. I thought, and still believe, that was the right thing to do. It was appropriate for the United States to help stand up at the United Nations and hold those resolutions accountable. It set the stage for the U.N. resolution that finally led Saddam Hussein to let the weapons inspectors back into Iraq. That was correct. When I voted to give that authority, I said the arms inspections are ``absolutely critical in building international support for our case. That's how you make clear to the world we are contemplating war not for war's sake, but because it may be the ultimate weapons inspections enforcement mechanism.'' The Bush administration, impatient to go into battle, stopped the clock on the inspections, against the wishes of key members of the Security Council, and despite the call of many in Congress who had voted to authorize the use of force as the last resort the President said it would be. Despite his September promise to the United Nations to ``work with the UN Security Council to meet our common challenge,'' President Bush rushed ahead on the basis of what we now know to be dubious, inaccurate, and perhaps even manipulated intelligence. So the first chance for a true international response that would have reduced this bill, that would have brought other countries to contribute was lost. Then there was a second opportunity. After the Iraqi people pulled down the statue of Saddam Hussein in the square in Baghdad, there was a moment when British and American forces had proven our military might and the world was prepared to come in and try to assume the responsibility for helping to rebuild Iraq. Once again, Kofi Annan and the United Nations offered their help. Once again, this administration gave them the stiff arm. They said: No, thank you; we do not need your help. And we proceeded forward without building the kind of coalition that would reduce the risk to our troops and without reducing the cost to the American people. Then the third occasion was just the other day, when the President went to the U.N. General Assembly. Other nations again stood ready to help to provide troops and, hopefully, funds. All President Bush had to do was show a little humility and ask appropriately. Instead of asking, he lectured. Instead of focusing on reconstruction, his speech was a coldly received exercise in the rhetoric of redemption. Kofi Annan offered to help. Again, we did not take them up on that offer in a way that was realistic. The President exhibited an attitude that was both self-satisfied and tone deaf simultaneously, once again raising the risk for American soldiers by leaving them alone, and once again raising the cost to the American people by leaving America alone. I believe the President could have owned up to some of the difficulties. The President could have signaled or stated a willingness to abandon unilateral control over reconstruction and governance. Instead, he made America less safe--less safe--in a speech and in conduct that pushed other nations away rather than brought them to our cause and what should be rightfully the world's cause. So what of this cost of the Iraqi operation? In the fall of 2002, OMB Chief Mitch Daniels told us the costs of Iraq would be between $50 and $60 billion. It is now already more than $100 billion more than that. In January of this year, Secretary Rumsfeld said the same, and he added that ``How much of that would be the U.S. burden, and how much would be other countries', is an open question.'' Well, today it is not an open question; it is a closed question. We know the answer: The majority is being paid by the American taxpayers. In March of this year, Deputy Secretary Wolfowitz testified in the Senate that Iraq is a ``country that can really finance its own reconstruction, and relatively soon.'' Did the Secretary mislead us or was the Secretary ignorant? Again, in March, Secretary Powell testified in the Senate that ``Iraq will not require the sorts of foreign assistance Afghanistan will continue to require.'' When Larry Lindsey predicted the war may cost $100 billion to $200 billion, he was deemed so far off base by the White House that he was fired. Now, a year later, Congress is set to appropriate over $160 billion, and the costs are estimated to rise to $350 billion to $400 billion over 5 years. Even Larry Lindsey's estimates are now low. With so much so wrong, Americans are looking to the White House for direction and leadership. They want, and they deserve, straight answers to straight questions. How long will we be there? How much will it really cost? How many American troops will it take? And how long will it be before we do what common sense dictates and get the world invested in this effort by not treating Iraq as though it is an American prize, a loot of war but, rather, treating it as a nation that belongs in the community of nations, dealt with properly by the United Nations, as we did in Bosnia and Kosovo and Namibia and East Timor and in other parts of the world? So far, the White House, with all of its evasion and explanation, has been a house of mirrors where nothing is what it seems and almost everything is other than what the President promised. But Americans are also looking to us in the Congress for leadership. The President has talked a lot about sacrifice in recent weeks. In an address from the White House, he said of Iraq, ``This will take time and require sacrifice.'' In his weekly radio talk, he warned that ``This campaign requires sacrifice.'' Even in his State of the Union Address, the President issued a call for sacrifice saying: ``We will not deny, we will not ignore, we will not pass along our problems to other Congresses, other presidents, and other generations.'' But that is exactly what we are doing if we leave this $87 billion in its current form. Also, there can be no doubt that the President has demanded that most of this sacrifice will come from the men and women in uniform. More than 300 troops have now already given their lives in Iraq. The Army is stretched too thin for its duties in Iraq. And troops who were promised that they would be home long ago remain in Iraq. The President has called on the National Guard and Reserve at historic rates and put more than 200,000 guardsmen and reservists on active duty. The Pentagon has changed the rules so that a Guard unit's activation date does not start until the troops arrive in Iraq. That is a bookkeeping sleight of hand that keeps thousands of forces deployed even longer than they expected or were promised. And, incredibly, the President's call for sacrifice even included billing wounded troops for the cost of hospital meals. Fortunately, the Congress rectified that problem in this supplemental. But it is not yet law. Despite all we are asking of the men and women in uniform, the bill we now debate appropriates $87 billion simply by increasing the Federal deficit. It asks no sacrifice of anybody in the United States today who can afford it. This is an off-budget, deficit-spending free ride. The amendment Senator Biden and I and others are offering changes that. It will pay the cost of this bill. It will pay the cost of the entire $87 billion by simply repealing--not all, which I think we ought to do--a portion of the tax cut for the wealthiest Americans. The Biden-Kerry amendment will ask those who can afford to pay this burden to do so, and make their contribution, make their sacrifice to the effort to win the peace. It protects the middle class. It meets our obligations in Iraq. And it will help ensure that we have the resources necessary to accomplish our goals here at home, goals such as making health care more affordable, paying for homeland security, and keeping the President's promise to leave no child behind. We should not abandon our mission in Iraq, and we understand the downsides of doing so. But we ought to demand that whatever we spend in Iraq be paid for with shared sacrifice, not deficit dollars. We are already shortchanging critical domestic programs to pay for unwise tax cuts for the wealthiest Americans. In addition, the Bush fiscal record and its trillions in debt demand that we follow the commonsense approach of our amendment. Since President Bush took office, the cumulative 10-year budget surplus has declined by almost $10 trillion. We have gone from the largest budget surplus in American history to the largest deficit in American history this year. We have added nearly $1 trillion to the debt inside of a single Presidential term. On top of that, we have passed a huge tax cut during wartime for the first time in American history. And that is the height of irresponsible, reckless budgeting. The Bush administration blames the budget crisis on the Nation's response to September 11 and on funding for domestic programs, but that is a stunning misstatement of fact. The simple facts are that the fiscal policies supported by this administration--tax cuts already passed, tax cuts that have been proposed, significant increases in defense spending and money for Iraq, and additional interest on the debt--have caused more than half of this turnaround. As the debt piles up, the President claims that he bears no responsibility when he, in fact, and his policies are the primary cause. Senator Biden and I are making a commonsense proposal. Rather than borrowing an additional $87 billion, we want to scale back a small portion of the tax cuts for the wealthiest Americans, for those making over $300,000 a year. The average income of those in that top tax bracket is $1 million a year. These Americans are not exactly hurting. Their real average after-tax income rose a remarkable 200 percent in the 1980s and 1990s, and their overall share of pretax income has nearly doubled over 20 years. That cannot be said of any other income group in the United States. In the year 2000, the 2.8 million people who made up the top 1 percent of the population received more total after-tax income than did 110 million Americans who make up the bottom 40 percent. Think about that: The top 1 percent of Americans earned more income than the bottom 40 percent, and that is after taxes.

Mr. KERRY

Mr. KERRY. Mr. President, today, as ranking democrat on the Committee on Small Business and Entrepreneurship, I join the committee's chair, Senator Olympia Snowe, in bringing to the floor for final Senate consideration, a 3-year reauthorization bill for the Small Business Administration's programs. These programs help small businesses with access to capital, business advice and training and Federal procurement opportunities. But before I speak more specifically about the provisions of the bill, I would like to thank Chair Snowe for working hand-in-hand with me on this, my third reauthorization of the Small Business Administration since becoming ranking member in 1997. Having worked close on two previous reauthorizations, and as a member of the Small Business and Entrepreneurship Committee for over 18 years, I can tell you that the SBA reauthorization process takes diligence and a strong attention to detail. I want to commend Senator Snowe for taking the initiative to draft legislation that makes such important and necessary changes to the SBA during this reauthorization process and for showing great leadership in her first 9 months as chair of the Committee on Small Business and Entrepreneurship. Our bill will strengthen the SBA and dramatically improve the agency's ability to deliver services to small businesses in every State. It is based on a sound committee record. In addition to holding two hearings and three roundtables to specifically address the SBA's programs and related reauthorization issues, our committee met and spoke with numerous constituents, program directors and small business advocates. It is through this correspondence, research and input that our committee has been able to prepare a comprehensive piece of legislation that should serve the Small Business Administration and the entire small-business community well past even the next reauthorization period. Over the past 3 years, as chairman and ranking member of this committee, I have seen this administration reduce Government funding and transfer that money to the wealthy with tax cut after tax cut, resulting in a significant loss of revenue for essential initiatives aimed at fostering small businesses and the job creation and economic activity they bring about. While many of like to note that small businesses are the engine of economic growth and should be bolstered by our Government, this administration has given small businesses more words than action. The need for small business programs--for access to capital, for training and counseling, for assistance in gaining access to the Federal marketplace--runs counter cyclically to the economy. When the economy is slumping, as it now is, small businesses and entrepreneurs need the SBA even more. Our committee has heard from the small-business community that demand for training and assistance and access to capital is up, yet this administration has proposed freezing funding for virtually all SBA programs for 6 years. Their proposal includes no adjustment for inflation or demand, despite the SBA's own numbers that show demand is up for its programs. The SBA's largest lending programs would have run out of money this year had the SBA not taken the drastic step of capping the size of loans. Both the problem of imminent shutdown and the SBA's solution of a cap would have been bad for struggling small businesses. But for additional funding of more than $3 billion made available by Congress, the SBA's solution would have disrupted many small businesses' access to otherwise unattainable capital. Again, the problem and its solution could have been avoided had the administration properly funded this important program. It is in carrying out our legislative and oversight responsibilities that Chair Snowe and I raised a number of concerns regarding the SBA's reauthorization proposal and the overall management and direction of many of the agency's programs through hearings and roundtables and in letters and phone calls to the administration. And after hearing from the community and working with small business experts in the field, Senator Snowe and I came to the conclusion that many of the proposals put forth by the Small Business Administration would not help the agency's programs, but rather would ultimately hinder them. This administration and small businesses across this Nation will find, however, that our prescription for small businesses in a flailing economy is quite different. Our reauthorization legislation embraces the initiatives that have worked for years, redirects those that have struggled, and sets the SBA and our small business sector up for continued success. Although banks have plenty of cash to lend, many small businesses still have a problem getting access to credit. Either the terms are unreasonable, or they can not get a loan at all. For the past few years as the economy has fizzled, the Federal Reserve has reported that banks have cut back on lending to small businesses, making it harder and more expensive to get loans. And who has been there to pick up the slack? The Small Business Administration and its lending partners. Lending is up 37 percent in the SBA's largest lending program for working capital. Lending is up 22 percent in the SBA's loan program for small businesses that are growing and need money to buy equipment and buildings. Lending is up in the SBA's microloan program, which serves those with the least access to capital through the private sector. And the SBA's venture capital programs play a significant role in this country's investment in our fastest-growing small businesses, accounting for more than 50 percent of all U.S. venture investments. Last year these loans and investments pumped about $20 billion into the economy, leveraged millions more from the private sector, fed the local tax base as the Federal Government cut back, and created or retained more than 400,000 jobs. As the committee reviewed the SBA's programs for reauthorization, these facts figured largely into establishing the program levels. I thank our chair, Senator Snowe, for working with me to set the levels for the SBA's lending and venture capital programs at increasing levels for the next 3 years. I am particularly pleased with the increased funding levels for the microloan program. I disagree with the administration's proposals over the past few years to cut back its investment in microloans and training assistance to micro-entrepreneurs. And I disagree with the administration's contention that these borrowers are being served through the 7(a) loan program. The small borrower in the microloan program is different than the small borrower being served through the 7(a) loan program. Both lending vehicles are important, but they are different, and one is not a substitute for the other. And who are these borrowers being served through the microloan program? Thirty percent are African American. Eleven percent are Hispanic. Thirty-seven percent are women. And anywhere from 30 to 40 percent go to small businesses in rural areas. Banks turn these borrowers away, and yet the administration proposed cutting the microloan program by 36 percent in its most recent budget--fiscal year 2004. The SBA needs to fully fund these programs and put more resources into the office that manages the program. Four people are not enough to manage 1,400 loans and 180 grants. Not only is the program level for microloans troublesome, but also the level for the agency's largest small business lending program, the 7(a) program. In the report that accompanies S. 1375, the committee notes that our duty as members of this committee, as well as that of the SBA itself, is not simply to maintain these programs but to monitor the demand and adjust the programs accordingly to meet the needs of small businesses. According to SBA's testimony before the committee on April 30, 2003, the agency estimates demand only by looking backwards-- what has happened in the past year. However, there are other important factors to consider: changes in loan volume, trends in the economy, and initiatives and program changes that will affect loan volume. For example, the agency often enters into memoranda of understanding with trade and ethnic associations in order to help their members who own small businesses, and recently the SBA opened its lending programs to all credit unions, which number 10,000. Both of these changes are intended to raise awareness of the SBA's services, which ultimately will affect demand. In a press release from the SBA regarding credit unions, the agency stated that delivery of SBA loans through credit unions, ``Represents a possible increase of nearly 30 percent in the overall number of institutions where entrepreneurs can seek capital for their businesses.'' That possibility, if it becomes a reality, will almost certainly increase demand for 7(a) loans. Therefore, it should be factored into the SBA's estimate of programs demand for fiscal year 2004 and beyond, and aligned in its annual appropriations requests and legislative proposals. Aside from setting the level for each small business financial assistance program, our SBA reauthorization makes important program changes and starts some important, new initiatives. In the SBA's microloan program, we have adopted many of the provisions we passed last year as part of S. 174, which Senator Snowe and I introduced and the committee and the full Senate voted to pass by unanimous consent. I thank the Association for Enterprise Opportunity, AEO, as well as the participants of the reauthorization roundtable on April 30, 2003--Mary Mathews of Minnesota's Northeast Entrepreneur Fund, Zach Gast of AEO in Washington, D.C., Alan Corbet of Missouri's Go Connection, and Blake Brown of Maine's Coastal Enterprises--for representing the microloan industry so convincingly and educating the committee on the inextricable correlation between technical assistance, lending and successful businesses that can repay their loans. I thank them for illustrating so vividly how they serve borrowers that would not otherwise have access to capital--because their loans are not profitable enough to appeal to traditional lenders, and because the efficiencies of credit scoring work against these small borrowers, even those with repayment ability. The SBA's microloans represent their only credit option to help them achieve economic independence and become bankable in the future. Picking up where we left off last year, and even the year before when we made important changes to the microloan program, S. 1375 will make it possible for lenders to offer small business ``short-term'' loans. This will benefit small businesses, the lenders and the SBA because it will eliminate repeated paperwork and administrative oversight from those small businesses, such as carpenters, who need revolving loans to finance the jobs as they come in, rather than taking multiple little fixed-term loans. Rather than tying eligibility to the expertise of the entity, we have made it possible for new entities to qualify as the SBA microlending intermediaries if they have staff with this unique lending and technical assistance expertise. We have made a conforming change regarding the average smaller size of microloans, increasing it from $7,500 to $10,000, to make it consistent with similar changes enacted in December 2000. Unlike the provisions we considered in 2000 and again last year with S. 174, this bill does not go as far to eliminate the restrictions on lenders contracting out the technical assistance or assistance before a loan is made. Instead, we raise from 25 percent to 30 percent the amount of TA funds an intermediary can contract with an outside expert and the amount of grants a lender can use to counsel prospective borrowers. The latter change does not go as far as I would like, but represents a compromise. Although there is a perception that pre-loan assistance means that TA money is used on microentrepreneurs who never get loans, in actuality the small-business owner in many cases needs help getting the loan more than assistance running the business after he or she gets the loan. Also, unlike the last two microloan bills, instead of including a provision authorizing the SBA to fund peer-to- peer mentoring among microloan lenders and TA providers, the microlenders asked the committee to increase the oversight of an existing statutory provision that requires the SBA to contract out 7 percent of its loan dollars for training of intermediaries. Now the SBA will have to report annually on this specific provision to highlight what they have done to comply with the law. Last, S. 1375 requires the SBA to develop an improved subsidy rate model to determine the cost of microloans because the one they have used since the program's inception does not reflect the performance of the program. For example, last year, in Fiscal Year 2003, the administration's budget doubled the subsidy rate, which is the Government's cost of the program, from 6.78 percent to 13.05 percent, even though the program had not experienced any loss of Federal funds since the first loan was made in 1992. This broken method of calculating the cost of these loans is a waste of taxpayer money because Congress has to appropriate unnecessary funds to run the program. In the 7(a) loan program, the SBA's largest loan program, which provides loans to small businesses for working capital with long terms of up to 25 years, we made permanent the reduction in the fees borrowers and lenders pay. We are testing a proposal that allows the most proficient 7(a) lenders in good standing to lend in every State. Lenders have complained that applying for lending autonomy in each of the 70 district offices and branches is administratively burdensome, both for them and for the agency staff, and that some district offices have taken advantage of the power to approve or disapprove lenders when they apply for this special lending status. Let me be clear--while I want to avoid unnecessary paperwork and eliminate reported abuses, I do not want the lenders to take this as a signal to quit working with the district directors and district staff. It is important to have a local connection and for the SBA and the lenders to work together to maximize service to the small businesses. We need to maximize resources to reach not only as many small businesses as possible, but also those populations that most need access to affordable capital. It would be unreasonable to continue holding district directors accountable for lending goals in their areas without building in a mechanism to encourage interaction. There are concerns that allowing lenders to make loans on a nationwide basis and bypass the local SBA staff to work only with SBA staff in Washington, DC, could undermine the local infrastructure and the SBA's ability to meet the individual needs of local small businesses. For this purpose I have included a provision that directs the SBA to consider the recommendations and comments of any district directors and regional administrators when reviewing a lender for national lending authority. To increase the value of 7(a) loans sold in the secondary market, the committee has included a provision to allow the SBA to pool and sell the guaranteed portion of loans with varied rates. Currently, the SBA has the authority to only sell those loans with identical rates. Proponents argue that this will create efficiencies in the market and strengthen the program by bringing it into line with what the private sector has been doing for years. At Senator Snowe's request, in order to reach more under-served small businesses, we have enhanced the Low-Doc program, allowing lenders to use the simplified application from for loans up to $250,000 from $100,000, making it the same as the SBA Express program. We have also expanded the incentives for lenders to provide financing to export small businesses, and proposed letting 7(a) borrowers use a simplified size standard when determining if an applicant is a small business. To improve the 504 loan program, which makes long-term loans of up to 20 years to small, growing businesses to buy equipment and buildings, we have raised the debenture size to keep peace with the rising cost of commercial real estate and equipment. We have raised the job requirement standard up from $35,000 to $50,000. This is reasonable given the increase in the Consumer Price Index since the last time the job requirement was changed in 1990. We have directed the SBA to simplify the application and documentation process of applying for and closing 504 loans, long a goal of this Committee and made a priority based on the compelling testimony of some of our witnesses during the reauthorization process. We have also created two alternatives for 504 lenders to use when establishing a loan loss reserve to cover potential losses. I am particularly pleased that we have included S. 822, the Child Care Lending Pilot Act in the reauthorization bill. It allows small, non-profit childcare businesses access to 504 loans. I thank Senator Snowe and my colleagues for agreeing to try this for 3 years, similar to what we have done with the microloan program. And I thank the trade association of 504 lenders, the National Association of Certified Development Companies, and other 504 lenders for their endorsement of, and input on, the pilot. The more research I have done, the more I have come to realize how vitally important it is that we give non-profit day care providers the same opportunities as for-profits to expand their businesses. Non- profit day care centers are often the only childcare suppliers available in needy areas, from the most urban to be most rural. I have taken note of states like Oregon, where 79 percent of day care providers are non-profit, Michigan, where that number jumps to 86 percent, Iowa with 77 percent, my own State of Massachusetts with 90 percent, Ohio with 62 percent, and the list goes on and on. I've learned that in State after State families are waiting for affordable day care; from more than 1,000 families on the waiting list in both Nevada and Maine to more than 30,000 on the list in Texas. These parents are waiting for quality day care they can afford, and making available affordable loans to all licensed child care providers may increase access to care and cut down those waiting lists. I understand there is concern about the precedent of the SBA lending to non-profits. Right now it is done in only limited circumstances-- microloans, physical disaster loans and economic injury disaster loans in the areas affected by the terrorist attacks of 9/11. And I agree it should not be expanded to all industries. However, this is a very unique industry whose critically important services in many States are delivered mostly through non-profits, and the only way to increase facilities to provide the child care is to reach both for-profit and non-profit child care providers. Further, non-profits are usually the providers that care for the neediest kids. I have added provisions to the pilot program to ensure that the underwriting standards are just as tough, if not more so, as those applied to for- profit centers. The loans must be personally guaranteed, the collateral must be owned outright by the child care provider, and it must be able to make its loan payments and cover normal operating expenses from the revenue generated from its clients. With these protections, the loans to non-profits should perform just as well as those made to for- profits, and if there is a problem, the loans should be collateralized sufficiently to cover the losses. The bill defines a small, non-profit child care businesses as an entity organized as a 501(c)(3), but not just any organization. It must be a licensed child care provider; it must meet the size standard for a small business; and it must provide care to infants, toddlers and pre- kindergarten and care to older children after school. This makes assistance available to eligible entities that offer Head Start services. At Senator Snowe's request, the pilot is limited to seven percent of the number of loans guaranteed by the 504 program overall, which is less than the 10 percent allowed for pilots under SBA's 7(a) guaranteed business loan program. I feel that the agreed upon cap should allow for sufficient lending under the pilot to adequately test whether lending to non-profit childcare providers is effective in increasing access to affordable childcare, and whether it protects the general 504 program, which is vital to the financing of small businesses in this country. Before I move on to discuss another important provision in the bill, I want to thank all the members of the Advisory Committee on Child Care and Small Business in Massachusetts who not only identified the need for this policy change but also developed many innovative ideas to coordinate Federal and State business services and child welfare services to expand the availability of quality, affordable child care and strengthen the businesses of child care of child care providers. The bill also includes a comprehensive study by the GAO to track and monitor the impact of this program both on child care industry and the 504 program. Last, I want to remind my colleagues that the 504 program is funded entirely through fees and does not require appropriations. Further, when the Congressional Budget Office reviewed the reauthorization act and estimated its cost and the impact the provisions would have on the programs, CBO assessed no cost increase to the 504 program, its subsidy rate, or the agency by enacting the child care lending pilot provision. Also included in this bill is S. 318, the Small Business Drought Relief Act. This simply reinforces in legislation something that the SBA should already be doing. You see, the SBA doesn't treat all drought victims the same. The agency only helps those small businesses whose income is tied to farming and agriculture. However, farmers and ranchers are not the only small business owners whose livelihoods are at risk when drought hits their communities. The impact can be just as devastating to the owners of rafting businesses, marinas, and bait and tackle shops. Sadly, at present these small businesses cannot get help through the SBA's disaster loan program because of something taxpayers hate about government--bureaucracy. The SBA denies these businesses access to disaster loans because its lawyers say drought is not a sudden event and therefore it is not a disaster by definition. Despite numerous requests, written and verbal, for a copy of this legal opinion, the SBA delayed compliance for 6 months. The delay jeopardized enactment of emergency legislation during the 107th Congress, leaving small business drought victims without assistance. Contrary to the agency's position that drought is not a disaster, as of July 16, 2002, the day this legislation was introduced last year, the SBA had drought disaster declarations in effect in 36 States. That number had grown to 48 by the beginning of this year, demonstrating that the problem had gotten worse and even more small businesses were in need. As I have said time and again, the SBA already has the authority to help all small businesses hurt by drought in declared disaster areas, but the agency will not do it. For years the agency has been applying the law unfairly, helping some and not others, and it is out of compliance with the law. The Small Business Drought Relief Act of 2003 would force the SBA to comply with existing law, restoring fairness to an unfair system, and would get help to small business drought victims that need it. I thank former Governor Jim Hodges of South Carolina, and his staffer Lane Hudson, for bringing this to the committee's attention. They served the needy small businesses of their State extremely well, and I am sorry that politics kept this common sense and much needed provision from being enacted. I thank the other 15 Governors who fought for their constituents, too. And I thank Senator Bond for working with me on this when he was the ranking member of the Committee on Small Business & Entrepreneurship, and Senator Snowe and her staff for all their help and support. While we might have had a lot of rain recently in the northeast, there are areas like Lake Mead in Arizona and Nevada where it is so dry that the water level is down and small businesses are losing business and having to make expensive changes, such as extending docks to reach the water in order to stay in business. In this bill are also provisions to strengthen the SBA's venture capital programs--the Small Business Investment Company Debenture and Participating Securities programs, and the New Markets Venture Capital Program. We have balanced investment incentives with financial soundness issues and allowed small businesses to receive more SBIC financing than currently permissible if they also have a 504 or 7(a) loan. We have improved the arrangement for distributing payments from successful SBICs so that the SBA and the investors are treated more fairly and the taxpayer has more protection for realizing repayment on the investments. We have put in place conforming amendments to make the New Markets Venture Capital program work with the New Markets Tax Credit, as Congress intended. And we have clarified that New Markets Venture Capital companies have 2 years to raise their matching capital, as Congress intended. The committee has been troubled by the agency's interpretation of the NMVC statute, which SBA viewed as permitting the agency to choose how much time it could give conditionally approved NMVCs to raise the private-sector matching money. The SBA's chosen time frames were unreasonable and not what Congress intended. I very much regret that the managers' amendment that we are considering today does not include a change to the New Markets Venture Capital Program which would better align allowable investments with repayment obligations. Right now the repayment and profit participation schedules are out of sync. Experts argue that this situation could force NMVCs to liquidate promising small businesses in order to raise repayment money. It would be unfortunate if this were to occur, particularly for the employees of small businesses in these high- unemployment areas who will be hard-pressed in this economy to find another job with sustainable wages and benefits. I do not have an SBA NMVC in my State, but there are about 20 States with NMVCs which would have benefited from this proposed change--Maine, New Hampshire, Vermont, Kentucky, Maryland, West Virginia, Ohio, Delaware, New Jersey, Pennsylvania, Arizona, and Washington, DC. I am sorry that we could not reach a compromise and I hope for the sake of existing NMVCs and the small businesses they assist that the experts are not right. I thank the many experts who have advised this committee over the years on developing and implementing the new markets venture capital program. My colleagues on the committee and I are grateful for their help. It is a great service to the taxpayers and businesses and the communities that will benefit from this innovative investment. In no particular order, I thank Dr. Julia Rubin who helped us when she was at Harvard, at Brown and now at Rutgers University. I thank Saunders Miller, now himself a small business owner of Peaq Funds in Manhattan, who was a principal developer of this program and may other venture capital initiatives for the many years he worked at the SBA. I thank Don Christensen, the former head of the SBA's investment division, where he served this nation and president Clinton extremely well. And to the many developmental venture capitalists who routinely impart their expertise and wisdom to this committee, such as Elyse Cherry of the Boston Community Venture Fund and Ray Moncrief of Kentucky Highlands. Responding to findings by the General Accounting Office and the SBA's Office of Inspector General, this legislation includes many measures to strengthen the SBA's oversight of lenders. And we have reauthorized and clarified the law for surety bond guarantees to help small businesses get Government contracts. While no one would deny the importance that access to capital plays in the success of small businesses, as SBA Administrator Hector Barreto and past SBA administrators have acknowledged time and again, debt is not always the answer. In the SBA's FY 2004 budget request, there is reference to information from the Ewing Marion Kauffman Foundation and Dun & Bradstreet that indicates ``80 percent of new businesses discontinue operation within 5 years because of lack of `knowledge' of key business skills.'' Despite the recognized importance of such assistance, the SBA's funding request for fiscal year 2004 and its legislative proposal to implement that request would freeze funding levels for virtually all agency programs, without even accounting for inflation, for a 6-year period. If enacted, that would severely hamstring this nation's small businesses and their ability to effectively compete and prosper in the national economy. For this reason, Senator Snowe and I took a comprehensive approach to supporting and improving the SBA's entrepreneurial development programs, while rejecting proposals put forth that would undermine their success. Cuts to or inadequate funding of the SBA's entrepreneurial development programs are often 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, are often at very different stages of development, and have many different needs. Just as it would be ineffective to only have one type of loan or venture capital financing structure for the 25 million small businesses in this country, it would be futile to water down specialized management and training programs to impose a one-size- fits-all approach. I want to commend Chair Snowe for giving women entrepreneurs such a prominent place in the reauthorization process. Rarely do women entrepreneurs get the recognition and attention they deserve for their contributions to our economy: Eighteen million Americans would be without jobs today if it were not for these entrepreneurs who had the courage and the vision to strike out on their own. During my tenure as a member, chair, and lead Democrat of the Senate Committee on Small Business and Entrepreneurship, I have worked to increase and improve the opportunities for enterprising entrepreneurial women in a variety of ways, leading to greater earning power, financial independence and asset accumulation--and I am glad that Senator Snowe is joining me in this endeavor. As Chair Snowe expressed when she introduced the Women's Small Business Programs Improvement Act--and when Senator Snowe and I passed the Women's Business Center's Preservation Act--protecting the extremely effective and well-established Women's Business Center network was a high priority in this reauthorization. For that reason, we make permanent the Women's Business Center Sustainability Pilot Program by creating 3-year ``renewal'' grants for those centers with sustainability grants and 4-year ``initial'' grants for new centers; increase the program's authorization levels; and direct the Office of Women's Business Ownership, OWBO, to make all Women's Business Center grants at $150K and to consult with the associations of Women's Business Centers when making improvements to the program. Other changes to the Women's Business Center Program include streamlining the data collection and the grant application and selection criteria, protecting the privacy of Women's Business Center, WBC, clients, and providing for a smooth transition from sustainability to the newly established WBC program. Our legislation will not only secure the future of the Women's Business Center Program, but it will connect all SBA-related women's initiatives with a unified mission, similar guidance and training. These changes were coupled with minor, yet significant, changes to the National Women's Business Council, NWBC, and the Interagency Committee on Women's Business Enterprise. Senator Snowe and I included provisions to give the NWBC cosponsorship authority, to allow more flexibility in the way the council uses funds, and to direct the council to serve as a clearinghouse for historical data. Each of these things will enable the council to become a better resource for the administration, Congress and the entire small-business community. Since its inception, the NWBC has provided Congress, the Small Business Administration, and the Interagency Committee on Women's Business Enterprise with independent advice and policy recommendations on issues facing women in business. In recognition of the council's importance to policy making and women in business, Senator Landrieu offered and the committee adopted an amendment identical to her National Women's Business Council Independence Preservation Act of 2003, which seeks to maintain the bipartisan balance on the NWBC. The structure of the NWBC helps to maintain its independence. It has 15 members. The chair is appointed by the President and must be a prominent business woman. Six members are representatives of women's business organizations, including representatives of women's business center sites, and the remaining eight are members appointed by the SBA administrator based upon recommendations of the chair and ranking members of the Senate Small Business and Entrepreneurship Committee and the House Small Business Committee. Of these eight ``party-affiliated'' members, four come from the same political party as the President and four members who are not from the President's party; all of them must be small business owners. The bipartisan balance in the NWBC's membership helps to ensure that any policy recommendations will reflect the needs of women in business and not the political agenda of one political party over another. Vacancies on the NWBC are supposed to be filled no later than 30 days after the position becomes open; however, in the past 2 years, the SBA has failed to meet this 30-day statutory deadline. The NWBC Chair was vacant from May 29, 2001, to May 21, 2002, a period of 11 months and 22 days. Of the party-affiliated slots reserved for the President's party, one was vacant for 3 months, two were vacant for a period of 7 months; and one was vacant for 21 months. Two of the seats reserved for members who are not from the President's party were vacant for nearly 2 years, one seat was vacant for 7 months, and the fourth seat remains vacant. At one point during the past 2 years the NWBC had a severe partisan imbalance. There were three Republican members on the NWBC and no Democratic members. The committee is concerned that these vacancies undermine the effectiveness of the NWBC, and that the lack of bipartisan balance will subject any policy positions taken by the NWBC to criticism as being motivated by partisan interests. Senator Landrieu's amendment, which was approved unanimously by the committee, requires that vacancies in the party-affiliated slots will be filled to maintain a bipartisan balance on the NWBC. The provision also ensures accountability by requiring the administration to report to Congress on vacancies that remain unfilled for more than 30 days. The committee expects the report to cite the reasons for the vacancies, what is causing any delays in filling the positions, whether nominees were available for consideration, at what stage in the vetting process nominees are, whether there are any objections to the nominees and what those objections are, an estimate for when the vacancies will be filled, and any other relevant information relating to the vacancies. To bolster the representation of women business owners in the Federal Government, our bill re-establishes the Interagency Committee on Women's Business Enterprise, directs the Deputy Administrator of the SBA to serve as acting chairperson of the Interagency Committee until a chairperson is appointed, establishes a Policy Advisory Group to assist the Committee's chairperson in developing policies and programs under this act and creates three subcommittees similar to those created under the National Women's Business Council. This bill also supports and protects the Small Business Development Center network, which has served millions of small-business owners since its inception more than 20 years ago. It should also be noted that in 2001, SBDCs helped small businesses create or retain over 80,000 jobs, generate $3.9 billion in sales and obtain $2.7 billion in financing. For every dollar spent on an SBDC, $2.09 in tax revenue was returned to the Federal Government. Numbers aside, the nationwide network of SBDCs provides important counseling services to small- business owners that are unable to afford private consulting, many of whom are women and minority clients. The SBDC program has grown to serve 1.25 million small-business owners and entrepreneurs each year, and there are nearly 1,000 centers serving every State in the Nation. While this bill rejects the potentially detrimental changes proposed by the SBA to the SBDC network, it does address concerns expressed by the centers and small businesses. Our bill increases authorization levels to keep up with increased demand and a provision to protect the privacy of the program's clients and a provision to help the SBDCs that have been adversely affected by poor economic conditions or government downsizing. Also included is a portability provision proposed by Senator Snowe to provide supplemental assistance to State SBDC networks that have been adversely affected by a military base or industrial site closure which has lead to a loss of jobs and severe economic harm. If implemented correctly, portability has the potential to help States, reeling in the aftermath of a sudden economic change, to provide the necessary small business assistance to quell the economic injury to a particular area. Also, included in the entrepreneurial development section of our bill is a provision to increase to $7 million annually the authorization level for the Service Corps of Retired Executives, SCORE, which has 10,500 volunteers, and technical change to allow SCORE to keep its modest staff of 14 employees. For more than 38 years, SCORE has been one of the SBA's greatest and most efficient successes. In 2002, SCORE volunteers held over 300,000 counseling sessions and put in nearly 1.4 million volunteer hours. To keep up with an our nonstop national economy, SCORE has dramatically advanced the outreach of its online services to reach clients 24 hours a day, seven days a week. Last year, for $5 million, SCORE volunteers provided small business owners an estimated $170.8 million worth of professional business advice. It is safe to say that in this down economy, SCORE is one investment that will be paying dividends for years to come. I thank Senator Snowe for working with me to include, as introduced, the Native American Small Business Development Act, which I reintroduced earlier this year together with Senator Johnson and Senator Smith to address the SBA's growing lack of commitment to the Native American community. According to a report released by the U.S. Census Bureau, the ``three year average poverty rate for American Indians and Alaska Natives from 1998-2000 was 25.9 percent; higher than for any other race groups.'' With an unemployment rate well above the national average and household income at just three-quarters of the national average, Native American communities need a commitment from the Federal Government that we will help them, particularly during these difficult economic times. To reaffirm this commitment, the Johnson-Kerry-Smith bill provides Native Americans the resources they need to take advantage of the opportunities of entrepreneurship. The Native American Small Business Development Act, as included in our reauthorization bill, will ensure that the SBA's programs to assist Native American communities cannot be dissolved by making the SBA's Office of Native American Affairs, ONAA, and its assistant administrator permanent. Our legislation would also create a statutory grant program, known as the Native American Development grant program, to assist Native Americans. It would also establish two pilot programs to try new means of assisting Native American communities and require Native American communities to be consulted regarding the future of the SBA programs designed to assist them. In short, this legislation will ensure that our Native American communities receive the adequate assistance they need to help start and grow small businesses. Senator Bingaman and I have worked closely to develop a provision for inclusion in a joint managers' amendment to the reported bill, which will expand the Program for Investment in Microentrepreneurs, PRIME, with a separate $2 million authorization to provide direct, in-depth technical assistance and counseling to disadvantaged Native American small business owners. The provision will complement the Native American Business Centers created in the Native American Small Business Development Act by following the PRIME model, which provides technical assistance through microenterprise entities that have extensive experience helping the least experienced entrepreneurs in low-income communities. The rationale for amending the PRIME Act, rather than creating a separate program, is that PRIME is currently operational and simply needs additional funding so it can better address the needs of the Native American entrepreneurial community. The provision follows the existing Small Business Administration's approach and terminology for implementing the PRIME Act to enhance the possibility of economic development through entrepreneurship in Native American communities. The Bingaman provision will strengthen the three-pronged approach the Senator Johnson and I designed in the Native American Small Business Development Act to find a solution to the longterm economic handicap existing in Native American communities nationwide. There are a number of microenterprise organizations in states across the country that are willing and prepared to take on the additional challenge of assisting disadvantaged Native American entrepreneurs, and there are a number of Native American communities that are eager to take a different path to economic development. However, there are currently a limited amount of funds to allow that to happen. I commend Senator Bingaman for his attention to this matter, for his continued support of my small business legislation, and for his foresight and vision for Native Americans in New Mexico and across the country. The Native American communities across our nation will be better off with the assistance that this provision makes possible. Were it not for the persistence of Senator Bingaman, this provision would not be part of SBA's tools to help Native American entrepreneurs. I also want to thank Senator Snowe for working with Senator Bingaman and me to include this provision in the managers' amendment. To address the growing business development needs of veterans, Senator Snowe and I reauthorized the Advisory Committee on Veterans Affairs, expanded veterans outreach grants from solely serving disabled veterans, to serving all veterans, reservists and service-disabled veterans. Further, we increase the funding for the Office of Veterans Business Development to enable that office to better deal with the demand by veterans for outreach and development services. Included in a joint Snowe-Kerry amendment, which was unanimously approved at the Committee markup, is a reauthorization of PRIME at $15 million. SBA Administrator Hector Barreto has stated, ``The PRIME program was created to help the smallest of small businesses. These are entrepreneurs at the most basic stage of starting a business and who typically require the greatest amount of committed service and guidance. In order to succeed, they require training and technical assistance that must be accessible.'' PRIME is a powerful investment that provides critical assistance to struggling, distressed communities. It's engineered to help low-income and very low-income families, defined as those at 150 percent of the poverty line or below. A very low-income family of four earns about $23,000 a year. The International Labor Organizations estimates that the return on investment in microenterprise development through resources like PRIME ranges from $2.06 to $2.72 for every dollar invested. Microenterprise contributes to our national economy through public tax revenues, private income increases, and reduced dependence on public assistance, such as welfare. Small Business Development Centers define a ``client'' as someone who has received two hours of training. On average, however, PRIME organizations spend 10 hours with low-income and very low-income entrepreneurs. Many often confuse PRIME assistance with the microloan technical assistance. Unlike the microloan program's technical assistance, which is directly tied to helping microentrepreneurs obtain access to capital through microlenders, the PRIME program is designed to help microentrepreneurs who may not be credit-worthy or don't need or want loans, but do need intensive technical assistance. Currently, there are fewer than 80 organizations with PRIME grants, yet the need for PRIME assistance is now greater than ever. While access to credit is vital for many microentrepreneurs, for low-income individuals, there is a severe gap between being credit-worthy and receiving the technical assistance needed to be successful in business. The PRIME program addresses this gap. for these reason, Senator Snowe and I reauthorized the program for three years. Our bill also moves PRIME's statutory language to the Small Business Act and includes a data collection provision. We continue to receive reports of the detrimental effects of the Administration's policy of reduced staffing and resources for essential programs aimed at allowing small businesses to thrive. Week after week, the Federal Times reports on the decline in contracts being allocated to small businesses, small businesses losing ground in the Federal marketplace, and most recently, on the awarding of more big contracts with less oversight from Federal agencies. With agencies awarding larger, more complex and more costly contracts with fewer staff performing oversight, this nation's small businesses and its tax payers are the ones shouldering the burden when small business goals continue to be unmet. In addition to helping small businesses obtain access to procurement opportunities, these goals are meant to help the government benefit from the cost-savings and innovations small business contractors can often provide. Significant improvements to the on-going problem of contact bundling, also called contract consolidation, are included in this bill. One provision included in this legislation that will make a significant impact on small businesses' ability to compete is the method we have adopted to address the ongoing problem of contract bundling. This language is a prime example of the effectiveness of bipartisanship, diligence and compromise. This approach incorporates language from an amendment to the Department of Defense reauthorization offered by Senator Collins and Senator Talent, language from my contract bundling bill, S. 633 and the President's initiative on contract bundling. The first provision creates a two-tiered threshold in order to prevent unnecessary contract consolidation. Civilian agencies will be required to meet specific standards if they attempt to consolidate contracts above $2 million and $5 million. The Department of Defense is required to meet similar requirements for contracts above $5 million and $7 million. The bill also further expands the definition of contract bundling to include contract consolidation, closing a loophole in the definition that has been widely used and detrimentally affecting small businesses. The second provision increases in the number of procurement center representatives, PCRs. These representatives advocate on behalf of small businesses in cases directly affecting contracting, such as the bundling or consolidation of contracts. Unfortunately, the number of PCRs has been reduced from over 200 at its peak in the late 1980s to the current level of just 47. In addition to reducing the number of traditional PCRs, the administration has also eliminated the Breakout PCRs, specially trained advocates that analyze highly technical large contracts and ``unbundle'' contracts and break out portions that are appropriate for small businesses. Their responsibilities have been rolled into that of traditional PCRs, even though the number of PCRs continued to decline. Often, the role of commercial marketing representatives, CMRs, was also incorporated into the responsibilities of traditional PCRs. CMRs are responsible for identifying opportunities and developing marketing strategies for small businesses to appeal to large prime contractors. The SBA's attempt to streamline their offices and replace trained individuals with electronic systems has resulted in the disenfranchisement of small businesses and hindered the SBA's ability to maintain a proper level of oversight over Federal contracting. In the bill, we have increased the number of procurement center representatives to ensure that every State and every major procurement center is allocated a PCR. Meanwhile, we have also ensured that these PCRs are not burdened with responsibilities that were previously the duties of breakout PCRs and commercial marketing representatives. These two improvements will dramatically increase the efficacy and efficiency of all three positions and allow proper review of the approximately 40 percent of Federal contracts, nearly, $90 billion, that are currently not being reviewed by PCRs. This should increase small business's access to Federal contract opportunities. The bill would also create a reporting requirement for the BusinessLINC program, which has been showing promise in creating real teaming opportunities for small businesses in the private sector. Although the administration recommended elimination of the program, the reports this committee received regarding the overwhelming success of the existing nine programs made it clear that the SBA did not have sufficient information about BusinessLINC to make an informed decision on its effectiveness. The committee's bill would ensure that the SBA offers the proper level of oversight and would foster the continued success of the program. I would like to thank Senator Snowe for working with me to find a compromise to preserve this successful program. At the Committee's roundtable on non-credit programs and the hearing on contract bundling, the small business community reiterated the need for accountability for small business contracting at the agency level. I applaud Senator Snowe on her efforts to ensure that Federal agencies be held accountable for fully utilizing small businesses and to allow a greater amount of Congressional oversight of the implementation of agency procurement strategies. Provisions within this bill will ensure that the heads of Federal agencies identify a specific portion of their budget request that will be awarded to small businesses in their strategic plan and their annual budget submission to Congress. The bill also gives senior procurement executives and senior program managers additional authority to educate their staff regarding the importance of meeting the government-wide goals for small business utilization and allows for greater accountability in annual performance evaluations. I would like to thank the members of the Senate committee on Government Affairs for working with Senator Snowe and me on these provisions to ensure that agency officials have the authority, as well as the flexibility, to efficiently and effectively meet the goals we have placed before them. In addition to increasing opportunities for prime contracts, this bill addresses another serious problem: Small businesses have been severely hampered by dishonest practices by some businesses that have prime contracts with the Federal Government and have received preference over other prime contractors due to their superior small business subcontracting plans. Senator Snowe and I have worked closely to address the concerns of small businesses regarding delays in payment, false reporting and the use of ``bait and switch'' tactics by prime contractors. The bill holds prime contractors responsible for the validity of subcontracting data, requiring the CEO to certify to the accuracy of the subcontracting report under penalty of law. It also expands the penalties for falsifying data included in subcontracting reports to match the $500,000 or 10 years in prison for businesses that falsify their status as a small and disadvantaged business. If one intentionally falsifies data as a part of a subcontracting report to a Federal agency, he is defrauding the United States government and will be punished to the full extent of the law. During the committee's reauthorization roundtables, we heard numerous accounts of subcontractors receiving late payments or partial payments from their prime contractors. Small firms do not have the luxury of waiting for their payments when they have invested time and money to provide their products and services to the prime contractor. To address this concern, the bill directs the SBA to create a three-year pilot program, which tests the feasibility of direct payment to subcontractors from the Federal agencies that are receiving the contracts and or services. In 2000, Congress passed legislation to implement a limited competition, set-aside program for women-owned businesses, intended to assist agencies to increase contracting to these firms and help to meet the five percent government-wide goal. The original bill amended the Small Business Act in section 8(m)(4) to require the SBA Administrator to complete a study to identify industries in which women-owned businesses are under-represented and report to Congress. The original study has been completed, but has been delayed by a subsequent study of the original study's ``methodology,'' causing the program to be delayed indefinitely rather than be implemented in 2002, as it should have been. This bill expedites the implementation of the already overdue program by reassigning the responsibility of the study from the SBA to the GAO and giving the Comptroller a deadline of December 31, 2003, to report his findings to Congress. During this time of economic downturn, we must ensure that long-term strategies of reorganization and restructuring do not have immediate negative impacts on our communities. One example of this is the economic impact on surrounding areas when a military base is closed. The loss of contracts to small businesses, jobs and resources can cripple a community's economy. To reduce the impact on these regions, this bill utilizes a contracting program, called the HUBZone program, intended to target under-served areas and maintain the profitability of the firms located within these areas. This bill will allow military installations that are closed after passage of this legislation to receive HUBZone status. Senator Snowe and I have included a further provision within the managers' amendment of S. 1375, which would limit this special classification for 5 years after the closure of the base. The intent of the immediate qualification of these areas is to allow for a smoother transition of the base to commercial use by encouraging small businesses to relocate to those facilities, through Federal contracting opportunities, and employing the workers in that area. Additional options for assistance for these areas are available through the SBA if these areas do not receive continued economic stability following the expiration of the 5-year HUBZone status. I want to thank Chair Snowe and her able staff for all of their cooperation over the past several months. I would like to thank the members of the Senate Committees on Armed Services and Government Reform for working closely with me and my staff to ensure that this bill meets the needs of the Federal Government's diverse procurement offices as they work to ensure that the government receives the essential goods and services it requires. I also want to express my gratitude to all the members of the committee for their diligent efforts to improve this legislation and urge them and my other Senate colleagues to support the Small Business Administration 50th Anniversary Reauthorization Act of 2003.