John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, I speak today to congratulate the 17 recipients of the Small Business Administration's Outstanding Women Entrepreneur Award. These inventive and resourceful entrepreneurs are leaders in a national community of women's businesses, which continue to outpace all other companies in overall growth--in number of firms, employment and sales. Women-owned firms are constantly breaking down the barriers of our past and proving that the business world is no longer a boys-only club. As many in the small business community are aware, women-owned companies have become increasingly important to our Nation's jobs and economy. Today there are over 10.1 million women-owned firms, employing 18.2 million workers, and generating $2.32 trillion in sales. With assistance from the SBA, these 17 women honored during last week's Small Business Week have created businesses that serve as remarkable examples of successful entrepreneurship in a variety of industries. Patricia Miller, Barbara Bradley Baekgaard, Rebecca Matthais, and Dr. Taryn Rose all started their own businesses in the fashion industry, relying on the SBA for loans and counseling. Patricia and Barbara created Vera Bradley Designs, a company that produces a popular line of luggage and handbags. Rebecca's company, Mothers Work, is now one of the leading providers of maternity clothes of women across the country. Taryn combined her medical knowledge as an orthopedic surgeon with her love of fashion to create a footwear company that is projecting to reach over $20 million in sales this year. The SBA has also helped several of these women break into male- dominated industries, like construction and defense. Donna Brinkmeyer- Asman of Clark Manufacturing, Lurita Doan of New Technology Management, and Carolyn Minerich of Carmin Industries have all created companies that have grown to include major defense-industry clients. Tina Cordova looked to the SBA's Small Business Development Center and SCORE programs to help her company, Queston Construction, expand from 2 to 26 employees. Kathryn Freeland, Marilyn Melkonian, Patty DeDominici, Nikki Olyai, Jeannette Lee White, and Julie Morgenstern all looked to the SBA to help them create their businesses. Now they are advising much larger businesses on potential employees, technology, and management issues. These women and their employees are not only beneficiaries of their companies' successes. In addition to starting and growing successful businesses, these women have made significant contributions to their communities. Blue Crab Bay, started by award recipient Pamela Barefoot, creates specialty food items for seafood lovers and uses its profits to give back to the Chesapeake Bay community. The company has given back to its community through scholarships, charity events, and donations to groups like the Chesapeake Bay Foundation. I would also like to recognize the accomplishments of awardees Heather Howitt, Judy George, and Maria Welch. Heather, along with cofounders Tedde McMillen, Carla Powell, and Lori Woolfrey, recognized a potential market for their traditional Chai drink, and now their company, Oregon Chai, sells its chai tea lattes at stores in all 50 States. Maria's company, Respira Medical, is a leading respiratory and durable home medical care equipment distributor in Maryland. Judy's Domain home furnishings company was recently featured on the popular television makeover program ``Queer Eye for the Straight Guy.'' I commend these 17 women for their creativity in business, their leadership for women entrepreneurs, and their generous contributions to their local communities. As the number of women business owners continues to grow--currently the number of women-owned businesses is growing at double the rate of all U.S. firms--we must do everything we can to ensure that these businesses have every opportunity to flourish. To that end, we are working to pass the Small Business Administration 50th Anniversary Reauthorization Act of 2003, legislation that will protect the extremely effective and well-established Women's Business Center network. With this bill we will also reestablish the Interagency Committee on Women's Business Enterprise to give women in business a greater voice in Federal policymaking. The 2003 SBA reauthorization legislation also closes the loopholes in Federal procurement practice that have allowed agencies to bundle contracts and limit Federal contracting opportunities for small and women-owned businesses. In addition, this bill will strengthen all of the SBA's access to capital, entrepreneurial development, and contracting programs, including those that helped bring success to the 17 recipients of the Outstanding Women Entrepreneur Award. I hope my colleagues in the Senate will join me and Senator Snowe in recognizing the important contribution these women, and other women in business across America, make to our Nation's economy by passing the SBA Reauthorization Act of 2003 and fully funding the SBA's programs.

Mr. KERRY

Mr. KERRY. Mr. President, I speak today in honor of the Small Business Administration, which this year is celebrating the 50th anniversary of its service to America's small businesses. This week marks the SBA's annual Small Business Week. Throughout the events of this week, the SBA will demonstrate many of the valuable programs that have been created to help entrepreneurs across the country achieve success over the past 50 years. The SBA is relied upon to help restore economically depressed communities, spur technological research and development, provide access to capital and business training, monitor the procurement practices of Federal agencies, and ensure small businesses are heard within the Federal Government. With the assistance of the programs and resources of the Small Business Administration and its dedicated employees, thousands of small businesses across the country have developed and expanded. Some of those companies have since developed into household names after receiving help from the SBA; companies like Outback Steakhouse, Nike, and Staples. These businesses exemplify the entrepreneurial spirit that is so unique to this country. The importance of the small business community cannot and should not be underestimated. The link between small businesses and a strong economy is clear: small businesses account for over 50 percent of nonfarm GDP, and account for 75 percent of all new jobs. Time and again, our small businesses have led this Nation out of bad economic times. We cannot help this country's economy by ignoring our small businesses and underfunding the initiatives meant to foster their establishment and growth. President Bush seems to understand that there is a need to support small businesses, but during his 3 years in office, he has yet to translate that understanding into actions. In his first year, he cut the SBA's budget by almost 50 percent. In his second year, he eliminated all funding for the agency's largest small-business loan program and shifted the cost--more than a hundred million--to the small businesses and the SBA's lending partners in the private sector who make the loans possible--never mind that the government was already overcharging them. He has cut funding for microloans and counseling-- the SBA's number one program for reaching African Americans, Hispanics and women. Here in the Senate, we are trying to pass legislation reauthorizing the programs of the Small Business Administration for another 3 years, and I think Chair Snowe and the other members of the committee for working with me to create a bill that enables small businesses to continue to prosper. We are doing our part to assist small businesses, and the next step is to ensure that the SBA and its programs receive the funding they need to actively help small businesses across the country in these difficult economic times. The administration's low- ball request for FY 2004 will not help about adequate funding of the critical assistance that America's small businesses need. I intend to do everything possible to obtain necessary funding for these critical small business programs to ensure they will thrive in the next year and for the 50 years to come.

Mr. KERRY

Mr. KERRY. Mr. President, the front page of the Washington Post recently featured a local graduate student who skillfully mapped the electronic networks that interconnect every business and industrial sector in the American economy. The article emphasized how the information was readily available on the Internet and the associated security concerns. It also discussed the astonishment and alarm among industry leaders upon hearing about it. Early this year, the Department of Homeland Security published two papers emphasizing the need to secure critical infrastructure from physical and cyber-attacks, including all aspects of the electric power infrastructure system. This was clarified further by the Federal Energy Regulatory Commission (FERC) in its Notice of Proposed Rulemaking on Standard Market Design, which states, holesale electric grid operations are highly interdependent, and a failure of one part of the generation, transmission, or grid management system can compromise the reliability of a major portion of the grid. Simply put, experts in the public and private sector, time and time again, acknowledge the vulnerability of the entire national electric power infrastructure and that all aspects should be protected. As blatantly demonstrated by the recent blackouts in the northeastern United States, the viability of the national power grid is an important national security concern. I am concerned, therefore, that a cyber security standard recently proposed by FERC, which is designed to protect the electric power grid, exempts rocess control systems, distributed control systems, or electric relays installed in generating stations, switching stations and substations from the definition of ``critical cyber assets'' to be protected. Despite the clear intent of the Department of Homeland Security and FERC to protect the power system entirely, the proposed rule calls for only partial protection. The FERC decision may mean that power distribution is protected, while power generation remains vulnerable.

Mr. KERRY. Mr. President, I think the answer is yes. No aspect of the electric power grid should be exempt from this cyber security standard. I urge the ranking member to work with us to address this issue during conference committee consideration of the Energy and Water appropriations bill for fiscal year 2004. With my good friend, the senior Senator from Massachusetts, I ask the Appropriations Committee, in conference with the House of Representatives, to include a requirement that the Federal Energy Regulatory Commission report to the committee and the Congress as to why generating infrastructure was excluded from the proposed rule.

Mr. KERRY

Mr. KERRY. Mr. President, today the Senate will vote on a joint resolution, of which I am a proud cosponsor, to disapprove the Federal Communications Commission's June 2, 2003, rules designed to loosen restrictions on broadcast media ownership. It is the Commission's responsibility to ensure that media ownership rules serve our national goals of diversity, competition and localism. Unfortunately, the Commission's June 2, 2003, ruling fails to meet this standard. The resolution before us today would reverse the FCC's decision to change the national television ownership cap from 35 percent to 45 percent, a decision that threatens local and independent voices in television. The television industry is undergoing rapid consolidation as a handful of national networks have acquired local stations across the country. I am concerned that when local stations are purchased by a national network, independent voices are lost in the media marketplace. Locally owned and operated stations are more likely to be responsive to local needs, interests and values than those stations owned and operated by national networks. Indeed many local stations are small businesses that drive innovative competition. A system of concentrated station ownership will trend toward nationalized programming aimed primarily at maximizing revenue with less concern for local interests and less room for competition. The resolution before us today will also reverse the FCC's decision to significantly loosen restrictions on cross-ownership of broadcast stations and newspapers within single markets. The cross-ownership rule is intended to increase or at least maintain the number of independent editorial voices in a community. This is especially important in smaller communities where citizens have fewer media operations covering local matters. While there is scant evidence that weakening this rule will result in significant economic benefit, leading academics and media experts have argued that doing so will dangerously reduce the venues for independent public discourse. I am also concerned with the process by which the FCC conducted these proceedings. This media ownership rulemaking is among the most important the FCC has undertaken, and it has garnered unprecedented public interest. Despite this, the Commission moved forward with dramatic rule changes without first taking public comment on a specific proposal. The Commission's outreach was simply insufficient. All parties concerned would have been better served if the Commission published a specific proposal and then allowed for a period of public comment before promulgating any rule changes. The Commission's first responsibility is to ensure diversity, competition and localism. The Commission has no responsibility to facilitate the business plans of the major networks or any other narrow economic interest. I strongly support the disapproval resolution before us today.

Mr. KERRY

Mr. KERRY. Mr. President, I am a proud cosponsor of the Dodd-Hagel- Jeffords amendment No. 1572 to H.R. 2660. I am also proud of the Individuals with Disabilities Education Act and the 6 million disabled children who this year have the keys to a brighter, more self- sufficient future. But so too am I greatly disappointed in this Congress and the President for breaking a promise for 28 straight years. In 1975, we made a deal with our State and local school boards. Give our disabled children the education they deserve, we said, and we'll pay 40 percent of the additional cost, no matter what it takes. An expensive commitment? You bet. But without it, our values of fairness and personal initiative are just words on a page. In the nearly three decades since, tens of millions of Americans have risen through the ranks of special education to become independent, productive citizens. They go to college, get jobs, and pay taxes. Every one of them a shining example of what can happen when people are empowered. Yet where they have fulfilled their promise, we have broken ours. We carry just 18 percent of this noble burden on our broad shoulders. Our States stagger under the heavy weight of the rest. We have tried to correct this problem before. In 2001, this body wisely passed a version of No Child Left Behind that was true to its name. We didn't mean ``no able-bodied child left behind''. We didn't mean ``no disabled child in private school left behind''. We meant that no child--no child--would be denied the tools needed to succeed. That's why we included--by a unanimous vote--full funding for IDEA. Unfortunately, George Bush and his henchmen in the House of Representatives had other ideas. They decided that our tax dollars were better spent on corporate welfare and massive tax cuts for the wealthiest Americans. This amendment would begin to right that wrong by restoring the $1.2 billion for IDEA cut from the Budget Resolution. Use the Republican forward-funding mechanism to pay for it. Get us back on the road to full funding. I know most of my colleagues recognize the desperate needs in special education. But this amendment is about so much more than that. It's about a principal made heart-sick by pitting one group of students against another. It's about a mainstream teacher on the short end of that equation who loses her job. It's about a mother and father who just want their child to have a chance. And right now, it's also about keeping a promise made to our most vulnerable children. We must take a stand. We must pass the Dodd/Hagel/ Jeffords amendment on IDEA.

Mr. KERRY

Mr. KERRY. Mr. President, the continuing activation of military reservists to serve in Iraq and the war on terror has imposed a tremendous burden on many of our country's small businesses. Too many small businesses, when their employees are asked to leave their jobs and serve the Nation, are unable to continue operating successfully and face severe financial difficulties, even bankruptcy. At the same time, more than one-third of military reservists and National Guard members suffer a pay cut when they're called to defend our Nation. Large businesses have the resources to provide supplemental income to reservist employees called up for active duty and to replace them with a temporary employee. However, many small businesses are unable to provide this assistance or temporarily replace the employee. I believe the Federal Government must take action to help small businesses weather the loss of an employee to active duty and protect small business employees and their families from suffering a pay cut to serve our Nation. That is why I am introducing legislation that will provide an immediate tax credit to assist both military reservists who are called to active duty and the small businesses who must endure their absence. The Small Business Military Reservist Tax Credit Act that I am introducing today will provide immediate help to affected small businesses through a Federal income tax credit and a reduced withholding requirement to help pay the difference in salary for a reservist called up to active duty and the cost of temporarily replacing that employee while he or she is serving our Nation. Specifically, the bill will provide a tax credit of up to $12,000 to any very small business, defined as any business with up to 50 employees, whose employee has been called up for active duty. Up to $6,000 can be used to assist in paying any difference in salary for the activated reservist and up to an additional $6,000 can be used to help hire a temporary replacement. For small manufacturers with up to 100 employees, the bill will provide a tax credit of up to $20,000, up to $10,000 to hire a temporary replacement. This tax credit is critical to immediately help struggling entrepreneurs keep their small businesses running after the loss of an employee to temporary military service. Too many American small manufacturers are already facing a difficult economy and strong international competition. This legislation provides higher thresholds for small manufacturers because they need greater help and employ more technical workers who are more expensive and difficult to replace. It will also help cushion the financial cost of being a citizen soldier for our reservists. I am pleased that this legislation is supported by the Reserve Officers Association. Since 1973, the United States has built an all-volunteer military of which reservists are an essential part. Our reservists are much more than weekend warriors. When they are called to active duty, they are a critical ingredient of any long-term or significant deployment of American forces. Everyone knows the contributions our reservists have made in the Army, Navy, Air Force, Marines and Coast Guard. They have been serving our country with distinction and pride for many years and should not be penalized financially for their honorable service. The use of reservists is a significant way to reduce the costs of maintaining a standing army and the cost of carrying a full standing army, in lieu of having a critical reservist component, far outweighs the small, targeted tax credit developed in this legislation. Reservists have become a vital component of U.S. forces in Iraq and the war on terror. On September 14, 2001, President Bush issued Executive Order 13223 authorizing the activation of up to 1 million military reservists for up to two years of active duty. Since October 2002, there has been a presidentially approved ceiling of 300,000 on the number of reservists that can be on duty at any one time. Some 295,000 reserves have been called up cumulatively since the issuance of the original Executive Order. Today, there are about 181,500 reserves on active duty in the war against terrorism. Just today, the Army announced that thousands of National Guard and Army Reserve forces will be required to extend their tours of duty. The new order requiring 12-month tours in Iraq and elsewhere means that many National Guard and Army Reserve troops could have their mobilizations extended anywhere from 1 month to 6 months. Extending tours of duty will make it more difficult for reservists, their families and the small businesses where they work to endure the hardships associated with serving our nation. It is imperative that we provide them with immediate assistance. A recent story in the Financial Times demonstrates the heavy price that some small businesses are forced to pay when one of their employees is called up for active duty. Lt. Col. Stephen Brozak, a Marine reservist and small business partner, was called up for active duty in November 2002. In addition to being a partner in the small financial services firm, Westfield Bakerink Brozak, Stephen is the only research analyst in the San Diego-based company. Since Stephen left to serve our country, the company has been unable to continue working on the investment banking issues he covered. This has dramatically affected the company's profitability and bottom line. To compound the problem, this small businesses is unable to provide Stephen a salary while he is on active duty and cannot afford to hire a replacement. Small businesses, like Stephen's, should not be crippled or incapacitated when their workers are called to serve our Nation. Our reservist solders who are called away from their jobs to serve our country should not have to endanger their family's finances to do so. The United States Chamber of Commerce estimates that 70 percent of military reservists called to active duty work in small- or medium-size companies. Everyone knows that small businesses continue to be a most effective at creating new jobs and spurring economic growth nationwide. Small businesses employ over 50 percent of the nation's work force. Nationwide, small businesses are currently creating 75 percent of new jobs. Furthermore, many these small businesses provide quality goods and services that are a vital link in the supply chain for our national defense. Many these small companies need immediate help to keep their business going while their employees are sacrificing for our country in Iraq and elsewhere. Many of our reservists left their companies in good shape. They were profitable, providing goods or services, creating jobs, adding to the tax base. Our nation should do everything possible to ensure that upon their return, reservists and their businesses to do suffer unnecessary hardships that ranges from impaired operations financial ruin; from deserted clients to layoffs, and even closure. Beyond the hardship of leaving their families, their homes and their regular employment, more than one-third of military reservists and National Guard members face a pay cut when they're called for active duty in our armed forces. Many of these reservists have families who depend upon that paycheck to survive and can least afford a substantial reduction in pay. Unlike many big businesses that can afford to provide supplemental income to make up for the salary disparity for military reservists called to active duty, most small businesses cannot afford to provide this benefit. This makes it more difficult for small businesses to attract and keep workers. I think it is imperative that we help families of reservists maintain their standard of living while their loved one serves our nation. We must ensure that our great tradition of citizen soldiers does not fade or stop because of the effect service has on work and family. Back in 1999, I wrote the Military Reservist Small Business Relief Act, which was enacted into law during the 106th Congress and authorized the Small Business Administration (SBA) to defer existing loan repayments and to reduce the interest rates on direct loans that may be outstanding, including disaster loans, for small businesses that have had a military reservist called up for active duty. It also established a low-interest economic injury loan program administered by the SBA through its disaster loan program. These loans have been available to provide interim operating capital to any small business when the departure of a military reservist for active duty causes economic injury. According to published reports, more than 10,000 small businesses have applied for these loans since August 2001. However, in today's economy, many small businesses are unable to take on additional debt to continue their operations. These small businesses need immediate tax relief to assist them in hiring a replacement and to pay their reservist worker who is away serving our country. This bill will help every small business whose owner, manager or employee is called to active duty. Most immediately, this bill will assist those small businesses whose employees are in service in Iraq and elsewhere but the act also applies to future contingency operations, military conflicts, or national emergencies. I ask all my colleagues to support this important legislation to help both military reservists and the small businesses they are forced to leave when they are called up for active duty.

Mr. KERRY

Mr. KERRY. Although I was not present to vote on the Energy bill passed last night, I would like the Record to reflect my opposition to the bill and the process by which it was passed. I voted for the Democratic Energy bill, H.R. 4, last Congress. When the same bill came up for a vote last night as S. 14, I was announced against it. The reason is that debate on the Energy bill was closed down prematurely before consideration of important provisions such as renewable portfolio standards, clean air standards, and climate change could even take place. Furthermore, there is no indication that the Senate and House conference committee is going to lead to any type of meaningful bipartisan negotiations. In fact, the Republican leadership has already boasted they will do little if anything to defend the Senate position. Instead, they have announced that intention to rewrite the bill in conference. Apparently the Senate process has little meaning in this regard. It was just a ticket to a conference committee and a free hand in drafting a partisan bill. The Nation needs a progressive, forward-looking energy policy that strengthens our national energy security, safeguards consumers and taxpayers, and protects the environment. Unfortunately, I believe passage of this legislation has put us on a fast track towards creation of an extreme Energy bill in conference that abandons each and every one of those core principles.

Mr. KERRY

Mr. KERRY. Mr. President, tonight the Senate passed implementing legislation for the Chile and Singapore Free Trade Agreements. These FTAs are comprehensive in nature and will serve well the interests of the United States. But they are not without flaws. I want the record to reflect my concerns and, more importantly, I want to make clear that I believe the direction the Bush administration is taking in the on-going negotiations over the Central American Free Trade Agreement and the Free Trade Agreement of the Americas is unacceptable. Chile is an excellent candidate for a free trade agreement. It has one of the fastest growing economies in the world. The agreement the Senate has passed tonight should facilitate a general expansion of American exports, particularly in electronics and transportation equipment industries. This will create good work and good jobs here in America. More broadly, Chile is the first Latin American country to join in a free trade agreement with the United States, and that will allow the United States to more directly support economic and social reform in Latin America and will serve as a major stepping stone for enhanced hemispheric trade and job growth here at home. Singapore is also an excellent candidate. Singapore is our 12th largest export market. The country provides a critical link between the United States and South East Asia and Singapore is the second largest Asian investor in the United States after Japan. Although the economic effects of the Singapore agreement are not likely to be great, this FTA would add a formal economic link to our significant security relationship with Singapore. It is an agreement that will ultimately build greater trade and create jobs here in America. Chile and Singapore both have laudable records in financial regulation and transparency and have demonstrated a commitment to fundamental worker protections. For example, Chile has adopted several international labor rights conventions. The United States, by contrast, has adopted only two. The performance of these two countries in these areas, and their status as models of reform in their respective regions, make these trade agreements desirable. That is not to say these nations are not without problems or that further improvement is not needed. It is to make clear that these nations have made progress, are striving to improve, and that these agreements will only help them develop and enforce more advanced policies. And more importantly, these agreements will not put American workers at risk of unfair competition. But, as I have said, there are flaws with these agreements. Over the past decade, the treatment of labor and environmental issues in trade agreements has evolved both in emphasis and enforcement. NAFTA represents an early stage in this evolution, addressing labor and environmental issues in the context of the agreement, albeit in side accords. The United States-Jordan Free Trade Agreement was the first FTA to include labor provisions in the actual text of the agreement and to subject those provisions to the same dispute settlement procedure as all other elements of the agreement. Although the Chile and Singapore agreements should be the next step forward in this evolution towards strong and effectively enforced labor and environmental standards, they are in fact a step back. Unlike the United States-Jordan FTA, the only labor provision subject to dispute settlement is the requirement that each trading partner enforce its existing labor laws. In addition, the Bush administration, specifically the United States Trade Representative, included provisions in this agreement related to immigration policy. The result is that America will allow the temporary entry of more than 6,000 foreign professionals for employment. This is not wise economic policy in good times and it is only worse economic policy in our current recession. Further, it amends unrelated immigration law, and I believe the Bush administration has abused fast track authority in doing so. The final point I want to make this evening is, in my view, the most important. The Bush administration has made clear that it plans to use the Chile and Singapore FTAs as models or templates for future trade negotiations. I feel strongly that future negotiations must reflect the particular concerns and uniqueness of each trading partner. This seems obvious, but those who follow trade negotiations have warned that the Bush administration may claim that the standards of the Chile and Singapore agreements are universally applicable and, in particular, should apply to CAFTA and FTAA. Let me be as direct as possible: If the CAFTA and FTAA agreements do not include labor and environmental protections that are far, far stronger than the Chile and Singapore agreements I will oppose them as strenuously as I can. The administration's one-size-fits-all approach will not work. Many of the nations considering inclusion in CAFTA and FTAA have no or low standards to protect workers and the environment and enforcement is nonexistent in some areas. Worker and environmental protections in the group of six Central American countries participating in CAFTA are not comparable to those in Singapore and Chile, for example. Some have not enacted or do not enforce basic labor standards that we take for granted, including bans on child and forced labor, non-discrimination and the right of workers to associate and bargain collectively. In Nicaragua and Guatemala employees cannot strike against poor working conditions, pay and benefits without government approval. And it is common for workers seeking better conditions to be physically intimidated and abused. In CAFTA, the Bush administration is running a race to the bottom. Even basic rights, like the right to be protected from physical violence, are cast aside in the name of business profit. That is a policy that exploits not only the people of these Central American nations, but Americans as well. It exploits American workers who are forced to compete hopelessly against companies that abide by no rules whatsoever. Consistent with my long held views on trade, I have made the decision to do what I can to force a change of course in the CAFTA and FTAA negotiations, to ensure that those agreements enshrine, within the four corners of the agreement and with equal standing, specific labor and environmental protections that are fully enforced. I will accept no less. For example, fundamental labor standards like the right of association, the right to collectively bargain, prohibitions against child and forced labor, prohibitions against discrimination and other basic rights must be included. And these provisions must be subject to the same dispute settlement procedure as all other elements of the agreement. I believe that trade is good for America, for our working families and for the international community. A race to the bottom--trade without rules--the sort of trade policy the Bush administration is pursuing in CAFTA and FTAA is not good for America, our workers or the international community, and I will oppose it.

Mr. KERRY

Mr. KERRY. Mr. President, 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. More families are forced to pay more than 50 percent of their income for housing at a time when Federal spending on housing programs are under attack. That is why, along with Senator Chafee, I am again proposing to address the severe shortage of affordable housing by introducing legislation that will establish a National Affordable Housing Trust Fund and begin a rental housing production program. The Affordable Housing Trust Fund that is established in this legislation would create a production program that will ensure 1.5 million new rental units are built over the next 10 years for extremely low-income families and working families. The goal is to create long- term affordable, mixed-income developments in areas with the greatest opportunities for low-income families. Seventy-five percent of Trust Fund assistance will be awarded, based on need, through matching grants to States and local jurisdictions. The States and local jurisdictions will allocate funds on a competitive basis to projects that meet Federal requirements, such as mixed-income projects and long-term affordability, and that address local needs. The remainder of the funding will be competitively awarded by the Department of Housing and Urban Development, HUD, to intermediaries, such as the Enterprise Foundation, which will be required to leverage private funds. A portion of the Trust Fund will be used to promote home ownership activities for low-income Americans. The Trust Fund would be paid for out of surplus revenue generated by the Federal Housing Administration and Government National Mortgage Administration after ensuring their fiscal safety and soundness. These Federal housing programs generate billions of dollars in excess income, which currently goes to the general Treasury for use on other Federal priorities. It is time to stop taking housing money out of housing programs. These excess funds should be used to help alleviate the current housing crisis. According to current projections, approximately $28 billion will be available for the Trust Fund between now and 2008. The need for affordable housing is severe. Many working families have been unable to keep up with the increase in housing costs. Today, for many low-income families and their children, the cost of privately owned rental housing is simply out of reach. According to the National Housing Conference, more than 14 million families spent over half of their income on housing in 2001. Today, working families in this country increasingly find themselves unable to afford housing. A person trying to live in Boston would have to make more than $35,000 annually, just to afford a two-bedroom apartment. This means teachers, janitors, social workers, police officers and other full-time workers may have trouble affording even a modest two-bedroom apartment. The cost of rental housing keeps going up. According to the Consumer Price Index, CPI, contract rents began to rise above the rate of inflation in 1997 and have continued every year since. Rental costs have outpaced renter income gains for households across the board. Low wage workers have been hardest hit by the increase in cost of rental housing. Because of the lack of affordable housing, too many families are forced to live in substandard living conditions putting their children at risk. Children living in substandard housing are more likely to experience violence, hunger, lead poisoning and to suffer from infectious diseases such as asthma. They are more likely to have difficulties learning and more likely to fall behind in school. Our Nation's children depend upon access to affordable rental housing. At the same time the cost of rental housing has been increasing, there has been a significant decrease in affordable rental housing units. More than 1.8 million affordable housing units have been demolished over the past decade. Making matters worse, many current affordable housing providers are deciding to opt-out of their Section 8 contracts or are prepaying their HUD-insured mortgages. These decisions have further limited the availability of affordable housing across the country. Many more providers will be able to opt-out of their Section 8 contracts in the next few years, further limiting the availability of affordable housing in our nation. The current decline has already forced many working families eligible for Section 8 vouchers in Boston to live outside the city because there are no available rental housing units which accept vouchers. The loss of affordable housing has exacerbated the housing crisis in this country, and the Federal Government must take action. We have the resources, yet we are not devoting these resources to fix the problem. Despite the fact that more families are unable to afford housing and there are fewer affordable rental housing units, we have decreased Federal spending on critical housing programs. Between 1978 and 1995, the number of households receiving Federal housing assistance was increased by almost 3 million. From 1978 through 1984, an additional 230,000 families received Federal housing assistance each year. This number dropped significantly to 126,000 additional households each year from 1985 through 1995. In 1996, this nation's housing policy went all the way back to square one-- not only was there no increase in families receiving housing assistance, but the number of assisted units actually decreased. From 1996 to 1998, the number of HUD assisted households dropped by 51,000. During this time of rising rents, increased housing costs, and the loss of affordable housing units, it is incomprehensible that we are not doing more to increase the amount of housing assistance available to working families. Yet in the face of these critical housing problems and the effect it has on our children, the Bush Administration is working to dismantle many federal programs that help Americans find affordable housing. The Bush Administration has proposed to block grant the Section 8 Voucher program, which I believe will reduce the number of families with children eligible for Federal housing assistance and increase housing costs for those families who remain. A recent Center on Budget and Policy Priorities study that shows President Bush's fiscal year 2004 budget request is inadequate to fund all Section 8 housing vouchers needed in fiscal year 2004. Specifically, the lack of funding in the voucher program request means that approximately 184,000 vouchers now in use serving low-income families will not be funded. In Massachusetts, this would mean a reduction of more than 6,000 vouchers or nearly ten percent of the vouchers projected to be in use in October 2003. If the President's request is enacted into law, the Center on Budget and Policy Priorities believes that it is likely that some families that now rely on vouchers to help pay their rent will lose assistance, placing these families at high risk of eviction and, in some cases, homelessness. President Bush's fiscal year 2004 budget request also proposes cutting an additional $2.45 billion from existing housing programs and eliminating the HOPE VI program, which has helped revitalize neighborhoods around the country. These cuts come on top of an earlier Bush Administration action to abolish the Public Housing Drug Elimination Grant program. The Bush Administration changes in Federal housing programs mean that the Commonwealth of Massachusetts and many other States will likely receive a reduction in Federal housing funds in fiscal year 2004. Almost every State is facing serious budget deficits and are forced to dramatically increase spending on homeland security. Additional funds are not available to make up the decline in Federal spending. The future is even bleaker. These reductions at HUD follow the enactment of two separate tax cuts, which primarily benefit the wealthiest in our society, that will make it almost impossible for any significant increases in the HUD's budget over the next decade. We need to bring housing resources back to where they belong. The National Affordable Housing Trust Fund will provide desperately needed funds to begin production of affordable housing in the United States. Enacting the Housing Trust Fund legislation is an important step in the right direction to add resources to housing and to help begin producing housing again. We can no longer ignore the shortage of affordable housing in America, and the impact it is having on families and children around the country. It is still unclear to me why this lack of housing has not caused more uproar. How many families are to be pushed out of their homes and into the streets, before action is taken. I believe it is time for our nation to take a new path--one that ensures that all Americans, especially our children, has the opportunity to live in decent, affordable and safe housing. Everyone knows that decent housing, along with neighborhood and living environment, play enormous roles in shaping young lives. Federal housing assistance, has assisted millions of low-income children across the nation and has helped develop stable home environments. However, too many children still live in families that have substandard housing or are homeless. These children are less likely to do well in school and less likely to be productive citizens. Because of the positive effect that this legislation would have on America's children, the Trust Fund was included in the Act to Leave No Child Behind, a comprehensive proposal by the Children's Defense Fund to assist in the development of our nation's children. I urge you to support this legislation to restore our commitment to provide affordable housing for all families. We can no longer turn our backs on those who struggle every day just to put a roof over their family's head.

Mr. KERRY

Mr. KERRY. Mr. President, 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. More families are forced to pay more than 50 percent of their income for housing at a time when Federal spending on housing programs are under attack. That is why, along with Senator Chafee, I am again proposing to address the severe shortage of affordable housing by introducing legislation that will establish a National Affordable Housing Trust Fund and begin a rental housing production program. The Affordable Housing Trust Fund that is established in this legislation would create a production program that will ensure 1.5 million new rental units are built over the next 10 years for extremely low-income families and working families. The goal is to create long- term affordable, mixed-income developments in areas with the greatest opportunities for low-income families. Seventy-five percent of Trust Fund assistance will be awarded, based on need, through matching grants to States and local jurisdictions. The States and local jurisdictions will allocate funds on a competitive basis to projects that meet Federal requirements, such as mixed-income projects and long-term affordability, and that address local needs. The remainder of the funding will be competitively awarded by the Department of Housing and Urban Development, HUD, to intermediaries, such as the Enterprise Foundation, which will be required to leverage private funds. A portion of the Trust Fund will be used to promote home ownership activities for low-income Americans. The Trust Fund would be paid for out of surplus revenue generated by the Federal Housing Administration and Government National Mortgage Administration after ensuring their fiscal safety and soundness. These Federal housing programs generate billions of dollars in excess income, which currently goes to the general Treasury for use on other Federal priorities. It is time to stop taking housing money out of housing programs. These excess funds should be used to help alleviate the current housing crisis. According to current projections, approximately $28 billion will be available for the Trust Fund between now and 2008. The need for affordable housing is severe. Many working families have been unable to keep up with the increase in housing costs. Today, for many low-income families and their children, the cost of privately owned rental housing is simply out of reach. According to the National Housing Conference, more than 14 million families spent over half of their income on housing in 2001. Today, working families in this country increasingly find themselves unable to afford housing. A person trying to live in Boston would have to make more than $35,000 annually, just to afford a two-bedroom apartment. This means teachers, janitors, social workers, police officers and other full-time workers may have trouble affording even a modest two-bedroom apartment. The cost of rental housing keeps going up. According to the Consumer Price Index, CPI, contract rents began to rise above the rate of inflation in 1997 and have continued every year since. Rental costs have outpaced renter income gains for households across the board. Low wage workers have been hardest hit by the increase in cost of rental housing. Because of the lack of affordable housing, too many families are forced to live in substandard living conditions putting their children at risk. Children living in substandard housing are more likely to experience violence, hunger, lead poisoning and to suffer from infectious diseases such as asthma. They are more likely to have difficulties learning and more likely to fall behind in school. Our Nation's children depend upon access to affordable rental housing. At the same time the cost of rental housing has been increasing, there has been a significant decrease in affordable rental housing units. More than 1.8 million affordable housing units have been demolished over the past decade. Making matters worse, many current affordable housing providers are deciding to opt-out of their Section 8 contracts or are prepaying their HUD-insured mortgages. These decisions have further limited the availability of affordable housing across the country. Many more providers will be able to opt-out of their Section 8 contracts in the next few years, further limiting the availability of affordable housing in our nation. The current decline has already forced many working families eligible for Section 8 vouchers in Boston to live outside the city because there are no available rental housing units which accept vouchers. The loss of affordable housing has exacerbated the housing crisis in this country, and the Federal Government must take action. We have the resources, yet we are not devoting these resources to fix the problem. Despite the fact that more families are unable to afford housing and there are fewer affordable rental housing units, we have decreased Federal spending on critical housing programs. Between 1978 and 1995, the number of households receiving Federal housing assistance was increased by almost 3 million. From 1978 through 1984, an additional 230,000 families received Federal housing assistance each year. This number dropped significantly to 126,000 additional households each year from 1985 through 1995. In 1996, this nation's housing policy went all the way back to square one-- not only was there no increase in families receiving housing assistance, but the number of assisted units actually decreased. From 1996 to 1998, the number of HUD assisted households dropped by 51,000. During this time of rising rents, increased housing costs, and the loss of affordable housing units, it is incomprehensible that we are not doing more to increase the amount of housing assistance available to working families. Yet in the face of these critical housing problems and the effect it has on our children, the Bush Administration is working to dismantle many federal programs that help Americans find affordable housing. The Bush Administration has proposed to block grant the Section 8 Voucher program, which I believe will reduce the number of families with children eligible for Federal housing assistance and increase housing costs for those families who remain. A recent Center on Budget and Policy Priorities study that shows President Bush's fiscal year 2004 budget request is inadequate to fund all Section 8 housing vouchers needed in fiscal year 2004. Specifically, the lack of funding in the voucher program request means that approximately 184,000 vouchers now in use serving low-income families will not be funded. In Massachusetts, this would mean a reduction of more than 6,000 vouchers or nearly ten percent of the vouchers projected to be in use in October 2003. If the President's request is enacted into law, the Center on Budget and Policy Priorities believes that it is likely that some families that now rely on vouchers to help pay their rent will lose assistance, placing these families at high risk of eviction and, in some cases, homelessness. President Bush's fiscal year 2004 budget request also proposes cutting an additional $2.45 billion from existing housing programs and eliminating the HOPE VI program, which has helped revitalize neighborhoods around the country. These cuts come on top of an earlier Bush Administration action to abolish the Public Housing Drug Elimination Grant program. The Bush Administration changes in Federal housing programs mean that the Commonwealth of Massachusetts and many other States will likely receive a reduction in Federal housing funds in fiscal year 2004. Almost every State is facing serious budget deficits and are forced to dramatically increase spending on homeland security. Additional funds are not available to make up the decline in Federal spending. The future is even bleaker. These reductions at HUD follow the enactment of two separate tax cuts, which primarily benefit the wealthiest in our society, that will make it almost impossible for any significant increases in the HUD's budget over the next decade. We need to bring housing resources back to where they belong. The National Affordable Housing Trust Fund will provide desperately needed funds to begin production of affordable housing in the United States. Enacting the Housing Trust Fund legislation is an important step in the right direction to add resources to housing and to help begin producing housing again. We can no longer ignore the shortage of affordable housing in America, and the impact it is having on families and children around the country. It is still unclear to me why this lack of housing has not caused more uproar. How many families are to be pushed out of their homes and into the streets, before action is taken. I believe it is time for our nation to take a new path--one that ensures that all Americans, especially our children, has the opportunity to live in decent, affordable and safe housing. Everyone knows that decent housing, along with neighborhood and living environment, play enormous roles in shaping young lives. Federal housing assistance, has assisted millions of low-income children across the nation and has helped develop stable home environments. However, too many children still live in families that have substandard housing or are homeless. These children are less likely to do well in school and less likely to be productive citizens. Because of the positive effect that this legislation would have on America's children, the Trust Fund was included in the Act to Leave No Child Behind, a comprehensive proposal by the Children's Defense Fund to assist in the development of our nation's children. I urge you to support this legislation to restore our commitment to provide affordable housing for all families. We can no longer turn our backs on those who struggle every day just to put a roof over their family's head.

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to express my support for S. 253, the Law Enforcement Officers Safety Act. This groundbreaking legislation will enable law enforcement officers to protect themselves and our communities, wherever they are, whenever they are needed. This legislation authorizes off-duty and qualified retired officers to carry a firearm anywhere in the Nation to help ensure the safety and well-being of law abiding citizens. While I strongly support this goal, I hope that amendments on the Senator floor will add additional common sense restrictions to the bill. Today, the authority of off-duty police officer to carry concealed weapons varies widely from State to State. This complex patchwork of Federal, State and local laws places an undue and unnecessary limitation on professionals sworn to defend the public interest. The Law Enforcement Officers Safety Act would allow active law enforcement officers to carry their weapons while traveling outside their own jurisdiction, anywhere in the country. However, the bill also preserves State laws that restrict the carrying of concealed weapons on private or government property. Although we need to supplement the nationwide effort to increase security, it is critical that enactment of such legislation be limited to current licensed professionals. This new authority to carry concealed firearms should complement existing duty of police officers to protect their communities however, it must also provide clear channels of accountability. I hope that the Senate will consider including the following common sense restrictions to improve this legislation for our officers and our citizens. First, we should limit this new authority to currently employed law enforcement officers. This will allow for reliable oversight by State and local authorities. We should also restrict the off-duty officer's firearm selection to handguns. This will reduce the potential for abuse and the unnecessary violence that high powered weapons may induce. We should also prevent off-duty officers from carrying weapons in places where alcohol is served. Clearly, guns and alcohol are a deadly combination, even in the hands of trained professionals. Finally, even as we take comfort in the greater protection this legislation will provide, we must not lose sight of the fact that there is no substitute for a uniformed, on-duty police officer. The reluctance of the administration to provide adequate State fiscal relief has forced many police departments to downsize their police forces at a time when they have never been in greater demand. In addition, the inadequate funding of First Responders within the Homeland Security Department puts even greater strain on police departments and threatens our national security. Furthermore, the decision by Congress and this administration to deny level funding for the successful Community Oriented Policing program is a betrayal of the very communities that the Law Enforcement Officers Safety Act is designed to protect. Though there is much to be gained by supplementing community security with armed and trained citizens, there is also much to be lost by law enforcement entities are not fully funded. I intend to support the Law Enforcement Officer's Safety Act. It is my hope that this is only the first step to giving those responsible for our protection the tools and resources that are necessary to uphold their oath.

Mr. KERRY

Mr. KERRY. Mr. President, the Senate will soon consider implementing legislation for the Chile and Singapore Free Trade Agreements. These FTAs are comprehensive in nature and will serve well the interests of the United States and these two very important trading partners. However, I am increasingly concerned with the notion that the Chile and Singapore FTAs should serve as models or templates for future trade negotiations. I feel strongly that future negotiations must reflect the particular concerns and uniqueness of each trading partner. This seems obvious, but those who follow trade negotiations have warned that the Bush administration may claim that the standards of the Chile and Singapore agreements are universally applicable. I hope those warnings are wrong because provisions that are acceptable given the circumstances in Chile and Singapore may not be acceptable in agreements with countries in very different situations. International trade enhances economic opportunity and can serve to improve workers' rights. As such, future trade agreements must build upon the progress made to date by including comprehensive worker protections and strong enforcement provisions. Over the past decade, the treatment of labor and environmental issues in trade agreements has evolved both in emphasis and enforcement. NAFTA represents an early stage in this evolution, addressing labor and environmental issues in the context of the agreement, albeit in side accords. The United States-Jordan Free Trade Agreement was the first FTA to include labor provisions in the actual text of the agreement and to subject those provisions to the same dispute settlement procedure as all other elements of the agreement. Although the Chile and Singapore agreements should be the next step forward in this evolution towards strong and effectively enforced labor and environmental standards, they are in fact a step back. Unlike the United States-Jordan FTA, the only labor provision subject to dispute settlement is the requirement that each trading partner enforce its existing labor laws. Furthermore, there is no enforcement mechanism to ensure that Chile and Singapore will strive to uphold basic international labor rights. As we pursue future trade agreements, we must encourage policies that avoid a downward spiral in working or environmental conditions. Trade agreements must be a catalyst to improve these standards. To achieve this end, American trade policy must be flexible: we must maintain a broad adherence to basic principles and at the same time address the unique characteristics of each trading partner. Maintaining this flexibility is of utmost importance in our ongoing trade negotiations with six Central American countries. These countries provide an entirely different set of political and economic conditions than Chile, Singapore, and our other FTA partners. The administration must not ignore the fact that critical differences exist between the CAFTA countries and Chile and Singapore in labor and environmental areas. A fully enforceable obligation to adopt and enforce basic labor standards will improve the broader socioeconomic dynamics in Central America. I have recently written to Ambassador Zoellick on this topic, along with Senators Baucus, Bingaman, and Jeffords. We expressed concern that the labor rights situation in a number of the Central American countries presents concerns of a significant degree different from those underlying the negotiations of the United States-Singapore and United States-Chile FTAs and urged that the CAFTA negotiations ought not be tied to previously negotiated agreements. I will monitor progress of future trade negotiations closely and fully expect to see substantial progress in several areas. In particular, the inclusion of basic worker protections, as well as strong monitoring and enforcement provisions, are necessary to meet the challenges of an inclusive and progressive trade policy.

Mr. KERRY

Mr. KERRY. Madam President, today I introduce a bill that would help give our most highly honored veterans a medal more worthy of their bravery and sacrifice by requiring the use of 90 percent gold in the Congressional Medal of Honor instead of gold-plated brass, as is currently used. The Congressional Medal of Honor is the highest award our country bestows for valor in action against an enemy force. These are ordinary soldiers who performed extraordinary deeds in battle, often giving what President Lincoln termed ``the final full measure'' in doing so. This is the medal won by Marine Corps pilot, Captain Joe Foss, who in less than 30 days of combat over Guadalcanal, shot down 23 enemy planes, three in one engagement, and is credited with turning-back an entire Japanese bombing mission before it could drop a single bomb. This is the medal won by Army Private Edward Moskala who set aside his personal safety one night on the Island of Okinawa to assault two machine gun nests, provide cover for his unit as it withdrew, and rescue fallen comrades amidst a hail of enemy fire before finally suffering a mortal wound. This is the medal won by Pharmacist's Mate First Class Francis Pierce, Jr., who on the island of Iwo Jima exposed himself repeatedly to enemy fire to save the lives of Marines he accompanied, traversing open terrain to rescue comrades and assaulting enemy positions that endangered his wounded comrades. This is the medal won by Marine Corps Second Lieutenant Robert Dale Reem, who on the night of November 6, 1950, after leading three separate assaults on an enemy position in the vicinity of Chinhung-ni, Korea, threw himself on top of an enemy grenade that landed amidst his men. This is the medal won by Air Force Captain Hilliard A. Wilbanks who made repeated strafing runs over an advancing enemy element near Dalat, Republic of Vietnam on February 24, 1967. Captain Wilbanks' aircraft, it should be noted, was neither armed nor armored. He made the assaults by sticking his rifle out the window and flying low over the enemy. His action saved the lives of friendly forces, but it cost him his own. The feats that earned these medals are the stuff of legend. But they are not legends. They are actual deeds that inspire humility and gratitude in all of us. In bestowing the Congressional Medal of Honor, the president enrolls the recipient in a sacred club of heroes. Regrettably, the medal itself, though gold in color, is actually brass plated with gold. It costs only about $30 to craft the award itself. I will be the first to tell you that the value of the Congressional Medal of Honor is not in the metal content of the award, but in the deeds done to earn it. But if you compare the $30 we invest in this, our Nation's highest award for valor, with the $30,000 Congressional medals presented to foreign dignitaries, famous singers, and other civilians, you will agree that we can do better. Put simply, this legislation will forge a medal more worthy of the esteem with which the nation holds those few who have earned the Congressional Medal of Honor through valor and heroism beyond compare. I ask unanimous consent that the text of the bill be printed in the Record. There being no objections, the bill was ordered to be printed in the Record, as follows:

Mr. KERRY

Mr. KERRY. Madam President, today I introduce a bill that would help give our most highly honored veterans a medal more worthy of their bravery and sacrifice by requiring the use of 90 percent gold in the Congressional Medal of Honor instead of gold-plated brass, as is currently used. The Congressional Medal of Honor is the highest award our country bestows for valor in action against an enemy force. These are ordinary soldiers who performed extraordinary deeds in battle, often giving what President Lincoln termed ``the final full measure'' in doing so. This is the medal won by Marine Corps pilot, Captain Joe Foss, who in less than 30 days of combat over Guadalcanal, shot down 23 enemy planes, three in one engagement, and is credited with turning-back an entire Japanese bombing mission before it could drop a single bomb. This is the medal won by Army Private Edward Moskala who set aside his personal safety one night on the Island of Okinawa to assault two machine gun nests, provide cover for his unit as it withdrew, and rescue fallen comrades amidst a hail of enemy fire before finally suffering a mortal wound. This is the medal won by Pharmacist's Mate First Class Francis Pierce, Jr., who on the island of Iwo Jima exposed himself repeatedly to enemy fire to save the lives of Marines he accompanied, traversing open terrain to rescue comrades and assaulting enemy positions that endangered his wounded comrades. This is the medal won by Marine Corps Second Lieutenant Robert Dale Reem, who on the night of November 6, 1950, after leading three separate assaults on an enemy position in the vicinity of Chinhung-ni, Korea, threw himself on top of an enemy grenade that landed amidst his men. This is the medal won by Air Force Captain Hilliard A. Wilbanks who made repeated strafing runs over an advancing enemy element near Dalat, Republic of Vietnam on February 24, 1967. Captain Wilbanks' aircraft, it should be noted, was neither armed nor armored. He made the assaults by sticking his rifle out the window and flying low over the enemy. His action saved the lives of friendly forces, but it cost him his own. The feats that earned these medals are the stuff of legend. But they are not legends. They are actual deeds that inspire humility and gratitude in all of us. In bestowing the Congressional Medal of Honor, the president enrolls the recipient in a sacred club of heroes. Regrettably, the medal itself, though gold in color, is actually brass plated with gold. It costs only about $30 to craft the award itself. I will be the first to tell you that the value of the Congressional Medal of Honor is not in the metal content of the award, but in the deeds done to earn it. But if you compare the $30 we invest in this, our Nation's highest award for valor, with the $30,000 Congressional medals presented to foreign dignitaries, famous singers, and other civilians, you will agree that we can do better. Put simply, this legislation will forge a medal more worthy of the esteem with which the nation holds those few who have earned the Congressional Medal of Honor through valor and heroism beyond compare. I ask unanimous consent that the text of the bill be printed in the Record. There being no objections, the bill was ordered to be printed in the Record, as follows:

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 introducing a three-year reauthorization bill for the Small Business Administration's programs. These programs help small businesses, often called the engine of the American economy, 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. Having worked closely 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 seven 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 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 will likely serve the Small Business Administration and the entire small-business community well past even the next reauthorization period. Over the past three 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 programs aimed at fostering small businesses and the economic activity they bring about. While many of us 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 cyclical 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 six years. Their proposal includes no adjustment for inflation or demand, despite SBA's own numbers that show demand is up for its programs. It is 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 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 programs that have worked for years, redirects those that have struggled and sets the SBA and up for continued success. Although banks have plenty of cash to lend, small businesses are still having a problem getting access to credit. 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 in SBA's largest lending program for working capital. Lending is up in SBA's microloan program, which serves those with the least access to capital through the private sector. And SBA's venture capital programs account for a significant role--more than 50 percent-- in this country's investment in our fastest-growing small businesses. Last year these loans 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 at least 400,000 jobs. As the Committee reviewed 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 SBA's lending and venture capital programs at increasing levels for the next three years. I am particularly pleased with the increased funding levels for the microloan programs. 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 Adminstration'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 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. SBA needs to fully fund these programs and put more resources into the office that manages the program. Four people is not enough to manage 1,400 loans and 180 grants. Aside from setting the levels for each small business financial assistance program, we made important program changes and started new initiatives. In the 7(a) loan program, SBA's largest loan program, which provides working capital to small businesses 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 office 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. I want to make clear while I want to avoid unnecessary paperwork and eliminate reported abuses, I do not want the lenders to take this as authority to quit working with the district directors. 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. For this purpose I have included a provision which 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 SBA to pool and sell the guaranteed portion of loans with varied rates. Currently SBA has the authority to only sell those loans with identical rates. This should create efficiencies in market and bring down borrowing costs for the small business borrower. 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 form 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 also raised the debenture size to keep pace with the rising cost of commercial real estate and equipment. We have brought the job requirement standard up from $35,000 to $50,000 after ten or twelve years. We have directed 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 testimony of one of our witnesses during the reauthorization process. We have 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 three 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 an input on the pilot. The more research I've done, the more I've 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 child care suppliers available in needy areas, from the most urban to the most rural. Giving these businesses access to 504 loans for three years will allow us to gauge whether this valuable loan program is the best way to aid these valuable providers of care to our Nation's children. 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 one thousand families on the waiting list in Nevada and Maine to more than thirty thousand 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 the concerns of those who are concerned about the precedent of SBA lending to non-profits. And I agree it should not be expanded to all industries. However, this is a very unique industry that in many States is delivered mostly through non-profits, and the only way to penetrate the market is to reach both for-profit and non- profit. Further, non-profits are usually the providers that care for the neediest kids. I have added provisions to ensure 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 business to mean 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 older children after school. At Senator Snowe's request, the pilot is limited to 7 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. The bill also includes a comprehensive study by the GAO to track and monitor the impact of this program both on the industry and the program. Last, I want to remind my colleagues that the 504 program is funded entirely through fees and does not require appropriations. Also included in this bill is S. 318, the Small Business Drought Relief Act. This simply reinforces in legislation something which 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. However, 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 in effect drought disaster declarations in 36 states. That number had grown to 48 the beginning of this year, demonstrating that problem had gotten worse and even more small businesses were in need. As I have said time and again, the SBA has the authority to help all small businesses hurt by drought in declared disaster areas, but the Agency won't 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 SBA to comply with existing law, restoring fairness to an unfair system, and get help to small business drought victims that need it. I thank Senator Bond for working with me on this when he was the Ranking Member of the Committee on Small Business & Entrepreneurship, and I thank 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 where it is so dry that the water level is down and small businesses are losing business and making expensive changes to extend docks to reach the water. In this bill are also provisions to shore up 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 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 SBA and the investors are treated more fairly and the taxpayers 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. We have clarified that new markets venture capital companies have two years to raise their matching capital, as Congress intended. The Committee has been troubled by the Agency's interpretation of the NMVC statute which they viewed as permitting SBA to choose how much time it can give conditionally approved NMVCs to raise the private-sector matching money. The chosen time frames were unreasonable and not what Congress intended. We have also included many measures to strengthen SBA's oversight of lenders, responding to findings by the General Accounting Office and the Office of Inspector General. 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 access to capital plays in the success of small businesses, as SBA Administration 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 five years because of lack of `knowledge' of key business skills.'' Despite the recognized importance of such assistance, the SBA's funding request for FY 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 six-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. 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 reauthoziation process. Rarely do women entrepreneurs get the recognition and attention they deserve for their contributions to our economy: 18 million Americans would be without jobs today if it weren't for these entrepreneurs who had the courage and the vision to strike out of 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 three-year ``renewal'' grants for those centers with sustainability grants and four-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 Council, 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. 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 Business Council. This bill also supports and protects the Small Business Development Center network, which has served 9 million 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 provide 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 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. Included in our bill are increased 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 SBDCs that have been adversely affected by poor economic conditions or government downsizing. 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 nearly 11,000 volunteers, and a technical change to allow SCORE to keep its modest staff of fourteen employees. I want to 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 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. 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 just service-disable veterans, to veterans, reservists and service-disable 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. 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 less 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 contract bundling, also called contract consolidation, are included in this bill. The first provision creates a two-tiered approach to preventing unnecessary contract consolidation. Civilian agencies will be required to meet specific standards if they attempt to consolidate contracts above $2 million and additional requirements for those contracts above $5 million. The Department of Defense is required to meet two types of similar requirements for contracts above $5 million and $7 million. The bill also eliminates the use of the term ``contract bundling'' and expands the definition of ``contract consolidation,'' closing a loophole that has been widely used and has detrimentally affected small businesses. The second provision increases in the number of Procurement Center Representatives (PCRs) stationed throughout the country. These representatives advocate on behalf of small businesses in cases directly affecting contracting, such as the bundling or consolidation of contracts. In the bill, we have increased the number of PCRs to ensure that every state and every major procurement center is allocated at least one 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 each of this Committee's three Roundtables on Reauthorization 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; will hold senior executives and senior program managers accountable in their annual performance evaluations for small business utilization in Federal contract awards. In addition to increasing opportunities for prime contracts, this bill addresses another serious problem: small businesses have been severely hamstrung by dishonest practices by some businesses that have prime contracts with the Federal Government and receive preference over other prime contractors due to their superior 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. This 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 penalty 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. I commend Senator Snowe for her diligence in creating these strict penalties and her efforts to create a bipartisan response to protect small businesses. I want to thank Chairwoman Snowe and her able staff for all of their hard work over the past several months. I also want to express my gratitude to all members of the Committee and urge them and my other Senate colleagues to support the Small Business Administration 50th Anniversary Reauthorization Act of 2003.

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 introducing a three-year reauthorization bill for the Small Business Administration's programs. These programs help small businesses, often called the engine of the American economy, 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. Having worked closely 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 seven 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 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 will likely serve the Small Business Administration and the entire small-business community well past even the next reauthorization period. Over the past three 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 programs aimed at fostering small businesses and the economic activity they bring about. While many of us 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 cyclical 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 six years. Their proposal includes no adjustment for inflation or demand, despite SBA's own numbers that show demand is up for its programs. It is 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 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 programs that have worked for years, redirects those that have struggled and sets the SBA and up for continued success. Although banks have plenty of cash to lend, small businesses are still having a problem getting access to credit. 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 in SBA's largest lending program for working capital. Lending is up in SBA's microloan program, which serves those with the least access to capital through the private sector. And SBA's venture capital programs account for a significant role--more than 50 percent-- in this country's investment in our fastest-growing small businesses. Last year these loans 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 at least 400,000 jobs. As the Committee reviewed 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 SBA's lending and venture capital programs at increasing levels for the next three years. I am particularly pleased with the increased funding levels for the microloan programs. 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 Adminstration'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 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. SBA needs to fully fund these programs and put more resources into the office that manages the program. Four people is not enough to manage 1,400 loans and 180 grants. Aside from setting the levels for each small business financial assistance program, we made important program changes and started new initiatives. In the 7(a) loan program, SBA's largest loan program, which provides working capital to small businesses 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 office 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. I want to make clear while I want to avoid unnecessary paperwork and eliminate reported abuses, I do not want the lenders to take this as authority to quit working with the district directors. 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. For this purpose I have included a provision which 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 SBA to pool and sell the guaranteed portion of loans with varied rates. Currently SBA has the authority to only sell those loans with identical rates. This should create efficiencies in market and bring down borrowing costs for the small business borrower. 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 form 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 also raised the debenture size to keep pace with the rising cost of commercial real estate and equipment. We have brought the job requirement standard up from $35,000 to $50,000 after ten or twelve years. We have directed 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 testimony of one of our witnesses during the reauthorization process. We have 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 three 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 an input on the pilot. The more research I've done, the more I've 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 child care suppliers available in needy areas, from the most urban to the most rural. Giving these businesses access to 504 loans for three years will allow us to gauge whether this valuable loan program is the best way to aid these valuable providers of care to our Nation's children. 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 one thousand families on the waiting list in Nevada and Maine to more than thirty thousand 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 the concerns of those who are concerned about the precedent of SBA lending to non-profits. And I agree it should not be expanded to all industries. However, this is a very unique industry that in many States is delivered mostly through non-profits, and the only way to penetrate the market is to reach both for-profit and non- profit. Further, non-profits are usually the providers that care for the neediest kids. I have added provisions to ensure 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 business to mean 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 older children after school. At Senator Snowe's request, the pilot is limited to 7 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. The bill also includes a comprehensive study by the GAO to track and monitor the impact of this program both on the industry and the program. Last, I want to remind my colleagues that the 504 program is funded entirely through fees and does not require appropriations. Also included in this bill is S. 318, the Small Business Drought Relief Act. This simply reinforces in legislation something which 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. However, 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 in effect drought disaster declarations in 36 states. That number had grown to 48 the beginning of this year, demonstrating that problem had gotten worse and even more small businesses were in need. As I have said time and again, the SBA has the authority to help all small businesses hurt by drought in declared disaster areas, but the Agency won't 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 SBA to comply with existing law, restoring fairness to an unfair system, and get help to small business drought victims that need it. I thank Senator Bond for working with me on this when he was the Ranking Member of the Committee on Small Business & Entrepreneurship, and I thank 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 where it is so dry that the water level is down and small businesses are losing business and making expensive changes to extend docks to reach the water. In this bill are also provisions to shore up 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 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 SBA and the investors are treated more fairly and the taxpayers 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. We have clarified that new markets venture capital companies have two years to raise their matching capital, as Congress intended. The Committee has been troubled by the Agency's interpretation of the NMVC statute which they viewed as permitting SBA to choose how much time it can give conditionally approved NMVCs to raise the private-sector matching money. The chosen time frames were unreasonable and not what Congress intended. We have also included many measures to strengthen SBA's oversight of lenders, responding to findings by the General Accounting Office and the Office of Inspector General. 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 access to capital plays in the success of small businesses, as SBA Administration 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 five years because of lack of `knowledge' of key business skills.'' Despite the recognized importance of such assistance, the SBA's funding request for FY 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 six-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. 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 reauthoziation process. Rarely do women entrepreneurs get the recognition and attention they deserve for their contributions to our economy: 18 million Americans would be without jobs today if it weren't for these entrepreneurs who had the courage and the vision to strike out of 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 three-year ``renewal'' grants for those centers with sustainability grants and four-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 Council, 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. 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 Business Council. This bill also supports and protects the Small Business Development Center network, which has served 9 million 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 provide 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 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. Included in our bill are increased 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 SBDCs that have been adversely affected by poor economic conditions or government downsizing. 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 nearly 11,000 volunteers, and a technical change to allow SCORE to keep its modest staff of fourteen employees. I want to 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 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. 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 just service-disable veterans, to veterans, reservists and service-disable 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. 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 less 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 contract bundling, also called contract consolidation, are included in this bill. The first provision creates a two-tiered approach to preventing unnecessary contract consolidation. Civilian agencies will be required to meet specific standards if they attempt to consolidate contracts above $2 million and additional requirements for those contracts above $5 million. The Department of Defense is required to meet two types of similar requirements for contracts above $5 million and $7 million. The bill also eliminates the use of the term ``contract bundling'' and expands the definition of ``contract consolidation,'' closing a loophole that has been widely used and has detrimentally affected small businesses. The second provision increases in the number of Procurement Center Representatives (PCRs) stationed throughout the country. These representatives advocate on behalf of small businesses in cases directly affecting contracting, such as the bundling or consolidation of contracts. In the bill, we have increased the number of PCRs to ensure that every state and every major procurement center is allocated at least one 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 each of this Committee's three Roundtables on Reauthorization 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; will hold senior executives and senior program managers accountable in their annual performance evaluations for small business utilization in Federal contract awards. In addition to increasing opportunities for prime contracts, this bill addresses another serious problem: small businesses have been severely hamstrung by dishonest practices by some businesses that have prime contracts with the Federal Government and receive preference over other prime contractors due to their superior 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. This 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 penalty 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. I commend Senator Snowe for her diligence in creating these strict penalties and her efforts to create a bipartisan response to protect small businesses. I want to thank Chairwoman Snowe and her able staff for all of their hard work over the past several months. I also want to express my gratitude to all members of the Committee and urge them and my other Senate colleagues to support the Small Business Administration 50th Anniversary Reauthorization Act of 2003.

Mr. KERRY

Mr. KERRY. Mr. President, I have been a long-standing supporter of the Olmstead decision to end the institutional bias in care for people with disabilities. Unfortunately, States have been slow to implement this landmark decision. To better help States in this effort, I am proud to say that I am an original cosponsor of Senator Harkin's MiCASSA legislation, S. 971, the Medicaid Community-Based Attendant Services and Supports Act of 2003, a bill to ensure that ``the money follows the people'' and that true choice is granted for people with disabilities to decide whether they wish to live in their own communities instead of being institutionalized. The bill also provides major Federal resources to assist States with the costs of paying for community-based attendant and support services. Had I been present for the vote, I would have voted against the motion to table the Harkin amendment and would have voted in favor of its inclusion in the Medicare prescription drug bill.

Mr. KERRY

Mr. KERRY. Mr. President, I wish to express my enthusiastic support for the amendment Senators Schumer and Santorum offered to increase funding for the Medicare+Choice Program in 2004 and 2005. This amendment addresses a critically important issue that has far-reaching implications affecting the health care benefits of millions of low- income and minority seniors. I am pleased to be a cosponsor of this amendment to ensure that this urgently needed funding increase is included in the Medicare bill. I believe we must take bold action to address the fact that Congress has not provided adequate funding for the health care of Medicare beneficiaries who select HMOs and other private sector health plans. In many parts of Massachusetts, and in other parts of the country, funding for Medicare+Choice plans has been limited to annual increases of only 2 percent in most years since 1998. These increase are inadequate at a time when health care costs are rising by 8 to 10 percent annually. This level of inadequate funding is unfair to the 170,000 Medicare beneficiaries in Massachusetts who have selected private health plan options. I am a strong supporter of the wonderful health plans we have in Massachusetts--Harvard, Tufts, Blue Cross/Blue Shield, and Fallon Community Health Plan. We must step up to the plate to help these plans--nonprofit plans in my State--in their time of need. The Schumer-Santorum-Kerry amendment takes important steps to address this problem. By providing funding now to stabilize existing private health plan options for Medicare beneficiaries, we can help ensure that the proposed Medicare Advantage Program will be successful in the future. Our amendment lays the groundwork for successful long-term efforts to provide beneficiaries with high-quality health care choices. As the Senate continues to debate changes in Medicare, it is important for us to remember that, for more than 4.5 million Medicare beneficiaries across America, Medicare+Choice is an essential program that provides high-quality, comprehensive, affordable coverage that is not always available, or affordable under the Medicare fee-for-service program. These seniors and disabled Americans have voluntarily chosen to receive their health coverage through Medicare HMOs and other private sector plans because they recognize the value they offer. Seniors in Massachusetts have come to rely on the high-quality health care they receive through their Medicare+Choice plans. Prescription drugs coverage, disease management services, physician exams, vision benefits, and hearing aids are examples of the additional benefits that are routinely offered by their Medicare+Choice plans. These additional benefits are valued by all seniors, but they are particularly important to low-income seniors who cannot afford other Medicare supplementary plans that might provide them such benefits but at a greater cost. As the Medicare debate moves forward, it is important for Congress to remember that Medicare+Choice serves as a vital safety net for many of our Nation's most vulnerable seniors. For millions of beneficiaries who cannot afford to purchase a Medigap policy, Medicare+Choice is their only hope for obtaining comprehensive health coverage. The Schumer-Santorum-Kerry amendment focuses on protecting this important option for seniors who have nowhere else to turn for the quality health coverage they need. I urge my colleagues to support the additional funding that is urgently needed to strengthen the Medicare+Choice Program for seniors. This should be among our highest priorities in this year's Medicare debate.

Mr. KERRY

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

Mr. KERRY. Mr. President, I send an amendment to the desk.

Mr. KERRY. Mr. President, I thank the distinguished ranking member and congratulate both him and Senator Grassley on what is obviously an extraordinarily important, complicated, and difficult road--to try to move toward prescription drug coverage for seniors in America. I wish to share a few words, if I may, at the outset, before moving specifically to the amendment, and to talk generally about the bill itself. Obviously, all across our country we have accomplished an extraordinary service for seniors through what we have achieved through Medicare. It is one of the great social programs of the United States of America. I can remember years ago a shared responsibility by Republicans and Democrats alike. I think it was President Nixon who signed the enormous proportion of it into law in the beginning of the 1970s. We lifted a great many seniors in this country out of poverty as a consequence. It has benefited millions of Americans who would otherwise go without quality health care and otherwise either be forced into poverty or remain in poverty. The face of poverty in the United States of America changed because of this program. I might add that it is a Government program. Often, the Government comes under great criticism. But the truth is that this is a program that has worked, a program that has made a difference in the lives of our fellow Americans, and a program that a large proportion of America appreciates, respects, and doesn't want to see destroyed. I think we have a duty to try to strengthen and improve the program by adding a comprehensive, affordable, and guaranteed prescription drug benefit to Medicare. Notwithstanding the very best efforts of the chairman and ranking member and others on the committee on which I serve, there are still questions as to whether this in fact does that at this point in time. That doesn't mean it isn't perhaps for some people worth voting for. I haven't made a final decision with respect to final passage. That may depend somewhat on what we achieve over the course of these days. But we need to put to the test the question of what we are doing versus what we could do. This is a fair standard for us to try to measure. My concern today is that the underlying bill as currently drafted is a good start, it is a good foundation, but it doesn't fulfill the full measure of the promise of comprehensive, affordable, and guaranteed in ways in which I think we could do it. Our Nation's seniors, I fear, will experience a very severe case of sticker shock when they learn how far the bill falls below their expectations for relief. Also, I wish we did not have to wait until 2006. I have serious questions about why, given it took us only 11 months to set up Medicare itself, it takes us 2\1/2\ years to set up the Medicare drug benefit. Frankly, it is beyond my acceptance of what is a legitimate reason. I know the reasons. I have heard the reasons. But think about that: We set up the entire Medicare Program in about 11 months, and now we are told to add a benefit within it, we ought to wait about 2\1/2\ years. I think it has far more to do about budgets and far more to do about elections than it does with the realities of what we need to do. Seniors, obviously, need this relief. Nearly 40 percent of Medicare beneficiaries report having no--zero--prescription drug coverage. And the average amount they pay out of their own pocket for prescription drugs has increased from $644 in the year 2000 to $996 in 2003. These expenses are projected to grow to $1,147 in 2004 and $1,454 by 2006, which is the year when the benefit actually gets implemented. So we are talking about a much larger bill than we have today. People who are measuring this bill by what we have today are actually measuring it short of what the need is because the need is going to be the year of implementation, 2006, and then we will have more than doubled the amount that individuals are paying for prescription drugs. That means the average annual out-of-pocket spending by seniors for prescription drugs will have doubled over that period. And I think seniors are to going to question: Well, if they all knew that, why am I still having such a hard time paying for prescription drugs? Now, again, I want to underscore, I know how hard it is for the chairman and Senator Baucus to try to do this. And the reason it is so hard is because we have been given an arbitrary number. And I will say something more about that in a minute. Let me say, for a moment, what I think is good that we have accomplished. No. 1, we have rejected President Bush's efforts to force seniors into private plans. We have rejected the President's plan to disadvantage seniors who want to stay in traditional Medicare and to keep the same doctors they have now. We have rejected the President's plan to give a windfall of incentives to PPOs to encourage their participation in the program. And we have adopted certain longstanding Democratic principles that include significant cost-sharing protections for low-income beneficiaries, a guaranteed fallback plan, and some key efforts that are targeted at improving the traditional fee-for-service benefits under Medicare. But there are concerns I expressed in my ``no'' vote in the Finance Committee, and I want to express those concerns now on the Senate floor. First of all, there are crucial areas I would hope we would try to find a way to improve. The most important of those is this gap in the coverage, in the donut hole as it is called, where seniors are charged a premium, but they do not get anything for the premium. It seems to me there ought to be adequate protection to ensure, also, that employer coverage is not substituted or dropped. We do not want to create a situation where employers are covering people today, but because you have a fallback situation, they may decide, OK, we are going to drop that coverage, and, in fact, people are downgraded in what is available to them because there are not enough private people coming in to make up for that; therefore, the fallback is what they get. In addition, we must improve the stability of the fallback plans to minimize confusion and inconvenience to seniors. Finally, I think we have to protect lowest income seniors by making sure they, too, can get the Medicare benefit. We ought to guarantee--or do our best to guarantee--a uniform national premium, somehow, for that benefit, and try to eliminate the new increases in beneficiary cost sharing under traditional Medicare and be more aggressive about providing additional benefits under the program. But the stark reality is, all of these constraints are not the fault of Senator Baucus or Senator Grassley. There is a reason we are operating under this straitjacket where we have had to tell a bunch of seniors they are going to pay a premium, they can buy insurance, they get to buy insurance up to $3,000--whatever it is--$4,500, and then they stop, but they continue to pay premiums. They continue to pay, but they are not going to get any benefit. They have to go back and start paying their full premium. But then when they get up to the $5,800 of catastrophic level, it begins to cut back in. The reason we are there is fundamentally that $400 billion is all the Congress was given to deal with this--the arbitrary: Let's pick a number. Here is what we will put into prescription drugs. I think every American has a right to ask--and they will ask over the course of the next years--why they were limited to $400 billion when the U.S. Congress chose to take $3 trillion off the table in tax cuts that went to upper income Americans over the course of the last 2 years. Now, that is a fair question. That is the choice in America today. We make choices. People sent us here to make choices. And the choice made on behalf of the American people is that it is more important to reward people earning $315,000 a year than to make certain a lot of seniors don't have a donut hole in their coverage in prescription drugs. When I heard Senator Craig Thomas a moment ago say not that many seniors are going to be left out, I said, well, that is interesting because in the next breath he said we can't afford it because it is going to cost $200 billion. Well, if it costs $200 billion, it sounds to me as if somebody is being left out to a pretty large amount of money. You cannot have it both ways. If it is expensive, it means it is meaningful to a lot of people. And if it is meaningful to a lot of people, we ought to be thinking about why we are not doing it. Warren Buffett--the second richest man in the United States of America--wrote a letter a couple weeks ago where he said: Well, I own my own company. And now that I own my own company, and I've been given this very nice dividend benefit by the Republicans, I can pay myself $1 billion. And when I pay myself $1 billion, I'm not going to have tax, in this first year, on $365 million of it. It's tax free. That's it. He said he thought it would have been better to give 365,000 families in America $1,000 each. He did not think he ought to get that benefit. Now, I think it is going to be fair for a lot of seniors in this country to ask the question, as we go forward, why Warren Buffett thinks that, and a whole bunch of people here think it is OK to do something else. So if we are going to offer a prescription drug benefit that stands the test of time, the test of coverage, the test of fairness, and ultimately the test of the compact that Medicare created with our seniors, I think we ought to try to eliminate the coverage gap in this bill. I think it is hard to turn to a senior at some point in time and say: Look, we want to help you buy drugs, but we are only going to help you up to the point where it gets really expensive. Then, when it gets really expensive, you are going to have to start carrying the bigger weight until it gets really, really expensive, and then we will come back and help you. It seems to me a lot of seniors are going to be asking questions about that choice. I think we also could do better in protecting seniors with retiree coverage. The current bill contains a flawed definition for the true out-of-pocket costs by prohibiting any drug spending payments made on behalf of Medicare beneficiaries by an employer-sponsored plan from counting toward the stop-loss threshold. In other words, they have an employer. That employer has given them a plan as a retiree, and they retire. They are qualified for Medicare. They paid into their retiree plan. It is their deal. But that is not now going to count toward their out-of-pocket expense. So they could, in fact, be left without the coverage that they deserve as a consequence of this definition. And that means that retirees covered under employer-sponsored plans will likely never reach the stop-loss threshold, and they will effectively be denied benefits under the catastrophic portion of the Medicare plan, even though they qualify for Medicare and worked just like everybody else for retirement and put money into the system. Seniors who have retiree prescription drug coverage from their former employer worked a lifetime. They made wage concessions over the years, with the expectation they were going to receive those benefits. This bill comes along and, in effect, denies them benefits and treats them unequally in the context of the Medicare plan. It is unfair to change those rules after the fact. We ought to try to change it and reward employers who do the right thing and provide retiree coverage for their employees. We also ought to try to strengthen the guarantee of a fallback plan and provide seniors with more stability and less confusion. Under the current bill, when a fallback program is available, it may not be available for very long. Medicare beneficiaries who are in the fallback program and like it will have to leave that program if two private insurers decide later to serve their region. In other words, the bill says there is only a fallback if you don't have two providers. But the minute you have two providers in a region, people who may have gone into the fallback program will have to turn around and leave the fallback program because there are now two providers, even if the two providers are providing more expensive premiums than they had in the fallback. So they will be forced out of their fallback into a more expensive plan which a lot of seniors are going to find both oppressive as well as very confusing to them as to why they have to do that. Some people are going to argue there is another area of concern. That is how we treat low-income seniors in this bill. These are our most vulnerable and poorest seniors. They are eligible for both Medicare and Medicaid. But under the bill, they are going to get their benefit from the Medicaid Program. They won't be allowed to go into the Medicare Program because they are poor. Some people are going to come to the floor and say: Wait a minute, a lot of States offer a better benefit in Medicaid. It is true. Some do. But we are not offering them an option. We are telling them they have to get it from Medicaid. And the problem is a whole bunch of States have a very limited Medicaid drug benefit. For instance, in the State of Texas, the benefit covers only three prescriptions. That is not a lot of protection. So we are forcing people into Medicaid in a State where, because they are poor, they have to take Medicaid, and they may only have three prescriptions available to them in the whole program. We are asking for trouble if that stays the way it is. Moreover, we all know a lot of States are facing the worst deficits in a generation. That means States are beginning to cut back their benefits. There isn't one of us who hasn't seen a State where a Governor is forced to start to clip back on Medicaid. That means we are going to see higher copayments. We will have tighter formularies, more bureaucracy, and we will not necessarily be achieving the goal we are seeking. Requiring low-income seniors to stay in a Medicaid prescription program is a bad deal for seniors because of the States that provide an inferior prescription drug benefit in Medicaid. We are now essentially creating the very thing we have always tried not to do. We are creating a second-class tier of citizens based on their income within the Medicare Program. We will for the first time say to seniors who paid into Medicare through a lifetime that just because now in their old age, because of their low income, they are going to have to accept a lesser benefit. That is wrong. For the first time in the history of the Medicare Program, seniors will be denied a benefit simply because of their income. It is a terrible precedent. It strains the social compact that was the foundation of Medicare in the first place. Another concern in the underlying bill is the lack of the guaranteed premium or uniformity of it. Under this legislation, insurance companies providing the new drug benefit have the freedom to design their prescription drug plan. That is great. I am for the marketplace. I am all for companies offering a private prescription plan to the degree they want to or choose to or can. They can decide what premiums and copayments they want to charge. But the point is, under Medicare, we have always decided there was a fundamental compact with seniors for which they could pay and which ought to have some uniformity of treatment in essence. What we are doing now is throwing that whole sense of the system into the competitive structure of sometimes very limited choices which may ratchet up prices in a way that is going to become very complicated for a lot of Senators and Congressmen to explain to seniors who are used to the Medicare plan being something different in the context of the compact. The bill promises an ``average premium'' of about $35 per month. But premiums are obviously going to vary from region to region in the country which means some seniors may pay $39 a month in Alabama, maybe $40 a month in Tennessee, but be charged $160 in New York. I believe we have to be very sensitive and thoughtful about what happens to people on fixed incomes. This is not your average marketplace. This is not a place where people even have the same set of choices. When a senior on a fixed income winds up with high blood pressure, diabetes, perhaps prostate cancer or a mastectomy, any number of different problems that seniors cope with, they are forced into an economic status, not choosing to get into one. The question is whether we are going to do our best to try to protect them from that kind of volatility. It is estimated in the first year of the program, approximately 35 percent of the Part D beneficiaries are going to pay more in premiums and out-of-pocket cost sharing than they will save from the new drug benefit; 35 percent will pay more than they are going to save from the new benefit. And to add insult to injury in that context, the bill doesn't just fail to provide an affordable, comprehensive drug benefit, but it also increases cost sharing for other Medicare benefits. In that context, there are two troublesome cost-sharing requirements. It increases the Medicare Part B deductible from $100 to $125. And then it indexes it by inflation and permits a new coinsurance for clinical laboratory services. That means Medicare beneficiaries will be asked to carry the burden of an additional $24 billion in new cost-sharing requirements over the next 10 years. Wait until your grandmother finds out about that one. For all of my concerns, we have certainly come closer than we have been at any time in recent years to trying to achieve the great goal of putting prescription drugs into some kind of Medicare benefit. I believe with additional persistence, with additional negotiations between us and the administration, we could make those concerns I just expressed go away or we could mitigate them. We could diminish them. I intend to support a number of amendments on the floor seeking to do that. I have an amendment I have just called up that seeks to do one part of that. Let me explain it very quickly. I want to talk about an amendment I have and I will get to the one I just called up in a moment. We have talked for a long time in the Senate about mental health parity. It is a goal we really want to achieve in this country. Senator Domenici has been a champion for it. There have been bipartisan efforts to try to get there. I would like to see us end the discriminatory practice of charging seniors in Medicare a 50 percent copay for mental health services, when we only charge a 20 percent copay for the other physician services. Too many seniors have mental illnesses that go untreated, and we should try not to make that worse by making it harder for people to be able to get the care. I have an amendment to bring parity for mental health services for seniors. I am also working with Senator Sununu to try to improve the Medicare benefit by adding vision rehabilitation services to the list of covered services. I am also pleased to join with Senator Hutchison and Senator Kennedy as a lead cosponsor of an amendment to increase the Medicare indirect medical education--so-called IME--payments for teaching hospitals. I appreciate very much the efforts of Senator Baucus and Senator Grassley to try to accommodate us to find a way to deal with this issue. It is a critical issue. Teaching hospitals incur a different set of costs, and you cannot measure the Medicare reimbursement against the expenses of the hospital in the same way. Fifty percent of the doctors in Montana were taught at hospitals in, I think, 11 or 12 States, including Massachusetts, New York, California, and a few others in the country. So 11 or 12 States are spending money in their teaching hospitals to provide the benefit to the rest of the country of that quality medical education. When 50 percent of the doctors in Montana were educated in 11 or 12 States, Montana has a benefit, but it is not measured in the Medicare reimbursement. We need to make up that difference so we can continue to have the quality medical instruction and education in our country from which every American benefits. In the spirit of improving this legislation, the amendment I offer today, which has bipartisan support, would dramatically improve the bill for some of the things I said I think are problems. It does it for very little money. My amendment will help seniors who are in the coverage gap. What it does, it doesn't fill the whole ``donut,'' but it will offer significant help to seniors who fall into the donut by expanding access to the existing prescription drug safety net. The Federal Government currently sponsors a discount prescription drug program for those qualifying entities, such as a community health center or a public hospital or the Ryan White grantees, and others. Under this program, which is known as the 340(b) covered entities program, they have access to discounted prescription drug pricing for their patients in the program. In other words, if you have a community health center and your community health center has an in-house pharmacy, they could fill the prescriptions for seniors at discounted rates. They are allowed to do it. We have already had that under law. The problem is, we know a whole bunch of community centers and public health hospitals don't have the in-house pharmacies. The benefit of this is to provide drugs that are significantly lower than the retail and wholesale prices. Based on a recent analysis of 200 very popular drugs, under 340(b) prices, on average, those drugs were 54 percent lower than the average wholesale price. Another recent survey showed that 340(b) prices were 24 percent lower than those available to groups purchasing as group organizations. So it is a sound program, but it is underutilized. Not all health centers and hospitals have an in-house pharmacy. One of the biggest barriers to participating in 340(b) for many of the qualifying entities is the very expensive upfront capital cost of putting in place a pharmacy in their facility. So what I would do is establish a $300 million grant fund from the prescription drug trust fund created under the bill for HHS to award grants to health centers, hospitals, and other qualifying 340(b) institutions to help them with the startup costs associated with establishing a pharmacy in their entity. CBO scoring of this bill showed there is about a $10 billion surplus available in the current scoring, and so we have come in under the $400 billion. We have some cushion here. If we took that $300 million and made it available to these in-house entities to create those discount drug centers, then we could have those people who fall into the donut hole go to those centers, get the discount drugs, and significantly reduce the impact of the donut, which I think is a worthwhile effort. We estimate there are up to 2,000 organizations in communities all across the country who would be assisted to set up in-house pharmacies as a result of this amendment. That will mean seniors all across the country who find themselves in the coverage gap will be able to purchase their prescription drugs for as much as 50 percent below the wholesale price. That savings is very significant in the context of what we are facing here. My amendment is endorsed by the National Association of Community Health Centers, the National Association of Public Hospitals, and the Public Hospital Pharmacy Coalition. I hope it can earn the support of my colleagues so we can address one of the unintended consequences of dealing with only a $400 billion benefit, such as we are today. I thank my colleagues for the opportunity to share these thoughts with them. I hope we can pass this amendment or have it accepted at the appropriate time. I yield the floor and suggest the absence of a quorum.

Mr. KERRY

Mr. KERRY. Mr. President, since its inception, the United Service Organization what we all know as the USO has worked to bring a piece of home to the members of our armed forces wherever they may find themselves. From Bob Hope's legendary tours to the latest cyber- canteens that allow service members to stay in contact with family and friends via email, the USO works tirelessly to provide simple pleasures to those who venture into harm's way. As the population of the armed forces has changed, so too have the services offered by the USO. Today, this great organization provides childcare services for kids whose parents are deployed, travel assistance for the family of wounded service members, prepaid phone cards, the ever-popular celebrity tours, and countless other services for our troops and their families. Recently, my staff and the staff of Senator Kennedy had very close contact with the personnel and services of the USO through its New England offices in Boston. Several weeks ago, our staff was contacted by the family of an American soldier who had become gravely ill in Iraq. She had been evacuated to the American hospital at Landstuhl, Germany, where doctors determined she was near death. She was so ill that her doctors ordered her medically retired, making her daughter eligible for retirement benefits. But that reclassification also meant that the Army could no longer pay for her family's travel to Germany to be at her bedside. That decision, made for all the right reasons, had the unintentional and regrettable consequence of bringing only more grief to a family already grappling with the prospect of losing their loved one. And that is when USO-New England and its director, Alice Harkins, got involved. When the situation was explained to her, Alice replied simply, ``We're going to do this. This is why we exist.'' And, as promised, the USO-New England found the money and paid for the soldier's family to travel to Germany. Alice Harkins and her capable staff at USO-New England represent the best of us. Through their vigorous efforts, their determination, and their simple desire to help those who serve in our military, they inspire us all. They are people who recognize what's right, and who show their love of country and their love for those who serve with deeds as well as words. The USO receives no financial support from the U.S. Government. Its success is due to the countless volunteers who contribute time and energy for the men and women of the Armed Forces in times of war and peace and the generosity of sponsors who make its operation possible. I know I express the sentiment of the Senate and current and former members of the Armed Forces when I say thank you, USO, for your efforts to bring a slice of home to those on the frontlines and for remembering their families while they are away. We should all aspire to make such a contribution. Fortunately, the people of the USO, people like Alice Harkins, do. And we can all be grateful.

Mr. KERRY

Mr. KERRY. Mr. President, I rise today as Ranking Member of the Committee on Small Business and Entrepreneurship with my esteemed colleague and Chair of the Committee, Senator Snowe, to offer legislation to fix a funding gap that exists for meritorious Women's Business Centers that are graduating from the first stage of the program and entering the sustainability portion. I would first like to thank Senator Snowe for working very closely with me on this issue. Her leadership and support has been invaluable. I would also like to thank our House counterparts on the Small Business Committee, Chairman Manzullo and Ranking Member Velazquez, who have also been working diligently on the issue of sustainability grants as we take on the process of reauthorizing the majority of the SBA's programs. In addition, I want to thank all of the cosponsors of this legislation, all of which have shown resounding support for women entrepreneurs and recognize the positive impact all small businesses have on our national economy. As I have said on more than one occasion, women business owners do not get the recognition they deserve for their contribution to our economy: Eighteen million Americans would be without jobs today if it weren't for these entrepreneurs who had the courage and the vision to strike out on their own. For 18 years, as a member of the Senate Committee on Small Business and Entrepreneurship, I have worked to increase the opportunities for these enterprising women in a variety of ways, leading to greater earning power, financial independence and asset accumulation. These are more than words. For these women, it means having a bank account, buying a home, sending their children to college, calling the shots. And helping them at every step are the Women's Business Centers. In 2002 alone, these centers helped 85,000 women with the business counseling and assistance they likely could not find anywhere else. Cutting funding for any centers would be harmful to the centers, to the women they serve, to the States, and to the national economy. The funding gap for Women's Business Centers in the sustainability portion of the program exists because the Small Business Administration has chosen to adopt a funding policy that short-changes existing, proven centers in order to open new, unproven ones. By incorrectly interpreting the funding formula set up in statute for the Women's Business Center program, the SBA intends to make way for new centers at the expense of those that are already established, operational and successful. This is both bad policy and contrary to congressional intent. As the author of the Women's Business Centers Sustainability Act of 1999, I can tell that when the Women's Business Centers Sustainability Act of 1999 was signed into law, it was Congress's intent to protect the established and successful infrastructure of worthy, performing centers. The law was designed to allow all graduating Women's Business Centers that meet certain SBA standards to receive continued funding under sustainability grants, while still allowing for new centers--but not by penalizing those that have already demonstrated their effectiveness. Currently there are 81 Women's Business Centers in 48 states. Forty- six of these are in the initial program, 29 are already in sustainability, and six more are graduating or have graduated from the initial program and are now applying for sustainability grants. Because the SBA is incorrectly interpreting the funding formula for sustainability grants in order to open new centers, and in order to accommodate funding for potentially six new sustainability centers, those from Georgia, Iowa, Illinois, North Carolina, Texas, and Washington State, the amount of funds reserved for Women's Business Centers in sustainability must be increased from 30.2 percent to 36 percent. This legislation does just that. It directs the SBA to reserve 36 percent of the appropriated funds for the sustainability portion of Women's Business Centers program--even though the SBA already has the authority on its own to increase the reserve--thereby protecting the established Women's Business Centers from almost certain grant funding cuts and still providing enough funds to open six or more new centers across the country. I want to again express my sincere and steadfast support for the growing community of women entrepreneurs across the Nation and for the invaluable programs through which the SBA provides women business owners with the tools they need to succeed. As a long-time advocate for women entrepreneurs and SBA's programs, my record in support of the SBA's women's programs and for women business owners speaks for itself. I have continually fought for increased funding for the women's programs at the SBA, for sustaining and expanding the women's business centers, and for giving women entrepreneurs their deserved representation within the Federal procurement process, to name a few. With respect to laws assisting women-owned businesses, I have been proud to either introduce the underlying legislation or strongly advocate to ensure their passage and adequate funding. This bill is necessary to continue the good work of SBA's Women's Business Center network, and I urge all of my colleagues to support it.

Mr. KERRY

Mr. KERRY. Mr. President, As Ranking Member of the Oceans, Fisheries and Coast Guard Subcommittee of the Committee on Commerce, Science and Transportation, I am pleased to join the Chair of the Subcommittee, Senator Snowe, in submitting a resolution regarding the policy of the United States at the upcoming 55th Annual Meeting of the International Whaling Commission, IWC. I wish to also thank my colleagues Mr. Hollings, Mr. McCain, Mr. Kennedy, Mr. Akaka, Mr. Reed, Ms. Collins, Mr. Dodd, Mr. Smith, Mr. Levin, Mr. Chafee, Mr. Biden, Mr. Corzine, Mrs. Boxer, Mr. Lautenberg, Mr. Cochran, and Mr. Lieberman for cosponsoring as well. The IWC will meet in Berlin from June 16-19, 2003. The IWC was formed in 1946 under the International Convention for the Regulation of Whaling, in recognition of the fact that whales are highly migratory and that international cooperation is necessary for their preservation. In 1982, due to the severe impacts of whaling on the populations of large whale species, the IWC agreed on an indefinite moratorium on all commercial whaling beginning in 1985. Whales are already under enormous pressure world wide from collisions with ships, entanglement in fishing gear, coastal pollution, noise emanating from surface vessels and other sources. The need to conserve and protest these magnificent mammals is clear. Despite the IWC moratorium on commercial whaling, significant whaling has continued. First, pursuant to its reservation to the moratorium. Norway has continued to commercially harvest whales. Second, Japan has been using a provision in the Convention--which allows countries to issue themselves permits for whaling under scientific purposes--to kill whales in the name of science, and later sell the meat commercially. More than 7500 whales have been killed in lethal scientific whaling programs since the adoption of the commercial whaling moratorium, and the lethal take of whales under scientific permits has increased both in quantity and species, with species now including minke, Bryde's sei, and sperm whales. The IWC Scientific Committee has not requested any of the information obtained by killing these whales and has stated that the scientific whaling data obtained through this so-called research is not required for management. Iceland, which joined the IWC last year under questionable legal authority--subject to the condition that it can unilaterally begin commercial whaling after 2006--has recently indicated its intent to lethally hunt hundreds of whales, including endangered species such as fin whales, pursuant to this same scientific whaling exception. Despite a ban under the Convention on International Trade in Endangered Species, the first international trade of whale meat in 15 years occurred last year between Norway and Iceland, both member countries of the IWC. Reports indicate that Norway is seeking to broaden such trade. One positive development expected to be addressed at the meeting is a proposal from Mexico to establish a conservation committee under the IWC. Such a committee would strengthen the focus of the IWC on conservation measures that are critically important for the survival of cetaceans. This resolution calls for the U.S. delegation to the IWC to remain firmly opposed to commercial whaling. In addition, this resolution calls for the U.S. oppose the lethal taking of whales for scientific purposes unless such lethal taking is specifically authorized by the Scientific Committee of the Commission. It also calls on the U.S. to seek to end the sale of whale meat and blubber from whales killed for unnecessary lethal scientific research to remove this perverse incentive. The resolution calls for the U.S. delegation to support an end to the illegal trade of whale meat and to support the permanent protection of whale populations through the establishment of whale sanctuaries in which commercial whaling is prohibited. It further calls on the U.S. to support the establishment of a Conservation Committee, and to otherwise expand whale conservation efforts. Finally, the resolution directs the U.S. to make full use of all appropriate mechanisms to encourage a change in the behavior of other nations which are undermining the protection of these great creatures.