John Kerry

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to join my colleague Senator Snowe in introducing the Medicare Mental Health Copayment Equity Act. This legislation will establish mental health care parity in the Medicare program. Medicare currently requires patients to pay a 20 percent co-payment for all Part B services except mental health care services, for which patients are assessed a 50 percent co-payment. Thus, under the current system, if a Medicare patient sees an endocrinologist for diabetes treatment, an oncologist for cancer treatment, a cardiologist for heart disease treatment or an internist for treatment of the flu, the co- payment is 20 percent of the cost of the visit. If, however, a Medicare patient visits a psychiatrist for treatment of mental illness, the co- payment is 50 percent of the cost of the visit. This disparity in outpatient co-payments represents blatant discrimination against Medicare beneficiaries with mental illness. The prevalence of mental illness in older adults is considerable. According to the U.S. Surgeon General, 20 percent of older adults in the community and 40 percent of older adults in primary care settings experience symptoms of depression, while as many as one out of every two residents in nursing homes are at risk of depression. The elderly have the highest rate of suicide in the United States, and there is a clear correlation between major depression and suicide: 60 to 70 percent of suicides among patients 75 and older have diagnosable depression. In addition to our seniors, 400,000 non-elderly disabled Medicare beneficiaries become Medicare-eligible by virtue of severe and persistent mental disorders. To subject the mentally disabled to discriminatory costs in coverage for the very conditions for which they became Medicare eligible is illogical and unfair. There is ample evidence that mental illness can be treated. Unfortunately, those in need of treatment often do not seek it because they are ashamed of their condition. Among our Medicare population, the mentally ill face a double burden: not only must they overcome the stigma about their illness, but once they seek treatment they must pay one-half of the cost of care out of their own pocket. The Medicare Mental Health Copayment Equity Act will phase-down the 50 percent co- payment for mental health care services to 20 percent over six years. By applying the same co-payment rate to mental health services to which all other outpatient services are subjected, the Medicare Mental Health Copayment Equity Act will bring parity to the Medicare program and improve access to care for our senior and disabled beneficiaries who are living with mental illness. I urge my colleagues to join with us to pass this critical legislation. I ask unanimous consent that several letters of support be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to join my colleague Senator Snowe in introducing the Medicare Mental Health Copayment Equity Act. This legislation will establish mental health care parity in the Medicare program. Medicare currently requires patients to pay a 20 percent co-payment for all Part B services except mental health care services, for which patients are assessed a 50 percent co-payment. Thus, under the current system, if a Medicare patient sees an endocrinologist for diabetes treatment, an oncologist for cancer treatment, a cardiologist for heart disease treatment or an internist for treatment of the flu, the co- payment is 20 percent of the cost of the visit. If, however, a Medicare patient visits a psychiatrist for treatment of mental illness, the co- payment is 50 percent of the cost of the visit. This disparity in outpatient co-payments represents blatant discrimination against Medicare beneficiaries with mental illness. The prevalence of mental illness in older adults is considerable. According to the U.S. Surgeon General, 20 percent of older adults in the community and 40 percent of older adults in primary care settings experience symptoms of depression, while as many as one out of every two residents in nursing homes are at risk of depression. The elderly have the highest rate of suicide in the United States, and there is a clear correlation between major depression and suicide: 60 to 70 percent of suicides among patients 75 and older have diagnosable depression. In addition to our seniors, 400,000 non-elderly disabled Medicare beneficiaries become Medicare-eligible by virtue of severe and persistent mental disorders. To subject the mentally disabled to discriminatory costs in coverage for the very conditions for which they became Medicare eligible is illogical and unfair. There is ample evidence that mental illness can be treated. Unfortunately, those in need of treatment often do not seek it because they are ashamed of their condition. Among our Medicare population, the mentally ill face a double burden: not only must they overcome the stigma about their illness, but once they seek treatment they must pay one-half of the cost of care out of their own pocket. The Medicare Mental Health Copayment Equity Act will phase-down the 50 percent co- payment for mental health care services to 20 percent over six years. By applying the same co-payment rate to mental health services to which all other outpatient services are subjected, the Medicare Mental Health Copayment Equity Act will bring parity to the Medicare program and improve access to care for our senior and disabled beneficiaries who are living with mental illness. I urge my colleagues to join with us to pass this critical legislation. I ask unanimous consent that several letters of support be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, owning your own home is the foundation of the American dream. It encourages personal responsibility, improves child development, provides economic security and gives families a greater stake in the development of their communities. Communities where homeownership rates are highest have lower crime rates, better schools and provide a better quality of life for families to raise their children. However, too many low- and moderate-income families living in urban and rural areas across our nation have not been able to share in the dream and benefits of homeownership due to the lack of available housing or the high cost of what housing is available. Today, I am introducing the Community Development Homeownership Tax Credit Act, along with Senators Santorum, Sarbanes, Allard, Daschle, Kennedy, Stabenow and Clinton to encourage the construction and substantial rehabilitation of 500,000 homes over the next ten years for low- and moderate-income families in economically distressed areas. The bill will increase the supply of affordable homes for sale in inner-cities, rural areas and low- and moderate-income neighborhoods across the United States. It will bridge the gap that exists today between the cost of developing-affordable housing and the price at which these homes can be sold in many low-income neighborhoods by providing investors with a tax credit of up to 50 percent of the cost of home construction or rehabilitation. By facing the mounting challenge of producing affordable housing, I strongly believe we can help provide critically needed economic development low- and moderate-income communities across our country and provide an important stimulus in the development of our nation's economy. The production of new homes provided in this legislation will create both construction and construction-related jobs which will both increase economic growth and lower the unemployment rate. New Economic activity can revitalize many inner-city neighborhoods and rural areas where unemployment and crime have been a fact of life for too long. Buying a new home also leads to the purchase of new appliances and furnishings. Average new homebuyers spend almost $5,000 on appliances and furnishings during the first year of living in their new home. This will help stimulate the manufacturing section of our economy. It is clear that building new homes creates jobs and moves our economy forward. Over the past decade, we have made substantial progress in increasing the homeownership rate in the United States. In 2000, the U.S. homeownership rate reached a record high of 67.1 percent with some 71 million U.S. households owning their own home. However, many working families have been struggling to find an affordable home in our nation's cities. Over the past two generations, many families have moved out of cities and into the suburbs, which has depressed the development of housing in the inner-city. In 1999, the homeownership rate in the central-city areas was 50.4 percent, this is more than 20 percent lower than the suburban homeownership rate of 73.6 percent. Working families with low- and moderate-income have also had difficulties buying a home. Currently, 83.3 percent of households with family income higher than the median family income are homeowners, while only 52.4 percent of households with family income below the median income are homeowners. Too many communities face a lack of available homes because developers are concerned that the new houses may not be sold for the cost of construction. Many properties or sites that could be developed into affordable homes now sit vacant, and neighborhoods remain undeveloped because the gap between development costs and market prices has not been filled. The lack of affordable single-family homes affect many urban and rural areas where a majority of residents earn less than the median income. Today, too many minority families face barriers in their attempts to reach the American Dream of homeownership. According to Census data for the fourth quarter of 2002, non-Hispanic whites have a 74.8 percent homeownership rate, while minority groups have just a 55.4 percent homeownership rate. African Americans have only a 47.5 percent homeownership rate, and Hispanics have a 49.5 percent homeownership rate in the same study. The gap between white and African American homeownership rates has been approximately 25 percent to 30 percent for most of the last century. These numbers are simply unacceptable. Despite our efforts at the federal level to promote homeownership, many minorities also face higher than average denial rates for mortgage applications. A recent study by the University of Massachusetts shows that racial and ethnic lending disparities continue in Boston. For example, African Americans were 2.73 times as likely as whites to be denied in their mortgage applications. Latinos were 2.25 times as likely as whites to be denied in their mortgage applications. Finally, Asians were 1.55 times as likely as whites to be denied in their mortgage applications. Along with a lack of available homes in urban and rural areas, our nation is also facing an affordable rental housing crisis. Thousands of low-income families with children, the disabled, and the elderly are finding it difficult to obtain or afford privately owned affordable rental housing units. Recent changes in the housing market have limited the availability of affordable housing across the country, while the growth in our economy in the last decade has dramatically increased the cost of the housing that remains. Constructing new housing will help many families move out of rental housing and help increase the number of available rental housing units and help ease the affordable housing crisis we now face. The story of Benjamin and Rita Okafor shows how working families in Massachusetts have great difficulty obtaining a decent home of their own. For many years, the Okafor's and their two young children were forced to live in a one-bedroom apartment. Benjamin Okafor, who worked full time as a cab driver in Boston, spent days and months looking for a bigger apartment for his family. However, the lack of affordable housing in the Boston area made it impossible for him to find anything appropriate. When his wife Rita became pregnant with their third child, the Okafor's knew something had to change in their living situation. Luckily, Ben was accepted into the Habitat for Humanity program and worked 300 sweat equity hours constructing a house. In August 2000, the Okafor family moved into a new home of their own in Dorchester. Ben says that this new home gives them the hope and stability they need. Yet, there are still far too many working families living a substandard housing and many more families that desperately need assistance to become homeowners. A new tax incentive for developers to build affordable homes in distressed areas will help working families like the Okafor's to afford a home for the first time. The benefits of owning a home can bring families financial rewards and personal satisfaction with a deep sense of security. Real estate values have historically risen over time. Homeowners may deduct mortgage interest and property taxes as an expense against income. Real estate has generally been seen as marketable, allowing for property to be sold at a predictable price to a dependable group of available buyers. We know that owning a home instead of renting leads to a better quality of life for its residents, but we are now learning more and more about the impact homeownership has on the cognitive and behavioral outcomes for children. A recent study by Ohio State University shows that children of families who own their home have fewer behavioral problems and are able to learn more effectively. Specifically, a child's cognitive abilities are 9 percent higher in math and 7 percent higher in reading for children living in their own homes. The study also shows that these children also experienced up to 3 percent lower behavioral problems than other children. This study proves that the national goal of homeownership has an added benefit of helping America's children learn and behave better, which helps our schools produce better citizens and will help our economy develop in the long term. The Community Development Tax Credit Act, which I am introducing today, bridges the gap between development costs and market value to enable the development of new or refurbished homes in urban and rural areas to blossom. The tax credit would be available to developers or investors that build or substantially rehabilitate homes for sale to low- or moderate-income buyers in low-income areas. The credit would generate equity investment sufficient to cover the gap between the cost of development and the price at which the home can be sold to an eligible buyer. The tax credit volume would be limited to $1.75 per capita for each State and allocated by the States themselves. Credits would be claimed over 5 years, starting when homes are sold. I believe this legislation will result in approximately 50,000 homes built or refurbished annually, assuming about $40,000 per home. The maximum tax credit equals 50 percent of the cost of construction, substantial rehabilitation, and building acquisition. The eligible cost may not exceed the Federal Housing Administration single-family mortgage limits. The minimum rehabilitation costs is $25,000. Eligible building acquisition costs are limited to one-half of rehabilitation costs. States will allocate only the level of tax credits necessary for financial feasibility of individual projects. Ten percent of the available credit will be set aside for nonprofit organizations. The eligible areas for the tax credit are defined as Census Tracts with median income below 80 percent of the area or state median. Rural areas that are currently eligible for USDA housing programs will be eligible for the tax credit. Indian tribal lands will be eligible for the tax credit. State-identified areas of chronic economic distress will also be eligible for tax credit, subject to disapproval by the Department of Housing and Urban Development. Those eligible to buy homes built or refurbished using the tax credit include: individuals with incomes up to 80 percent of the area or state median and up to 100 percent of area median income in low-income/high- poverty Census Tracts. Individual states will write plans to allocate the available tax credits using the following selection criteria: contribution of the development to community stability and revitalization; community and local government support; need for homeownership development in the area; sponsor capability; and the long-term sustainability of the project as owner-occupied residences. Then individual developers along with investors can apply to the state to be awarded a tax credit for developing a property in a low- or moderate-income area. If chosen by the state, investors can start to claim the tax credit as the homes are sold to eligible buyers. They can continue to claim the tax credit for five years. Investors are not subject to recapture. If the home owner sells the residence within five years, a scale would determine the percentage of the gain that would be recaptured by the Federal Government. In the first two years, 100 percent of the gain and 80, 70 and 60 percent in the third, fourth, and fifth years, respectively, would be recaptured. The Community Development Homeownership Tax Credit Act that I am introducing today will positively affect the lives for approximately 500,000 families over the next 10 years, help resolve the affordable rental housing crisis we face, and help create jobs and grow our economy. I ask all of my colleagues to help expand the foundation of the American Dream by supporting this new tax incentive to encourage the construction and rehabilitation of homes for low- and moderate- income families in economically distressed areas. This legislation is supported by the U.S. Conference of Mayors, Fannie Mae, Freddie Mac, the Enterprise Foundation, Local Initiatives Support Coalition, Mortgage Bankers Association of America, National Association of Home Builders, National Low Income Housing Coalition, National Association of Local Housing Finance Agencies, National Association of Realtors, National Council of La Raza, National Hispanic Housing Conference, Habitat for Humanity International and others.

Mr. KERRY

Mr. KERRY. Mr. President, today I am introducing a package of targeted, affordable tax relief provisions designed to help the Nation's small businesses during this time of economic stagnation. After the Easter recess, I know that the Finance Committee will be marking up a wide-ranging tax bill whose ultimate size is yet to be determined. I also know, however, that few of the proposals offered by the President will truly stimulate the economy or help the millions of struggling small businesses. Instead, the Bush tax proposal will reward the richest among us and pass the bill to our children. We can and must do better. As the Ranking Member of the Senate Committee on Small Business and Entrepreneurship, I have drafted legislation that will truly help small businesses and the Nation. It is a tax proposal with meaningful, affordable reforms that will make a difference without sticking our kids with a huge bill. I hope that all of part of this legislation can be incorporated into a Senate economic stimulus package. I have titled the bill that I am introducing today ``The Affordable Small Business Stimulus and Simplification Act of 2003,'' and it builds upon a bill that I introduced in the 107th Congress. I call my bill an ``affordable'' stimulus package for small business because it targets the policies that can make the biggest difference and uses our limited resources as wisely and efficiently as possible. It does not include everything that I would like to do for small business, but it includes enough to help stimulate this essential component of our economy. Moreover, the bill will help address the tax complexity concerns of small businesses because it includes the Single Point Tax Filing Act that has passed the Senate on two previous occasions and a new standard deduction that will benefit millions of small businesses. Let me briefly explain the contents of my bill. First, my bill increases the expensing limitation for small businesses. It raises it to $35,000, rising to $40,000 in 2008, and it increases the phase-out level, above which expensing is not allowed, to $350,000, rising to $400,000 in 2008. I know that others have proposed raising this limit as high as $75,000, but such an increase is simply unaffordable while we face huge budget deficits. Raising it to $35,000 now, rising to $40,000 in 2008, is a more responsible approach and will provide an immediate investment incentive to many small businesses. Second, my bill creates a new standard deduction of $500 for sole proprietorships. This provision provides tax relief and real tax simplification to the smallest of small businesses because it would relieve these businesses of the paperwork burden of having to itemize the myriad of small expenses on IRS forms. Of course, businesses with expenses greater than $500 would retain the option of full itemization. But for the very smallest businesses, many of them home-based or part- time, this new provision will be a significant step towards tax simplification. Third, the bill modifies and expands a provision that was signed into law in 1993 regarding new equity investments in small businesses' stock. Under my bill, new investments in companies with capitalization of up to $100 million at the time of investment will have a 75 percent capital gains exclusion if the investments are held at least four years. The exclusion for such investments will be 100 percent if they are made in a business involved in such critical technologies as transportation or homeland security, defense-related technologies, anti-terrorism, pollution control, energy efficiency, or waste management. The 100-percent exclusion would also be allowed for investments in specialized small business investment companies, or SSBICs, whose investments are made solely in disadvantaged small businesses. Both the 75 and 100 percent exclusion levels would be available for investments made by both individuals and corporations. In addition, the rollover period for such investments would be increased from 60 days to 180 days. The provision passed in 1993 was crafted too narrowly to stimulate substantial new investment. I hope that this new, expanded capital gains treatment will prompt new investments in small and entrepreneurial businesses. Fourth, my bill recognizes that the current depreciation schedules for high-tech equipment and software are out of date, given how quickly such items become obsolete in our fast-changing economy. My bill would reduce the recovery period for computers or peripheral equipment from five years to three, and for software from three years to two. This change would be permanent. Fifth, my bill would fix a problem with the tax deductibility of health insurance expenses for the self-employed. Under current law, these expenses are fully deductible in 2003 for the first time--but the Internal Revenue Code denies the deduction to taxpayers who are eligible to participate in another plan, such as their spouse's employer's plan. My bill would clarify that the deduction is denied only if the taxpayer actually participates in the other plan. Sixth, to simplify tax filing, my bill would include the Single Point Tax Filing Act. This section would simplify the tax filing process for employers that choose to participate by allowing the Internal Revenue Service and State agencies to combine, on one form, both State and Federal employment tax returns. This provision has been passed by the Senate twice before, but has not yet become law. There is currently a demonstration project along these lines in Montana, which is working very well. I believe such authority should extend to all States. Seventh, my bill clarifies that married couples who co-own a business can elect to be sole proprietors for purposes of filing their Federal income taxes. This provision aligns the law with the way many married couples actually do business. Under present law, married couples who co-own a business technically own that business as a partnership for Federal income tax purposes. This treatment carries with it all the complications of the partnership provisions of the Internal Revenue Code, including having to file partnership returns. But in reality, many married couples in this situation consider themselves sole proprietors and are incorrectly filing tax returns as such. While the IRS may not be strictly enforcing the law against these taxpayers, this technical non-compliance can cause trouble down the road. Upon divorce, for example, it may not be clear that the business had been jointly owned. This same ambiguity might complicate a spouse's ability to get the full Social Security and Medicare benefits to which they are entitled. My bill makes clear that for Federal income tax purposes, married couples who co-own a business can be treated as sole proprietors. Eighth, my bill would extend the existing income averaging provisions to cover fishing as well as farming. In other words, the choice to average income from a farming trade or business under present law would be extended to cover income from the trade or business of fishing as well. Under my bill, a farmer or fisherman electing to average his or her income would owe the alternative minimum tax, AMT, only to the extent he or she would have owed AMT had averaging not been elected. This is an important change that will benefit not only people in my state, but also throughout New England, the Pacific Northwest, the Gulf of Mexico region, Alaska, and in other areas of the country where fishing is an important industry. Finally, my bill would modify the tax treatment of investments in debenture small business investment companies, or SBICs, so they are less likely to create unrelated business taxable income, UBTI, liability. The current tax treatment of money borrowed from the government by a debenture SBIC creates taxable income for an otherwise tax-exempt investor, which makes it almost impossible to raise capital from these investors. Free to choose, tax-exempt investors opt to invest in venture capital funds that do not create any UBTI liability. Therefore, my bill would assure that money borrowed from the government by an SBIC does not subject tax-exempt investors to UBTI. In so doing, the bill would encourage greater investment in SBICs, which provide critically needed venture capital to emerging small businesses. These venture capital funds are sorely needed in today's stalled economy. I believe that ``The Affordable Small Business Stimulus and Stimulus Act of 2003'' will provide a much-needed stimulus to small business in a way that we can afford, particularly if we can find offsets to pay for the bill. I look forward to working with the Chairman and Ranking Member of the Finance Committee to have some or all of its provisions enacted into law.

Mr. KERRY

Mr. KERRY. Madam President, I rise today to offer my support for the CARE Act of 2003. Now that the objectionable ``charitable choice'' provisions of the bill have been removed, and the Republicans have agreed to pay for the tax provisions in the bill, the positives of the legislation clearly outweigh the negatives and the final result is worthy of support. There are several aspects of the bill of which I want to make note. Let me briefly mention them. First, several elements in the bill were included as amendments after several Senators, including myself, worked to add them in the Finance Committee. These include an enhanced tax deduction for contributions of food inventory, which will be very helpful for food banks assisting the poor; a new market-value deduction for art donated to nonprofit institutions by an artist during his or her lifetime; and some restoration of funding for the social service block grant program. These are all worthy provisions. Second, I have argued that while we have the largest deficits in history and face pressing domestic needs and the long-term expense of rebuilding Iraq, we should not have any new tax cuts that are not paid for. That is why I have offered a stimulus package whose costs are offset in future years, so we can stimulate the economy today without passing the bill to our kids. I am pleased that the Finance Committee worked in a bipartisan way to pay for the provisions in the CARE Act, in order to eliminate any long-term cost. Moreover, I am especially pleased that the major pay-for provisions in the bill are clarification of the economic substance doctrine and other provisions related to tax shelters. I introduced legislation to reform these shelters during the 107th Congress and the Finance Committee took much of the language from my original bill when they needed a more comprehensive offset this year. Most notably, last year's offsets for the CARE Act did not include the economic substance provision; now it represents the single largest pay-for. At a time when we are learning how far companies will go to abuse the tax system, changes to these shelter provisions come at just the right time. Finally, although the nonitemizer deduction for charitable contributions is getting the most attention in this bill, the largest permanent provision of the CARE Act will allow tax-free IRA rollovers to charitable organizations. Under the bill, people will be able to make planned charitable gifts out of IRAs at age 59\1/2\, and direct gifts at age 70\1/2\, without any tax consequence. This is language that I worked on with Senator Dorgan, and I worked hard in the Finance Committee to have the Dorgan-Kerry language included in the CARE markup. The new language will be very beneficial to the many colleges, universities, and cultural institutions throughout my home State. The new law will make a big difference, and it is important that people understand how it works. Under current law, one's itemized deductions are generally limited to one-half of one's income. In the case of a retired worker with $30,000 of annual income, but $150,000 accumulated in an IRA, this limitation would prevent the retiree from making a $30,000 donation from the IRA to the charity of his or her choice. The entire $30,000 withdrawal from the IRA would be taxed as income, but only $15,000--50 percent of annual income--would be allowed as a charitable deduction. Under this bill, however, the entire contribution would be free of any tax consequence: The withdrawal would not be taxed as income, and the contribution would not be counted as a deduction. The taxpayer can simply make the transfer to the charity completely tax-free. If the objective of this bill is to increase charitable giving, this is the central provision that will drive that result. I thank the sponsors of the bill, Senators Lieberman and Santorum, and the Finance Committee leadership, Senators Grassley and Baucus, and I urge my colleagues to support the CARE Act.

Mr. KERRY

Mr. KERRY. Mr. President, today I am introducing a package of targeted, affordable tax relief provisions designed to help the Nation's small businesses during this time of economic stagnation. After the Easter recess, I know that the Finance Committee will be marking up a wide-ranging tax bill whose ultimate size is yet to be determined. I also know, however, that few of the proposals offered by the President will truly stimulate the economy or help the millions of struggling small businesses. Instead, the Bush tax proposal will reward the richest among us and pass the bill to our children. We can and must do better. As the Ranking Member of the Senate Committee on Small Business and Entrepreneurship, I have drafted legislation that will truly help small businesses and the Nation. It is a tax proposal with meaningful, affordable reforms that will make a difference without sticking our kids with a huge bill. I hope that all of part of this legislation can be incorporated into a Senate economic stimulus package. I have titled the bill that I am introducing today ``The Affordable Small Business Stimulus and Simplification Act of 2003,'' and it builds upon a bill that I introduced in the 107th Congress. I call my bill an ``affordable'' stimulus package for small business because it targets the policies that can make the biggest difference and uses our limited resources as wisely and efficiently as possible. It does not include everything that I would like to do for small business, but it includes enough to help stimulate this essential component of our economy. Moreover, the bill will help address the tax complexity concerns of small businesses because it includes the Single Point Tax Filing Act that has passed the Senate on two previous occasions and a new standard deduction that will benefit millions of small businesses. Let me briefly explain the contents of my bill. First, my bill increases the expensing limitation for small businesses. It raises it to $35,000, rising to $40,000 in 2008, and it increases the phase-out level, above which expensing is not allowed, to $350,000, rising to $400,000 in 2008. I know that others have proposed raising this limit as high as $75,000, but such an increase is simply unaffordable while we face huge budget deficits. Raising it to $35,000 now, rising to $40,000 in 2008, is a more responsible approach and will provide an immediate investment incentive to many small businesses. Second, my bill creates a new standard deduction of $500 for sole proprietorships. This provision provides tax relief and real tax simplification to the smallest of small businesses because it would relieve these businesses of the paperwork burden of having to itemize the myriad of small expenses on IRS forms. Of course, businesses with expenses greater than $500 would retain the option of full itemization. But for the very smallest businesses, many of them home-based or part- time, this new provision will be a significant step towards tax simplification. Third, the bill modifies and expands a provision that was signed into law in 1993 regarding new equity investments in small businesses' stock. Under my bill, new investments in companies with capitalization of up to $100 million at the time of investment will have a 75 percent capital gains exclusion if the investments are held at least four years. The exclusion for such investments will be 100 percent if they are made in a business involved in such critical technologies as transportation or homeland security, defense-related technologies, anti-terrorism, pollution control, energy efficiency, or waste management. The 100-percent exclusion would also be allowed for investments in specialized small business investment companies, or SSBICs, whose investments are made solely in disadvantaged small businesses. Both the 75 and 100 percent exclusion levels would be available for investments made by both individuals and corporations. In addition, the rollover period for such investments would be increased from 60 days to 180 days. The provision passed in 1993 was crafted too narrowly to stimulate substantial new investment. I hope that this new, expanded capital gains treatment will prompt new investments in small and entrepreneurial businesses. Fourth, my bill recognizes that the current depreciation schedules for high-tech equipment and software are out of date, given how quickly such items become obsolete in our fast-changing economy. My bill would reduce the recovery period for computers or peripheral equipment from five years to three, and for software from three years to two. This change would be permanent. Fifth, my bill would fix a problem with the tax deductibility of health insurance expenses for the self-employed. Under current law, these expenses are fully deductible in 2003 for the first time--but the Internal Revenue Code denies the deduction to taxpayers who are eligible to participate in another plan, such as their spouse's employer's plan. My bill would clarify that the deduction is denied only if the taxpayer actually participates in the other plan. Sixth, to simplify tax filing, my bill would include the Single Point Tax Filing Act. This section would simplify the tax filing process for employers that choose to participate by allowing the Internal Revenue Service and State agencies to combine, on one form, both State and Federal employment tax returns. This provision has been passed by the Senate twice before, but has not yet become law. There is currently a demonstration project along these lines in Montana, which is working very well. I believe such authority should extend to all States. Seventh, my bill clarifies that married couples who co-own a business can elect to be sole proprietors for purposes of filing their Federal income taxes. This provision aligns the law with the way many married couples actually do business. Under present law, married couples who co-own a business technically own that business as a partnership for Federal income tax purposes. This treatment carries with it all the complications of the partnership provisions of the Internal Revenue Code, including having to file partnership returns. But in reality, many married couples in this situation consider themselves sole proprietors and are incorrectly filing tax returns as such. While the IRS may not be strictly enforcing the law against these taxpayers, this technical non-compliance can cause trouble down the road. Upon divorce, for example, it may not be clear that the business had been jointly owned. This same ambiguity might complicate a spouse's ability to get the full Social Security and Medicare benefits to which they are entitled. My bill makes clear that for Federal income tax purposes, married couples who co-own a business can be treated as sole proprietors. Eighth, my bill would extend the existing income averaging provisions to cover fishing as well as farming. In other words, the choice to average income from a farming trade or business under present law would be extended to cover income from the trade or business of fishing as well. Under my bill, a farmer or fisherman electing to average his or her income would owe the alternative minimum tax, AMT, only to the extent he or she would have owed AMT had averaging not been elected. This is an important change that will benefit not only people in my state, but also throughout New England, the Pacific Northwest, the Gulf of Mexico region, Alaska, and in other areas of the country where fishing is an important industry. Finally, my bill would modify the tax treatment of investments in debenture small business investment companies, or SBICs, so they are less likely to create unrelated business taxable income, UBTI, liability. The current tax treatment of money borrowed from the government by a debenture SBIC creates taxable income for an otherwise tax-exempt investor, which makes it almost impossible to raise capital from these investors. Free to choose, tax-exempt investors opt to invest in venture capital funds that do not create any UBTI liability. Therefore, my bill would assure that money borrowed from the government by an SBIC does not subject tax-exempt investors to UBTI. In so doing, the bill would encourage greater investment in SBICs, which provide critically needed venture capital to emerging small businesses. These venture capital funds are sorely needed in today's stalled economy. I believe that ``The Affordable Small Business Stimulus and Stimulus Act of 2003'' will provide a much-needed stimulus to small business in a way that we can afford, particularly if we can find offsets to pay for the bill. I look forward to working with the Chairman and Ranking Member of the Finance Committee to have some or all of its provisions enacted into law.

Mr. KERRY

Mr. KERRY. Mr. President, with most of the country's attention focused on the war in Iraq, important issues at home are falling through the cracks. Today I rise to talk about one of the needs of working moms and dads and their children--child care. We have a shortage of childcare in this country, and it is a problem for our families, a problem for our businesses, and a problem for our economy. The Census Bureau estimates that there are approximately 24 million school age children with parents who are in the workforce or pursuing education, and the numbers are growing. There has been a 43 percent increase in dual-earner families and single parent families over the last half a century. As parents leave the home for work and education, the need for quality child care in America continues to increase. As the Ranking Democrat of the Committee on Small Business and Entrepreneurship, I think we can foster the establishment and expansion of existing child care businesses through the Small Business Administration, SBA. Today with Senators Harkin, Landrieu, Pryor, Lieberman, Daschle, Bingaman, and Johnson. I am introducing the Child Care Lending Pilot Act of 2003, a bill to create a three-year pilot that allows small, non-profit child care providers to access financing through SBA's 504 loans. There is a real need to help finance the purchase of buildings, to expand existing facilities and improve the conditions of established centers to meet the demand for child care. It is appropriate to provide financing through the 504 program because it was created to spur economic development and rebuild communities, and child care is critical to businesses and their employees. Financing through 504 could spur the establishment and growth of child care businesses because the program requires the borrower to put down only between 10 and 20 percent of the loan, making the investment more affordable. Another advantage of 504 loans is that they have terms of up to 20 years, with fixed interest rates, allowing small businesses to keep their monthly payments low and predictable. As anyone with children knows, quality childcare comes at a very high cost to a family, and it is especially burdensome to low-income families. The Children's Defense Fund has estimated that child care for a 4-year-old in a child care center averages $4,000 to $6,000 per year in cities and states around the Nation. In all but one state, the average annual cost of child care in urban area child care centers is more than the average annual cost of public college tuition. These high costs make access to child care all but non-existent for low-income families. While some states have made efforts to provide grants and loans to assist childcare businesses, more must be done to increase the supply of childcare and improve the quality of programs for low-income families. According to the Child Care Bureau, state and federal funds are so insufficient that only one out of 10 children in low-income working families who are eligible for assistance under federal law receives it. For parts of the country, when affordable child care is available, it is provided through non-profit child care businesses. I formed a task force in my home state of Massachusetts to study the state of child care, and of the many important findings, we discovered that more than 60 percent of the child care providers are non-profit and that there is a real need to help them finance the purchase of buildings or expand their existing space. Child care in general is not a high-earning industry, and the owners don't have spare money lying around. Asking centers to charge less or cut back on employees is not the way to make child care more affordable for families and does not serve the children well. An adequate staff is needed to make sure children receive proper supervision and support. Furthermore, if centers are asked to lower their operating costs in order to lower costs to families, the safety and quality of the child care provided would be in jeopardy. I urge my colleagues to join us in supporting this legislation so non-profit childcare providers can access funds to start new centers or expand and improve upon existing centers. As we have done in Massachusetts, Senators could bring together 504 lenders, childcare providers not for-profit and non-profit--and the state department of child welfare to facilitate the increase of childcare providers in their states. As common sense tells us, and the child advocates if we listen, there is no magic bullet to addressing the shortage of safe and affordable child care in this country--it takes coordinated and complementary efforts to make a real difference. This is as much a child welfare issue as a workforce issue, and it makes sense to leverage one of SBA's effective resources to try and contribute to making a positive difference. I argue--we argue--that allowing non-profit child care centers to receive SBA loans can increase the availability of child care in the United States. Non-profit child care centers provide the same quality of care as the for-profit centers, and non-profit centers often serve our nation's neediest communities. I hope that my colleagues will recognize the vital role that early education plays in the development of fine minds and productive citizens and realize that in this great nation, child care should be available to all families in all income brackets. I ask unanimous consent that several letters of support be printed in the Record. These letters demonstrate that this is a good investment and good for our country.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to join with my friend and colleague, Chairwoman of the Senate Committee on Small Business and Entrepreneurship, Olympia Snowe, in reintroducing the ``Independent Office of Advocacy Act'', which our Committee and the full Senate endorsed unanimously last Congress. This legislation will help ensure the Small Business Administration's, SBA, Office of Advocacy has the necessary autonomy to remain an independent voice for America's small businesses. I would like to thank Senator Snowe and her staff for working with me and my staff to make the necessary changes to this legislation to garner bipartisan support. The independent Office of Advocacy Act rewrites the law that created the Small Business Administration's Office of Advocacy to allow for increased autonomy. It reaffirms the Office's statutory and financial independence by creating a separate funding account for the Office from the General Fund of the Treasury instead of being allocated through the SBA's annual appropriation. At its heart, this legislation will allow the Office of Advocacy to better represent small business interests before Congress, Federal agencies, and the Federal Government without fear of reprisal for disagreeing with the position of any current Administration. For those of my colleagues without an intimate knowledge of the critical role the Office of Advocacy and its Chief Counsel play in protecting and promoting America's small businesses, I will briefly elaborate its important functions and achievements. From studying the role of small business in the U.S. economy, to promoting small business exports, to advocating for the best interests of small business in a myriad of areas, to lightening the regulatory burden of small businesses through the Regulatory Flexibility Act, RFA, and the Small Business Regulatory Enforcement Fairness Act, SBREFA, the Office of Advocacy has a wide scope of authority and responsibility. The U.S. Congress created the Office of Advocacy, headed by a Chief Counsel to be appointed by the President from the private sector and confirmed by the Senate, in June of 1976. The rationale was to give small businesses a louder voice in the councils of government. Each year, the Office of Advocacy advises Congress and the executive branch regarding policy issues affecting small businesses, brings together small business people with members of Congress, congressional staff and executive branch officials to resolve issues affecting small business, publishes numerous studies and reports, compiles vast amounts of data and successfully lightens the regulatory burden on America's small businesses. In the area of contracting, the Office of Advocacy developed PRO-Net, a database of small businesses used by Federal contracting officers to find small business interests interested in selling to the Federal Government. The U.S. Congress, the Administration, and, of course, small businesses have all benefited from the work of the Office of Advocacy. In October 2001, an Advocacy research study titled, The Impact of Regulatory Costs on Small Business, established that small businesses with less than 20 employees spend nearly $7,000 each year, per employee just to comply with Federal regulations and mandates. By working with Federal agencies to implement the Regulatory Flexibility Act, the Office of Advocacy in 2002 saved small businesses over $21 billion in foregone regulatory costs that can now be used to create jobs, buy equipment and expand access to health care for millions of Americans. Small businesses remain the backbone of the U.S. economy. According to a study conducted by the Small business Administration Office of Economic Research and released in January 2003, small businesses account for approximately 99 percent of all employers, account for 51 percent of private-sector output, represent 52 percent of GDP and, in 2002, provided two-thirds of all net new jobs. Small businesses have also taken the lead in moving people from welfare to work and an increasing number of women and minorities are turning to small business ownership as a means to gain economic self- sufficiency. Put simply, small businesses represent what is best in the United States economy, providing innovation, competition and entrepreneurship. Their interests are vast, their activities divergent, and the difficulties they face to stay in business are numerous. To provide the necessary support to help them, SBA's Office of Advocacy needs our support. The responsibility and authority given the Office of Advocacy and the Chief Counsel are crucial to their ability to be an effective independent voice in the Federal Government for small businesses. This bill has been endorsed by the U.S. Chamber of Commerce, the Small Business Legislative Council and the National Federation of Independent Businesses. Small businesses are asking us to do everything we can to protect and strengthen this essential office. I believe this legislation accomplishes that important goal. I have always been a strong supporter of the Office of Advocacy and I am pleased to join with Chairwoman Snowe in introducing this legislation, which will ensure that the Office of Advocacy remains an independent and effective voice representing America's small businesses.

Mr. KERRY. Mr. President, with most of the country's attention focused on the war in Iraq, important issues at home are falling through the cracks. Today I rise to talk about one of the needs of working moms and dads and their children--child care. We have a shortage of childcare in this country, and it is a problem for our families, a problem for our businesses, and a problem for our economy. The Census Bureau estimates that there are approximately 24 million school age children with parents who are in the workforce or pursuing education, and the numbers are growing. There has been a 43 percent increase in dual-earner families and single parent families over the last half a century. As parents leave the home for work and education, the need for quality child care in America continues to increase. As the Ranking Democrat of the Committee on Small Business and Entrepreneurship, I think we can foster the establishment and expansion of existing child care businesses through the Small Business Administration, SBA. Today with Senators Harkin, Landrieu, Pryor, Lieberman, Daschle, Bingaman, and Johnson. I am introducing the Child Care Lending Pilot Act of 2003, a bill to create a three-year pilot that allows small, non-profit child care providers to access financing through SBA's 504 loans. There is a real need to help finance the purchase of buildings, to expand existing facilities and improve the conditions of established centers to meet the demand for child care. It is appropriate to provide financing through the 504 program because it was created to spur economic development and rebuild communities, and child care is critical to businesses and their employees. Financing through 504 could spur the establishment and growth of child care businesses because the program requires the borrower to put down only between 10 and 20 percent of the loan, making the investment more affordable. Another advantage of 504 loans is that they have terms of up to 20 years, with fixed interest rates, allowing small businesses to keep their monthly payments low and predictable. As anyone with children knows, quality childcare comes at a very high cost to a family, and it is especially burdensome to low-income families. The Children's Defense Fund has estimated that child care for a 4-year-old in a child care center averages $4,000 to $6,000 per year in cities and states around the Nation. In all but one state, the average annual cost of child care in urban area child care centers is more than the average annual cost of public college tuition. These high costs make access to child care all but non-existent for low-income families. While some states have made efforts to provide grants and loans to assist childcare businesses, more must be done to increase the supply of childcare and improve the quality of programs for low-income families. According to the Child Care Bureau, state and federal funds are so insufficient that only one out of 10 children in low-income working families who are eligible for assistance under federal law receives it. For parts of the country, when affordable child care is available, it is provided through non-profit child care businesses. I formed a task force in my home state of Massachusetts to study the state of child care, and of the many important findings, we discovered that more than 60 percent of the child care providers are non-profit and that there is a real need to help them finance the purchase of buildings or expand their existing space. Child care in general is not a high-earning industry, and the owners don't have spare money lying around. Asking centers to charge less or cut back on employees is not the way to make child care more affordable for families and does not serve the children well. An adequate staff is needed to make sure children receive proper supervision and support. Furthermore, if centers are asked to lower their operating costs in order to lower costs to families, the safety and quality of the child care provided would be in jeopardy. I urge my colleagues to join us in supporting this legislation so non-profit childcare providers can access funds to start new centers or expand and improve upon existing centers. As we have done in Massachusetts, Senators could bring together 504 lenders, childcare providers not for-profit and non-profit--and the state department of child welfare to facilitate the increase of childcare providers in their states. As common sense tells us, and the child advocates if we listen, there is no magic bullet to addressing the shortage of safe and affordable child care in this country--it takes coordinated and complementary efforts to make a real difference. This is as much a child welfare issue as a workforce issue, and it makes sense to leverage one of SBA's effective resources to try and contribute to making a positive difference. I argue--we argue--that allowing non-profit child care centers to receive SBA loans can increase the availability of child care in the United States. Non-profit child care centers provide the same quality of care as the for-profit centers, and non-profit centers often serve our nation's neediest communities. I hope that my colleagues will recognize the vital role that early education plays in the development of fine minds and productive citizens and realize that in this great nation, child care should be available to all families in all income brackets. I ask unanimous consent that several letters of support be printed in the Record. These letters demonstrate that this is a good investment and good for our country.

Mr. KERRY

Mr. KERRY. Mr. President, we are currently engaged in a war with Iraq. I strongly believe that our military must have every resource at its disposal to fully prosecute and win this war. I support the Senate fiscal year 2003 supplemental appropriations bill because it provides funding for the military functions of the Department of Defense as it prosecutes the war in Iraq. The bill also includes funding for the reconstruction efforts in Iraq and funding to continue our anti-terrorism efforts. However, I am disappointed that the bill does not provide adequate funding to protect our homeland. The bill provides more than $62 billion to prosecute the military operations in Iraq, including replenishing munitions that have been expended and maintaining air, ground and sea operations critical to our war effort. It also provides more than $7.8 billion to support the reconstruction of health services, sanitation, transportation and telecommunications for the people of Iraq. I also support the additional funds included in this bill to increase airline security. The bill provides $1 billion to reimburse airline security costs, $100 million to assist airlines in upgrading cockpit doors, and $375 million for airline operating and capital costs. I believe that this funding will help maintain the flying safety of the American public. I am grateful to both Chairman Stevens and Ranking Member Byrd for providing $150 million to the Department of Veterans Affairs for health care services to veterans of the Iraq war. I worked with Senator Graham on an amendment to help pay for the health care of returning service members who are released from the military. We are not meeting our promises to our veterans. The VA has consistently received inadequate resources to meet rising medical costs and a growing demand for its health services. This funding crisis has forced the VA health system to resort to short-term fixes, such as discontinuing outreach activities in an effort to reduce enrollment and instituting new regulations that require the rationing of health care. This veteran's health care crisis has been exacerbated with the recent announcement that the VA would provide free medical services to all veterans of the Iraq war for 2 years. The additional funding included in the supplemental is crucial to insure that current veterans do not receive a further reduction in health benefits. While this legislation contains an acceptable level of funding to help prosecute the war with Iraq, I am deeply concerned that this legislation does not meet our Nation's homeland security needs. Vulnerabilities exist in our homeland security infrastructure, and we should not squander a single day addressing them. An independent task force, chaired by former Senators Gary Hart and Warren Rudman, recently advised that ``America remains dangerously unprepared to prevent and respond to a catastrophic attack on U.S. soil.'' We must act to ensure that the Federal and State agencies needed to better protect our borders, coasts, cities, and towns have sufficient resources to do so. The bill includes approximately $4.6 billion for increased border and maritime security to assist State and local governments in protecting our cities and our critical infrastructure from terrorism. But I believe that more should have been done to protect our homeland from the risk of terrorism. That is why, I supported an amendment offered by Senator Schumer which would have provided $3 million in additional funding for first responders and $1 billion for security in high-threat areas. Last year I was very involved in the development of the new port security law, which included new rigorous security requirements for our ports. Given the vulnerabilities that we know exist in our port security, I am deeply disappointed that the Senate has thus far provided insufficient funding to address these problems. I strongly supported a Hollings amendment that would have provided $1 billion for port security and to screen vessels for radioactive materials. I also support an amendment offered by Senator Boxer that would provide $30 million to the Department of Homeland Security for research, development and initial deployment of technology to protect commercial aircraft from the threat posed by stinger missiles. While I missed the votes on these amendments, I was recorded in support of each in the Record. We must continue to fight both the war with Iraq and the war against terrorism and funding for these programs is a necessary component of that fight.

Mr. KERRY

Mr. KERRY. Mr. President, on behalf of myself, Senator Snowe and Senator Bennett, I am offering an amendment to the FY2003 Supplemental Appropriations bill in order to make available an additional $1 billion in government guaranteed loans to small businesses. Let me make clear to my colleagues that we are not requesting additional money for the Small Business Administration. This amendment is technical, clarifying a provision enacted as part of the Conference Report to H.J. Res. 2, the FY2003 Omnibus Appropriations Act. It clarifies that Congress intends that the SBA to use a more accurate method--known in the technical terms as an econometric model--to estimate the cost of all small business loans authorized under Section 7(a) of the Small Business Act of FY2003. Right now the SBA is only using the new method to estimate the cost of ``regular'' 7(a) loans, treating differently 7(a) loans--known as Supplemental Terrorist Activity Relief (STAR) Loans--made to small business victims of the 9/11 terrorist attacks. This inconsistently affects the overall program by leaving it short on lending dollars at time when demand for loans through the SBA's flagship loan program is up 38 percent. If the SBA will use the new, more accurate method to calculate STAR loans, it will mitigate the shortfall by making available an additional $1.2 billion in loans to small businesses. This amendment clarifies the SBA's authority to do this. I thank Senator Hollings, Gregg, Byrd and Stevens for their help on this important issue.

Mr. KERRY

Mr. KERRY. Mr. President, I rise to thank my colleagues for voting last night in favor of the Small Business Drought Relief Act of 2003. Time is of the essence for disaster victims; small businesses across the country have been waiting 8 months for Congress to take action and force the Small Business Administration to comply with the law and open its disaster loan program to them. They are frustrated, and understandably so. 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, 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 has grown to 48, demonstrating that problem has gotten worse and even more small businesses are 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 the Chair of the Committee on Small Business and Entrepreneurship, Senator Snowe, for all her work to ensure passage of this bill, as well as our many colleagues who are cosponsors--Senators Bond, Landrieu, Edwards, Johnson, Bingaman, Levin, Baucus, Daschle, Hollings, Lieberman, Warner, Crapo, Harkin, Reid, Allen, Bennett, and Enzi. Mr. President, I ask unanimous consent that letters of support from Governors who advocated prompt passage of this legislation last year be printed in the Record.

Mr. KERRY

Mr. KERRY. Mr. President, I offer my strong support for the Armed Forces Tax Fairness Act and am proud to be a cosponsor of the original bill. This legislation, among other measures, will remedy several provisions in the Tax Code that needlessly penalize the members of our Armed Forces. The act eliminates taxes on military death gratuities. It allows service members to benefit from the sale of a home as civilian taxpayers now do by exempting up to $250,000 of the revenue from the sale of a principal residence even if the owner is away on active duty. It excludes amounts received under the military housing assistance program. It expands combat zone filing rules to include contingency operations. And it takes other sound steps that will benefit Americans who have chosen to serve their country so admirably in our armed services. There is also a provision to assist the families of astronauts lost in the tragic crash of the Space Shuttle Columbia. As a veteran, I hold the dedication and commitment of our military personnel in especially high regard. They are putting their time, talent, energy and, often, their very lives on the line for our Nation. For that, I thank them and am proud to support this legislation.

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to discuss the merits of the Coast Guard Authorization Act of 2003. This bill authorizes appropriations for fiscal year 2004 for the Coast Guard and will be introduced by my subcommittee chairman Senator Snowe today. I thank Senator Snowe for her work on this legislation and her willingness to work with me and others on the Commerce Committee to improve it. The events of September 11 resulted in a new mandate for the Coast Guard as port security and homeland defense missions rose to the forefront of its responsibilities. Homeland Security officials realized that our ports and sddcoastlines were vulnerable to terrorist attacks and quickly charged the Coast Guard with additional missions to help protect the homeland. Though I have no doubt that the Coast Guard will continue to play a valuable role in our domestic security, as it should, I have voiced my concern over the past year that traditional missions have suffered as a result of these new security responsibilities. Fishery patrols, drug and illegal immigrant interdiction and Marine resources protection have in large measure fallen by the wayside since September 11. We simply cannot allow this to happen. We should provide the Coast Guard sufficient funding to meet its new and traditional missions. In light of this, I am pleased that the bill increases the Coast Guard's budget by 10 percent, to $6.8 billion. This reflects a $500 million increase over last year's budget and is virtually identical to what the President has requested. Of this amount, roughly $4.7 billion is earmarked for operating expenses, an increase of $400 million over fiscal year 2003. The bill also authorizes $775 million for acquisition, construction and improvements, a $33 million increase over fiscal year 2003. Although I support these budget numbers, I have not co-sponsored the bill because it does not include an authorization for the costs the Coast Guard will incur complying with the Maritime Transportation Security Act we passed last year. We know that the Coast Guard will require addition funds to oversee and coordinate the port security upgrades mandated by the law, and I feel strongly that a port security provision needs to be added to the bill before it passes the Senate. Considering that we are waging a war on terror, port security should be part of any Coast Guard reauthorization bill. Senator Snowe has agreed to work with me to draft additional language which would provide the Coast Guard with adequate funding. I look forward to drafting a comprehensive provision with my colleague to help the Coast Guard improve port security. The Coast Guard has unique missions not covered by any other Federal agency. It is the only U.S. military service with domestic law enforcement authority, and it has taken on many new homeland security missions since September 11. As such, I am pleased that the bill authorizes an active duty personnel level of 45,500. I've consistently supported raising personnel levels because the agency is charged with patrolling 95,000 miles of coastline, enforcing fish and marine conservation laws, conducting search-and-rescue missions, drug and illegal immigrant interdiction, along with its new homeland security missions. This is an awesome responsibility for an agency that is smaller than the New York City Police Department. Ultimately, as the Coast Guard becomes more integrated into the Department of Homeland Security, we may need to authorize higher personnel levels to ensure that the agency can adequately meet all its missions. I am also pleased that the bill includes a provision increasing funding levels for the Oil Spill Liability Trust Fund. For the past 3 years, emergency fund expenditures have exceeded the $50 million annual appropriation, reaching a projected high of over $100 million this fiscal year. The fund has relied on carryovers from prior year balances to augment the annual appropriation and meet the increased need. This provision would increase the amount of the annual appropriation from $50 million to $150 million, thus reducing reliance on carryovers from prior year balances to augment the annual appropriation and meet the increased need. I will also be working with my colleagues to include several other important provisions in this legislation as we move forward. For example, because the Coast Guard is still below pre-9/11 levels for fisheries enforcement, I will be seeking a provision that will require the Coast Guard to better coordinate its fisheries enforcement efforts with other Federal agencies, such as NOAA, and relevant State and local agencies. Also, some measures ought to be taken to extend certain provisions of the Oil Pollution Act to vessels that, due to their size, still pose a significant risk to our environment in the event of an oil spill. Lastly, I would like to acknowledge the inclusion of a $25 million authorization for the Loran-C radio navigation system, which is used by fishermen and general aviation pilots as well as the Coast Guard. The Loran system is very reliable, and I feel strongly that we should continue to fund it as a secondary navigation system to the Global Positioning System. Although GPS is certainly the most sophisticated and modern tracking system now in operation, it is imperative that we retain an alternative navigation system and not simply throw all of our eggs in one basket. GPS signals can be jammed and are subject to interference. The Loran-C provision has been in past Coast Guard reauthorization bills and was fully appropriated by the Congress for fiscal year 2003. It is important that we continue to support this system. I support the provisions in this bill and I look forward to improving it as it moves through the legislative process.

Mr. KERRY

Mr. KERRY. Mr. President, I rise today to discuss the merits of the Coast Guard Authorization Act of 2003. This bill authorizes appropriations for fiscal year 2004 for the Coast Guard and will be introduced by my subcommittee chairman Senator Snowe today. I thank Senator Snowe for her work on this legislation and her willingness to work with me and others on the Commerce Committee to improve it. The events of September 11 resulted in a new mandate for the Coast Guard as port security and homeland defense missions rose to the forefront of its responsibilities. Homeland Security officials realized that our ports and sddcoastlines were vulnerable to terrorist attacks and quickly charged the Coast Guard with additional missions to help protect the homeland. Though I have no doubt that the Coast Guard will continue to play a valuable role in our domestic security, as it should, I have voiced my concern over the past year that traditional missions have suffered as a result of these new security responsibilities. Fishery patrols, drug and illegal immigrant interdiction and Marine resources protection have in large measure fallen by the wayside since September 11. We simply cannot allow this to happen. We should provide the Coast Guard sufficient funding to meet its new and traditional missions. In light of this, I am pleased that the bill increases the Coast Guard's budget by 10 percent, to $6.8 billion. This reflects a $500 million increase over last year's budget and is virtually identical to what the President has requested. Of this amount, roughly $4.7 billion is earmarked for operating expenses, an increase of $400 million over fiscal year 2003. The bill also authorizes $775 million for acquisition, construction and improvements, a $33 million increase over fiscal year 2003. Although I support these budget numbers, I have not co-sponsored the bill because it does not include an authorization for the costs the Coast Guard will incur complying with the Maritime Transportation Security Act we passed last year. We know that the Coast Guard will require addition funds to oversee and coordinate the port security upgrades mandated by the law, and I feel strongly that a port security provision needs to be added to the bill before it passes the Senate. Considering that we are waging a war on terror, port security should be part of any Coast Guard reauthorization bill. Senator Snowe has agreed to work with me to draft additional language which would provide the Coast Guard with adequate funding. I look forward to drafting a comprehensive provision with my colleague to help the Coast Guard improve port security. The Coast Guard has unique missions not covered by any other Federal agency. It is the only U.S. military service with domestic law enforcement authority, and it has taken on many new homeland security missions since September 11. As such, I am pleased that the bill authorizes an active duty personnel level of 45,500. I've consistently supported raising personnel levels because the agency is charged with patrolling 95,000 miles of coastline, enforcing fish and marine conservation laws, conducting search-and-rescue missions, drug and illegal immigrant interdiction, along with its new homeland security missions. This is an awesome responsibility for an agency that is smaller than the New York City Police Department. Ultimately, as the Coast Guard becomes more integrated into the Department of Homeland Security, we may need to authorize higher personnel levels to ensure that the agency can adequately meet all its missions. I am also pleased that the bill includes a provision increasing funding levels for the Oil Spill Liability Trust Fund. For the past 3 years, emergency fund expenditures have exceeded the $50 million annual appropriation, reaching a projected high of over $100 million this fiscal year. The fund has relied on carryovers from prior year balances to augment the annual appropriation and meet the increased need. This provision would increase the amount of the annual appropriation from $50 million to $150 million, thus reducing reliance on carryovers from prior year balances to augment the annual appropriation and meet the increased need. I will also be working with my colleagues to include several other important provisions in this legislation as we move forward. For example, because the Coast Guard is still below pre-9/11 levels for fisheries enforcement, I will be seeking a provision that will require the Coast Guard to better coordinate its fisheries enforcement efforts with other Federal agencies, such as NOAA, and relevant State and local agencies. Also, some measures ought to be taken to extend certain provisions of the Oil Pollution Act to vessels that, due to their size, still pose a significant risk to our environment in the event of an oil spill. Lastly, I would like to acknowledge the inclusion of a $25 million authorization for the Loran-C radio navigation system, which is used by fishermen and general aviation pilots as well as the Coast Guard. The Loran system is very reliable, and I feel strongly that we should continue to fund it as a secondary navigation system to the Global Positioning System. Although GPS is certainly the most sophisticated and modern tracking system now in operation, it is imperative that we retain an alternative navigation system and not simply throw all of our eggs in one basket. GPS signals can be jammed and are subject to interference. The Loran-C provision has been in past Coast Guard reauthorization bills and was fully appropriated by the Congress for fiscal year 2003. It is important that we continue to support this system. I support the provisions in this bill and I look forward to improving it as it moves through the legislative process.

Mr. KERRY

Mr. KERRY. I ask unanimous consent that Senators Kohl, Lautenberg, Daschle, and Boxer be added as cosponsors and the reading of the amendment be dispensed with.

Mr. KERRY. I call up amendment No. 281.

Mr. KERRY. As all of us know, there are 42 million people living with AIDS worldwide. The Senate has addressed this issue previously, but the amount of money annually allocated falls short of the promises almost every single year. We have been working in the Senate Foreign Relations Committee to develop bipartisan legislation. What I ask our colleagues to do today is to provide the amount of money that we will authorize in that legislation, in order to combat the AIDS epidemic. It simply increases the funding level included in the budget resolution to match the spending levels that will be in the authorization bill by $800 million. In addition, I tell all my colleagues, this is completely in line with the legislation Senator Frist and I wrote and put together and that the Senate passed last year. So it is not a change; it is what we did before, but it meets the promise of the Senate and does not fall short. It also dedicates $800 million for deficit reduction. I ask my colleagues to help us fulfill a promise that has been too long in coming.

Mr. KERRY

Mr. KERRY. Mr. President, I speak today to ask my colleagues to support the nomination of Mr. Harold Damelin, whom President Bush has nominated to serve as the next Inspector General, IG, of the U.S. Small Business Administration, (SBA). Mr. Damelin's extensive experience in and out of government makes him very well suited to this important position, and I look forward to working closely with him and his office. As my colleagues are well aware, the IG post at any Federal agency is a critical one--assigned by Congress the duties of protecting taxpayer money, ensuring that laws are upheld, and investigating abuses within an agency. This is no less true at the SBA, which has played a vital role in helping to develop and foster small businesses and small business initiatives for the past 50 years. The role of the IG is unique: someone who is above the political fray of other appointees, and someone who may even be called upon to investigate them. By their very nature, IG's must function independently and with a distinct authority, so it is no small amount of trust the President and the Congress must place in any IG. Additionally, an IG must possess not only managerial and policy experience, but should possess investigative experience as well. Fining such a candidate can be a difficult task. Phyllis Fong, the former IG for the SBA, was recently confirmed as the IG for the Department of Agriculture, where I am sure she will continue to perform her official duties in a skillful, competent, and efficient manner. However, because of a delay in her confirmation, the IG position at the SBA was only recently vacated. Given this delay, coupled with the importance of the IG position, Senator Snowe, the Chair of the Committee on Small Business and Entrepreneurship, and I have agreed to seek unanimous consent that Mr. Damelin's nomination be discharged from the Committee on Small Business and Entrepreneurship and considered immediately by the full Senate. In my capacity as ranking member, I have thoroughly reviewed Mr. Damelin's employment and educational experience, his FBI background check and the Committee questionnaire. Mr. Damelin has fully answered all questions put before him. As Mr. Damelin clearly possesses the necessary skills and experience to serve as the next SBA IG, I support moving forward with his nomination at this time. Mr. Damelin, if confirmed by the Senate, will come to the SBA from the private sector, where he most recently worked as a lawyer for the firm of Powers, Pyles, Sutter and Verville in Washington, DC. Prior to joining the private sector, Mr. Damelin had a long and illustrious career as a public servant, holding such positions as the branch chief for the U.S. Department of Justice's Criminal Division, Fraud Section, Governmental Fraud Branch and the senior counsel to the majority for the Senate Committee on Governmental Affairs' Special Investigation Committee. I believe these experiences and others uniquely qualify Mr. Damelin to serve as the SBA's IG. Mr. Damelin was born in Malden, in my home State of Massachusetts, although he now resides in Virginia. He attended Boston College and earned his JD from Boston College Law School, also my alma mater. Mr. Damelin was also a member of the Armed Forces, serving as a 2nd Lieutenant after college and attaining the rank of Captain in the Army Reserves before being honorably discharged with the rank of Captain. I am always pleased to see a fellow Bay Stater, and Eagle, dedicate his energies toward public service, and this is no exception. Mr. Damelin's nomination also has the support of Small Business and Entrepreneurship Committee Chair Olympia Snowe. I ask all of my colleagues to vote in favor of Mr. Damelin's nomination to be the next Inspector General of the U.S. Small Business Administration.

Mr. KERRY

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

Mr. KERRY. Mr. President, as we all know, consumer confidence is at its record lowest level in 10 years. There are 300,000 Americans who lost their jobs in February alone--2.5 million in the last 2 years. State and local governments are in trouble. Families and businesses are having trouble. We are running Federal deficits as far as the eye can see. And we are at war. My amendment tries to avoid saddling the next generations with debt by offering a $150 billion tax cut to average Americans over the course of the next 2 years, contemplating a payroll tax holiday, paid for in the outyears. It will strengthen our economy by putting money as a stimulus into the pockets of Americans now. And it does not take a dime out of Social Security or Medicare. We can give every American worker $750 this year. If you are married with children and are both working, you would get $1,500, which is more than with the Bush tax cut, without any of the negative impact in the long run. It does not raise taxes. It simply avoids going forward with the worst components of the President's proposal. It is not a tax increase; it is simply not giving the cut, which is unwise and nonstimulative and takes from our children. I hope my colleagues will support it.

Mr. KERRY. Mr. President, I call up amendment No. 397.

Mr. KERRY

Mr. KERRY. Mr. President, I rise before you today to honor the life and decorated naval career of Captain Joseph D. Nolan, who passed away late last year. The journey that he and his wife Betty traveled through the U.S. Navy extended from Virginia to the shores of Korea and Vietnam, and it finally came to rest in the deserts of New Mexico. Throughout his 30 years of service Captain Nolan wore the uniform of the U.S. Navy with pride and honor, and his dedication was recognized by the Silver Star amongst many others. The quantity and quality of his service stand as a model for all Americans to emulate as this young nation enters its fourth century. Joseph Nolan's roots in my home State run deep. Joe graduated from Boston College then went on to receive his master's degree from Boston Teachers College, where his masters thesis focused on Oliver LaFarge's ``Laughing Boy.'' After graduating from the Officer Candidate School in Newport, Rhode Island, Joe was commissioned in January 1952. His first tour of duty was as CIC officer on-board the USS Preston where he received the Naval Commendation Medal with Combat ``V'' for his combat action in Korea. He continued to serve in destroyer types as Operations Officer and Gunnery Officer of the USS Cross and matriculated into the Regular Navy in August 1955. Officer Nolan assumed the role of aide to the Shipyard Commander in his first tour of shore duty at the Pearl Harbor Naval Shipyard. Here, he received orders to return to sea duty as Executive Officer of the USS Snyder based in New York. Following the decommissioning of the USS Snyder, Nolan reported to the U.S. Atlantic Fleet Operational Control Center for 2\1/2\ years and attended the Air Command and Staff College at Maxwell AFB, Alabama throughout 1964 and 1965. Upon completion of the Air Command and Staff College, Nolan served as Senior Naval Advisor in the ``I'' Corps area of Vietnam and as Commander Task Group 115.1 in Operation Market Time. For his combat action Nolan was awarded the Vietnamese Cross for Gallantry and Legion of Merit with Combat ``V.'' Nolan assumed command of the USS New in December 1966 in Portsmouth, VA. After gaining the rank of captain, Captain Nolan was given command of the USS Halsey and later became the commanding officer of the Naval Destroyer School and then Surface Warfare Officer School, in Newport. In his final tour of duty Captain Nolan moved to Albuquerque, NM, to work for the Defense Nuclear Agency at Kirtland Air Force Base. In 1982 Captain Nolan retired after 30 years of service with the United States Navy. Proud as he was of his professional military career, Joe Nolan's life encompassed much more than his service to country; he was a man of action who consumed the works of J. Frank Dobie and Eugene Manlove Rhodes and he came to love Western art. While I am saddened by his passing and the grief it visits upon his family and friends, I am proud to stand here today and share with the Nation my regard for the truly American life lived by Captain Joseph Nolan. We are humbled by his loss but we are better for his time here on earth.

Mr. KERRY

Mr. KERRY. Mr. President, I rise to discuss an amendment offered by my good friend from Louisiana, Senator Breaux. The amendment, which was No. 339 and has been described as the moderates tax amendment, would have reduced the size of the tax cut in the budget resolution from more than $700 billion to $350 billion. I would like the record to reflect exactly why it is that I voted for this amendment. I voted for the amendment offered by Senator Breaux because it presented our best chance to cut the size of the irresponsible tax cut in this budget. Let me be clear, Mr. President, I do not support a $350 billion tax cut as part of this budget. Had the Breaux amendment passed, I would have sought further reductions in the tax cut. Today, America is at war in Iraq. We have troops in Afghanistan and the Philippines. We are fighting to keep our homeland safe from terrorism. We have pressing needs in health care, education, and other areas. The Nation is running deficits. State and local governments are in fiscal crisis. The economy is slumping. For these reasons, a $350 billion tax cut, just like a $700 billion tax cut, is wrong. Both proposals will dump debt on our children. And the President's plan is not only too big, but it unfairly favors the wealthiest among us over working families. I have filed at the desk an amendment to this budget that I believe charts the right course. Consumer confidence is at its lowest level in 10 years. Some 300,000 Americans lost their jobs in February. State and local governments are in trouble. Families and businesses are hurting. We are running huge deficits, and we are at war. Our economy needs help. Working families need help. But we shouldn't be burdening future generations with more debt. My amendment provides for a $150 billion tax cut for all Americans this year and next and it is paid for in the outyears. It will stimulate our economy without sticking our kids with the bill. Without taking a dime out of Social Security or Medicare, we can give every American worker a one-time payroll tax holiday of more than $750 that is far more than President Bush's tax plan. We could pass a temporary job creation tax credit and help small businesses, all without adding to the ``debt tax'' on future generations. It we pass the budget now before us--if we pass the President's plan--we will be spending our kids' money--and that is wrong. We need a tax cut that goes to working people who will spend the money--and we need a tax cut that is paid for. Let's do what is right and pass a real stimulus package, and let us do what average Americans do: Let's pay for it.

Mr. KERRY

Mr. KERRY. Mr. President, I am pleased to be a cosponsor of Senator Murray's amendment to the budget resolution that will fully fund the No Child Left Behind Act. I regret that I will not be present for the vote, but if I were present I would vote for the Murray amendment to increase education funding by $8.9 billion. Unfortunately, both the budget resolution that we are debating and President Bush's proposed fiscal year 2004 budget do not fulfill the funding commitment that Congress made when we passed the No Child Left Behind Act into law. In fact, the budget resolution contains a $700 million cut in funding for the No Child Left Behind Act compared to the fiscal year 2003 levels. The budget resolution's title I funding leaves more than 6 million disadvantaged children behind. There is no increase for teacher quality funds, even though nearly 40 percent of title I children are taught by teachers without a college degree in their primary instructional field and our schools will need to hire 2 million new teachers over the next decade. While 6 million latchkey children currently go without afterschool programs, this budget cuts afterschool funding for more than 500,000 children. And it eliminates all funding for rural education, dropout prevention, preparing tomorrow's teachers in technology, and smaller learning communities among other things. We have said it time and again during debate on No Child Left Behind and since it became law: new reforms and stronger accountability systems are not going to work if we don't provide resources to ensure that all children can learn to high standards. That means providing the full authorized amount of title I funding, it means helping schools meet the major new requirements for teacher quality that the law imposed, and it means increasing not slashing funding for afterschool programs. I hope all of my colleagues can support this important amendment.