Jon Kyl

Mr. KYL

Mr. KYL. I appreciate the courtesy of the chairman of the committee. If Senator Grassley takes a minute, and we have three other Senators who take 4 minutes, that gives me a minute to say thank you and that would do it. I propose that as a unanimous consent request.

Mr. KYL. I ask that further reading of the amendment be dispensed with.

Mr. KYL. I thank the Senator.

Mr. KYL. Madam President, if I may take 1 minute to make two quick points. I note that the chart of the Senator from Michigan uses the figures for the last year of the Bush tax cuts to show in the very best light the impact of reductions of a number of estates that pay the estate tax. It is a fairly low number, a relatively low number, and it will continue to be low if Republicans have their way. Unfortunately, the next 2 years, years after which the Bush tax cuts expire, in the year 2011, the number goes back up to 131,000 and in the year 2015, according to the Joint Tax Committee, nearly 177,000 estates will file estate tax returns. The second point is that the bottom line is that the 1 year cited by the Senator from Michigan does get down to a fairly low number because of the Republican tax cuts. Then they expire, and the number shoots back up. The only other point I wish to make is our budget amendment is designed to accommodate a bill offered by the senior Senator from Louisiana which was not offset at all because those of us who support reform of the death tax appreciate its significance in the lives of Americans and the priority to eliminate or to reduce that tax.

Mr. KYL. Off your time.

Mr. KYL. I suspect I am out of time, but I am happy to yield.

Mr. KYL

Mr. KYL. Madam President, I now have a number. The Senator from North Dakota was very close in the estimate which he gave. I believe the number is $72.3 billion for 5 years, which is very close to the number that the Senator had. Of course, since the budget raises taxes by $916 billion, that more than accommodates what we provide.

Mr. KYL. Madam President, the so-called payment for this is the same as other things are paid for in this budget, by the assumption that revenues will be available. As a result, there is no specific cost, if that is what the Senator is asking.

Mr. KYL. Madam President, I thank the Senator from New Hampshire, the ranking member of the committee, for all his hard work and support for those of us who have prepared amendments and would like to offer them. This is actually the Kyl-Graham amendment. The Senator from South Carolina will be offering this amendment and, incidentally, as soon as we have the exact text typed, we will present that for actual formal submission, but I can begin talking about it right now. Let me begin doing that. The purpose of this amendment is to demonstrate, I believe, that there is sufficient ability in this budget to take care of a couple of problems that are very important and which we believe should be included within this budget before it gets passed: provisions that provide for the education of American children, provide for capital gains and dividend tax relief to continue to exist both for our families and businesses and the competitiveness of our economy, as well as other provisions which were not included in the underlying budget, such as death tax reform, which I think most of us acknowledge needs to occur and which we need to provide for in the budget. This amendment Senator Graham and I will be offering in a moment is designed to include these very important provisions which I think most of us support in the budget. Not to do so would clearly represent a very big hole, I suggest, in the budget. There is a suggestion in the amendment that was offered by the Senator from Montana and others that what Republicans have been saying about this budget resolution--namely, that it raises taxes on every American taxpayer--is, in fact, the case because as approved by the Budget Committee on a party-line vote, I might add, this budget raises taxes by $916 billion over the 5 years of the budget, which would be, of course, the biggest tax increase in the history of the country. The chairman of the Senate Finance Committee, the Senator from Montana, well understood this, and I suggest probably is the reason for his offering of the amendment to reduce the revenue that is projected by the budget resolution and then, in his case, purports to dedicate that revenue to middle-class tax relief. He wouldn't be offering this amendment were it not for the recognition that there is a huge tax increase in the budget that came from the Budget Committee. So I submit, to begin this conversation, that Senator Baucus's amendment is a good start, but it leaves in place the tax hikes on millions and millions of Americans, and that is not something most Republicans want to see. If the Baucus amendment is adopted, then Democrats will be proposing to raise taxes on hard-working Americans by $736 billion over 5 years, rather than the $916 billion, still the biggest tax increase ever. We don't think this is right. Incidentally, on a technical note, according to the Republican Budget Committee staff, the Baucus amendment increases the deficit in 2010 and 2011. This is important. When the interest is factored in, the Baucus amendment would take the budget out of balance in 2012 by some $6 billion. In the past, the Budget Committee members have had an informal agreement that interest would not be computed for amendments because it would be too cumbersome. While this amendment would take the budget further into deficit-- preventing tax increases is more important than worrying about a small, manageable size deficit--it may be interesting to note that the Baucus amendment would have this effect. In addition to raising taxes, we are talking about increasing the amount of deficit. The Senator from Montana notes that his amendment would extend the 10-percent bracket, the child tax bracket, the marriage penalty relief, the adoption tax credit, the earned-income tax credit for combat pay, and provide modest estate tax relief. I agree with the Senator on all these policies except with the modesty of the death tax relief. Senator Baucus and some of his cosponsors, especially the two Senators Nelson, have always supported repeal of the death tax, as have I. So it is disappointing to many family businesses and farm owners that we now have sponsors who had supported the repeal of the death tax endorsing an amendment that would set the death tax rate at what I believe is a confiscatory 45 percent and set the exemption at only $3.5 million, which most of us believe is too low. This leaves more than 22,000 families subject to the estate tax each and every year, according to the Joint Tax Committee. Another one of the cosponsors of the amendment of the Senator from Montana, the Senator from Arkansas, says on his Senate Web site that he supports a $5 million exemption and a 35-percent rate. I am disappointed he would then be endorsing a proposal that would have a 45-percent rate. A 45-percent rate allows the Government--think about this for a moment--to take almost half a family farm or business over the $3.5 million exempted amount at the time of death. There is a reason this particular policy has been supported by life insurance companies. I think everybody can understand that. It keeps the onerous death tax in place and would require these family businesses and farms to continue to pay exorbitant premiums to insurance companies. One of the reasons we would like to eliminate the death tax is so we don't have to pay the burden of trying to avoid the tax, which a lot of these small businesses have to do. As I said, the Kyl-Graham amendment we think substantially improves the Baucus amendment by modifying the year-to-year revenue numbers so that certain tax provisions that have been essential in helping families pay education expenses essential to our economic recovery, essential to savings for retirement, senior citizens, and families facing the death tax are provided for in this budget. Let me quickly go through them and then ask my colleague, Senator Graham, to make further comments. On the matter of education, the Baucus amendment fails to extend the many education tax provisions that are scheduled to expire. Our amendment, on the other hand, makes higher education more affordable for middle-class Americans by extending the tuition deduction, extending the modifications to the Coverdell education savings accounts, extending certain provisions for the student loan interest deduction, and for extending the exclusion for employer-provided educational assistance. These are important provisions to American families. They need to be recognized in this budget. Our amendment permanently extends the $250 deduction for expenses of elementary and secondary school teachers who, on many occasions, are required to pay for the very school supplies they feel are necessary and are important for educating the kids for whom they are responsible. These are the education provisions. On capital gains and dividends, who can argue that the capital gains and dividend tax rate reductions have been two of the most important reasons for the strong economic recovery that our country has made. Yet the Baucus amendment fails to prevent an increase in these two important tax rates. An extension of the current rates would allow our economic recovery to continue. Allowing these rates to expire and to go back up to where they were would be devastating for our economy and for the competitiveness of our capital markets and, by the way, for the retirement savings of many Americans. So the Kyl-Graham amendment permanently extends the reduced tax rate for qualified dividends and capital gains for nearly 18 million families and individuals every year. That, too, is an important component that should be in this budget. Quickly on two items before I turn to the discussion of the death tax, this goes to competitiveness. What our amendment would do is prevent tax increases that would clearly hurt our competitive position in the world economy. We talk about outsourcing of jobs and competitiveness and the rest of it. If you want to know what will save American jobs and will allow us to continue to grow, it is the tax rates that Senator Graham and I preserve in this budget. America cannot be the home for worldwide capital markets if it is hostile to American investors. So the amendment makes the existing tax rates for long-term capital gains and for qualified dividends permanent tax policy. We understand that the lower tax rates that were implemented in 2003 and extended again in 2006 have been a tremendous success for our economy and have benefited a broad range of American citizens. Growth, since the 2003 tax relief, has averaged more than 3.5 percent a year, while it averaged 1.3 percent from the first quarter of 2001 through the second quarter of 2003, before these tax rates were put into effect. The Dow Jones industrial average has risen by 40 percent since the lower investment tax rates were enacted. The average 401(k) balance has risen by about 65 percent since 2003, very good news for American families and investors. Why would we want to destroy this tremendous growth in the economic wealth of Americans? All of this investment activity makes it easier for entrepreneurs and businesses to raise funds to expand and grow their businesses, create more jobs, and improve the standard of living for all Americans. By the way, to answer the question of who benefits by all this, some of our colleagues are prone to suggest it is only the wealthy who benefit. Not so. It is interesting to note that most Americans who are benefiting from these lower tax rates are middle-income taxpayers. Fully 43 percent of tax filers in 2004 reporting capital gains had adjusted gross income of under $50,000. These are not the wealthy; these are not the rich. Just 9.5 percent of filers reporting capital gains had an adjusted gross income of $200,000 or above. So the majority of Americans benefiting from these lower tax rates, the rates we preserve in the budget if our amendment is adopted, are average, middle-class Americans. For lower income Americans, the current 5-percent rate for investments, which drops to zero in 2008, is another important but sometimes forgotten benefit, especially, important, I might add, to our senior citizens. According to statistics calculated by the Joint Committee on Taxation, more than 75 percent of all elderly taxpayers' returns reporting capital gains income have adjusted gross incomes of less than $100,000; more than 40 percent have incomes of $50,000 or less. Again, wealthy, the rich? No, we are trying to preserve lower tax rates for middle-income Americans and for senior citizens who rely significantly on their investment income in their retirement. Madam President, 79 percent of all elderly taxpayers' returns reporting dividend income have incomes of $100,000 or less, and 44 percent have incomes of $50,000 or less, adjusted gross income. So clearly, continuing these lower tax rates is important for our senior citizens and for middle-income Americans. Incidentally, these lower tax rates, far from blowing a hole in the budget, have actually helped increase revenues far beyond the projections of CBO. I note that since 2003, Treasury has collected $133 billion more in capital gains revenue than was originally projected by CBO and exceeded the official CBO projections by 68 percent. In the meantime, all the additional tax revenue flowing into the Treasury from our growing economy has caused our budget deficit to shrink below 2 percent of GDP, which is below the historical average. If we stay on this current path, we can see continued increase in revenues, continued reduction in the deficit, and continued growth of our economy, not to mention support for our families and retirees. Last point. What happens if the budget is adopted without providing for the continuation of these lower tax increases? Last fall, Goldman Sachs conducted a very interesting analysis. They wanted to see how the economy would react if taxes were increased in 2011, as the Democrats advocate. Their analysis showed that the tax increase, and I am now quoting, ``would almost surely mark the onset of a recession.'' Their analysis assumed that the Federal Reserve would step in and cut interest rates to boost the economy, and I am quoting here, ``In an effort to resuscitate demand, the Fed immediately cuts the federal funds rate, bringing it 250 basis points below the status quo level over the next year and one-half. Despite this, output growth remains well below trend over that period, putting downward pressure on inflation as slack in the economy increases.'' That is a projection of what would occur if this were to happen. We want to prevent this. We want to keep the economy strong and not allow anything that would cause it to go into recession. Just a final point having to do with the death tax reform. We can't pass a budget that doesn't include an assumption that we are going to reform the death tax. We ought to be repealing the death tax. But what we have done in this amendment is to provide an amount of money that would accommodate the kind of death tax reform that has been supported by both Republicans and Democrats. Last year, the senior Senator from Louisiana introduced a death tax reform bill, S. 3626, which would provide for a $5 million exemption per estate, indexed for inflation. It would provide for a family business ``carve out,'' a 35-percent rate to taxable estates, and it would begin in the year 2010. The Senator from Arkansas, Mr. Pryor, has endorsed death tax reform that meets these specifics in a statement, according to his Web site. Now, our amendment provides room in the year-by-year revenue numbers in the budget to accommodate death tax reforms such as those which were proposed by Senator Landrieu and endorsed by Senator Pryor. There have been other Members on the Democratic side of the aisle who have supported proposals I have introduced on death tax reform. What we are very much hoping is that all of the people, both Republicans and Democrats, who have supported these proposals in the past will remain true to their commitments to their constituents to make sure small farms and small business owners aren't going to have to prepare for or pay the death tax and that we would make room for that in this budget. If we fail to do that, then clearly we are not going to be able to provide the kind of relief our constituents demand and deserve. Our amendment provides room in the year-by-year revenue numbers to accommodate death tax reform such as that which has been proposed by our Democrat colleagues and, I would add, that I have proposed as well. Now, of course, budget resolutions don't dictate policy to the Finance Committee, so it would certainly be our intention to work with a lot of different Senators. I worked with Senator Lincoln in the past, and certainly we would want to work with Senators Landrieu and Pryor and all of the others who have indicated they would be willing to support a kind of death tax reform. As long as we have provided the numbers in the budget as Senator Graham and I propose here, then we can work to make those provisions law. I would hope we could craft an estate tax proposal that would provide an exemption of at least $5 million, indexed for inflation, that provides workable relief for the smallest estates, and that provides for a top death tax rate which is no higher than 35 percent--no higher than 35 percent. Workable relief could mean a lower rate for the smallest estates; it could also mean a family business carve-out as long as it actually works for small businesses and farms and doesn't drive up their administrative costs and leave them with planning uncertainty. All of these are goals both Democrats and Republicans have endorsed. We hope our colleagues on both sides of the aisle will therefore agree with us that it is important for us to accommodate in this budget room to extend the important tax provisions for education, capital gains and dividends, and for the estate tax. Amendment No. 507 Madam President, I understand the amendment about which I have just been speaking is actually at the desk. I would like to call it up at this time, and I ask unanimous consent that Senator Graham be added as an original cosponsor.

Mr. KYL. All of the provisions that we have in this amendment are accommodated by the budget that has been provided to us by the committee. Let me get the exact number.

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

Mr. KYL. Madam President, may I say to the Senator, the chairman of the committee, our amendment is some four pages long, and it has the amounts increased and decreased stated. I am sorry I have not totaled up the exact amount and then subtracted out the cuts. I will be happy to try to do that for the Senator.

Mr. KYL. I yield to the Senator from South Carolina, Madam President.

Mr. KYL

Mr. KYL. Mr. President, I have listened with interest to all of my colleagues who have made a case for changing the law, but I have yet to hear any of them discuss the specific proposal they presumably intend to support. The disconnect is that it does not solve the problem they have identified. It doesn't even begin to solve the problem. I urge my colleagues, before simply voting on a partisan basis for a bill which is allegedly designed to solve a problem, that they at least ask the question whether it solves the problem they have identified. It does not. That is why I proposed an amendment that does solve the problem. I urge my colleagues, before they vote in 45 minutes, to read the underlying bill--it is only 2\1/2\ pages--to read my amendment--it is about the same length--and perhaps to listen to 5 minutes of what I have to say. This is not partisan. We are going to have Republicans and Democrats as President and a Republican- and Democratic-controlled Senate. We want the U.S. attorneys to be nominated by the President, and we want the Senate to be able to act on the nominees. The underlying bill does not guarantee that. In fact, it does not even provide for it. My amendment ensures that happens. So I urge my colleagues, you have stated the case for a change. Please listen to what I have to say because I think you will see that the bill, the underlying bill, was drafted in great haste; it does not solve the problem. My amendment does. I made several arguments yesterday on behalf of this amendment. I argued that it corrects the flaws in the underlying bill that all of us should want to correct. Briefly, yesterday, I noted that the committee-reported bill does not ensure the President will nominate a U.S. attorney. That is the first thing we want to happen. Secondly, as a result, therefore, it certainly does not solve this problem my colleagues have been trying to identify here this morning about being accountable for Federal criminal prosecutions. Secondly, the Senate would have no say in the selection of a U.S. attorney who is appointed by a Federal judge, which the committee- reported bill allows to happen. Third, I noted that even the district judges themselves do not want to be placed in the position of selecting the U.S. attorneys. They have found this to be a conflict of interest, and they have refused in some cases to appoint a U.S. attorney. Fourth, I have argued that the district judges are ill-equipped in selecting U.S. attorneys. By the way, to my knowledge, no one has sought to dispute what I have been saying here. Fifth--I think this would be of interest to my Democratic colleagues--the committee-reported bill does not even end the practice of allowing an individual to serve as a U.S. attorney without Senate confirmation and without a nomination even being sent to the Senate. The committee-reported bill restores the 1986 to 2006 statutory language, and that language allowed consecutive appointments of interim U.S. attorneys by the Attorney General--the exact practice my Democratic colleagues are criticizing here today. So they permit the continuation of exactly what they object to. It would allow an administration to stack the terms of acting U.S. attorneys and interim U.S. attorneys, which would allow an individual to serve as U.S. attorney for nearly a year without confirmation ever being submitted to the Senate, and perhaps beyond that. I made these same arguments in a ``Dear Colleague'' I circulated Monday morning. I am going to try to have that letter distributed to the desks of all Senators, so when they arrive, they can at least take a look at it and evaluate what I am saying. Yesterday, I had expected that opponents of my amendment would come to the floor and respond as to why they disagreed with my amendment. A significant number of Democratic Senators did come to the floor yesterday and today to speak to the bill. All of them urged passage of the bill. Not one of them even mentioned my amendment, an amendment the Senate will be voting on in about 45 minutes. My staff ran a computer search this morning to see if someone at least had the decency to submit a statement for the record explaining why they opposed my amendment. No such statement exists. I listened carefully to the speeches this morning. All made a case for a change. Not one referred to the underlying bill or showed how it solves the problem, because it does not, and not one referred to my amendment, which, as I said, does solve the problem they have identified. I understand this issue has become very political. I understand there is great pressure within the Democratic caucus to vote down any amendments to preserve an undiluted victory over the administration. But this has nothing to do with the political issue that is raging out there; it has to do with solving a specific problem we have all agreed exists with the existing law, a problem not solved by the underlying bill. I would urge my colleagues to think before they jump over this cliff. We are all elected to a 6-year term for a reason: We are given this much time so we can stop and think about things and not be rushed into decisions that in retrospect do not appear to be a very good idea. That is how the legislation got into the PATRIOT Act that everybody is complaining about today. We are going to be compounding one mistake, I expect, with another. Allow me, therefore, to make one final pitch to my colleagues on the Democratic side who presumably simply will follow the leader and vote against my amendment without having read it or the underlying bill. If you think about the long term, I think you will agree that my proposal is the one that makes sense. But let us think about the short term and compare how the committee-reported bill and my amendment would operate over the remaining 2 years of this administration. Let's see how they work. Under the committee-reported bill, which presumably would be signed into law maybe in April, all interim U.S. attorneys would continue to serve for another 120 days until sometime in July. What would happen then, after that 120 days? One of three things could happen. A district judge could pick a U.S. attorney. Well, the Senate has no say in that. Most judges who do so are very likely to reappoint the current interim U.S. attorney. If the judge does so, that interim U.S. attorney could serve through the remainder of this administration without a nomination ever having been sent to the Senate. The second alternative is that if the district judge does not choose to appoint an interim U.S. attorney, the Attorney General could then reappoint the current one to one or more consecutive terms--the very thing all of my colleagues on the Democratic side have objected to here, that the Attorney General could appoint an interim U.S. attorney. That judicial district would have a U.S. attorney, likely for the remainder of the administration, who was not submitted to or confirmed by the Senate. The third possibility under the committee-reported bill is that after the 120 days are up, sometime in July, the administration could simply designate the interim U.S. attorney as the acting U.S. attorney--a designation that could last until March of 2008 without a nomination having ever been submitted the Senate. By March of 2008, it is likely that no nomination would ever be submitted to the Senate and that the acting or interim U.S. attorney would simply be recess-appointed for the remainder of the President's term. In all three scenarios, no Presidential nomination, no Senate confirmation or consideration of the nominee--the very thing the Democrats here are objecting to would continue to exist under the bill so many of them have spoken in support of. The bottom line is, if the Senate blindly votes down my amendment and passes the committee-reported bill without fixing any of its flaws, the judicial districts that have no Senate-confirmed U.S. attorney today will stand an excellent change of having no Senate-confirmed U.S. attorney for the remainder of this administration. Compare this to the result that would happen if my amendment were adopted. Under my amendment, the interim authority is repealed in its entirety. In other words, the main thing my Democratic colleagues have complained about--that Attorney General Gonzales can make an interim U.S. attorney appointment--would be gone. He would not be able to do that anymore. Not so under the bill. Under my amendment the President would be required to nominate a U.S. attorney candidate within 120 days; obviously, by the middle of summer. Under my amendment, even if the President doesn't comply with this deadline because acting authority expires after 210 days if no nomination is submitted, the President would be forced to nominate a U.S. attorney before the end of the year. The bottom line is, if my amendment is adopted, all judicial districts in the country will have a Senate-confirmed U.S. attorney or at least a nomination pending in the Senate for most of the remainder of the administration. Just in case my colleagues think I am kidding, lets look at the underlying bill. This is all there is to it. There is not a whole lot here. Let's read what it says. First, it says: The Act may be cited as the ``Preserving United States Attorney Independence Act of 2007.'' That is a misnomer if I ever heard one. Why? The code is amended by striking the provision above and inserting the following: A person appointed as United States Attorney under this section may serve until the earlier of-- (1) the qualification of a United States attorney appointed by the President-- That is the normal process-- or (2) the expiration of 120 days after appointment by the Attorney General under this section. Wait. I thought the object was not to have the Attorney General appoint U.S. attorneys. Let's read this again: Or . . . the expiration of 120 days after appointment by the Attorney General under this section. So under the underlying bill, the Attorney General still gets to appoint interim U.S. attorneys. Not so under my amendment. That section is repealed. Or, third: If an appointment expires under subsection (c)(2), the district court for such district may appoint a United States attorney until the vacancy is filled. The district court, for all the reasons we have discussed, is not the best entity to be appointing a U.S. attorney. All of us would agree it would be preferable not to have the district court do that. In any event, if the object is to preserve the Senate's ability to evaluate a nominee and to act on that nomination and reject it or confirm the individual, we have no such authority if the district judge appoints the U.S. attorney. So there are three possibilities. That the President would nominate is one; but if he does not, there is no penalty. For those who argue that the President is trying to get by with something by having his Attorney General appoint interim U.S. attorneys who never have to be confirmed by the Senate, under this first point the President can simply do nothing, and then his Attorney General can appoint an interim U.S. attorney. I thought that was what we were trying to avoid. If the Attorney General doesn't do it, then a Federal court judge can do it. In none of those cases does the Senate have anything to say about it. Clearly, the bill doesn't solve the problem that everybody has identified. My amendment, on the other hand, does. It does so in three specific ways. This is all of one page and three lines. It is not hard to read. What we say is that under the new law, if my amendment is adopted, section 546 of title 28 is repealed. That is the interim appointment authority of the Attorney General, the thing that everybody is objecting to: Alberto Gonzales is going to appoint an interim, and the Senate will never have a chance to act on that nominee. My amendment eliminates his ability to do that or any subsequent Attorney General, unlike the underlying bill. So how would we fill the vacancy? Not later than 120 days after the date on which a vacancy occurs in the office of United States attorney for a judicial district, the President shall submit an appointment for that office to the Senate. My amendment, unlike the underlying bill, requires the President to make a nomination within 120 days. Why? A, the President should be making these nominations--as we all agree--B, the Senate would then have the ability to act on that nomination. How do we know? Because we also say that 120 days after the date of submission of an appointment under paragraph 1, ``the Senate shall vote on that appointment.'' So we have ensured that the President will make a nomination and that the Senate will act on that nominee. People have said: But you can't sue the President for not actually nominating someone. So we have a final provision that creates a very strong incentive for the President to nominate to fill the vacancy: If the President fails to comply with paragraph (1) with regard to the submission of any appointment for the office of United States attorney, paragraph (2) of this subsection shall have no force or effect with regard to any appointment to the office of U.S. Attorney during the remainder of the term of that President. What that means is that the President has a very strong incentive to nominate people to fill the vacancy so that the Senate can act on that nomination because, if he fails to do so, the requirement that the Senate act on his nominations for U.S. attorney is vitiated for the remainder of his term. He no longer has any assurance that his nominees will be acted upon by the Senate. This is about as simple--it is all on one page--a way of solving the problem that I can imagine. Let me summarize. The problem my colleagues have suggested is that in the PATRIOT Act we put a provision that allows the Attorney General to fill vacancies with an interim U.S. attorney, and the Senate has no say-so. Under the bill, that exact process continues. It is not changed. We haven't solved a thing in that regard. What we have said is, if he doesn't do that, a district judge could fill the vacancy. That is a great solution. Actually, it is not great. District judges don't want the authority. They haven't exercised it well in the past. They are not the best people; in fact, they have an inherent conflict of interest to be appointing prosecutors who are going to appear before them. In any event, the Senate has no ability to act on the nominee. It is not even a nominee, it is an appointment. The Attorney General can appoint or a Federal district judge can appoint. In neither case does the Senate get an opportunity to confirm or reject the nominee. The underlying bill does not solve the problem that everybody is talking about. Only my amendment solves the problem which says, first, the ability of the U.S. Attorney General to fill these vacancies with an interim U.S. attorney is now gone. He cannot do that anymore. The very thing we don't like can't happen under my amendment. Secondly, instead of having a Federal district judge appoint a prosecutor with no Senate confirmation, we require the President to make his nomination, that the Senate will act within 120 days of receiving that nomination, and if the President fails to do so, the Senate no longer has to act on any of his U.S. attorney nominations for the remainder of his Presidency. Those who have argued that there is a problem have an obligation to explain how their proposed solution solves the problem. I issue this challenge to any of my Democratic colleagues who plan to vote for the underlying legislation, S. 214. Please come to the floor within the next 40 minutes and explain to me what it is in these two pages that solves the problem. Can they point to where the Attorney General can no longer appoint a U.S. attorney? No, they cannot. It says right here that the Attorney General can appoint an interim U.S. attorney, and the Senate can't do anything about it. Can they show how the Senate would be able to act on the appointment by a Federal district judge? No. It says that a Federal district judge may appoint the U.S. attorney. Not nominate, appoint. Again, the Senate has nothing to say about it. I challenge my Democratic colleagues--they have done a great job of saying we have a problem--to show me how their bill solves the problem. Have enough humility to come to the Senate floor and say: We made the case for a change. We are willing to acknowledge that actually your solution is a better solution than ours, and we are willing to say we will support your solution. That would solve the problem. For the future we would all be happy. We wouldn't have politics dictate the solution that in the end doesn't work to anybody's satisfaction. I urge colleagues, vote yea on the Kyl amendment to solve the problem that has been presented.

Mr. KYL. Mr. President, that is exactly correct. Let's go to the other side of the coin. The President's own Attorney General could appoint someone who very aggressively followed his policies, and the Senate would have nothing to say about it.

Mr. KYL. Mr. President, the first vote will be on the amendment which I have offered which solves the problem that has been described here, unlike the underlying bill which does not solve the problem. The problem is that the U.S. Attorney General can appoint interim attorneys and the Senate doesn't have a chance to confirm them. My amendment repeals that section of the law; the underlying bill does not. So it is still possible in the future, under the underlying bill, for the Attorney General to appoint interim U.S. attorneys without Senate confirmation. If he doesn't do that, then a Federal district judge makes the appointment, again without the Senate having the ability to act on the nomination. Again, my amendment solves that problem by requiring the President to nominate a candidate for U.S. attorney and requiring the Senate to act on that nomination. Should the President not fulfill his responsibility, the requirements for the Senate to act are vitiated. So there is a powerful incentive for the President to nominate. The underlying bill reinstates the old law. The Senator from California has said the old system, which is the basis for her legislation, has worked well for 20 years. It hasn't worked well. The Senate has no ability to act on a nominee when there is no nominee. Under the existing law, the district court judge appoints the U.S. attorney. We have no ability to say yes or no to that individual. So I would argue that, from the Senate's prerogative and point of view, it has not worked well. Secondly, yesterday, I noted two situations, one in the district for West Virginia in 1987, where the system of having a Federal judge appoint the U.S. attorney did not work well at all. It is a case that perhaps the Presiding Officer is aware of. Eventually, the Justice Department had to remove the investigative files from the U.S. Attorney's Office and had to direct the nominee to recuse herself from some criminal matters until a background check could be effectuated. The situation was not resolved until another U.S. attorney was approved by the Senate. We had the odd situation 2 years ago in South Dakota where we ended up having two U.S. attorneys serving at the same time because of the appointment by a district judge. The point is, the old system did not work well. In any event, the Senate has no say in the matter when a district judge appoints the U.S. attorney. Conclusion: We have all recognized a problem exists. The problem is a U.S. attorney can be appointed without the Senate ever having a say in it, either by the Attorney General, as an interim, or by a district judge. The underlying bill permits both of those practices to continue. My amendment precludes both of those practices. It eliminates the Attorney General's ability to appoint an interim U.S. attorney and it eliminates the district court's ability to do so. It puts the responsibility where it belongs, on the shoulders of the President and the Senate.

Mr. KYL. Actually, there are two alternatives. Let me read them. I am reading from the bill. I urge my colleagues to read the bill. It really helps. There are two options if the President does not submit a nomination. This is No. 2, if the President hasn't nominated someone, ``the expiration of 120 days after appointment by the Attorney General under this section.'' The first option is that the President could try to submit another nomination. But if he chose not to do so, his Attorney General could appoint the U.S. attorney. Or the third possibility is, if an appointment expires under this section, the district court for such district may appoint a U.S. attorney. So there are two options if the President doesn't nominate another candidate. His Attorney General can appoint the U.S. attorney, with no Senate confirmation, or a Federal district judge can appoint the U.S. attorney with no Senate confirmation.

Mr. KYL. Mr. President, I ask for the yeas and nays.

Mr. KYL. Absolutely.

Mr. KYL. Mr. President, there are two alternatives in that situation. Either the President's Attorney General could appoint an interim U.S. attorney with no Senate confirmation or a district judge could appoint that U.S. attorney with no Senate confirmation.

Mr. KYL

Mr. KYL. Mr. President, I call up my amendment which, I understand, is at the desk.

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

Mr. KYL. Mr. President, I ask unanimous consent that at the conclusion of my remarks a letter I wrote to all of my colleagues in the Senate, dated March 19, regarding interviewing U.S. attorneys be added to my statement as well.

Mr. KYL. Mr. President, there has been a lot of discussion over the course of the last couple of hours about the firing of seven U.S. attorneys and a lot of speculation about why that occurred. I suggest it is important to find out the facts and then we can quit speculating and we will know what those facts were. I wish to change the subject a little bit to what we are going to do about it. Actually, the Judiciary Committee passed a bill which is on the floor and will be amended tomorrow, I hope, and then we will vote on that bill tomorrow. It relates to what was conceived to be at least part of the problem here. The problem was that in the PATRIOT Act, a provision of law relating to appointment of U.S. attorneys was amended to allow the Attorney General to put into office what is called an interim U.S. attorney who would never have to come before the Senate for confirmation. Early on, there was speculation that the reason these seven U.S. attorneys were asked to resign was so the administration could put someone else in their place without going through the regular confirmation process of a nominee by the President. Except for the U.S. attorney in Arkansas, however, there appears to be no evidence that was the case. In the case of Arizona, for example, it is clear it was not the case. There was no one ready to be appointed as interim U.S. attorney. In fact, Senator McCain and I have recommended an individual to the President for his consideration to be nominated to fill the vacancy that now exists. Nonetheless, there was concern this statute shouldn't remain on the books, that it shouldn't be that the Attorney General can appoint an interim U.S. attorney who never has to come to the Senate for confirmation. I think there is a general consensus that that statute should be changed and that the President should nominate people and the Senate should have an opportunity to act on the nomination. An interesting thing has occurred, however. The legislation which has been proposed doesn't achieve the objective. It doesn't even begin to achieve the objective. So I drafted an amendment which I will be offering tomorrow that actually achieves the objectives. It says: The President has to nominate to fill the vacancy and the Congress has to act on the nomination, and it provides a very strong incentive for the President to comply with the law because if he doesn't, then Congress's requirement to act on any of his U.S. attorney nominations for the entire remainder of his term is vitiated. So if he wants strong and quick action by Congress on his nominees, he has to do his part and actually nominate somebody within the 120 days required by my amendment. Now, that achieves both objectives we are trying to achieve here: that the President will actually nominate and the Congress will have a chance to act on the nomination. The underlying bill, unfortunately, does not achieve that objective. It reverts to the old law which doesn't require the President to nominate, and if he doesn't, it has U.S. district court judges nominating U.S. attorneys, something they don't want to do and they haven't been very good at, and, in any event, confuses their article 3 responsibilities with the article 2 responsibilities of U.S. attorneys. It is not a good idea, and it doesn't solve the problem that people perceive existed. My amendment also eliminates the current statute relating to interim nominees so the President could no longer appoint these interim nominees who would have to be confirmed by the Senate, or at least acted upon by the Senate. So I believe my amendment goes directly to the concern that our Democratic colleagues have had regarding this issue. I would hope politics wouldn't play a part in the consideration of my amendment. This issue generally has been so politicized-- everybody has chosen up teams. I would hope that conversation would not be confused with the practical solution to the problem everybody has agreed exists, and that Members on both sides, in a very clear-eyed way, could consider which of the solutions represents the best option of solving the problem. My colleague Senator Sessions has a proposed solution which, in the event my amendment were not adopted, I would support as well, because it at least improves somewhat on the underlying bill. But the reality is we shouldn't have Federal district judges making these nominations, and if our goal is to have the President make the nomination and enable the Senate to act on the nomination, the only amendment that does that is my amendment. I ask my colleagues on both sides of the aisle to remember we are not always going to have a Republican President and a Democratic Senate. We are going to have a Democratic President some day and a Democratic Senate or a Republican Senate or a Republican President and a Republican Senate. All the permutations will exist and politics should play no role in it. We should want the President to nominate to fill the vacancy and we should want the Congress to have a chance to act on that nomination. That is what my amendment provides. The committee-passed bill, the number is S. 214, restores the interim U.S. attorney appointment statute that existed between 1986 and 2006. As I said, that system, which delegates to Federal judges the authority to appoint interim attorneys, has several flaws. First, as I said, S. 214 does not ensure the President will nominate a U.S. attorney. Whoever serves in a district should be someone who is nominated by the President, not a district judge. It is the President, not the district court, who is charged by the Constitution with ensuring that the laws are faithfully executed. It is the President's job to enforce the law. To do that effectively, he needs to have in place U.S. attorneys who are accountable to him. If he is not bringing important prosecutions or enforcing particular statutes, he and his superiors need to be held accountable. But if that U.S. attorney were appointed by a district judge, there is no one to complain to. Judges, after all, have lifetime tenure. It is only by ensuring that U.S. attorneys are appointed by the President that we can ensure there is ultimate accountability in the system. This is, after all, the way in which the Constitution envisioned that accountability for enforcing the laws would be charged--by charging the President with the duty to enforce the law. The second flaw in the underlying bill is that the Senate has no say in the selection of U.S. attorneys appointed by a district judge. One of the major complaints about the administration's handling of the interim U.S. attorney appointment authority is that it did not consult with home State Senators; that, in fact, some individuals sought to use the authority to avoid consulting with Senators. It is right that the Senate take action in an effort to protect its prerogatives, but letting judges pick U.S. attorneys does not protect the Senate's rights. Senators have absolutely no say in the selection of a U.S. attorney who is picked by a judge. There is no confirmation of the judge's selection as there is when the President nominates someone. This system, which S. 214 puts back in place, is a solution that doesn't solve the problem that we have set out to address. There is a third problem with this underlying bill. The judges don't want the authority. In the past, when district judges have had the authority to appoint interim U.S. attorneys, some have simply refused to do so. Incidentally, the statutory language is ``may,'' not ``shall.'' If they don't appoint judges, then the very concern that the Democratic Senators have had that an interim U.S. attorney is appointed and serves is exactly what happens. So judges don't want the authority, and there have been at least three such occasions during the current Bush administration when a district judge has refused to appoint an interim U.S. attorney and, in fact, they have had good reason. It is at least a potential conflict of interest for the district judge, who presides over criminal cases, to also select a U.S. attorney who prosecutes those cases. It is for this reason that some judges have refused to intervene in this area and select U.S. attorneys. Yet with the committee-reported bill, we once again foist this authority on the judges. Why are we doing this--restoring power to the district judges that those judges don't want and have refused to use in the first place? Why are we forcing them to take actions that judges themselves, for good reason, see as a potential conflict of interest? There is a fourth reason why this is not a good idea. Unfortunately, some district judges have not acquitted themselves very well when they have exercised the power to appoint U.S. attorneys. A Federal district judge may have the measure of the legal abilities of the lawyers who practice in his district, but he has no way to gauge their managerial skills, which is an important quality in a successful U.S. attorney. A district judge doesn't even have access to a candidate's personnel file and would not know of potentially disqualifying information or conflicts of interest in that file. Allow me to describe two cases under the old system where the appointment of a U.S. attorney by a district judge led to a situation that can only be described as a fiasco: In the Southern District of West Virginia, in 1987, the U.S. attorney for the District of West Virginia was confirmed to be a Federal judge. When the term of the interim U.S. attorney expired, the chief district judge appointed another individual as U.S. attorney. This individual was not a Justice Department employee and had not undergone an FBI background investigation. The court's appointee came into office and started asking about ongoing public integrity investigations, including investigations involving the mayor of Charleston and the State's Governor. Not only were this mayor and Governor under investigation by the U.S. Attorney's Office at the time, both were later indicted and convicted of various Federal crimes. The first assistant U.S. attorney, who knew that the district court's U.S. attorney had not undergone a background investigation, believed that these inquiries about pending investigations of local politicians were inappropriate and reported them to the Executive Office for United States Attorneys in Washington, DC. The Justice Department eventually had to remove the investigative files involving the Governor from that U.S. Attorney's Office for safekeeping. The Justice Department also had to direct the court's appointee to recuse herself from some criminal matters until a background check could be completed. This situation wasn't resolved until another U.S. attorney was confirmed by the Senate. Mr. President, at the very time that some Democrats are suggesting that it just might be--there is no evidence, but it just might be that one or more of these U.S. attorneys was removed because they were hot on the trail of some Republican officeholder, they were involved in a political investigation or an investigation of a political person, and that was the reason they were removed--again, there is no evidence, but that is the suggestion--why would you want to substitute for that situation a statute that goes back to the way it used to be, which allowed the same thing to occur as in the case in West Virginia that I just cited? Why not change the situation so that the President must nominate, and the Senate explicitly has a right to act on that nominee by either confirming or rejecting the nominee? That is the check and balance we need, rather than going back to the way it used to be, where the judge can appoint and we end up with problems like this involving investigations of political corruption. Another case occurred in the District of South Dakota. In 2005, when the term of an interim U.S. attorney was about to expire, the chief district judge told the Justice Department he wanted to appoint an individual who didn't have any Federal prosecutorial experience, had not undergone a background check, and did not have the necessary security clearances. The Justice Department strenuously objected. Once the Justice Department believed the matter had been resolved, the Attorney General appointed another candidate. A Federal judge executed the oath of office for this appointee and copies of the Attorney General's order were sent to the district court. Ten days later, the Justice Department received a fax indicating that the chief district judge had changed his mind and ``appointed'' the earlier, unacceptable candidate as U.S. attorney. This created a situation where two different people claimed to be the U.S. attorney for the District of South Dakota. Defense lawyers representing criminal defendants in the district indicated that they would challenge ongoing investigations and cases on the basis that they could not know who was in charge. The chief judge then refused to negotiate a resolution to the situation. Eventually, in order to protect ongoing criminal cases, the President was forced to resolve the situation by firing the district judge's U.S. attorney. The matter was not completely resolved until another U.S. attorney was confirmed by the Senate the next year. Don't we want to avoid this situation in the future? We are going to be asking for this kind of problem if we pass S. 214, the bill pending before us now. Far better it would be to adopt the amendment that I will offer that precludes this from occurring. Let me point out another very serious problem that I don't think the authors of the legislation have even thought of or they clearly would have tried to fix it. S. 214 does not prevent the Attorney General from making multiple consecutive appointments of the same interim U.S. attorney. In other words, the very thing they are afraid of--that the President got rid of these people so the Attorney General could put his own person in office--is precisely what would be permitted under the bill pending before the Senate because it reinstates the exact language that existed before the statute was amended in 2006: the Attorney General could make consecutive 120-day appointments of interim U.S. attorneys. Has this ever been done? There is at least one case where the Attorney General appointed a U.S. attorney to four consecutive 120-day interim terms. Well, that is a year and a half, by my reckoning. This incident occurred in the Eastern District of Oklahoma during the years 2000 and 2001. As a result, that district had an interim U.S. attorney who had been appointed by the Attorney General for over a year. Similarly, in Florida, in 2005, an interim U.S. attorney was appointed by the Attorney General. After the 120-day term ran out, the Attorney General appointed that individual to another interim term. After that term ran out, the Attorney General appointed him to a third interim term. This practice is what the language of the 1986 law allowed. It is the same language that is in the bill that is before us now. It is obvious that much of the impetus for the present legislation is a desire to rein in the Attorney General's authority to appoint interim U.S. attorneys without Senate confirmation. Yet I submit that such power hasn't exactly been ``reined in,'' and the Senate's prerogatives are not protected, by a system that allows the Attorney General to make consecutive appointments of non-Senate-confirmed U.S. attorneys, which is precisely what the bill before us would allow. That system clearly falls short of ensuring that U.S. attorneys are subject to U.S. Senate confirmation, which is one of our two goals. Finally, I note that S. 214's system of judge-made interim appointments is duplicative of the designation of acting U.S. attorneys under the Vacancies Act. We are effectively creating two different and redundant systems for appointing ``temporary'' U.S. attorneys. That makes no sense and creates obvious potential problems. For example, this system would make it possible for an individual to be consecutively designated as an acting U.S. attorney and serve in that post for 210 days and then be appointed as interim U.S. attorney and serve another 120 days. So he can be reappointed and reappointed again, if the Attorney General wanted to do so. This is nearly a whole year that someone could serve as U.S. attorney without ever being confirmed or acted upon by the Senate, without the nomination ever being sent to us. Mr. President, we can all agree there is a problem. The solution, which was very quickly devised, is not a solution at all, as I have demonstrated. We can do better. There is nothing partisan about what I suggest. It would work equally for Republican and Democratic Presidents and Republican and Democratic Senates. To that end, I will offer an amendment on Tuesday that will achieve these goals of ensuring that U.S. attorneys are promptly nominated by the President and that the Senate has an opportunity to act on the nomination. My amendment, again, requires that the President nominate a U.S. attorney candidate within 120 days of vacancy. It then requires that the Senate consider the nomination within 120 days after it is submitted. In order to encourage the President to abide by these time limits, the amendment provides that if the President fails to nominate an attorney candidate in any district within the time limit, then the 120-day limit on Senate consideration is vitiated for all U.S. attorney nominations for the remainder of the President's term in office. In effect, in order to enjoy the substantial benefits of prompt Senate consideration of his nominees, the President would be required to, himself, nominate promptly. My amendment makes one other important change. It completely repeals the interim U.S. attorney statute, as I said, which is what people have gotten all concerned about in the first instance but seem to have forgotten. The interim authority is unnecessary in light of the Vacancies Act and has caused a host of problems. By repealing this authority, my amendment would effectively bar the President or a judge from appointing any long-term U.S. attorney without Senate confirmation. Any temporary gap in the office of U.S. attorney would be addressed by the Vacancies Act, which applies to all Senate-confirmed executive appointments and allows another employee or officer-- presumptively the first assistant--to carry out the function and duties of the office subject to various time limits and other requirements. Mr. President, especially those who are upset about recent events should support a complete repeal of the interim authority. It is only a complete repeal that will ensure that U.S. attorneys are appointed by the President by and with the advice and consent of the Senate. It is only a complete repeal that will prevent consecutive appointments of U.S. attorneys by the Attorney General. It is only a complete repeal that will prevent the stacking of the interim and acting terms as U.S. attorney. Only a complete repeal ensures that Senators will always have a say in who serves for the long term as the U.S. attorney in their State. The interim appointment authority has lately become a contentious and very politicized issue. It need not be. It is particularly in times such as these that the Senate must do what was designated by the Framers to do: cool the passions and look to the long term. I hope my colleagues will do this when I present my amendment tomorrow. I hope we will lay partisanship aside and that my amendment will be supported. Exhibit 1 U.S. Senate Washington, DC, March 19, 2007. Re Interim U.S. Attorneys. Dear Colleague: There is a consensus that the changes made to the interim U.S. attorney statute, 28 U.S.C. Sec. 546, by the Patriot Improvement and Reauthorization Act, Pub. L. 109- 177, were a mistake. It is my hope that we will not compound that mistake with another--namely, involving Federal district judges in the appointment of U.S. attorneys. During Monday's debate and Tuesday's vote, I urge you to consider that in the future both Democrats and Republicans will control the Senate, and both a Democrat and a Republican will serve as President. The solution that we adopt should be one that we are ready to live with under all combinations of these circumstances. It should be a solution that ensures that the President timely nominates U.S. attorneys, and that those U.S. attorneys are subject to confirmation by the Senate. S. 214, the committee-reported U.S. attorneys bill, does not meet these goals. My proposed amendment does. S. 214 restores the interim U.S. attorney appointment statute that existed between 1986 and 2006. That statute, which delegates to Federal judges the authority to appoint interim U.S. attorneys, has several flaws. First, it does not ensure that the President will nominate a U.S. attorney. Second, the Senate has no say in the selection of a U.S. attorney who is appointed by a district judge. Moreover, judges do not want this authority. Some have simply refused to appoint interim U.S. attorneys, finding it a potential conflict of interest for the district judge who presides over criminal cases to also select the U.S. attorney who would prosecute those cases. And finally, some district judges have not acquitted themselves well when they have exercised the power to appoint U.S. attorneys. A Federal district judge may have the measure of the legal abilities of the lawyers who practice in his district, but he is in no position to gauge an individual's management skill--an important quality in a successful U.S. attorney. A district judge does not even have access to a candidate's personnel file and would not know of disqualifying information in that file or of potential conflicts of interest. An additional problem, which may be of concern to those who are eager to respond to recent events, is that the permissive language of the pre-2006 statute--the same language that S. 214 restores--was understood to allow the Attorney General to make consecutive 120-day appointments of interim U.S. attorneys. In at least one case, the Attorney General appointed a U.S. attorney to four consecutive 120-day ``interim'' terms. Such a system falls short of ensuring that U.S. attorneys are subject to Senate confirmation. And finally, S. 214's approach is duplicative of the designation of Acting U.S. attorneys under the Vacancies Act, 5 U.S.C. Sec. 3345 et seq., and potentially allows an individual to be consecutively designated as an Acting U.S. attorney, and then as an interim U.S. attorney--again avoiding Senate confirmation for a substantial period of time. I believe that we can do better. To that end, I will offer an amendment on Tuesday that will achieve our goals of ensuring that U.S. attorneys are promptly nominated by the President and that the Senate has an opportunity to act on those nominations. My amendment: (1) Would require the President to nominate a U.S. attorney candidate within 120 days of a vacancy. It then would require the Senate to consider the nomination within 120 days after it is submitted. In order to encourage the President to abide by these time limits, the amendment also would provide that if the President fails to nominate a U.S. attorney candidate in any district within the time limit, the l20-day limit on Senate consideration is vitiated for all U.S. attorney nominations for the remainder of that President's term in office. In effect, in order to enjoy the substantial benefits of prompt Senate consideration of his nominees, the President would be required to nominate promptly. Finally, my amendment: (2) Would completely repeal the interim U.S. attorney statute, 28 U.S.C. Sec. 546. The interim authority is unnecessary in light of the Vacancies Act and has caused a host of problems. By repealing this authority, my amendment would effectively bar the President (or a judge) from appointing any long-term U.S. attorney without Senate confirmation. Any temporary gap in the office of U.S. attorney would be addressed by the Vacancies Act, which applies to all Senate-confirmed executive appointments and allows another employee or officer (presumptively the First Assistant) to carry out the functions and duties of the office subject to various time limits and other requirements. The interim appointment authority has lately become a contentious and very politicized issue. It need not be. It is particularly in times like these that the Senate must do what it was designed by the Framers to do: To cool the passions and look to the long term. I hope that you will do so--and that you will support my amendment. Sincerely, Jon Kyl. Amendment No. 459

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that Seth Poldberg of Senator Grassley's office be granted floor privileges during today's session of the Senate.