Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a markup on Thursday, June 17, 2004, at 9:30 a.m. in Dirksen Senate Building Room 226. Agenda I. Nominations: Henry W. Saad, to be U.S. Circuit Judge for the Sixth Circuit; and Claude A. Allen to be U.S. Circuit Judge for the Fourth Circuit. II. Legislation: S. 1735, Gang Prevention and Effective Deterrence Act of 2003 Hatch, Feinstein, Grassley, Graham, Chambliss, Cornyn, Schumer, Biden; S. 1635, L-1 Visa Intracompany Transferee, Reform Act of 2003 Chambliss; S. 2013, Satellite Home Viewer Extension Act of 2004 Hatch, Leahy, DeWine, Kohl; S.J. Res. 4, Proposing an amendment to the Constitution of the United States authorizing Congress to prohibit the physical desecration of the flag of the United States Act of 2003 Hatch, Feinstein, Craig, Sessions, DeWine, Grassley Graham, Cornyn, Specter, Chambliss; S. 1700, Advancing Justice through DNA Technology Act of 2003 Hatch, Biden, Specter, Leahy, DeWine, Feinstein, Kennedy, Schumer, Durbin and Kohl; S. Res. 322, A resolution designating August 16, 2004, as ``National Airborne Day'' of 2004 Hagel, Durbin, Graham, Hatch; S. Res. 370, A resolution designating September 7, 2004, as ``National Attention Deficit Disorder Awareness Day'' of 2004 Cantwell; and S. 2396, Federal Courts Improvement Act of 2004 Hatch, Leahy, Chambliss, Durbin, Schumer, Clinton

Mr. KYL. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, June 17, 2004, at 3 p.m. to hold a hearing on Nominations.

Mr. KYL. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, June 17, 2004, at 2 p.m. to hold a hearing on Nominations.

Mr. KYL. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, June 17, 2004, at 9:30 a.m. to hold a hearing on Law Enforcement Treaties.

Mr. KYL. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on Thursday, June 17, at 10 a.m. to receive testimony regarding the Environmental Management Program of the Department of Energy and Issues associated with accelerated cleanup.

Mr. KYL. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet on June 17, 2004, at 9:30 a.m. on Enhancing Border Security.

Mr. KYL. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Thursday, June 17, 2004, at 10 a.m. to conduct a hearing on ``An Overview of the Regulation of the Bond Markets.'' Concurrent with the hearing, the Committee intends to vote on the nomination of the Honorable Alan Greenspan to be Chairman of the Board of Governors of the Federal Reserve System; on S. 894, ``The Marine Corps 230th Anniversary Commemorative Coin Act''; and S. 976, ``The Jamestown 400th Anniversary Commemorative Coin Act of 2003.''

Mr. KYL

Mr. KYL. Mr. President, with regard to the amendment before us, the chairman of the committee and of the subcommittee have made precisely the right point. Congress has passed a law to get us to this point today, to begin the kind of operational testing that everybody agrees we need to do, that even critics of the missile defense program want us to do. Yet now they say let's stop building the missiles that would be used for the operational testing. The essence of this is captured in one of the first comments of the Senator from California. She talked about the concept of ``fly before you buy,'' which ordinarily is the way we buy military equipment but not always. She noted that is one of the reasons why the Office of Test and Evaluation was created, and she noted there had been problems as a result of the fact that not all of the operational testing had been done on this program. Let me quote from the person who heads that office, the Director for Operational Test and Evaluation, Thomas Christie, on this precise issue in his recent testimony before the Senate Armed Services Committee: . . . I think the issue we're talking about here is the building of missiles that will be put into silos that are part of the test bed, and we have to have this test bed in order to do some of the testing that will become more realistic engagements, geometrics, for example, than we've been able to do before. And some of these attributes of this test bed are in response to criticism that came from my office and my predecessor in previous administrations. . . . Mr. President, that is the precise point. The criticism has been that not all of the testing has been under the kind of realistic conditions that would be the real battlefield we need to be able to test against. It has been done by contractors, and, of course, that is the way you have to start out to test the components and make sure they work. Eventually, you have to build the missiles, put them into the ground, and test them in real conditions. What better way to do that than to put them in the actual silos in which they will have to be located in Alaska? By the way, when Thomas Christie speaks of this, he talks about the places for the best chance of intercepting missiles, where we think they might come in. Where is that? Alaska. Weather conditions in Alaska are not necessarily the best. We have to test these missiles under conditions where there would be several feet of snow or ice on top of the missile silo, the lid that has to be blown off for the ground-based missile interceptor to be shot off. That is why we have to have missiles precisely in the place where they can be tested under these operational conditions. That is precisely why we have to, A, authorize and, B, fund this group of 10 missiles which will be part of the test bed. Now, the fact that they may also have the capability in an extreme emergency of actually shooting down a hostile missile should not be a bad thing. If, God forbid, a hostile country should challenge us and either mistakenly launch a missile at us or intentionally do so against us, wouldn't it be nice to have the missile in the silo to shoot it down with? I fear some opponents--certainly not anybody on the Senate floor--would say you cannot do that because we have not certified yet that it is an operational system. In the 1991 gulf war, for example, when we had an air defense system called Patriot and Saddam Hussein began sending Scud missiles at our troops in Saudi Arabia and Kuwait, we actually sent that air defense system to Saudi Arabia, doing some fixes to it on the way over, and we put it on the ground. As the Scuds were launched, we fired Patriot missiles at them. We didn't hit them all, but I think we hit something like about a third of the Scud missiles. That system wasn't designed to shoot down missiles. It had never been operationally tested and hadn't been certified for deployment, but in an emergency we needed it. We have done that with other systems, such as JSTARS and some of our unmanned aerial vehicles. There are some other programs we can talk about that we didn't ``fly before we buy'' with those systems. We had them in a developmental process, and all of a sudden we needed them and we used them. Thank God, they were there to be used. So even if we had to use one of these missiles in an emergency, God forbid, would anybody object to us doing that? Would we have to say, wait a minute, we don't have the certification called for in the Boxer amendment yet? Sorry, we cannot defend ourselves. I think not. It is an unrealistic requirement. More importantly, it is a requirement that even the head of the group that we have set up, the Director of the Operational Test and Evaluation Office, has said is unnecessary. We need to move forward in building these missiles so we can put them in the silos and conduct the operational tests that we all agree need to be conducted. I note that our colleague from California said she has always voted for research. I accept her word on that. But part of the problem for missile defense is that a lot of us vote for research, but when it comes to bending the metal, actually building the system and putting it into the ground, that is when people say we need to slow up, we have not done enough testing, we are not sure it will work against everything. So we have spent an awful lot of money on missile defense and, frankly, a lot of research, but we have not been able to put something into the ground. President Bush said, when he came into office, we are going to put something into the ground that will work. We may have to let it evolve as it moves forward, and we will make changes as we learn more and more. But that is all right. At least we have an initial capability that might work, God forbid, should somebody accidentally launch something against us, or even do so intentionally. I look at our weapons systems, such as the F-16s that are tested at Luke Air Force Base in Arizona. I am not sure which version of the F-16 we are flying now, but it is not the A, B, C, or D. We build systems and we keep improving them. We evolve in our technology and keep putting that new technology into the systems. That is precisely what we have decided to do with missile defense, rather than trying to come up with the perfect system that will defeat any kind of offensive system against us. We understand we need to start with something that will be rudimentary and at least will deal with a threat coming from a country like--let's say North Korea, and it may not work against one of the old Soviet systems, for example. But as we get better, we will include those new technologies into these systems, improve them; so as our adversaries develop systems, we will be one step ahead of them. Finally, part of the purpose of this is deterrence. It is not just to be able to defeat a missile that might be thrown against us. The message we want to send to North Korea, Iran, and other countries is the same one we sent to Soviet Union, which it heard loudly and clearly. It was the message President Reagan sent: We have the economy to outspend you, out-research you, out-build you, and we are going to build a missile defense that will defeat you. Why go to the trouble, since you cannot afford to do it, of trying to build an offensive system that we can defeat? That is the message we want to send to these potential enemies. We can deploy a system and we will always be able to have a system that will defeat what you throw against us. Why take the time and trouble to develop that kind of system? It has a deterrent effect as well. We need to move forward with this system and defeat the Boxer amendment. Both Chairman Warner and the Senator from Colorado, Senator Allard, are precisely correct in their opposition to this amendment.

Mr. KYL

Mr. KYL. Mr. President, I assure my colleague from the State of Delaware, for whom I have a tremendous amount of respect, that his inability to persuade us has nothing to do with his lack of passion or eloquence. He has an abundance of both, and a lot of good faith and friendliness thrown in to boot. The problem is, he is wrong. That is the only problem. I would like to try to explain why I think that is so, with all good faith, to my friend. He started out by saying that the purpose of his amendment is to unite the Nation and then proceeded to offer an amendment which chose a very small minority of taxpayers on whom to raise taxes, and that is supposed to unite the Nation. With all due respect to my friend, I do not think that unites the Nation. That hearkens back to the old class warfare concept that there are some people who are so rich that we have to soak them a little bit more in order to be fair. In fact, that is implicit in the argument. We have a lot of people overseas sacrificing. These rich people must not be sacrificing enough so let us extract more money from them in the form of income taxes. That is the implicit argument. That is not a uniting argument. The interesting thing is that when it comes to the Tax Code of the United States, Americans are very egalitarian. Middle-income taxpayers support repeal of the death tax, for example, even though they know it would never help them. They support the retention of the tax cuts on the highest tax brackets, on the middle tax brackets. We all support it for the lower tax brackets. In fact, a lot of people would like to be in the next higher bracket. That may be one reason they do not want to soak the rich, because they would like to be in that next bracket maybe in a few years. The reality is, most people are perfectly happy, even where they are, supporting fair taxes. Polls have been taken, and the question asked is, What do you think is the fair percentage of taxes to extract from Americans? The answer, uniformly, year after year, is about one-third, and that applies to all tax brackets. So most Americans believe that the fair tax would be about a third of what one makes, regardless of how rich they are. What are the real facts about the sacrifice that Americans make financially, the sacrifice, that is to say in the amount of taxes that they pay to fund things such as the war effort? Let me give the exact statistics, because I think this makes the point that there is already a lot of sacrifice--and, by the way, it is a willing sacrifice. When it comes to war, I think we are all willing to do more because we are asking some young men and women to sacrifice an awful lot, but let's get the exact facts. How much do the top 1 percent--and that is the people we are talking about--pay in taxes in this country? The top 1 percent obviously pay more than 1 percent, maybe 5 percent or 10 percent, maybe 20 percent, 30 percent? Do my colleagues know how much the top 1 percent pay? They pay almost a third of the taxes of this country. So the folks we are talking about, the 1 percent pay, to be exact, 32.3 percent of the taxes. Almost exactly a third of the taxes are paid by the top 1 percent. That is more than fair. That is a pretty progressive tax system. How about the top 5 percent? They pay over half of all taxes. Just the top 5 percent pay 52.8 percent of the taxes. How about the top 10 percent? We always like to talk about the top 10 percent of the class, and that is a pretty elite group. The top 10 percent pay almost two-thirds of all of the taxes--64.8 percent, to be exact. What do the bottom half percent of our taxpayers pay? There is the top half and the bottom half. How much do my colleagues think the bottom half pay? Less than 4 percent of the taxes are paid by the bottom half--36 percent, to be exact. One could say the wealthier people in this country are paying their fair share. One could say they are making a sacrifice. I would not put it that way because, frankly, I think most of them can afford to do it. I do not think it is something they resent doing. So I think it is a sacrifice they are very willing to take on, but I do not think we should contend that we are uniting America by picking a very small minority of taxpayers, who are already paying a third of all of the taxes in the country, and saying now they are going to have to pay some more or else they are not sacrificing enough. The interesting thing is that the tax cuts President Bush proposed and we passed into law actually increased the percentage of taxes paid by those in the higher brackets. It did not decrease it. So it added to the sacrifice, if one wants to put it that way. In every one of these brackets, if we want to take the top 1 percent, the top 5 percent, the top 10 percent, the percentage of taxes paid by that group of people is higher today than it was before the tax cuts. And the percentage paid by the lower 50 percent is actually less. It used to be 4.1 percent. Now it is down to 3.6 percent. So it is a specious argument to suggest that somehow these people are not paying their fair share, that the only way to be fair is to make them sacrifice some more. I don't think we should look at the war effort this way, let alone fund our Government this way. I don't think it is the way to unite the country. If anything, it further tends to divide the country. I would like to move to the second point. I think most people now recognize that the tax reductions had a great deal to do with the stimulation of the economy. Why was that so? Primarily because there was more capital available. People were able to keep more of their own money, and they did one of three things with it: They either spent it, which helped some businesses because they now had more revenue; or they invested it, then there was more capital to be invested in businesses to create more jobs, for example; or they saved it, and savings amounts to investment because whatever institution you put it in then invests the money. So in all three situations there was more money infused into the economy; more capital, which created more jobs; and those jobs, the jobs that have been created and the capital infused in the economy, have created an extraordinarily strong economy. One of the results of that has been to begin to reduce the budget deficit by providing more income to the Federal Government because more money is being paid by people and by businesses. That wealth is what is going to be able to help us win the war as well as fund the other things we have to fund. The argument of my colleague from Delaware is: But this is a very small amount of money. One-tenth of 1 percent, I believe, is the number. That may be. One-tenth of 1 percent of what we are talking about is a heck of a lot of money--$25 billion to be exact, as I understand it. So we are not talking peanuts. That is $25 billion that would not be helping to create new jobs, to stimulate the economy, to create additional wealth, which could be used to pay for the war as well as the other things on which we need to spend it. It is an especially important part of the economy. Phil Gramm, our former colleague from Texas, used to talk about one of his constituents who said he had a lot of jobs in his life. He worked for a lot of employers, and he said, the funny thing was they all had more money than he did. There are employers and there are employees. Thank God for both. But you have to have enough capital, enough wealth, to create jobs to pay people to do work for you in order for the rest of us to have a job. It is those people in these tax brackets who have that capital that they are able to invest in a business, so-called disposable income, money that they can invest in a stock or some other equity to help create a job in this country. That money has more effect in the economic recovery than a lot of the other money that is paid in taxes. Therefore, this is not an insignificant proposition that we are talking about, only talking about one-tenth of 1 percent, and therefore what difference and does it matter? It could make a great deal of difference in the economic health of our country. It is wrong to raise taxes at this point when we know the reduction in taxes, especially the marginal rates, have produced such a strong effect on the economy. We could get into an argument about small businesses. There is an entire report that I could get into that talks about the effect on small businesses. We know many of the people in this tax bracket are small business owners. These are where most of the jobs are created, 7 out of 10 jobs, if you want to get into the statistics, are created by small businesses. There are 8 million small businesses in America that employ over half the workers, and this tax rate is the rate many pay because they are a passthrough entity, like the subchapter S corporations and partnerships and so on. We don't need to get into all that. The point is, this hurts small businesses just as much as it hurts big businesses. In any event, it hurts those who create jobs, and it doesn't unite America. It doesn't unite us as a nation, as my colleague would suggest. It tends to divide us and hurt us. That is one of the reasons we oppose it. There are very few people on the other side of the aisle for whom I have greater respect than the Senator from Delaware. I understand the motivation behind his proposal. I simply think it is the wrong approach. It is in that spirit that I oppose his amendment and urge my colleagues to keep the tax cuts that we put in place. They have done a lot of good. Let's keep them. We do not need to hurt somebody in order to unite the country. We have enough revenue to pay for the increased needs of our country. Of course, the amendment doesn't even apply that money to the war in Iraq. There is an assumption that it would be used for that purpose, and I will grant that assumption. But the bottom line is we don't have to do this in order to win the war in Iraq, in order to supply our troops, and it would have very negative effects on the economy of the country, as well as being very unfair. So I urge my colleagues to vote against the amendment of the Senator from Delaware.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the column ``Empty Words'' by Frank Gaffney, which appears in today's Washington Times, be printed in the Record. I believe that this piece appropriately emphasizes the crucial role continued research plays in maintaining the credible nuclear deterrrent of the United States. As more information becomes available regarding covert nuclear programs in North Korea and Iran, the sustainability and credibility of America's nuclear arsenal is of paramount concern.

Mr. KYL

Mr. KYL. Mr. President, I, too, would like to comment on one of the legacies of our late President Ronald Reagan, the legacy of ensuring that the free world would prevail over the Soviet Union in the cold war. I thought it was interesting that in one of the comments about Reagan very recently made on National Public Radio, June 8 of this year, Mr. Gennady Gerasimov, spokesman for Mikhail Gorbachev, said this: I see President Reagan as a grave digger of the Soviet Union and the spade that he used to prepare this grave was SDI, a Strategic Defense Initiative, so-called ``Star Wars.'' The trick was that the Soviet leadership believed that this SDI defense is possible and then--because it's possible, we must catch up with the Americans. And this was an invitation to the arms race, and the Soviet economy could not really afford it and this way Reagan really contributed to the demise of the Soviet Union. Who better to know that than the spokesmen for Mikhail Gorbachev who have said similar things? Twenty-one years ago, President Reagan posed a very important question to the American people. He asked us to consider whether the free people of the world should continue to have to rely upon the threat of a massive retaliation of nuclear weapons to prevent an attack by the opposition. He asked: What would it take to free the world from this threat? He answered as follows: I know this is a formidable, technical task, one that may not be accomplished before the end of this century. Yet, current technology has attained a level of sophistication where it's reasonable for us to begin this effort. It will take years, probably decades of effort on many fronts. There will be failures and setbacks, just as there will be successes and breakthroughs. . . . But isn't it worth every investment necessary to free the world from the threat of nuclear war? We know it is. We began making that investment. It was one of the reasons we had a deficit during the Reagan years. It was part of the so-called defense buildup, to invest billions of dollars in the research--yes, there were failures, but there were many successes--to develop a Strategic Defense Initiative, an ability to defend ourselves against a ballistic missile attack from an enemy. A lot of Americans probably think we developed that strategic defense, that we have that capability today. They might remember that during the first Persian Gulf war Patriot missiles shot down some of the Scuds that were fired by Saddam Hussein. But the grim reality is strategic defense is still not a reality. We still don't have the ability to defend against a missile attack. What happened during the Persian Gulf war? We used an air defense system to shoot down airplanes, and in the field, literally, as we shipped it from the United States to Israel and to Saudi Arabia and to Kuwait, made modifications in it so that we hoped it might work to shoot down some of the missiles that Saddam Hussein shot toward Saudi Arabia and Kuwait. In fact, some of those missiles--roughly a third of them--were intercepted by the Patriot. It was a crude weapon that was modified in the field. It had never been tested against other missiles. Yet we used what we had at the time because of the threat that existed. Throughout the Clinton years and the first Bush administration, research continued. Every time we got close to, as they say, bending metal, actually building a missile, somebody would object and say we are not quite there yet. We haven't proven it can work. It is going to cost a lot of money, or the Russians--then the Soviets--might be unhappy with it. After the demise of the Soviet Union, we agreed to scrap the ABM Treaty, and both President Putin and President Bush agreed that there was no need for a treaty that would define how many missiles each country could have and how many nuclear warheads because, frankly, we didn't have the need for them anymore and they were costly to maintain. We would destroy as many of ours as we wanted to destroy, and they could destroy all of theirs that they wanted to destroy. It was too expensive to keep around. There are still some. There are still some in Russia, I might add, where some believe it still might be worth trying to develop this offensive capability because the U.S. has never deployed a ballistic missile defense. There are those in China who believe the same thing, and also in North Korea, who I suspect believe we are bluffing. Let me quote something from a high-ranking official in Iran, from Iran's clerical hierarchy, delivered at Tehran's Al-Hussein University very recently, and reported in the May 28 edition of a newspaper in London: We have a strategy drawn up for the destruction of Anglo- Saxon civilization and for the uprooting of the Americans and the English. The global infidel front is a front against Allah and the Muslims, and we must make use of everything we have at hand to strike at this front, by means of our suicide operations or by means of our missiles. There are 29 sensitive sites in the U.S. and in the West. We have already spied on these sites and we know how we are going to attack them. There is more that we could bring to the information from the intelligence community, that is open material that we are all aware involve plans by leaders in North Korea, Iran, and other places to try to develop missile technology and nuclear technology to attack places such as the United States. The North Koreans already have the capacity to attack Hawaii and Alaska, and we don't yet have a missile defense system in place to stop it. Thanks to President Bush and the efforts of the Congress and the missile act that we passed, we have put into place a program to actually develop and deploy a missile defense system. It is not the be-all and end-all. It would not destroy everything the Soviet Union used to be able to use against us, but it would stop the kinds of missiles that North Korea, Iran, and perhaps others might want to send our way. Yet today we are at a crossroads. We begin debating today the Defense Authorization Act and expect amendments to be offered once again to cut the heart out of the missile defense program, prevent it from being deployed to actually be able to shoot down the missiles of an attacking country. It is interesting what is at work here. I say cut the heart out. They want to cut out over half a billion dollars--$515.5 million-- from the missile defense program. Why? They claim it hasn't yet been operationally tested. What does operational testing mean? It means you take it out of the laboratory kind of testing and put it into the ground; put the missile into the silo, and you run against it a real test with an offensive missile like the one you want to be able to defend against and see if you can knock it down. That is real operational testing, battlefield conditions. Sometimes you cannot afford to do that kind of testing, and you have to go with what you have just as we did in the first Persian Gulf war. There are other examples. The JSTAR is a program that had never been operationally tested, but we found that we needed it and, as a result-- it is the Joint Surveillance and Target Attack Radar System, which is an aircraft that played an important role in the 1991 Persian Gulf war by providing warning to forces on the ground when the Iraqi military was on the move. This had never been tested. JSTAR was in preproduction; it was a preproduction aircraft. They literally had to outfit it on the way to the theater. We used it and it worked. The Predator is another example, and the Global Hawk. Unmanned aerial vehicles have been valuable assets on the war on terrorism. They were not operationally tested. They were hardly ready for use, but we needed something that could do what they did. That is the way it is with missile defense today. We need to have the ability to shoot down a missile aimed at us by, for example, Iran or North Korea or some other enemy that might think we are bluffing. What about this claim that it hasn't been operationally tested? Mr. President, this is how we operationally test it. We put it into the silo, erect the radars, send a target missile against it, and see if it will work. We have had many tests--something like 18 tests, and all of the most recent tests have been successful. We are quite confident it will work. It needs to be tested in battlefield conditions, and this is the way to get it done. But the cuts that are being proposed would prevent us from buying the number of missiles we need in order to conduct this testing and still have enough left in the ground to prevent an attack should there be one launched against us. There is a basic catch-22 being imposed against us. That catch-22 is that you cannot deploy it until you can operationally test it, and you cannot test it until you deploy it. It would be folly for us to support an amendment that would prevent us from fielding these missiles. Eventually, we are only talking about 20 interceptors based at Fort Greeley in Alaska and Vandenberg Air Force Base. The money that has been set aside for the first tranche of these missiles is already now producing the missiles to put in the first set of silos. We are now talking about the downpayment on the additional interceptors, No. 21 through No. 30. We have already cut the long lead procurement funding for interceptors No. 31 through 40. So we have already delayed that, which will make it much more costly. The bottom line is, as we have been told by General Kadish--the general who runs this program--it will be much more time-consuming and expensive if we cut the money out of the budget this year to prevent the production of these missiles that are going to be needed both for operational testing, as well as to be prepared to defend against an enemy attack should it come. The point I want to make today is this: The Soviet Union was brought to its knees because it believed President Reagan when he said we are going to develop a means of countering your most effective weapon, so you might as well not even try to spend the money and the effort and the time to create this program because we will be able to defeat you; we are not kidding. It has been over 20 years since President Reagan made that announcement, and we still do not have the missiles in the ground. I am afraid some of our potential enemies are going to conclude that we were bluffing all along, that we do not have the will to spend the money and to put the program in place to provide this kind of defense. The point of this defense is not just to be able to operationally test it and have it in the ground to stop a missile should one be launched against us, but to deter nations that might believe we are bluffing, to deter nations from spending the money to build these offensive weapons in the first place, to deter these leaders, these people in places such as North Korea and Iran, from concluding that if they will simply spend the money it will take to build the nuclear weaponry and the missiles to fire them, that we will somehow forget about developing missile defenses or conclude that it is too expensive, and the richest Nation on Earth, the Nation that has the financial capability of providing this kind of defense, will decide not to do it. The point of our exercise today is to move forward with the bill that the committee has put before us. It is a good bill. The bill has an authorization for enough money to buy the next group of missiles we need to put in the silos for testing purposes, for the purpose of shooting down a missile should one be launched against us--we do not have that ability today--and third, to deter countries that might be thinking they can go ahead with the development of this kind of a system because the United States will never get around to deploying an effective missile defense system. Now is the time for us to act. It is not the time for us to blink in the face of these dictatorial countries. Should we support the amendment that would cut the heart out of missile defense funding for this year, it would send a signal to these countries that the United States has been bluffing all along. We were not bluffing when Ronald Reagan made that important announcement. The Soviet Union understood that. Can we do any less today than to make it crystal clear to our would-be enemies that we are not bluffing, that we mean what we say, that we intend to protect America, that we intend to protect others who are our allies, and that we will not permit an offensive ballistic missile to strike our land and kill our people? To do anything else would be morally irresponsible. As President Reagan said, if we have the capability of defending ourselves and preventing this kind of conflagration, should we not take advantage of that wonderful capability? I am optimistic about our ability, and I am confident about the American people, and I am sure they want us to confirm to the world that we mean what we say, just as Ronald Reagan meant what he said.

Mr. KYL

Mr. KYL. Mr. President, Robert Robb is one of the great columnists in American journalism today, and his tribute to Ronald Reagan is among his best work. I ask unanimous consent to have the following article printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, America mourns the loss of an epic-making leader, Ronald Wilson Reagan. As the biographer Lou Cannon has said, Reagan ``possessed a special `something' that transcended the appeal of ordinary politicians,'' and he knew it. Even so--and this is an important point--he was neither a vain man nor in love with power. In not misusing that special appeal that he had, he showed such character and goodness. He could have been, but was not, a demagog. He was trying to accomplish his exalted vision of this country, only that. And in large measure, he succeeded. Militarily, he rebuilt America's capacity to defend itself and its allies. Reagan's defense buildup led to U.S. victories in the cold war, the Persian Gulf war, and beyond. In fact, dealing skillfully with a Congress controlled during most of his Presidency by the other party, he secured funding for weapons systems that are still being used. Diplomatically, he achieved with the Soviet Union, our adversary for most of the last century, an accord that eliminated whole classes of nuclear weapons from the stockpiles of both countries. Politically, he enabled us to regain confidence in America. His confidence in his country and his goodness was utterly unshakeable, so he was just the right leader to rise to the fore when the national spirit had been battered by our withdrawal from Vietnam, the scandal of Watergate, and the malaise that his predecessor identified but could not seem to counteract. Economically, he slew the dragon of double-digit inflation. He braved unpopularity to stay the course with Paul Volcker, Chairman of the Federal Reserve, in tightening the money supply. This steadfastness saw the United States through its worst economic crisis in 50 years. The economy slid deep into a recession before recovering in late 1982. Along with tightening the money supply to kill inflation, Reagan was convinced that marginal tax rates must be cut to stimulate growth. These anti-inflation and tax policies defied the conventional wisdom of that time. But they worked. They gave us what the late, great journalist Robert Bartley called ``the seven fat years,'' a time of unprecedented job creation and economic expansion in America. Even as Ronald Reagan won through in domestic policy, he was a statesman who left his mark on the world. During his two terms in office, early 1981 to the end of 1988, he championed the cause of human rights in the Soviet Union and Central and Eastern Europe, standing up for freedom, democracy, and civil society. He spoke passionately of God-given rights and said self- government and free markets were the only way to vindicate those rights. He wanted the people who were living under oppression to regain their dignity, and his words gave hope to millions. In his 1982 Evil Empire speech before the British House of Commons, President Reagan said: While we must be cautious about forcing the pace of change, we must not hesitate to declare our ultimate objectives and to take concrete actions to move toward them. We must be staunch in our conviction that freedom is not the sole prerogative of a lucky few but the inalienable and universal right of all human beings. The Reagan administration fostered democracy around the world in the 1980s, in Central America, South America, Asia. The Philippines, Taiwan, and South Korea all liberalized their societies in ways that may not have been possible without the Reagan administration's support. President Reagan will go down in history for his doctrine of peace through strength. It turned this country around militarily and diplomatically and turned the course of the cold war dramatically in our favor. It was also a negotiating strategy--just the right one, it turned out--for dealing with a Communist power that was ailing economically but still aggressive. The Soviet Union had last invaded a country the year before he was elected, Afghanistan in 1979. The U.S.S.R. was engaged in the 1970s in a rapid military buildup. The prevailing nuclear standoff between the two superpowers when Reagan came into office was frightening. They were locked in a decades-old equilibrium under which neither attacked the other because each could, at the push of a button, destroy the other's populations with nuclear weapons. President Reagan once commented that this nuclear standoff, which was called mutual assured destruction, was ``a sad commentary on the human condition.'' He had the courage and the imagination to think of a way out of it: erecting a defense against nuclear arms. This would end the practice of holding civilian populations hostage to the atomic bomb. It was, he believed, both militarily and morally necessary to strike off in this new direction. As he pointed the way, he endured heavy criticism and even ridicule, but it didn't faze him. His idea was brilliant, for even if embarking on this high-tech shield against missiles did not lead to a deployable U.S. system right away, he knew the Soviets would pour their resources into matching our progress toward missile defense. It was a competition they could ill afford. The extra burden economically and even psychologically of keeping up with missile defense and the entire Reagan military buildup hastened the collapse of the Soviet economy and the Communist system itself. People who didn't agree with President Reagan called him a saber rattler and worse. Opponents wrung their hands at this peace-through- strength approach, insisting a buildup of U.S. military capabilities couldn't possibly help us if the goal was a safer and more peaceful world. Yet the critics were wrong. President Reagan, the saber rattler, sat down with Soviet leader Mikhail Gorbachev in Washington in December of 1987 and the two men signed the Intermediate Nuclear Forces Treaty which abolished the use of all intermediate and shorter range missiles by the United States and the Soviet Union. The following year the Reagan administration created the On-Site Inspection Agency to conduct U.S. inspections of Soviet military facilities and to aid Soviet inspections at our facilities. The Reagan- Gorbachev diplomacy set the stage for the 1990 signing between NATO and the Warsaw Pact of the Conventional Forces in Europe Treaty. One of the well-known personal traits of Ronald Reagan was he didn't care who got credit for successful policies. Goodness knows, his detractors, then and even now, will deny him any credit he might deserve for making the world safer. He did make the world safer, though. That is the truth of it. And history will remember him that way. We can say of Ronald Reagan what Lincoln said in praise of his, Lincoln's, personal role model Henry Clay: He loved his country partly because it was his own country, but mostly because it was a free country. The role model of our time is Ronald Reagan. His principles are the principles we now embrace. They will help us to keep this free country and to help others who want to be free. As we continue in the wake of September 11 to fight the war on terror, we all take comfort and inspiration from the jaunty optimism and the seriousness of purpose of Ronald Reagan. President George W. Bush practices Reagan's doctrine of peace through strength. He has done so by confronting and defeating tyranny in Afghanistan and Iraq, by pursuing deployment of missile defenses, by leading the international community to stop the spread of weapons of mass destruction, and by demonstrating to the world that the United States is willing to rally free peoples in defense of our civilization and our democratic way of life. Thank you, Ronald Reagan, for showing the way.

Mr. KYL. I am happy to yield.

Mr. KYL

Mr. KYL. Mr. President, I join my colleagues in celebrating the first anniversary of the Jobs and Growth Tax Reconciliation Act of 2003, which was signed into law by President Bush on May 28, 2003. Also, I want to announce that today I am introducing legislation to make the dividends and long-term capital gains tax cuts permanent. It has been one year since Congress and President Bush joined together to enact pro-growth, supply-side tax cuts. Now, since some in the Senate are proposing that we repeal the tax cuts--this would be one of the largest tax increases in history--let's review the impact these cuts have had on our economy. The 2003 tax cuts have triggered the fastest growing economy in two decades. Real gross domestic product grew at an annual rate of 8.2 percent in the third quarter of 2003, 4.1 percent in the fourth quarter, and 4.4 percent in the first quarter of 2004. If we sustain this pace, our economy will double in 13 years. When the tax cuts were enacted last year, the national unemployment rate was 6.3 percent. Today, it has dropped nearly 11 percent to 5.6 percent, which is lower than the average unemployment rate of the 1970s, 1980s, and 1990s. A growing economy means good, high-paying jobs and a better quality of life for all Americans. I want to draw my colleagues' attention to research published by the National Bureau of Economic Research (NBER)--the Nation's leading nonprofit economic research organization. This study demonstrates that the 2003 tax cuts corrected a terrible mistake we made in 2001 when we phased in the marginal rate cuts. The phase-in of the 2001 tax cuts prompted workers and firms to delay work until the tax cuts were fully implemented. Employment, output, and investment actually fell in response to the phased-in tax cuts. The NBER study found that, ``Just as the phased-in nature of the 2001 tax law may have delayed production and employment, the immediate tax relief included in the 2003 law may have contributed towards the increased pace of economic activity in the second half of 2003.'' I am confident that, as more economic data comes in and as the 2003 tax cuts are studied further, we will find that the 2003 tax cuts are directly responsible for the economic growth we are seeing today. The NBER study demonstrates that individuals really do delay economic activity in anticipation of lower future tax rates. It also corroborates the theory that high marginal tax rates cause individuals to restrict economic activity in order to minimize the tax burden imposed on their next dollar earned. Because the tax cuts were accelerated in 2003, individuals had an incentive to work harder and longer immediately because their next dollar of income would be taxed at a lower rate. Among the taxpayers benefited by the reductions in the individual rate are America's small businesses. The top individual rate is often called the small business rate because most small businesses are organized as pass-through entities, which pay at individual rates. Owners of pass-through entities, including small business owners and entrepreneurs, comprise more than two-thirds, about 500,000, of the 750,000 tax returns that benefited from speeding up the reduction in the top tax bracket. These small business owners received 79 percent, about $10.4 billion, of the $13.3 billion in tax relief from accelerating the reduction in the top tax bracket to 35 percent. The task for us now is to make the individual rate reductions permanent. If Congress fails to act, the tax cuts will expire at the end of 2010. The bottom rate would increase from 10 percent to 15 percent, an increase of 33 percent; the top rate would increase from 35 percent to 39.6 percent, an increase of 11 percent. The effect such tax increases would have on our economy would be devastating. Not only did Congress and President Bush work together to bring down individual income tax rates, but we also reduced the tax on dividend distributions and long-term capital gains. Before the 2003 tax cuts, our tax code actually discouraged dividend payouts. The 2003 tax cut lowered the tax rate imposed on dividends from 38.6 percent to 15 percent through 2008. Before 2003, corporate earnings were taxed once at the corporate level, 35 percent, and again at the individual rate, as high as 38.6 percent, meaning they were double-taxed. It made no sense for investors to seek out dividend-paying stocks, from a tax perspective. While dividends are still double-taxed, the tax penalty is greatly reduced. This has made dividend-paying stocks more attractive to investors, which has helped companies raise capital to expand and grow their businesses. Further, because dividends must be paid from cash, companies that pay dividends must have actual profits, thus making it more difficult for companies to hide financial mismanagement. Some of my colleagues want to repeal the dividend tax cut. This is obviously misguided, since we have strong evidence that the dividend tax cut has worked. Since the 2003 tax cut was signed into law, 374 companies on the S&P 500 pay dividends--an increase of 22 companies. Companies have increased dividend payments to shareholders by 40 percent, reversing a two-decade decline. The Dow Jones Industrial index has risen more than 1,400 points since the 2003 tax cuts were signed into law. Similarly the capital gains tax cut has also encouraged economic growth. It reduced the tax imposed on long-term capital gains from 20 percent to 15 percent. This has made it more attractive for individuals to risk their hard-earned money by investing it in businesses. The result is that it is easier for businesses to raise needed capital to expand and create new jobs. Stock market gains, the strong GDP we have experienced, and falling unemployment all indicate that the economy has recovered. Now, to help our economy to continue to grow and create new jobs, the dividend and capital gains tax cuts must be made permanent. If we allow the dividend rate to return to the individual rate, we will increase taxes on dividends by 62 percent. Allowing the capital gains rate to return to 20 percent will be a 25 percent tax increase. We must make the 15 percent rate for each permanent, and then we must work to reduce both the dividends and the capital gains rates to zero, so that we eliminate the double-taxation of corporate earnings. The Senate bill actually would have brought the dividend tax rate to zero for three years, but the agreement that we worked out with the House was to tax dividends at 15 percent. The dividends and capital gains tax relief will expire in 2009. The most important thing we can do next year is make the 2003 tax cuts permanent. Today I am introducing legislation that will make the dividends and capital gains tax relief permanent. I will work to make the individual income tax rate cuts permanent as well. To allow the tax cuts to expire--or worse, to seek to higher taxes at the very time our economy has pulled out of the recession and is growing strong--would be unthinkable.

Mr. KYL

Mr. KYL. Mr. President, I join my colleagues in celebrating the first anniversary of the Jobs and Growth Tax Reconciliation Act of 2003, which was signed into law by President Bush on May 28, 2003. Also, I want to announce that today I am introducing legislation to make the dividends and long-term capital gains tax cuts permanent. It has been one year since Congress and President Bush joined together to enact pro-growth, supply-side tax cuts. Now, since some in the Senate are proposing that we repeal the tax cuts--this would be one of the largest tax increases in history--let's review the impact these cuts have had on our economy. The 2003 tax cuts have triggered the fastest growing economy in two decades. Real gross domestic product grew at an annual rate of 8.2 percent in the third quarter of 2003, 4.1 percent in the fourth quarter, and 4.4 percent in the first quarter of 2004. If we sustain this pace, our economy will double in 13 years. When the tax cuts were enacted last year, the national unemployment rate was 6.3 percent. Today, it has dropped nearly 11 percent to 5.6 percent, which is lower than the average unemployment rate of the 1970s, 1980s, and 1990s. A growing economy means good, high-paying jobs and a better quality of life for all Americans. I want to draw my colleagues' attention to research published by the National Bureau of Economic Research (NBER)--the Nation's leading nonprofit economic research organization. This study demonstrates that the 2003 tax cuts corrected a terrible mistake we made in 2001 when we phased in the marginal rate cuts. The phase-in of the 2001 tax cuts prompted workers and firms to delay work until the tax cuts were fully implemented. Employment, output, and investment actually fell in response to the phased-in tax cuts. The NBER study found that, ``Just as the phased-in nature of the 2001 tax law may have delayed production and employment, the immediate tax relief included in the 2003 law may have contributed towards the increased pace of economic activity in the second half of 2003.'' I am confident that, as more economic data comes in and as the 2003 tax cuts are studied further, we will find that the 2003 tax cuts are directly responsible for the economic growth we are seeing today. The NBER study demonstrates that individuals really do delay economic activity in anticipation of lower future tax rates. It also corroborates the theory that high marginal tax rates cause individuals to restrict economic activity in order to minimize the tax burden imposed on their next dollar earned. Because the tax cuts were accelerated in 2003, individuals had an incentive to work harder and longer immediately because their next dollar of income would be taxed at a lower rate. Among the taxpayers benefited by the reductions in the individual rate are America's small businesses. The top individual rate is often called the small business rate because most small businesses are organized as pass-through entities, which pay at individual rates. Owners of pass-through entities, including small business owners and entrepreneurs, comprise more than two-thirds, about 500,000, of the 750,000 tax returns that benefited from speeding up the reduction in the top tax bracket. These small business owners received 79 percent, about $10.4 billion, of the $13.3 billion in tax relief from accelerating the reduction in the top tax bracket to 35 percent. The task for us now is to make the individual rate reductions permanent. If Congress fails to act, the tax cuts will expire at the end of 2010. The bottom rate would increase from 10 percent to 15 percent, an increase of 33 percent; the top rate would increase from 35 percent to 39.6 percent, an increase of 11 percent. The effect such tax increases would have on our economy would be devastating. Not only did Congress and President Bush work together to bring down individual income tax rates, but we also reduced the tax on dividend distributions and long-term capital gains. Before the 2003 tax cuts, our tax code actually discouraged dividend payouts. The 2003 tax cut lowered the tax rate imposed on dividends from 38.6 percent to 15 percent through 2008. Before 2003, corporate earnings were taxed once at the corporate level, 35 percent, and again at the individual rate, as high as 38.6 percent, meaning they were double-taxed. It made no sense for investors to seek out dividend-paying stocks, from a tax perspective. While dividends are still double-taxed, the tax penalty is greatly reduced. This has made dividend-paying stocks more attractive to investors, which has helped companies raise capital to expand and grow their businesses. Further, because dividends must be paid from cash, companies that pay dividends must have actual profits, thus making it more difficult for companies to hide financial mismanagement. Some of my colleagues want to repeal the dividend tax cut. This is obviously misguided, since we have strong evidence that the dividend tax cut has worked. Since the 2003 tax cut was signed into law, 374 companies on the S&P 500 pay dividends--an increase of 22 companies. Companies have increased dividend payments to shareholders by 40 percent, reversing a two-decade decline. The Dow Jones Industrial index has risen more than 1,400 points since the 2003 tax cuts were signed into law. Similarly the capital gains tax cut has also encouraged economic growth. It reduced the tax imposed on long-term capital gains from 20 percent to 15 percent. This has made it more attractive for individuals to risk their hard-earned money by investing it in businesses. The result is that it is easier for businesses to raise needed capital to expand and create new jobs. Stock market gains, the strong GDP we have experienced, and falling unemployment all indicate that the economy has recovered. Now, to help our economy to continue to grow and create new jobs, the dividend and capital gains tax cuts must be made permanent. If we allow the dividend rate to return to the individual rate, we will increase taxes on dividends by 62 percent. Allowing the capital gains rate to return to 20 percent will be a 25 percent tax increase. We must make the 15 percent rate for each permanent, and then we must work to reduce both the dividends and the capital gains rates to zero, so that we eliminate the double-taxation of corporate earnings. The Senate bill actually would have brought the dividend tax rate to zero for three years, but the agreement that we worked out with the House was to tax dividends at 15 percent. The dividends and capital gains tax relief will expire in 2009. The most important thing we can do next year is make the 2003 tax cuts permanent. Today I am introducing legislation that will make the dividends and capital gains tax relief permanent. I will work to make the individual income tax rate cuts permanent as well. To allow the tax cuts to expire--or worse, to seek to higher taxes at the very time our economy has pulled out of the recession and is growing strong--would be unthinkable.

Mr. KYL

Mr. KYL. Mr. President, I rise in opposition to the amendment and would like to first reflect on some remarks that would have been presented by the chairman of the Armed Services Committee, Senator Warner, were he able to be here. Then I will make a couple of comments on my own as well. He points out that for the past 2 years, the Department of Energy has requested funding or legislation for several nuclear-weapons-related activities, including a feasibility study on the robust nuclear earth penetrator and the advanced concepts initiative. These requests generated significant debate in the Congress, both last year and in the previous year. Last year, Congress decided to authorize research and the feasibility studies on advanced concepts and the robust nuclear earth penetrator, while ensuring that the Congress has the final say on whether more advanced development activities may proceed in the future. So it is strictly up to Congress as to whether we would authorize anything in the future, and that has nothing to do with the bill that is before us today. Specifically, the National Defense Authorization Act for fiscal year 2004 prohibits the Department of Energy from proceeding to the engineering/development, production or deployment phases of the robust nuclear earth penetrator, or a low-yield nuclear weapon, unless specifically authorized by Congress. This is a prudent way to handle a very sensitive issue, which is deserving of the Congress's most careful oversight. I believe we struck a proper balance which will allow our weapons scientists, engineers, and technicians to conduct necessary research and studies to ensure that they maintain the ability to respond to any future military requirements from the Department of Defense. We know rogue nations are increasingly developing hardened and deeply buried targets where they can conduct command, control, and communications operations, operate laboratories to produce and store weapons of mass destruction, and engage in other activities. Pursuant to military requirements from the Department of Defense to address hardened and deeply buried targets, the National Nuclear Security Administration is doing a feasibility study to determine whether an existing nuclear weapon can be modified so that it can destroy these hardened targets--I repeat, an existing nuclear weapon, not a new nuclear weapon. The feasibility study is also trying to determine what collateral damage would result in such an event. The need for validating this capability is well documented over several preceding administrations. Increased urgency to develop a capability to destroy hardened and deeply buried targets, both conventional and nuclear, was identified in the Quadrennial Defense Review, also in the Nuclear Posture Review, and the Hard and Deeply Buried Target Capstone Report and the HDBT report to the Congress. Advanced penetrators armed with conventional warheads have a very limited capability. They can only address relatively shallow targets whose location is known precisely. I would parenthetically note that we also have photographs at the very beginning of the gulf war where we thought we had identified the location of Saddam Hussein. Very precise weaponry was deployed to try to penetrate the bunkers and facilities in which we thought the command and control was located. You remember the photographs of the concrete, layer upon layer upon layer, and hardened steel intermeshed with that concrete, none of which, of course, was penetrated enough to destroy the target we wanted to destroy. Only nuclear weapons can address the deeply buried targets that are protected by manmade or even hard geology. Our current nuclear penetrator, the B6-111, is only capable of penetrating a few feet of frozen soil and is incapable of attacking successfully a growing number of these hardened targets. The feasibility study on the Robust Nuclear Earth Penetrator is focused on technical issues related to adapting an existing nuclear weapon to meet a spectrum of nuclear requirements for hardened and deeply buried targets, including survival through impact and penetration of hard geology. While the feasibility study on the Robust Nuclear Earth Penetrator will allow the Department of Energy to determine if the capability of destroying the HDBTs is possible, the current authorization will not result in a new or modified nuclear weapon. Again I want to emphasize that the National Defense Authorization Act for the fiscal year 2004 included a provision requiring a specific authorization from the Congress before the Secretary of Energy can proceed to the engineering/development phase or subsequent phase of a Robust Nuclear Earth Penetrator or a low-yield nuclear weapon. I support the National Nuclear Security Administration's ability to continue the feasibility study and the Advanced Concepts Initiative, and I urge my colleagues to oppose the amendment, which is, if anything, premature because of the points I have just made. I will note in closing that it is possible to show photographs of a flattened Tokyo during World War II that was not bombed with a nuclear weapon or a burned-out Dresden, Germany. It is possible to show a lot of destruction in war caused by either nuclear or conventional weapons. But that is not what we are talking about nor are we talking about opening the nuclear door, as was mentioned. No new nuclear weapon is envisioned here. What we are talking about, again, is a feasibility study to use something we already have to destroy a target. I would answer the question, Why would we want to do this? There are a lot of intelligence reports we cannot get into on the Senate floor that discuss the propensity for potential enemies of the United States to deeply bury what they don't want us to be able to destroy--whether it be weapons of mass destruction, production or storage or launch capability facilities or command and control or other kinds of targets we may need to deal with in a time of war. Why would we want to deny ourselves the ability to destroy those kinds of targets? The point was mentioned that Secretary Rumsfeld testified. What did he testify to? That this was worth studying. He never said we were proceeding, because the law would prohibit that. That is all he said, that this is worth studying. Indeed it is. Why does the 5-year budget requirement carry out a larger sum of money? Simply because that is what we require. We say to the DOE: Even though you have a 1-year number here, what would it look like if you proceeded 5 years out? And they have to tell us. But that is a hypothetical number because we have not authorized anything beyond the number we are talking about here. The final point. Once we start talking about nuclear weaponry, a lot of very extraneous arguments get brought into the picture. I suggest we not go down that road because it is not necessary. It has nothing to do with this debate. One of the arguments is, why would we want to begin testing nuclear weapons when we are trying to convince these other countries such as Pakistan and India, and so on, not to do so? I remind my colleagues that long after the United States imposed a moratorium on all nuclear testing, it was not just India or Pakistan but the North Koreans who were trying to develop a weapon. The French and the Chinese tested weapons after our moratorium was declared. So it is fallacious to say if only we would forego any testing of any kind, then the other countries would forego it as well. History shows that is a fallacious argument. My point is let's not get into the scary discussion of reopening the nuclear window with an amendment that would prohibit us from continuing to study something that all of our defense people say we need to continue to study, and that is whether an existing weapon could be used to destroy a target we may need to destroy at some time in the future. As long as Congress has the ultimate say as to whether we would proceed with the development or deployment of the weapon--and we have not done that--it is absolutely not necessary for us to adopt an amendment such as this that would cripple us from even looking into the subject. That would be a Luddite position for a country like the United States with all of the responsibilities we have to take. I urge my colleagues to vote against this amendment when we have the opportunity to do so.

Mr. KYL

Mr. KYL. Mr. President, this morning, the Senate will conduct a period of morning business for up to 60 minutes, with the Democratic leader or his designee in control of the first 30 minutes and the majority leader or his designee in control of the final 30 minutes. Following morning business, the Senate will resume consideration of the Department of Defense authorization bill. Chairman Warner and Senator Levin will be here all day, working through amendments. As the leader announced last night, we were able to lock in a finite list of first-degree amendments to the bill, and Senators are encouraged to work with the bill managers so we can finish this bill this week or early next week. On behalf of the leader, I remind Senators that the Senate will stand in recess from 12:30 p.m. to 2:15 p.m. to accommodate the Democratic policy luncheon, and that at 5 p.m. there will be a reception honoring Senators Akaka, Hollings, Inouye, Lautenberg, Stevens, and Warner, who are all veterans of the Second World War. We will devote the hour prior to the reception for speeches honoring their service. Order of Procedure I now ask unanimous consent that there be a period of morning business today from 4 to 5 p.m., with the time equally divided between the two leaders or their designees.

Mr. KYL

Mr. KYL. Mr. President, I rise today to introduce a bill that would repeal Sec. 224 of the USA Patriot Act. Section 224 provides that 16 different parts of the Patriot Act ``shall cease to have effect on December 31, 2005.'' The authorities subject to this sunset include some of the most important provisions of the Act. They are sections 201, wiretapping in terrorism cases; 202, wiretapping in computer fraud and abuse felony case; 203(b) sharing wiretap information; 203(d), sharing foreign intelligence information; 204, Foreign Intelligence Surveillance Act (FISA) pen register/trap and trace exceptions; 206, roving FISA wiretaps; 207, duration of FISA surveillance of non-United States persons who are agents of a foreign power; 209, seizure of voice-mail messages pursuant to warrants; 212, emergency disclosure of electronic surveillance; 214, FISA pen register/ trap and trace authority; 215, FISA access to tangible items; 217, interception of computer trespasser communications; 218, purpose for FISA orders; 220, nationwide service of search warrants for electronic evidence; 223, civil liability and discipline for privacy violations; and 225, provider immunity for FISA wiretap assistance. Rather than praise the Patriot Act myself, I would like to quote others who have done so. First, I would note that the President has called on Congress to renew all parts of the Patriot Act that are scheduled to expire next year. As he has emphasized, ``to abandon the Patriot Act would deprive law enforcement and intelligence officers of needed tools in the war on terror, and demonstrate willful blindness to a continuing threat.'' FBI Director Robert Mueller, in a hearing before the Judiciary Committee yesterday, also voiced strong support for renewing the Patriot Act. As he noted, ``for over two and a half years, the PATRIOT Act has proved extraordinarily beneficial in the war on terrorism and has changed the way the FBI does business. Many of our counterterrorism successes, in fact, are the direct results of provisions included in the Act, a number of which are scheduled to `sunset' at the end of next year. I strongly believe it is vital to our national security to keep each of these provisions intact.'' Similarly, in an April 14 field hearing before the Judiciary Committee, Deputy Attorney General James Comey stated that the Patriot Act ``has made us immeasurably safer.'' He also responded to the allegation, occasionally made by some critics, that the Patriot Act was passed too quickly. He replied that ``the USA Patriot Act was not rushed, it actually came 10 years too late.'' The importance of the Patriot Act to American security also has drawn the attention of the 9/11 Commission. Former New Jersey Governor Thomas Kean has noted that the Commission has had ``witness after witness tell us that the Patriot Act has been very, very helpful, and if the Patriot Act, or portions of it, had been in place before 9/11, that would have been very helpful.'' This praise has not been limited to the Republicans who have participated in the Commission's proceedings. Former Attorney General Janet Reno, for example, testified before the Commission that ``everything that's been done in the Patriot Act has been helpful.'' Nor is President Bush alone among the major candidates for President this year in hailing the importance of the Patriot Act. Indeed, his principal rival for the office, Senator Kerry, recently claimed that he would go even further than the President. According to an April 25 story in the Los Angeles Times, Senator Kerry's spokesman insists that ``it is the challenger, not the president, who brings the most muscular view of the Patriot Act into the race.'' Senator Kerry's presidential campaign website even includes a ``Plan to Restore American Security,'' which lists as its number-one priority to ``improve intelligence capabilities.'' Senator Kerry states that he ``understands that intelligence information is the key to disrupting and dismantling terrorist organizations and that we need to improve our intelligence capabilities, both domestically and internationally, in order to win the war on global terrorism.'' One reform implemented by the Patriot Act that Attorney General Reno and others have particularly emphasized is its authorization for information sharing. Because this part of the Patriot Act is often praised but infrequently described in detail, I would like to quote the following accounts of pre-Patriot barriers to information sharing, and of the investigative successes that the removal of those barriers has made possible. The FISA Court of Review decision upholding the Patriot Act's authorization for information sharing, In re: Sealed Case, 310 F.3d 717, F.I.S. Ct. Rev. 2002 , describes the origins of the pre-Patriot barriers: Apparently to avoid running afoul of the primary purpose test used by some courts, the 1995 [Attorney General] Procedures [(``Procedures for Contacts Between the FBI and the Criminal Division Concerning Foreign Intelligence and Foreign Counterintelligence Investigations'')] limited contacts between the FBI and the Criminal Division in cases where FISA surveillance or searches were being conducted by the FBI for foreign intelligence (FI) or foreign counterintelligence (FCI) purposes. The procedures state that ``the FBI and Criminal Division should ensure that advice intended to preserve the option of a criminal prosecution does not inadvertently result in either the fact or the appearance of the Criminal Division's directing or controlling the FI or FCI investigation toward law enforcement objectives.'' Although these procedures provided for significant information sharing and coordination between criminal and FI or FCI investigations, based at least in part on the ``directing or controlling'' language, they eventually came to be narrowly interpreted within the Department of Justice, and most particularly by OIPR, as requiring OIPR to act as a ``wall'' to prevent the FBI intelligence officials from communicating with the Criminal Division regarding ongoing FI or FCI investigations. Thus, the focus became the nature of the underlying investigation, rather than the general purpose of the surveillance. Once prosecution of the target was being considered, the procedures, as interpreted by OIPR in light of the case law, prevented the Criminal Division from providing any meaningful advice to the FBI.'' In re: Sealed Case, 310 F.3d at 727-28 citations omitted. FBI Director Mueller, in his testimony yesterday, provided a concrete account of the impact that these information-sharing barriers had on intelligence investigations: Prior to September 11, an [FBI] Agent investigating the intelligence side of a terrorism case was barred from discussing the case with an Agent across the hall who was working the criminal side of that same investigation. For instance, if a court-ordered criminal wiretap turned up intelligence information, the criminal investigator could not share that information with the intelligence investigator--he could not even suggest that the intelligence investigator should seek a wiretap to collect the information for himself. If the criminal investigator served a grand jury subpoena to a suspect's bank, he could not divulge any information found in those bank records to the intelligence investigator. Instead, the intelligence investigator would have to issue a National Security Letter in order to procure that same information. Chicago U.S. Attorney Patrick Fitzgerald, in an October 21, 2003 hearing before the Senate Judiciary Committee, described how these pre- Patriot information-sharing limits undercut one potentially vital terror investigation. Mr. Fitzgerald discussed the grand-jury testimony of Wadih el Hage, a key member of the Al Qaeda cell in Nairobi who, in September 1997, was apprehended while changing flights in New York City. Federal prosecutors subpoenaed el Hage from the airport to testify before a Federal grand jury in Manhattan. Mr. Fitzgerald described how el Hage: [P]rovided some information of potential use to the intelligence community--including potential leads as to the location of his confederate Harun and the location of Harun's files in Kenya. Unfortunately, as el Hage left the grand-jury room, we knew that * * * [because of pre-Patriot restrictions] we would not be permitted to share the grand- jury information with the intelligence community. * * * Fortunately, we found a way to address the problem that in most other cases would not work. Upon request, el Hage voluntarily agreed to be debriefed by an FBI agent outside the grand-jury room * * *. El Hage then repeated the essence of what he told the grand jury to the FBI agent, including his purported leads to on the location of Harun and his files. The FBI then lawfully shared the information with the intelligence community. In essence, we solved the problem by obtaining the consent of a since-convicted terrorist. We do not want to have to rely on the consent of al Qaeda terrorists to address the gaps in our national security. Mr. Fitzgerald went on to describe how, in August 1998, the American Embassy in Nairobi was bombed by al Qaeda. Investigators quickly learned that el Hage's associate Harun was responsible. In this particular case, investigators had been able to work around information-sharing limits because of an al Qaeda terrorist's willingness to be interviewed by the FBI, and even with this information U.S. agents were not able to stop a terrorist attack. The pre-Patriot limits were not a decisive factor in blocking U.S. intelligence agents from preventing the Kenya bombing. But they could have been. As U.S. Attorney Fitzgerald concluded, ``we should not have to wait for people to die with no explanation [other] than that interpretations of the law blocked the sharing of specific information that probably [c]ould have saved [American lives].'' As Attorney General Reno noted in her testimony before the 9/11 Commission, ``these restrictions [on information sharing] have now been eliminated as part of the Patriot Act.'' Director Mueller, in his Judiciary Committee testimony yesterday, described the impact of this change: The removal of the ``wall'' has allowed government investigators to share information freely. Now, criminal investigative information that contains foreign intelligence or counterintelligence, including grand jury and wiretap information, can be shared with intelligence officials. This increased ability to share information has disrupted terrorist operations in their early stages--such as the successful dismantling of the ``Portland Seven'' terror cell--and has led to numerous arrests, prosecutions, and convictions in terrorism cases. In essence, prior to September 11th, criminal and intelligence investigators were attempting to put together a complex jigsaw puzzle at separate tables. The Patriot Act has fundamentally changed the way we do business. Today, those investigators sit at the same table and work together on one team. They share leads. They fuse information. Instead of conducting parallel investigations, they are fully integrated into one joint investigation. These Patriot Act changes can directly be credited with some important recent successes in the war on terror. For example, in February 2003, Federal prosecutors arrested and indicted Sami Al-Arian and seven other suspected terrorists. The 50-count indictment indicated that Al-Arian was the financial director and the North American leader of Palestinian Islamic Jihad, a terrorist group that has killed more than 100 people in and around Israel, including two Americans. Al-Arian wired money to groups in Israel that paid money to the families of terrorists who carried out suicide bombings. He also founded three organizations in Florida which, among other things, drafted final wills and testaments for suicide bombers. Incredibly, through much of the 1990s, Al-Arian was secretly watched by two different sets of U.S. investigators. The FBI had been conducting a criminal probe of Al-Arian since 1995. Meanwhile, intelligence agents had monitored Al-Arian since the late 1980s. Because of pre-Patriot restrictions, the two sets of investigators were not able to share information and were not aware of the full extent of each other's investigations. It was only after the FISA Court of Review upheld Patriot Act Sec. 203's information-sharing provisions in November 2002 that intelligence officials were able to show their files to prosecutors. Several months after this Patriot provision was upheld and made effective, prosecutors arrested and indicted Al-Arian and put an end to his activities. Of course, the provisions of the Patriot Act subject to the Sec. 224 sunset include much more than just the three provisions that facilitate information sharing. Although I will not discuss all of those provisions in detail today--some of which have never been controversial--I would like to discuss one provision that has been a particular focus of attacks on the Patriot Act. Section 215 of the Patriot Act allows the FBI to seek an order for ``the production of tangible things (including books, records, papers, documents, and other items) for an investigation to obtain foreign intelligence information.'' FISA defines ``foreign intelligence'' as information relating to foreign espionage, foreign sabotage, or international terrorism, or information respecting a foreign power that relates to U.S. national security or foreign policy. Thus Sec. 215 cannot be used to investigate ordinary crimes or even domestic terrorism. And in every case, a Sec. 215 order must be approved by a judge. Alhough Sec. 215 is basically a form of subpoena authority, like that allowed for numerous other types of investigation indeed, it is more tightly restricted than other types of subpoenas because it must be pre-approved by a judge Sec. 215 has been heavily targeted by Patriot Act critics. Chief among their complaints is that Sec. 215 could be used to obtain records from bookstores or libraries. Some of these critics have even alleged that Sec. 215 would allow the FBI to investigate someone simply because of the books that he borrows from a library. Section 215 could in fact be used to obtain library records, though neither Sec. 215 nor any other provision of the Patriot Act specifically mentions libraries or is directed at libraries. Nevertheless, Sec. 215 does authorize court orders to produce tangible records--which could include library records. Where the critics are wrong is in suggesting that a Sec. 215 order could be obtained because of the books that someone reads or the websites that he visits. Sec. 215 allows no such thing. Instead, Sec. 215 allows an order to obtain ``tangible things'' as part of an investigation to ``obtain foreign intelligence information''-- information relating to foreign espionage or terrorism or relating to a foreign government or group and national security. By requiring a judge to approve such an order, Sec. 215 ensures that these orders will not be used for an improper purpose. And as an added protection against abuse, the Patriot Act also requires that the FBI ``fully inform'' the House and Senate Intelligence Committees on all use of Sec. 215 every six months. These checks and safeguards leave FBI agents little room for the types of witch hunts that Patriot Act critics conjure up. Further, it bears mention that federal investigators already use an authority very similar to Sec. 215 the grand jury subpoena--to obtain bookstore records. As Deputy AG Comey recently emphasized in a letter that he submitted to the editor of the New York Times, ``orders for records under [Sec. 215] are more closely scrutinized and more difficult to obtain than ordinary grand jury supoenas, which can require production of the very same records, but without judicial approval.'' Similarly, in a September 11, 2003 editorial, ``Patriot (Act) Games,'' the Washington Post noted that investigative authority to review library records ``existed prior to the Patriot Act; the law extends it to national security investigations, which isn't unreasonable.'' Finally, I would emphasize that an intelligence or criminal investigation may have good and legitimate reasons for extending to library or bookstore records. For example, in a recent domestic terrorism case, Federal investigators sought to prove that a suspected bomber had built a particularly unusual detonator that had been used in several bombings. The investigators used a grand-jury subpoena to show that the suspect had purchased a book giving instructions on how to build such a detonator. Moreover, we should not forget that terrorists and spies historically have used libraries to plan and carry out activities that threaten U.S. national security. We know, for example, that some terrorists have used computers at public libraries to use the internet and communicate by email. It would be unwise to place libraries and bookstores beyond the scope of anti-terror investigations. Andrew McCarthy, a former federal prosecutor who led the 1995 terrorism case against Sheik Omar Abdel Rahman, recently elaborated on this point in a November 13, 2003 article in National Review Online, ``Patriot Act Under Siege'': [H]ard experience--won in the course of a string of terrorism trials since 1993--instructs us that it would be folly to preclude the government a priori from access to any broad categories of business record. Reading material, we now know, can be highly relevant in terrorism cases. People who build bombs tend to have books and pamphlets on bomb making. Terrorist leaders often possess literature announcing the animating principles of their organizations in a tone tailored to potential recruits. This type of evidence is a staple of virtually every terrorism investigation--both for what it suggests on its face and for the forensic significance of whose fingerprints may be on it. No one is convicted for having it--jurors are Americans too, and they'd not long stand for the odious notion that one should be imprisoned for the mere act of thinking. When a defendant pleads ``not guilty,'' however, he is saying: ``I put the government to its proof on every element of the crime, including that I acted with criminal purport.'' Prosecutors must establish beyond a reasonable doubt not only that the terrorist engaged in acts but did so intending execrable consequences. If an accused says the precursor components he covertly amassed were for innocent use, is it not relevant that he has just borrowed a book that covers explosives manufacture? If he claims unfamiliarity with the tenets of violent jihad, should a jury be barred from learning that his paws have yellowed numerous publications on the subject? Such evidence was standard fare throughout Janet Reno's tenure as attorney general--and rightly so. In his testimony yesterday, FBI Director Mueller also described the importance to antiterror investigations of some of the other Patriot Act authorities subject to expire under Sec. 224. For example, Director Mueller noted that: The PATRIOT Act gave federal judges the authority to issue search warrants that are valid outside the issuing judge's district in terrorism investigations. In the past, a court could only issue a search warrant for premises within the same judicial district--yet our investigations of terrorist networks often span multiple districts. The PATRIOT Act streamlined this process, making it possible for judges in districts where activities related to terrorism may have occurred to issue search warrants applicable outside their immediate districts. In addition, the PATRIOT Act permits similar search warrants for electronic evidence such as email. In the past, for example, if an Agent in one district needed to obtain a search warrant for a subject's email account, but the Internet service provider (ISP) was located in another district, he or she would have to contact an AUSA and Agent in the second district, brief them on the details of the investigation, and ask them to appear before a judge to obtain a search warrant--simply because the ISP was physically based in another district. Thanks to the PATRIOT Act, this frustrating and time-consuming process can be averted without reducing judicial oversight. Today, a judge anywhere in the U.S. can issue a search warrant for a subject's email, no matter where the ISP is based. [Further], the PATRIOT Act updated the law to match current technology, so that we no longer have to fight a 21st-century battle with antiquated weapons. Terrorists exploit modern technology such as the Internet and cell phones to conduct and conceal their activities. The PATRIOT Act leveled the playing field, allowing investigators to adapt to modern techniques. For example, the PATRIOT Act clarified our ability to use court-ordered pen registers and trap-and-trace devices to track Internet communications. The Act also enabled us to seek court-approved roving wiretaps, which allow investigators to conduct electronic surveillance on a particular suspect, not a particular telephone this allows them to continuously monitor subjects without having to return to the court. All of the authorities described by Director Mueller obviously are critical to antiterrorism investigations--and all will expire next year unless Congress acts to repeal Sec. 224. In responding to some of the accusations of Patriot Act critics, I do not mean to dismiss the importance of either civil liberties or of independent oversight of the federal government. I would simply emphasize that the Patriot Act is carefully crafted legislation that both guarantees protection for civil liberties and is subject to ample oversight. I would note, in this vein, that in a report filed in January 2004, Department of Justice Inspector General Glenn A. Fine--an appointee of President Clinton described the results of his investigation of all recent civil-rights and civil-liberties complaints received by the Justice Department. The Inspector General found no incidents in which the Patriot Act was used to abuse civil rights or civil liberties. The Patriot Act's provisions for independent oversight of the new authorities created by the Act were described in detail by Deputy AG Comey in his April 14, 2004 testimony before the Judiciary Committee. Mr. Comey noted: First, the USA PATRIOT Act preserves the historic role of courts by ensuring that the vital role of judicial oversight is not diminished. For example, the provision for delayed notice for search warrants requires judicial approval. In addition, under the Act, investigators cannot obtain a FISA pen register unless they apply for and receive permission from federal court. The USA PATRIOT Act actually goes farther to protect privacy than that Constitution requires, as the Supreme Court has long held that law enforcement authorities are not constitutionally required to obtain court approval before installing a pen register. Furthermore, a court order is required to compel production of business records, in national security investigations. Second, the USA PATRIOT Act respects important congressional oversight by placing new reporting requirements on the Department. Every six months, the Attorney General is required to report to Congress the number of times section 215 has been utilized, as well as to inform Congress concerning all electronic surveillance under the Foreign Intelligence Surveillance Act. Under section 1001 of the USA PATRIOT Act, Congress receives a semiannual report from the Department's Inspector General detailing any abuses of civil rights and civil liberties by employees or officials of the Department of Justice. It is important to point out that in the Inspector General's most recent report to Congress, he reported that his office has received no complaints alleging misconduct by Department employees related to the use of a substantive provision of the USA PATRIOT Act. Finally, the USA PATRIOT Act fosters public oversight of the Department. In addition to the role of the Inspector General to review complaints alleging abuses of civil liberties and civil rights, the Act provides a cause of action for individuals aggrieved by any willful violation of Title III or certain sections of FISA. To date, no civil actions have been filed under this provision. The United States has had some important successes in the war on terror so far. Worldwide, more than half of al Qaeda's senior leadership has been captured or killed. More than 3,000 al Qaeda operatives have been incapacitated. Within the United States, 4 different terrorist cells have been broken up--cells located in Buffalo, Detroit, Seattle, and Portland. 284 individuals have been criminally charged to date, and 149 individuals have been convicted or pleaded guilty, including: shoe bomber Richard Reid, six members of the Buffalo terrorist cell, two members of the Detroit cell, Ohio truck driver Iyman Faris, and U.S.-born Taliban John Walker Lindh. Patriot-aided criminal prosecutions also have contributed to U.S. intelligence efforts to learn more about terrorist organizations. Facing long prison terms, some apprehended terrorist have chosen to cooperate with the U.S. government. So far, the Justice Department has obtained plea agreements from 15 individuals who are now cooperating with terror investigations. One individual has given the U.S. information about weapons stored by terrorists in the United States. Another cooperating terrorist has given U.S. investigators information about locations in the U.S. that are being scouted or cased for potential attacks by al Qaeda. The Patriot Act has played a major role in what U.S. antiterror investigations have accomplished so far. And it is clear that we will continue to need the authorities created by the Patriot Act into the foreseeable future. For these reasons, I am pleased to introduce today with my colleagues a bill to repeal Sec. 224 and make the Patriot Act permanent. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I rise today to introduce a bill that would repeal Sec. 224 of the USA Patriot Act. Section 224 provides that 16 different parts of the Patriot Act ``shall cease to have effect on December 31, 2005.'' The authorities subject to this sunset include some of the most important provisions of the Act. They are sections 201, wiretapping in terrorism cases; 202, wiretapping in computer fraud and abuse felony case; 203(b) sharing wiretap information; 203(d), sharing foreign intelligence information; 204, Foreign Intelligence Surveillance Act (FISA) pen register/trap and trace exceptions; 206, roving FISA wiretaps; 207, duration of FISA surveillance of non-United States persons who are agents of a foreign power; 209, seizure of voice-mail messages pursuant to warrants; 212, emergency disclosure of electronic surveillance; 214, FISA pen register/ trap and trace authority; 215, FISA access to tangible items; 217, interception of computer trespasser communications; 218, purpose for FISA orders; 220, nationwide service of search warrants for electronic evidence; 223, civil liability and discipline for privacy violations; and 225, provider immunity for FISA wiretap assistance. Rather than praise the Patriot Act myself, I would like to quote others who have done so. First, I would note that the President has called on Congress to renew all parts of the Patriot Act that are scheduled to expire next year. As he has emphasized, ``to abandon the Patriot Act would deprive law enforcement and intelligence officers of needed tools in the war on terror, and demonstrate willful blindness to a continuing threat.'' FBI Director Robert Mueller, in a hearing before the Judiciary Committee yesterday, also voiced strong support for renewing the Patriot Act. As he noted, ``for over two and a half years, the PATRIOT Act has proved extraordinarily beneficial in the war on terrorism and has changed the way the FBI does business. Many of our counterterrorism successes, in fact, are the direct results of provisions included in the Act, a number of which are scheduled to `sunset' at the end of next year. I strongly believe it is vital to our national security to keep each of these provisions intact.'' Similarly, in an April 14 field hearing before the Judiciary Committee, Deputy Attorney General James Comey stated that the Patriot Act ``has made us immeasurably safer.'' He also responded to the allegation, occasionally made by some critics, that the Patriot Act was passed too quickly. He replied that ``the USA Patriot Act was not rushed, it actually came 10 years too late.'' The importance of the Patriot Act to American security also has drawn the attention of the 9/11 Commission. Former New Jersey Governor Thomas Kean has noted that the Commission has had ``witness after witness tell us that the Patriot Act has been very, very helpful, and if the Patriot Act, or portions of it, had been in place before 9/11, that would have been very helpful.'' This praise has not been limited to the Republicans who have participated in the Commission's proceedings. Former Attorney General Janet Reno, for example, testified before the Commission that ``everything that's been done in the Patriot Act has been helpful.'' Nor is President Bush alone among the major candidates for President this year in hailing the importance of the Patriot Act. Indeed, his principal rival for the office, Senator Kerry, recently claimed that he would go even further than the President. According to an April 25 story in the Los Angeles Times, Senator Kerry's spokesman insists that ``it is the challenger, not the president, who brings the most muscular view of the Patriot Act into the race.'' Senator Kerry's presidential campaign website even includes a ``Plan to Restore American Security,'' which lists as its number-one priority to ``improve intelligence capabilities.'' Senator Kerry states that he ``understands that intelligence information is the key to disrupting and dismantling terrorist organizations and that we need to improve our intelligence capabilities, both domestically and internationally, in order to win the war on global terrorism.'' One reform implemented by the Patriot Act that Attorney General Reno and others have particularly emphasized is its authorization for information sharing. Because this part of the Patriot Act is often praised but infrequently described in detail, I would like to quote the following accounts of pre-Patriot barriers to information sharing, and of the investigative successes that the removal of those barriers has made possible. The FISA Court of Review decision upholding the Patriot Act's authorization for information sharing, In re: Sealed Case, 310 F.3d 717, F.I.S. Ct. Rev. 2002 , describes the origins of the pre-Patriot barriers: Apparently to avoid running afoul of the primary purpose test used by some courts, the 1995 [Attorney General] Procedures [(``Procedures for Contacts Between the FBI and the Criminal Division Concerning Foreign Intelligence and Foreign Counterintelligence Investigations'')] limited contacts between the FBI and the Criminal Division in cases where FISA surveillance or searches were being conducted by the FBI for foreign intelligence (FI) or foreign counterintelligence (FCI) purposes. The procedures state that ``the FBI and Criminal Division should ensure that advice intended to preserve the option of a criminal prosecution does not inadvertently result in either the fact or the appearance of the Criminal Division's directing or controlling the FI or FCI investigation toward law enforcement objectives.'' Although these procedures provided for significant information sharing and coordination between criminal and FI or FCI investigations, based at least in part on the ``directing or controlling'' language, they eventually came to be narrowly interpreted within the Department of Justice, and most particularly by OIPR, as requiring OIPR to act as a ``wall'' to prevent the FBI intelligence officials from communicating with the Criminal Division regarding ongoing FI or FCI investigations. Thus, the focus became the nature of the underlying investigation, rather than the general purpose of the surveillance. Once prosecution of the target was being considered, the procedures, as interpreted by OIPR in light of the case law, prevented the Criminal Division from providing any meaningful advice to the FBI.'' In re: Sealed Case, 310 F.3d at 727-28 citations omitted. FBI Director Mueller, in his testimony yesterday, provided a concrete account of the impact that these information-sharing barriers had on intelligence investigations: Prior to September 11, an [FBI] Agent investigating the intelligence side of a terrorism case was barred from discussing the case with an Agent across the hall who was working the criminal side of that same investigation. For instance, if a court-ordered criminal wiretap turned up intelligence information, the criminal investigator could not share that information with the intelligence investigator--he could not even suggest that the intelligence investigator should seek a wiretap to collect the information for himself. If the criminal investigator served a grand jury subpoena to a suspect's bank, he could not divulge any information found in those bank records to the intelligence investigator. Instead, the intelligence investigator would have to issue a National Security Letter in order to procure that same information. Chicago U.S. Attorney Patrick Fitzgerald, in an October 21, 2003 hearing before the Senate Judiciary Committee, described how these pre- Patriot information-sharing limits undercut one potentially vital terror investigation. Mr. Fitzgerald discussed the grand-jury testimony of Wadih el Hage, a key member of the Al Qaeda cell in Nairobi who, in September 1997, was apprehended while changing flights in New York City. Federal prosecutors subpoenaed el Hage from the airport to testify before a Federal grand jury in Manhattan. Mr. Fitzgerald described how el Hage: [P]rovided some information of potential use to the intelligence community--including potential leads as to the location of his confederate Harun and the location of Harun's files in Kenya. Unfortunately, as el Hage left the grand-jury room, we knew that * * * [because of pre-Patriot restrictions] we would not be permitted to share the grand- jury information with the intelligence community. * * * Fortunately, we found a way to address the problem that in most other cases would not work. Upon request, el Hage voluntarily agreed to be debriefed by an FBI agent outside the grand-jury room * * *. El Hage then repeated the essence of what he told the grand jury to the FBI agent, including his purported leads to on the location of Harun and his files. The FBI then lawfully shared the information with the intelligence community. In essence, we solved the problem by obtaining the consent of a since-convicted terrorist. We do not want to have to rely on the consent of al Qaeda terrorists to address the gaps in our national security. Mr. Fitzgerald went on to describe how, in August 1998, the American Embassy in Nairobi was bombed by al Qaeda. Investigators quickly learned that el Hage's associate Harun was responsible. In this particular case, investigators had been able to work around information-sharing limits because of an al Qaeda terrorist's willingness to be interviewed by the FBI, and even with this information U.S. agents were not able to stop a terrorist attack. The pre-Patriot limits were not a decisive factor in blocking U.S. intelligence agents from preventing the Kenya bombing. But they could have been. As U.S. Attorney Fitzgerald concluded, ``we should not have to wait for people to die with no explanation [other] than that interpretations of the law blocked the sharing of specific information that probably [c]ould have saved [American lives].'' As Attorney General Reno noted in her testimony before the 9/11 Commission, ``these restrictions [on information sharing] have now been eliminated as part of the Patriot Act.'' Director Mueller, in his Judiciary Committee testimony yesterday, described the impact of this change: The removal of the ``wall'' has allowed government investigators to share information freely. Now, criminal investigative information that contains foreign intelligence or counterintelligence, including grand jury and wiretap information, can be shared with intelligence officials. This increased ability to share information has disrupted terrorist operations in their early stages--such as the successful dismantling of the ``Portland Seven'' terror cell--and has led to numerous arrests, prosecutions, and convictions in terrorism cases. In essence, prior to September 11th, criminal and intelligence investigators were attempting to put together a complex jigsaw puzzle at separate tables. The Patriot Act has fundamentally changed the way we do business. Today, those investigators sit at the same table and work together on one team. They share leads. They fuse information. Instead of conducting parallel investigations, they are fully integrated into one joint investigation. These Patriot Act changes can directly be credited with some important recent successes in the war on terror. For example, in February 2003, Federal prosecutors arrested and indicted Sami Al-Arian and seven other suspected terrorists. The 50-count indictment indicated that Al-Arian was the financial director and the North American leader of Palestinian Islamic Jihad, a terrorist group that has killed more than 100 people in and around Israel, including two Americans. Al-Arian wired money to groups in Israel that paid money to the families of terrorists who carried out suicide bombings. He also founded three organizations in Florida which, among other things, drafted final wills and testaments for suicide bombers. Incredibly, through much of the 1990s, Al-Arian was secretly watched by two different sets of U.S. investigators. The FBI had been conducting a criminal probe of Al-Arian since 1995. Meanwhile, intelligence agents had monitored Al-Arian since the late 1980s. Because of pre-Patriot restrictions, the two sets of investigators were not able to share information and were not aware of the full extent of each other's investigations. It was only after the FISA Court of Review upheld Patriot Act Sec. 203's information-sharing provisions in November 2002 that intelligence officials were able to show their files to prosecutors. Several months after this Patriot provision was upheld and made effective, prosecutors arrested and indicted Al-Arian and put an end to his activities. Of course, the provisions of the Patriot Act subject to the Sec. 224 sunset include much more than just the three provisions that facilitate information sharing. Although I will not discuss all of those provisions in detail today--some of which have never been controversial--I would like to discuss one provision that has been a particular focus of attacks on the Patriot Act. Section 215 of the Patriot Act allows the FBI to seek an order for ``the production of tangible things (including books, records, papers, documents, and other items) for an investigation to obtain foreign intelligence information.'' FISA defines ``foreign intelligence'' as information relating to foreign espionage, foreign sabotage, or international terrorism, or information respecting a foreign power that relates to U.S. national security or foreign policy. Thus Sec. 215 cannot be used to investigate ordinary crimes or even domestic terrorism. And in every case, a Sec. 215 order must be approved by a judge. Alhough Sec. 215 is basically a form of subpoena authority, like that allowed for numerous other types of investigation indeed, it is more tightly restricted than other types of subpoenas because it must be pre-approved by a judge Sec. 215 has been heavily targeted by Patriot Act critics. Chief among their complaints is that Sec. 215 could be used to obtain records from bookstores or libraries. Some of these critics have even alleged that Sec. 215 would allow the FBI to investigate someone simply because of the books that he borrows from a library. Section 215 could in fact be used to obtain library records, though neither Sec. 215 nor any other provision of the Patriot Act specifically mentions libraries or is directed at libraries. Nevertheless, Sec. 215 does authorize court orders to produce tangible records--which could include library records. Where the critics are wrong is in suggesting that a Sec. 215 order could be obtained because of the books that someone reads or the websites that he visits. Sec. 215 allows no such thing. Instead, Sec. 215 allows an order to obtain ``tangible things'' as part of an investigation to ``obtain foreign intelligence information''-- information relating to foreign espionage or terrorism or relating to a foreign government or group and national security. By requiring a judge to approve such an order, Sec. 215 ensures that these orders will not be used for an improper purpose. And as an added protection against abuse, the Patriot Act also requires that the FBI ``fully inform'' the House and Senate Intelligence Committees on all use of Sec. 215 every six months. These checks and safeguards leave FBI agents little room for the types of witch hunts that Patriot Act critics conjure up. Further, it bears mention that federal investigators already use an authority very similar to Sec. 215 the grand jury subpoena--to obtain bookstore records. As Deputy AG Comey recently emphasized in a letter that he submitted to the editor of the New York Times, ``orders for records under [Sec. 215] are more closely scrutinized and more difficult to obtain than ordinary grand jury supoenas, which can require production of the very same records, but without judicial approval.'' Similarly, in a September 11, 2003 editorial, ``Patriot (Act) Games,'' the Washington Post noted that investigative authority to review library records ``existed prior to the Patriot Act; the law extends it to national security investigations, which isn't unreasonable.'' Finally, I would emphasize that an intelligence or criminal investigation may have good and legitimate reasons for extending to library or bookstore records. For example, in a recent domestic terrorism case, Federal investigators sought to prove that a suspected bomber had built a particularly unusual detonator that had been used in several bombings. The investigators used a grand-jury subpoena to show that the suspect had purchased a book giving instructions on how to build such a detonator. Moreover, we should not forget that terrorists and spies historically have used libraries to plan and carry out activities that threaten U.S. national security. We know, for example, that some terrorists have used computers at public libraries to use the internet and communicate by email. It would be unwise to place libraries and bookstores beyond the scope of anti-terror investigations. Andrew McCarthy, a former federal prosecutor who led the 1995 terrorism case against Sheik Omar Abdel Rahman, recently elaborated on this point in a November 13, 2003 article in National Review Online, ``Patriot Act Under Siege'': [H]ard experience--won in the course of a string of terrorism trials since 1993--instructs us that it would be folly to preclude the government a priori from access to any broad categories of business record. Reading material, we now know, can be highly relevant in terrorism cases. People who build bombs tend to have books and pamphlets on bomb making. Terrorist leaders often possess literature announcing the animating principles of their organizations in a tone tailored to potential recruits. This type of evidence is a staple of virtually every terrorism investigation--both for what it suggests on its face and for the forensic significance of whose fingerprints may be on it. No one is convicted for having it--jurors are Americans too, and they'd not long stand for the odious notion that one should be imprisoned for the mere act of thinking. When a defendant pleads ``not guilty,'' however, he is saying: ``I put the government to its proof on every element of the crime, including that I acted with criminal purport.'' Prosecutors must establish beyond a reasonable doubt not only that the terrorist engaged in acts but did so intending execrable consequences. If an accused says the precursor components he covertly amassed were for innocent use, is it not relevant that he has just borrowed a book that covers explosives manufacture? If he claims unfamiliarity with the tenets of violent jihad, should a jury be barred from learning that his paws have yellowed numerous publications on the subject? Such evidence was standard fare throughout Janet Reno's tenure as attorney general--and rightly so. In his testimony yesterday, FBI Director Mueller also described the importance to antiterror investigations of some of the other Patriot Act authorities subject to expire under Sec. 224. For example, Director Mueller noted that: The PATRIOT Act gave federal judges the authority to issue search warrants that are valid outside the issuing judge's district in terrorism investigations. In the past, a court could only issue a search warrant for premises within the same judicial district--yet our investigations of terrorist networks often span multiple districts. The PATRIOT Act streamlined this process, making it possible for judges in districts where activities related to terrorism may have occurred to issue search warrants applicable outside their immediate districts. In addition, the PATRIOT Act permits similar search warrants for electronic evidence such as email. In the past, for example, if an Agent in one district needed to obtain a search warrant for a subject's email account, but the Internet service provider (ISP) was located in another district, he or she would have to contact an AUSA and Agent in the second district, brief them on the details of the investigation, and ask them to appear before a judge to obtain a search warrant--simply because the ISP was physically based in another district. Thanks to the PATRIOT Act, this frustrating and time-consuming process can be averted without reducing judicial oversight. Today, a judge anywhere in the U.S. can issue a search warrant for a subject's email, no matter where the ISP is based. [Further], the PATRIOT Act updated the law to match current technology, so that we no longer have to fight a 21st-century battle with antiquated weapons. Terrorists exploit modern technology such as the Internet and cell phones to conduct and conceal their activities. The PATRIOT Act leveled the playing field, allowing investigators to adapt to modern techniques. For example, the PATRIOT Act clarified our ability to use court-ordered pen registers and trap-and-trace devices to track Internet communications. The Act also enabled us to seek court-approved roving wiretaps, which allow investigators to conduct electronic surveillance on a particular suspect, not a particular telephone this allows them to continuously monitor subjects without having to return to the court. All of the authorities described by Director Mueller obviously are critical to antiterrorism investigations--and all will expire next year unless Congress acts to repeal Sec. 224. In responding to some of the accusations of Patriot Act critics, I do not mean to dismiss the importance of either civil liberties or of independent oversight of the federal government. I would simply emphasize that the Patriot Act is carefully crafted legislation that both guarantees protection for civil liberties and is subject to ample oversight. I would note, in this vein, that in a report filed in January 2004, Department of Justice Inspector General Glenn A. Fine--an appointee of President Clinton described the results of his investigation of all recent civil-rights and civil-liberties complaints received by the Justice Department. The Inspector General found no incidents in which the Patriot Act was used to abuse civil rights or civil liberties. The Patriot Act's provisions for independent oversight of the new authorities created by the Act were described in detail by Deputy AG Comey in his April 14, 2004 testimony before the Judiciary Committee. Mr. Comey noted: First, the USA PATRIOT Act preserves the historic role of courts by ensuring that the vital role of judicial oversight is not diminished. For example, the provision for delayed notice for search warrants requires judicial approval. In addition, under the Act, investigators cannot obtain a FISA pen register unless they apply for and receive permission from federal court. The USA PATRIOT Act actually goes farther to protect privacy than that Constitution requires, as the Supreme Court has long held that law enforcement authorities are not constitutionally required to obtain court approval before installing a pen register. Furthermore, a court order is required to compel production of business records, in national security investigations. Second, the USA PATRIOT Act respects important congressional oversight by placing new reporting requirements on the Department. Every six months, the Attorney General is required to report to Congress the number of times section 215 has been utilized, as well as to inform Congress concerning all electronic surveillance under the Foreign Intelligence Surveillance Act. Under section 1001 of the USA PATRIOT Act, Congress receives a semiannual report from the Department's Inspector General detailing any abuses of civil rights and civil liberties by employees or officials of the Department of Justice. It is important to point out that in the Inspector General's most recent report to Congress, he reported that his office has received no complaints alleging misconduct by Department employees related to the use of a substantive provision of the USA PATRIOT Act. Finally, the USA PATRIOT Act fosters public oversight of the Department. In addition to the role of the Inspector General to review complaints alleging abuses of civil liberties and civil rights, the Act provides a cause of action for individuals aggrieved by any willful violation of Title III or certain sections of FISA. To date, no civil actions have been filed under this provision. The United States has had some important successes in the war on terror so far. Worldwide, more than half of al Qaeda's senior leadership has been captured or killed. More than 3,000 al Qaeda operatives have been incapacitated. Within the United States, 4 different terrorist cells have been broken up--cells located in Buffalo, Detroit, Seattle, and Portland. 284 individuals have been criminally charged to date, and 149 individuals have been convicted or pleaded guilty, including: shoe bomber Richard Reid, six members of the Buffalo terrorist cell, two members of the Detroit cell, Ohio truck driver Iyman Faris, and U.S.-born Taliban John Walker Lindh. Patriot-aided criminal prosecutions also have contributed to U.S. intelligence efforts to learn more about terrorist organizations. Facing long prison terms, some apprehended terrorist have chosen to cooperate with the U.S. government. So far, the Justice Department has obtained plea agreements from 15 individuals who are now cooperating with terror investigations. One individual has given the U.S. information about weapons stored by terrorists in the United States. Another cooperating terrorist has given U.S. investigators information about locations in the U.S. that are being scouted or cased for potential attacks by al Qaeda. The Patriot Act has played a major role in what U.S. antiterror investigations have accomplished so far. And it is clear that we will continue to need the authorities created by the Patriot Act into the foreseeable future. For these reasons, I am pleased to introduce today with my colleagues a bill to repeal Sec. 224 and make the Patriot Act permanent. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, earlier this month, more than 1,250 students from across the United States were in Washington, DC to compete in the national finals of the ``We the People: The Citizen and the Constitution'' program. I am proud to note that the class from Dobson High School from Mesa, AZ received a fourth place honorable mention in this year's competition. I would like to take a moment to mention the names of those students who competed for Dobson High: Andrew Barrett, Andi Berlin, Amanda Campbell, Catherine Capozzi, Eric Chen, Katy Cronenberg, Tom Emmons, Eva Farnsworth, Jennifer Heller, Annie Ho, Jamie Kearney, Katie Kearney, Maureen Klaum, Nicole Klundt, Jessie Leatham, Angela Mallard, Tara McMurdy, Joanna Sung, Taylor Morris, Kim Nath, Janne Perona, Dean Thong-Kahm, and Shaochen Wu. I would also like to acknowledge their teacher, Abby Dupke, the district coordinator, Kathy Williams, and the State coordinator, Susan Nusso. I congratulate these budding constitutional experts and wish them the best of luck in the future.

Mr. KYL

Mr. KYL. Mr. President, the State Department and Treasury Department strongly oppose this amendment because it is more restrictive than the current authority exercised by the President under IEEPA. The amendment would focus solely on ownership, which is a standard that can easily be circumvented and would be less effective than the administration's approach, which applies not only to ownership but also to control. It is very easy for a company to get just under 50-percent ownership but still control the subsidiary. Under the Senator's amendment, no sanction would be permitted in that circumstance. So rather than broadening the authority and making it more capable of adding sanctions to what we already have, it would actually restrict the authority the President currently has. That is why both Treasury and the State Department say let the President exert the current authority he has, which is broader. It is not a choice between helping people such as the Senator alluded to. This President is applying sanctions in those countries precisely where this condition exists. I urge my colleagues to vote against the Lautenberg amendment and don't weaken the provisions already existing. Allow the President the flexibility he needs.

Mr. KYL. Mr. President, I would like to respond to the comments of my friend from Nevada. He had five basic arguments. I think they could all be dispensed with fairly quickly. His first argument is there are a lot of people who make money in this country, a lot of money, CEOs of businesses, sports figures, and others who receive very large salaries. He wondered if there is any difference between that and the tobacco lawyers who are billionaires because of the money they have made off the tobacco settlement. The answer is, yes, there is a huge difference. The CEOs and the sports figures are not fiduciaries. They are not in a trust relationship with the people who pay their salary. A sports figure, for example, uses a representative of the union and negotiates a fee with the baseball team, and they do pretty well. But it is all a contract negotiation. If George Steinbrenner is willing to take any New York Yankee player, whatever he is willing to pay him, that is what he thinks he is worth, that is what he brings in the gate, that player is not taking advantage of George Steinbrenner or the New York Yankee fans based upon any fiduciary responsibility. It is the same thing with respect to the boards of directors who set the salaries of CEOs of major corporations. What I quoted before from professors of law and others is that there is a special category of people who are in a fiduciary relationship. I know my friend from Nevada, as a good lawyer, knows this concept. Lawyers owe their clients a very special duty, a duty far and above what normal contract law is. You cannot take advantage of your client. Even if you can get your client to sign an agreement regarding fees, that agreement will be thrown out of court if the court determines it is unfair. That doesn't apply with the rich CEOs or the rich sports figures, but it applies in the case, for example, of lawyers, of fiduciaries who are trustees of a trust. That gets to the second argument--that this is unprecedented. No, it is not. I refer my colleague to section 4958 of the Tax Code. The section deals with an intermediate sanctions tax on fiduciaries, trustees who pay themselves too much money out of a trust. They are held to a standard of a reasonable fee. If they exceed that fee, they pay what? A 200-percent tax. We got the idea from the Tax Code. We didn't make this up. It is not unprecedented. So our section follows that section; it is 4959. So 4958, existing law, says if you are a fiduciary, a trustee, and you charge your trust too much money for your salary so that the beneficiary is being hurt and it is unfair, then you are going to pay a 200-percent tax to the IRS unless, of course, you give the excessive part back and the tax is waived. That is the whole idea. We never collect the 200-percent tax because nobody is foolish enough to take the money and pay twice as much back. They just don't take the money in excess of what is fair. It is in the code and it applies to fiduciaries, people in this special trust relationship. The third argument was that the tobacco settlement was good, and it is good. There were scholarships, and a lot of people benefited from it. What bothers me is the fact that lawyers benefited unreasonably from it--not all lawyers; a lot of tobacco lawyers did a lot of work and got paid a lot for it, but they put the work in. Others rode along on the work of others and charged far in excess of what any reasonable fee would be. That gets to the next argument. My friend from Nevada talked about cases he took on a contingency fee, a one-third fee. He is correct. That is common for plaintiffs' lawyers. When they win, they get a third of the settlement. In many cases, that is a totally fair and reasonable fee. I know in the case of my colleague of Nevada, it was fair and reasonable because that is exactly the kind of person he is. If for some reason it would not have been, the court would not have allowed it because of this special fiduciary relationship with his clients. The court would not have allowed it if it exceeded that amount. I am sure-- and I would not ask my colleague--that none of those fees topped $20,000 an hour. That is the amount we have set forth in this bill. Again, these are not my words. I will quote a couple of people. John Coale, who is a big tobacco industry opponent in Washington, DC, denounced these fee awards as ``beyond human comprehension'' and stated that ``the work does not justify them.'' The president of the organization to which these lawyers belong, the Association of American Trial Lawyers, said: Common sense suggests that a $1 billion fee is excessive and unreasonable and certainly should invite the scrutiny [of the courts.] The point is, a one-third contingency fee in a typical case is perfectly fine. But a one-third contingency fee in tobacco litigation-- the kind of reward these lawyers are receiving--is totally unreasonable by any standard, including that of the president of the organization to which these few lawyers belong. These lawyers have already received about $4 billion in awards. None of that will be touched. They are going to get another $\1/2\ billion a year under the settlement. All we are saying is that a reasonableness test has to apply, just as it does to other fiduciaries under the Tax Code. The excess refers to the Treasury so we can pay for things the Defense Department needs. Another argument was this would interfere with private contracts. No, it doesn't. It has no applicability between lawyers and clients--none. All this applies to is this master settlement agreement that automatically pays out a $\1/2\ billion in fees per year to these lawyers. It doesn't apply retroactively; it only applies if and when the collection by the lawyer gets to the point that it represents more than $20,000 an hour. These lawyers can be paid until the cows come home at $19,999 an hour. But when the level finally gets to $20,000, we say that is enough. Just as the Tax Code today makes the trustee pay the rest of it back, we say the rest of it gets paid back. It doesn't hurt the plaintiffs at all. The plaintiffs have received what they are going to receive out of the settlement. It doesn't help the tobacco companies. They still have to pay the money. But the tax--in effect, the money the tobacco companies pay goes partially to the trial lawyers, and the rest goes to the U.S. Treasury, rather than all of it going to the trial lawyers. So the tobacco lawyers get paid what is fair--more than fair--and the plaintiffs have already received their reward. The tobacco companies still have to pay what they had to pay originally. The benefit is to the U.S. Treasury, Department of Defense, and the people we put in harm's way to carry out their missions. The final argument made was one that I am not sure why it was made. My colleague acknowledged he knew this wasn't my motivation. Since I offered the amendment, it is unclear whose motivation therefore it would be--that it was a discriminatory tax policy to get at political enemies. This is what Nixon is alleged to have done. Of course, that is not the case here. I don't even know who these people are. I could not give you the name of one of them. I don't know how many there are. I don't know their politics or anything else. All I know is what others have said about them, which is that their fees are unconscionable, beyond human comprehension, that the work doesn't justify them, that the fees are excessive and unreasonable and should invite scrutiny, and so on and so on. The question the law professor asked after going through the ethics rules about lawyers fees always having to be reasonable, the kind of fee contracts that my colleague from Nevada had with his clients--he goes through that and says fees cannot be clearly excessive. The fees have to be reasonable. Then he asked: Are these fees, which in many cases amount to effective hourly rates of return of tens of thousands--and even hundreds of thousands--of dollars an hour, reasonable? I think to ask the question is to answer it. At the end of the day, the arguments raised against this amendment, frankly, are all fallacious. There is no relationship to CEOs or other people who make a lot of money. They don't have the same fiduciary relationship that a lawyer has to his client. A one-third contingency fee is a good thing. We all stipulate to that. But it still cannot be unreasonable. In this case, the amounts are so egregious that they go far beyond what the Senator from Nevada was talking about. Unprecedented? No. It is in the Tax Code today--the same 200-percent tax, the same application to the fiduciaries who charge more than reasonable fees. By the way, that also applies to another kind of fiduciaries--these particular tobacco lawyers. It would not interfere with other private contracts. By its terms, it doesn't apply to that. I think the bottom line here is that we are faced with the same choice we had before. We have an opportunity to generate some funds to pay for the things our troops need. We are on the Defense authorization bill. We are trying to authorize a lot of programs. Eventually, we are going to have to appropriate money for them. This amendment provides additional funds of, by my calculation, something on the order of about $9 billion, that we can apply toward the acquisition of this important equipment and the other things needed in our Defense bill. I suggest we need to give that stuff to our troops, that this is a way to pay for it, and that we have the added benefit of conforming our Tax Code to a situation here that is totally unreasonable and unconscionable, in the words of many, and that is that some of the tobacco lawyers are reaping a windfall. Money that is paid by the tobacco companies instead would be paid to the Treasury because it is far in excess of what is a reasonable fee. We have said, OK, we will not limit it at $2,000. Some people said a reasonable fee might be more than that. We said, how about $10,000 an hour? No, that might be a reasonable fee someplace. We said $20,000. I have not found anybody who can come on this floor and say to me that a legal fee, even in this case, of $20,000 an hour for all of these hours of work is reasonable and will meet the laugh test or the reasonableness test, which is the test all lawyers must meet and the test of the IRS Code with respect to fiduciary duties in the trustee context. It seems to me we have a great opportunity to help our troops. We are not hurting anybody by this amendment. I do not even think we can argue we are hurting these billionaire lawyers. I think it would be hard for them to spend all they have, and the little bit they are going to be denied here can do a whole lot more good in equipment in the hands of our troops. They cannot justify those fees coming to them in a prospective way under the settlement agreement they are taking advantage of today. This is the amendment we will vote on first. I urge my colleagues to vote for it. Then I urge my colleagues to vote against the underlying Lautenberg amendment. The easiest way to summarize the Lautenberg amendment--the Senator from New Jersey presented photographs and told some very disheartening stories of people who had been taken advantage of by other countries that harbor terrorists and that the United States does not consider places where American companies should do business. I totally agree with the Senator from New Jersey. We need to have a provision for sanctions in a case such as that. If it were not for the fact we already have one, I would be supportive of the Senator's amendment. But we do already have a provision. It is being applied by the President of the United States. The point I tried to make earlier is that--and I am sure he did not mean to do it this way, but the language of the amendment of the Senator from New Jersey is even more restrictive than current law because it talks about ownership and control and defines it as at least 50 percent when, in fact, you can keep the ownership under the 50 percent and still have effective control of the corporation. In the case of the application of sanctions the way the President does it, he takes into account both factors so that a company that keeps the ownership at that level, under 50 percent, is not at all exempt from the application of sanctions imposed by the President of the United States because we also take into account the element of control. The Treasury Department and the State Department oppose the Lautenberg amendment because it restricts the President's authority in ways it is not restricted today. If there are any situations in which we need to apply these sanctions to countries where they are not applied today, I am perfectly willing to discuss that with anybody and urge the administration to do so. We have the authority today. The President is utilizing it. It does not seem to me, therefore, that the amendment of the Senator from New Jersey should be supported. I urge my colleagues to support the Kyl amendment, which will be voted on first, and oppose the Lautenberg amendment. That vote, I understand, will begin at 5:30 this afternoon. I yield the floor.

Mr. KYL. Mr. President, will the Senator from Nevada yield for a question? Is there a division of time for both sides? Has the Chair announced how much time remains on both sides?

Mr. KYL. Mr. President, what we have pending right now is a second- degree amendment to the Lautenberg amendment, and there will be discussions about precisely how that will be treated when this amendment and the Lautenberg amendment are voted on at the end of the afternoon. Let me begin by noting what some of my objections are to the Lautenberg amendment. Then I will speak to the second-degree amendment which I have offered. The point of the Lautenberg amendment is to change the way in which sanctions are put on companies doing business abroad. The State Department has issued some objections to this amendment which I will speak to later. To summarize: That it would interfere with the President's discretion in conducting foreign affairs; that it would lead to a number of foreign policy problems for the United States; that it is unnecessary because the President exercises authority with respect to these foreign subsidiaries today. To be precise about a particular concern the State Department expresses, the amendment would actually only focus on ownership, which is a standard that could easily be circumvented by these companies against whom we would all want sanctions to apply, and would be less effective than the administration's current approach utilized by the President. By defining this under the definition of control to mean owning at least 50 percent of the capital structure of the entity, the test could easily be circumvented by manipulating the percentage of ownership so that it remains under 50 percent, but at the same time maintaining control in fact. Under current law, the U.S. Treasury Department considers both ownership and control so the President has the ability to exert this kind of sanction authority in a much more flexible way than would be the case under the amendment offered by the Senator from New Jersey. The Lautenberg amendment diminishes the President's authority and reduces the scope of the sanctions. Finally, its impact on existing sanction programs is unclear. The authority exists already. The Lautenberg amendment would raise questions, complications, and reduce the President's flexibility in ways we don't think would be appropriate. That is one of the reasons we are offering this alternative, this substitute or second-degree amendment, depending upon how we agree to characterize it. This is an amendment which has been offered as a way to raise revenues for different purposes, but the revenues--perhaps $9 billion in revenues generated here, but in any event some amount, substantial billions of dollars--would be available for expenditures by the Secretary of Defense on a variety of equipment such as replacement of equipment lost in combat, ammunition, and selected items of high priority such as vehicles or night vision devices, Javelin missiles, sensors, unmanned aerial vehicles. In fact, to the degree that we would want to expand the existing program, which will be completed shortly for our own troops for additional add-on protection for shoulder and side-body areas or interceptor body armor for Iraqi troops, for example, or additional add-on ballistic protection for medium and heavy wheeled vehicles or multipurpose wheeled vehicles, all of those things could be paid for with the fees that would be generated out of this particular amendment. What is this amendment? I had actually offered versions of this before. The point was to try to prevent the tobacco settlement of 1998 from resulting in a windfall to certain of the trial lawyers who were involved in that settlement. What we did is to utilize an existing Tax Code provision which says in cases of trusts, for example, where the trustee pays himself too much or an unreasonable fee, the IRS can impose an excessive tax. I say excessive because it is 200 percent of income. The purpose of it is to discourage the behavior of a trustee who would bilk the trust in effect by charging himself fees that are not deemed reasonable. And we utilize that same concept here, adding a second section immediately following that section of the Internal Revenue Code to provide similar treatment with respect to these unreasonable lawyer fees. So the concept is already in the Tax Code. We would simply apply it to the master settlement agreement for lawyer fees as well. I make it very clear that, first of all, the amendment does not apply to any fees that have already been judicially reviewed and approved by courts under appropriate standards. It does not apply retroactively. It is only prospectively, to fees paid in the future out of the tobacco settlement on which taxes have yet to be collected. And by the way, there are about $100 million in fees paid out of this settlement every year. The trial lawyers will still receive billions of dollars in fees under this amendment, far more than their actual legal work would justify. What we have done is to say that the cap on fees we had suggested before of $2,000 an hour--if you stop and think about it, that is a lot of money--we have scrapped that. Some people said, no, some lawyers might actually have been worth $2,000 an hour. Think about your plumber and what he charges per hour. But we said, OK, how about $10,000 an hour. And they said, no, that is still not enough. These lawyers need more than $10,000 an hour. So what we have done in this amendment is to say: OK, we will bend over backward here, be fair to these poor trial lawyers. We are going to let them earn $20,000 an hour for every hour they put in. I think that is enough. I am not sure that would meet most people's definition of reasonable, but we are going to say that that is reasonable, that they can earn $20,000 an hour. But that isn't enough. Some people have said this is the ``one yacht per lawyer rule.'' I am not sure what a yacht goes for. The bottom line is that there is a point at which the fees are obscene and unreasonable and unethical, and under the existing IRS Code, this kind of conduct is taken care of by a special tax that is imposed of 200 percent. The same thing would be true here. Obviously, what the lawyer would do is to limit his fee to $20,000 an hour and then return anything in excess of that, so he would not be taxed at 200 percent--returning that money, in this case, to the Treasury of the United States of America. So the tobacco companies are still going to pay every dime they committed to pay in lawyer fees. But the money, instead of going to the trial lawyers, after they have collected $20,000 an hour, will go to the U.S. Treasury to pay for the military equipment that is the subject of the bill before us right now. Now, let me make a point about these fees being excessive. Some may dispute this, although, in view of the history, I cannot imagine anybody seriously disputing it. Let me give you some examples. I will start with reminding my colleagues exactly how the tobacco fees were awarded. In the State of Texas, for example, trial lawyers were awarded $3.3 billion for their legal work--work that amounted in this case to filing a copycat lawsuit. The fee would amount to an effective hourly rate for these lawyers of over $100,000 an hour. Most people don't make $100,000 in a year. I don't even know how many hours there are in a year, but it is a lot. This is $100,000 an hour. That is wrong. I don't think they would suffer too much if we cut them down to $20,000 an hour. My colleague from Texas, Senator Cornyn, was attorney general of the State of Texas and he had a firsthand relationship with this issue. In fact, it was a pretty difficult situation. Let me read to you some of the things he described about what happened in Texas. I am quoting the junior Senator from Texas: In my home State of Texas, trial lawyers have accused the then Attorney General of demanding $1 million in campaign contributions in exchange for their being included on the State's tobacco litigation team. One prominent lawyer--a former President of the Texas Trial Lawyers Association--has since said that the attorney general's solicitation was so blatant that ``I knew that instant . . . that I could not be involved in the matter,'' and he even later wondered if the meeting had been a ``sting operation.'' Another lawyer simply characterized his encounter with the attorney general as a bribery solicitation. He describes the rewards these trial lawyers reaped for their political investment: As for the five law firms that actually did represent Texas in the tobacco litigation, they filed relatively late lawsuits based on other lawyers' work--and were awarded $3.3 billion in attorneys fees. This award amounts to compensation that, even had these attorneys worked all day, every day during the entire period of the litigation, is well in excess of $100,000 an hour. As one newspaper editorial has noted, for the amount of money that these lawyers were awarded, Texas could hire 10,000 additional teachers or policemen for ten years. Senator Cornyn also described how these excessive and, I suggest, clearly unethical fees were obtained by lawyers in other States: In Maryland, [a tort lawyer, a billionaire] demanded a $1 billion fee for his work on that State's case, even though, according to the State senate President, the State legislature had retroactively ``changed centuries of precedent to ensure [his] win in the case. [He] ultimately received an accelerated $150 million payment for this no-risk lawsuit. In Massachusetts, according to other tobacco plaintiffs' lawyers, Massachusetts' suit piggybacked on the work of other lawyers and was not pivotal to the outcome of the tobacco litigation. Result: $775 million was awarded to the Massachusetts lawyers in that [State's arbitration on the tobacco case.] In Missouri, a State supreme court justice in Missouri resigned his post in order to join one of the private law firms expected to receive a portion of the [tobacco fee award.] Ultimately, the firms representing the State spent just 5 months on the State's lawsuit. They received a fee award of $111 million. One State leader has described the award as ``the biggest rip-off in the 180-year history of the State.'' The law firms receiving these fees had donated more than $500,000 to State politicians and parties in the years leading up to their selection as the State's outside counsel. As I mentioned earlier, these fee contracts were awarded in a variety of ways, including through political cronyism, and really resulted in very little original legal work. That is my assertion to you. Don't take my word for it. On this tort reform issue, even many of the trial bar lawyers are in full agreement that the lawyers' fees here were excessive. They certainly should know; they are experts in this area. This is what some folks, including some tobacco lawyers, had to say: Michael Ciresi, a pioneer in tobacco litigation who represented the State of Minnesota in its lawsuit, and who is very familiar with these lawsuits, has said that the Texas, Florida, and Mississippi lawyers' fees awards ``are far in excess of these lawyers' contribution to any of the State results.'' Washington, DC lawyer and tobacco industry opponent, John Coale, has denounced the fee awards as ``beyond human comprehension'' and stated that ``the work does not justify them.'' Even the Association of American Trial Lawyers, the Nation's premier representative of the plaintiffs bar, has condemned attorneys' fees requested in the State tobacco settlement. The President of ATLA stated: Common sense suggests that a $1 billion fee is excessive and unreasonable and certainly should invite the scrutiny [of the courts.] [ATLA] generally refrains from expressing an institutional opinion regarding a particular fee in a particular case, but we have a strong negative reaction to reports that at least one attorney on behalf of the plaintiffs in the Florida case is seeking a fee in excess of $1 billion. Perhaps the best gloss on the tobacco fee awards is that provided by Professor Lester Brickman, a professor of law at Cardozo Law School, a noted authority on legal ethics and attorney fees: Under the rules of legal ethics, promulgated partly as a justification for the legal profession's self-governance, fees cannot be ``clearly excessive.'' Indeed, that standard has now been superseded in most States by an even more rigorous standard: Fees have to be ``reasonable.'' Are these fees, which in many cases amount to effective hourly rates of return of tens of thousands--and even hundreds of thousands-- of dollars an hour, reasonable? I think to ask the question is to answer it. Let me emphasize one more point. Lawyers are universally held in the law to be fiduciaries. That is, they owe a duty of trust to their clients, a special duty of trust. One can easily understand why that is so. As such, as a fiduciary, under the legal ethics that apply to every lawyer, lawyers are not allowed to take advantage of their clients with regard to their fees. A contract for an unreasonable or unethical fee, for example, is unenforceable in the courts, and the excessive portion of the fee must be returned to the client. Numerous legal authorities confirm that lawyers are fiduciaries whose fees have always been subject to enforceable reasonableness requirements. I say this because, of course, that is what we are doing right here. We have done that with respect to other fiduciaries in the Tax Code-- the trustees I spoke of earlier--and we can obviously do it here also. One court said: We realize that business contracts may be enforced between those in equal bargaining capacities, even though they turn out to be unfair, inequitable, or harsh. However, a fee agreement between lawyer and client is not an ordinary business contract. The profession has both an obligation of public service and duties to clients which transcend ordinary business relationships and prohibit the lawyer from taking advantage of the client. I will tell you what another court said: An attorney is only entitled to fees which are fair and just and which adequately compensate him for his services. This is true no matter what fee is specified in the contract, because an attorney, as a fiduciary, cannot bind his client to pay a greater compensation for his services than the attorney would have a right to demand if no contract had been made. Therefore, as a matter of public policy, reasonableness is an implied term in every contract for attorney's fees. So the choice before the Senate is either to allow the tobacco settlements to be diverted to self-dealing billionaire tobacco lawyers, or to provide our troops in Iraq and Afghanistan with additional combat equipment to help them perform their missions. The choice could not be more clear: We can either allow the de facto taxes imposed by the tobacco settlement to continue to be diverted to pay $100,000-an-hour fees to these politically connected billionaire lawyers or we can put those taxes to use providing our troops with additional equipment. We already have the precedent of doing this with respect to other fiduciaries in the Tax Code, specifically section 4958. This adds a new section immediately following, section 4959, that applies the very same concept to these particular fees. It is prospective only. It does not apply to anything that the court has already approved. I cannot imagine how this would not be a good idea. The amendment is a sense of the Senate to pass this proposition. I urge my colleagues to support it, assuming we have a vote on this perhaps in an hour and a half or so this afternoon. Mr. President, if there is no one else seeking recognition, I suggest the absence of a quorum.