Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I went to law school and studied the concepts of gross negligence and reckless conduct. There are thousands, in fact probably millions, of pages of case law trying to define those legal terms. The reality is no judge or lawyer can tell you today what they mean. They say it all depends. This amendment does not clear that up. In fact, it only adds to the confusion, because it statutorily creates a standard of care when there is no underlying cause of action, no basis for liability against the defendant. There will still be lawsuits to defend and lawyers to pay even if you win. I guess that may be the whole point of the proponents--create a requirement for manufacturers to defend themselves in court even though there is no legitimate cause of action against them. They pay more insurance, more lawyers, so even if they win, they lose. This bill is all about ensuring there is no cause of action against a manufacturer which makes a legal, nondefective product. It makes no sense to say unless he is grossly negligent. He is already liable if he is grossly negligent. Say the gun blows up and kills somebody; that standard applies already if there is a legal cause of action against him--in other words, a legal basis for holding him liable. It adds nothing but confusion when there is no underlying cause of action. Here is an example: You get yourself rear-ended by the guy behind you, and I am not that guy. You have no right to sue me. It doesn't change anything if we say in the law ``unless Kyl is grossly negligent;'' Kyl wasn't even there. All we are doing is adding confusion to this by adding this gross negligence language which, unfortunately, will cause a lot of people to have to defend themselves in court, pay lawyer fees, and at the end of the day we are trying to avoid that here.

Mr. KYL

Mr. KYL. I am happy to yield for a question.

Mr. KYL. Mr. President, I rise today to discuss the subject of the removal of Saddam Hussein's regime in Iraq and to address some of the recent criticism regarding whether, given that large stockpiles of weapons of mass destruction have not been found, action by the United States was justified. When I have concluded, I know there are some colleagues who will want to address this same question from slightly different perspectives. The tragic events of September 11, 2001, demonstrated with great clarity that we can no longer afford to wait for threats to fully emerge before we deal with them. We paid a heavy price that day for our previous half-measures against those who hate us and want to destroy us. By definition, intelligence is imprecise, and no matter what reforms we implement in our intelligence community, the fact is, at least to some degree, it will always be uncertain. This is precisely why intelligence information is just part of a larger puzzle, as it was in the case of Iraq, that we used to determine the direction of U.S. policy. So given the uncertainty about weapons of mass destruction stockpiles, were our actions in Iraq justified? The answer to that question is most certainly yes. There is no doubt that the United States, the Iraqi people, and the international community are far better off today without Saddam Hussein in power. The inability to find weapons of mass destruction stockpiles now does not mean that Iraq did not have access to such weapons, and that under Saddam Hussein Iraq was not a grave and gathering danger. In fact, the overwhelming body of evidence, including most recently that from the Iraq Survey Group, indicates that his regime did, indeed, pose a threat, and that its removal will aid in our overall aid against terror. Some of our colleagues have charged that the President led the American people to war under false pretenses; that the case for removing Saddam Hussein's regime was supposedly based on an imminent threat posed by that regime because of its arsenals of weapons of mass destruction which now cannot be found. This assertion is categorically false, and today I intend to explain why. Let's briefly review how we arrived at the decision to authorize force against Iraq in October of 2002. Contrary to what some would have us believe, the Bush administration did not fundamentally change U.S. policy with Iraq from that of the Clinton administration. Upon entering office in January 2001, President Bush inherited from the Clinton administration a policy of regime change. I repeat, the Bush administration pursued the same Iraqi policy as the Clinton administration. That policy was based on the 1998 Iraq Liberation Act which stated: It should be the policy of the United States to support efforts to remove the regime headed by Saddam Hussein from power and to promote the emergence of a democratic government to replace that regime. This policy was unanimously approved by this Senate. This legislation and, thus, the shift in U.S. policy from containment to regime change reflected an acknowledgment that diplomatic solutions for dealing with Saddam's intransigence were being exhausted. Even before that shift, however, the Clinton administration was clear about the nature and capabilities of Saddam Hussein's regime and, moreover, believed that if left unchecked, the regime would pose a serious threat in the future. On February 17, 1998, as he prepared for war against Iraq, President Clinton stated the following: Now let's imagine the future. What if [Saddam Hussein] fails to comply and we fail to act or we take some ambiguous third route, which gives him yet more opportunities to develop this program of weapons of mass destruction and continue to press for the release of the sanctions and continue to ignore the solemn commitments that he made? Well, he will conclude that the international community has lost its will. He will then conclude that he can go right on and do more to rebuild an arsenal of devastating destruction. And some day, some way, I guarantee you he will use that arsenal. . . . In the next century, the community of nations may see more and more of the very kind of threat Iraq poses now--a rogue state with weapons of mass destruction, ready to use them or provide them to terrorists, drug traffickers, or organized criminals who travel the world among us unnoticed. That quote was from President Clinton's remarks in 1998 as he prepared for war against Iraq. He pointed out that the arsenal which Iraq possessed--``a rogue state with weapons of mass destruction'' were his exact words--will pose a threat because he can provide them to terrorists, drug traffickers, or organized criminals who travel the world among us unnoticed. Note that he talked about weapons of mass destruction which Saddam Hussein possessed. I have noted no objections or caveats on these warnings by Democratic Members of the Senate. Later that year, not 2 months after President Clinton signed the Iraqi Liberation Act into law, he delivered an address to the Nation explaining his decision to order air strikes against Iraqi military targets. He discussed the potential long-term threat posed by Saddam Hussein. Again, I quote President Clinton: The hard fact is that so long as Saddam Hussein remains in power he threatens the well-being of his people, the peace of his region, the security of the world. The best way to end that threat once and for all is with a new Iraqi government, a government ready to live in peace with its neighbors, a government that respects the right of its people. . . . Heavy as they are, the costs of inaction must be weighed against the price of inaction. If Saddam defies the world and we fail to respond, we will face a far greater threat in the future. Saddam will strike again at his neighbors; he will make war on his own people. Mark my words, he will develop weapons of mass destruction. He will deploy them, and he will use them. Again, I note no dissent from Democratic Senators to these comments of President Clinton. Consider the striking similarity between these statements by President Clinton and the statements Bush administration officials made about Iraq during the leadup to Operation Iraqi Freedom. In the first statement I cited from February of 1998, President Clinton discussed the consequences of inaction in the face of continued noncompliance by Saddam Hussein, noting that inaction would lead the dictator to conclude the international community had lost its will. Consider the statements of President George W. Bush to the United Nations General Assembly in September 2002: The conduct of the Iraqi regime is a threat to the authority of the United Nations. Iraq has answered a decade of U.N. demands with a decade of defiance. . . . The United Nations [faces] a difficult and defining moment. Are Security Council resolutions to be honored and enforced, or cast aside without consequence? Will the United Nations serve the purpose of its founding, or will it be irrelevant? I point out the focus of President Clinton's statements was on the totality of our knowledge about Saddam Hussein's history, his defiance of the United Nations, use of chemical weapons, aggression against his neighbors, savage treatment of his own people. This is what we had to gauge his intentions by. This broad focus on Saddam's past actions and known capabilities, not any particular piece of intelligence, was also what prompted many Members of this body to authorize force against Iraq in October 2002. Consider some of the statements made in 2002 by my colleagues. First I quote Senator Daschle, majority and minority leader: Iraq's actions pose a serious and continued threat to international peace and security. It is a threat we must address. Saddam is a proven aggressor who has time and again turned his wrath on his neighbors and on his own people. Iraq is not the only nation in the world to possess weapons of mass destruction, but it is the only nation with a leader who has used them against his own people . . . Note: 2002, Saddam Hussein possesses weapons of mass destruction, no qualifications except he is not the only country to do so. No expression of doubts or caveats. As minority leader or majority leader, Senator Daschle has access to all of the intelligence that is available to anybody in this body. Now I quote Senator Biden, whose comments I quote not just because he is one of the more thoughtful Members of this body and ranking member of the Foreign Relations Committee, but also because they happen to be very close to the views I expressed on this issue. I quote Senator Biden in his colorful way of putting it: There is a guy named Saddam Hussein who, in the early 1990s broke international law, invaded another country, violating every rule of international law. The world, under the leadership of a President named Bush, united and expelled him from that country. Upon expulsion, he said a condition for your being able to remain in power, Saddam Hussein, is you sue for peace and you agree to the following terms of surrender . . . If the world decides it must use force for his failure to abide by the terms of surrender, then it is not preempting, it is enforcing. It is enforcing, it is finishing a war he reignited, because the only reason the war stopped is he sued for peace. That is exactly true. That is precisely what happened. Now let me quote another leader in the Senate, Senator Kerry, who said this: It would be naive, to the point of grave danger, not to believe that, left to his own devices, Saddam Hussein will provoke, misjudge, or stumble into a future, more dangerous confrontation with the civilized world. . . . So this was the backdrop against which we all had voted to authorize the President to act and upon which he acted. I should not say we all voted to authorize the President because there were a few who did not, but the vast majority of the House of Representatives and the Senate voted to authorize the President to take appropriate action. Some now are voicing second thoughts. Since our successful removal of Saddam Hussein from power, it emerges that some of the intelligence regarding the regime's weapons of mass destruction capabilities may have been wrong, because most notably large stockpiles of chemical and biological weapons have yet to be found. I feel compelled to point out three obvious facts: One, an intelligence failure is not synonomous with a misuse of intelligence. Two, this intelligence issue does not fundamentally change the case against Saddam Hussein. Three, since Iraq itself had provided documentation to the United Nations on its production of chemical and biological agents, the question is not whether but what happened to the stockpiles. Let's take the first, the misuse of intelligence. The fact remains the Bush administration relied largely on the same intelligence information used by the Clinton administration during the late 1990s, the same information that was available to Senators and about which they spoke on this floor, some of which I have quoted. President Clinton's CIA Director was retained by President Bush. By and large, the intelligence information was also the same as that of the other allied intelligence services, with a primary source being the two U.N. inspection bodies UNSCOM and UNMOVIC, the initials of which are U-N-S-C-O-M and U-N-M-O-V-I-C, which were led by non-Americans, such as Rolf Ekeus and Richard Butler. That Saddam had weapons of mass destruction capabilities was widely accepted, even by those who vehemently opposed the war. As French President Jacques Chirac commented during an interview with ``Time'' Magazine in February of 2004: There is a problem--The probable possession of weapons of mass destruction by an uncontrollable country, Iraq. The international community is right to be disturbed by this situation, and it's right in having decided Iraq should be disarmed. I would note, if he does not have any weapons of mass destruction, there is no point in talking about disarming him. The entire world community believed he possessed these weapons, among other things because he himself had said he did. So given the information the international community had at the time, the conclusions about Iraq's capabilities seemed clear. As former head of the Iraqi Survey Group David Kay recently stated in his testimony to the Senate Armed Services Committee: . . . All I can say is if you read the total body of intelligence in the last 12 to 15 years that flowed on Iraq, I quite frankly think it would be hard to come to a conclusion other than Iraq was a gathering, serious threat to the world with regard to WMD. I might add, that is exactly what President Bush said. That is obviously a big-picture view. It seems opponents of the President, in charging the administration misled the American people, preferred to point to specific intelligence. So let's take a closer look at a couple of those examples. First, that the President's reference in his State of the Union Address regarding Iraq's attempts to purchase uranium and, second, that the administration presented intelligence community information on Iraq's WMD capabilities as though it were an undeniable fact rather than qualifying it properly with caveats. First, there were the following 16 words in the President's State of the Union Address: The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa. Major newspapers, the Democratic National Committee, and some policymakers claim this is one of the top examples of the Bush administration knowingly misleading the American people and presenting false intelligence information. As the DNC chairman Terry McAuliffe stated: This may be the first time in recent history that a President knowingly misled the American people during a State of the Union Address. . . . this was not a mistake. It was no oversight and it was no error. That is a grave charge. Charges that the administration purposely included false information in the President's speech I deem despicable, an attempt to create a scandal where one does not exist. The President had every reason to believe the information in his speech was true. It had been vetted by the CIA Director and it was consistent with the judgment of the intelligence community in October 2002. The National Intelligence Estimate at that time said Iraq was ``vigorously trying to procure uranium ore'' from several African countries. The British government, which the President cited, included a judgment in its dossier similar to that of the intelligence community's majority judgment on this point. In retrospect, Director Tenet stated this phrase, though factually correct and approved in the interagency process, should not have been included in the President's speech because it was not central to the intelligence community's judgment that Iraq was reconstituting its nuclear weapons program. In other words, it was just a piece of evidence, not important enough to include in a speech like the State of the Union speech, and certainly not what we relied upon for our conclusion Iraq was trying to reconstitute its nuclear weapons program. In any event, it does not suggest in any way that the President was at fault for including the information, or that he had any intention of misleading the American people. The President believed the text was sound. It was not in error. If there was an error, it was simply including a piece of information which really wasn't central to making the case, but not misleading the American people. Second, the President's critics argue he failed to mention caveats in the intelligence community's assessment of Iraqi capability. This criticism is highly misleading. According to the 2002 National Intelligence Estimate, and I have an unclassified copy of it here, the intelligence community had ``high confidence'' in the following statements: Iraq is continuing, and in some areas expanding, its chemical, biological, nuclear, and missile programs contrary to U.N. Resolutions. Iraq possesses proscribed chemical and biological weapons and missiles. Iraq could make a nuclear weapon in months to a year once it acquires sufficient weapons-grade material. So the National Intelligence Estimate, prepared by the entire intelligence community, led by the CIA Director George Tenet, had high confidence, among other things, in the fact that Iraq possessed proscribed biological and chemical weapons and missiles. After the fact we found some of the missiles. We found the programs to make chemical and biological weapons. But we don't find the big stockpile of those weapons. It turns out the intelligence community's high confidence in this statement was either misplaced or we simply haven't found the material yet, or it went somewhere else. We don't know the answers to those questions. As to this, the only dissent came from the State Department. But even in its alternate view it said Saddam continues to want nuclear weapons and available evidence suggests Baghdad is pursuing a limited effort to maintain and acquire nuclear weapons capabilities. Moreover, it appears the State Department did not have significant objections to the key judgments related to chemical, biological, and missile programs. So it is clear, it is fair to say, we had a general opinion of Saddam's capabilities, that that is what the President addressed. I want to also make it clear the President and the administration never claimed Iraq posed an imminent threat, as some have said. To the contrary, administration officials said the United States and the international community needed to act before it became imminent. Indeed, President Bush challenged those who wanted to wait until the threat was imminent in his 2003 State of the Union Address, saying the following: Some have said that we must not act until the threat is imminent. Since when have terrorists and tyrants announced their intentions, politely putting us on notice before they strike? If this threat is permitted to fully and suddenly emerge, all actions, all words, and all recriminations would come too late. Trusting in the sanity and restraint of Saddam Hussein is not a strategy, and it is not an option. So said President Bush. Administration officials did use words like ``immediate'' and ``urgent'' but more to convey the importance of dealing with the threat they judged to be growing; that they did not imply or state was imminent, in other words, that the attack was about to occur. They did not say that. Indeed, that the threat was not yet imminent was well understood on both sides of the aisle. As Senator Daschle, whom I quoted earlier, stated in explaining his support for the resolution authorizing the use of force against Iraq: The threat posed by Saddam Hussein may not be imminent, but it is real, it is growing, and it cannot be ignored. I submit he was correct. One can argue, and indeed some of my colleagues have argued, administration officials were at times too certain in the way they said it, too certain in their statements using phrases like ``we know.'' But given all the information we had about Saddam's history of using and producing weapons of mass destruction, his aggressive intentions, and the intelligence community's high confidence in the key areas of assessment, it is difficult to imagine how the administration could have determined Iraq was not a threat that needed to be dealt with immediately. So, no, there may have been mistakes in intelligence. We have yet to find that out. But there was not a misleading--an attempt to mislead by the administration. The second point is the larger point, that whatever deficiencies there may have been about the stockpiles of weapons of mass destruction, it doesn't change the basic case against Saddam Hussein. Some of what I have quoted earlier makes that point. While it is troubling our intelligence cannot tell us where these stockpiles are, the larger case remains. The Bush administration, supported by a large coalition, pursued a responsible policy, given all of the pieces of the puzzle it had. As I said, there was Saddam's previously known missile capabilities and chemical and biological weapons programs; his desire to acquire a nuclear weapon; his continuing flagrant violation of numerous Security Council resolutions; his history of aggression including, I might add, shooting at American airplanes constantly in the no-fly zone while we were trying to enforce that, if you will recall; and even an attempt to assassinate former President Bush. Add to this the regime's vast human rights abuses which really only came to light after we were able to liberate Iraq. In other words, absent any statement or specific piece of intelligence, the case against Saddam Hussein was already made by Saddam Hussein himself and this was before, as I said, we found the mass graves of hundreds of thousands of Iraqis. Our colleague Senator Kerry summed it up well at the time. He said this: I believe the record of Saddam Hussein's ruthless, reckless breach of international values and standards of behavior is cause enough for the world community to hold him accountable by the use of force, if necessary. I want to quote that again: I believe the record of Saddam Hussein's ruthless, reckless breach of international values and standards of behavior is cause enough for the world community to hold him accountable by use of force, if necessary. There is no suggestion here we had to find weapons of mass destruction, or even necessarily that we had to believe those weapons existed at the time, even though, as I said, we all did, based upon the intelligence at the time, but that this gross violation of human rights was, in and of itself, a sufficient casus belli. Given the same causes and information, what then accounts for the differences between the actions of the Bush and Clinton administrations? Very simply, the Bush administration made a decision that, post 9/11, it was too dangerous to allow American security to rest in the hands of an international organization that, after 12 years, had failed to enforce its own resolutions demanding Iraqi compliance with the 1991 Gulf war cease-fire. It was too dangerous to allow a regime to stay in place which had demonstrated a clear intent to develop weapons of mass destruction, had ongoing ties to terrorist organizations, and whose leader made it abundantly and routinely clear the United States was his enemy. We needed to begin the process of changing the facts on ground in the Middle East. In fact, it was, in part, the very uncertainty that made dealing with Saddam Hussein an urgent matter. As Senator Kerry explained before his vote in favor of the authorization to use force: In the wake of September 11, who among us can say, with any certainty, to anybody, that those weapons might not be used against our troops or against allies in the region? Who can say that this master of miscalculation will not develop a weapon of mass destruction even greater--a nuclear weapon-- then reinvade Kuwait, push the Kurds out, attack Israel, any number of scenarios to try to further his ambition to be the pan-Arab leader or simply to confront in the region, once again miscalculate the response, to believe he is stronger than those weapons? And while the administration has failed to provide any direct link between Iraq and September 11, can we afford to ignore the possibility that Saddam might accidentally, as well as purposely, allow those weapons to slide off to one group or other in a region where weapons are the currency of trade? How do we leave that to chance? While we have not and may not find these weapons stockpiles, the case against Saddam Hussein is not diminished. His was a threat that needed to be dealt with. The third and final point, the jury is still out as to what happened to Iraq's weapons of mass destruction and when. It is an intelligence failure--a lack of knowledge, not an attempt to mislead people--that we don't know the answer to that question. Presumably, some day we will find out or at least come closer to the resolution of the issue. Perhaps some day we will find some of the weapons, or maybe we will find evidence they were destroyed or removed before the war. There is no way now to know. But one fact is certain. What we know is that at one time Saddam Hussein had chemical and biological weapons. Saddam Hussein admitted it and the entire world believed it. What is more, that Saddam used those weapons against Iran and against the Iraqi Kurds will remain forever etched in our minds. I point to simply one picture among many which we can present to remind us of the fact that Saddam Hussein had weapons of mass destruction and used them--in this case, against his own people. Who will forget the picture of this Kurdish mother with arms wrapped around baby, both dead, as a result of Saddam Hussein's perfidy--the use of his chemical weapons.

Mr. KYL

Mr. KYL. Madam President, I rise in support of the amendment of the Senator from Texas, and I will explain a couple of reasons for that. First, there has been a suggestion to the States that did not receive their full share of funding, the fast growing States--California, Texas, Florida, Arizona, Colorado primarily--that there just was not enough money to be able to bring those States up to the same level as the other States. There is an acknowledgment that a lot of other States get to the 95- cent level long before these five States do. That is the primary reason for the deficiency. In fact, as my colleagues can see from this chart, Arizona is in the dark blue, and we have simply selected a State--and I do not mean to pick on my colleagues from this particular State because there are others that reveal the same kind of thing--this happens to be the State of Missouri. We can see that beginning in the very first year, Missouri is returned 95 cents for every dollar. That is guaranteed to the State of Missouri all the way across from the very beginning. Whereas in my home State of Arizona, we are stuck at the current level of 90.5 cents in 2004, 2005, 2006, and 2007. It goes up one- or two-tenths of a percent in 2008. It is not until the sixth year, if the funding is available, that Arizona, as well as these other donor States that I mentioned, would be brought up to the same level that all the other States have been at all this time. In the case of Arizona, the lost revenue during this period of time is about $160 million. So that is money Arizona would have received had it been treated the same as Missouri in terms of the 95 cents received per dollar. The Senator from Oklahoma is quite right that when there are States that need more than a dollar, then there are going to be States that do not get a dollar for every dollar in taxes that they send in. That is, of course, true. Under the Federal system I think there is an acknowledgment that it is not totally unfair that some States are going to send more in in gasoline taxes than other States. When it is way out of balance and the balance can be corrected, it ought to be corrected. The argument has been that it would simply have cost too much money to bring States such as Arizona up to this level. I think it would only cost $2 billion. In any event, the Senator from Texas distributes $9 billion over this period of time and makes these States whole. One place that the $9 billion could have come from, had they wanted to, is the set-aside program in the committee-reported bill for something called the Infrastructure Performance and Management Program. The IPAM is a--I do not want to call it a slush fund but it is a source of funding that is very unclear about where it is going to be spent. Very little is known about the purpose of such a program, although there are some who believe that it basically will be used to distribute to folks who vote for the bill and whose vote is needed for the bill and that the money, therefore, needs to be held in reserve in order to ensure that in the end they will have enough money to do all that they want to do. Why not use that money to bring the States such as Arizona, California, Texas, and those other States up to this 95-cent level? It is more than enough to do that. So when they say there is not enough money to do what we are complaining needs to be done, that is simply incorrect. There is enough money. It just needs to be moved from this one program, which does not seem to have a very clear or fair purpose, and move it over to fund this deficiency. I have just used the State of Arizona with another State that is somewhat comparable, in terms of size and so on, to illustrate the point, but I think the same can be demonstrated for the other States involved. That is why I support the amendment of the Senator from Texas because what it would do is restore this funding level so that from the very beginning all of the States would be treated the same. Now, that can be done at whatever level of spending one wants to do it. I believe that the level of spending should be much less than the level in the bill. The President believes it should be much less than is in the bill. The President believes that the total amount should be $256 billion. That ought to be enough. That is a 21-percent increase. That is what I think. Whatever the level of spending in the bill, it should be fair as between the States. Not all States can be treated exactly the same. We understand that. At least it is fair to have a base level. I will give credit to the chairman of the committee and others; they wanted to get this base level at 95 cents and they got there for most of the States but they did not get there for five or six of the States. My State happens to be one of them. It is not fair to the citizens of Arizona. As a result, I support the amendment because it would bring this level up to 95 cents for the entire period of time we are talking about, not only in the very last year. I urge my colleagues to support fairness and to support the amendment of the Senator from Texas.

Mr. KYL. If the Senator from Nevada would permit the Senator from New Hampshire to speak, then I am happy to let the vote go forward after he has concluded.

Mr. KYL. Mr. President, first I wish to correct something I said. I was trying to estimate the amount of money the Finance Committee has come up with in corporate loophole closings. That is a gross way of saying what we did. We have changed several provisions of law that are going to raise revenue. It amounts to a tax increase on certain kinds of businesses, but it represents good policy. Some of this follows the Enron scandal. I thought we had gotten up to about roughly $50 billion. Actually, the amount is $22 billion. I stand corrected on that. That would be a $22 billion tax increase if you want to put it that way. Second, there are two things to which I want to respond. My colleague from Missouri basically made the argument: But our needs are great; we have a great need to rebuild our highway system. First, I don't want my views to be characterized as I don't care about building highways; that I don't think we have needs. Of course we have needs. We have all kinds of needs. If the Congress responded to every need that every Member brought forth, we would have a budget that is five times as big as it is right now. We can't possibly satisfy all of the needs of all of the people all of the time with the revenues we have, and it is probably a good thing because it does force us to set priorities. That is what this amendment does. It says we would like to have maybe a 42-percent or 41-percent increase over the last 6 years in highway spending, but everything else in the budget is going to be less than 1 percent, except for homeland security and defense. If we can set a priority with health, education, welfare, and justice and all of the other activities we do, if we can create a budget that has growth of less than 1 percent for those activities, then why do we have to have more than a 21-percent increase in highway funding, which is the amount that $256 billion finances? That is the amount the President will support. I do not want my colleagues to characterize this amendment as against highway funding. It is a 21-percent increase. Is that not enough? No, my colleagues say it needs to be 41 percent. Well, that is a legitimate argument, a difference of opinion: Do we need to increase it 41 percent or 21 percent? But do not mischaracterize the argument that those of us who think 21 percent is enough are somehow against doing something about our infrastructure. The final point I want to make is to respond to the Senator from Oklahoma. As to the rationale used, and he characterized it correctly a moment ago, in the Finance Committee by those people who say this money ought to be attributed to the highway trust fund, we only raised $196 billion in gas tax revenues, but we have made some public policy decisions, the results of which have denied money to the highway trust fund and because of that we ought to attribute those funds to the highway trust fund. One public policy decision is that schools, towns, and churches should not pay the gas tax. That is a legitimate public policy decision. So we do not collect the gas tax. But the logic is stood on its head to say but because that is a decision that denies funds from the trust fund we should pretend as though we put the money in the trust fund. The bottom line is, the general revenues of the country are paying for that policy decision, and the same thing is true with respect to the ethanol tax. We do not collect 5.2 cents of it. Now we are going to collect it and rebate it, and they say that hurts the highway trust fund. Fine. Then charge the tax. Do not pretend as though we charge the tax and say that justifies attributing that money to the highway trust fund when, in fact, there is no money, and the only way one gets the actual money in the highway trust fund is going over to this $22 billion in new corporate taxes, taking it from the general revenues and then putting it in the highway trust fund. That is why I think we should limit this funding to $256 billion, a 21-percent increase. The President says that ought to be enough. I agree with the President.

Mr. KYL. Mr. President, let me briefly describe for my colleagues what this amendment does. In simple terms, it reduces the funding we have provided for the transit and highway purposes of this bill from the amount in the substitute offered by the Senator from Oklahoma to the amount requested by the President; namely, $256 billion over the 6- year period. That is the amendment. There are some features of it we could discuss, if you like, and I would be happy to answer questions from my colleagues. But the gist of this amendment is simply to say, we understand the bill before us is too expensive. The President has said he supports a $256 billion number. The statement of position by the administration would recommend a veto if the bill violates the principles set forth by the President, including specific reference to the substitute that we are considering. So it seems to me if we want to ensure the bill will not be vetoed, if we want to demonstrate that we are going to begin to spend money wisely here, then we should be willing to support the level requested by the President over 6 years, which is $256 billion. Now, we have quoted before from the Statement of Administration Policy. What I would like to do is quote from the President's press officer, Scott McClellan, on board Air Force One this morning at just a little after 10 o'clock. After talking about some other things, he had this to say about the question of the highway bill before the Congress. He said: This is the first test for the Congress when it comes to spending restraint. And the President's proposal is at $256 billion. I am reading from the comments this morning of the President's press secretary. He said: This is the first test for the Congress when it comes to spending restraint. The President's proposal is at $256 billion. This is for the next 6 years. It's a 21 percent increase above the previous 6 years, and we urge Congress to show spending restraint in moving forward on this legislation. That is the basis for this amendment, to limit our funding for highway transit purposes for the next 6 years to this level, $256 billion. Let me get into a little bit of detail about what the Finance Committee did to come up with a larger number. One of the reasons it is important for us to focus on this number is because in all three respects that the President's advisers laid out in the statement of position of the White House, the bill before us violates the principles laid down by the President. Those three principles which caused the advisers to the President to recommend a veto if any of them were violated are as follows: That the transportation infrastructure spending should only rely on gas tax revenues and that there not be any increase in gas tax or other Federal taxes. This bill raises other Federal taxes. This bill provides new spending that doesn't come out of the highway trust fund but, rather, results from work the Finance Committee has done to close a variety of corporate loopholes. We are familiar with some of the corporate loopholes the Enron executives were able to take advantage of, for example. There are some other provisions we were able to close which represent tax increases for the people who otherwise would have been able to take advantage of those loopholes. Those tax increases will produce revenue--I have forgotten the exact amount, but in the neighborhood of $50 billion or thereabouts. That was revenue we counted on to use in providing relief to our manufacturing facilities because we are going to be taking away from that some special tax treatment the World Trade Organization held to be impermissible under the WTO principles. Our European trade competitors brought a case against us in the WTO, and we lost that case. The way in which we gave tax advantages to our manufacturing companies can no longer exist. We have committed to the WTO we will change our tax laws so those advantages no longer exist. However, we recognize we have lost a lot of manufacturing jobs over the last several years. We don't want to simply reduce for those companies the offending provisions. We want to substitute something else so our manufacturing corporations and other corporations will have the tax structure to continue to grow economically, to continue to produce jobs and hopefully create new jobs. If we use the revenue the Finance Committee came up with for this purpose--and it is called the FSC ETA reforms--if we use those revenues instead to build highways, I don't know where we are going to come up with the money to aid our manufacturing firms. I mean this with all sincerity. It is fine to respond to our general contractors who are great people back in our home States; we are going to be spending a lot of money on highways. We are going to be increasing spending by 21 percent if we just adopt the amendment I have laid forth and the number the President has requested. But I don't know how we are going to look our manufacturing constituents in the eye, and particularly the people who work for them, and say: Gee, we are sorry. We spent the money we would have provided to you on building highways. I don't know where we are going to get the money to support the tax relief to these manufacturing corporations if we use all of that money for this purpose. That is exactly what the Finance Committee bill does. The chairman of the committee has said the bill is paid for. This is how the bill is paid for. So we have increased taxes, and we are going to be transferring that revenue from a project we all committed to, and we have to move this forward by March or there will be retaliation by our trading partners in Europe. They have waited patiently for a year and a half or 2 years now. We have to do that. But now we are going to apply those revenues to this bill. Why? Because the chairman of the Finance Committee felt he had an obligation, in view of the Bond amendment that passed last year, to find some way to fund the level the Senate had passed. It raises taxes. It violates the President's principle. On that alone the President's people would recommend a veto. We should not do it. Secondly, the President's principle was the bill should not be funded by mechanisms that conceal the true cost to taxpayers. This bill obviously conceals the true cost to taxpayers because it doesn't limit highway and transit spending to revenues we collect in taxes from those revenue sources. The gas tax produces $196 billion in revenue over 6 years. But we don't limit the spending on highways to $196 billion. Instead, we have found other ways to increase that amount of money. In the Finance Committee we went over all of these various options, and there are some of them that make enough sense that I am willing to support them and say: All right. You could go above the gas tax revenues of 196. You can get up to about 210 to $214 billion and argue with a straight face this is money that is real money and could, in fact, be attributed to the highway trust fund. But beyond that, we are in fact concealing what we are really doing. That gets into the third principle, which is we should not be funding from the general fund; that we should fund from the revenues we derive from the gas tax and should not take money from the general fund for this purpose. This substitute violates that principle that until now has guided our spending for highway projects. It is there both to protect highway users to make sure the money in the fund will be used for highway purposes--a point that was eloquently spoken to by the chairman of the committee, the Senator from Oklahoma, a day or so ago. It also protects those people who don't pay a great deal into the fund because they don't drive very much and they don't buy very much gas. It protects them from having to pay income taxes to support roads they never use. We have always had the principle that we are not going to dip into general revenues, because once you begin doing that, there is literally no constraint, up until now. Now for the first time we are going to dip into general revenues. How does this bill violate that principle and the second principle of concealing from the American people exactly how these revenues are going to be spent? It pretends money is in the trust fund that is not there. By saying that, I don't mean to denigrate the purposes or motives of my colleagues who created this mechanism. But the fact is, no new revenue is being created by the collection of gas tax revenues to be put into the trust fund. We are simply going to deem that money was put there without it ever having been put there through the gas tax. For example, there is an exemption for schools and churches and States and towns. So when your local school bus drives around and has to refill the gas tank with gas, we don't charge them the Federal gas tax for that. What we are going to do now is pretend as though we did. We are going to say, there is $9 billion that would have been collected if we had done that, so we are going to pretend as though there is $9 billion in the highway trust fund. The other thing we are going to do is, if you buy ethanol, you get a 5.2 cent exemption. You don't pay the full 18.3 cents. You pay 18.3 minus 5.2. We are going to pretend as though that 5.2 cents was collected and transferred to the highway user fund. When I say that, the mechanism is we are going to actually collect that tax, but then we will rebate it to the taxpayer. So it actually was collected once, but it has also been rebated. So again, no net new money. Since you have to pay highway contractors in real dollars--they don't pave these highways for nothing, with fake money--how do you do it? That is where this corporate tax increase money comes in. The Finance Committee closed these tax loopholes, raised taxes on these corporations, and produced--again, the number is roughly 50 billion. If one of my colleagues wishes to correct me, I am happy to be corrected, but say it is $50 billion. That new tax increase from corporations is going to then be taken from the general fund and transferred over to the highway trust fund. That is general revenues. So all three of the principles that the President laid down will have been violated. We have increased taxes on corporations, we have obscured the fact that the highway trust fund doesn't pay for all of what we are spending here, and we have transferred money from the general fund into the highway trust fund in order to pay for the bill on which we are about to vote. In all three respects, we have violated the principles that the President's statement of policy laid down. Given the fact that the advisers to the President said they would recommend a veto if we do that, and if we move forward with legislation--I will cite the sentence from the Statement of Administration Policy: Accordingly, if legislation that violates these principles, such as this legislation-- These people are saying ``this legislation'' violates those principles-- Accordingly, if legislation that violates these principles, such as this legislation, which authorizes $318 billion, were presented to the President, his senior advisers would recommend that he veto the bill. As that letter says, and as Scott McClellan confirmed, the President's proposal is $256 billion, a 21-percent increase over the previous 6 years. That ought to be enough. That is why I offered as an amendment for colleagues to vote on here the opportunity to support the President and say, enough is enough, a 21-percent increase is enough-- we don't need to spend more--and, as a result, we are going to exercise fiscal restraint and pass a bill that is funded at the $256 billion level. I would like to yield the floor now to any of my colleagues.

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

Mr. KYL. Mr. President, I cannot tell you how much I appreciate the words of my colleague from Nevada. I would like to make two points. First of all, when my staff showed me this morning the words of the Senator from Nevada--and they seemed to be very concerned about it-- they probably were a little astonished that my reaction was not particularly negative. I said: Look, people say things on the floor not exactly the way they meant to express them, and I simply attribute it to that. Then I chuckled. The Senator from Nevada and I talked a bit about it, because I said: My friends at the White House might wonder what on Earth the Senator from Nevada was talking about when they appreciate the fact that I don't support the amount of funding in the highway bill even that the President supports, that I don't support the amount of the funding in the energy bill, and in some cases I have been kind of a royal pain for folks in the administration. I try to support the President all I can, and I do support the President a lot, but we all find ourselves sometimes in opposition to the administration, sometimes in support of the administration. But I do appreciate the sentiment of the Senator from Nevada. He certainly did not mean to suggest, I know, that I only do things if the President wishes them. I appreciate his comments just now. I also appreciate what else he said, which is the debate has been constructive, that there has been a process to try to get amendments to votes. Just to reiterate that, and describe what I think might happen here next, the budget point of order my colleague from Arizona raised a moment ago has been amended by the Senator from Missouri. I checked with the staff for Senator McCain, and he has no objection to having that vote at or about 2 o'clock, depending upon what the managers of the bill wish to do in that regard. He would be prepared, as I understand it, to come to the floor just before then to make closing comments about that point of order. I also know Senator Graham is here and wishes to speak. Rather than lay aside the pending business, my suggestion would be to go ahead with that, have any other people speak on it who wish. The managers should certainly be the ones who determine what time the vote is. I will simply express what Senator McCain's staff has told me, which is that he has no objection to voting at or about 2 o'clock and would presume to be here for a few minutes ahead of that time to speak on this budget point of order. Then presumably following that, if there is not a Democrat who wishes to offer an amendment at that time, I would like to offer an amendment which should not take very long to debate and would be happy to have a vote on that amendment as soon as debate time is concluded. I mean perhaps half an hour or something in that timeframe. I don't know who all might want to speak on it, but I don't have that much time left, and I want to save a little bit of time to speak on other business as well.

Mr. KYL. Mr. President, I think my colleague from Arizona makes a valid point of order. And as the Senator from New Hampshire has just pointed out, the bill clearly exceeds the budget; therefore, a budget point of order is valid and should be supported by the Members of this body. For those who would vote against the budget point of order, they are in effect saying: Throw the budget to the wind; we want to spend more money than is authorized; and we are going to do that. The response from our side, those people who wish we would stick with the budget, is to vote to sustain the budget point of order so that we can at least try to keep within the bounds we ourselves have set. The rejoinder of our colleagues who oppose sticking to the budget is: We will fix the bill in conference. But they are never willing to commit they will bring a bill out of conference that does not violate the budget. That is our problem. That is why we cannot accept the proposition from our colleagues that we will just pass this bill, that it is all going to somehow magically get fixed in the conference. There have been no commitments made that the bill that comes out of conference will be consistent with the budget. This is why the President has also expressed concerns. In the Statement of Administration Policy, after noting the fact that the bill pending before us is $62 billion above the President's request--which was for $256 billion--the letter reads as follows: The Administration's proposed authorization level of $256 billion over six years is consistent with the three principles listed above. And those are the principles that have been read before that called for a bill which does not raise taxes, which does not use smoke and mirrors, and which does not take money from the general fund to pay for the highways. The letter goes on to say: We support a reasonable [responsible] six-year bill and support many of the provisions contained in this legislation. However, we oppose S. 1072 and the pending substitute because their spending levels are too high and they violate these principles discussed above. Accordingly, if legislation that violates these principles (such as this legislation, which authorizes $318 billion) were presented to the President, his senior advisors would recommend that he veto the bill. If we sustain the budget point of order that has been raised by my colleague from Arizona, we will go a long way toward meeting what the President has asked us to do: to stick within the limits that he set and that we set. If, on the other hand, we support the motion to waive the Budget Act of the Senator from Missouri, we have basically said we are not yet prepared to face up to fiscal realities. We are not prepared to show we are going to be fiscally responsible. But trust us, when we get to conference, we might or might not be doing something to bring us back into fiscal balance. For those reasons, I urge my colleagues to support the budget point of order raised by the Senator from Arizona and to oppose the motion to waive all budget points of order offered by the Senator from Missouri.

Mr. KYL

Mr. KYL. I thank the Senator.

Mr. KYL. Madam President, if I could ask my colleague from Oklahoma a question, I appreciate the relative dollars received by States such as his and mine. I would just ask one question: Does the State of Oklahoma, under this policy, receive 95 cents in each of the next 5 years, and does the State of Arizona receive 90.5 cents for every dollar we send in?

Mr. KYL. Madam President, I ask unanimous consent to print in the Record the Statement of Administration Policy dated February 11, 2004, and also, though I did not quote from it, an editorial of the Wall Street Journal entitled ``Road Kill,'' and the date is February 10, 2004.

Mr. KYL. I am quoting now from a February 11, 2004, Statement of Administration Policy from the executive office of the President, Office of Management and Budget. As my colleagues know, these Statements of Administration Policy are issued with respect to important legislation and they set forth the administration's position on the legislation. After noting that the administration supports enactment of the 6-year highway funding bill, the letter says the following: The administration's proposal, as modified by the President's FY 2005 budget, would provide $256 billion over six years, an historically high level of investment for highways and transit. This proposal represents a $45 billion, or 21 percent, increase over the Transportation Equity Act for the 21st Century (TEA-21), the six-year bill enacted in 1998. The administration goes on in this Statement of Administration Policy to say the following: The administration believes that surface transportation reauthorization legislation should exhibit spending restraint and adhere to the following three principles. Now, let me digress before I state what those principles are. The reason the administration is talking about spending restraint is because the bill that is before us is far larger in its amount of spending than what the administration's proposal and the President's budget provide for, and it is far larger than is necessary. Frankly, in view of the status of our excess spending and our Federal budget deficit, it is more than we can afford. Moreover, it is greatly in excess of the funds we collect with the gas tax, which in the past has been the funding that has been used to pay for this highway bill. So this is what the President and the administration is writing in this letter. The administration believes the legislation should exhibit spending restraint and adhere to the following three principles: One, transportation infrastructure spending should not rely on an increase in the gas tax or other Federal taxes. Two, transportation infrastructure spending should not be funded through bonding or other mechanisms that conceal the true costs to the Federal taxpayers. And three, highway spending should be financed from the highway trust fund, not the general fund of the Treasury. It goes on: All spending for highways should be authorized and appropriated from the Trust Fund and derived from taxes imposed on the highway use, thereby maintaining the link between Trust Fund revenues and highway spending. Madam President, how does the administration's position and the articulation of the three principles under which it believes the bill should be funded compare with what we are considering on the floor here? I am going to go on and quote the administration's characterization of the legislation on the floor. However, the bill pending before the Senate authorizes $262 billion on highway and highway safety, which is $50 billion above the President's request, and $56 billion on mass transit, which is $12 billion above the President's request. In total the Senate bill authorizes $318 billion in spending on highways, highway safety, and mass transit over the next six years, a full $62 billion above the President's request for the same period. The Administration's proposed authorization level of $256 billion over six years is consistent with the three principles listed above. We support a responsible six-year bill and support many of the provisions contained in this legislation. However, we oppose S. 1072 and the pending substitute because their spending levels are too high and they violate these principles discussed above. Accordingly, if legislation that violates these three principles--such as this legislation which authorizes $318 billion--were presented to the President, his senior advisors would recommend that he veto the bill. There is more in the letter, but I think you get the gist of it. The administration is trying to tell us it would prefer a bill that, No. 1, adheres to the President's budget, to spend no more than $256 billion, and, No. 2, does not violate the three sensible funding principles the President lays out in the bill. But the statement of administration policy notes that the bill before the Senate is a full $62 billion above the President's request, and it concludes in this part by noting that: The administration, therefore, opposes Senate bill S. 1072 because the ``spending levels are too high'' and because ``they violate the principles discussed above.'' And if we end up passing legislation such as this, then the President's senior advisors will recommend he veto the bill. I think the President is getting the same message the rest of us should be getting from our constituents, the American people: Congress and the President have been spending too much money. In defense of the President, he has reached agreements in the past year with the leaders of the House and the Senate over spending limits and has said he would not support any legislation--and I presume he would have vetoed legislation--above that level. We have sent him bills at those levels. So in that regard, it is not the President's fault. But I take responsibility as a Member of this body, and all of my colleagues should as well, that we as the body that initiates the spending proposals and sends them to the President must act more responsibly in ensuring that we do not exceed revenues, that we send the President bills that are fiscally restrained and that will not add to our budget deficit. Alan Greenspan, the Chairman of the Fed, has made the point many times in recent months that the biggest threat to our economic growth and to our fiscal stability is profligate spending, and he has urged us to rein in our appetite for spending. Some of my colleagues on the other side have expressed great dismay that when the Office of Management and Budget was finally able to calculate the cost of the Medicare prescription drug bill from last year, instead of $395 billion of cost over 10 years, as calculated by the Congressional Budget Office, the administration's people found that it actually would be far higher than that, over $500 billion. Some of our Democratic friends have said--I gather they seem to suggest that therefore it is the President's fault. The President's people are the folks who found out that the spending was more than the $400 billion and have brought that forth and told us that. What should we do? Later on I am going to give my colleagues an opportunity to bring the spending back in line with the $400 billion of which they seem so enamored. I think that is plenty. I think we can live within that $400 billion limit. So we will all have an opportunity to decide whether we really mean it when we say the spending on that bill should be limited to $400 billion over 10 years. My point in digressing from the discussion of the highway bill is to note that there has been a focus on a lot of the spending the Senate and House have engaged in recently, and certainly the prescription drug and Medicare funding bill is one of the largest. Another we have had before us is the energy bill, which has a subsidy of about $30 billion. The administration budget request was $8 billion. That is another bill that, were we to pass in excess of $8 billion in subsidies, would exceed the administration's request. Here is a third example where the Senate is poised to pass a bill way in excess of the President's request. My point is it is not the White House that is doing the spending, it is the Congress that is passing the bills that have the spending in them. The President is sending us a signal that he is tired of this and his advisors are saying, to be precise about it, that they will recommend a veto to the President if we don't get this bill more in line with what the President's budget is. He is sending us a message. I urge my colleagues to read that message, to listen to what the President is saying. He means business. He is right. We are spending too much money. This bill is an over 40 percent increase in highway spending. We all know roads and bridges need to be built. We all understand some jobs are produced. That is fine. But do we, in this era of budget deficits and excess spending, have to increase spending in this one area by over 40 percent? Isn't a 21 percent increase over last year sufficient? The President's budget is almost flat. It has about a half a percent increase--except for homeland security and defense--for the discretionary part of our budget. We know it is going to be difficult to live within that, but we should try. But how can we in good conscience pass a budget that has virtually no growth in it, except for homeland security and defense, and then with regard to highways say that is an exception; we are going to increase spending by 21 percent? The income of how many people in this country will grow 21 percent this year? Not very many. Not, certainly, for the average working man and woman. I daresay, at a 21 percent increase, we can do just as well, in terms of building our roads and highways, and then if we need to adjust it later on because we are rolling in dough, we can do that. But for this year at this time with this kind of deficit, we should not do it. That is what the President's advisors are saying in this letter. What I would like to do is talk for a little bit about how the bill before us violates those three principles. Let me just cite a couple of examples. The first principle is that the transportation infrastructure spending should not rely on an increase in the gas tax or other Federal taxes. It doesn't rely on an increase in the gas tax, but it will rely upon Federal taxes because we will be taking money from the general fund. That gets us to the second and third points. Transportation infrastructure should not be funded through bonding--we are not going to do that--or other mechanisms that conceal the true cost to Federal taxpayers. I will show you in this bill how that happened. And the third principle is highway spending should be financed from the highway trust fund and not from the general fund of the Treasury. No. 2 and No. 3 go together here. Let me give a couple of examples from the highway part of this; not mass transit but the highway part is funded from the gas tax. We are going to collect $196 billion in gas tax revenue. That is how much we should spend on highways. But, no, we are going to be spending much more than that. How do we make up the difference? Obviously, Members of Congress are pretty creative in figuring out how to pay taxpayer dollars. So, a lot of new ways of deeming money to be in the trust fund have been thought up here. Some of them actually I suggest have some merit. Just to give one example: Interest in the highway trust fund. The highway trust fund is a fund that has maybe $9 billion or $10 billion, give or take $1 billion, in it at any given time. You have to have some money in the bank. It is like a bank account, to pay the checks when they come due. There is always money coming in when people buy gasoline and pay the tax, and one thing we could do is attribute to the trust fund interest which is otherwise attributed to the general fund. That is between $1 and $2 billion. I am perfectly happy to have that attributed to the trust fund. If you go through some exercises like that, you can get up to $214 billion, more or less, in revenue you say is somewhat legitimately attributed to gas tax revenues. Let me give you two examples of revenues that are being attributed to the highway trust fund that really are not revenues in any sense of the term, and, therefore, would violate both principle No. 2 and principle No. 3. One of these concepts has to do with the fact that counties, cities, towns, churches, and schools are by and large exempt from paying a gas tax. What we are going to do in this bill is pretend like they actually paid the tax. That is worth, I think, $8 billion. That is a nice thing, if you can get away with it. But I don't think it reflects reality. That is $8 billion. We are simply going to treat this as if the trust fund had received all of the money from counties, cities, towns, and so on. Is the general fund going to collect that money from the schools, churches, cities, and towns? No. There isn't going to be any new revenue. Your school district is not going to have to pay money for the gasoline that it buys for the schoolbuses that are driven. They will not have to pay the Federal gasoline tax, but we will pretend like it does. That $8 billion is pretend money. There is another part of this which they calculate at $9 billion that is attributed to the highway trust fund. What is this? The gas tax is 18.3 cents. But for ethanol users, we provide that they don't have to pay 5.2 cents of that. There is an exemption for that of 5.2 cents on each gallon. In this bill, we are going to pretend like they paid that to the trust fund. We are going to actually collect their money. The revenue will actually be collected. But when people ask for a refund, we will send it right back to them. Assuming that most people will ask for a refund because they can get it, we are going to be sending the money right back to them. As a result, we take with one hand and we give back with the other, and the fund is no better off. There is no real money in the fund except what was there before. We haven't added to the fund. We have collected the 5.2 cents and then we give it back when the people apply for the refund. Since Federal contractors actually have to pay their people, buy asphalt, and run their road graders, how are we going to make up this $17 billion? As I have indicated, in both cases this is not real money. We are going to get it from the general fund. We are going to just spend that money from the general fund. How are we going to do that? It is not in the budget. The Finance Committee has come up with a variety of tax law changes which will close certain corporate loopholes and in other ways raise revenue that is not currently raised. We had hoped and anticipated that additional revenue would be applied to a reform which has to do with corporate tax relief that will have to be passed this year because the WTO--the World Trade Organization--has ruled against the United States in a case in which we have been providing some tax relief to American manufacturers abroad. We are going to have to take that tax relief away in order to make these companies whole. We will have to pass a different kind of tax relief. To do that, you have to have the ability to pay for it. That is what this money was going to be used for. Instead of using it for that, we will use it to build bridges and highways. We will take that money, put it in the general fund, and send that over to the highway trust fund. We are violating the principles laid down by the administration that none of this bill should be paid for by either a mechanism that conceals the true cost to the taxpayers or financed from the general fund of the Treasury. This bill, both by being in violation of at least some of the principles laid down by the President and by being $62 billion in excess of what the President said the bill should cost, is going to create a situation in which the senior advisers of the President are going to recommend a veto. We should not be passing a bill under those circumstances or be passing this bill under those circumstances. What do we do about it? There are a couple of different options. One of the options is that we could simply modify the bill to take out that $62 billion, get it back down to the level of the President's budget, and support that. I have an amendment that would do that. In effect, it will say the President's budget of $256 billion--that represents a 21- percent increase--ought to be enough, and, therefore, we would finance only that amount of money. I think we should vote on that and express our will in that regard, support the President, and be willing to begin exercising some fiscal restraint. Some people say they do not want to reduce the 6-year funding by that much money. They would actually be able to spend over 40 percent more than last year and, therefore, maybe what we should do instead is simply reauthorize the existing law for 1 year, get past the election, and then do another 6-year authorization bill that will spend 40 percent more than last year, since, obviously, that is going to cost more money than we are taking in in gas tax revenues, since there are objections to taking it from the general fund because that creates a horrible precedent, and therefore we will raise the gas tax. We don't want to tell people that because, of course, in an election year we wouldn't want anybody to really think we intend to raise the gas tax. So let us be real quiet about this and not discuss this alternative too much because it assumes that next year we will come in and provide this large amount of money and raise the gas tax. We could do that. It certainly is at least better than what we have before us, because it simply reauthorizes at existing levels the highway authorization bill for 1 year and we can decide to do it next year at the time. Some of us would oppose the gas tax increase. I suggest that either of those alternatives are better than the third alternative, which is to pass the bill that is before us. I want to make this clear. There are not very many people in this body for whom I have greater respect than the chairman of the EPW Committee, the Senator from Oklahoma. I don't mean to suggest in anything that I am saying here that the effort of the committee and the chairman of the committee is anything other than an attempt in good faith to try to satisfy the demands of our country's infrastructure and provide the best possible highway transit funding program they can. I will say they have been very unfair about the way they treated my State, but that is another matter that I will talk about in a minute. I want to make it clear that the chairman has a tough job. He has done his very best in this regard. I want that to be very clear. But the third alternative is to pass the bill before us. The argument made is that we know it is way too much money but we will get into the conference committee because the House will pass a bill and then you will have the House and the Senate bills. We will get together and figure out an appropriate amount of money. We will get the President's people in there to negotiate to make sure it won't be too much so the President won't veto the bill. That is another way to do it. I can't support that because we would be supporting a bill out of this body that is far too big in spending. The House bill presumably will be above the President's request. It is a little hard to figure out how we are going to start with a bill that is $62 billion over what the President wants, and the House bill is--I don't know how much but let us pick a number--say, $50 billion more than the President wants. And somehow they are going to compromise at a number closer to what the President wants. That is ordinarily not the way things work around here. I think it will be close to $256 billion. They are playing with fire and risk sending the bill to the President which he is going to veto. That will demonstrate that we are not very responsible. I think that would be the wrong thing to do. Let me address the other subject I said I would address, and that is the fairness of this bill. I say to my colleague from Oklahoma that he would be the very first to say it is almost impossible to get a bill that spends this amount of money and divvy it up among over 400 Members of the House of Representatives and 100 Senators and have everybody think they have been treated fairly, especially given the historic unfairness of the way the formulas have worked. Again, he has a tough job. I make the point right up front that I know he has tried his hardest to do this right. In fact, one of his guiding principles was to try to get all of the States up to a level of funding equal to 95 cents out of every dollar that they send to Washington for the highway gas tax. The minimum level today is 90.5 cents. There are a lot of us who represent donor States such as Arizona. We are donors. We send $1 and we only get 90.5 cents back in highway revenues. The chairman wanted to try to do something about that to try to remove some of that unfairness. I commend him for that. For the most part, he has gotten States up to 95 cents out of every $1. A lot of States are donee States, and they are way above a dollar. Obviously, the reason only some States get 95 cents back is some States get more than $1. But I commend the chairman for trying to get at least to 95 cents. The problem is, as has been explained to me, there are some fast- growth States, such as Florida, California, Colorado, or Arizona. We have been at such a low level in the past in terms of the amount we were reimbursed, the 90.5 cents, and we are growing so fast in order to keep up with our growth, it would require so much money to catch us up to the 95-cent level that basically it cannot be done. So they will bring other States up to 95 percent, States that already for the past 5 years have done very well, for the past 10 years have done very well. For those States that have continually lagged behind, such as the ``growth'' States I mentioned, since it is so darned expensive to catch them up, we just will not try to do that for 5 years. So here is the result we get, demonstrated on this chart. I note the dark blue represents on the chairman's chart a green color which he demonstrated the other day when we were discussing this, saying: Arizona actually will increase its spending over this period of time. Then in 2009--assuming the money is there--you will go back up to 95 cents like everyone else. In 2004, the State of Arizona, which is in the dark blue, would get a little bit more--it gets 90.5 cents. That is what is guaranteed. In 2005, we get 90.5 cents. In 2006, we get 90.5 cents, as well as in 2007. In 2008 it goes up a little bit but is still under 91 cents. Then if there is enough money in 2009, hopefully we get to go back up to where everyone else is, guaranteed 95 cents. We just took a State perhaps roughly comparable to Arizona, and this State happens to be Missouri, but I could pick any number of States that illustrate the same idea. Missouri, on the other hand, is guaranteed 95 cents each one of these years. Here is the point: During this 5-year period of time--because there was not enough money, some State had to sacrifice or be sacrificed and that happens to be my State of Arizona. I don't like that, and I don't think it is fair. I would have rather had, in this case, Missouri brought down to 93 and raise Arizona up to 93 rather than taking some all the way up to 95 and leaving the rest of us down at 90. My colleague from Oklahoma says, but you are getting a substantial percentage increase and even a dollar increase, because you are growing so fast. That is true. But in terms of the total amount of money Arizona would lose during this period of time, it is over $160 million. So during this 5 years, Arizona will lose out on over $160 million it would have received if it had been treated the same as the other States and gotten the base of 95 cents. Remember, there are a lot of States that are way up here that are getting over 100 cents, 110 cents; some are getting several dollars back. I will not name names. The bottom line is some States are treated very well and States such as my State of Arizona are not treated so well. I obviously cannot be expected to support a bill that picks on a few States such as mine and says, look, we just did not have enough to go around so you have to be the one that does not get paid what everyone else gets paid. We are sorry; be happy with the fact you are getting more money than you have ever gotten before. My answer is, we are growing faster than anybody and therefore, of course, we are getting more money than we got in the past, but we are not getting the same relative amount other States are. We are not getting 95 cents on our dollar contributed. We are still stuck down here at this 90.5 cent level. That is not fair. I want to be clear about this. My opposition to this legislation is based upon the first two points I made. It is too much money and we are going to fund it now out of general revenues rather than the highway trust fund, as a result of which there will be no logical constraint on how much we spend in the future. At least pegging it to what we received in Federal gas revenues in the past was a break-loss, a check and a balance, and it prevented us from going beyond that amount of money. But once you begin to dip into the general treasury, there is no logical end to how far you can dip. As I said, you could double the amount of increase the administration has asked for, you could go to over 40 percent increase and say, we are just going to make part of that up through general revenues. Why not 50 or 60 percent? There is no logical end once you get away from the highway trust fund. That is why I oppose this bill. The sponsors of the bill were not able to equalize the States, as hard as they tried, in terms of the funding formula, and therefore there are some Members from some States that obviously have to point this out, have to demonstrate the unfairness and inequality of it and ask the bill be amended to provide a more fair result. The amendment I spoke of that funds the bill at $256 billion over 6 years does not address this problem. So I make it clear, the amendment I have offered that allows people to vote for an amount in the highway spending that is consistent with the President's budget request does not fix this. I am willing to support that amendment. I am willing to send the bill to conference with that amount of money, but I am also hopeful my colleague from Texas will be offering an amendment tomorrow--has filed it and will offer tomorrow--that will to some degree at least fix this problem for those states such as Texas and Arizona which are not guaranteed the same 95 cents everyone else is guaranteed. I am hopeful we will be able to vote on that and support that tomorrow. There are other amendments which I will speak to later, one that my colleague Senator McCain has offered that represents a good compromise in the way we fund highway revenue and reimburse the States. We will talk about that tomorrow. There may be an additional amendment offered tomorrow we will want to support. I am hoping I will have a chance to vote on these tomorrow. The way this bill has procedurally come before the Senate, we will vote on a cloture petition tomorrow at 9 o'clock. That is a vote which presumably will pass. It means we then have only 30 hours of debate on the bill and opportunity to offer amendments and have those amendments voted on. My understanding is there are over 400 amendments that have been filed. On a bill of this importance and this magnitude, I don't think it is right we only have 30 hours to dispose of 400 amendments. It obviously cannot be done. I ask for my colleagues' understanding that when this debate begins after the cloture motion is approved tomorrow--assuming it is--we will have an opportunity to offer these amendments, have a brief period of time to discuss them, have a vote on them, and go on to the next amendment. It is not my intention to try to garble up the works or slow things down. I hope we can speed things up to the point we can get these amendments considered within that period of time. If not, because there are actually two different cloture motions here, we may have to have a second cloture vote and then have another 30 hours so we can continue to try to get the amendments adopted. That is something we are just going to have to work through. I ask for my colleagues' cooperation so that perhaps we can avoid that second 30 hours. But if necessary, obviously, we will have to use that. Now, if there are questions or refutation of anything I have said, I am happy to hear that and I can stay for a few minutes to try to answer or respond to questions. If my colleague from Oklahoma would like to speak, I yield the floor to him. Exhibit 1 Executive Office of the President, Office of Management and Budget, Washington, DC, February 11, 2004. Statement of Administration Policy s. 1072--safe, accountable, flexible, and efficient transportation equity act The Administration supports enactment of a six-year highway, highway safety, and transit authorization bill and procedural efforts that would limit consideration of extraneous amendments and bring the bill to an up or down vote. Such a multi-year authorization would provide States and localities with predictable funding that enhances long- term transportation planning. The Administration's proposal, as modified by the President's FY 2005 Budget, would provide $256 billion over six years, an historically high level of investment for highways and transit. This proposal represents a $45 billion, or 21 percent, increase over the Transportation Equity Act for the 21st Century (TEA-21), the six-year bill enacted in 1998. The Administration believes that surface transportation reauthorization legislation should exhibit spending restraint and adhere to the following three principles: (1) transportation infrastructure spending should not rely on an increase in the gas tax or other Federal taxes; (2) transportation infrastructure spending should not be funded through bonding or other mechanisms that conceal the true cost to Federal taxpayers; and (3) highway spending should be financed from the Highway Trust Fund, not the General Fund of the Treasury. All spending for highways should be authorized and appropriated from the Trust Fund and derived from taxes imposed on highway use, thereby maintaining the link between Trust Fund revenues and highway spending. However, the bill pending before the Senate authorizes: $262 billion on highways and highway safety, which is $50 billion above the President's request, and $56 billion on mass transit, which is $12 billion above the President's request. In total the Senate bill authorizes $318 billion in spending on highways, highway safety, and mass transit over the next six years, a full $62 billion above the President's request for the same period. The Administration's proposed authorization level of $256 billion over six years is consistent with the three principles listed above. We support a responsible six-year bill and support many of the provisions contained in this legislation. However, we oppose S. 1072 and the pending substitute because their spending levels are too high and they violate these principles discussed above. Accordingly, if legislation that violates these principles (such as this legislation, which authorizes $318 billion) were presented to the President, his senior advisors would recommend that he veto the bill. In addition, the Administration opposes inclusion in a surface transportation bill of unrelated provisions regarding Amtrak. Any legislation regarding the future of Amtrak should be considered separately and should provide for meaningful reforms, such as those proposed by the Administration. If surface transportation legislation containing such provisions were presented to the President, his senior advisors would recommend that he veto the bill. The Administration wants to work closely with Congress to achieve an acceptable bill and recommends attention to the following areas. Safety. The Administration appreciates the creation of a new Highway Safety Improvement Program (HSIP) and a strong safety belt incentive program, but believes the bill should also require States that have not enacted primary safety belt laws or achieved safety belt use rates of 90 percent to spend no less than 10 percent of core highway safety construction HSIP funds on behavioral safety projects eligible under the Section 402 program. In addition, the Administration opposes limiting a State's flexibility to use HSIP funds by requiring mandatory set-asides for rail-highway grade crossings or safe routes to schools. The Administration believes that several programs of the National Highway Traffic Safety Administration (NHTSA) should be consolidated and a portion of those funds should be used to reward States that aggressively reduce fatalities in the manner proposed by Section 2001(a) of the Administration's proposal. Also, language similar to that included in the Administration's proposal on providing for NHTSA-administered highway safety data grants should be added to help States improve their data to reasonable standards. Environmental Provisions. The Administration opposes substantially broadening the list of eligible projects for Congestion Mitigation and Air Quality (CMAQ) funding because many of these new projects would have minimal air quality benefits. Eligibility for CMAQ funds should be limited to projects that achieve air quality benefits, particularly because the number of Clean Air Act nonattainment areas, which need this type of funding, will increase. The Administration believes that the bill should improve project delivery while protecting our environment. The bill should include a 180-day statute of limitations for legal challenges following final agency approval of highway and transit projects. This limit is necessary to reduce litigation uncertainty that can impede project development for years. The bill should also avoid adding new requirements to the transportation planning process, and integrate the transportation planning process with other environmental review processes to reduce redundancies. With respect to project review under the National Environmental Policy Act, the bill should clarify the authority of State and local governments to be joint lead agencies, with the U.S. Department of Transportation, in preparing environmental documents. The Administration also notes that section 1511 is inconsistent with the President's proposal is SAFETEA, and encourages the Senate to adopt the President's proposal. The Administration also believes that the bill should clarify standards pertaining to public park and recreational lands, wildlife and waterfowl refuges, and historic sites-- commonly referred to as ``Section 4(g).'' A clarification of the Section 4(f) definition of ``prudent'' is needed to forestall confusing standards applied unevenly by the Federal Courts of Appeals. In addition, the bill should address the overlap between Section 4(f) and Section 106 of the National Historic Preservation Act to decrease project delays and uncertainty. In addition, the Administration believes that the bill should not include a mandatory two percent set-aside from the Surface Transportation Program (STP) to support a highway stormwater discharge mitigation program. Stormwater discharge mitigation costs are already eligible under STP. New Regulatory Mandates. The Administration strongly opposes the numerous mandated rulemakings for NHTSA and the FMCSA. These provisions predetermine timetables and outcomes without adequate grounding in science, engineering and proof of net safety benefits. By prescribing specific requirements and mandating priorities, these provisions will delay or interfere with ongoing safety initiatives and may have the unintended consequence of redirecting agency resources away from programs that will do more overall good for safety. The Administration also objects to the inclusion of: (1) costly and burdensome provisions of the bill requiring FMCSA to issue medical certificates to 6.5 million commercial drivers while limiting the performance of medical examinations to physicians alone; and (2) the bill's expansion of hours-of-service safety exemptions. Financing and Freight Mobility. The Administration appreciates the bill's expansion of the Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program by lowering the project threshold and broadening the list of eligible projects to include freight projects. However, the Administration opposes removing the TIFIA program requirement that a borrower have a dedicated source of revenue for repaying its TIFIA loan. Likewise, the Administration opposes allowing railroads to use Federal grants to pay the credit risk premium or repay Railroad Rehabilitation and Improvement Financing loans. The Administration supports amending the bill to give States the ability to manage congestion and raise additional revenue by allowing drivers of single occupant vehicles to use High Occupancy Vehicle lanes by paying tolls. The Administration also supports amending the bill to provide States flexibility to implement variable tolls on interstates for congestion management or air quality improvement purposes. In addition, the Administration supports amending the bill to incorporate the Administration's proposal to amend the Internal Revenue Code to permit the issuance by State and local governments of ``private activity bonds'' for highways and surface freight transfer facilities. Public Transportation Programs. Aside from concerns about overall funding levels, the Administration is pleased that the bill includes provisions to improve human service transportation coordination and expand the ``New Starts'' program, but is disappointed by the omission of a performance incentive program to reward transit agencies based on increases in transit ridership. Accountability and Oversight. The Administration is pleased that the bill includes stringent project management and financial plan requirements which were requested by the Administration. Improved accountability and focused oversight by the Federal Highway Administration will help maximize the effective use of available funds. Funding Firewalls and Guarantees. The Administration supports a separate category or ``firewalls'' for determining the level of spending from the Highway Trust Fund, but only in the context of the Administration's proposal for annual statutory limits on discretionary spending. In addition, the Administration does not propose the creation of ``firewalls'' for general fund spending on such critical areas as defense and homeland security, and therefore opposes such treatment for general fund spending on mass transit programs. Byrd Test Change. The Administration opposes weakening the Byrd Test to compare spending authority to current resources plus for years, rater than two years, of estimated future revenue. The Byrd Test was established at the creation of the Highway Trust Fund in 1956 to ensure that future revenues would be sufficient to cover outstanding spending authority. The Byrd Test has been successful in ensuring the Highway Trust Fund's solvency for nearly 50 years, and modification could allow levels of spending that cannot be sustained by estimated revenues to the Highway Trust Fund. Park Roads. The Administration supports the funding level for park roads, but opposes the provisions of section 1806 of the bill that establish a park funding priority system that would reduce the Administration's ability to implement the President's Park Legacy Program. Allocation of park road funding should be consistent with the sound asset management approach on which the President's Park Legacy Program is based and which is currently used by the National Park Service, in a manner that will best address the needs of all parks, not just a few. Cross-Border Transportation. The Administration opposes the bill's provisions defining foreign trucks and buses engaged in the cross-border transportation of cargo and passengers into the United States as ``imports.'' Existing statutory provisions already address cross-border transportation safety, and the revised definition would significantly disrupt the almost $2 billion daily cross-border movement of goods. MAGLEV. The Administration opposes the continued authorization of funding for Magnetic Levitation Transportation Technology Deployment (MAGLEV). The Administration's SAFETEA proposal did not seek funding for MAGLEV and believes funds can be better spent investing in the Nation's public transportation systems. Budget estimates and enforcement This bill would affect direct spending and receipts. It is critical to exercise responsible restraint over Federal spending in a manner that ensures deficit reduction and the Administration looks forward to working with Congress to control the cost of this bill. The Budget Enforcement Act's pay-as-you-go requirements and discretionary spending caps expired on September 30, 2002. The President's FY 2005 Budget includes a proposal to extend the discretionary caps through 2009, a pay-as-you-go requirement that would be limited to direct spending, and a new mechanism to control the expansion of long-term unfunded obligations. OMB's cost estimate of this bill currently is under development.

Mr. KYL. Mr. President, I rise to speak about the highway transportation bill which we are on right now. I will discuss basically two general points. The first has to do with the amount of funding in the bill and the administration position on that matter. Then secondly, I will talk a little bit about the funding formula in the bill. As everyone knows, we are talking about a bill that would authorize and pay for the highway transportation and mass transit needs of the country over the next 6 years, financed historically by the gas tax. The 6-year bill that has been offered intends to be more generous than that by taking in some additional revenues, providing a lot more funding, and extending the authorization that currently exists for a period of 6 years. I ask unanimous consent that at the conclusion of my remarks this Statement of Administration Policy be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, there has been a great deal of focus on the recent Senate testimony of David Kay, the former head of the Iraq Survey Group. Unfortunately, most media reports have highlighted only those statements by Dr. Kay that might be used to criticize the administration. They have largely ignored Dr. Kay's assertions that Iraq was more dangerous than we even realized prior to the war, that Saddam Hussein clearly intended to continue developing weapons of mass destruction, and other statements which contradict the false notion that the administration ``hyped'' intelligence on Iraq. I thought it would be beneficial for the American people to have a chance to read Dr. Kay's entire testimony, including his edifying exchanges with members of the Senate Armed Services Committee. I therefore ask unanimous consent that his entire testimony be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I wish to respond to a few of the comments our colleague from North Dakota has just made. I begin with the proposition that it does help to have been on the Senate Intelligence Committee or to be a member of the committee today to conduct a more thoughtful, reasoned discussion of this debate than has generally been characterized by the media accounts. People in the media tend to try to capsulize everything in an attention-grabbing headline way when in fact intelligence is a very complex, difficult proposition that needs to be handled and approached in the most cautious and careful manner. I think it is important for those people who have been on the committee or, as the Senator from Missouri sitting next to me noted, currently just received briefings as a member of the committee--it is important for them to be able to respond when comments have been made such as those just concluded. David Kay did not say we got it all wrong. I invite anyone who would like to bring to this floor a quotation from David Kay that says ``we got it all wrong'' to do so. He did not say that. I know that is what opponents of the Bush administration wish he had said, but he didn't say that. Let me quote to you some of the things he did say. He was asked a question by Senator McCain testifying before the House Armed Services Committee: You agree with the fundamental principle here that what we did was justified and enhanced the security of the United States and the world by removing Saddam Hussein from power? David Kay: Absolutely. But then Senator Kennedy asked a question that kind of got to some of the points our colleague from North Dakota just made. He asked: Many of us feel that the evidence so far leads only to one conclusion: that what has happened was more than a failure of intelligence, it was the result of manipulation of the intelligence to justify a decision to go to war. David Kay: All I can say is if you read the total body of intelligence in the last 12 to 15 years that flowed on Iraq, I quite frankly think it would be hard to come to a conclusion other than Iraq was a gathering, serious threat to the world with regard to WMD. That is exactly the conclusion that other Members of this body articulated. I won't quote names, but I remember several of my colleagues, including a Member on the other side of the aisle, saying pretty much the same thing. President Clinton said almost exactly the same thing. In fact, in 1998, we overwhelmingly passed a resolution in this body authorizing President Clinton to take action to remove the Saddam Hussein regime in Iraq precisely because of this. The intelligence that existed then, that existed before then, and that existed before our most recent conflict with Iraq all verified what David Kay said was true. So far from saying that we got it all wrong, David Kay is saying we were perfectly justified in taking the action we took. Part of getting it all wrong would have been the information that we had regarding the violations of the U.N. resolutions. What did David Kay think about that? He said: In my judgment, based on the work that has been done to this point of the Iraq Survey Group, and in fact, that I reported to you in October, Iraq was in clear violation of the terms of Resolution 1441. Resolution 1441 required that Iraq report all of its activities: one last chance to come clean about what it had. We have discovered hundreds of cases, based on both documents, physical evidence and the testimony of Iraqis, of activities that were prohibited under the initial U.N. Resolution 687 and that should have been reported under 1441, with Iraqi testimony that not only did they not tell the U.N. about this, they were instructed not to do it and they hid the material. Iraq was in clear and material violation of 1441. They maintained programs and activities, and they certainly had the intentions at a point to resume their program. So there was a lot they wanted to hide because it showed what they were doing was illegal. I hope we find even more evidence of that. This is what David Kay actually said. One of the arguments made was that, somehow or other, the CIA and our intelligence community were pressured by the Bush administration to somehow modify the intelligence to suit their nefarious purposes, the implication being that the administration wanted to go to war and needed to somehow manipulate the intelligence to reach that conclusion. Here is what David Kay said about that: And let me take one of the explanations most commonly given: Analysts were pressured to reach conclusions that would fit the political agenda of one or another administration. I deeply think that is a wrong explanation. And never--not in a single case--was the explanation, ``I was pressured to do this.'' The explanation was, very often, ``The limited data we had led one to reasonably conclude this. I now see that there's another explanation for it.'' And each case was different, but the conversations were sufficiently in depth and our relationship was sufficiently frank that I'm convinced that, at least to the analysts I dealt with, I did not come across a single one that felt it had been, in the military term, ``inappropriate command influence'' that led them to take that position. Some people in saying, well, maybe we didn't get it all wrong, but what was the real state of intelligence here and did it comport with what we thought we knew--I thought the colloquy between Senator McCain and David Kay at this hearing was most interesting. Senator McCain: Saddam Hussein developed and used weapons of mass destruction; true? David Kay: Absolutely. Parenthetically, I would note, this is not an answer from a man who is saying we got it all wrong because, remember, the allegation had been that Saddam Hussein had developed and used weapons of mass destruction. So he didn't say: We got it all wrong. He said: Absolutely. Senator McCain then: He used them against the Iranians and the Kurds; just yes or no. David Kay: Oh, yes. Senator McCain: OK. And U.N. inspectors found enormous quantities of banned chemical and biological weapons in Iraq in the '90s? David Kay: Yes, sir. Senator McCain: We know that Saddam Hussein had once a very active nuclear program. David Kay: Yes. Senator McCain: And he realized and had ambitions to develop and use weapons of mass destruction. David Kay: Clearly. Senator McCain: So the point is, if he were in power today, there is no doubt that he would harbor ambitions for the development and use of weapons of mass destruction. Is there any doubt in your mind? David Kay: There's absolutely no doubt. And I think I've said that, Senator. There is one final thing I would like to talk about that David Kay actually said. Senator Clinton asked him a question at that hearing as follows: I think that rightly does raise questions that we should be examining about whether or not the U.N. inspection process pursuant to 1441 might not also have worked without the loss of life that we have confronted both among our own young men and women, as well as Iraqis. David Kay: Well, Senator Clinton, let me just add to that. We have had a number of Iraqis who have come forward and said, ``We did not tell the U.N. about what we were hiding, nor would we have told the U.N. because we would run the risk of our own''--I think we have learned things that no U.N. inspector would have ever learned given the terror regime of Saddam and the tremendous personal consequences that scientists had to run by speaking the truth. That's not to say, and it's not incompatible with the fact that inspections accomplish a great deal in holding a program down. And that's where the surprise is. In holding the program down, in keeping it from break out, I think the record is better than we would have anticipated. I don't think the record is necessarily better than we thought with regard to getting the final truth, because of the power of the terrorist state that Saddam Hussein had. The bottom line is that David Kay recognizes that, while the U.N. inspectors found certain things, the inspections that he performed were even more helpful because of the pressure that the Iraqis had been under when Saddam Hussein was in power. But what David Kay said--if you read all of the rest of the testimony--was basically this: There are many things we found about Saddam Hussein's weapons program. We even found some weapons, and we talked to a lot of Iraqis who told us that he had every intention of reinitiating the programs once the sanctions were lifted. Everything was in place for him to do that. The thing that puzzled David Kay is that we had not found the stocks of chemical weapons, primarily. We knew that he had artillery shells, some of which were filled with chemical agents, and others that could be filled with chemical agents, and that he had large stocks of those agents, as well as some biological agents. How do we know that is true? Because the Iraqis admitted that and the U.N. inspectors confirmed it. He admitted it in 1998. He never explained what happened to those stocks thereafter. Now, one would think that when he admits that he has the stuff--and we know that he used that same kind of weapon before--that if he doesn't prove to us that he got rid of it--in fact, he offers no explanation about where it is--you have to assume that he hasn't. It would be imprudent to assume otherwise. So to suggest that David Kay came back and said, no, we got it all wrong, that is wrong. What he puzzles about was why we had not found this stock of artillery shells. Before the military activity was taken, all of the Senators were invited every day at 9 o'clock to go to the secure area of the Capitol to visit with the general and CIA people who briefed us on the status of the war. Every morning, if colleagues will remember, one of the things they briefed us on was how close our troops were getting to the red line--that line around Baghdad--where we had information that artillery with chemical shells could be lobbed against our soldiers. We did everything we could to stop that. We bombed warehouses of artillery, and we were trying to take out the command and control that would issue the orders. We dropped millions of leaflets on the military commanders of the Iraqis, saying they would be war criminals if they carried out orders to fire those artillery shells against our troops. We were surprised when we took the Baghdad Airport and they had not fired the artillery shells. We thought they were going to use them. We went to a lot of trouble to take them out. Maybe we took them out. Maybe we ruined their plan with command and control. Maybe they had gotten rid of them by then. Maybe they buried them or sent them to Syria. Secretary Rumsfeld testified yesterday that there are about five different scenarios that could explain why we have not found the artillery shells so far. David Kay says he is not sure we will ever find them, or that they existed on the day we went to war against Iraq. Maybe they had been destroyed, although you would wonder why Saddam Hussein didn't tell anybody about it. Maybe they were sent to other countries or maybe they were given to terrorists. That would be a terrible thing, but we don't know. Obviously, we had no evidence that they no longer existed. At one time, they existed. So it is far from David Kay saying we got it all wrong; he is saying that we got it all right, except--and I am paraphrasing here--for the fact that we cannot explain what happened to those weapons, and he wonders whether they existed when we went to war. What does George Tenet have to say about it? Our colleague says that George Tenet's comments were defensive. Maybe they were a little defensive. If you have been the subject of attack for several weeks about how you got it all wrong, you would be defensive, too. I found his speech today to be a very interesting presentation, a careful presentation about what, in fact, we knew, why we knew it, and why it would not have been prudent for us not to take action on it. I thought this to be particularly interesting. One of the things that he said was: To understand a difficult topic like Iraq takes patience and care. Unfortunately, you rarely hear a patient, careful, or thoughtful discussion of intelligence these days. But these times demand it because the alternative--politicized, haphazard evaluation, without the benefit of time and facts-- may well result in an intelligence community that is damaged and a country that is more at risk. I don't find that defensive. Rather, I find it an attempt to try to put this discussion into a thoughtful, careful way of analyzing where we were right and where we were wrong, and how to make sure we are as right as possible in the future. He went on to say: By definition, intelligence deals with the unclear, the unknown, the deliberately hidden. What the enemies of the United States hope to deny, we work to reveal. The question being asked about Iraq in the starkest terms is, were we right or were we wrong? In the intelligence business, you are almost never completely wrong or completely right. He goes on to detail the information we had about the missile program of the Iraqis. I would like to say to colleagues, with respect to the missile program, it appears that we got it right. He talks about what we thought we knew, what he told the President we thought we knew, and what we believe is the case of our military actions. And with respect to their efforts to develop missiles that were in violation of U.N. resolutions, they appear to have gotten that pretty well right. His conclusion on that was this, and I will quote it: My provisional bottom line on the missiles: We were generally on target. He says that because he urges us to consider the fact that there is still a great deal of information left to be discovered in Iraq. They are nowhere near complete in their effort to try to find what Saddam Hussein had and to analyze how dangerous it was. With respect to that general proposition, I want to quote this: And to come to conclusions before the war other than those we reached, we would have had to ignore all the intelligence gathered from multiple sources after 1998. He detailed many here. He said: My provisional bottom line on missiles: We were generally on target. Regarding the unmanned aerial vehicles, he said: My provisional bottom line today: We detected the development of prohibited and undeclared unmanned aerial vehicles. But the jury is still out on whether Iraq intended to use its newer, smaller, unmanned aerial vehicle to deliver biological weapons. With regard to nuclear weapons, he said: My provisional bottom line today: Saddam did not have a nuclear weapon, he still wanted one, and Iraq intended to reconstitute a nuclear program at some point. We have not yet found clear evidence that dual-use items Iraq sought were for nuclear reconstitution. We do not yet know if any reconstitution efforts had begun. But we may have overestimated the progress Saddam was making. That is in contrast to what he said before the first gulf war when he noted that that colored the way they approached their analysis with respect to his nuclear program. Then, with respect to a biological program, he said: My provisional bottom line today: Iraq intended to develop biological weapons. Clearly, research and development work was underway that would have permitted a rapid shift to agent production if seed stocks were available. But we do not yet know if production took place. And just as clearly, we have not yet found biological weapons. Finally, with regard to the chemical weapons, he said: My provisional bottom line today: Saddam had the intent and capability to quickly convert civilian industry to chemical weapons production. However, we have not yet found the weapons we expected. I will quote a little more on this point: I have now given you my provisional bottom lines, but it is important to remember that estimates are not written in a vacuum. Let me tell you some of what was going on in the fall of 2002. He proceeds to detail several kinds of sources that came to the attention of the intelligence community, sources which provided information which no rational intelligence leader would have ignored: Saddam Hussein calling together his nuclear weapons committee--I am not going to go into all of this detail. He quotes, ``A stream of reporting from a different sensitive source'' that caused the intelligence community to advise the President, the Vice President, and others that they believed Saddam Hussein was actively trying to pursue these programs. He said: So what do I think about all of this today? Based on an assessment of the data we collected over the past 10 years, it would have been difficult for analysts to come to any different conclusions than the ones we reached in October of 2002. That is what George Tenet said. You can say he is being defensive. I say it is important for George Tenet to speak out and to explain to the American people how difficult it is to get intelligence, what we thought we knew at the time, what he advised our leaders of, what we think we know today. He also noted the fact they have instituted efforts internally to try to discover why they didn't know things perhaps they should have known, how they can do it better in the future. When you combine that with what David Kay said about the fact there was no evidence that our leadership in any way pressured our intelligence community to come to different conclusions, you have to stand up to the people who gathered this intelligence and presented it to the leaders. They maybe didn't get it all right, but they did their best. And with respect to our leadership, there is no reason to believe they didn't treat this information with the utmost of seriousness and honesty; that they presented it to the American people, exactly as George Tenet said today. They presented it in an honest way and that it would have been irresponsible of them to have acted any differently, to have presented it any differently given the information that had been presented to them. I think that had the President, knowing what he now knows and all of this would eventually come out even though a lot of it is classified information, if the President had not taken action and, God forbid, something had happened, a lot of people on the Senate floor, in the Senate, around the country, and certainly pundits would be saying: Why did President Bush ignore these warnings? Why did he ignore what the intelligence community came up with? There are some people who are saying that with respect to the attack of 9/11 when the President had virtually nothing, in fact, when we had obviously no reason to believe that on September 11 there would be an attack from the airliners that would be used by the al-Qaida terrorists, and yet with virtually nothing to go on, people are saying the President should have known and done something about it. With all of the evidence we had about Saddam Hussein and all of the evidence with regard to Iraq, to have ignored that would have been absolutely irresponsible. My colleagues who are criticizing him today for acting would then be criticizing him for not acting, I believe. In a political season, you are darned if you do and darned if you don't. We understand that. But I think it is important, as George Tenet asked us to do, especially for those of us in the Senate, especially those of us who served on the Intelligence Committee, to urge people to approach this subject from a sober, careful, nonpoliticized point of view because lives are at stake. We make decisions and the executive branch and military make decisions based upon our intelligence. We have to make sure that the way we restructure intelligence, the funding decisions that we make, and the other things we do are not based upon quick judgments, on political judgments certainly, but rather are based upon a calm analysis, a reflection based upon perspective and certainly an understanding of the difficulties that the intelligence community faces. When you do all of that, I think you can come to no other conclusion than what David Kay came to, that George Tenet said, the President, the Vice President, Secretary Powell, before the United Nations, that there was a problem here that could not be ignored. It would be absolutely wrong for anybody to suggest today that we got it all wrong and that for some reason that is President Bush's fault and certainly not for anyone to suggest that somehow or another our leadership misled the American people in order to go to war. That would be the absolute height of irresponsibility. No President, Republican or Democrat, I can think of would ever do such a thing. I am disappointed that some--and I am not referring to anybody in this body at this point--that some people would actually suggest that would be the case. But when we talk about the intelligence the way it has been discussed here today, it leads to that kind of conclusion. I think that is unfortunate. I urge all of my colleagues to try to discuss this in a relatively impassioned way, a carefully constructive way so working together we can craft the kind of policies that will provide for our security in the future, protection of the American people, and certainly the protection of the people we send into harm's way to protect us.

Mr. KYL. I really do appreciate that. I think what the Senator referred to and what he read was that Mr. Kay said: We all got it wrong. But he did not say: We got it all wrong.

Mr. KYL. Will my colleague yield for one moment on that?

Mr. KYL. Go right ahead and read that again. That is the distinction I would make. We did get one thing wrong. We cannot find the weapons.

Mr. KYL

Mr. KYL. I ask the chairman to yield. This has to do with the chart you showed and the percentage increases. When you talk about percentage increases, I start to smile. You can always make a point with a percentage. I can remember when I was an associate in a law firm and I would be making, let's say, a salary of $25,000 a year. The senior partner was making $150,000 a year. We both get a 3-percent increase in our salary and he would say: That is fair. In fact, I will tell you what; I will take a 3-percent increase and I will give you a 4-percent increase. At first, I would say that sounds all right. Then I said, wait a minute, you get 3 percent on $150,000 and I get 4 percent on $25,000. I think the gap is widening, not narrowing here. When I got to be more of a senior person in the law firm--and certainly with my Senate staff now, I always try to give the people at the bottom a higher percentage. Otherwise, the gap continues to widen. We see on the chart here how bad the pink or red numbers are, where Arizona is today. I appreciate you pointing that out. It is deceptive to suggest that since we are going up, we ought to be happy. In terms of real dollars, the States that have collected more money in the past than Arizona, which have been donee States and haven't had this huge gap, are making far more in terms of the collections each year than Arizona will. You can show that it is going up, but the averages don't help Arizona. It is like the saying, how deep is the Mississippi River? The average is 6 feet, but if you get in the middle, you are in very deep water. Averages really don't count. I would rather be the $150,000 senior partner getting a 3-percent increase than a $25,000 associate getting a 5-percent increase. That is, in effect, what Arizona is being offered. Mr. President, I criticize the product. I do not criticize the chairman or other members of the committee. I know this is hard. Everybody is looking out for their own States, obviously. You cannot be fair to everybody and everybody's view. I appreciate that. So the comments are, I hope, in no way to be considered a reflection on the good faith of the people who are trying to do the work. My point is that I cannot stand here and represent the interests of my State with the kind of unfairness that I think is inherent in the bill, and that is simply, as the chairman said, something on which we are going to have to disagree. I thank the chairman.

Mr. KYL. As to the first items you mentioned, we are in total agreement. Those were items that should have been added to the trust fund, and they make up the difference between the $196 billion in gas tax revenues and the $214 billion. So there is no disagreement there. But as to the last two items, you could argue that the schools and churches and States and cities should have been paying the gas tax all along and that if they do pay it, it should go to the highway trust fund. That is true. You can argue that. But we are not going to collect it from them. We are not going to make them pay. I suppose what you could say is, from now on churches and schools and cities and States have to pay the gas tax. And when they pay it, it should go to the highway trust funds. We are not saying that. We are going to deem that they have to pay it, but they don't actually have to pay it. There is no real money there. It is the same thing with the gas tax credit on ethanol. There the tax is actually going to be collected but then remitted. So the Government has it for a few days, but when they apply for credit, it goes back. Once again, we are going to credit the trust fund with the money, but it doesn't in fact get the money. That is why the Finance Committee had to use creativity in finding these other corporate loophole closings and applying the revenue derived from that to make up the difference in the $17 billion or so. So it is not revenue we should have been collecting all along and putting into the highway trust funds. You can argue whether we should have been collecting it or not, but it is not revenue we are going to be collecting in the future from the cities and schools, for example. We are going to have to get it from the corporate loopholes.

Mr. KYL. Will the chairman yield?

Mr. KYL. Mr. President, Penn State and the University of Oklahoma have had their share of victories and now it is time for somebody else to have their fair share. I appreciate the hard work of the chairman, the Senator from Oklahoma. I make it very clear I join those who recognize the need for improvement of our highways. There is not a road in my State that could not stand some improvement. As a very fast growing State, Arizona needs to add to our highway miles. I appreciate the fact that there is a need to create jobs, and highway construction certainly can help to create jobs in this country. However, it has always been the case that we prioritized because Members would literally ask for everything they could possibly get in the way of funding for their States. We have had to set limits. There is, after all, a limit on the amount of Federal revenue available for all good projects. Certainly, highways are no more important than education or health care or national defense or many of the other categories which also compete for the Federal dollar. So while we acknowledge there is a need for a highway bill and that can have some jobs benefits, that should not be the driving force in terms of the competition with dollars for other worthwhile projects. We have to set a limit, particularly in this case where we have over a half trillion dollar deficit, according to the OMB; we have to be clear we do not spend more than we are taking in. The reason this is a bad bill, and why I oppose it, first, it spends far too much money. Second, it spends more money than we collect in revenues from the gas tax. Third, it is very unfair to States such as mine, which are donor States. Arizona has always contributed far more than it has gotten back, and under this bill that gets even worse for the next 5 years. Let me discuss each of those items very briefly. We start from the premise that we do need highways. We also have a huge budget deficit. Therefore, we have to clearly be sensitive about the kind of bill we pass. In this regard, the Secretary of the Treasury, Secretary Snow, and the Secretary of Transportation, Secretary Mineta, yesterday notified the Senate that they would recommend a veto of this bill if it raises the gas tax or other Federal taxes or draws money from the general fund. They wrote that the bill ``should not use any mechanism that conceals the true costs to Federal taxpayers. Highway spending should be financed from the highway trust fund, not the general fund of the Treasury.'' The bill before the Senate violates this principle in a significant amount, by billions of dollars. Therefore, if my Senate colleagues insist on going down the road of passing a bill that violates the principles that the President has laid out, we risk having the President veto this bill. At a time when we have this large Federal budget deficit, it seems to me we ought to be joining with the President in trying to prioritize our spending and constraining it to at least the amount of revenue we take in, a balanced budget approach. That is the way we have done it in the past, and that is the way we should do it now. Just the highway portion--and I make it clear there is a mass transit portion of this bill that has not gotten out of the committee of jurisdiction, the Banking Committee, and in terms of funding it is in the neighborhood of $50 billion; it could be more or less and I do not mean to be tied to a specific figure, $49 billion or 50 billion; I will leave that part out of the discussion because that part is not complete until we know the actual numbers--but the highway portion, the amount the Federal Government has to spend over the next 6 years, is $231 billion. This is what the Bond-Reid amendment from last year in the budget resolution called for the Senate to fund. The House is looking at a number far higher than this. I even heard today that some people in the administration are looking at a number above this. In any event, the number that the Finance Committee yesterday raised revenue for was $231 billion. I sit on the Finance Committee and our job is to try to figure out what kind of revenues we are getting, and therefore, whether we could pay for $231 billion of highway funding. What we learned was that the gas tax, the use tax, that funds highway construction, is only going to bring in $196 billion during that same period of time. So the bill that the Senate said we should try to fund exceeds the amount of revenues by $35 billion. Now, there are four choices. We can reduce the amount we had hoped to be able to spend last year when we did not have this big Federal budget deficit number staring us in the face, and now that we know the size of the deficit, acknowledge that we were just a little bit too optimistic last year; we were a little bit too forward leaning, shall we say, and trim back to suit the revenues that we are actually going to be collecting. That is the first thing we could do. That is what we should do and what any family would have to do. Because we are the Federal Government, we could raise taxes to make up that difference. I don't think that will happen. The President says he would veto the bill if that happened. We could just go into greater deficit. But on both sides of the aisle I think that would be met with great opposition. We do not want to increase the size of our Federal budget deficit. That leaves the other alternative, and that is to take money from other areas in the budget and apply it to highways, to take general revenue funds, funds that might be spent on defense or homeland security or education or medical care, for example, to take that money away from those programs and spend it on highways instead. That is what is being proposed. But it gets worse because the effort that is undertaken here is to confuse the American taxpayer into thinking that it is highway-related revenues. It is not. What the Finance Committee concluded yesterday was that we could legitimately come up with--and I acknowledge this and hope to construct the addition of the funds--that we could come up with about $214 billion in revenues that was, in fact, legitimately connected, money that was connected to highways or to the trust fund. For example, there is $196 billion from gas taxes. There is an argument that we should be able to count the interest earned on the trust fund balances as part of the trust fund that is currently deposited in the general fund. Most would say that we can legitimately transfer that from the general fund and put it into the trust fund and call that trust fund money, and I agree with that. I will not get into detail, but there are four or five other areas like that. Some might be a little questionable in some people's eyes, but at least in my view, you could justify $214 billion in revenues, in real money, being transferred from the general fund to the trust fund, but which we could legitimately contend should not belong in the general fund, it should belong in the highway trust fund. That is $214 billion. That leaves a $17 billion deficit. That is just on the amount we were trying to mark up of $231 billion. So how do we make up the other $17 billion? By sleight of hand, which is why I voted against the bill. We came up with phony money, money that does not really exist but which, for the purposes of paying for this bill, we are going to count in an accounting technique. There are two key pieces: one $9 billion and the other $8 billion. The $9 billion fund comes from something called the ethanol exemption. The gas tax is 18.4 cents but for ethanol we give a 5.2-cents-per- gallon exemption. We say you do not have to pay that tax. The Finance Committee bill proposes to convert this exemption into a tax credit. But under the new system, even if the money comes in, it will be sent right back to the taxpayer when they seek a refund for it, when they seek to apply for the ethanol tax credit, so the net result is that, even though the Government may collect the money for an instant, it goes right back to the taxpayer who paid it and there is no money, then, to be put in the highway trust fund. So what we have is the Government will collect 5.2 cents it does not currently collect, it will theoretically send that to the taxpayer, and as soon as the taxpayers ask for the refund of the credit, the general fund of the Treasury sends the money back. So no new money has been raised. We collected it; we gave it back. But in the meantime, through an accounting gimmick, we say that the trust fund is 5.2-cents-per-gallon richer. And that amounts to $9 billion over this 6-year period of time. But there is no new money. So that is fraudulent. It is wrong for us to suggest we are actually paying with real money for that part of this bill. The other is called the fuel tax exemption, and it relates to an exemption that is provided to tax-exempt entities, such as cities and States and schools and churches. They do not pay the gas tax. They receive either a full or a partial exemption from the gas tax. So the Finance Committee bill just credits the highway trust fund as if it had received those taxes, even though the funds will never have actually been received. That is $8 billion over 6 years. It reminds me of that old riddle Abe Lincoln used to ask. He said: If you call a tail a leg, how many legs does a dog have? And he would always fool the kids, and they would say five. And he would say: No, four. Calling it a leg doesn't make it a leg. Well, calling this money part of the trust fund does not make it part of the trust fund because it is not ever going to be collected. It is an accounting gimmick. So when the Secretary of Transportation and the Secretary of Treasury write in the letter that they are going to recommend a veto of the bill if it uses mechanisms that conceal the true cost to the Federal taxpayers--they go on to say: Highway spending should be financed from the highway trust fund, not the general fund of the Treasury--I think this is exactly the kind of thing they had in mind. How does the General Treasury make up this $17 billion? You cannot pay for highway construction with fake money. You have to pay with real money. So you take that money out of the general fund and you somehow have to make that up in the general fund. Do they make it up with a highway user fund or fee? No. Instead, there are a series of tax changes that have nothing to do with highways. Some close down abusive corporate tax shelters, the kind that Enron had used. And there are some other kinds of changes like that--nothing that has anything to do with transportation or highways. Some of these tax changes, by the way, are actually good tax changes and, in fact, we should make the changes, but they should be used to fund other things in general revenue that are traditionally funded by such mechanisms. They should not be transferred from the general fund to the highway trust fund, thus breaking a precedent that has held ever since the beginning of highway transportation. My view is we should be very clear that by breaking this precedent, by using the general fund against what the Secretary of Treasury warned us, that we would be opening up the possibility that the highway fund or highway spending would be basically unconstrained by any mechanism whatsoever. It would be a honeypot of projects and ways for Members to go home and brag about how much they brought home to their States or their districts with no financial constraint because no longer would it be pegged to the amount of revenues we received through the user fees, from the people who actually used the highways. So if we go down this road, I think there will be no end to the claim we will make on general revenues for highway projects. And I think it is a very bad precedent for us to undertake. So, first of all, we are spending too much money. Secondly, we are not funding it in the proper way. We are now going to be spending general revenues to fund the deficit. The third thing I want to say is that this is not fair to some States. You might imagine that one of them is my State. I am going to describe this very briefly. And with the indulgence of the chairman of the committee, since our offices are closed down right now, I do not have access to the specific information which I wanted to bring to the floor. I am going to say this generally, and then, when we have access to that data, I will come back to the floor with the specific information. But a bit of history: Arizona has always been a donor State, meaning that Arizonans send a dollar in tax revenue for highways to Washington, and we get back 70, 80 cents. In the last few years, we have gotten 90.5 cents. Just a few years ago that was 83 cents, as I recall. A lot of the donor States put their foot down and said: Look, we, at least, ought to get 90 percent of what we send. And that is when the 90.5 cents was put into effect. Arizona is a fast-growing State, the fastest growing State in the Union. We have huge new infrastructure needs, including highways. We have large areas of Federal land. Only 12 percent of the land in our State is privately owned. The rest is owned by a governmental entity. We have huge border infrastructure financing requirements. We are now trying to build a new bridge over the Colorado River, below the Hoover Dam, with our sister State of Nevada. We have huge expenses with our highways. Yet instead of getting back an amount of money that would be commensurate with those needs, Arizonans send a dollar to Washington and get back 90.5 cents. When the debate about the new highway bill began, we had some thought that perhaps we would finally get to the point where we could be treated fairly relative to other States. But, unfortunately, this was not to be the case. In a very general way, what happened was this: The Senator from Oklahoma, and others, with very good intentions, said we want to try to bring all of the States we possibly can up to 95 cents on the dollar. And they set out to try to do that. But what they soon learned was there are some States with needs growing so rapidly, with populations growing so rapidly--States such as Arizona, Texas, Colorado, Florida, the fastest growing States--these States are growing so rapidly that it would cost a lot of money to be fair to them. In other words, we are behind the other States now. We are donor States, and to try to bring us up to parity with those States would cost a lot of money because we are so far behind. Now, if we had been treated fairly in the past, this would not be a problem because, presumably, we would be like everybody else--right around the norm. But we have not been treated fairly in the past, which is why we are so far behind. Now they are saying: Because you are so far behind, and it would cost so much to let you catch up, sorry, we are going to take care of everybody else, but you all have to stay that far behind for 5 more years. That, I suggest, is not fair. Now, it might have been fair to say to folks: Look, we can't get to 95 cents on the dollar. Maybe we can get to 93.5 cents for all of the States. I don't know what the exact number was--93, 94, perhaps, somewhere in that neighborhood. If all the States had been brought up to the same level, then that might be where it is--92, 93, 94, somewhere around in there. But, instead, they decided to go to 95 cents for most of the States, and then, for four or five of the States they say: Sorry, we are not going to bring you up to speed for the first 5 years of this program. Perhaps in the sixth year we will try to get you to 95 cents. Well, in the meantime, every one of those 5 years the gap will grow wider. And because our populations are growing, because our infrastructure needs are increasing disproportionately to these other States, because we have been behind for so many years--and, therefore, have a backlog that a lot of the other States do not have--instead of gradually being brought up to where the other States are, we are basically being left in the dust. That is not fair. Now, if you only do that to about five States, you can still guarantee your bill gets passed because you do not need their votes. This is all about vote counting. This is the way the highway formula was always developed. And I commend my good friend and colleague, the chairman of the committee, for noting the fact that in the past that is the way the formula has been derived. That is why his State and mine and a lot of others suffered for a lot of years. But I suggest that since there now seems to be a will to make things right--again, I commend him for that--that we should make it right for everybody, not just for those States where we can afford to make it right. In fact, I would argue that we really ought to start with those States that have been on the short end of the stick all these years. We should start with the States that are the furthest behind, start with the States, such as Arizona, that have so much further to catch up. If we have money to add to the amount of money that donor States get, why shouldn't we start with those States that have the biggest population growth and infrastructure needs and have received relatively, therefore, the smallest amount of money in the past? Well, I guess you only get 8, 10 votes out of those States, so we start from a different premise. I do not think it is fair. That is the third reason I have to oppose this bill and why my friends in Arizona are basically saying to me: We can understand why we have to spend more money on homeland security and fighting the war on terror and on fighting in Iraq, and so on. We can understand why there are some other big needs that perhaps could get an increase in funding, such as education and the Medicare prescription drug bill last year. But we will be darned if we are willing to continue to send our money to Washington to be spent by other States when we have such large needs here. And they basically tell us, because you have so many needs, we cannot afford to bring you up to speed with everybody else and, therefore, you are going to have to wait 5 years. I cannot go back to my friends in Arizona and say: Gee, I am sorry but that is just the way it is in Washington; they expect me to do something about it. So I hope my colleagues who support this bill will indulge me, and those others, and put themselves in my place and ask what they would do if they were in this position and not give us too hard a time when we ask questions that may be difficult and make sure that from a parliamentary point of view, we use all of the options we have to try to convince our colleagues the bill should be made more fair than it is. I would be happy if all of us received less money by reducing the top number of this bill down to an amount we can afford, say $214 billion, or to simply reauthorize the existing spending levels for 1 year until we can go back and get this formula right. I would favor either of those two solutions today. I raised them both in the Finance Committee yesterday. Both were defeated. But I would opt for either one of those. What I can't agree to is a bill that spends far too much money, funds it with general revenues for the first time, and is blatantly unfair to States such as Arizona.

Mr. KYL

Mr. KYL. Mr. President, with respect to the other subject which I wish to briefly deal with, this afternoon several of our Democratic colleagues have criticized the President and the administration and invoked the name of David Kay, a weapons inspector, to make the point that they claim proves the administration somehow misled the American people and the rest of the world in making the case for taking military action against Iraq. That is not true. I think it is time people start quoting David Kay properly to see just exactly what he said. I am briefly going to do that. I have a few excerpts from his testimony before the Senate Armed Services Committee on January 28 of this year. Senator McCain asked him this question: [Y]ou agree with the fundamental principle here that what we did was justified and enhances the security of the world by removing Saddam Hussein from power? David Kay: Absolutely. Senator Kennedy asked this interesting question: Many of us feel that the evidence so far leads to only one conclusion: that what has happened was more than a failure of intelligence, it was the result of manipulation of the intelligence to justify a decision to go to war. . . . David Kay responding: All I can say is if you read the total body of intelligence in the last 12 to 15 years that flowed on Iraq, I quite frankly think it would be hard to come to a conclusion other than Iraq was a gathering, serious threat to the world with regard to WMD. And WMD, as we know, is weapons of mass destruction. How about its violations of the United Nations resolutions? Somehow the impression has been created that maybe it was just a fraud, that Iraq really wasn't in violation of those resolutions, that somehow the weapons of mass destruction never existed. Here is what David Kay said: In my judgment, based on the work that has been done to this point of the Iraq Survey Group, and in fact, that I reported to you in October, Iraq was in clear violation of the terms of Resolution 1441. Resolution 1441 required that Iraq report all of its activities: one last chance to come clean about what it had. We have discovered hundreds of cases, based on both documents, physical evidence, and the testimony of Iraqis, of activities that were prohibited under the initial U.N. Resolution 687 and that should have been reported under 1441, with Iraqi testimony that not only did they not tell the U.N. about this, they were instructed not to do it, and they hid material. Going on: Iraq was in clear material violation of 1441. They maintained programs and activities, and they certainly had the intentions at a point to resume their program. So there was a lot they wanted to hide because it showed what they were doing was illegal. I hope we find even more evidence of that.