Jon Kyl

Mr. KYL

Mr. KYL. If I could respond to the Senator from Pennsylvania, some of the best evidence of what has changed or what hasn't changed comes from Secretary Powell's comments on the United Nations report. Here is what he said: Iraq has been and continues to be in material breach of all its earlier obligations. We are giving the resolution one more chance to Iraq. We put a firm list of conditions for Iraq to meet and what they should allow the inspectors to do to assist them in disarmament. Iraq's time for disarmament is fast coming to an end.

Mr. KYL. Mr. President, if I could respond to the Senator from Pennsylvania, I don't want to characterize Senator Kennedy's response to that. He made his statement. The essence of one of the things he said was things have changed since we debated this. From his perspective, he said things have changed. One of the things he said was inspectors had not been able to find anything. I would respond to that in two quick ways. First of all, the U.N. inspectors have determined Iraq is not voluntarily disarming as required by United Nations Resolution 1441. Quoting Hans Blix, head of the inspector team: Iraq appears not to have come into genuine acceptance--not even today--of disarmament which was demanded of him and which he needs to carry out to win the confidence of the world and live in peace.

Mr. KYL. That is the subject I would like to devote the rest of my time to discussing. It is the issue the President addressed in the State of the Union speech, an issue we dealt with 3 months ago in the Senate when we approved a resolution authorizing the President to use force, if need be, to bring Iraq into compliance with both agreements it had signed at the end of the Persian Gulf war 12 years ago and also various United Nations resolutions. I rise to speak today because there are obviously a lot of legitimate concerns being expressed by various Members of the Congress, including a long-time Member of the Senate, Senator Kennedy, who recently introduced a resolution calling for the Senate to revisit this issue. I did not have the opportunity to tell Senator Kennedy I would be speaking about his resolution, but I did want to note this has been dealt with by the Congress. We have given the President the authority. One could argue with respect to any change in circumstances that conditions have only gotten worse, not better, since the President was granted that authority by the Congress and therefore we do not need to vote on that resolution again or a new resolution giving the President the authority to act. I make that point because of the submission of his resolution yesterday and because of the remarks he made. I will be referring to those remarks. The point of the President's comments in his State of the Union speech was not to lay out the case for proceeding against Saddam Hussein but, rather, to begin to create the predicate for action we will have to take. People have asked why President Bush has not been more vocal about the case to be made. I don't know because I have not talked to him, but I suspect that the last thing President Bush wanted to do was to be seen as beating the war drums. This is a grave decision he will have to make. It is a decision I know he does not make lightly. He makes it very reluctantly. But in the end, he will have to make a decision. I believe, from the tone and tenor of his remarks on Tuesday evening and the fact that he has not been speaking out a lot about this in the last several weeks, that is an illustration of the fact that he did not want to be seen as promoting the United States involvement in military action in Iraq but rather exactly the opposite: Asking Secretary Powell to visit with our allies at the United Nations and other nations, as well, and Secretary Rumsfeld and Dr. Rice to go out and speak to others to assert their views on the subject and express our views on the subject, to try to find some way to avoid having to use military action to enforce these U.N. resolutions. The President has made the point that time is running out, that Saddam Hussein has steadfastly, continuously, repeatedly refused to comply with those resolutions and that at some point the international community as a whole, the United Nations as a body, and the United States specifically, have to decide whether these international agreements are going to be enforced. If they are not, then one could easily say they are not worth the paper on which they are written. The United States would have less moral suasion in the world if it refused to act when it had a clear responsibility to do so, and the United Nations and its Security Council would be deemed increasingly irrelevant by virtue of the fact that it has passed no fewer than 16 resolutions expressing the fact that Saddam Hussein has remained in violation of his promise to dismantle his weapons of mass destruction and has not done so. If we are to rely upon international bodies, multilateral agreements, and even treaties and agreements signed by Saddam Hussein, there has to be an ``or else'' if they are not complied with or there is no point in entering into them in the first instance. Second, if you do not enforce the agreements, you foster more rogue behavior by nations such as Iraq under Saddam Hussein's leadership because those nations know they can continue to violate international norms of behavior and get away with it because at the end of the day no one is willing to enforce those norms of behavior even when they have been codified in agreements or in United Nations resolutions. That is why President Bush is right; time is running out, and Saddam Hussein has a very critical decision to make. Will he finally see the handwriting on the wall that his days and his regime's days are very numbered and comply with the agreement he made, to save his own life, to dismantle his weapons of mass destruction under international supervision? That is the term that is used in Resolution 687 of the United Nations which has been incorporated into the most recent Resolution 1441. That is the basis for the ability of the United States and the other nations of the world to act in this case. Saddam Hussein promised to dismantle his weapons of mass destruction under international supervision. He never did that. There was an inventory in 1998 of his weapons of mass destruction by the United Nations. He has never fully explained what happened to that inventory. He had a last opportunity to do so in the declaration he was invited to file a couple of months ago. A declaration was filed. It contained the same old things he talked about before but no evidence that he had destroyed those weapons of mass destruction. Now, why did the United Nations say he had to dismantle these weapons under international supervision? Precisely because we did not want to be in the position of having to go find the needle in the haystack: We have to go find evidence somewhere to prove that he still maintains or possesses these weapons of mass destruction. After all of these years and the opportunities he has had to hide these weapons, the burden should not be on the United States or the United Nations to go find these weapons but, rather, right where it was when he signed the agreements at the end of the gulf war and when the United Nations adopted its original resolution saying he had to dismantle these weapons under international supervision. We knew that was the only way we would know for sure it had been done, because of his record of lying and cheating. Sure enough, over the past 11 years, that record has continued. He has never explained what happened to these weapons. He has never given us the evidence that they have been destroyed. We have evidence that they still exist, from the declarations of the United Nations in 1998 as well as our own intelligence and some admissions from the Iraqi Government itself and eye witness accounts. You cannot get better evidence than that. Now, some of this evidence, of course, is collected by the intelligence agencies and not of the kind that can be released publicly. But Secretary Powell is going to visit with our allies and others at the United Nations, hopefully next week, to lay out some additional information we can disclose and, hopefully, persuade these nations it is now time to act. The basis of the resolution Senator Kennedy offered was that there should be more time for the inspections to work. I would like to confront that directly because I know that while the concept is well meaning, it is very misplaced. There is nothing in the evidence to suggest Saddam Hussein will change his behavior in the least if he has more time. In fact, quite the opposite is true. The only time Saddam Hussein has ever come forward and done anything that has even begun to suggest compliance has been when he has been pressured to do so, when he has known the time was short and people were going to enforce the agreements he made if he did not do something. Ironically, the best way to get him to comply is to make it clear that military action is a very distinct and proximate possibility. That is the only basis on which I think there is any hope to avert military action--if he understands it is inevitable unless he complies. So I think giving him more time would be seen not only by Saddam Hussein but other rogue terrorists and terrorist states in the world as a lack of willingness on the part of the international community to enforce these agreements it has gotten Saddam Hussein to sign and the resolutions the United Nations adopted. What are the implications of that? If international norms of behavior are not enforced and if the free nations of the world cannot muster the will and the ability to enforce them, it merely fosters similar action by terrorists and rogue states around the world. The eyes of the world are upon us. This is why President Bush has made the commitment to move forward if Saddam Hussein does not comply, because he understands that everyone is watching, and if the rogue terrorists of the world--rogue states and terrorists decide they can get the United States and the United Nations to blink, that at the end of the day they are not really willing to enforce these resolutions and agreements, you can see them act in ways that very soon will challenge us to military action and perhaps at a time when it is more disadvantageous for us to take that action. The lesson of Korea is a good lesson. It would have been better if we could have dealt with Korea permanently before it acquired nuclear weaponry. Because it has that kind of weaponry today, and longer-range missiles, we are very reluctant to engage North Korea militarily, and with good reason. We cannot afford to wait until countries such as Iraq or other rogue states acquire similar weapons, nor to decide it is time to deal with them, to get them to comply with these agreements and U.N. resolutions. That is why more time is not the answer. More time will not solve the problem. More time will do nothing but exacerbate the problem. Confidence is also misplaced to rely on the inspections to produce anything. President Bush has made the point, Secretary Powell has made the point--inspections only work if you have a willing, compliant party on the other side that has demonstrated a desire to dismantle weapons and wants the world to verify that has been done. We did this before in Ukraine and Kazakhstan, countries that were willing to dismantle their weapons. Where inspections are able to confirm that, demonstrate that, this is a technique that can work. But it can never work, as Secretary Powell said, with a nation such as Iraq which has as its intention hiding these weapons rather than cooperating. The inspectors are not in Iraq--and I repeat this, the inspectors are not in Iraq--to find evidence with which to prosecute Saddam Hussein. That would be an impossible task. They would have to get enormously lucky to find anything in that country. In fact, I guess we could say they were lucky, to the extent they found 16 shells which contained warheads suitable for chemical weaponry, warheads that were not declared by Saddam Hussein in his declaration and therefore were in clear violation of the U.N. requirement that he destroy these weapons. They were lucky to find them. People say you need a smoking gun. There is a smoking gun. Why is that not good enough? The bottom line is you cannot put the burden on the inspectors because there is no way in any reasonable period of time that you could expect them to find them all. I have forgotten the exact number now, but there are in the tens of thousands of these weapons that Saddam Hussein had. We knew he had them and he has never shown he has destroyed them. How are we going to find those? The fact is the inspectors are there to verify voluntary compliance. They are not there to try to find things that are being deliberately hidden. One of the reasons the document I had printed in the Record, the letter signed by European leaders, is so important is because it validates the notion that the free nations of the world need to be united in enforcing these norms of international behavior. Thus the headline: ``Europe and America Must Stand United.'' The last paragraph I will read: The United Nations Charter charges the Security Council with the task of preserving international peace and security. To do so, the Security Council must maintain its credibility by ensuring full compliance with its resolutions. We cannot allow a dictator to systematically violate those resolutions. If they are not complied with, the Security Council will lose its credibility and world peace will suffer as a result. We are confident the Security Council will face up to its responsibilities. Some of the signatories include Tony Blair, of the United Kingdom, Silvio Berlusconi, of Italy, Vaclav Havel, of the Czech Republic, one of the real democrats of our era, and others, who make the point that we have to stand united in this effort. The problem they are facing and that President Bush is facing is if we believe we have to get the approval of the Security Council, and any of the five permanent members, which could be Russia, China, or France, for example, were to veto another resolution, then our hands would be tied. That is why another resolution is not required. Resolution 1441 is good enough. President Bush has made that point and Secretary Powell made the point, telling those nations, don't vote for the Resolution 1441 if you are not going to be prepared to support action when the time comes. Now the time is upon us. What these distinguished leaders are saying in this letter is the Security Council needs to step to the plate and authorize the kind of action that is called for here. If not, it can be done unilaterally by the United States and the rest of the coalition of willing partners. We have that legal authority to do so. Obviously, it would be better if the world opinion, expressed through United Nations resolutions, backed that action. But that is not necessary. I would argue also in some respects it is not desirable to keep going back to the United Nations Security Council for approval. This is the reason why. You begin to create the precedent that action is illegitimate unless this group has approved it; that unless the Security Council has given its stamp of approval other nations may not act in their self-interest and in the interest of the international community of countries. That would be an extraordinarily bad precedent. It would cede the sovereignty of the United States to a United Nations body which is not some kind of angelic group of objective judges on high somewhere, deciding what is right, truth, and justice in the world. It is five countries with self-interests, one of which is the United States. All of these countries act in their self-interest and there is nothing wrong with that. France acts in its self-interest. A lot of French have business dealings with the Iraqis. There is nothing wrong with that except it may violate the sanctions of the United Nations. But they have reasons for perhaps not wanting to confront Iraq. Russia has a lot of money tied up in Iraq in debts that are owed to Russia. It wants to see those debts repaid. There is nothing wrong with that. So it is naturally a little bit careful here in the way it is dealing with Iraq in this resolution. China has its own issues, as have Great Britain and the United States. All of us approach these issues from the legitimate position of our own self-interest as nations. The combination of those five countries represents the permanent members of the Security Council, who have a veto. There are additionally 10 other nations that rotate on and off the Security Council. We got a unanimous decision of all 15 nations, including even Syria, with Resolution 1441. So we have the ability to proceed. What I am saying is it is a mistake to have to go to the Security Council again, first, because you are setting a very bad precedent that is the only way you can legitimately act, and, second, because there is some kind of suggestion that nations put their self-interests over here on a shelf when they deal with questions such as this. They do not. They make decisions based upon their perception of their own self-interest and there is nothing wrong with that. But what it can mean is that if our interests are divergent enough, we can get into situations where some countries decide to take an action and other countries decide to veto that action. If they have a legal veto, then they can preclude countries such as the United States and Great Britain, for example, from acting in their own self-interest. That is why, even though I welcome the debate and would be very willing to spend all of the time our good friend and colleague, Senator Kennedy, would like to take on the floor of the Senate, debating his resolution to have yet another expression of Congress in support of military action by the President, it is not necessary. We have already covered that ground. It has already been approved by the Senate. The President has taken a lot of action in reliance upon the action of the Senate back in November. It is kind of like pulling the rug out from under him. I know that is not Senator Kennedy's intent, but it could have that effect because the President relied on the approval the Senate gave to him to mobilize tens of thousands of American troops all over the world. These troops are now committed to the theater of Iraq. A great deal depends upon our ability to combine a military mission with the timing that is required to achieve success, and all the other factors that are involved in a successful outcome of the enforcement of these U.N. resolutions by the United States and its committed allies. We can't be getting to the point where there is a herky-jerky, we'll give you the authority, we'll take it back, OK, we'll give you some more, now you can't. The Commander in Chief cannot operate that way. That is why last December we said we will vote to give the authority. Don't vote for it if you don't think he should exercise that. Many of our colleagues did not, and they have good and sufficient reasons for voting that way. The vote overwhelmingly carried. The President was granted the authority by the Congress. Now, on the eve of his exercise of that authority, if he chooses to do so, is not the time to suggest that, well, we didn't really mean it; he has to come to us one more time. That would be an act, I suggest, that would not be worthy of the Senate, given our responsibilities to act in concert with the President in conducting his responsibilities as Commander in Chief. Even though we know there are sincere questions and concerns about taking military action--and every one of us shares those concerns--we also know leadership is about making decisions when the situation is not clear. All of us have heard about the fog of war. Henry Kissinger has written about the essence of leadership and making a decision when almost everything seems to be in doubt and there is no clear path to a decision. Making the right decision at that time and following through is what enables you to succeed, because waiting until everything is clear is usually to wait until it is too late. It is the situation I described before with North Korea, for example. If we wait until it is clear that Saddam Hussein has the nuclear weapon, it will be too late to confront him over the use of that weapon or over the fact he possesses that weapon. That is why the President has been so insistent that the original promise of Saddam Hussein to dismantle under international supervision and never having complied with that promise must now be enforced. That is the essence of the President's case. While I am sure he will speak to the American people and lay this out much more clearly than I have, and that he, Secretary Powell, and others will continue to speak with our allies so they know fully why we are prepared to act and will feel comfortable in joining us in this action--and even with those actions which I think we can contemplate in the next several days--I think it would be a big mistake, as I said, for the Senate to assume we need to revisit this issue in a legal way and that the President would not be authorized to act unless we pass some kind of legislation. I welcome the debate, as I said. If our colleagues wish to have that debate here on the Senate floor, I suggest it would be far better for us to acknowledge the President's authority and to stand behind him in the decisions he makes, knowing our support for his actions is support for the troops we are sending in harm's way. The best thing we can do for those sons and daughters is not to continue to question and wring our hands and express self-doubt about what we are doing but to solemnly weigh all of the factors, make a judgment to support the President in his judgment, and then support those troops when they are called upon to act. That is the best way we can repay those who are willing to make that supreme sacrifice for that willingness on their part. I solemnly hope as we debate these issues, we can do so in that spirit, in the spirit of the sacrifice our troops are willing to make, and that the debate be as serious, as analytical, and as nonpartisan as much as we can make that kind of debate, but when the time comes that every one of us will support the President and our troops.

Mr. KYL. Finally, I ask unanimous consent to print in the Record a letter from several international leaders called ``Europe and America Must Stand United,'' reprinted from the Wall Street Journal. It is signed by representatives from Spain, Portugal, Italy, the United Kingdom, the Czech Republic, Hungary, Poland, and Denmark. It makes the point that other countries in Europe stand with the United States in our determination to bring the country of Iraq into compliance with the norms of international behavior and U.N. resolutions that apply to its weapons of mass destruction program.

Mr. KYL

Mr. KYL. Secondly, I ask unanimous consent to print in the Record a Wall Street Journal editorial dated Monday, January 27, which is entitled ``No More Than 30 Percent.'' This complements some comments I made yesterday regarding President Bush's tax plan and makes the point that most Americans, rich or poor, agree that the most any American should ever have to pay in income taxes is 30 percent. In fact, most people believe it should be no higher than 30 percent. So even though we have a lot of Americans who are extraordinarily wealthy, by far and away most Americans believe confiscatory taxation violates America's sense of fairness.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent to have printed in the Record three separate items. The first, as was mentioned by the distinguished assistant majority leader, concerns the Judiciary Committee that is meeting today to consider the nomination of Miguel Estrada for the D.C. Circuit Court of Appeals. I left that meeting in order to be in the Chamber but will be casting my vote in support of his nomination. I ask unanimous consent to have printed in the Record an editorial appearing in today's Wall Street Journal by Herman Badillo, who illustrates some of the reasons why Miguel Estrada should be confirmed when he is brought before the full Senate.

Mr. KYL

Mr. KYL. Mr. President, I pay special tribute to a member of the staff of Senator Trent Lott who is going to be leaving his Senate responsibilities and going elsewhere in this city to work in the private sector. For many years, David Hoppe has worked in various capacities for Senator Lott, most recently as his chief of staff when he was majority leader. He also has worked as his staff director. He also worked for Representative Jack Kemp. He has had positions in the Heritage Foundation, as well as working on his own previously. He is a specialist in a variety of areas, including the area of energy policy. I think most of us remember David as someone who was always very clear headed, very level headed, and very helpful to all of us, minority and majority, as we worked in the Senate. It can be a very hectic proposition to try to juggle all of the things that have to be juggled on the floor, and it takes a very level- headed person to be able to manage the egos of 100 Senators and deal with the majority leader's responsibilities. David Hoppe always did that with great aplomb, and it will be our loss that he leaves the Senate, but I am sure we will not hear the last of David Hoppe. My hat is off to him for his many years of service. I wish him the very best in his new career.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that I be allowed to address the Senate for a period not to exceed 30 minutes.

Mr. KYL

Mr. KYL. Mr. President, In a December 2002 speech delivered by the commentator, Charles Krauthammer, at the Hillsdale College Churchill dinner entitled ``American Unilateralism,'' Mr. Krauthammer superbly articulates the necessity of American action to confront today's challenges in the international arena, most notably Iraq. He makes a compelling case against the two kinds of multilateralist thinking that are common today: that of the liberal internationalists and that of the pragmatic realists. Liberal internationalists, Krauthammer shows, cling to multilateralism as a shield for their real preference--in this case, inaction. He aptly points out that those most strenuously opposed to U.S. military action in Iraq are also the strongest supporters of requiring U.N. backing. The reason, Krauthammer concludes, is that ``they see the U.N. as a way to stop America in its tracks.'' The liberal internationalist fails to take into account that there is no logical, or moral, basis for depending upon the member of the U.N. Security Council to confer legitimacy on U.S. actions. Pragmatic realists, Krauthammer explains, understand the absurdity of the liberal internationalist's arguments, but believe that, nonetheless, the U.S. needs from a practical standpoint, international support to act. They believe that shared decisionmaking will result in good will, improved relations, and greater burdensharing. But, as Krauthammer demonstrates, our experiences in the gulf war prove otherwise. It is important to note that Krauthammer does not see unilateralism as a first choice. Rather, he advocates taking actions that are in the best interest of the United States, bringing others along if possible. What he wisely cautions against is allowing ourselves ``to be held hostage'' by the objections of countries that don't have America's interests at heart. He describes unilateralism as ``the high road to multilateralism.'' This may sound paradoxical, but it makes sense. It is American leadership, asserting a firm position and committing to take whatever actions are necessary to see if through, that enables a solid coalition to be built. Charles Krauthammer's remarks are both timely and insightful as the United States discusses Iraqi noncompliance with members of the U.N. Security Council and contemplates military action in Iraq. I highly recommend them to my colleagues in the Senate. I ask unanimous consent that Mr. Krauthammer's December 2002 speech be printed in the Record.

Mr. KYL

Mr. KYL. I have indeed.

Mr. KYL. I thank the Chair.

Mr. KYL. I revise my unanimous consent request to incorporate what Senator Reid has just requested.

Mr. KYL. Madam President, I ask unanimous consent that morning business be extended until 6 p.m., with the time equally divided between the two leaders or their designees.

Mr. KYL

Mr. KYL. Madam President, I will speak about the President's proposals articulated last night in his State of the Union speech to ensure job creation and economic growth for the United States for the benefit of all American families, and for our future. I note with interest some of the comments my colleagues have uttered. I will respond to some of those before I get into what the President said last night. I noted that the Senator from New Jersey and other colleagues have been very quick to criticize the President, but I have heard absolutely no proposals emanating from that side of the aisle that offer an alternative to what the President has proposed. There is an old phrase that you cannot beat something with nothing, and I think that is true here. If they have a better plan, then I would like to see it. If they understand better than President Bush and his economic advisers how to ensure and sustain long-term growth in this economy, how to provide more jobs for American families, how to better protect the investments of our senior citizens and the like, then let us see those proposals. It is easy to stand on the sidelines and criticize, but it is not as easy to present good, solid information and be willing to defend it. I am ready to defend what the President has proposed, and I would like to see those who have been critical come up with some ideas of their own rather than rhetoric. Most of the people who have been critical of the President, especially if they are Members of the Senate, begin that criticism by noting the President's proposal, in their view, will increase the deficit and they regard this as a most serious sin. Virtually every one of these critics voted last week for $502 billion more in new spending for the fiscal year 2003 by virtue of supporting amendments that were offered to the fiscal year 2003 omnibus appropriations bill. They cannot have it both ways. They cannot argue on the one hand they are very concerned about deficits, about not having a balanced budget, and on the other hand vote over and over again last week to increase spending above what the President has proposed, above what the Appropriations Committee has proposed on the floor, by over a half of a trillion dollars in 1 year. Compound that spending over time and, of course, the growth is exponential. The bottom line is the critics of the President's plan, A, need to come up with a plan of their own if they are going to be credible and, B, if they are going to be credible about concern over the deficit then they should recant the votes they cast last week over and over again for over half of a trillion dollars in new spending above what the appropriations bill called for and that we all supported. Let's look at the specific criticisms they make. I note that almost all of them say the President needed to pay more attention to the needs of States. This is a curious argument. It is true that almost all States are suffering from lack of finances to serve the needs of the people of the States. That is true in my State as it is in other States. There are a lot of reasons for that. First of all, the Federal Government imposes some unfunded mandates. That is not fair or right. The Federal Government should make up for those, but that does not explain the whole problem. The problem of State and local governments is essentially the same problem the U.S. Government faces: Namely, the economy is not as robust as it should be, as we would like it to be, as we hoped it would be. Therefore, it is producing less in the way of tax revenues. In the case of the United States Government, we can relatively easily go into debt. States cannot do that. As the distinguished Presiding Officer knows from her experience in State government, you have to pay as you go in State government. So they are hurting because the economy is not as strong. People are not making as much money, and the States are not collecting as much in tax revenues as they had projected. So they are in a deficit situation. What do we do about that? What is the Federal Government expected to do about it? Should the Federal Government tax American citizens even more, bring the money back to Washington and then write 50 checks to the States and send it back? How would that help the people who have just had the Federal Government take their tax dollars, then write a check back to the States? I do not see the logic of that. States can raise their own taxes. If raising taxes is the answer, they all have the capability of raising taxes much more quickly than the Federal Government does, and of collecting that tax revenue because they can do it in sales taxes so that the effect is immediate. They do not need to wait for a whole year for income tax collections, which is the Federal Government's means of financing to catch up with revenue needs. I found it interesting that the Senator from New Jersey said the President's plan ignored sales taxes and property taxes. Rightly so. Those are taxes traditionally left to the States to fund needs of State governments--not the Federal Government. Woe be to the Senate and the House of Representatives if we begin collecting sales taxes and property taxes as a means of financing the Federal Government. Woe be to us. That is not right. States and local governments can raise those taxes if they want. The reality is most of them are not going to do it. They understand, as most of us understand, that taxing people more does not make them better off. It does not help to collect taxes at the State and local level and provide benefits to the very same people who paid the taxes. What does make sense? What has always made sense in the past? If the economy grows, it will create jobs, it will produce more wealth for American families and, at the same time, more tax collections to the governmental entities that collect taxes. The Federal Government's problems are primarily a result of a sluggish economy. It was pointed out yesterday in the confirmation of the President's nominee for Treasury Secretary that just a 1-percent difference in growth in our economy from 3 percent to 4 percent means-- I hope this figure is correct--$8 trillion over a 10-year period. That is a lot of money. It illustrates the fact that very small measures of growth differential can mean a great deal in tax collections for both the Federal Government and the State government. If we can encourage economic growth on a sustained, long-term basis, we will not have to worry about balancing budgets or about deficits or the financial straits our States are in. A healthy economy not only helps families but it also helps the State and local governments and the Federal Government collect the necessary tax revenues to provide services. Therefore, when critics--such as Governors--say the President ignored the States, I guess I put the challenge back to them: Do you think the Federal Government should raise taxes from your citizens so you can give it back to them? If so, why don't you raise the taxes? Tax increases are not the answer. Almost all would agree that a robust economy is the answer. How do we get to a robust economy? The Senator from New Jersey is correct that there is not that much economic stimulus in this current fiscal year in the President's proposal. He identified about $34 billion worth. I cannot contest that figure. It may well be correct; I don't know. In any event, it was $34 billion more than the Democrats proposed because they did not pass a budget for fiscal year 2003, provided no tax relief for fiscal year 2003, provided no way to stimulate the economy, provide economic growth or job creation. It was the Democratic Party that was in control of this body last year. I guess it could be fair to say that $34 billion is not enough, but it certainly beats what the Democratic leadership was able to produce last year, which was exactly nothing. Is the answer a stimulus? It is hubris in the first degree to suggest that the Congress--in fact, the Government--can really affect a multitrillion-dollar economy very much in a rapid way by the policies we institute here. We can do far more to help the economy, as Alan Greenspan has said, by curbing our appetite to spend taxpayer money than almost anything else we do. Yet my Democratic friends last week were willing to spend over half a trillion more than the appropriations bill provided and that the President had requested. I don't think they are in a very good position to argue about the proper prescription here for economic growth. The reality is the best way to promote economic growth is to reduce the tax burden of American businesses, small businesses, and American families. That is what President Bush has attempted to do in the proposal he has made. Does he pretend that in 1 year we can turn everything around? No. As he said last night, if the tax relief we passed a year and a half ago, which was phased in over time, is good in 5 years, 6 years, 7 years, why is it not even better to make it effective now? If my friends on the other side of the aisle are so concerned about doing something now to stimulate the economy, then I challenge them, let's make the tax reductions we passed a year and a half ago, that were phased in over a 10-year period of time, effective now. That would do a lot of good. It goes up and down the entire spectrum of American taxpayers, from those who are the wealthiest all the way down to those who are the least wealthy. Interestingly enough, those small businesses that create most of the jobs in this country--and we are very interested in job creation--would benefit significantly because they are organized under our laws to pay taxes at individual tax rates. For the most part, their tax rate is higher than the corporate tax rate. So the small businesses we are trying to encourage are paying a higher rate of taxes than the big corporations. I ask, is that fair? Is it a way to stimulate job creation, given they provide more of the jobs in the country than the large corporations? Let's look at the President's program in more detail. Some on the other side of the aisle have been very critical of the dividend section of the President's proposal, the part that says it is fair to tax dividends once when the corporation makes the profit but it is not fair to turn around and tax the dividends a second time when they are paid to the shareholder. It is a matter of basic equity and fairness and makes common sense. But there are some who say, for some reason or other, that is not a good idea. One of the arguments is that eliminating the double taxation of dividends gives money to shareholders. As my friend from New Jersey said a moment ago, that may be nice for the folks who receive it-- meaning the deduction for dividends paid by corporations--but does it do much to help the economy? Let's break that into two parts. It is nice for the people who receive those dividends. Now, over half of the adults in America are investors in equities. Half of Americans are stockholders. A large number of those will receive a benefit by not having their dividends taxed when the corporations pay the dividends to them. The President's object is not to provide for consumer spending. It is not to increase consumer spending. That is not the problem with our economy now, but to increase capital formation, which is the problem. For confirmation of that, the White House has provided some information comparing personal consumption expenditures with private investment. The top line, which is personal expenditures, is going up from $6 trillion to $7 trillion in just over a 3-year period. Consumer spending is not the problem. The problem is this squiggly line down here, capital formation, gross private investment. Gross private investment has actually decreased from just after the year 2000, from $1.8 trillion to currently $1.6 trillion. The problem is the need to enhance investment, not to deal with personal spending. The dividends being taxed today are not going into reinvestment, into business. But the President's proposal is to encourage this reinvestment by eliminating the double taxation of dividends. This attracts billions of dollars of new investment to the economy since increasing the aftertax returns to capital will make new investments sufficiently profitable to be undertaken. Reducing the tax on dividends should raise share prices by many times the amount of additional annual dividend payments. The more real earnings a company has, the more willing the managers are to pay dividends and the more the share prices increase--prosperity for everyone. Moreover, what is lost on some critics: To eliminate double taxation, this harmonizes tax treatment of debt and equity. We have been too favorable to debt creation in the corporations, so some major corporations have gone into bankruptcy because they created so much debt. As soon as we had a downturn in the economy, they could not handle the repayment of all that debt. We ought to promote less debt capitalization of businesses and more equity capital. Harmonizing the tax treatment of debt and equity removes the current tax preference for financing business expansions with debt. Debt is more risky because, while dividends can be reduced or eliminated during difficult economic times, companies that finance with debt must continue to pay the interest regardless of the economy. That is what leads to the bankruptcies. In addition, eliminating this double taxation of dividends will encourage better corporate behavior. We certainly understand the need for that, given some of the shenanigans that occurred during the last few years. Companies that pay dividends must have real cash earnings rather than possibly doctored paper earnings--which was the case with some corporations over the last few years. It will help create new jobs. The main beneficiaries of the increased investment activity will be the workers who are employed to use the additional capital and the consumers who get to enjoy the cheaper products and services that it makes possible. I mentioned that it is simply unfair to tax the same income twice. We sometimes forget that basic argument when we are talking about all the good reasons to eliminate the double taxation of dividends, but in practice I think we all appreciate that double taxation of dividends means that even an investor of modest means is paying a higher tax rate on dividends that wealthy taxpayers pay on their income. What about this distribution of benefits? Roughly 35 million American households receive dividend income that is taxable, and will directly benefit under the President's plan. So this is not something that just benefits a few--35 million American households receive dividend income that is taxable and will directly benefit as a result of the President's plan. Almost half of all savings from the dividend exclusion under the President's plan would go to taxpayers 65 years and older. The average tax savings for the 9.8 million seniors receiving dividends would be $936. To the argument that this dividend savings only goes to a very few, the point here is that the average will be almost $1,000 per senior receiving the tax break on the dividends. It seems to me it is very difficult to argue that eliminating this double taxation of dividends is bad for seniors, bad for shareholders, or bad for the economy. Let's talk about the other aspect of the plan, though, the major piece of the plan that the President spoke to last night and that is the benefit of accelerating the marginal rate reductions. What do we mean here? We are talking about the income taxes that we pay. Depending upon which bracket you are in, you pay a higher percentage of your income in taxes. We decided a year and a half ago to reduce those rates but we couldn't get the votes to reduce them all immediately, so we phased them in over time. We phased those reductions in over a 10-year period of time. Last night the President said, look, if it was a good idea to reduce the tax rate 6, 7, 8 years from now, why isn't it an even better idea to do it right now? I ask that question of my colleagues who oppose this. Why is it not a better idea to do it right now? Some of them might say that will cost the Federal Treasury money. My response to that is, Why did you vote for an additional $502 billion in spending? That also takes money out of the Federal Treasury. Let's just talk about this marginal rate reduction in terms of economic growth potential. This is where the economic growth really occurs, because reducing marginal tax rates provides an ongoing incentive for all taxpayers to work harder and longer, which is what creates the increased economic activity that we seek. It also creates additional income which can be taxed, so Government ends up making more money in the long run. Most importantly, it allows taxpayers to keep more of their own money, which they can use to invest or spend or save as they choose. When we talk about savings, we are really talking about investing. So regardless of how this money is used, it will benefit economic growth. If you save it, you put it in a bank and the bank immediately turns that money around, loaning it to others, and that will put the money to use creating more jobs. If you spend it, it is going to eventually find its way back into the capital market and help create jobs. Of course if you invest it, that is the most efficient way of all to provide capitalization to companies to hire new people and produce new things. I spoke before about small businesses and the benefit of the President's tax plan for small businesses. Reducing the top rate primarily helps these small businesses. The current top individual rate is 38.6 percent. That is the rate at which most small businesses are charged. The top corporate rate is 35 percent. So the small businesses are paying over 3.5 percent more in their income tax rate than the big corporation. Accelerating these rate reductions to the year 2003 will harmonize the small business income tax rate with the corporate rate. That is fair. It is equitable. It is the right thing to do, and it will stimulate economic investment and job creation because, as I said before, it is small businesses that create most of the jobs. The small businesses would receive about 79 percent, which represents over $10 billion, of the $13.3 billion in tax relief that comes from accelerating the reduction of the top bracket to 35 percent in the year 2003, as opposed to the year 2006. That is why the President said let's bring that reduction forward 3 years and provide this benefit immediately. There is another benefit for small business that has not been talked about much. The President's proposal would increase from $25,000 to $75,000 the amount that small businesses may expense each year, that is to say that they can write off in their income taxes. There is broad bipartisan agreement that allowing small businesses to expense a larger amount of their investment in equipment will provide a strong incentive for small business to expand. As I said, these are the businesses that provide most of the new jobs in our country. Let me conclude by talking about this class warfare. The previous speaker said he didn't want to talk about class warfare but immediately got into the same argument about who benefits. He also acknowledged something that is very true. John Kennedy is famous for saying, back in 1963 when he was proposing a capital gains tax reduction and people pointed out that there were not very many people who had capital gains, President Kennedy said: But a rising tide lifts all boats. If some taxpayers benefit, in the long run all taxpayers benefit. That is an acknowledged principle of economics. One ought not be asking why do you get a $3,000 benefit from President Bush's tax proposal and I only get a $1,500 benefit? But rather, they should say, I am glad I got the $1,500 benefit and I am glad you got the $3,000 benefit, because for all of it is going to make the economy healthier and in the long run it will make us all wealthier. That is the attitude, fortunately, most Americans have. According to the IRS data from 2000, the top 5 percent of tax filers paid more than 50 percent of all income taxes, and the top half of all tax filers were responsible for nearly all of our taxes, 96 percent. Who ends up paying a higher percentage or lower percentage after all of the Bush tax plan is put into effect? It turns out that the wealthier people end up paying an even higher percentage of taxes and the people in the lower brackets pay an even smaller percentage of taxes. So it does not help the wealthy at the expense of the poor. In fact, if you want to just measure it by that measure, the wealthy pay even more of the taxes than they do today. If your income is over $200,000, you are going to be paying 45.4 percent of all of the Federal income taxes. Currently, they pay 44.8 percent. So that is an increase in the amount of taxes that are going to be paid by people who make $200,000 or more. If you are making above $100,000 and less than $200,000, you are going to be paying 27.9 percent of all Federal income taxes. Currently, you pay 27.6 percent-- an increase. Under the Bush plan, families with incomes of over $100,000 would end up paying 73 percent of all Federal income taxes. By the way, it takes 3.8 million low-income taxpayers off the tax rolls completely, the Bush plan does. So it is not even an effective rebuttal to say it benefits the rich at the expense of the poor. I have gone through all the different arguments. We talked about where is the alternative. We talked about the benefits to the States. We talked about the benefits to families. I haven't even talked here about the child tax credit or the marriage penalty elimination. All of these features of the Bush plan are designed in one way or another to help different parts of our economy, different types of families in America, so at the end of the day everybody benefits. It is possible to pick out one little segment of the tax cuts proposed by the President and say that does not benefit everybody. Of course. If you don't have any children, the child tax credit isn't going to help you. But for those families with children, it is going to help a lot. Same thing if you are two single people; ending the marriage penalty might not help you. If you are a married couple, you might get the benefit of that. But you put it all together and end up with a mosaic that provides not only help to all Americans but an economic long-term growth package that can sustain the kind of living we want in this country, while providing the kind of revenues to State and local governments as well as the Federal Government. That is the philosophy of the Bush tax plan. It is a good philosophy, and I look forward to a robust debate with my colleagues who may disagree with portions of that plan. It is a very defensible plan, and I am proud to support what the President has proposed here. I hope we will have plenty of opportunity to debate this in the near future so we can enact all of the President's proposal as soon as we possibly can for the benefit of the American economy but, more importantly, all American families.

Mr. KYL

Mr. KYL. Madam President, it is my understanding I have until 4 o'clock to speak. Therefore, if I need a unanimous consent request for that I will propound it at this time. If I do not, I will simply proceed.

Mr. KYL

Mr. KYL. Mr. President, on behalf of Senator McCain and myself I am introducing legislation today that would codify the settlement of the Zuni Indian Tribe's water rights for its religious lands in northeastern Arizona. Congress first recognized the importance of these lands in 1984 when it created the Zuni Heaven Reservation, Pub. L. 98- 498, as amended by Pub. Law No. 101-486, 1990. For nearly a century, the small communities upstream from this Reservation have fully- appropriated the water from Little Colorado River for use in their homes and on their fields. Yet the Zuni Tribe asserted that it would need water to restore and use its Reservation lands. The prospect of dividing the limited water of the Little Colorado River with still another user created great uncertainly. To resolve that uncertainty and to avoid expensive and protracted litigation, the Zuni Tribe, the United States on behalf of the Zuni Tribe, the State of Arizona, including the Arizona Game and Fish Commission, the Arizona State Land Department, and the Arizona State Parks Board, and the major water users in this area of Arizona negotiated for many years to produce a water settlement that is acceptable to all parties. This bill would provide the Zuni Tribe with the resources and protections necessary to acquire water rights from willing sellers and to restore and protect the wetland environment that the Zuni Tribe previously used. In return, the Zuni Tribe would waive its claim in the Little Colorado River Adjudication. In addition, the Zuni Tribe would, among other things, grandfather existing water uses and waive claims against many future water uses in the Little Colorado River basin. In summary, with this bill, the Zuni Tribe can achieve its needs for the Zuni Heaven Reservation while avoiding a disruption to local water users and industry. Furthermore, the United States can avoid litigating water rights and damage claims and satisfy its trust responsibilities to the Tribe regarding water for the Reservation. The parties have worked many years to reach consensus and I believe this bill would produce a fair result to all. This legislation unanimously passed the Senate in the 107th Congress. Unfortunately, the House of Representatives adjourned and was unable to take action on the bill. We hope for its swift passage in the 108th Congress.

Mr. KYL

Mr. KYL. Mr. President, on behalf of Senator McCain and myself I am introducing legislation today that would codify the settlement of the Zuni Indian Tribe's water rights for its religious lands in northeastern Arizona. Congress first recognized the importance of these lands in 1984 when it created the Zuni Heaven Reservation, Pub. L. 98- 498, as amended by Pub. Law No. 101-486, 1990. For nearly a century, the small communities upstream from this Reservation have fully- appropriated the water from Little Colorado River for use in their homes and on their fields. Yet the Zuni Tribe asserted that it would need water to restore and use its Reservation lands. The prospect of dividing the limited water of the Little Colorado River with still another user created great uncertainly. To resolve that uncertainty and to avoid expensive and protracted litigation, the Zuni Tribe, the United States on behalf of the Zuni Tribe, the State of Arizona, including the Arizona Game and Fish Commission, the Arizona State Land Department, and the Arizona State Parks Board, and the major water users in this area of Arizona negotiated for many years to produce a water settlement that is acceptable to all parties. This bill would provide the Zuni Tribe with the resources and protections necessary to acquire water rights from willing sellers and to restore and protect the wetland environment that the Zuni Tribe previously used. In return, the Zuni Tribe would waive its claim in the Little Colorado River Adjudication. In addition, the Zuni Tribe would, among other things, grandfather existing water uses and waive claims against many future water uses in the Little Colorado River basin. In summary, with this bill, the Zuni Tribe can achieve its needs for the Zuni Heaven Reservation while avoiding a disruption to local water users and industry. Furthermore, the United States can avoid litigating water rights and damage claims and satisfy its trust responsibilities to the Tribe regarding water for the Reservation. The parties have worked many years to reach consensus and I believe this bill would produce a fair result to all. This legislation unanimously passed the Senate in the 107th Congress. Unfortunately, the House of Representatives adjourned and was unable to take action on the bill. We hope for its swift passage in the 108th Congress.

Mr. KYL

Mr. KYL. Mr. President, one of the primary reasons that Senator Brownback is interested in this matter is because the last portion of this amendment talks about the fact that North Korea, alone among nations in the world, does not participate appropriately in the distribution of food aid assistance under the World Food Program. The United States is the largest provider of food aid to North Korea, some $620 million since 1995. Yet North Korea does not comply with the World Food Program requirements to ensure that the food we provide actually gets to its intended beneficiaries. They, instead, divert much, if not most, of that food aid--that we desire for humanitarian reasons, to keep the people of North Korea fed, at least in a modest way--to its military industrial complex. What this sense of the Senate does is to make it clear that the Senate believes that North Korea is in violation of agreements that it has signed not to develop nuclear weapons, that it is in violation of the agreed framework--by its own actions it has been declared null and void--that a diplomatic solution desirable in this situation must achieve the total disarmament of North Korea's nuclear weapons and their production capability, and that the United States and other allies in the region must take measures to ensure the highest possible level of deterrence and military readiness in the event that something there should occur. So what we want to do by this sense of the Senate--as I said, the subject is far too serious to be dealt with in just a perfunctory way, but at least we hope this sense-of-the-Senate resolution, which was adopted earlier this evening, will begin the debate in the Senate, will enable us to make clear to the rest of the world that we view this situation seriously, that we support the President's efforts to try to achieve a resolution of it in a way that will result in the dismantlement of the nuclear program in North Korea and, frankly, will expose its horrendous practice of taking food aid with which the rest of us intend to keep the people of North Korea alive and diverting that for the military in North Korea. It will expose that problem to the light of day so we can begin to get that food to the people who deserve it.

Mr. KYL. Mr. President, obviously, the subject which I will speak to is a very serious one and requires a lot more discussion than we are going to give it this evening. But the reason Senator McCain and I offered the sense-of-the-Senate resolution on North Korea was to begin to shed light on this most difficult problem and to give voice to the Senate feelings so that everyone could appreciate the fact that the Senate views this as an incredibly important problem that requires us to pay a lot more attention to it and that requires the President to have additional tools to deal with it. Mr. President, I ask unanimous consent that Senator Brownback of Kansas be added as a cosponsor of the amendment.

Mr. KYL. Sure.

Mr. KYL. I wanted to speak for 5 minutes on that.

Mr. KYL. Mr. President, I think the Korea resolution sense of the Senate was in that list that the chairman read.

Mr. KYL

Mr. KYL. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 61

Mr. KYL. Mr. President, I have already objected to the modification of the amendment because it includes an offset of U.S. Customs Service fees. I have talked to the Senator from New York about my commitment to try to find a way in the Finance Committee to develop a plan very early in this year to find the reimbursement capability for the health care providers that are included within her amendment because I have in the past cosponsored legislation which would provide for adequate reimbursement to all of the health care professions. To set the record straight, we have ensured in this legislation that the cut that was going to take place in physician reimbursements will not take place. Additionally, there is funding for the rural hospitals. That will be done because those were the emergency requirements that we deal with in this legislation. In addition to that, the add-ons to the reimbursements to all of the other providers that are the subject of the amendment of the Senator from New York are set to expire. It is my intention to work with the Senator from New York to find a way to ensure that we can continue those add-ons. That can be done in the Finance Committee, and I am hopeful we will be able to do that. The first point I want to make is that the true emergency--the physicians--is being taken care of in this legislation. The expiration of the add-ons is something I will work on with the Senator from New York to try to accomplish, but we cannot do it by offsetting Customs user fees. At a time when we are asking the Customs Department to aid us in the war on terror at our borders and they are stretched as thin as they can possibly be stretched, it would be the absolute wrong thing to do. In talking with the Senator from New York, I am sure she agrees that if this is, in fact, what would happen, this would not be a necessarily good thing, that the funding that ordinarily would accrue to the Customs Service would not necessarily accrue to the Customs Service if an offset is permitted for this particular program. I will quote two things from a statement before the Terrorism Subcommittee last year. Bonni Tischler, the Acting Director of the Customs Service, testified, and I will quote a couple of things she said. I asked her about the effect of an offset on Customs user fees. She said: My personal opinion is it would severely hamper us. Later on she said: Yes, we would be severely hampered in how we operated. Then in a letter from the Customs Service from the Acting Commissioner which was sent to all of us--it was actually a memorandum from the Under Secretary for Enforcement--the point was that it would negatively impact the available funding from the Customs Service. I think my bone fides are pretty good. I helped to defeat a proposal of my chairman, Chairman Grassley, which was also going to be using the Customs user fees as an offset. This is the wrong way to achieve what may well be good objectives, and therefore I was constrained to object. We are all in agreement that we cannot allow the reimbursements to physicians to be cut in March. We are taking care of that in this legislation. In addition, we should try to find ways to prevent the add-ons, or the other health care providers, from not continuing to be in effect throughout the next year. It is my commitment to try to work with the Senator from New York in a way to ensure that happens as part of the Finance Committee deliberations probably on the Medicare legislation.

Mr. KYL. Mr. President, I object because the Customs user fees would be one of the worst offsets we could provide, given the obligations of the Homeland Security Department with Customs security at our borders.