Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent to speak as long as I may speak beyond 10 minutes.

Mr. KYL. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the text of this bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the text of this bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I rise to introduce the Crime Victims' Rights Amendment. The scales of justice are imbalanced. The U.S. Constitution, mainly through amendments, grants those accused of crime many constitutional rights, such as a speedy trial, a jury trial, counsel, the right against self-incrimination, the right to be free from unreasonable searches and seizures, the right to subpoena witnesses, the right to confront witnesses, and the right to due process under the law. The Constitution, however, guarantees no rights to crime victims. For example, victims have no right to be present, no right to be informed of hearings, no right to be heard at sentencing or at a parole hearing, no right to insist on reasonable conditions of release to protect the victim, no right to restitution, no right to challenge unending delays in the disposition of their case, and no right to be told if they might be in danger from release or escape of their attacker. This lack of rights for crime victims has caused many victims and their families to suffer twice, once at the hands of the criminal, and again at the hands of a justice system that fails to protect them. The Crime Victims' Rights Amendment would bring balance to the judicial system by giving victims of violent crime the rights to be informed, present, and heard at critical stages throughout their ordeal. The amendment gives victims of violent crime the right: to reasonable and timely notice of any public proceeding involving the crime and of any release or escape of the accused; not to be excluded from such public proceeding; reasonably to be heard at public release, plea, sentencing, reprieve, and pardon proceedings; and to adjudicative decisions that duly consider the victim's safety, interest in avoiding unreasonable delay, and just and timely claims to restitution from the offender. These rights have been at the core of the amendment since 1996, when Senator Feinstein and I first introduced the Crime Victims' Rights Amendment. The amendment is the product of extended discussions with the White House, the Department of Justice, Representative Steve Chabot, Senators Hatch and Biden, law enforcement officials, major victims' rights groups, and such diverse scholars as Professor Larry Tribe and then-Professor Paul Cassell. The current version is similar to the version in the 107th Congress. As President Bush stated when announcing his support for the language of the amendment, the amendment was ``written with care, and strikes a proper balance.'' http:// www.whitehouse.gov/news/releases/2002/04/20020416-1.html. One of the nation's leading constitutional scholars, Harvard Law Professor Laurence Tribe, who is on the opposite end of the ideological spectrum from President Bush, concurred. Professor Tribe praised the Amendment's ``brevity and clarity'' and commented, ``That you achieved such conciseness while fully protecting defendants' rights and accommodating the legitimate concerns that have been voiced about prosecutorial power and presidential authority is no mean feat. . . . I think you have done a splendid job at distilling the prior versions of the Victims' Rights Amendment into a form that would be worthy of a constitutional amendment.'' Letter of April 15, 2002. If reform is to be meaningful, it must be in the U.S. Constitution. Since 1982, when the need for a constitutional amendment was first recognized by President Reagan's Task Force on Victims of Crime, 32 states have passed similar measures, by an average popular vote of about 80 percent. These state measures have helped protect crime victims; but they are inadequate for two reasons. First, each amendment is different, and not all States have provided protection to victims; a Federal amendment would establish a basic floor of crime victims' rights for all Americans, just as the federal Constitution provides for the accused. Second, statutory and state constitutional provisions are always subservient to the federal constitution; so, in cases of conflict, the defendants' rights, which are already in the U.S. Constitution, will always prevail. The Crime Victims' Rights Amendment would correct this imbalance. It is important to note that the number one recommendation in a 400 page report by the Department of Justice on victims rights and services was that ``the U.S. Constitution should be amended to guarantee fundamental rights for victims of crime.'' U.S. Department of Justice, Office for Victims of Crime, New Directions from the Field: Victims' Rights and Services for the 21st Century 9, 1998. The report continued: ``A victims' rights constitutional amendment is the only legal measure strong enough to rectify the current inconsistencies in victims' rights laws that vary significantly from jurisdiction to jurisdiction on the state and federal levels.'' Id. at 10. Further: ``Granting victims of crime the ability to participate in the justice system is exactly the type of participatory right the Constitution is designed to protect and has been amended to permanently ensure. Such rights include the right to vote on an equal basis and the right to be heard when the government deprives one of life, liberty, or property.'' Id. Some may say, ``I'm all for victims' rights but they don't need to be in the U.S. Constitution. The Constitution is too hard to change.'' But the history of our country teaches us that constitutional protections are needed to protect the basic rights of the people. Our criminal justice system needs the kind of fundamental reform that can only be accomplished through changes in our fundamental law, the Constitution. Attempts to establish rights by Federal or State statute, or even State constitutional amendment, have proven inadequate, after more than twenty years of trying. Then-Attorney General Reno has confirmed the point, noting that, ``unless the Constitution is amended to ensure basic rights to crime victims, we will never correct the existing imbalance in this country between defendants' constitutional rights and the haphazard patchwork of victims' rights.'' Senate Judiciary Committee Hearing, April 16, 1997, statement of Attorney General Janet Reno, at 41. On behalf of the Department of Justice, Ray Fisher, then Associate Attorney General, now a judge on the Ninth Circuit Court of Appeals, testified that ``the state legislative route to change has proven less than adequate in according victims their rights. Rather than form a minimum baseline of protections, the state provisions have produced a hodgepodge of rights that vary from jurisdiction to jurisdiction. Rights that are guaranteed by the Constitution will receive greater recognition and respect, and will provide a national baseline.'' Senate Judiciary Committee Hearing, April 28, 1998, statement of Associate Attorney General Ray Fisher, at 9. A number of legal commentators have reached similar conclusions. Harvard Professor of Law Laurence Tribe has explained that the existing statutes and state amendments ``are likely, as experience to date sadly shows, to provide too little real protection whenever they come into conflict with bureaucratic habit, traditional indifference, sheer inertia, or any mention of an accused's rights regardless of whether those rights are genuinely threatened.'' Senate Judiciary Committee Hearing, March 24, 1999, statement of Laurence Tribe, at 6. He also stated, ``there appears to be a considerable body of evidence showing that, even where statutory or regulatory or judge-made rules exist to protect the participatory rights of victims, such rights often tend to be honored in the breach . . . .'' Id. at 7. Indeed, according to a report by the National Institute of Justice, even in states that gave ``strong protection'' to victims rights, fewer than 60 percent of the victims were notified of the sentencing hearing and fewer than 40 percent were notified of the pretrial release of the defendant. National Institute of Justice, Research in Brief, ``The Rights of Crime Victims--Does Legal Protection Make a Difference?'' at 4 (Dec. 1998). If crime victims are to have meaningful rights, those rights must be in the U.S. Constitution. As President Bush has stated, ``The protection of victims' rights is one of those rare instances when amending the Constitution is the right thing to do. And . . . the Crime Victims' Rights Amendment is the right way to do it.'' http:// www.whitehouse.gov/news/releases/2002/04/20020416-1.html. The Crime Victims' Rights Amendment has strong bipartisan support in the House and Senate. Senator Feinstein is the lead Democratic sponsor. I would like to thank her for her tireless efforts on behalf of crime victims and for her hard and very valuable work on the language. Also, a bipartisan group of 39 State Attorneys General has signed a letter expressing their ``strong and unequivocal support'' for an amendment. In January 1997, the National Governors' Association voted in favor of an amendment. In 1996 and 2000, both the Republican and Democratic Party Platforms called for a crime victims' rights amendment. Additionally, the amendment is supported by the International Association of Chiefs of Police and major national victims' rights groups, including Parents of Murdered Children, the National Organization for Victim Assistance, Mothers Against Drunk Driving, MADD, the Maryland Crime Victims' Resource Center, Arizona Voice for Crime Victims, Crime Victims United, and, Memory of Victims Everywhere. The amendment has received strong support around the country. As I mentioned earlier, 32 states have passed similar measures--by an average popular vote of almost 80 percent. Since we first introduced the amendment in 1996, Nila Lynn has been murdered in my home State of Arizona. Nila and her husband Duane were three months short of their 50th wedding anniversary. Nila was shot in the back by Richard Glassel and died in Duane's arms. Despite the fact that Duane had a State constitutional right to be heard at Glassel's sentencing and despite the fact that Glassel was afforded the right to make a sentencing recommendation to the jury, Duane's voice was silenced because he had no U.S. Constitutional right to make a similar sentencing recommendation. For far too long, the criminal justice system has ignored crime victims who deserve to be treated with fairness, dignity, and respect. Our criminal justice system will never be truly just as long as criminals have rights and victims have none. I ask unanimous consent that the text of the joint resolution be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, my best wishes today go to the Salt River Project on the celebration of its centennial of service to the communities of central Arizona. When the Salt River Project, or SRP, was created on February 7, 1903, Arizona was still a territory and the people who had settled its central desert valleys had just endured a period of devastating droughts. They knew the future of their farms, businesses, and families depended on securing a reliable supply of water. If they failed, they were sure to witness the continued withering of their farms and livelihoods. With commitment, they banded together to form the Salt River Valley Water Users Association, later to become SRP. With courage, they mortgaged their lands as debt collateral for a federal loan that was granted under terms of the National Reclamation Act of 1902. And the result eight years later was the completion of a great monolithic stone dam that was named after the President, Theodore Roosevelt. It would be the first of other dams and water works built through partnership with SRP and federal and local governments to ensure the economic vitality of my native state. Without Roosevelt Dam, Arizona's early communities could not have grown. Similarly, growth would not have continued without SRP's development and management of early hydropower resources and later leadership and partnership in constructing extensive generation and transmission systems to fuel Arizona's economy. In the past century, SRP has become Arizona's largest water supplier and the third largest public power provider in the nation. It has gained a reputation as a utility with a record for service, safety, and commitment to the environment and human services. As SRP celebrates its centennial, it deserves recognition for its past achievements and for the important role it will continue to play in Arizona's advancement in the 21st century.

Mr. KYL

Mr. KYL. Mr. President, Investors are the backbone of the U.S. economic system. They provide the capital that entrepreneurs use to start and grow businesses. Investors invest in everything from corporations like General Electric to the local Mom and Pop convenience store. These are the businesses that employ our American workers and compete against other businesses throughout the United States and the world. It is investor capital that fuels the most dynamic workings of our economy. Too often, our Federal Government has taken the American investor for granted. Even worse, our Federal Government has singled him out for adverse treatment by placing significant impediments in his path. Congress needs to refocus our government's attention on helping our investors as well as making our U.S. businesses more attractive entities in which to invest. Today, I am introducing legislation, the ``Contract with Investors,'' which incorporates a number of proposals to foster a better investment environment. In order to satisfy an arcane Senate budget rule, the 2001 tax-relief law's provisions will expire in 2011. Making this bipartisan tax relief permanent will eliminate a large source of investor uncertainty that currently exists in the marketplace. Businesses are having a hard time planning with the Tax Code potentially reverting back to old tax laws. Businesses, and the investors who own them, need certainty and a stable environment in which to prosper. Making last year's tax provisions permanent will go a long way towards providing that certainty. The second thing my bill does is accelerate last year's marginal income tax rate reductions. Instead of reducing the tax brackets in 2004 and 2006, as currently scheduled, my bill will move the 2004 rate reductions up to 2003 and the 2006 rate reductions up to 2004. Marginal tax-rate reductions benefit all income tax-paying Americans. Many investors invest in businesses that are sole proprietorships, i.e. non- incorporated business entities. Owners of these businesses pay the highest individual marginal income tax rate; under my bill the highest rate they would pay in 2004 and beyond would be 35 percent, the same rate as corporations. The third provision would accelerate the repeal of the estate, or more accurately ``death'', tax. A December 1998 report by the Joint Economic Committee concluded that the existence of the death tax during the last century has reduced the stock of investors' capital in the economy by nearly half a trillion dollars. The Joint Committee estimates that, by repealing the death tax and putting those resources to better use, as many as 240,000 jobs could be created over seven years, and Americans would have an additional $24.4 billion in disposable personal income. Last year, Dr. Wilbur Steger, President of Consad Research Corporation and a professor at Carnegie Mellon University testified before the Senate Finance Committee that an immediate death-tax repeal would provide a $40 billion automatic stimulus to the economy. This is based on estimates of the amount of net unrealized capital gains that would be unlocked by such a repeal. Many Americans choose to hold onto their assets until death in order to obtain for their heirs a ``step- up'' in basis. Eliminating the death tax and a limited step-up in basis will provide an incentive for Americans to sell assets before death, hence the term ``unlocking.'' Under current law, the death tax will go down to zero in 2010 but reappear thereafter, at potent 2001 levels, thus adding significant complexity to future death-tax planning, increasing costs that are a drag on productivity, and retreating from a principled rejection of a frankly immoral tax. This is unsatisfactory. Until the death tax is repealed, family businesses, farms and ranches must still pay for expensive life-insurance policies, death-tax planners, and tax attorneys. These expenses total more than $12 billion a year, according to Consad Research Corporation. A more efficient utilization of these resources would result in an immediate stimulus for the economy. More workers will be hired, more capital assets purchased and more productive goods made if we accelerate the elimination of the death tax and make it permanent. In short, Congress should hurry up and bury the death tax for all time to enable family businesses, farms, and ranches to begin investing those billions of wasted resources in the economy, creating jobs and expanding services, providing a powerful stimulus for their long-term survival. My bill would permanently repeal the death tax in 2005, thus allowing all Americans 2 years to plan for a future in which the federal government no longer taxes the death of its citizens. The fourth provision in my Contract with Investors addresses the taxation of capital gains. My bill would reduce it to 10 percent. The capital-gains tax is a form of double-taxation that penalizes risk- taking and entrepreneurship. As many economists, including Federal Reserve Chairman Alan Greenspan, note, the capital-gains tax should not exist. Short of eliminating this tax, Congress must enact a large, and permanent, reduction in the capital-gains tax rate in order to stimulate new investment and more productive use of resources for both the short-term and the long-term health of our economy. According to a recent study by the American Council for Capital Formation, American taxpayers face capital-gain tax rates that are 35 percent higher than those paid by the average investor in other countries. In addition, the United States is one of a small number of countries that requires a holding period for an investment to qualify for a lower capital-gain treatment. In the last decade, individual capital-gains rate reductions and shortening of the holding period has boosted U.S. economic growth. Reducing the cost of capital will promote the promote the type of productive business investment that fosters growth in output and high- paying jobs. Lowering rates will aid entrepreneurs in their effort to promote technological advances in products and services that people want and need. And let's not forget about our national savings. Reducing capital- gains taxes means fewer taxes on Americans who choose to save for their future. What our economy needs is to remove impediments for savings and capital formation. When Americans choose to save for their retirement security and other financial goals, they are investing in the United States. We need to make that choice more attractive so that Americans choose to invest more in the United States. Reducing the capital-gains taxes will help achieve this goal. My bill will also modernize the capital-loss provisions by increasing the amount of capital loss an individual may deduct against ordinary income to $10,000 from the current-law $3,000, and indexing it for future inflation. This $3,000 limit was arbitrarily set over 25 years ago and would have grown to $10,000 had it been indexed when it was enacted. Due to this lack of indexation, many investors are forced to hold on to unproductive investments. Updating this $3,000 limit will permit investors to sell these unproductive assets and invest the proceeds in more productive assets. Next, my bill will provide additional incentives for Americans to increase the amounts and periods of time in which they invest for their retirement security. Increasing the annual, maximum IRA contribution from $3,000 to $5,000 and the annual, maximum 401(k) plan contribution from $11,000 to $15,000 would enable American workers to save more for their future by investing in businesses. Increasing from 70.5 to 75 the age at which those tax-deferred retirement-savings accounts must begin making minimum required annual withdrawals will allow American seniors who are approaching this arbitrary age to choose whether to maintain their investments. They will not longer be forced to divest. The next provision in my bill would eliminate the double taxation of corporate profits. Currently, businesses pay income taxes on their profits. Their investors are forced to pay a second income tax on the amounts that corporations distribute to them in the form of dividends. The national Center for Policy Analysis has calculated that the combined tax rate on corporate profits is approximately 60 percent. My bill would remedy this problem by exempting from income tax the dividends received by individuals from publicly traded C corporations. Eliminating this taxation will produce higher returns on dividend- yielding equity investments. Companies will have an incentive to make money and give it to the investor/shareholders in order to increase the value of the stock. Investors and businesses will benefit from this proposal. Finally, I have included five provisions under Sense of the Senate language. I believe that the Senate must act on these issues and I stand ready and willing to assist my fellow Senators in solving these problems. First, Congress should pass legislation to safeguard American workers' pension and retirement accounts. This year, the Finance Committee unanimously passed out of committee such a bill. The Senate and the House of Representatives should act quickly to pass similar legislation as soon as possible. Second, Congress should modernize this country's international tax provisions in order to permit U.S. companies to better compete internationally. Our Tax Code's provisions, particularly the international tax, are placing our U.S. companies and the investors who own them at a distinct competitive disadvantage. Congress must modernize these provisions and move towards ending the current practice of taxing profits earned outside our country's boundaries. Third, Congress must take the trouble to purge redundant, outdated, and unscientific regulatory burdens on investors and U.S. companies. Congress is quick to pass onerous new laws but slow to repeal them. This is an abdication of our responsibilities as legislators. Before placing new burdens on investors and businesses, Congress should be required to perform a cost-benefit analysis as well as instituting performance criteria to monitor and evaluate these new burdens on U.S. businesses and investors. Fourth, Congress should enact meaningful tort reform as soon as possible. Finally, Congress should enact meaningful tax reform that simplifies the Federal Tax Code and reduces the cost-recovery periods that businesses are forced to use to recover the costs of capital. Now is the time for bold action. A ``Contract with Investors'' is long overdue. I have laid out my principles. I look forward to future hearings and discussions with my colleagues. It's time to get working.

Mr. KYL

Mr. KYL. Mr. President, Investors are the backbone of the U.S. economic system. They provide the capital that entrepreneurs use to start and grow businesses. Investors invest in everything from corporations like General Electric to the local Mom and Pop convenience store. These are the businesses that employ our American workers and compete against other businesses throughout the United States and the world. It is investor capital that fuels the most dynamic workings of our economy. Too often, our Federal Government has taken the American investor for granted. Even worse, our Federal Government has singled him out for adverse treatment by placing significant impediments in his path. Congress needs to refocus our government's attention on helping our investors as well as making our U.S. businesses more attractive entities in which to invest. Today, I am introducing legislation, the ``Contract with Investors,'' which incorporates a number of proposals to foster a better investment environment. In order to satisfy an arcane Senate budget rule, the 2001 tax-relief law's provisions will expire in 2011. Making this bipartisan tax relief permanent will eliminate a large source of investor uncertainty that currently exists in the marketplace. Businesses are having a hard time planning with the Tax Code potentially reverting back to old tax laws. Businesses, and the investors who own them, need certainty and a stable environment in which to prosper. Making last year's tax provisions permanent will go a long way towards providing that certainty. The second thing my bill does is accelerate last year's marginal income tax rate reductions. Instead of reducing the tax brackets in 2004 and 2006, as currently scheduled, my bill will move the 2004 rate reductions up to 2003 and the 2006 rate reductions up to 2004. Marginal tax-rate reductions benefit all income tax-paying Americans. Many investors invest in businesses that are sole proprietorships, i.e. non- incorporated business entities. Owners of these businesses pay the highest individual marginal income tax rate; under my bill the highest rate they would pay in 2004 and beyond would be 35 percent, the same rate as corporations. The third provision would accelerate the repeal of the estate, or more accurately ``death'', tax. A December 1998 report by the Joint Economic Committee concluded that the existence of the death tax during the last century has reduced the stock of investors' capital in the economy by nearly half a trillion dollars. The Joint Committee estimates that, by repealing the death tax and putting those resources to better use, as many as 240,000 jobs could be created over seven years, and Americans would have an additional $24.4 billion in disposable personal income. Last year, Dr. Wilbur Steger, President of Consad Research Corporation and a professor at Carnegie Mellon University testified before the Senate Finance Committee that an immediate death-tax repeal would provide a $40 billion automatic stimulus to the economy. This is based on estimates of the amount of net unrealized capital gains that would be unlocked by such a repeal. Many Americans choose to hold onto their assets until death in order to obtain for their heirs a ``step- up'' in basis. Eliminating the death tax and a limited step-up in basis will provide an incentive for Americans to sell assets before death, hence the term ``unlocking.'' Under current law, the death tax will go down to zero in 2010 but reappear thereafter, at potent 2001 levels, thus adding significant complexity to future death-tax planning, increasing costs that are a drag on productivity, and retreating from a principled rejection of a frankly immoral tax. This is unsatisfactory. Until the death tax is repealed, family businesses, farms and ranches must still pay for expensive life-insurance policies, death-tax planners, and tax attorneys. These expenses total more than $12 billion a year, according to Consad Research Corporation. A more efficient utilization of these resources would result in an immediate stimulus for the economy. More workers will be hired, more capital assets purchased and more productive goods made if we accelerate the elimination of the death tax and make it permanent. In short, Congress should hurry up and bury the death tax for all time to enable family businesses, farms, and ranches to begin investing those billions of wasted resources in the economy, creating jobs and expanding services, providing a powerful stimulus for their long-term survival. My bill would permanently repeal the death tax in 2005, thus allowing all Americans 2 years to plan for a future in which the federal government no longer taxes the death of its citizens. The fourth provision in my Contract with Investors addresses the taxation of capital gains. My bill would reduce it to 10 percent. The capital-gains tax is a form of double-taxation that penalizes risk- taking and entrepreneurship. As many economists, including Federal Reserve Chairman Alan Greenspan, note, the capital-gains tax should not exist. Short of eliminating this tax, Congress must enact a large, and permanent, reduction in the capital-gains tax rate in order to stimulate new investment and more productive use of resources for both the short-term and the long-term health of our economy. According to a recent study by the American Council for Capital Formation, American taxpayers face capital-gain tax rates that are 35 percent higher than those paid by the average investor in other countries. In addition, the United States is one of a small number of countries that requires a holding period for an investment to qualify for a lower capital-gain treatment. In the last decade, individual capital-gains rate reductions and shortening of the holding period has boosted U.S. economic growth. Reducing the cost of capital will promote the promote the type of productive business investment that fosters growth in output and high- paying jobs. Lowering rates will aid entrepreneurs in their effort to promote technological advances in products and services that people want and need. And let's not forget about our national savings. Reducing capital- gains taxes means fewer taxes on Americans who choose to save for their future. What our economy needs is to remove impediments for savings and capital formation. When Americans choose to save for their retirement security and other financial goals, they are investing in the United States. We need to make that choice more attractive so that Americans choose to invest more in the United States. Reducing the capital-gains taxes will help achieve this goal. My bill will also modernize the capital-loss provisions by increasing the amount of capital loss an individual may deduct against ordinary income to $10,000 from the current-law $3,000, and indexing it for future inflation. This $3,000 limit was arbitrarily set over 25 years ago and would have grown to $10,000 had it been indexed when it was enacted. Due to this lack of indexation, many investors are forced to hold on to unproductive investments. Updating this $3,000 limit will permit investors to sell these unproductive assets and invest the proceeds in more productive assets. Next, my bill will provide additional incentives for Americans to increase the amounts and periods of time in which they invest for their retirement security. Increasing the annual, maximum IRA contribution from $3,000 to $5,000 and the annual, maximum 401(k) plan contribution from $11,000 to $15,000 would enable American workers to save more for their future by investing in businesses. Increasing from 70.5 to 75 the age at which those tax-deferred retirement-savings accounts must begin making minimum required annual withdrawals will allow American seniors who are approaching this arbitrary age to choose whether to maintain their investments. They will not longer be forced to divest. The next provision in my bill would eliminate the double taxation of corporate profits. Currently, businesses pay income taxes on their profits. Their investors are forced to pay a second income tax on the amounts that corporations distribute to them in the form of dividends. The national Center for Policy Analysis has calculated that the combined tax rate on corporate profits is approximately 60 percent. My bill would remedy this problem by exempting from income tax the dividends received by individuals from publicly traded C corporations. Eliminating this taxation will produce higher returns on dividend- yielding equity investments. Companies will have an incentive to make money and give it to the investor/shareholders in order to increase the value of the stock. Investors and businesses will benefit from this proposal. Finally, I have included five provisions under Sense of the Senate language. I believe that the Senate must act on these issues and I stand ready and willing to assist my fellow Senators in solving these problems. First, Congress should pass legislation to safeguard American workers' pension and retirement accounts. This year, the Finance Committee unanimously passed out of committee such a bill. The Senate and the House of Representatives should act quickly to pass similar legislation as soon as possible. Second, Congress should modernize this country's international tax provisions in order to permit U.S. companies to better compete internationally. Our Tax Code's provisions, particularly the international tax, are placing our U.S. companies and the investors who own them at a distinct competitive disadvantage. Congress must modernize these provisions and move towards ending the current practice of taxing profits earned outside our country's boundaries. Third, Congress must take the trouble to purge redundant, outdated, and unscientific regulatory burdens on investors and U.S. companies. Congress is quick to pass onerous new laws but slow to repeal them. This is an abdication of our responsibilities as legislators. Before placing new burdens on investors and businesses, Congress should be required to perform a cost-benefit analysis as well as instituting performance criteria to monitor and evaluate these new burdens on U.S. businesses and investors. Fourth, Congress should enact meaningful tort reform as soon as possible. Finally, Congress should enact meaningful tax reform that simplifies the Federal Tax Code and reduces the cost-recovery periods that businesses are forced to use to recover the costs of capital. Now is the time for bold action. A ``Contract with Investors'' is long overdue. I have laid out my principles. I look forward to future hearings and discussions with my colleagues. It's time to get working.

Mr. KYL

Mr. KYL. Mr. President, I rise today to express my opposition to the conference report on H.R. 3210, the terrorism insurance bill. I had hoped that Congress would approve legislation that encouraged building construction, gave business owners limited liability protection in the event of a terrorist attack, and protected taxpayers from exorbitant costs. These goals were all enunciated by President Bush when he pressed Congress to act on this issue after months of delay. Unfortunately, the legislation in its current form fails to meet any of those objectives. First, the conference report subjects victims of terrorism to potentially unlimited liability by placing no restrictions on court awards of punitive damages or non-economic damages. This has the potential of encouraging a slew of frivolous lawsuits against business owners whose business may be destroyed in terrorist attacks. Certainly no business that was located in the World Trade Center, for example, should be held at fault for the unforeseeable tragedy that took place on September 11. As several of the President's economic advisors noted in a June 10, 2002 letter to Senate Minority Leader Lott, ``the victims of terrorism should not have to pay punitive damages. Punitive damages are designed to punish criminal or near-criminal wrongdoing.'' The letter goes on to say ``the availability of punitive damages in terrorism cases would result in inequitable relief for injured parties, threaten bankruptcies for American companies and a loss of jobs for American workers.'' I strongly agree with that position and am troubled that the conferees did not take these concerns into account before bringing this legislation to the Senate floor. Additionally, I am concerned that this legislation leaves taxpayers open to liability for terrorist attacks. One of the original goals of this bill was to allow the Secretary of the Treasury to sign off on out-of-court settlements to protect the taxpayers from exorbitant costs. Without such a provision, taxpayers, who are liable for as much as 90 percent of property and casualty costs after a terrorist attack, could be gouged by trial attorneys. That is primarily because insurers, with only a ten percent stake in the outcome of litigation, will favor faster, rather than fairer, settlements--at the taxpayers' expense. Of additional concern, the low per-company deductibles will impede the development of a private reinsurance market and will increase the likelihood that this temporary federal program becomes permanent. Since the Federal Government limits each company's liability, rather than that of the entire industry, insurance companies have less incentive to spread their risk. I am also troubled by certain provisions in Title II of this legislation covering victim compensation through seized assets from terrorists and terrorist-sponsoring states. As the conference report stands now, this provision would create a race to the courthouse benefiting a small group of Americans over a far larger group of victims just as deserving of compensation. Economic sanctions against terrorist states have kept the economic activity of those states to a minimum. Yet this limited pool of frozen assets and diplomatic property would be exhausted quickly as large, and often uncontested, compensatory and punitive damage awards are satisfied, leaving most victims with nothing. For example, the special provisions for terrorism victims of Iran expands the number of judgment holders eligible for payment under the 2000 Act (to approximately eight), but metes out all of the approximately $30 million remaining in the fund to satisfy judgments in only two cases. And there are a number of ongoing lawsuits by terrorism victims and their families against Iran that will be foreclosed under this agreement. This section would also disproportionately benefit trial lawyers, since plaintiff's lawyers whose fees are contingent upon satisfying their clients' judgments stand to gain the lion's share of the compensation, not the victims. Overall, this legislation is far from what President Bush wanted. It is a major disappointment that literally benefits trial lawyers at the expense of the taxpayers. I realize that many of my colleagues want to support this bill, despite its flaws. And I understand that. It is regrettable that special-interest groups exerted so much influence in the drafting of this legislation, leaving the President with a bill that amounts to little more than the best he could get from this Congress. But as it stands today, I cannot ask Arizona taxpayers to absorb the potential losses they might incur because of the self-serving and unjustified lawsuits that are the all but inevitable outcome of this legislation.

Mr. KYL

Mr. KYL. Mr. President, Investors are the backbone of the U.S. economic system. They provide the capital that entrepreneurs use to start and grow businesses. Investors invest in everything from corporations like General Electric to the local Mom and Pop convenience store. These are the businesses that employ our American workers and compete against other businesses throughout the United States and the world. It is investor capital that fuels the most dynamic workings of our economy. Too often, our Federal Government has taken the American investor for granted. Even worse, our Federal Government has singled him out for adverse treatment by placing significant impediments in his path. Congress needs to refocus our government's attention on helping our investors as well as making our U.S. businesses more attractive entities in which to invest. Today, I am introducing legislation, the ``Contract with Investors,'' which incorporates a number of proposals to foster a better investment environment. In order to satisfy an arcane Senate budget rule, the 2001 tax-relief law's provisions will expire in 2011. Making this bipartisan tax relief permanent will eliminate a large source of investor uncertainty that currently exists in the marketplace. Businesses are having a hard time planning with the Tax Code potentially reverting back to old tax laws. Businesses, and the investors who own them, need certainty and a stable environment in which to prosper. Making last year's tax provisions permanent will go a long way towards providing that certainty. The second thing my bill does is accelerate last year's marginal income tax rate reductions. Instead of reducing the tax brackets in 2004 and 2006, as currently scheduled, my bill will move the 2004 rate reductions up to 2003 and the 2006 rate reductions up to 2004. Marginal tax-rate reductions benefit all income tax-paying Americans. Many investors invest in businesses that are sole proprietorships, i.e. non- incorporated business entities. Owners of these businesses pay the highest individual marginal income tax rate; under my bill the highest rate they would pay in 2004 and beyond would be 35 percent, the same rate as corporations. The third provision would accelerate the repeal of the estate, or more accurately ``death'', tax. A December 1998 report by the Joint Economic Committee concluded that the existence of the death tax during the last century has reduced the stock of investors' capital in the economy by nearly half a trillion dollars. The Joint Committee estimates that, by repealing the death tax and putting those resources to better use, as many as 240,000 jobs could be created over seven years, and Americans would have an additional $24.4 billion in disposable personal income. Last year, Dr. Wilbur Steger, President of Consad Research Corporation and a professor at Carnegie Mellon University testified before the Senate Finance Committee that an immediate death-tax repeal would provide a $40 billion automatic stimulus to the economy. This is based on estimates of the amount of net unrealized capital gains that would be unlocked by such a repeal. Many Americans choose to hold onto their assets until death in order to obtain for their heirs a ``step- up'' in basis. Eliminating the death tax and a limited step-up in basis will provide an incentive for Americans to sell assets before death, hence the term ``unlocking.'' Under current law, the death tax will go down to zero in 2010 but reappear thereafter, at potent 2001 levels, thus adding significant complexity to future death-tax planning, increasing costs that are a drag on productivity, and retreating from a principled rejection of a frankly immoral tax. This is unsatisfactory. Until the death tax is repealed, family businesses, farms and ranches must still pay for expensive life-insurance policies, death-tax planners, and tax attorneys. These expenses total more than $12 billion a year, according to Consad Research Corporation. A more efficient utilization of these resources would result in an immediate stimulus for the economy. More workers will be hired, more capital assets purchased and more productive goods made if we accelerate the elimination of the death tax and make it permanent. In short, Congress should hurry up and bury the death tax for all time to enable family businesses, farms, and ranches to begin investing those billions of wasted resources in the economy, creating jobs and expanding services, providing a powerful stimulus for their long-term survival. My bill would permanently repeal the death tax in 2005, thus allowing all Americans 2 years to plan for a future in which the federal government no longer taxes the death of its citizens. The fourth provision in my Contract with Investors addresses the taxation of capital gains. My bill would reduce it to 10 percent. The capital-gains tax is a form of double-taxation that penalizes risk- taking and entrepreneurship. As many economists, including Federal Reserve Chairman Alan Greenspan, note, the capital-gains tax should not exist. Short of eliminating this tax, Congress must enact a large, and permanent, reduction in the capital-gains tax rate in order to stimulate new investment and more productive use of resources for both the short-term and the long-term health of our economy. According to a recent study by the American Council for Capital Formation, American taxpayers face capital-gain tax rates that are 35 percent higher than those paid by the average investor in other countries. In addition, the United States is one of a small number of countries that requires a holding period for an investment to qualify for a lower capital-gain treatment. In the last decade, individual capital-gains rate reductions and shortening of the holding period has boosted U.S. economic growth. Reducing the cost of capital will promote the promote the type of productive business investment that fosters growth in output and high- paying jobs. Lowering rates will aid entrepreneurs in their effort to promote technological advances in products and services that people want and need. And let's not forget about our national savings. Reducing capital- gains taxes means fewer taxes on Americans who choose to save for their future. What our economy needs is to remove impediments for savings and capital formation. When Americans choose to save for their retirement security and other financial goals, they are investing in the United States. We need to make that choice more attractive so that Americans choose to invest more in the United States. Reducing the capital-gains taxes will help achieve this goal. My bill will also modernize the capital-loss provisions by increasing the amount of capital loss an individual may deduct against ordinary income to $10,000 from the current-law $3,000, and indexing it for future inflation. This $3,000 limit was arbitrarily set over 25 years ago and would have grown to $10,000 had it been indexed when it was enacted. Due to this lack of indexation, many investors are forced to hold on to unproductive investments. Updating this $3,000 limit will permit investors to sell these unproductive assets and invest the proceeds in more productive assets. Next, my bill will provide additional incentives for Americans to increase the amounts and periods of time in which they invest for their retirement security. Increasing the annual, maximum IRA contribution from $3,000 to $5,000 and the annual, maximum 401(k) plan contribution from $11,000 to $15,000 would enable American workers to save more for their future by investing in businesses. Increasing from 70.5 to 75 the age at which those tax-deferred retirement-savings accounts must begin making minimum required annual withdrawals will allow American seniors who are approaching this arbitrary age to choose whether to maintain their investments. They will not longer be forced to divest. The next provision in my bill would eliminate the double taxation of corporate profits. Currently, businesses pay income taxes on their profits. Their investors are forced to pay a second income tax on the amounts that corporations distribute to them in the form of dividends. The national Center for Policy Analysis has calculated that the combined tax rate on corporate profits is approximately 60 percent. My bill would remedy this problem by exempting from income tax the dividends received by individuals from publicly traded C corporations. Eliminating this taxation will produce higher returns on dividend- yielding equity investments. Companies will have an incentive to make money and give it to the investor/shareholders in order to increase the value of the stock. Investors and businesses will benefit from this proposal. Finally, I have included five provisions under Sense of the Senate language. I believe that the Senate must act on these issues and I stand ready and willing to assist my fellow Senators in solving these problems. First, Congress should pass legislation to safeguard American workers' pension and retirement accounts. This year, the Finance Committee unanimously passed out of committee such a bill. The Senate and the House of Representatives should act quickly to pass similar legislation as soon as possible. Second, Congress should modernize this country's international tax provisions in order to permit U.S. companies to better compete internationally. Our Tax Code's provisions, particularly the international tax, are placing our U.S. companies and the investors who own them at a distinct competitive disadvantage. Congress must modernize these provisions and move towards ending the current practice of taxing profits earned outside our country's boundaries. Third, Congress must take the trouble to purge redundant, outdated, and unscientific regulatory burdens on investors and U.S. companies. Congress is quick to pass onerous new laws but slow to repeal them. This is an abdication of our responsibilities as legislators. Before placing new burdens on investors and businesses, Congress should be required to perform a cost-benefit analysis as well as instituting performance criteria to monitor and evaluate these new burdens on U.S. businesses and investors. Fourth, Congress should enact meaningful tort reform as soon as possible. Finally, Congress should enact meaningful tax reform that simplifies the Federal Tax Code and reduces the cost-recovery periods that businesses are forced to use to recover the costs of capital. Now is the time for bold action. A ``Contract with Investors'' is long overdue. I have laid out my principles. I look forward to future hearings and discussions with my colleagues. It's time to get working.

Mr. KYL

Mr. KYL. Mr. President, Investors are the backbone of the U.S. economic system. They provide the capital that entrepreneurs use to start and grow businesses. Investors invest in everything from corporations like General Electric to the local Mom and Pop convenience store. These are the businesses that employ our American workers and compete against other businesses throughout the United States and the world. It is investor capital that fuels the most dynamic workings of our economy. Too often, our Federal Government has taken the American investor for granted. Even worse, our Federal Government has singled him out for adverse treatment by placing significant impediments in his path. Congress needs to refocus our government's attention on helping our investors as well as making our U.S. businesses more attractive entities in which to invest. Today, I am introducing legislation, the ``Contract with Investors,'' which incorporates a number of proposals to foster a better investment environment. In order to satisfy an arcane Senate budget rule, the 2001 tax-relief law's provisions will expire in 2011. Making this bipartisan tax relief permanent will eliminate a large source of investor uncertainty that currently exists in the marketplace. Businesses are having a hard time planning with the Tax Code potentially reverting back to old tax laws. Businesses, and the investors who own them, need certainty and a stable environment in which to prosper. Making last year's tax provisions permanent will go a long way towards providing that certainty. The second thing my bill does is accelerate last year's marginal income tax rate reductions. Instead of reducing the tax brackets in 2004 and 2006, as currently scheduled, my bill will move the 2004 rate reductions up to 2003 and the 2006 rate reductions up to 2004. Marginal tax-rate reductions benefit all income tax-paying Americans. Many investors invest in businesses that are sole proprietorships, i.e. non- incorporated business entities. Owners of these businesses pay the highest individual marginal income tax rate; under my bill the highest rate they would pay in 2004 and beyond would be 35 percent, the same rate as corporations. The third provision would accelerate the repeal of the estate, or more accurately ``death'', tax. A December 1998 report by the Joint Economic Committee concluded that the existence of the death tax during the last century has reduced the stock of investors' capital in the economy by nearly half a trillion dollars. The Joint Committee estimates that, by repealing the death tax and putting those resources to better use, as many as 240,000 jobs could be created over seven years, and Americans would have an additional $24.4 billion in disposable personal income. Last year, Dr. Wilbur Steger, President of Consad Research Corporation and a professor at Carnegie Mellon University testified before the Senate Finance Committee that an immediate death-tax repeal would provide a $40 billion automatic stimulus to the economy. This is based on estimates of the amount of net unrealized capital gains that would be unlocked by such a repeal. Many Americans choose to hold onto their assets until death in order to obtain for their heirs a ``step- up'' in basis. Eliminating the death tax and a limited step-up in basis will provide an incentive for Americans to sell assets before death, hence the term ``unlocking.'' Under current law, the death tax will go down to zero in 2010 but reappear thereafter, at potent 2001 levels, thus adding significant complexity to future death-tax planning, increasing costs that are a drag on productivity, and retreating from a principled rejection of a frankly immoral tax. This is unsatisfactory. Until the death tax is repealed, family businesses, farms and ranches must still pay for expensive life-insurance policies, death-tax planners, and tax attorneys. These expenses total more than $12 billion a year, according to Consad Research Corporation. A more efficient utilization of these resources would result in an immediate stimulus for the economy. More workers will be hired, more capital assets purchased and more productive goods made if we accelerate the elimination of the death tax and make it permanent. In short, Congress should hurry up and bury the death tax for all time to enable family businesses, farms, and ranches to begin investing those billions of wasted resources in the economy, creating jobs and expanding services, providing a powerful stimulus for their long-term survival. My bill would permanently repeal the death tax in 2005, thus allowing all Americans 2 years to plan for a future in which the federal government no longer taxes the death of its citizens. The fourth provision in my Contract with Investors addresses the taxation of capital gains. My bill would reduce it to 10 percent. The capital-gains tax is a form of double-taxation that penalizes risk- taking and entrepreneurship. As many economists, including Federal Reserve Chairman Alan Greenspan, note, the capital-gains tax should not exist. Short of eliminating this tax, Congress must enact a large, and permanent, reduction in the capital-gains tax rate in order to stimulate new investment and more productive use of resources for both the short-term and the long-term health of our economy. According to a recent study by the American Council for Capital Formation, American taxpayers face capital-gain tax rates that are 35 percent higher than those paid by the average investor in other countries. In addition, the United States is one of a small number of countries that requires a holding period for an investment to qualify for a lower capital-gain treatment. In the last decade, individual capital-gains rate reductions and shortening of the holding period has boosted U.S. economic growth. Reducing the cost of capital will promote the promote the type of productive business investment that fosters growth in output and high- paying jobs. Lowering rates will aid entrepreneurs in their effort to promote technological advances in products and services that people want and need. And let's not forget about our national savings. Reducing capital- gains taxes means fewer taxes on Americans who choose to save for their future. What our economy needs is to remove impediments for savings and capital formation. When Americans choose to save for their retirement security and other financial goals, they are investing in the United States. We need to make that choice more attractive so that Americans choose to invest more in the United States. Reducing the capital-gains taxes will help achieve this goal. My bill will also modernize the capital-loss provisions by increasing the amount of capital loss an individual may deduct against ordinary income to $10,000 from the current-law $3,000, and indexing it for future inflation. This $3,000 limit was arbitrarily set over 25 years ago and would have grown to $10,000 had it been indexed when it was enacted. Due to this lack of indexation, many investors are forced to hold on to unproductive investments. Updating this $3,000 limit will permit investors to sell these unproductive assets and invest the proceeds in more productive assets. Next, my bill will provide additional incentives for Americans to increase the amounts and periods of time in which they invest for their retirement security. Increasing the annual, maximum IRA contribution from $3,000 to $5,000 and the annual, maximum 401(k) plan contribution from $11,000 to $15,000 would enable American workers to save more for their future by investing in businesses. Increasing from 70.5 to 75 the age at which those tax-deferred retirement-savings accounts must begin making minimum required annual withdrawals will allow American seniors who are approaching this arbitrary age to choose whether to maintain their investments. They will not longer be forced to divest. The next provision in my bill would eliminate the double taxation of corporate profits. Currently, businesses pay income taxes on their profits. Their investors are forced to pay a second income tax on the amounts that corporations distribute to them in the form of dividends. The national Center for Policy Analysis has calculated that the combined tax rate on corporate profits is approximately 60 percent. My bill would remedy this problem by exempting from income tax the dividends received by individuals from publicly traded C corporations. Eliminating this taxation will produce higher returns on dividend- yielding equity investments. Companies will have an incentive to make money and give it to the investor/shareholders in order to increase the value of the stock. Investors and businesses will benefit from this proposal. Finally, I have included five provisions under Sense of the Senate language. I believe that the Senate must act on these issues and I stand ready and willing to assist my fellow Senators in solving these problems. First, Congress should pass legislation to safeguard American workers' pension and retirement accounts. This year, the Finance Committee unanimously passed out of committee such a bill. The Senate and the House of Representatives should act quickly to pass similar legislation as soon as possible. Second, Congress should modernize this country's international tax provisions in order to permit U.S. companies to better compete internationally. Our Tax Code's provisions, particularly the international tax, are placing our U.S. companies and the investors who own them at a distinct competitive disadvantage. Congress must modernize these provisions and move towards ending the current practice of taxing profits earned outside our country's boundaries. Third, Congress must take the trouble to purge redundant, outdated, and unscientific regulatory burdens on investors and U.S. companies. Congress is quick to pass onerous new laws but slow to repeal them. This is an abdication of our responsibilities as legislators. Before placing new burdens on investors and businesses, Congress should be required to perform a cost-benefit analysis as well as instituting performance criteria to monitor and evaluate these new burdens on U.S. businesses and investors. Fourth, Congress should enact meaningful tort reform as soon as possible. Finally, Congress should enact meaningful tax reform that simplifies the Federal Tax Code and reduces the cost-recovery periods that businesses are forced to use to recover the costs of capital. Now is the time for bold action. A ``Contract with Investors'' is long overdue. I have laid out my principles. I look forward to future hearings and discussions with my colleagues. It's time to get working.

Mr. KYL

Mr. KYL. Mr. President, I rise today to express my opposition to the conference report on H.R. 3210, the terrorism insurance bill. I had hoped that Congress would approve legislation that encouraged building construction, gave business owners limited liability protection in the event of a terrorist attack, and protected taxpayers from exorbitant costs. These goals were all enunciated by President Bush when he pressed Congress to act on this issue after months of delay. Unfortunately, the legislation in its current form fails to meet any of those objectives. First, the conference report subjects victims of terrorism to potentially unlimited liability by placing no restrictions on court awards of punitive damages or non-economic damages. This has the potential of encouraging a slew of frivolous lawsuits against business owners whose business may be destroyed in terrorist attacks. Certainly no business that was located in the World Trade Center, for example, should be held at fault for the unforeseeable tragedy that took place on September 11. As several of the President's economic advisors noted in a June 10, 2002 letter to Senate Minority Leader Lott, ``the victims of terrorism should not have to pay punitive damages. Punitive damages are designed to punish criminal or near-criminal wrongdoing.'' The letter goes on to say ``the availability of punitive damages in terrorism cases would result in inequitable relief for injured parties, threaten bankruptcies for American companies and a loss of jobs for American workers.'' I strongly agree with that position and am troubled that the conferees did not take these concerns into account before bringing this legislation to the Senate floor. Additionally, I am concerned that this legislation leaves taxpayers open to liability for terrorist attacks. One of the original goals of this bill was to allow the Secretary of the Treasury to sign off on out-of-court settlements to protect the taxpayers from exorbitant costs. Without such a provision, taxpayers, who are liable for as much as 90 percent of property and casualty costs after a terrorist attack, could be gouged by trial attorneys. That is primarily because insurers, with only a ten percent stake in the outcome of litigation, will favor faster, rather than fairer, settlements--at the taxpayers' expense. Of additional concern, the low per-company deductibles will impede the development of a private reinsurance market and will increase the likelihood that this temporary federal program becomes permanent. Since the Federal Government limits each company's liability, rather than that of the entire industry, insurance companies have less incentive to spread their risk. I am also troubled by certain provisions in Title II of this legislation covering victim compensation through seized assets from terrorists and terrorist-sponsoring states. As the conference report stands now, this provision would create a race to the courthouse benefiting a small group of Americans over a far larger group of victims just as deserving of compensation. Economic sanctions against terrorist states have kept the economic activity of those states to a minimum. Yet this limited pool of frozen assets and diplomatic property would be exhausted quickly as large, and often uncontested, compensatory and punitive damage awards are satisfied, leaving most victims with nothing. For example, the special provisions for terrorism victims of Iran expands the number of judgment holders eligible for payment under the 2000 Act (to approximately eight), but metes out all of the approximately $30 million remaining in the fund to satisfy judgments in only two cases. And there are a number of ongoing lawsuits by terrorism victims and their families against Iran that will be foreclosed under this agreement. This section would also disproportionately benefit trial lawyers, since plaintiff's lawyers whose fees are contingent upon satisfying their clients' judgments stand to gain the lion's share of the compensation, not the victims. Overall, this legislation is far from what President Bush wanted. It is a major disappointment that literally benefits trial lawyers at the expense of the taxpayers. I realize that many of my colleagues want to support this bill, despite its flaws. And I understand that. It is regrettable that special-interest groups exerted so much influence in the drafting of this legislation, leaving the President with a bill that amounts to little more than the best he could get from this Congress. But as it stands today, I cannot ask Arizona taxpayers to absorb the potential losses they might incur because of the self-serving and unjustified lawsuits that are the all but inevitable outcome of this legislation.

Mr. KYL

Mr. KYL. I thank my friend from California for her question. I know that she has worked long and hard on these issues and that it is her work and her dedication that is responsible for the inclusion of the children's provisions in the homeland security bill. I would further say to my friend from California that while additional reforms may be warranted, the legislation before us today was primarily a structural bill, not a policy bill. That fact prevented the consideration of some of the reforms she has championed from being included in this legislation. I pledged to work with her in the 108th Congress to help fashion legislation that could address some of the issues that had to be left out of this measure.

Mr. KYL

Mr. KYL. Mr. President, I rise today to cosponsor the Protection of Lawful Commerce in Arms Act, S. 2268. I feel that this bill is necessary in light of the large numbers of lawsuits initiated in recent years seeking to impose liability on gun manufacturers and dealers for the violent conduct of third-party criminals. At common law, tort liability would not lie for harm that was proximately caused by the intervening acts of a third party. It was universally understood that you could not hold a person responsible for the behavior of another person whom he did not control. Applying these long-standing principles, the vast majority of courts have thrown out these types of gun lawsuits. Unfortunately, however, some courts have allowed these suits to go forward. Ohio's Supreme Court, for example, recently overruled both trial courts and appellate courts when, in a 4-3 vote, it reinstated a lawsuit against firearms manufacturers brought by the City of Cincinnati. Lower courts in Massachusetts have also allowed such lawsuits to go forward. This type of politicized litigation affects all firearms manufacturers' and dealers' right to conduct lawful commerce. These lawsuits thus affect all Americans' second amendment rights, not just the rights of those in the jurisdictions that have allowed these suits to go forward. For this reason, a Federal solution to this problem is appropriate. I, therefore, am pleased to cosponsor S. 2268, though I do so with one reservation. The bill as introduced in the Senate appears that it would not only bar political lawsuits, but would also bar recovery for a type of claim that I believe to be legitimate: an action for damages that result if a dealer knowingly or negligently sells a gun to a criminal. The same concern about barring this type of lawsuit was raised during the House of Representatives' consideration of the House companion to this bill, one member knew of a case in his district in which a dealer was sued for selling a gun to someone who was intoxicated. In response, the House Commerce Subcommittee on Commerce, Trade, and Consumer Protection added an additional exception to the bill's preemption for actions arising from: the supplying of a firearm or an ammunition product by a seller for use by another person when the seller knows or should know the person to whom the product has been supplied is likely to use the product, and in fact does use the product, in a manner involving unreasonable risk of injury to himself and others. I believe that this House amendment is sufficient to allow legitimate lawsuits for harm arising from improper gun sales to go forward, while still protecting dealers and manufacturers from politicized anti-gun litigation. On the understanding that Senate conferees would accede to this or an equivalent provision in the House-Senate conference on this legislation, I am pleased to cosponsor the Protection of Lawful Commerce in Arms Act.

Mr. KYL

Mr. KYL. Mr. President, I rise in support of S. 3018, the Beneficiary Access to Care and Medicare Equity Act, which was recently introduced by the Chairman and Ranking member of the Finance Committee. This act would provide more than $40 billion over the next 10 years to improve benefits for Medicare beneficiaries, guarantee that Medicare beneficiaries continue to receive the high quality health care they deserve, and increase reimbursements to Medicare providers. I would prefer that we address these issues as part of comprehensive Medicare reform, reform that includes a new prescription-drug benefit. Unfortunately, the process the Majority Leader used to bring a prescription drug benefit to the Senate floor guaranteed its defeat, and no drug proposal put forward won the 60 votes necessary for passage. While the Senate was unable to pass a prescription drug bill, we still have an opportunity to address other critical Medicare issues. And it is critical. In 1997, Congress passed the Balanced Budget Act. This act made significant cuts in Medicare provider reimbursements and implemented new payment systems. In many cases, these cuts made sense. However, in some cases they went too far. Moreover, the process of implementing these new payment systems for home health care, hospital outpatient services and skilled nursing-facility services has not been a smooth one. One key area where we see this is in payments to physicians. Physicians are reimbursed for providing services to Medicare beneficiaries under a fee schedule. The fee schedule is updated annually under a very complex formula. The formula considers the sustainable growth rate which is based on four factors: the estimated changes in fees; the estimated changes in the average number of Medicare Part B enrollees, not including Medicare+Choice beneficiaries; estimated projected growth in real gross domestic product growth per capita; and estimated change in expenditures due to changes in law or regulations. On November 1, 2001, the Center for Medicare and Medicaid Services (CMS) announced that the annual update of the fee schedule in 2002 would result in a 5.4 percent reduction in reimbursements. A number of factors led to this decline, including the adjustment by the sustainable growth rate. But the sustainable growth rate is flawed because of mistakes made by CMS. In the late 1990's, CMS overestimated the number of Medicare beneficiaries in the Medicare+Choice program and underestimated gross domestic product growth. These errors resulted in reimbursements greater than what they should been if CMS had not made them. As more accurate data came about CMS has corrected its previous errors. This correction has partially led to the -5.4 percent update this year. Additionally, physicians are looking at future payment cuts next year and the two years following that. Overall, physicians could see a 17 percent reduction in reimbursements from Medicare over these four years. The key concern, of course, is really not so much Medicare reimbursements for physicians, but Medicare beneficiaries' access to medical care. There is increasing evidence that doctors are not taking new Medicare beneficiaries, are retiring early or accepting administrative positions. According to a report in the March 12, 2002 edition of the New York Times, 17 percent of family doctors are no longer taking new Medicare patients. The Beneficiary Access to Care and Medicare Equity Act would increase reimbursements to physicians over the next three years, and, in turn, help stem the tide of doctors refusing to treat new Medicare patients. Of course, physicians are not the only health-care providers that this legislation would help. The legislation would eliminate a 15 percent reduction in home health-care reimbursements mandated by the Balanced Budget Act of 1997. As it turns out, the Balanced Budget Act's original change in the payment system for home health care services helped save money. But it is no longer necessary to implement the 15 percent cut. Additionally, this legislation would help smooth out the transition to a new payment system for skilled nursing facilities. S. 3018 would also provide both urban and rural hospitals with increases in reimbursements. It has many provisions to help alleviate the reimbursement differences between rural and urban hospitals. Of particular note, S. 3018 contains a technical change that will allow publicly-funded safety net hospitals to negotiate for lower drug prices. These hospitals bear a disproportionate burden in caring for the uninsured in our country; allowing them to negotiate lower prices will save them millions of dollars. Another provision of note is section 805, which would provide $48 million annually for two years to States and other providers that offer federally-required emergency medical treatment to illegal aliens. A congressionally-commissioned study by the U.S.-Mexico Border Counties Coalition estimates that the 24 counties along the southwest border incur uncompensated costs of over $200 million per year in connection with the provision of emergency health treatment to undocumented aliens. The non-border counties in southwest States, and other states, including New York, Florida, Illinois, New Jersey, Massachusetts, Washington, Colorado, and Maryland, also incur tremendous costs. The entire state of Arizona, for example, incurs unreimbursed costs of approximately $100 million per year to provide such treatment. These southwest States and counties, many of which have very small tax bases and small annual budgets, and other States should not be forced to bear the responsibility of providing emergency health treatment to undocumented aliens. These unreimbursed costs have helped put Arizona's and other States' affected hospitals in a state of dire fiscal emergency. Many hospitals have closed, or are in danger of closing, their emergency rooms either temporarily or permanently. The Balanced Budget Act of 1997 provided funding to states to help defray some of these uncompensated costs; however, this provision expired at the end of fiscal year 2001. Section 805 would specifically extend and refine the Balanced Budget Amendment Act of 1997 to provide $32 million in each of fiscal year 2003 and fiscal year 2004 to the 17 States with the highest number of undocumented aliens, as defined by the U.S. Department of Justice. Additionally, in fiscal year 2003 and fiscal year 2004, $16 million would also be allotted to the six highest undocumented alien apprehension States, as defined by the U.S. Department of Justice. Forty-eight million dollars per year is just a fraction of the unreimbursed costs that the States incur each year, but this funding will at least begin to defray some of the costs. Although, I strongly support most of the provisions contained in S. 3018, I do have concerns about others. For instance, section 707 of S. 3018 provides States with a temporary 1.3 percent point increase in their Federal Medical Assistance Percentage, FMAP, payments, the amount that the Federal Government supplements States' Medicaid spending. Under FMAP, Medicaid funds are distributed to States based upon a formula designed to provide a higher Federal matching percentage to those States with lower relative per capita income, and a lower Federal matching percentage to those States with higher per capita income. This formula, although not perfect, is justified because States cannot manipulate it for their own gain; the data are periodically published and can be estimated with reasonable accuracy. Additionally, the use of per capita income is a proxy for state-tax capacity which, in turn, relates to a State's ability to pay for medical services for needy people. To put it simply: poorer States get more help than wealthier States. Unfortunately, S. 3018 ignores the Medicaid formula and gives each State a 1.3 percent point increase. Under this section, States that have been determined by the Medicaid formula to receive the lowest FMAP of 50 percent receive the greatest percentage increase in FMAP. States with the highest FMAP receive the lowest percentage increase. This is the exact opposite of how the funds should be allocated. The Medicaid formula, whatever its faults, does indicate a relative sense of need. It would be wrong to give the least needy States the largest percentage increase. Even though I have concerns about how funds are distributed under this section, I urge my colleagues to support S. 3018. It is vitally important that Congress enact changes to Medicare payment policies before we adjourn. I also support the passage of a Medicare prescription-drug benefit, preferably the tripartisan modernization proposal; but we should not allow our inability to reach a consensus on that matter to stop us from making the appropriate changes to Medicare's payment policies. Medicare beneficiaries need guaranteed access to high quality care, and S. 3018 is a means to that end.

Mr. KYL

Mr. KYL. Mr. President, I suggest the absence of a quorum.

Mr. KYL. Mr. President, let me note a little bit what the second document is, and then I will conclude. What the Deputy General Counsel of the FBI testified before our committee was how terrorism has changed from the time the FISA statute was first enacted to what we see today. Let me quote a little bit from his statement: When FISA was enacted, terrorism was very different from what we see today. In the 1970s, terrorism more often targeted individuals, often carefully selected. This was the usual pattern of the Japanese Red Army, the Red Brigades and similar organizations listed by name in the legislative history of FISA. Today we see terrorism far more lethal and far more indiscriminate than could have been imagined in 1978. It takes only the events of September 11, 2001, to fully comprehend the difference of a couple of decades. But there is another difference as well. Where we once saw terrorism formed solely around organized groups, today we often see individuals willing to commit indiscriminate acts of terror. It may be that these individuals are affiliated with groups we do not see, but it may be that they are simply radicals who desire to bring about destruction. Mr. President, he goes on then to relate that to the legislation that Senator Schumer and I introduced. Let me quote a little more. What he says is: . . . we are increasingly seeing terrorist suspects who appear to operate at a distance from these organizations. In perhaps an oversimplification, but illustrative nevertheless, what we see today are (1) agents of foreign powers in the traditional sense who are associated with some organization or discernible group (2) individuals who appear to have connections with multiple terrorist organizations but who do not appear to owe allegiance to any one of them, but rather owe allegiance to the International Jihad movement---- Parenthetically, Mr. President, which is not a terrorist organization---- and (3) individuals who appear to be personally oriented toward terrorism but with whom there is no known connection to a foreign power. Let me skip in the interest of time. Agent Bowman goes on to say: During the decade-long Soviet/Afghan conflict, anywhere from 10,000 to 25,000 Muslim fighters representing some forty-three countries put aside substantial cultural differences to fight alongside each other in Afghanistan. The force drawing them together was the Islamic concept of ``umma'' or Muslim community. In this concept, nationalism is secondary to the Muslim community as a whole. As a result, Muslims from disparate cultures trained together, formed relationships, sometimes assembled in groups that otherwise would have been at odds with one another and acquired common ideologies. . . . Following the withdrawal of the Soviet forces in Afghanistan, many of these fighters returned to their homelands, but they returned with new skills and dangerous ideas. They now had newly-acquired terrorist training as guerrilla warfare was the only way they could combat the more advanced Soviet forces. These are the forces that after the Soviets were defeated in Afghanistan became a force that coalesced around, among others, Osama bin Laden, but not all of them associated specifically with Bin Laden. I quote further: Information from a variety of sources repeatedly carries the theme from Islamic radicals that expresses the opinion that we just don't get it. Terrorists world-wide speak of jihad and wonder why the western world is focused on groups rather than on concepts that make them a community. This is the way we have organized our statutes. What he is telling us is we are not seeing it the way our enemies see it. They do not organize in groups. They do not have membership cards that say they are a member of al-Qaida. They have coalesced around an idea, not a group. The agent concludes this way: The lesson to be taken from this is that al-Qaida is far less a large organization than a facilitator, sometimes orchestrator of Islamic militants around the globe. These militants are linked by ideas and goals, not by organizational structure. He concludes by saying: The United States and its allies, to include law enforcement and intelligence components world-wide have had an impact on the terrorists, but they are adapting to changing circumstances. Speaking solely from an operational perspective, investigation of these individuals who have no clear connection to organized terrorism, or tenuous ties to multiple organizations, is becoming increasingly difficult. The current FISA statute has served the nation well, but the International Jihad Movement demonstrates the need to consider whether a different formulation is needed to address the contemporary terrorist problem. That is the end of that quotation, Mr. President. Of course, he and others representing the Department of Justice went on to specifically endorse the Schumer-Kyl legislation to bring our current FISA statute up to date to conform to this new challenge about which Agent Bowan testified. That is the change we are trying to make. To wrap this up, there are three words we would add to the FISA statute: ``or foreign person,'' so that if you can prove the terrorist is either a terrorist for an international terrorist organization or is a terrorist for another state, a country, or is acting for himself ``or foreign person'' are the words we use--in other words, he is a terrorist and a foreign person--any one of those three circumstances enable you to go to the judge and say: Here is our evidence that this individual is planning to engage in terrorism against people in the United States. Will you give us a warrant to search his computer, to search his personal effects, his home, or to put a wiretap on his telephone, whatever the case might be? The judge will then make a decision under the law, whether it is authorized or not. If the court authorizes the issuance of the warrant, we can then look further to determine what this individual is seeking to do. We may find out it is an innocent situation or we may find out that the individual is just acting on his own but is a radical terrorist meaning to do harm to Americans or we may find, as in the case of Zacarias Moussaoui, that it turns out he is engaged as part of an international conspiracy with a specific organization, in this case al-Qaida, but we do not know that and cannot prove it going in. That is why the change we seek is so critical. I ask my colleagues to support the inclusion of this amendment as part of the authorization bill for the intelligence community, and if there is any problem that anybody sees, to bring it to our attention so we can deal with that prior to that bill coming to the floor because we do not want to slow that bill down or stop it from being considered favorably on the Senate floor. Mr. President, I urge my colleagues to support our amendment. It is for the good of the country, for our national security, and I say this in conclusion: If we fail to do this and it was our fault that someone utilized our legal system to plan an act of terror against Americans, and Americans are killed or injured as a result of our failure, then we would have nobody but ourselves to blame. I am going to try as hard as I can to get this done, but anyone who stands in the way is going to have to stand accountable if, God forbid, something should happen and we are unable to get this accomplished before we close our session. I urge my colleagues to please support Senator Schumer and me in ensuring we can get this important amendment accomplished before we adjourn for the year. Exhibit 1 U.S. Senate, Committee on the Judiciary, Washington, DC, September 26, 2002. Dear Colleague: We have introduced S. 2586--the Schumer/Kyl ``Moussaoui exception'' bill--as an amendment to the Homeland Security bill. S. 2586 would amend the Foreign Intelligence Surveillance Act (FISA) to reach any foreign visitor to the United States who is believed to be involved in international terrorism, regardless of whether that person is known to be an agent of a foreign government or terror group. The bill is designed to make it easier for the FBI to monitor suspected lone-wolf terrorists such as alleged 20th hijacker Zaccarias Moussaoui. The Senate Select Committee on Intelligence held a hearing on S. 2586 on July 31, 2002. The Department of Justice has endorsed the bill in a Statement of Administration Policy, which we have attached for your review. Below is our explanation of the workings of the bill and an examination of those facts that we believe show that this change is necessary. We hope that you will join us in supporting this important legislation. The Foreign Intelligence Surveillance Act requires that in order for a warrant to issue under that law, a court must find probable cause to believe that the target of the warrant is either an agent of, or is himself, a ``foreign power''--a term that is currently defined to only include foreign governments or international terrorist organizations. Requiring a link to governments or established organizations may have made sense when FISA was enacted in 1978; in that year, the prototypical FISA target was a Soviet spy or a member of one of the hierarchical, military-style terror groups of that era, such as West Germany's Baader-Meinhof gang or the Red Army Faction. Today, however, the United States faces a much different threat. We are principally confronted not by a specific group or government, but by a movement. This movement--of Islamist extremists--does not maintain a fixed structure or membership list, and its adherents do not always advertise their affiliation with this cause. S. 2586 will help the United States to meet this threat by expanding FISA's definition of ``foreign power.'' In addition to governments and organized groups, that term, under the bill, would also include ``any person, other than a United States person, or group that is engaged in international terrorism or activities in preparation therefor.'' With this change, U.S. intelligence agents would be able to secure a FISA warrant to monitor a foreign visitor to the United States who is involved in international terrorism--even if his links to foreign government or known terror groups remain obscure. The role of the foreign-power requirement in obstructing pre-September 11 investigations of Zaccarias Moussaoui was confirmed in dramatic testimony before the House and Senate Intelligence Committees on Tuesday of this week. An agent from the Minneapolis FBI office described to the Committees how that office opened an investigation of Moussaoui on August 15, 2001. Minneapolis agents arrested Moussaoui on immigration charges and applied for a FISA warrant to search his belongings. But as the FBI's Deputy General Counsel stated on Tuesday before the Committees, although Moussaoui was found to have some associations with Chechen terrorists, the evidence was inadequate to show that he served as an agent of that group--or that he had any links to Al Qaeda. (Thus, as the FBI's Deputy General Counsel has confirmed, it was the strength of Moussaoui's connection to the Chechens-- not a ``misunderstanding'' of whether the Chechens constitute a ``recognized'' foreign power for FISA purposes, as yesterday's Washington Post story suggested--that ultimately prevented the issuance of a warrant.) As a result, for three weeks prior to the September 11 attacks, the FBI was unable to search Moussaoui's computer or his papers. After the Trade Center and Pentagon attacks--and largely because of them--the FBI received a criminal warrant to search Moussaoui. Among other things, the information in his effects linked Moussaoui to two of the actual hijackers, and to a high-level organizer of the attacks who was recently arrested in Pakistan. No one can say whether this information would have allowed the FBI to stop the September 11 conspiracy. But all must agree that the FBI should have access to this information. Once U.S. agents had evidence that Moussaoui was involved in international terrorism, the full tools of FISA should have been available to them--regardless of whether Moussaoui could be linked to a particular group. Instead, this outdated and unnecessary requirement blocked U.S. intelligence agents from pursuing their best lead on the eve of the September 11 attacks. Indeed, according to FBI Director Mueller, the current standard probably would have prevented the FBI from using FISA against any of the September 11 hijackers. As the Director noted in his testimony before the Judiciary Committee earlier this year, ``prior to September 11, [of] the 19 or 20 hijackers, * * * we had very little information as to any one of the individuals being associated with * * * * a particular terrorist group.'' Several congressional Committees have now conducted investigations and held hearings examining why our intelligence services failed to prevent the September attacks. Those hearings and investigations uncovered a substantial defect in the current law--a defect that may have prevented the United States from stopping that conspiracy, and is likely to hinder future investigations. Simply put, our laws are no longer suited to the type of threat that we face. It is now incumbent on Congress to act on what it has learned. We hope that you will join us in supporting our ``Moussaoui fix'' amendment to the Homeland Security bill, should a roll call vote on that amendment be required. If you have any questions, please contact Jim Flood in Senator Schumer's office at 4-7425 or Joe Matal in Senator Kyl's office at 4-6791. Sincerely, Charles Schumer. Jon Kyl.

Mr. KYL. Mr. President, I would like to speak in morning business for as long as I might consume to discuss some legislation Senator Schumer and I have introduced and to discuss my intention to seek to have that legislation added to the conference of the intelligence authorization bill which, hopefully, will come before this body for our deliberation and acceptance by the end of this week--again, hopefully. This legislation not only will reauthorize the intelligence community activities that are funded by the Congress, but also, perhaps, will include an agreement on an outside commission that will later be established to look into the events prior to September 11. So there are some important elements to this bill. One of the items I would like to add to it also deals with the subject of terrorism, the Schumer-Kyl bill--that I will describe in just a moment--which is a very small provision in the so-called FISA law that would be appropriately added in this conference as an additional way we can help win the war on terror. Let me begin by discussing just a little bit what this legislation is and why it is necessary, and then I will discuss a little bit further how we would like to have it considered. The bill number is S. 2568, called the Schumer-Kyl bill. It would add three words to the FISA legislation under which we are now able to gather information that is useful in conducting our war on terror. The Foreign Intelligence Surveillance Act, or FISA, is a law which provides a special way of gathering this evidence against terrorists, and its origins are back in the 1970s. But it deals with a different situation today in terrorism than it did back then. Let me just go back in time. The idea was if you were working for a foreign government, we ought to have a little better ability to investigate you than through the probable cause requirements of the 4th amendment that we would ordinarily apply in a title III court situation. So the FISA law was established to say if you have evidence someone is working for a foreign government or an international terrorist organization, then you can involve the FISA Court, the special court, to ask that court for a warrant to do a wiretap or to search a home or to search a computer, or whatever the case might be. Back in the 1970s, when this was first started, it was a fairly straightforward proposition. If you thought, for example, you might be dealing with a foreign spy, somebody working for the then-Soviet Union, you could go to the FISA Court and get a warrant for the information you were seeking, and it was a little easier to obtain than through a regular court. Secondly, the information was all classified, secret; it did not have to be shared with anyone else, and these judges were cleared to receive that information. So we were able to keep these kinds of investigations classified, and obviously that was a key element to be able to prosecute these counterterrorism types of cases. But back then the classical FISA target would be either a Soviet agent or perhaps one of the sort of hierarchical terrorist organizations such as the Bader- Meinhof gang in West Germany or the Red Army faction or a group of that sort. Today, as you know, the situation is very different. We have in the world today amorphous terrorist groups that have spread throughout the entire world that are very loosely affiliated, sometimes not affiliated at all. It is not even clear frequently whether individual people are directly connected to the terrorist group or actually members of the terrorist group. And when we speak of ``members of,'' I am not even sure anybody can define a member of a terrorist organization. You do not pay dues and have a card that identifies you as a member of al-Qaida or Hamas or Hezbollah or the Islamic Jihad or any of these other organizations. Now, it is true within the group there, you would have to be accepted as someone they could trust, but I do not necessarily think they look at the people with whom they work as members of the organization. So we wrote a statute back in the 1970s for a different type of enemy than the enemy we face today. What we are finding is sometimes it is very difficult to connect up a particular terrorist either with a foreign country or with a particular terrorist organization. We know there are state sponsors of terrorism, and I suppose if we had evidence somebody here in the United States was planning to commit an act of terror, and they were employed by the Government of, let's say, Iran, we could probably get a FISA warrant because we could connect them pretty easily to a foreign country that has been known to conduct state terrorism. But it is a lot more difficult when you have somebody such as Zacarias Moussaoui, for example, the alleged 20th hijacker. His is an actual case in point used by many to demonstrate the fact that our law enforcement agencies did not act quickly enough in order to obtain a FISA warrant against him. The reason they did not is precisely because of the difficulty of connecting him to a foreign country or a particular international terrorist organization, which is what the FISA statute requires. Now, bear in mind one of the rationales for being able to accelerate and short circuit the procedures here with a FISA warrant, as opposed to a regular title III type warrant, is you are dealing with a foreign country. You are not dealing with an American citizen. You are dealing with a threat from without or an international terrorist organization. So that is the theory. But in the case of someone such as Zacarias Moussaoui, even though he was a foreign person--not a United States citizen--we could not connect him with Algeria or France or any of the other countries of the world. We thought his activities looked very suspicious and that they could be terrorist-type planning, but not connected to a particular country. Nor was it possible to connect him to al-Qaida. We did not have information connecting him to al-Qaida. We had some information that in an around- about way connected him to terrorists in a particular place but not an international terrorist organization. So here you had a situation where he was talking to some terrorists, he looked to be interested in engaging in activity that could result in terrorism here in the United States, but the two requirements to get a warrant--either that he was involved in state-sponsored terror with a particular country or a particular international terror organization-- could not be proved. And as a result, either legitimately or not legitimately, the FBI did not authorize a warrant to search his computer, notwithstanding the fact there were some in our law enforcement community who wished to do that. And, of course, his computer was not searched until after September 11. What the Schumer-Kyl bill does is to correct this one little deficiency in the statute to bring it up to date, literally from the time it was created back in the cold war days, to today's environment in which you have amorphous terrorist groups floating around with individuals freely associating amongst them, or perhaps even not at all with them but engaged in terror. What it does is to correct this problem with the statute by adding just three words--``or foreign person''--to the targets of the warrant. So an individual would be the subject of a warrant if you could show you had probable cause to believe the individual was engaged in or planning to engage in an act of terrorism and either was doing so on behalf of another country, an international terrorist organization, or the person himself is a foreign person. So you have the connection of two things. You have a potential act of terror and a foreign person. And that is basically the same rationale that exists with respect to the rationale for the original FISA law and warrants authorized thereunder. By adding to the definition of ``foreign power,'' a ``foreign person,'' ``a foreign person,'' you include the kind of case Moussaoui presented to us where we knew we wanted to look into his affairs. We could not do so under FISA because we couldn't connect him to a foreign power or terrorist organization, and yet as the facts definitely indicated, it was somebody we should have been able to, whose computer we should have been able to search prior to September 11. Let me be a little more specific about this case because there are those who will wonder whether or not maybe we are opening the FISA statute up to potential abuse of American citizens--the answer to that is no--by our definition, or that guests of the United States, foreign persons who were here on, let's say, a nonimmigrant visa, such as Moussaoui--that maybe their rights would be violated. I want to make it clear that that would not be the case. We are familiar with the FBI special agent from Minneapolis, Coleen Rowley, who wrote the famous memo relating to Zacarias Moussaoui. She testified before the Intelligence and Judiciary Committees that she believed this kind of additional authority not only was warranted but was necessary for people like her in the field offices to do their work and she did not believe that would raise any additional questions; that it was an essential part of the tools the individuals in her position would need. Director Mueller of the FBI, as well, indicated in testimony that he believed the current limited foreign power definition would have made it difficult for the FBI to secure a FISA warrant against any of the September 11 hijackers. And in fact he noted to the committee: Prior to September 11, of the 19 or 20 hijackers, we had very little information as to any one of the individuals being associated with a particular terrorist group. So what this amendment does is deal with two situations. The first is where you literally have the lone wolf, a terrorist acting on his or her own behalf unconnected to an international terrorist organization or foreign power but who is a foreign person in this country planning to commit an act of terrorism against Americans. That is exactly what the FISA warrants are supposed to be getting at or are supposed to enable us to collect information on. Yet under the current statute that would not be possible. This solves the lone wolf problem. It also solves the Moussaoui problem, which is the case of an individual who you think is associated with terrorists but you cannot prove that, but you definitely have the probable cause to think there is an act of terror being planned and, therefore, you seek the warrant. It would be authorized under the foreign persons provision we are adding, and you then could connect the individual to an international terrorist organization or foreign power. That is what eventually occurred with respect to Moussaoui. The point is, we are no longer just looking at the FISA warrant to prosecute someone for a crime that has been committed. The entire effort of the Congress, the intelligence community, and the administration after September 11 was to add a mission as a superior mission to the law enforcement after-the-fact-prosecution-of-crime mission of the FBI, and that new mission was to try to prevent or preempt crimes from occurring in the first instance. So the FBI has been reorganized to go out and seek information on potential terrorists and be able to prevent the terrorist attack before it occurs. If it occurs, they can still do the second function, which is to prosecute after the fact. But the first object of the game is to prevent it from happening in the first place. That is the way they have been reorganized. What they are now going to try to do is, using statutes such as the FISA statute, to uncover information with respect to people about to commit acts of terror and stop it from occurring. But without the change in the Schumer-Kyl bill, we are leaving one great big loophole available to the terrorists. That is the terrorist who is either acting on his own or the terrorist who, while acting on behalf of an international terrorist organization or state, has not yet clearly signalled that to our law enforcement officials to the point that we can succeed in getting a FISA warrant. Our change will enable us to get the warrant and then tie the individual to the international terrorist organization or foreign state, if that, in fact, is the state of information. Let me go on with respect to the Moussaoui case to illustrate how this would work. The agent from the Minneapolis FBI office described to the Judiciary and Intelligence Committees how that office opened the investigation of Moussaoui on August 15, 2001. The dates are very important. This was a month before the attack on the World Trade Center and the Pentagon. The Minneapolis agents arrested Moussaoui on immigration charges at that time and applied for a FISA warrant to search his belongings. But as the FBI's deputy general counsel stated before the two committees, although Moussaoui was found to have some association with Chechen terrorists, the evidence was inadequate to show that he served as an agent of that group or that he had any links whatsoever to al- Qaida. So as the FBI deputy general counsel confirmed, it was the strength of Moussaoui's connection to the Chechens, not a misunderstanding of whether they constituted a recognized foreign power for FISA purposes, as the Washington Post originally suggested, that ultimately prevented the issuance of a warrant. As a result, for 3 weeks prior to the September 11 attack, the FBI was unable to search Moussaoui's computer or his papers. After the trade center and Pentagon attacks, and largely because of them, the FBI received a criminal warrant to search Moussaoui. Among other things, the information in his effects linked him to two of the actual hijackers and to a high-level organizer of the attacks recently arrested in Pakistan. Nobody can say whether this information necessarily would have allowed us to stop the September 11 conspiracy. But everyone would agree that access to this information would have been very helpful and could have enabled us to do more than we did. Once they had evidence that he was involved in international terrorism, the full FISA tools would have been available to them, regardless of whether they could be linked to a particular group. But instead, the outdated and unnecessary requirement in the statute to link him to a specific international group prevented the FBI agents from pursuing what turned out to be the very best lead they had prior to the September 11 attacks. We have looked into this. We have had several people testify before our committee on behalf of the administration in support of this three- word change to the FISA statute. Yet it has been very difficult for us to get action. It is true that the legislation has not been marked up in the Judiciary Committee, but, frankly, the chairman has not afforded us that opportunity. Notwithstanding the fact that we have had testimony in several different hearings of two different committees, we have not been able to get the bill as a freestanding bill to the floor for consideration by the Senate. There is an opportunity for us to attach it as an amendment. As I said, the best opportunity is the authorization bill of the intelligence community. This is the perfect opportunity for us to do so. There will be those who will say the bill has not gone through the regular order of the committees and, therefore, it should not be included on the authorization bill of the intelligence community. The response to that is twofold: First of all, at this stage in the session, in these last few days, we will see hundreds of bills come through here, hotlined--the phrase we use--bills that will be put at the desk. Members will be asked whether they have any objection to these bills. If there are no objections, they will pass by unanimous consent bills that never saw a markup in committee. Some legislation will be brought over from the House of Representatives that was not even considered in a hearing in a Senate committee. That is the way at the end of the session a lot of legislation is dealt with. There would be no reason for something such as this not to be dealt with in the same way. The second reason I submit is, we are in a war. Certainly we should not put form above substance in these circumstances. If we all agree that it makes sense to do what the FBI and the Justice Department and the intelligence community are asking for--to add three words to the FISA statute so that we don't have another case like the Moussaoui case, so that we are able to look at the effects of someone who we believe is engaged in terrorism against Americans or is planning to be engaged in it, even though we can't connect them yet to a specific terrorist organization--if we believe that that is a good thing, then we should find the very first legislative vehicle we can to attach this amendment in order to effect that change. Time is very short. We will have to get it over to the House of Representatives, which will have to act in the same truncated fashion in order to send the bill to the President. We can do that if it is part of the intelligence authorization conference report because both bodies can approve the legislation at the same time and have it sent to the President and signed in a matter of days. So this is the best opportunity for us to do that--unless we are going to put form over substance. Let me make this sober point. A lot of our colleagues have pointed fingers at different people in the intelligence community. They have criticized procedures and policies of the intelligence community, and by that I mean our law enforcement community has been criticized, even by name. It has been said there was a massive intelligence failure prior to September 11. I am part of a joint investigative committee looking into the events from an Senate Intelligence Committee standpoint--events prior to September 11--as a member of the Senate Intelligence Committee. Almost every one of us has spoken at one time or another about what we believe were defects in the way our law enforcement and intelligence community approached events prior to September 11. There has been enough information uncovered by now to know that things could have been done better. A lot of different people could have done better than they did. Could we have prevented September 11? Nobody has gone that far. We could have come a lot closer. The Zacarias Moussaoui case is a good example of it. Today, we are in a situation where the Moussaoui kind of case could easily be replicated tomorrow. It could be the situation that is underway right now. It could be that someone such as this plans an attack and, God forbid, even carries out an attack, and later people are going to ask the question: What could we have done about that? If we don't find a way to make this change now, in the last very few days of this legislative session, we are going to be passing up an opportunity to save American lives. We would not be able to look at ourselves in the mirror if something similar to this happened again and we had failed to make this change. It is certainly not a preposterous thought that it could happen. It has already happened. Our law enforcement community and intelligence community have told us this is a problem in today's environment. It is no longer the cold war, where you were just dealing with the Soviet Union or the Red Brigade. You are dealing now with people who have very loose affiliations--if any at all--but they are still terrorists. Our law didn't contemplate that when it was written. So now we have to fix the law. There is no reason not to make this change. Violate American civil rights? No. By its definition, it only applies to foreign persons. It cannot possibly violate the constitutional rights of any American--by its definition, it cannot. Are we concerned about the constitutional rights of a non-American? Now, non-Americans do have certain rights in this country, but they do not have the right of the fourth amendment search and seizure prohibitions in the context of a statute such as the FISA statute, which has been upheld as constitutional. So as long as there is the foreign nexus there, and you are not talking about a U.S. citizen, again, it is impossible to be violating somebody's rights. The warrant request still has to be made to a judge. The judge still has to sign off on it. You still have to have the evidence backing up your belief that the individual is planning to or is in the act of engaging in an act of terror. So this isn't just some two-bit street criminal you are talking about. It has to be somebody on whom you have some evidence with respect to terrorism. It has to be a foreign person. If that person is in the United States, and if the terrorist act is focused on Americans, then you should have the right under the FISA statute to look further. That is all this statute does. It enables you to go to a judge and say: Judge, will you please issue a warrant so that we can open up this guy's computer and see whether he really is engaged in an act of terrorism against American citizens? That is what we are talking about, and it is all we are talking about. I just ask any Member of this body who disagrees with me to please come down here, if not tonight, then tomorrow or the next day or approach me in the hallway or call my office and tell me why they would not support us. What I don't want to happen is that there is some anonymous objection--a so-called hold--put on the bill, so that I have to try to track down who it is who anonymously objects to what we are trying to do. This is too important for the sake of America's security. By the way, I have no idea that any one of my colleagues necessarily objects to what I am trying to accomplish. But what I am saying is that we don't have time now to fool around with this and go through the delays that sometimes accompany the consideration of legislation toward the end of a session. I need to know who, if anyone, really does have an objection so I can meet with that individual and try to assure her or him that there is no problem with this piece of legislation. It has been vetted by the administration. The administration supports it. It has the support of those who have testified before our committees. The Office of Legal Counsel has confirmed that the amendment is well within the Constitution. I will quote that in a moment. So if there is any objection, we need to know what it is. We intend to include it in the Intelligence Committee authorization bill, and, obviously, that is a bill that must pass the Senate and the House. We don't want it to be held up because of somebody's concern about our particular amendment. With regard to this question of constitutionality, I direct your attention to a July 31, 2002, letter presenting the views of the U.S. Department of Justice on S. 2586. It announces the Department's support for the bill and provides ``a detailed analysis of the relevant fourth amendment case law in support of the Department's conclusion that the bill would satisfy constitutional requirements.'' So there is no reason for anyone to object to the bill on constitutional grounds, and, obviously, I can see no other grounds on which anyone would raise any questions. The Department of Justice, in particular, emphasized that ``anybody monitored pursuant to the bill would be someone who, at the very least, is involved in terrorist acts that transcend national boundaries in terms of the means by which they are accomplished, the persons they appear intended to coerce or intimidate, or the locale in which the perpetrators operate or seek asylum''--50 U.S.C., section 1801(c)(3). As a result, the Department says: A FISA warrant would still be limited to collecting forward intelligence for the international responsibilities of the United States and the duties of the Federal Government to the States in matters involving foreign terrorists. That is the test supplied by U.S. v. Duggan, a Second Circuit case, 1984, which presents the relevant test. Therefore: The same interests and considerations that support the constitutionality of FISA as it now stands would provide the constitutional justification for S. 2568. Mr. President, I think there is no question of constitutionality, there is no question of need, and there is no question about the timing requirement that we act now. Therefore, I urge my colleagues to support the Schumer-Kyl legislation to enable us to include it as part of the authorization bill for our Intelligence Committee. If there is any question about whether or not their support would be there, bring that to my attention at the earliest moment so that we won't have an issue. I have assured Senator Graham of Florida, chairman of the Select Committee on Intelligence, of my commitment to ensure that the authorization bill is passed and not to allow anything to interfere with that. At the same time, it seems to me our proposal here is so required, so commonsense, so timely, that it is appropriate to include it in the legislation and that the burden should be on someone who objects to demonstrate to us why they object, if in fact they do. Mr. President, I ask unanimous consent to print in the Record at the conclusion of my remarks two documents: One is a Dear Colleague letter dated September 26, 2002, that was sent by Senator Schumer and I to our colleagues that describes in some detail S. 2586; and the other document is a statement for the Record of Marion E. ``Spike'' Bowman, Deputy General Counsel, the Federal Bureau of Investigation, in testimony before the Senate Select Committee on Intelligence, July 31, 2002.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. KYL

Mr. KYL. Mr. President, I rise today to introduce, with Senator Wyden, the Global Internet Freedom Act. The Internet is one of the most powerful tools to promote the exchange of ideas and to disseminate information. In that regard, it is a key component in our efforts to reach populations living under undemocratic governments that continue to restrict freedom of speech, the press, and association. Unfortunately, however, many authoritarian governments including the regimes in the People's Republic of China, Saudi Arabia, Syria, Vietnam, Cuba, and North Korea aggressively block and censor the Internet, often subjecting to torture and imprisonment those individuals who dare to resist the controls. In Vietnam, for example, the Prime Minister issued a decree in August 2000 that prohibits individuals from using the Internet ``for the purpose of hostile actions against the country or to destabilize security, violate morality, or violate other laws and regulations.'' The Communist government owns and controls the sole Internet access provider, which is authorized to monitor the sites that subscribers use. It erects firewalls to block sites it deems politically or culturally inappropriate. And it is seeking additional authority to monitor some 4,000 Internet cafes in Vietnam, and hold responsible the owners of these cafes for customer use of the Internet. The situation in Syria is no better. Like Vietnam, that country has only one government-run Internet service provider. The Government blocks access to Internet sites that contain information deemed politically sensitive including pro-Israel sites and also periodically blocks access to servers that provide free e-mail services. In 2000, the Syrian Government which monitors e-mail detained one individual for simply forwarding via e-mail a political cartoon. The Chinese Government is one of the worst offenders. Beijing has passed sweeping regulations in the past 2 years prohibiting news and commentary on Internet sites in China that are not state-sanctioned. The Ministry of Information Industry regulates Internet access, and the Ministries of Public and State Security monitor its use. According to the State Department's most recent Country Reports on Human Rights Practices. Despite the continued expansion of the Internet in the country, the Chinese government maintained its efforts to monitor and control content on the Internet. . . . The authorities block access to Web sites they find offensive. Authorities have at times blocked politically sensitive Web sites, including those of dissident groups and some major foreign news organizations, such as the VOA, the Washington Post, the New York Times, and the BBC. The U.S.-China Security Review Commission noted in its recent report that China has even convinced American companies like Yahoo! to assist in its censorship efforts, and others, like America Online, to leave open the possibility of turning over names, e-mail addresses, or records of political dissidents if the Chinese Government demands them. Those who attempt to circumvent Internet restrictions in China are often subject to harsh punishment. For example, Huang Qi, the operator of an Internet site that posted information about missing persons, including students who disappeared in the 1989 Tiananmen massacre, was tried secretly and found guilty of ``subverting state power.'' According to the State Department, Huang was bound hand and foot and beaten by police while they tried to force him to confess. These are but a few examples of the incredible lengths that authoritarian governments will go to in order to preserve control over their populations and prevent change. Voice of America, Radio Free Asia, Amnesty International, and the National Endowment for Democracy-- just to name a few--all utilize the Internet to try to provide news, spread democratic values, and promote human rights in these countries. But the obstacles they face are great. The U.S. private sector is developing a number of techniques and technologies to combat Internet blocking. Unfortunately, however, the U.S. Government has contributed few resources to assist these efforts and to put the new techniques to use. For example, Voice of America and Radio Free Asia have budgeted only $1 million for technology to counter Chinese Government Internet jamming, and that funding has now expired. This is why I am pleased to introduce the Global Internet Freedom Act. This bill will take an important step toward promoting Internet freedom throughout the world. Specifically, it establishes, within the Commerce Department's National Telecommunications and Information Administration, the Office of Global Internet Freedom. It authorizes $30 million per year in fiscal years 2003 and 2004 for this office, which would be responsible for developing and implementing a comprehensive global strategy to combat state-sponsored Internet jamming and persecution of Internet users. Additionally, the director of the office would be required to submit to Congress an annual report on U.S. efforts to counter state interference with Internet use. Similar legislation has already been introduced in the House of Representatives by Congressmen Cox and Lantos. I cannot stress enough the importance of the Internet in promoting the flow of democratic ideas. If the benefits of the Internet are able to reach more and more people around the globe, repressive governments will begin to be challenged by individuals who are freely exchanging views and getting uncensored news and information. The United States should take full advantage of the opportunities inherent in worldwide access to the Internet, and should make clear to the international community that fostering Internet freedom is a top priority. Creation of an Office of Global Internet Freedom will enable us to do just that. I ask unanimous consent that the bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I rise today to introduce, with Senator Wyden, the Global Internet Freedom Act. The Internet is one of the most powerful tools to promote the exchange of ideas and to disseminate information. In that regard, it is a key component in our efforts to reach populations living under undemocratic governments that continue to restrict freedom of speech, the press, and association. Unfortunately, however, many authoritarian governments including the regimes in the People's Republic of China, Saudi Arabia, Syria, Vietnam, Cuba, and North Korea aggressively block and censor the Internet, often subjecting to torture and imprisonment those individuals who dare to resist the controls. In Vietnam, for example, the Prime Minister issued a decree in August 2000 that prohibits individuals from using the Internet ``for the purpose of hostile actions against the country or to destabilize security, violate morality, or violate other laws and regulations.'' The Communist government owns and controls the sole Internet access provider, which is authorized to monitor the sites that subscribers use. It erects firewalls to block sites it deems politically or culturally inappropriate. And it is seeking additional authority to monitor some 4,000 Internet cafes in Vietnam, and hold responsible the owners of these cafes for customer use of the Internet. The situation in Syria is no better. Like Vietnam, that country has only one government-run Internet service provider. The Government blocks access to Internet sites that contain information deemed politically sensitive including pro-Israel sites and also periodically blocks access to servers that provide free e-mail services. In 2000, the Syrian Government which monitors e-mail detained one individual for simply forwarding via e-mail a political cartoon. The Chinese Government is one of the worst offenders. Beijing has passed sweeping regulations in the past 2 years prohibiting news and commentary on Internet sites in China that are not state-sanctioned. The Ministry of Information Industry regulates Internet access, and the Ministries of Public and State Security monitor its use. According to the State Department's most recent Country Reports on Human Rights Practices. Despite the continued expansion of the Internet in the country, the Chinese government maintained its efforts to monitor and control content on the Internet. . . . The authorities block access to Web sites they find offensive. Authorities have at times blocked politically sensitive Web sites, including those of dissident groups and some major foreign news organizations, such as the VOA, the Washington Post, the New York Times, and the BBC. The U.S.-China Security Review Commission noted in its recent report that China has even convinced American companies like Yahoo! to assist in its censorship efforts, and others, like America Online, to leave open the possibility of turning over names, e-mail addresses, or records of political dissidents if the Chinese Government demands them. Those who attempt to circumvent Internet restrictions in China are often subject to harsh punishment. For example, Huang Qi, the operator of an Internet site that posted information about missing persons, including students who disappeared in the 1989 Tiananmen massacre, was tried secretly and found guilty of ``subverting state power.'' According to the State Department, Huang was bound hand and foot and beaten by police while they tried to force him to confess. These are but a few examples of the incredible lengths that authoritarian governments will go to in order to preserve control over their populations and prevent change. Voice of America, Radio Free Asia, Amnesty International, and the National Endowment for Democracy-- just to name a few--all utilize the Internet to try to provide news, spread democratic values, and promote human rights in these countries. But the obstacles they face are great. The U.S. private sector is developing a number of techniques and technologies to combat Internet blocking. Unfortunately, however, the U.S. Government has contributed few resources to assist these efforts and to put the new techniques to use. For example, Voice of America and Radio Free Asia have budgeted only $1 million for technology to counter Chinese Government Internet jamming, and that funding has now expired. This is why I am pleased to introduce the Global Internet Freedom Act. This bill will take an important step toward promoting Internet freedom throughout the world. Specifically, it establishes, within the Commerce Department's National Telecommunications and Information Administration, the Office of Global Internet Freedom. It authorizes $30 million per year in fiscal years 2003 and 2004 for this office, which would be responsible for developing and implementing a comprehensive global strategy to combat state-sponsored Internet jamming and persecution of Internet users. Additionally, the director of the office would be required to submit to Congress an annual report on U.S. efforts to counter state interference with Internet use. Similar legislation has already been introduced in the House of Representatives by Congressmen Cox and Lantos. I cannot stress enough the importance of the Internet in promoting the flow of democratic ideas. If the benefits of the Internet are able to reach more and more people around the globe, repressive governments will begin to be challenged by individuals who are freely exchanging views and getting uncensored news and information. The United States should take full advantage of the opportunities inherent in worldwide access to the Internet, and should make clear to the international community that fostering Internet freedom is a top priority. Creation of an Office of Global Internet Freedom will enable us to do just that. I ask unanimous consent that the bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, on behalf of Senator Warner, unless Senator Lieberman wishes any time, I yield the remainder of the time to Senator Gramm.

Mr. KYL. Mr. President, I will speak for about 7 minutes. If any other Senator wishes to speak, they may certainly do so. Mr. President, I want to address directly the Senator's amendment. He talked about everything but his amendment. His amendment is remarkable because instead of allowing the President to deal with the continuing threat posed by Iraq, this amendment would require the President to identify an imminent threat; that is to say, one that is immediate, pressing, upon us, imminent. I suggest, as a member of the Intelligence Committee for almost 8 years, that it is virtually impossible for us to know when a threat is imminent, a threat posed by a regime such as Saddam Hussein's, or a group of terrorists. These people do not announce their threats in advance. They conceal their intentions, as well as their capabilities, and it is very difficult for us to know the precise moment at which the threat is imminent. So this amendment is remarkable because it would literally force the President to wait until the last minute in order to take the action that is permitted by the amendment. There is a saying in the intelligence community that we do not know what we do not know. We find out later what we did not know. We did not know that Saddam Hussein, for example, had gone to the extent he had in the development of biological and chemical weapons until defectors came out of Iraq and told us what he had done. We did not find out about that through other intelligence. Then we sent inspectors, and before Saddam Hussein got it all hidden, they were able to find some of it, at which point he said: Oh, gosh I forgot about that--or words to that effect. We did not realize the extent to which he had developed his nuclear capability until after the gulf war was over, when we learned that he was years closer to having a nuclear weapon than we had thought. If Saddam Hussein had waited to attack Kuwait, had not attacked Kuwait, and gone ahead with his plans, he would have had a nuclear capability before the United States knew about it. By then, it would have been too late. My point is this: We may have pretty good intelligence, but it is not good enough to calibrate as closely as the Senator's amendment would require, to wait until the moment when the President says now it is imminent. And that is the problem. Action has to be taken when the threat is clear, when it is known to be there, but we do not really know exactly when he is going to make his move. As September 11 showed, if it showed us anything, our intelligence is not good enough to do that. We can know there is a threat. We can know it is growing, we can know it is continuing, but we cannot know that moment when it becomes imminent. This amendment asks an impossibility of the President: To prove that the threat is imminent or at least to wait until it is clear to him that the threat is imminent. But we may never know until it is too late that Saddam Hussein has a nuclear weapon. The Senator also complained about this new doctrine of preemption, but I would suggest that with respect to Iraq, we are not talking about preemption, we are talking about unfinished business called the gulf war. Every day the United States and the United Kingdom fly airplanes, pursuant to United Nations resolutions, to enforce those resolutions-- frankly, to engage in aerial inspection called reconnaissance--and they get shot at almost every day. When they get shot at, they either try to take out the radar site or SAM missile site that is firing at them after they have been shot at, or what they try to do is knock it out before they get shot at. Now, somebody may call that preemption. I call it self-defense and common sense. This is not some new doctrine we are about to engage in that is going to threaten world peace. This is the unfinished business of the gulf war that is authorized by United Nations resolutions that we engage in every day and that requires us to act in our own self-defense. It is also said that for the last 11 years, Saddam Hussein has not used his weapons of mass destruction. So why deal with this now? Why not wait until the threat is imminent? Is that it? We are supposed to put our trust in Saddam Hussein? I am unwilling to place the security of the United States of America in the hands of the likes of Saddam Hussein. I do not believe we can trust him. Because our intelligence is not good enough to calibrate this threat to the action that would be authorized by the amendment, and because we cannot trust Saddam Hussein, I support the resolution that is before us and oppose the amendment of the Senator from Illinois. Finally, suggesting, as some have, although I did not hear these words from the Senator, that there has to be a smoking gun--that is the concept behind this notion of imminence--before we can take action, is extraordinarily misguided. Remember, a gun smokes after it has been fired. When I think of a smoking gun, I think of the Pentagon and the World Trade Center. I believe that the amendment of the Senator from Illinois is dangerous, misguided, and I hope my colleagues will join me in defeating it.

Mr. KYL

Mr. KYL. Madam President, I hope to have the opportunity to speak to this issue again, but I will say two quick things in response to the Senator from Virginia. First, I note that Hans Blix has largely, it appears to me from news media accounts, agreed with the position of the United States on what would be necessary to conduct meaningful inspections that would result in the disarmament of Saddam Hussein because, as he noted, the object here is not inspections; the object is disarmament. And inspections would be but a way to achieve that. Secondly, as I said, I think that only the most naive would believe that it is possible to have an effective regime, irrespective of what kind of resolution were adopted, as long as Saddam Hussein is in power. That is why I quoted the former U.N. inspection team leader David Kay, who made the point, with which I totally agree, that as long as Saddam Hussein is in power there, it is impossible to have disarmament of the kind that was called for at the end of the gulf war.

Mr. KYL. Madam President, I support S.J. Res. 45 authorizing the use of force against Iraq. Perhaps the most difficult decision one can make as a Member of this body is to vote to send American troops into harm's way. It forces one to consider every question, every possibility, and every option short of war. But this does not mean we should eschew action simply because we have not yet tried every other option. Some threats must be dealt with before implausible alternatives are allowed to play out because of the consequences of delay. Preemption may be the only logical course of action in some situations. A nation need not allow itself to be struck to be justified in acting to protect itself. With these principles in mind, we can evaluate the need to authorize the use of force against Iraq. Actually, use of force against Iraq has already been authorized by both the United States and the United Nations. And the United States and Great Britain are already using force on a weekly basis. Notwithstanding his obligations to allow aerial inspections in the no-fly zones, Saddam Hussein regularly attempts to shoot down our unarmed reconnaissance planes, and we either react by destroying the offending anti-aircraft site or seek to discover and destroy it before it can fire--preemption. No one questions our right to do this. Two facts can, therefore, be established: No. 1, Saddam Hussein is not willing to allow unconditional inspections as he claims. He is not doing it now. No. 2, his continued violation of the United Nations resolutions requires a military response. That is assuming the resolutions were intended to be enforced when they were adopted. Delay in doing so only degrades our claim of authority to act and makes more difficult the task. No one can argue that the United States and the international community have not exhausted the full range of legal, diplomatic, and other alternatives to try to compel Saddam Hussein to obey all of the terms of the cease-fire to which he agreed at the end of the gulf war. His continuing defiance of that agreement, including his desire to acquire nuclear weapons and his support of terrorism, presents a real and growing threat to U.S. national security. We have now reached a juncture where the risks of inaction outweigh the risks of action. Those who oppose the authorization of force usually define the test as whether there is an immediate threat, asking, Why do we have to act now? But I submit this is the wrong question. Our intelligence will never be good enough to allow us to calibrate our action to a threat just a few days or a few weeks away. We simply do not know enough to do that. We cannot wait until we are sure that Iraq has a nuclear weapon and is about to use it because it is unlikely we will ever have that evidence, and it will be too late when we do. I find it ironic that some of the people insisting on this standard are also some of the loudest critics of our intelligence failures before September 11, arguing that we should have known an attack was imminent and we should have taken action to prevent it. If September 11 had not happened, my guess is that these same people would be urging caution, arguing that since we haven't yet ``connected all the dots,'' any preemptive action at that time would be too risky and premature. Moreover, action is warranted now because there is no realistic hope that the United Nations resolutions and Saddam's promises to us at the end of the gulf war will otherwise be enforced, and each month that passes increases the danger. Finally, Iraq is another front in this war on terror. Eliminating Saddam's threat will give us greater latitude in other actions we will have to take, and it will create a more willing group of allies in the region. For some of these countries to throw in with us, they need to know that we are absolutely committed to winning and that they are better off joining the winning side than continuing to pay tribute to terrorists in order to protect their regimes from terrorists. While there is much about Iraq's capabilities we do not know, there are also some things we do know. No one, for example, can doubt the extent of Iraq's weapons of mass destruction. The only question is when and how he will use them and how long it will be before he can add nuclear weapons to his existing chemical and biological capabilities. In recounting Iraq's nasty capabilities, it is useful to remind ourselves that Baghdad has continued to pursue the development of these weapons of mass destruction and the means to deliver them in violation of numerous U.N. resolutions. There are 13 such resolutions. During the 7 years that the United Nations Special Commission-- UNSCOM--inspectors were present in Iraq, Saddam Hussein went to great lengths to obstruct inspections to conceal his stockpiles and continue his programs under cloak of secrecy. It has now been 4 years since United Nations inspection teams last set foot in Iraq. We have evidence that Saddam has used that time to enhance his weapons and his development programs. I need not detail that evidence here. It has been amply discussed in a variety of open and closed sources of information provided by the administration, and it includes everything banned by the United Nations--chemical, biological, and nuclear weapons, and the means of delivering them. In addition, Saddam Hussein has demonstrated proclivity to use force to achieve his objectives--twice against his neighbors. And his aggressive ambitions have already led him to deploy the devastating weapons if his stockpiles. He used chemical weapons against Iran. He again used them against his own Kurdish population. And he has launched ballistic missiles against four neighbors. He is devoting enormous resources of his country to upgrade his threat, which is not an action of one who only wants to survive. There should be little doubt that Saddam Hussein will use his weapons of mass destruction again either to back up a threat to harm us if we stand in the way of some future aggression or in actual attack against us or our allies, including, potentially a terrorist type attack on our homeland. A recent article by Kenneth Pollack in the Arizona Republic amplifies this point. In the article, Pollack concludes, ``. . . there is every reason to believe that the question is not one of war or no war, but rather of war now or war later--a war without nuclear weapons or a war with them.'' Saddam Hussein's abuse of the Iraqi people is also deplorable, not to mention a violation of a U.N. resolution passed just after the Gulf War, resolution 688. His hideous treatment of Iraqi men, women, and children is documented. A report published by Human Rights Watch in 1990 described the shocking brutality of the Iraqi regime: Large numbers of persons have unquestionably died under torture in Iraq over the past two decades. Each year there have been reports of dozens--sometimes hundreds--of deaths, with bodies of victims left in the street or returned to families bearing marks of torture. . . . The brazenness of Iraqi authorities in returning bodies bearing clear evidence of torture is remarkable. Governments that engage in torture often go to great lengths to hide what they have done. . . . A government so savage as to flaunt its crimes obviously wants to strike terror in the hearts of its citizens. . . . And, as Iraqi citizens starve, Saddam has illegally used oil revenues from the U.N. oil-for-food program to rebuild his military capabilities, including his weapons of mass destruction. Then, of course, Saddam blames the United States and the United Nations for the suffering of the Iraqi people. Finally, there is Saddam Hussein's support for international terrorism. In his address to the Nation following the September 11 attacks, President Bush presented the countries of the world with two unambiguous options. He said: ``Every nation in every region now has a decision to make. Either you are with us, or you are with the terrorists.'' Saddam Hussein made his decision. Iraq was the only Arab-Muslim country that failed to condemn the September 11 attack. In fact, the official Iraqi media stated on that day that America was ``reaping the fruits of [its] crimes against humanity.'' We know that Iraq has hosted members of al-Qaeda. And National Security Advisor Condoleezza Rice has commented specifically on Iraq-al-Qaeda ties. ``We clearly know,'' she said, ``that there . . . have been contacts between senior Iraqi officials and members of al Qaeda. We know too that several of the [al Qaeda] detainees, in particular some high- ranking detainees, have said that Iraq provided some training to al Qaeda in chemical weapons.'' And Iraq has supported other terrorists. For example, Abu Abbas, the mastermind of the 1985 Achille Lauro hijacking and murderer of American Leon Klinghoffer, lives in Baghdad. The notorious Abu Nidal lived in Baghdad from 1974 to 1983, and then again recently until he was gunned down earlier this year. And Saddam Hussein has provided over $10 million to the families of Palestinian homicide bombers. Now, the question is, what has the international community been doing about all of this? The answer, Madam President, is not much. The much- touted doctrine of deterrence only works if agreements are enforced. Saddam obviously has not been deterred because no one has been willing to stop him from continuing his unlawful activities. Saddam Hussein has failed to live up to his cease-fire obligations. The U.N. has failed to enforce them. President Bush described it succinctly in his speech before the United Nations: Just months after the 1991 cease-fire, the Security Council twice renewed its demand that the Iraqi regime cooperate fully with inspectors, condemning Iraq's serious violations of its obligations. The Security Council again renewed that demand in 1994, and twice more in 1996, deploring Iraq's clear violations of its obligations. The Security Council renewed its demand three more times in 1997, citing flagrant violations; and three more times in 1998, calling Iraq's behavior totally unacceptable. And in 1999, the demand was renewed yet again. If nothing else, the decade following the Gulf War has illustrated clearly the limits of U.N. diplomacy. But the U.S. does not have to participate in this folly. Our word must mean something. If we fail to force Saddam Hussein to comply with his obligations, we will have sowed the seeds of even greater and more threatening action in the future. Is it possible that we could avoid military actions by accepting Iraq's offer to allow unlimited inspections? The answer, I submit, is no. It would have been hard enough for UNSCOM, but it has been replaced by a new entity negotiated between Secretary General Kofi Annan and Iraq in 1998. Unlike UNSCOM, this new entity, the U.N. Monitoring, Verification, and Inspection Commission, known as UNMOVIC, is staffed by U.N. employees, rather than officials on loan from member governments. The inspectors--who are not even required to have expertise in relevant weapon programs--will not be able to make effective use of intelligence information. They can't receive intelligence information on a privileged basis, and the information that they gather can't flow back to national intelligence agencies, like our CIA. As Gary Millholin, Director of the Wisconsin Project on Nuclear Arms control recently commented, ``This eliminates the main incentive for intelligence sources to provide UNMOVIC with information in the first place.'' Since most of what we learned during inspections was the result of intelligence gathered from Iraqi defectors, it is doubtful UNMOVIC could produce much of value. The absurdity of this set-up can only be trumped by the absurdity of believing that this commission could possibly succeed against a vicious dictator who has spent the last 11 years perfecting the arts of concealment and deception in a country the size of France. As David Kay, former head of the U.N.'s nuclear inspection team, recently remarked, ``The only way you will end the weapons of mass destruction program in Iraq is by removing Saddam from power.'' Let me repeat that. This is from the former head of the nuclear inspection team of the United Nations: The only way you will end the weapons of mass destruction program in Iraq is by removing Saddam from power. Here is the bottom line on the international community's ability to deal with the Iraqi threat: Since the end of the Gulf War, Saddam has a nearly perfect record in violating U.N. Security Council resolutions. The United Nations, in turn, has a nearly perfect record in failing to enforce them. It is time to end this whole charade. Knowing that diplomacy will continue to fail, we have an obligation to act, and not allow diplomacy to be used as a weapon by a brutal dictator. That is a lesson we should have learned through our experiences with the likes of Hitler, Stalin, Ho Chi Minh, and Slobodan Milosevic. Moreover, too much is at stake to place American security in the hands of unaccountable bureaucrats at the U.N. It is time for military action that will terminate the regime of Saddam Hussein and destroy his weapons of mass destruction. We cannot be assured of peace unless this threat is removed. Some observers still insist that we should try to contain Saddam through the doctrine of deterrence. After all, they say, we relied on deterrence to contain the Soviets for 50 years, and maybe that will work against Saddam. Mr. President, perhaps we should be thankful that we suddenly have so many new converts to deterrence, since many of these same voices were 20 years ago arguing instead for a nuclear freeze and unilateral U.S. disarmament. I'll remember their newfound commitment to deterrence as we attempt to deal with China's growing militarization in the coming months and years. There are situations where deterrence can work. This is not one of them for two reasons. First deterrence has a shelf life. If there is no response to violations, a dictator is not deterred--the threat of retaliation is no longer credible. The U.N. has done nothing and the U.S. next to nothing. As a result, Saddam has not been deterred. In any event, containment and deterrence do not apply well in this case. President Bush was absolutely correct when he declared at West Point that ``deterrence means nothing against shadowy terrorist networks with no nation or citizens to defend;'' and, ``containment is not possible when unbalanced dictators with weapons of mass destruction can deliver those weapons on missiles or secretly provide them to terrorist allies.'' While belatedly embracing deterrence, critics of force reject a doctrine of preemption. Yes, they say, there have always been situations where countries had to act with force to prevent some attack on them, but that's different from an announced doctrine of preemption. There are several answers. The first is: no it is not. Preemption only applies to certain situations--like Iraq. Though Iran presents many of the same circumstances as Iraq, there are differentiating factors that make preemption less appropriate vis-a-vis Iran. There is no ``outstanding warrant'' as with Iraq; regime change could come from within Iran; and, militarily, force is much less an option--to name three differences. Second, it is senseless to require a ``smoking gun'' in order to act. As Secretary Rumsfeld has said: ``A gun doesn't smoke until it's been fired and the goal has to be to stop such an attack before it starts.'' Since September 11, this takes on a whole new meaning. Don't think smoking gun--think World Trade Center and Pentagon. As we stand here more than one year after 3,000 innocent civilians perished at the hands of vicious terrorists, we need to ask ourselves, do we really want to wait until another attack, perhaps one using weapons of mass destruction? What opponents really mean is, wait until just before such an attack, and only act if we're reasonably sure the attack is coming. Obviously, we can't count on knowing that, and the potential consequences are too great to risk it. So the answer to that question is an emphatic no. September 11 changed everything, or at least should have changed everything, in the way we approach these matters. September 11 moved us out of the realm of international relations theory and into the realm of self-defense. If the President decides to move against Iraq, it will be an act of self-defense. And by voting to authorize the President to take that action, this body will be authorizing an act of self-defense. Knowing what we know, how could we explain inaction if we were subsequently attacked? What's more, it should be obvious that if Saddam acquires nuclear weapons, it will give him the ability to deter us. We are already hearing arguments against the use of force because of the potential of Iraq using chemical or biological weapons against our forces. Consider having this debate a few months or years from now after we've ascertained that he definitely has a nuclear saber to rattle. This will make a move against Saddam, or any other American action in the Middle East, more dangerous, and in all probability, less likely. It is Saddam's dream come true. He will be able to check our actions. So, again, the time to act is now. But, some critics say, we must wait for international approval. Mr. President, I submit that the proponents of ``multilateralism,'' in addition to willfully ignoring the fecklessness of the U.N. and certain other countries, neglect the special leadership role that our country plays in the world. It is no accident that it devolved to us to end German imperialism in World War I, stop Adolf Hitler in World War II, and defeat the forces of international communism in the Cold War. It is no accident that the oppressed peoples of the world look at us, rather than other countries or the U.N., as their ray of hope. That is why we lead, and why we must lead. We are fortunate to have a President today who appreciates this. While much of the rest of the world insists on burying its head in the sand or clinging to failed approaches, President Bush understands that now is the time to confront Saddam. And while others insist on a false distinction between the Iraqi threat and the war on terrorism, President Bush has, as Noemie Emery has written in The Weekly Standard, connected the dots. In so doing, writes Emery, President Bush has, like Harry Truman when the Soviets encroached on Greece and Turkey in the 1940s, perceived ``an ominous and enlarging pattern'' that demanded a response. Emery continues, ``Several presidents have had to wage wars, but only two, Bush and Truman, have had to perceive them, and then to define them as wars.'' This is the essence of leadership. By perceiving that we can no longer afford to be attacked before we act, President Bush's doctrine of preemption allows us, where appropriate, to act first against terrorist organizations and states. Our use of force in self-defense against Iraq will also help liberate the beleaguered people of Iraq. Aside from the moral imperative, there are a number of tangible benefits to the United States that a more democratic Iraq will bring. First, if real democracy can take hold, it will dispel the notion that the people of the Middle East are incapable of democratic governance, just as Taiwan and the Philippines have destroyed the ``Asian values'' myth in recent years. It's notable that the scourge of Islamic terrorism has been nurtured, not in democratic Muslim countries such as Turkey, but in repressive dictatorships like Iraq, Iran, Syria, and Saudi Arabia. A democratic regime in Baghdad will set an example and hopefully spark other badly-needed changes in governments in the region. And, in the long run, democracy will prove to be the antidote to Islamic-based terrorism. A democratic regime that follows our removal of Saddam Hussein will also provide us with a new and reliable ally in this critical part of the world. The war on terrorism will almost certainly entail additional actions, and the intelligence, political support, overflight rights and the like from an allied regime in Iraq could prove critical to those efforts. Lastly, a democratic Iraq will bring that nation's vast oil production capabilities back onto the world market. This will help the world economy by, among other things, lessening the ability of the Saudis and others to manipulate oil prices. While I support this resolution and support using force to rid the world of Saddam Hussein, I do want to offer a few caveats. First, our commitment to this effort must be total. Our goal here must be nothing short of the destruction of the current Iraqi regime. There is no other realistic way to permanently disarm Iraq of its weapons of mass destruction. And providing our Armed Forces with anything less than everything they need to accomplish that goal is unacceptable. And that includes the support of our intelligence community. Second, after removing the regime, we must resist the temptation to rush home. As I just stated, there are enormous benefits in helping Iraq achieve democracy. However, it is most unlikely that Iraq can be stabilized and democratized without a significant U.S. presence after the defeat of Saddam. There can be no questioning the fact that the U.S. occupation of Germany and Japan after World War II was critical to forging those two countries into the democracies they now are. I am not saying we need to copy those examples precisely, but it would be short-sighted and dangerous for us to leave a shattered Iraq on its own or in the hands of the United Nations after the removal of Saddam. Third, we must not undertake this struggle on the cheap. We should make no mistake: this operation is going to require a great deal of manpower, weapons platforms and equipment, possibly for quite some time. Those forces need to come from somewhere, and our forces have already been stretched thin by the profusion of peacekeeping missions and the budget cuts of the 1990s. Meanwhile, we need to maintain and, I would say, even augment our deterrent posture elsewhere in the world. For example, last year's Quadrennial Defense Review, mostly drafted before September 11, called for increasing our carrier presence in the Western Pacific. This seems to me to be quite necessary, given that we normally have only one carrier--the Kitty Hawk--in that region, but two potential conflict zones, Korea and Taiwan. Yet, when we began our operations in Afghanistan last year, the Kitty Hawk was called to duty in the Arabian Sea, leaving us with no carrier in the Western Pacific for months. We will almost certainly face this situation again if we go to war against Iraq, and it is not something that we should ignore. The upshot, is that this body needs to come to grips with the need for a defense budget that supports the cost of operations like Afghanistan and Iraq, defense transformation and an adequate global force posture. At current spending levels, we are going to come up short of that goal. Last, but not least, I believe the administration needs to be very careful in its diplomatic efforts to secure a new U.N. Security Council resolution. That body includes the terrorist regime of Syria, Communist China, which threatens our friends on Taiwan and sells fiber-optics to Iraq, and Russia, which has forged close economic ties with Iraq over the past decade. Principle, not expedience, must be our ultimate guide in dealing with these countries that hold the votes to deny or authorize U.N.-backed action. If we need to make concessions to these regimes that undermine our interests elsewhere--in Taiwan, for example--then it is not worth securing their votes in the Council. Ultimately, we should be prepared to defend our interests with or without the U.N. Which bring me to my conclusion, Mr. President. This resolution we are considering today, and this action the President is contemplating in Iraq, is not about carrying out the will of the United Nations or restoring its effectiveness. It is not about assuring the world that the United States is committed to ``multilateralism.'' Section 3(a)(1) is the heart and soul of this resolution. It authorizes the President to use the Armed Forces of the United States to ``defend the national security of the United States against the continuing threat posed by Iraq.'' That is what we are doing here today, defending our national security. It is a sobering, and humbling, task. But as members of the United States Senate, it is our solemn duty.