Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I want to talk about the delivery of prescription drugs to America's seniors. It is a subject that Senators have been talking about pretty much all week long, but people tuning in might wonder whether we are really making any progress toward getting a bill passed. That is what I would like to address this morning. For quite a long time now, we have appreciated the fact that when Medicare was created, treating people with medications was not the preferred or first or primary method of treatment. So much of what Medicare covers today is the cost of invasive surgery, and the cost of just about every other kind of treatment except treatment through the use of medication or prescription drugs. Over the last 25 years, it has become increasingly common for physicians first to treat with medications, if possible. It seems second nature to us now. When Medicare was first established, that was not the case. As a result, most prescription drugs were not covered as part of Medicare. Over the years, people learned how to receive supplemental drug coverage through Medigap insurance and other ways to pay for prescription drugs, but the combination of the fact that Medicare itself did not set out to cover those drugs and, second, that the cost of drugs has obviously increased over the years has made it more difficult for some seniors to be able to pay for their prescription drugs, especially since, again, this is what their physicians are prescribing as the best way to treat them in many cases. Add to that the fact that people are, fortunately, living longer today, but that the longer one lives, the more likely they are going to need to take various kinds of drugs, and we have a situation in which clearly it is time for Congress to respond with an inclusion of a Medicare drug benefit for all of America's seniors. We have been working on that now for quite a long time. I find it interesting that on the Republican side there are three or four very good, somewhat different, ways of approaching this because Members on our side have been working hard to try to fashion a set of benefits we can afford and which will also provide the kind of care we want for our senior citizens, and now we have a number of options. I sit on the Finance Committee. Last year, when Senator Grassley chaired the Finance Committee, we began working legislation through the Finance Committee to try to bring to the Senate floor so we could provide a prescription drug benefit to Medicare. Then the control of the Senate changed. Toward the end of last year, Republican members continued to meet and, in fact, began reaching across the aisle to meet with the Democratic members of the Finance Committee and also with the Independent Member of the Senate, Senator Jeffords, who had left the Republican Party and caucused with the Democrats but is identified as an Independent, and over the months, representatives of the Republican Party, the Democratic Party, and Senator Jeffords have come together on an approach that has now acquired the name, the tripartisan approach-- because it is not just the two parties but, it is actually three parties--an approach that actually will deliver a very good prescription drug benefit to our seniors and a plan that actually is unique among all of the different ideas that have been brought to the floor because it can actually pass the Senate. It has more than 51 votes in the full Senate, we believe, and it could pass the Finance Committee. Senator Breaux is one of the leaders in this coalition, and he has been a leader in the Finance Committee in support of this. So a great deal of work has been done to try to develop the kind of reform that is necessary to provide prescription drugs to our seniors. Then why the discussion on the Senate floor and what is going to happen next week? Well, at the early part of next week, we are finally going to have a chance to vote on some alternatives. There will be at least two. One will be this tripartisan plan I mentioned that has been offered by Senators Grassley, Hatch, Snowe, Jeffords, Breaux, and others, and the other will be a competing plan brought by some members of the Democratic Party, led by Bob Graham from the State of Florida. The two proposals approach the prescription drug issue in fairly different ways. I am hoping we will have a good debate about the difference between those two approaches. There are also approaches from other Republican colleagues who are even more different and in some ways provide a very direct benefit to seniors at a much lower cost than either of the two bills I just described. The problem is that at the end of next week, it is doubtful the Senate will have passed any of these bills. How can that be if, as I said, there is majority support at least for one of the bills? I fear the problem is a political one, that there are some people who would rather have an issue than a bill, a problem rather than a solution, because of course the problem can continue to be talked about in a campaign context. I would rather have a bill that provides the benefit we can all take credit for, but if politics is the primary motivation, then clearly doing something is a good way to appeal to voters. But of course the whole point is it is the right thing to do. It is past time that we provided a drug benefit to our seniors. Why is it that my prediction is what it is? Ordinarily, if the Finance Committee brought a bill to the floor, we would vote on it and the majority would prevail. It either wins or it loses. But in this case, even though the Finance Committee has been working very hard under the chairmanship of Senator Baucus's and Senator Grassley's leadership on the Republican side, we are close to being able to mark up the bill in the Finance Committee and bring it to the floor. It is clear that the Senate majority leader has, according to Senator Baucus, indicated the bill would have to be acceptable to him in order for it to come out of the Finance Committee and brought to the floor. That was not the case with the so-called tripartisan bill. The legislation that has been brought to the floor by the majority leader is not legislation that would have come out of the Finance Committee. Why is that important? Because a point of order lies against legislation that does not come out of committee. In practical terms, that means you have to have 60 votes on the Senate floor to pass it. What has been set up is a process that is set up to fail. By not allowing the Finance Committee to bring its bill to the floor and be voted on by a majority of 51, we are setting up a requirement that any bill has to pass with 60 votes because it did not come out of committee; 60 votes will be very difficult to achieve because the Senate is divided roughly \50/50\ among the two parties. We have different approaches to this solution, this problem. The only bill that likely would pass is the so-called tripartisan compromise. But if it has to have 60 votes, that is a stretch, as well. I am not sure we can get 60 votes. At the end of the day, by virtue of the process that has been created, we are not likely to end up with any legislation at the end of next week. Then what will we do? Point fingers: It is your fault. No, it is your fault. The bottom line will be that the American people end up the losers. Our seniors will not have a prescription drug benefit because the Senate decided to operate in a way that guaranteed that conclusion. The House of Representatives has passed a bill that is a good bill. It is not exactly what I would do, but it is a good start. The Senate should act in the same way. Let me describe a little bit about what this tripartisan bill does. Even though it is not a bill I would have written, I am willing to support it, primarily because it does have a number of good ideas, and it can be passed and we can move on, get a bill to conference and to the President for signature to begin providing Medicare drug benefits for our seniors. The tripartisan plan is a comprehensive plan. It is a permanent plan with respect to providing drugs to all Medicare beneficiaries. It also has another feature that the other plans, by and large, do not, in that it provides reforms of Medicare that will ensure that as the program continues on out into the future, it will actually work. The problem with both Social Security and Medicare today is without serious modernizations neither one can provide the benefits that have been promised. Those are commitments that we should be ensuring we can keep. Under this plan, Medicare beneficiaries will have a new drug benefit option. They can keep their current Medicare plan and do nothing, or they can buy into the new drug plan provided for them. If they sign up for the new plan, it is completely voluntary on their part. If they sign up for the new plan, they will have choices so that they can pick what best suits them. They would pay a premium that is estimated to be about $24 a month, very similar to the monthly premium seniors now pay for Medicare Part B. They would be able to choose between competing plans. The plans would compete for their business and therefore would offer the best possible arrangements for each individual senior. The plans generally would have an annual deductible of $250. This is similar to the Part B deductible seniors now pay which is currently $100. A key difference is after $3,700 in out-of-pocket drug spending by the beneficiary, the Government would pay 90 percent of the costs, and the beneficiary would only pay 10 percent. As Medicare beneficiaries know, traditional fee-for-service Medicare does not have this type of important stop-loss coverage for the benefits it provides; stop-loss meaning after you pay a certain amount you do not have to pay anymore, the Government would begin paying the bulk at that point. It is important to protect the beneficiaries from high drug costs, particularly those who have a significant illness, or a longstanding illness that will require them to pay for drugs over a long period of time. Another important aspect of the proposal is it is affordable. The CBO has estimated the cost, what we call scoring, will be $370 billion over 10 years. Given it is estimated the alternative offered by the House Democrats cost in the neighborhood of $800 billion to $900 billion over 10 years, and the Graham-Miller proposal will cost almost $600 billion over 10 years, we clearly have an inability to fund that kind of a program. I believe the tripartisan plan is a much more affordable and practical plan. In an artificial attempt to keep down their costs, the Graham-Miller plan sunsets after just 6 years. The proponents of this plan claim the reason they sunset their legislation after 6 years, in the year 2010, is they want the ability to look to see whether changes are necessary. The fact is, it is a very expensive plan, about $600 billion over 10 years, if enacted on a permanent basis, making it undesirable from a political point of view. That is one of the reasons that plan should not be supported. Let me also say we can examine legislation at any time, whether or not it sunsets, and we can review legislation every year and propose amendments to it. We do not need to sunset this legislation. I mentioned the fact that traditional fee-for-service Medicare does not have the stop-loss provision so people can continue to pay for high-cost drugs on and on. Under the tripartisan plan, beneficiaries will have a chance to join this new fee-for-service option instead of joining Medicare Part A and Part B, as they do now. It would have a combined deductible, instead of two separate deductibles that beneficiaries have to deal with today. Additionally, it would eliminate the beneficiary cost sharing for preventive benefits, such as breast cancer screening, prostate cancer screening, and screening for glaucoma. This allows Medicare beneficiaries to receive these benefits without having to pay a so- called copay. One of the important aspects of the new option is the ultimate $6,000 stop-loss coverage, especially important if a Medicare beneficiary has a long hospital stay. As I said, there are those who have serious illnesses that simply cannot afford to pay more than that. This new option is a complete benefits package as opposed to just a prescription drug package. Instead of just trying to address the issue of providing drugs, the tripartisan bill puts it into a new option in the traditional Medicare Program that currently exists so people will know what they have a comprehensive plan. They can make an intelligent choice and know that it is all there for them together. I will comment on another important part of the plan, and that is that it uses the current market system that seniors are familiar with to deliver the benefits. The alternative is a strictly Government plan that has to be run by Government bureaucrats. They will make the rules. They would establish exactly what the benefits are over time and what the costs of those are. By using the market that is currently used, there is competition to provide the product that is the best for seniors at the lowest cost, so that seniors' needs will actually keep the costs down and keep the benefit structure positive, as opposed to the Government bureaucrats making those decisions. The tripartisan plan includes coverage for drugs within all therapeutic categories and classes, and provides timely appeals if there is any denial of drug coverage in a particular case. This allows the beneficiary to continue to have access to the needed drug and to call on outside experts to review any decision that would deny them those drugs. The plans that participate in the program will have to meet access and quality standards that are decided by the Department of Health and Human Services, including pharmacy access standards. We want to make sure in the rural areas Medicare beneficiaries have access to pharmacies they can go to and get good advice. In rare cases, where beneficiaries may not have a choice of at least two of these plans, the legislation guarantees they would have an option of a fallback plan. Providing affordable drug coverage is the goal of the tripartisan plan. That is why it subsidizes private plans to provide this drug benefit. Using this delivery method, as I said before, will both provide competition to hold down the costs and maintain the kind of program benefit that seniors are used to at the present time. The CBO has told the authors of the tripartisan plan that using this delivery method not only ensures Medicare beneficiaries access to the new drug plans but also the most effective use of taxpayer dollars. We know the plan will become more expensive over time. Seniors care just as much about taxes as anyone else and they want to know it is affordable. The more affordable it is, the more likely they can expand the benefit to seniors. So that is in their interests, as well. In contrast, the Graham-Miller plan uses government contractors to administer their drug benefit. These contractors would have little interest in holding down the cost of prescription drugs for Medicare beneficiaries. We all know what the ultimate result of this would be: the federal government would establish price controls on prescription drugs to hold down the costs. This would have a devastating impact on prescription drugs. Let me offer a real life example of what will happen here. In some major cities today you have price controls, or rent controls on housing. We all know what happens when you have these rent controls. The bottom line is the prices either go up or the conditions of the tenements go down because the people who own them are no longer in a position to continue to upgrade them because they cannot make a profit on them. What happens is that a severe shortage of housing is created and most people who do not have access to rent controlled housing have to pay very large amounts just to live in a small apartment. We are familiar with this in the area of housing. The same thing would happen with respect to drugs. If you use the alternative plan, which will ultimately lead to an attempt by the Government to control the prices--whenever you try to control the price of something, you get less of it. That is exactly what would happen here. People who do not have access will pay extremely high costs. Just as there is no incentive to build new rental housing units in areas with price controls, there will be no incentive to create new prescription drugs. After all, if you cannot make a profit with a new drug that you create, why would you go to the effort and expend the money to try to develop that new drug and put it on the market? It is just not worthwhile to spend the amount of money necessary to create a product when you cannot even cover the costs when you sell it. If we just think about price controls, if they had existed on prescription drugs over the last 20 years, you are probably not likely to have seen the creation of the fantastic new drugs we all have the benefit of today--to control cholesterol levels, like Lipitor; to help people with allergies; to help people with diabetes; and the list goes on. This could be the result of the Democratic alternative which would try to impose price controls without providing an incentive to create these new drugs. Over time, that will result in inferior medical care because fewer and fewer drugs are being brought to market that will help seniors as well as everyone else. This is another reason we should support the tripartisan plan that essentially builds on the system we have today, that gives seniors at least two types of choices. Medicare beneficiaries can either continue in the existing Medicare system or get to choose the new options. If you get into the new options, you are going to have at least two plans to choose from. So there is a lot of choice at the same time that it is also very similar to the current system private employees and federal workers have to receive their health care. Let me finally talk about how much the Government is paying Medicare providers to serve Medicare beneficiaries. It is a very serious concern. At some point we are going to have to deal with it. In the House of Representatives there was, I think, $30 billion added to their prescription drug benefit legislation to ensure that physicians and hospitals and other providers would receive the money they need literally to stay in business. We have emergency rooms around the country that are closing because they are not being paid. It is going to be necessary for us to provide some supplemental funding to the hospitals and other health care providers literally to continue to provide the benefits we are promising through programs such as Medicare and Medicaid. If there are not doctors and hospitals to serve people, we can pass all the laws we want, but it is not going to do people any good. So we are going to have to address this issue, whether it is on this legislation or legislation down the road. My colleagues may appreciate that by Federal law, under the Medicare Program, physicians will receive a 17-percent cut over the next 4 years in what Medicare pays them to see a Medicare patient. Since private plans frequently base their reimbursements on what the Government Medicare plan reimburses, the effect is, for virtually all physicians, that they are seeing this kind of drastic cut in what they are reimbursed, either by the Government--which provides about 50 percent of the health care--or by the private plans, which provide the remainder. According to a March 12, 2002, New York Times story, 17 percent of family doctors are not taking new Medicare patients because of this problem. They are simply not getting paid enough to cover their overhead costs. Last year, Senators Jeffords and Breaux and I introduced legislation that would have partially fixed this problem. This legislation now has 80 cosponsors in the Senate. That means virtually everybody in the Senate has said we need to adopt this legislation. It would help to fix this problem of declining reimbursements for providers. Additionally, Home health care agencies will be taking a 15-percent reduction in payments starting October 1, skilled nursing facilities will experience a 17-percent cut in some of their Medicare rates, and these are just a few of the examples of payment reductions. So we are not going to be able to provide quality care under Medicare if we are not able to sustain the experts who are providing that care today. I am looking forward to working with my colleagues to ensure that through the reimbursements we will add, whether in this legislation or some other legislation this year, we will be able to provide that supplemental help to them until we are able to straighten out the payment formulas under which Congress reimburses the hospitals and other providers that are providing care called for by Medicare. Let me summarize the point about the difference between the two prescription drug proposals and how we are likely to pass a drug bill that will actually be signed into law. If we had been able to pass a bill out of the Finance Committee, we would only have to have a bare majority--51 votes. The tripartisan bill has support on both sides of the aisle, Democrat and Republican as well as Senator Jeffords, another cosponsor, to be able to pass. We could actually get together with the House of Representatives, make the changes, the compromises between the House bill that has already been passed and this bill, and get it to the President for his signature, and by the beginning of the fiscal year we could actually be implementing a new drug for our seniors that they do not currently have. But because that does not fit in with the plans of the majority leader, we are now in a situation where any bill that is brought here is going to have to have 60 votes to pass. Because of the realities of the political environment in which we operate, it is unfortunately the case that it is going to be very difficult to get 60 votes for any plan. The one that has the best chance is the tripartisan plan that I alluded to earlier. It is not the bill I would have written, but I am willing to support it because it is a good proposal that has the best chance we have to actually get something passed and deliver a real benefit to our seniors. We will have time to work the issues in the conference committee. We will have time to continue to modify the legislation after it is passed and signed into law. But we have to act, and every year we do not act is a year in which more and more seniors are denied the benefit that they need, that their physicians are prescribing for them and, unfortunately, many of them cannot afford. It seems to me we should put ideologies and politics aside and try to do something good for the seniors of our country and lay those differences aside to the extent that we can actually pass a bill. It is a good bill. It is a very good bill in terms of providing the benefits. It is costly, but with the reforms in Medicare that are included within it, I think over time we will be able to afford these costs. After all, it is a commitment that we should be satisfying for our seniors. I urge my colleagues, when the time comes early next week, to lay aside partisan differences, to support the tripartisan bill, the only bill that has a chance of succeeding here, and move on with the political process so we can work with the House of Representatives, pass it on to the President, who I am quite sure will sign it, and begin providing a prescription drug benefit to our seniors. Going all the way back to when Medicare was created, we treated people differently. Today we know medications are the primary method of treatment. We have to recognize that here in the Senate, something that all seniors understand very well. Let's recognize the reality, let's provide this drug benefit and really keep faith with the seniors we represent. I suggest the absence of a quorum.

Mr. KYL

Mr. KYL. Mr. President, I ask unanimous consent to speak until the hour of 11:20 a.m. in morning business.

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

Mr. KYL

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

Mr. KYL

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

Mr. KYL

Mr. KYL. Reluctantly, I must object at this time on behalf of a group of other Senators and myself, not to the terms of the unanimous consent agreement as has been outlined by the Senator from Nevada, but rather to bringing up the bill until there has been an agreement reached on how to deal with the supplemental funding for dealing with these wildfires. I think the Senator from Nevada is absolutely correct that that funding should be on the supplemental appropriations bill. Unfortunately, it has not been put on that bill so far. There are a lot of different reasons alleged to exist for that. It seems everybody is willing to do it but somehow or another they cannot all get together to make it happen, and if it does not happen on that bill, the only other alternative is to try to do it on the military construction bill. The Interior Department appropriations bill is not likely to be able to come before us in a timely fashion so the money that is needed for replenishing these Forest Service accounts can be replenished before the end of the fiscal year, and that is the reason we have to retain this option. I hope that within the next several hours an agreement can be reached and these funds will be put on the supplemental appropriations bill, as the Senator from Nevada suggests, and then we can move on with this important legislation. Until then, we do need this as a possible way to move forward with the funding that it seems everybody is for but they just cannot find a way to make happen.

Mr. KYL

Mr. KYL. Mr. President, as Congress debates S. 2673, the Public Company Accounting Reform and Investor Protection Act of 2002, it is important to keep in mind certain facts: The United States of America is the most successful country in the world. No other country outworks, outproduces, or economically outperforms the United States. Americans have much to be proud of and it is due to the vigor of our businesses, the entrepreneurial spirit of our citizens, and the willingness of both to take risks. For hundreds of years, people from every corner of the globe have chosen to come to our country and pursue what has become known to the world as the American Dream. The American Dream can and should be available to all Americans who, with diligence, determination, and a sound moral compass, choose to pursue it. Unquestionably, our government has an important role to play in ensuring its viability. By the passage and enforcement of laws to protect Americans seeking to achieve success, lawmakers reaffirm that America's prosperity rests on the rule of law, on the existence of safeguards, checks, and balances to ensure that all compete fairly in the marketplace. These protections must be transparent and easy to understand. This is not only so that businesses and individuals can readily determine what distinguishes appropriate from inappropriate action, but so that all may have faith in the governmental bodies tasked with enforcing the rules. The implosion of Enron, Global Crossing, WorldCom, and other public companies has caused widespread concern about the soundness of American businesses. Public confidence in corporate practices has been undermined, and serious questions have been raised about the accuracy of corporate audits and the integrity of auditors. Many Americans have become worried that neither internal corporate safeguards nor the government's financial oversight mechanisms are functioning properly. I share these concerns and I am glad that the Senate is seeking to address them. All Americans have a stake in a healthy business climate, and we know that health depends on having an ethical business climate. While the past two decades have unleashed a tidal wave of entrepreneurship and successful business growth, we have also witnessed, most notably throughout the late 1990's, an ``anything goes'' relativism that has increasingly penetrated our corporate business and political culture. We've always taught our children a moral principle well expressed by Macauley: that ``The measure of a man's real character is what he would do if he knew he would never be found out.'' We do so because, as parents, we know that we cannot supervise our children forever. When they face, as they inevitably will, a choice between the easy road of cheating or the tough road of following the rules, we want them to choose right, not wrong. Sadly, this lesson seems to have been forgotten lately. In the haze of morally gray areas, corporate executives have come right up against the limits of what is acceptable behavior, and in several cases, have gone beyond it. What's worse, these companies' boards of directors have stood by in the face of wrongdoing, either unable to discover it or unwilling to rouse themselves to take corrective action. I am very troubled by the inability of the markets to see through the phony numbers being generated by these enterprises. As a result, average investors no longer enjoy the protections put in place to ensure accountability and transparency. I agree with President Bush, who said that ``to properly inform shareholders and the investing public we must adopt better standards of disclosure and accounting practices for all of corporate America.'' Yesterday, President Bush outlined an aggressive plan to rejuvenate the mechanisms that ensure corporate responsibility. This plan will expose and punish acts of corruption, make corporate accounting standards more transparent, and protect small investors and pension holders. The President has urged Congress to adopt tough new criminal penalties and enforcement provisions in order to punish those who refuse to play by the rules and who choose to undermine the integrity of our financial markets. The House of Representatives have already passed legislation addressing this slippage in corporate responsibility, while also permitting enough legal and regulatory flexibility to tackle future problems. Rather than seeking to provide a statutory answer for every current deficiency and every recent transgression, the House bill recognizes that this is a job for experts and gives the Securities and Exchange Commission the authority necessary to prevent future abuses. By attempting to legislate detailed accounting standards, the bill before us puts Congress in the position of micro-managing details that we know less about than SEC experts. So, the legislation before the Senate represents a less workable approach than the President's proposal. Although I support its goals, particularly the need to improve the quality of independent audits and financial reporting and ensure meaningful accountability by executives of public companies, this bill has other specific problems. For example, the Public Company Accounting Oversight Board, which would be created by the bill, would be allowed to begin proceedings against accounting firms without affording them the same due-process protections they would have in court. Their livelihood could be at stake. Certainly, bad actors should be held accountable for wrongdoing. But our system of justice has always had safeguards to protect the innocent; checks need to be in placed to prevent the wielding of unbridled government power. The bill would make accountants liable for not reporting ``any material noncompliance'' with the law that auditors ``should know'' about. What does that mean? That standard is so vague that it is certain to invite a flood of litigation. Unfortunately, we have had some experience with frivolous lawsuits trumped up by trial lawyers over alleged securities violations. Section 105 of the bill establishes liability for any ``failure to supervise,'' another vague standard that is likely to invite litigation. Again, let me say that bad actors must be held accountable for wrongdoing. But as we attempt to root out and punish the wrongdoers, we must be mindful of the impact legislation will have on the greater number of people who are acting in good faith. Setting up a system that is too costly to comply with, or one that even good people find too onerous to comply with, will ultimately harm the very people we are trying to protect--employees, retirees, and others who have invested in American corporations. If the liability potential is too great, it will be hard for many businesses to obtain accounting services at a reasonable cost. Fortunately, we can still improve the bill in conference, before we send it to the President and he must decide whether to sign it. And while we're at it, the Senate would be wise to look at its own financial practices. We, too, are accountable to the American people. The Budget Enforcement Act of 1974 requires Congress to approve a budget resolution on how much the government can spend each fiscal year. Yet, this year, the Majority has refused to bring a budget to the Senate floor. This is unprecedented and unacceptable. The majority is abrogating its duty to the Senate and the American people. Its stubborn refusal to do what is right, while the whole country watches, is indefensible. Its eagerness to hammer away at what are admittedly acts of wrongdoing in American business, while gliding over its own dereliction of duty in the same general area--is breathtakingly hypocritical. So while we work to pass these important reforms, we must remember that, like the CEOs of public companies, we, too, have an ethical duty to protect and use wisely other people's money. I would remind my colleagues that it is thoroughly disingenuous to rise today to demand clean accounting practices by the private sector, while failing to ensure even basic general accounting standards for the federal government. In closing, consider the thoughts of George Will on capitalism and ethics. Mr. Will wrote that a properly functioning free-market system is ``a complex creation of laws and mores that guarantee, among much else, transparency, meaning a sufficient stream, a torrent, really, of reliable information about the condition and conduct of corporations. By casting a cool eye on Enron's debris and those who made it, government can strengthen an economic system that depends on it.'' I am confident that, despite these recent abuses of the public's trust, our economy and our system remain fundamentally sound and strong. The vast majority of businesspeople respect legal norms and live by them. We will make our free enterprise system better for them, and for all Americans, by penalizing those who did wrong and repairing creaky enforcement mechanisms. The President has acted. The House has acted. Now it is time for the Senate to act, to return trust, accountability and transparency to our financial institutions.

Mr. KYL

Mr. KYL. Madam President, I object, and I would like to explain the reason why. I concur with the comments Senator Lott has made about the importance of moving this legislation forward. I have conferred with the ranking member of the committee, the Senator from Texas, who makes a strong case that the legislation has been carefully crafted, and it is important to move it forward. I totally concur with her on that. I also have no problem with the way in which the unanimous consent agreement has been constructed in terms of moving forward as soon as it is possible to do so. I have no objection to any of that. I do simply want to, as the minority leader said, preserve the option of dealing with the subject of the recent floods and droughts on this appropriation bill. The reason is as follows: The ranking member of the committee, the chairman of the Appropriations Committee, and the ranking member of the Energy and Water Subcommittee are all meeting today with other people, including the Director of the OMB, the Senator from Texas, and others, to try to figure out the best way to deal with the new issue of the fire and flood and drought damages that have occurred in this country since the supplemental appropriations bill was put together. My personal view is that the supplemental would probably be a preferable place to include the disaster relief to replenish the funds for the forest fires to the BIA and the Forest Service. There are those, however, who disagree. If the Director of OMB and chairman and ranking member of the Appropriations Committee believe that it is not appropriate to use the supplemental as the vehicle for doing that, then one of the other appropriations bills will be appropriate, and the first one before us is the military construction bill. That would be the next appropriate vehicle. I am simply preserving their option to decide which is the best vehicle for moving this forward. The reason specifically for wanting to do it right now--in response to the Senator from Nevada, I am confident that we will deal with this issue because it has to be dealt with. Here is the very practical problem. We have had about one-fourth of the entire budget of the Forest Service now consumed in fighting forest fires; whereas, ordinarily it is something like 4 percent of their budget, or something like that. So they have borrowed from other accounts in order to pay these firefighters. The fires in Arizona cost almost $50 million to fight. As a result, they have had to borrow that money from other accounts. The result of that is that right after the fire is over, before it is even cool, they will not be able to go into the area of these fires and prevent the erosion that inevitably occurs as soon as the rains start, and now the rainy season is beginning, and the planting of the grasses and trees and so on that further inhibits that erosion. They literally want to go in as soon as they can after the fire to stabilize the ground. If they wait too long, it doesn't do any good. So they have to do that right away. The problem is, they have spent all the money in the restoration accounts. The head of the Forest Service put a stop on the expenditure of any money that doesn't have to be spent almost on an emergency or daily operations basis. So right now, both the Department of the Interior and the Department of Agriculture are significantly precluded from doing the other things Congress mandated that they do. We need to make sure they know they are going to have the funds to restore those accounts so they can get on with the jobs we have asked them to do; and, most importantly, in the very near term they can get into the area of these fires and begin the restoration that is essential in a timely fashion. That is why the first vehicle in terms of an appropriations bill that can be used should be used for this process--whether it is the supplemental or this appropriations bill. There have been suggestions that the Interior Appropriations bill would be a better vehicle. From a purely substantive point of view, that is true, but that will not come before us for another month, or 6 weeks, or 2 months. That is, obviously, way too late. That is the reason why we need to preserve this particular option. I hope we can move quickly to the consideration of the MILCON bill, both for the purpose of completing the work of the Senator from Texas, as well as the work we are talking about.

Mr. KYL

Mr. KYL. Thank you, Mr. President. Let me make a general statement, and also preliminarily comment on the debate that has been conducted by the two Senators from the State of Nevada. They have been tenacious in the representation of their position. I take no pleasure in opposing their position. They are both fine Senators and are extraordinarily good at representing the interests of their constituents in this particular case. I know it is not just a matter of representing the people who have spoken out from the State of Nevada. I have talked to Senator Ensign a lot, and he has argued his case with a lot of personal conviction that you don't always see in this body. I commend both of them and make the point that I take no pleasure in opposing them. I do, however, strongly believe it is time for us to move forward with this process, and the next step in the process is the approval of this legislation. Then there are other things that have to be done, including the Department of Energy action. I want to make a comment about this issue of the storage of nuclear waste because the Palo Verde nuclear-generating station just west of the city of Phoenix is the biggest in the country. It is a huge, successful, good nuclear-generating station. It stores an awful lot of waste. In fact, I believe, according to the Nuclear Energy Institute, more than 45,000 metric tons of high-level radioactive waste are housed at the 131 sites in 39 States--sites such as Palo Verde. If we don't use a storage facility such as Yucca Mountain, the problem only gets worse. Each year, about 2,000 more tons of radioactive waste are being added to the total. Senator Ensign made the point that even if we have a site such as Yucca Mountain, of course, we are still going to have the other storage sites around the country. That is very true. But I think it begs the question of what we are going to do with the majority of this waste. It is a little like saying since every Wednesday morning everybody in my area of Phoenix is going to put their garbage out, and because we keep producing garbage, we should not have a dump to where all of that garbage is taken. It is certainly true that every Wednesday everybody is going to put their garbage out. We produce more garbage, and to store it onsite is in effect storing it on the curb. That doesn't argue for the proposition that there should not be a central repository where that material is taken and disposed of in a proper way. That is what we are talking about here. We are going to continue to produce waste. There will have to be a place to temporarily store it at each of these nuclear-generating facilities around the country. But eventually, when it cools off, it is put into these casks and transported to Yucca Mountain. That is where most of the scientists have decided is the right place to put it. As a matter of fact, the scientific reports of the Department of Energy conclude that a repository at Yucca Mountain would protect the public health and safety in accordance with the EPA and NRC guidelines. The Nuclear Regulatory Commission is in support. The Nuclear Waste Technical Review Board is in support. The experts on the National Academy of Sciences panel who recommended the site note that there is ``worldwide scientific consensus'' for the idea. I might also add that there is now a new element that is injected into the debate. That is the element of terrorism. We can't talk about that a lot on the floor of the Senate. I am on the Intelligence Committee. I can assure my colleagues that it is a significant issue to have this waste dispersed at a variety of sites around the country in the conditions that currently pertain. It would be much better if we were able to take a majority of it, when we could, to one site that is clearly safe from terrorism. Yucca Mountain is a remote location. It is 100 miles away from the nearest metropolitan area. It has the highest security--again, because of its general proximity to the Nevada Test Site and Nellis Air Force Range. Those are reasons we think it is important to go ahead with the next step of the process and get this material to Yucca. With respect to transportation, we know that there have been a lot of questions raised. But the truth is we have had 45 years of experience and 3,000 successful shipments of used nuclear fuel. That is not exactly the same as this fuel, but we have much better casks now--these steel casks that have been described in detail here on the floor that will be used for the transportation of the material. There have been no radiation releases, fatalities, or injuries, nor any environmental damage that has occurred as a result of the transportation of this radioactive cargo in the past. I am a little distressed by the fact that people have been scared. I am very disappointed that some people--clearly not those on the floor of the Senate today--but there are some who have really attempted to scare people in individual communities with the notion that somehow there will be some great catastrophe as a result of the transportation of this material. That is so unlikely as to be something that should not be of concern to us as we move forward with this legislation. I urge my colleagues to recognize that at some point something has to be done. We can't just allow the waste to sit where it is. There is a safe, scientifically proven location where the material can be stored. The transportation has also been throughly considered by the scientific community. A method for transporting it has been developed. Sandia Laboratories, which has done a lot of testing, assures us it would withstand the most extreme accident scenarios. For all of these reasons, I think it is important for us to move on, get beyond this next step, and allow the DOE now to look at this Yucca Mountain site for licensing. Again, I commend all of my colleagues for the way in which this debate has been conducted. This is an emotional issue with a lot of people around this country. But the debate has been responsible and serious and based upon good science. I commend both the proponents and the opponents for the way they have conducted this debate. Thank you, Mr. President.

Mr. KYL

Mr. KYL. Would it be possible to lock in the vote at 3:15? I am sorry.

Mr. KYL. Would the Senator yield for a question?

Mr. KYL. Let me say, first of all, it gives me no great pleasure to oppose an amendment offered by two of my best friends in the Senate, one Republican and one Democrat, good colleagues with whom we have worked on a lot of things. This is not a matter of Arizona v. Oregon. It came to my attention on the night the senior Senator from Oregon was mentioning that there was an objection to the inclusion of an item in the managers' amendment to the supplemental appropriations bill which a number of Senators-- Senator Gramm of Texas, our colleague Senator McCain, and I believe some others in this part of the Chamber were going through the managers' amendment to the supplemental appropriations bill. We objected to a whole variety of amendments which attempted to either spend money or micromanage money in ways inappropriate in our view at that time. That is when this matter first came to my attention because a Member of the other side mentioned to me there was a managers' relating to the State of Arizona. Naturally, I was curious when I saw that the Air Force's 939th unit was going to be moved from Oregon to Arizona and that the amendment of the Senator from Oregon would have stopped that. I didn't know about it at the time. We objected to that and a variety of other things because we believed it was inappropriate to be on the supplemental appropriations bill. Now our colleagues from Oregon have determined that they should not interfere with the movement of that unit to Arizona. But they want to make up for its loss through the amendment they are presenting here--I think that is a fair way to present it--as a result of which they want to take $3 million from the Army's active-duty operations and maintenance account for upgrades of helicopters; $3 million will be spent for procurement of helicopters and $1.8 million for the 26 Oregon National Guard personnel. If I am incorrect, correct me. I believe those numbers are correct. The fact that I don't view this as Arizona v. Oregon is illustrated by the fact that the unit will move to Arizona, and Arizona is no worse off. I speak on this matter having nothing in terms of a parochial interest involved but, rather, because I have taken President Bush and Secretary Rumsfeld at their word. And Senator McCain and I have worked for many months--in fact, a number of years, even before President Bush came into office--trying to preserve as much in the way of funding for our military as possible to be spent in an efficient way and not be wasted. It is one reason we both support and are cosponsors of the base closing amendment, notwithstanding the fact that it jeopardizes at least one or maybe two Air Force bases. In at least one round, we had a major base closed. We are willing to take that risk for the State of Arizona because we believe we are United States Senators and we have an interest first to protect the United States of America and to protect our constituents to the extent we can. But when it comes to national security and national defense, we don't play around with it. I don't put parochial interests ahead of the interests of America in its defense. When the President says, I don't have enough money for defense and I have to spend every nickel we get in the wisest possible way, and when the Secretary of Defense says, I am going to husband these resources and allocate them in the following way, then I don't think it is a good idea for Congress to say, because we want something for our home State, we are going to take money out of the Army's active-duty operations and maintenance account--almost $5 million--and put it into our State because we want a search and rescue mission for people who get into trouble in our beautiful mountains. That is not right. I have no doubt that the local communities around Mount Hood and some of these other areas may not have the tax base to pay for this themselves. But the State of Oregon is on television--I have seen the ads, and they look great because they happen in the prettiest country in the world. You see the ads: ``Come to Oregon''--I believe it is. I won't give the exact quotation of the ad. But they are very effective ads. There is a great deal to come to Oregon for. Their beautiful mountains are part of that. If the State of Oregon, I think, with its multimillion-dollar budget--over a billion-dollar State budget--has enough money to urge people to come to the State of Oregon to enjoy its beauties, then I think they also have the ability to provide for their safety when they are there if $4.8 million is the difference; in other words, to provide some mechanism for the State to be sure people needing rescue on the side of a mountain could be rescued. I have no idea what this unit is going to be doing in Arizona. We don't have big, beautiful snowcaps. We have a couple of them, but not the same kind of tourist attractions as the mountains in Oregon. The training, I believe, could be for the number of illegal aliens who come across the border to be rescued. About 50 or 60 have died already this year. Maybe that is what they intend to do. But I don't know. That is really, in a way, beside the point. Neither State, nor any other State, should be seeking to take active- duty account money from the Defense Department and using it for what is a parochial need. I don't say parochial in a negative sense, but a local need, a need that could be satisfied by the people of the State. That is reason for our opposition. It is not an Arizona v. Oregon issue, as the Senator from Oregon was himself being very clear. We don't believe we should be micromanaging the military, let alone taking money from the active-duty accounts. I regret we are not able to offer the second-degree amendment because that would have prevented this, in effect. But it would require people from Oregon to make some choices about the $9 million we just added last night in this bill for Oregon. They will be able to move that money around and make the choices themselves as to where they want to get the funding. But it wouldn't have to come from active-duty accounts. I hope if this amendment is adopted--I urge my colleagues not to allow it to be adopted--that there will be some discussion along the lines the Senator from Oregon was alluding to earlier. I don't think at the end of the day, as it is going right now, this is going to result in a conclusion that will be desirable from the standpoint of our colleagues from Oregon. I appreciate what they are trying to do. Again, it gives me no pleasure to oppose them. But I think, if we have any concern at all about our active-duty troops, if we have any concern about spending money wisely, and keeping U.S. Federal military missions focused on our military and not the parochial needs of individual States to rescue people who may get into trouble, we should keep our eye on that ball, vote against this amendment, and allow the Defense Department to spend the money the way it wants to and help the State of Oregon get its funding in some other way.

Mr. KYL

Mr. KYL. Madam President, I rise to speak on the crisis pending before the whole State of Arizona. Arizona has never had a tragedy like this Rodeo fire. It has now consumed an area 10 times the size of the District of Columbia. It has burned at least 200 homes, probably more. We can't go back into areas that have been burned because it is still too hot. It has destroyed a lot more buildings than that, and animals, both domestic and a lot of the animals that populate our beautiful forests. People who are not familiar with Arizona might not understand how there can be a forest fire in Arizona. But the world's largest ponderosa pine forest stretches from the Grand Canyon into New Mexico, across a rather wide swath of Arizona at an elevation of about 7,000 feet. It is beautiful country, with pine trees, aspen, fir, spruce, lakes, rivers--not the kind of environment you would ordinarily associate with Arizona. It is a place to which many Arizonans repair during the summer when it is very warm ``down in the valley,'' as we call it. It contains some of the most interesting and unique habitat in the United States--habitat, both flora and fauna, which is not preserved by wildfire but is absolutely and utterly destroyed. You might be interested to know that an area not far from this-- 75,000 acres--burned a couple years ago, and it was the largest black bear habitat in the whole United States. When you think of Arizona, think of habitat for an enormous variety of animals, including fish and birds, that has now been destroyed by this fire. We have the Apache golden trout, which, at great pains and at great cost, the Apache Indian tribe and the U.S. Government have tried for years to bring back to the area of the White Mountain Apache Indian Reservation and surrounding areas. It has been dealt a huge setback because of the fire that has gone through the area which this trout ordinarily populates. The erosion that will come from the devastation caused by this fire will clog the streams, and it is unlikely, I have heard today, that the Apache trout will be able to make a comeback in this area. I am sure there are many other species--the gosant, just to mention one--that will be devastated as a result of this fire. Yet it is interesting that some of the radical environmentalists in our country are the very ones who are responsible for preventing the kind of management of our forests that might have prevented this devastation. Their view is that man should not touch the forest. As one of them was reported as saying today: If the price for that is a 500,000-acre fire with an entire town like Show Low, AZ, devastated, then so be it; that is the way it should be. That is a misreading of history and science. A century ago, before we overgrazed the area, and before we employed a policy of fighting all of the fires, fire regularly burned through our beautiful ponderosa pine forests. We had, about every 7 years, a small fire that would burn the ``fuel'' on the ground and a few of the smaller trees, but it could not hurt the great big, beautiful trees-- maybe 50, or 60, or 70, or 80 per acre. Now we have 3,000 trees per acre, or more, because we have suppressed the fires and the grazing has resulted not in more grass growing but all of these seedlings growing. If you look at a lot of these forests in Arizona today, instead of the big sequoia trees, which is what the mature ponderosas look like, you see what is called a ``dog-haired thicket,'' which is a forest so thick with stunted, little--frankly, ugly--trees and brush that they say a dog cannot even run through without losing half of his hair. It is hard to walk through these forests; they are so thick with this ``fuel,'' as the Forest Service people call it. What happens when there is a lightning strike or a man-caused fire, as in this case? Instead of burning around the ground, licking at the base of these big trees--and they shrug it off--it roars throughout the underbrush and climbs up the ladder of the smaller trees, up through the higher trees, and finally the superheated structure at top of the trees explodes into flame, and the flames swirl, creating air currents, and even affecting the weather. The fire then races across the top of the forest, devastating everything in its path. The heat is so intense, the soil is sterilized and the waxes from the needles that ordinarily don't bother the forest floor melt and literally create a coating on the floor. The rains that may someday come--although we have not had any for a long time--will wash the unprotected soil into the streams, creating huge erosion problems, and it will be a hundred years before this forest once again looks like it did a week ago. That is just the impact on the forest itself. The other fauna-- various varieties of animals, birds, fish, and insects--are destroyed. That is not to mention the human tragedy. The elderly people who moved to these communities, because they are retirement and recreation communities, don't want to leave their homes. A family I heard about saw the pictures and saw that their outbuildings had been burned, and they had no idea whether their own home was still standing. The town of Show Low, with 30,000-plus people, was evacuated. Every one of the citizens was forced to leave town. The fire is within the town limits, and it has been there for basically a day now, as the firemen from our State and from other places in the country are battling to keep it from totally destroying that town. Almost as bad, immediately to the south of town there is basically a clear path of forest, tinderbox dry, all the way to New Mexico that would literally devastate the entire Apache- Sitgreaves Forest, which I consider to be some of the most beautiful country in the world. Our own summer cabin is in those mountains. I know the area. I have hiked it. I love it. It is a tragedy of unspeakable proportion that we have allowed a condition to endure that created this much devastation. To give you an idea of the magnitude, a person not from Arizona was asked to describe it, or try to characterize it, provide an objective description. He thought for a long time and finally said: I have seen one thing worse, Mount St. Helens. Now, could this have been prevented? The answer is, probably so--at least to the order of magnitude of this devastation. We have known for a long time that it is possible to manage our forests by going into these densely populated forests, mechanically thinning them--that is to say, removing all the little trees I spoke of in the brush, the downed trees, and so on, mechanically moving most of it; and then during October and November, when it is cool and wet, you burn what is left during a prescribed burn, which is very safe, so that the following spring grasses crop up. And what we have found by research done out of the Northern Arizona University--primarily by Wally Covington and his group--is that the number of species of butterflies and birds and animals of all kinds, by orders of magnitude, return to the area and the protein content of the grass is great. The antelope, deer, and elk want to get there to graze. Also, the pitch content of the trees is improved so the bark beetles cannot get in and cause the trees to die. It looks so much better. Instead of this tangled mass of little trees and brush, which I talked about before, you have beautiful, big trees that, as I say, look like the sequoias in California, and which are much healthier as a result of the fact that they are not competing with so many little trees for the nutrients in the water and the soil. It can be done by thinning and taking out that dead brush and then, in appropriate cases, doing a prescribed burn as well. After that, nature can take its course. When you have a lightning strike 5, 6, 7 years later, what happens? It burns along the ground. It will burn the grass and some of the stumps that are left, but it will not crown to the top of these trees, creating the devastating fires we have seen. Why haven't we been able to do that? I am sorry to say it is a combination of a lot of factors, but most of it goes back to one central problem: There are radical environmentalists who don't agree with this. Most mainstream environmentalists understand that this so- called ecological restoration is exactly what our forests need, and they are willing to support it. Yes, there are quibbles about, do you cut 16-inch or 24-inch diameter trees, but the concept is agreed to. Some of the radicals are so afraid that there will be any commercial timber operation left standing in this country--and there is none in Arizona to speak of anymore--but they are so afraid somebody might make a little bit of money cutting timber commercially that they will do anything to prevent anybody from getting into the forest to cut trees; thus, our roadless policy, and thus, 5,000 appeals to Forest Service actions seeking to go into our forests and provide this kind of management. Between 40 and 50 percent of the Forest Service budget is devoted to dealing with these legal challenges. Think about that for a moment. Talk about a litigious society. Between 40 and 50 percent of the Forest Service budget is devoted to these administrative and legal challenges to moving forward with this management. Part of the fault is Congress. We have written laws that are so open-ended and unclear that it is very easy for radical environmentalists to find something wrong and challenge one of these proposed management programs. Bureaucrats make mistakes. It is always easy to stop a project. It is very difficult to move these projects forward, as a result of which a lot of Forest Service people have essentially given up. I have asked them and they say: Why should we propose any more? We will get stopped, and we don't have enough personnel to fight this in court or in the administrative process. There is plenty of blame to go around. We tried to get more funding in the Congress, and, frankly, my colleagues have not been all that supportive. We tried to get support from this administration and the past administration. Again, we could have had a whole lot more help than we have received. To its credit, this administration only had one budget, and I am hopeful that as a result of this--the Secretary of the Interior I know is strongly committed to this kind of management, as is the head of the Forest Service. I am hopeful that as unfortunate as the Rodeo fire is-- and, by the way, the Chediski fire--might stimulate both the administration and my colleagues in the Congress to support more meaningful management practices. I spoke with friends on the other side of the aisle who are anxious to help in this regard because all the Western States have the same environment. The ponderosa forest is a little different than other forests. They have their own nuances but generally the concept is pretty much the same. We need to do three things. We need to, first, provide whatever supplemental funding is necessary to deal with the crisis that is here today. The Forest Service long ago spent all the money we gave it to fight fires. We are just entering the fire season. We have to replenish those accounts and get more money into the Departments of Agriculture and Interior. Second, we have to in next year's budget provide adequate funding for the implementation of a forest plan that provides this management on a large-scale basis. The General Accounting Office said 3 years ago that we have to treat 35 million acres in a 15- to 20-year period or these forests will be lost forever through disease and burning. Now it is down to about 30 million because about 4 million of those have burned. But we still have a job and less time within which to do it. We need to devote the resources that are necessary, and that will mean spending some money. Third, we will have to change some of the laws to provide for more expedited procedures to get these plans approved and to make it more difficult for frivolous objections to prevail or to slow up the process. If these plans are done in accordance with commonly accepted good management practices, then the burden should be on those opposing the sale to prove why the sale should not go forward. When I use the term ``sale,'' I want to be very specific. We do not have enough money in this country to treat these forests without commercial enterprise. I have gotten a little bit of money each year to support Northern Arizona University and the research people in Denver who hire AmeriCorps volunteers and grad students at the university to go out during the summer and do some of the work by hand. They can treat a few hundred acres doing that, but they cannot do a large area treatment that the GAO said is necessary. That is why we are going to need commercial enterprises to clear the forest of the debris, the fuel about which we are talking. Somebody might make a little bit of money doing that, but it is not going to be by taking out the big trees that all of us want to preserve. It will be by having enough wood for fiber board, plywood, and a few poles for cabinet construction, for example. There may be a little bit of lumber but not very much. Those are the actions we are going to have to undertake in the next few days to begin to deal with this situation. The one way we can begin to repair what has occurred and to keep faith with the people who have lost their homes and their livelihood, their livestock, and, frankly, the people of this great Nation who have now lost a tremendous resource of almost half a million acres in Arizona, one way we can help to make this right is to see it does not happen again. We can do that by implementing sound management that begins to restore our forests to the way God created them and the way they can be preserved if we will but treat them as we would treat anything that belongs to us in our own yard or in our own garden. We would never hope to have a successful garden without ever weeding it, and there has been a parallel made of our forests to our gardens. To keep it healthy, one has to weed it every now and then. That is not unnatural. In fact, it is a very natural way of dealing with our forests. Madam President, I join all who have expressed sympathies and best wishes for the people who have suffered as a result of this fire. I appreciate all the comments that have been made to me, expressions of concern and support. I am absolutely delighted President Bush is going to be flying to Arizona tomorrow to this little town of Show Low whose Fourth of July parade I do not think I have missed now in about 15 years. It is a beautiful little town. I know the people of Show Low and of northeast Arizona will appreciate the President's visit, and I know it will be on behalf of all of us that he visits there and expresses our sympathies and concerns and hope for the future as a result of our ability to join together and engage in sound management practice. I support what he is doing. I regret I cannot join him. I know he would ask us to do the work here in response to this important Defense authorization bill. I ask unanimous consent to print in the Record a Wall Street Journal editorial of Friday, June 21.

Mr. KYL

Mr. KYL. Madam President, that terminates my remarks on the bill. May I inquire of the Chair, is it correct that at the conclusion of my remarks the Chair was prepared to put the Senate into a period of morning business?

Mr. KYL. Madam President, by way of introduction, my remarks will primarily be in support of an amendment that will be offered by the distinguished ranking member of the Armed Services Committee, the Senator from Virginia, tomorrow to restore missile defense funding that was cut in the Armed Services Committee. I wanted to note that this afternoon the President advised both Senator McCain and I that he would be traveling to our home State of Arizona tomorrow--specifically to the town of Show Low which is under threat of this raging wildfire we have all seen and read about--and he graciously offered to allow us to accompany him on that trip. But, obviously, the importance of this Defense authorization bill-- specifically, the votes we will have tomorrow, including an effort to restore funding for the missile defense portion of the bill--requires that we remain. I am going to speak to the issue that will involve his visit to Arizona tomorrow, why these raging wildfires don't need to continue to devastate our country, what we can do about it, and what we need to do about it as a country at the conclusion of my remarks on the Defense bill. I will address my comments first to this bill which is before the Senate, and which we will be considering this week. It seems to me that there is a strange disconnect between recent developments in the world and some of the contents of the bill that we are considering. For example, in early May, Iran--newly dubbed by the State Department as the No. 1 terrorist nation in the world--conducted a successful test of its 800-plus-mile-range Shahab III missile. There are some reports that Iran is now set to begin domestic production of the Shahab III which will be able to reach Israel, as well as U.S. troops deployed in the Middle East and South Asia. On May 7, the Associated Press, citing an administration official, reported that Iran is continuing the development of a longer range missile, the Shahab IV, with an estimated range of 1,200 to 1,800 miles. The Shahab IV will be able to reach deep into Europe. That means that the fanatical mullahs in Tehran will be able to put a multitude of U.S. allies and our troops within striking distance of their missiles and weapons of mass destruction. We have also just witnessed one of the scariest standoffs in recent decades with India and Pakistan angrily pointing their nuclear-tipped missiles at each other. These developments represent a dramatic increase in the worldwide missile threat. You might think that the United States would therefore want to accelerate its effort to build a defense against such weapons. But the bill before us today would seriously hamper our ability to do exactly that. This is not something that the American people will stand for. This is why I believe that tomorrow it is incumbent upon the Members of this body to listen to their constituents, to listen to the President of the United States, to look at the events around the world, and to reconnect our policy here in the Senate to the realities of the world around us. This bill makes very deep and damaging cuts to the President's proposed budget for missile defense. Unless remedied, those cuts will seriously limit our ability to end our current--and let me say our unacceptable--vulnerabilities to ballistic missile attack. As I noted, the threat from ballistic missiles continues to grow. In addition to the two examples I mentioned, consider this: Today, there are nearly three dozen countries that either have or are developing ballistic missiles of increasing range and sophistication. That includes Iran's fellow ``axis of evil'' partners--or members, I should say--Iraq and North Korea, as well as the terrorist regimes of Syria and Libya. Let us take a look at some of these developments, which, unless indicated otherwise, are taken straight from the December 2001 National Intelligence Estimate on Foreign Ballistic Missiles. That is the estimate of our intelligence community about this threat. North Korea, despite the moratorium on flight testing that it is supposedly adhering to, continues its development of long-range missiles. According to press accounts and administration officials, North Korea has recently conducted rocket motor tests of these missiles. In fact, North Korea's Taepo Dong 2 missile, which is capable of reaching the United States with a nuclear-weapon-sized payload, may now be ready for flight testing. As to Iraq, despite U.N. sanctions, Baghdad has been able to maintain the infrastructure and expertise necessary to develop longer range missiles. Its Al-Samoud missile, with a 60 to 90-mile range, probably will be deployed soon. And Iraq retains a covert force of scud-variant missiles, launchers, and conventional, chemical, and biological warheads. Not to forget about China, the intelligence community assesses that it could begin deploying its 5,000-mile-range DF-31 missile during the first half of this decade. That means essentially any time now. China's even longer range mobile missile, the DF-41, could be deployed in the latter half of the decade. China also maintains a robust force of medium-range CSS-5 missiles which can reach our troops in Japan and Korea. Of course, China continues to add to its arsenal of short-range missiles which already number in the several hundreds and are deployed opposite Taiwan. According to the intelligence community--and I am quoting now-- China's leaders calculate that conventionally armed ballistic missiles add a potent new dimension to Chinese military capabilities, and they are committed to continue fielding them at a rapid pace. Beijing's growing short-range ballistic missile force provides China with a military capability that avoids the political and practical constraints associated with the use of nuclear-armed missiles. The latest Chinese short-range ballistic missiles provide a survivable and effective conventional strike force and expand conventional ballistic missile coverage. Even the terrorists are getting into the act. According to a variety of news sources, some of which have quoted U.S. and Israeli officials, Iran and Syria have supplied Lebanon's Hezbollah terrorist organization with Fajr-5 missiles, which, at 40 to 50 miles, can reach deeper into Israel than any rockets Hezbollah has fired so far. One press account stated further that Hezbollah is assembling chemical warheads for these missiles. These developments, among others, led to the following conclusions in the December 2001 National Intelligence Estimate: One, short- and medium-range ballistic missiles, particularly if armed with weapons of mass destruction, already pose a significant threat overseas to U.S. interests, military forces, and allies. Two, proliferation of ballistic-missile-related technologies, materials, and expertise--especially by Russian, Chinese, and North Korean entities--has enabled emerging missile states to accelerate development timelines for their missile programs. In other words, this is making the point that instead of having to always indigenously develop a missile capability, a country can now buy these literally readymade missiles from countries such as China, North Korea, and Russia. Three, most intelligence community agencies project that, before 2015, the United States most likely will face ICBM threats from North Korea and Iran, and possibly from Iraq, as well as from the existing ICBM forces of China and, of course, Russia. Four, the probability that a missile with a weapon of mass destruction will be used against U.S. forces or interests is higher today than during most of the cold war, and will continue to grow as the capabilities of potential adversaries mature. After September 11, we dare not willfully remain vulnerable to these threats. But that is essentially the impact of the partisan cuts that were made to this bill when it was before the Armed Services Committee. Of course, there are those who suggest that the September 11 attacks demonstrated that the major threat to this country comes from relatively low-tech attacks: suitcase bombs and the like. But what September 11 really demonstrated is that our enemies have the will and the ruthlessness to exploit our weaknesses in any way they can. In other words, if we are weak in a given area, that will be an area attempted to be exploited. Therefore, if we have no missile defense, is there any question that a potential adversary would see the ability to strike us with ballistic missiles as a potential area for their policy? The new types of threats we face from terrorists and the rogue regimes that support them cannot be dealt with solely through traditional deterrence. President Bush was right when he recently remarked at West Point: Deterrence--the promise of massive retaliation against nations--means nothing against shadowy terrorist networks with no nation or citizens to defend. In addition, I make this point. I do not think the majority of the Iranian or Iraqi people or Syrian people detest the United States or wish to attack us with nuclear weapons. If tyrants like Saddam Hussein, who dictatorially rule some of those countries, were to use a weapon of mass destruction against our ally Israel, or even against U.S. troops abroad, I am not sure the President of the United States, in those circumstances, would want to retaliate with a nuclear weapon in the middle of Baghdad, let's say, or some other Iraqi city. Clearly, we would rain massive retaliation upon Saddam Hussein, but we would have to think very carefully about a nuclear deterrent in a situation such as that. So traditional deterrence may or may not be an appropriate response to a terrorist attack. The bottom line is, we are not always dealing with rational actors. To depend on nuclear deterrence alone with a dictator like Saddam Hussein, who, remember, used chemical weapons against his own people, or a terrorist like Osama bin Laden would be to place American lives in the hands of madmen. That, itself, is mad when we have the ability to defend against such an attack. That alternative, of course, is to develop and deploy missile defenses. They will add to our options in terms of a crisis. Defenses against missiles will help the United States avoid being frozen into inaction by the threat of a missile attack. This is the threat of blackmail: A country that acquires a nuclear weapon and the ballistic missile capability to deliver it will be in a much stronger position to dictate what it wants around the world--or to prevent the United States from acting--than one that does not. It reduces our options significantly. Just imagine the impact on our decision to go to war against Saddam Hussein in 1991 had he been able to threaten the United States or our allies with nuclear missiles. Missile defense will also reduce the incentives for proliferation by devaluing offensive missiles. If a rogue actor views missiles as likely to be effective because of our lack of defenses, they will be developed. If, on the other hand, we have defenses, then they will obviously be less inclined to spend as much time or money trying to acquire it. Finally, and perhaps most important of all, in the worst case scenario, we will save American lives with missile defense. So we should not be fooled by the fact that the bill still authorizes several billion dollars for something called missile defense. Make no mistake that the cuts in this bill are very carefully designed to gut the administration's plans to protect the American people from missiles. If one had wanted to leave intact a program that looked very much like missile defense, but very surgically gutted the key components of it, one could not have done better than the language and the money that comes out of the Armed Services Committee bill. Allow me to describe some of the features of the President's new approach. We are very much aware that the President has decided that we need to transform our military. And the President has proposed an aggressive overhaul of not only the missile defense program but other programs from the previous administration. Let me describe some of the features of this transformational approach: First, a single, integrated architecture to command and control all of the various components of a missile defense system. What this does is to move us from the old concept of several unlinked systems to one overarching system composed of several integrated components or elements, as they are now called. This system removes the need for each element to do everything and, instead, distributes the basic tasks--such as launch detection, tracking, and battle management--across the entire system. So instead of having three or four specific components that do everything, you have several ways of attacking the problem, all linked together; therefore, they are much more effective in their overall ability to detect, track, and destroy an enemy missile. Secondly, multilayered defenses capable of intercepting missiles in all phases of flight, including the boost, midcourse, and terminal phases is an element of the President's transformation plan. The obvious benefits of this feature is that it will give us several shots, if necessary, to knock down a missile after it has been launched. The point is, we do not have very much time, when a missile has been launched against us, to make a decision to launch a counterattack. By the time we do that, the missile could well be coming down on top of us. We need the ability to have multilayered defenses which can be effective in the boost phase, as the offending missile is going up, which can try to attack it in midcourse, and, as a last resort, as it is barreling down on us at something like 17,000 miles an hour. But if you only rely on that last system, you are not going to get multiple shots. You are going to get one shot. And it may not always do the trick. In that case, you have lost. Third, the ability to deploy defenses rapidly in the event of an emergency is one of the critical components of the President's plan. To accommodate these goals and others, the administration reformed the Missile Defense Agency and gave it wide latitude to pursue innovative approaches rather than the former approach which was to have a long- term project of design and research and then development and then deployment. The problem is that the bill on the floor today takes dead aim at each of these worthy efforts. The system's integration and command and control accounts, the brains of the whole system, if you will, are reduced in funding by two-thirds. That is gutting the program. To cut the funding by two-thirds, literally, imagine the human body. It looks just like it did after the operation except for one thing: You have taken out the brain. It is not going to work very well. That is the first damage that was done to the President's program as a result of Armed Services Committee action. Programs to intercept missiles in the boost phase, particularly those employing new basing modes and technologies, are virtually wiped out. Funding for 10 THAAD test missiles, which would be deployed in an emergency, is eliminated, and the Missile Defense Agency staff is cut by two-thirds. Essentially what the bill leaves us is the old piecemeal approach, with many of the most promising technologies starved of funding and a variety of impediments created to early deployment of the President's proposed system. It is quite interesting that just as these cuts were being made, cuts that will wreck the Bush administration's approach to protecting the American people from missiles, the ABM Treaty lapsed into history on June 13. The bill is an attempt to revive the spirit of that treaty by those who have never accepted President Bush's decision to opt out of it. If this is the case, they are in dwindling company. A year ago, the anti-missile defense, pro-ABM Treaty crowd created much hubbub over how any decision to renounce the ABM Treaty would supposedly alienate our allies, cause a major rift with Russia, and spark an arms race. It was going to be a disaster. Well, as it turns out, none of those dire predictions came true. Let's have a look. Have we alienated our allies? As of last count, 12 of our 19 NATO allies have contributed troops to our campaign in Afghanistan, 7 countries have sent their troops into combat alongside our own, and dozens of countries are contributing to our war on terrorism. Did it cause a rift with Russia? No. Russia has just entered into a new partnership with NATO, and President Bush just signed a communique with President Putin of Russia in May, committing both sides to cooperation on a host of issues, including, of all things, missile defense. How about a new arms race? No, again. President Bush also signed a treaty with Russia under which both sides intend to reduce strategic nuclear warheads to between 1,700 and 2,200. So the doomsayers were wrong. It is true that Russia and many European countries might have preferred that President Bush not renounce the ABM Treaty, but it seems these countries were not quite as wedded to this outmoded document as some of its Americans supporters. The ABM Treaty, as the cold war that gave birth to it, is gone. Russia and the United States, despite a number of disagreements and interests that don't always intersect, have moved beyond enmity toward a new, more cooperative relationship, and at the same time we have entered into a new area in international relations in which the threats to this Nation are increasingly complex and difficult to predict. So the President expended a great deal of energy and capital in working with our allies and Russia to terminate the cold war and its documentation in the form of the ABM Treaty, to enter into new agreements with Russia, to demonstrate we are friends, not enemies. In order to be able to pivot and address the new threats that face us, the threats from these Third World rogue powers, he proposes a national missile defense. Having gone to all of that trouble--and I shouldn't characterize it as trouble so much as devoting a great deal of America's prestige and commitment to this effort--we now have opponents in the Senate who would go right back to a missile defense of the kind that would be authorized by the ABM Treaty, which is to say virtually none at all. That is wrong, very wrong. The traditional cold-war-style deterrence is not going to deal with the threats we face today. It is time for ABM Treaty supporters who have stood in the way of missile defense for nearly 30 years to recognize this new reality. This reality was brought home with horrible abruptness on September 11. Just imagine if that day were to repeat itself but this time with a ballistic missile armed with a nuclear or chemical or biological warhead. The only responsible course of action to deal with that possibility is to proceed with the most robust program of missile defense development we can muster. That is what the President proposed. The Pentagon's approach to missile defense is exactly that. It is an aggressive, forward-looking plan to provide the American people with protection against ballistic missiles at the earliest possible date. Indeed, this body overwhelmingly voted to make such a plan U.S. policy in the 1999 Missile Defense Act. We have to fund the plan, and we can't allow those who oppose missile defense to go in and surgically remove the key components of the President's program in order to effectively defeat missile defense while at the same time arguing that they have left the program intact. It does no good to spend $5 or $6 billion on a program without a brain, on a program that can't communicate among its independent parts, and on a program that does not begin the transformational policy the President has outlined. I am hopeful that when we vote on the amendment of the Senator from Virginia tomorrow, which restores the funding that was proposed by the President, the Senate will overwhelmingly stand with the President and with the American people, with common sense, to be able to defend the American people against ballistic missile attack. The issue is literally that stark. If we support the committee action, while people can claim that they still support missile defense, the reality will be that that program cannot go forward because it has effectively been denuded by the cuts that have been made. We have to support the amendment of the Senator from Virginia. I wanted to talk about that tonight because I am not sure that tomorrow I will be able to engage in the debate prior to the vote. As I said, it is a vote which we must be here to cast, notwithstanding a devastating tragedy occurring in my home State. Since I believe it is the desire of the majority to terminate my remarks on the Defense authorization bill and the Warner amendment so that we can go into morning business for a little bit and I can discuss that subject separately, I ask unanimous consent that a Wall Street Journal editorial of June 17, 2002, be printed in the Record on the Defense authorization bill.

Mr. KYL

Mr. KYL. Madam President, in accommodation of my colleague from New Jersey, if he will keep his remarks to 4 minutes, shall we say, I would be happy to provide him the opportunity, and then I will begin after he is finished speaking.

Mr. KYL. I intend to take about 20 or 25 minutes.

Mr. KYL. Thank you, Madam President. If the Senator from New Jersey wishes to speak for any period of time, I will go ahead and take my right. But if he wants only to ask for a unanimous consent, I would be happy to provide that opportunity.

Mr. KYL

Mr. KYL. Mr. President, In 1959, the City of Mesa, AZ wrote the Navy asking for an aircraft to display at one of its parks. In 1965, the aircraft, a Navy Panther, was donated for static display to Mesa Parks and Recreation from the Naval Air Station at Litchfield Park. The aircraft was used as a centerpiece for a children's playground. In 1994, the City of Mesa auctioned off the relic as surplus equipment to Richard Oldham for $100. The City of Mesa sold the aircraft to Mr. Oldham in an open bidding process, and he has temporarily lodged it at the USS Hornet Museum in California. He intends for it to be transferred to the Women's Airforce Service Pilots, (W.A.S.P.), Museum in Quartzite, AZ. According to the Naval Historical Center, it is a common for the Navy to conditionally donate aircraft, in what amounts to a long-term loan, to municipalities and museums. Donation of aircraft to city parks is conditional upon Congressional termination of title. Absent evidence of the U.S. Government's intent to make the donation unconditional, (a permanent transfer), the Navy would still hold title to the aircraft. Under section 3, article 4 of the United States Constitution, only Congress can make laws pertaining to the disposal of Federal property. Since there is no evidence in the Navy's or the City of Mesa's files that the Navy intended to give away the aircraft permanently, the aircraft still legally belongs to the Navy, and it would appear that Mesa did not have the right to sell the aircraft to Mr. Oldham. I understand the Navy is willing to enter into a long-term loan agreement with the USS Hornet Museum and with the W.A.S.P. Museum; however, it would still be in the possession of the government. Congress has in the past approved legislation to permanently transfer ownership of Federal property. One recent example is in the FY98 National Defense Authorization Act. Section 1023 transferred two obsolete Army tugboats to the Brownsville Navigation District, Brownsville, TX. Section 1025 of the same act transferred naval vessels to the governments of Brazil, Chile, Egypt, Israel, Malaysia, Mexico, and Thailand. Congress does not transfer property to individuals, but to organizations, muncipalities, and countries. The W.A.S.P. Museum is a non-profit museum and is eligible to receive such a relic aircraft. Aircraft 125316 will find an appropriate and welcome home in the W.A.S.P. museum where it may continue to serve the nation as an important piece of our nation's military history.

Mr. KYL

Mr. KYL. Mr. President, I would like to congratulate the National Law Center for Inter-American Free Trade on its 10th anniversary by having the following letter printed in the Congressional Record. Dr. Boris Kozolchyk, President and Director, National Law Center for Inter- American Free Trade, Tucson, AZ Dear Dr. Kozolchyk: I would like to congratulate the National Law Center for Inter-American Free Trade on the celebration of its tenth anniversary on April 1, 2002. The Center is an impressive research and educational institution affiliated with the James E. Rogers College of Law at the University of Arizona in Tucson. It takes excellent advantage of being near one of the most significant international borders in the world. Since its establishment, the Center has undertaken significant work for the U.S. Department of State to harmonize commercial law in the Americas, focusing on a model law for secured transactions, uniform documentation for cross-border surface transportation, and rules for electronic commerce. This legal reform work is performed in cooperation with the Organization of American States. The Center plays an important role in integrating U.S. business into the economies of the Western Hemisphere. Its work to reduce legal barriers to trade promotes the rule of law, democratic institutions, and enhances political stability and security in the region. Once again, congratulations, and I wish the Center continued success.

Mr. KYL

Mr. KYL. Mr. President, I compliment the Senator from Texas for sponsoring this amendment and for making the arguments which I believe will result in this body finally voting to making permanent what we voted for just a year ago. I want to remind my colleagues that 48 Republicans and 12 Democrats-- 56 of us in all--voted to repeal the death tax. There were two other Republican Senators who were not here but would have voted to do that. That is 58 of us. It passed in the House of Representatives. The President signed it into law. By now we all know, however, that because of the rules under which we operate, all of the tax relief we provided sunset at the end of 10 years. It is for that reason only that we have to come back and revisit this today. The good news is we have a chance today to make what we did before permanent. I submit that unless Senators want to say to their constituents, ``I was just kidding when I voted to repeal the death tax,'' that those who voted to repeal it before are going to have to vote to repeal it again, and this time to make it permanent, or else we will perpetuate this hoax. I have heard a lot of talk about meritrocracy and aristocracy. I would like to talk about the American dream. I prefer to go back a couple of generations when immigrants came to this country. They brought the ethic of hard work and savings and investment. By the way, investment means job creation. We all know that. But they worked very hard because they wanted to be able to give their kids and their grandkids a better chance and more opportunity than they themselves had. That is what this country is all about. That is why people have sacrificed a lot--as Senator Gramm said, to be able to leave their kids something. That is the American dream. When we talk about doing something for the rich, they are not listening to the debate. The rich man died. He is not rich anymore. He is not even alive anymore. He died. So who pays the death tax? His kids, usually. Who are they? Are they rich people? I have said this before. Let me say it again. This is from the Internal Revenue Service. These are the official statistics of the IRS. They answer the question about who actually pays. They break it out by men and women. This, by the way, is their latest statistics, Statistics of Income Bulletin, Summer of 1999, pages 72-76. The largest group are men: 27.7 percent were administrators, upper management, and business owners. That you would expect. That is only 27 percent. Who is the next group? The second largest group of men, 12.3 percent, were schoolteachers, librarians, and guidance counselors--these filthy rich who deserve to be punished. Maybe their dad had accumulated a lot of wealth. These are not rich people. But their dad is maybe giving them an opportunity to invest some of that money, maybe, to start a small business of their own, or to do something more with it to create jobs and to help make this American dream come true. How about women? As we know, the majority of small businesses in this country are owned by women. For females, the IRS statistics say that the largest group--14.1 percent--were educators and teachers. These are people who are paying the death tax. These are the women who are paying the death tax. The next largest group--9.6--were in clerical and administrative support occupations. If you want to analyze all of the occupations, a significant number of the estate tax filers were scientists, sales people, entertainers, airline pilots, military officers, and mechanics. These are the estate tax filers. These are the people we want to punish. It is not fair. These people deserve to be treated just as fairly as anybody else in this country. Again, according to the Internal Revenue Service, in 1999, 116,500 estate tax returns were filed; 60,700 of those--in other words, more than half--were filed by estates with values of less than $1 million. For estates valued between $1 million and $5 million, 50,600 were filed. That is just about all that is left. Above $5 million, there were only 5,200 of those estates. Even combined, the millionaires filing do not exceed the nonmillionaires filing. The vast bulk of these, in other words, are by people who do not have these multibillion-dollar kinds of patina, or even multimillion-dollar kinds of patina that people would like to create. What kind of people are they? What is their money? The Senator from New York talked about the salaries of all of these rich entrepreneurs. They are paying income taxes on those salaries, I might add. We are talking about the estate tax, the death tax--not income tax. I talked this morning about Brad Eiffert who with his dad owns the Boone County Lumber Company in Columbus, MO. He doesn't make very much in salary every year. They do not have any cash to speak of because they put all of their money back into the Boone County Lumber Company. They go to the bank and borrow money to buy lumber which they sell. They buy trucks and forklifts. They do the same thing we do. We don't go out and buy a house with cash. We go get a mortgage loan from the bank. For much of what they own they have borrowed the money. But they make enough money to pay themselves a salary to live on--the dad and the son--and to hire 30 people whose salaries they pay. That is 30 more families that benefit. When the dad dies, Brad is concerned that he doesn't have the cash around to pay half of the value of the estate. It is not his income that gets taxed. It is the value of the entire business; that is, all of the lumber inventory, trucks, forklifts, the warehouse, and the whole thing. Take that whole value and he says: I don't have that much money to pay half of that to Uncle Sam when my dad dies. Where am I going to get it? I can't borrow. I am fully leveraged. I have done the financing. I will have to sell the business to pay the tax. That is what this is all about. That is why it is so unfair. Job creation--well, those jobs are gone. I suppose if you sell it to somebody else and the idea is to prevent the accumulation of wealth, you usually sell it to a large corporation. So instead of a family business, you have some large conglomerate that may let people go and consolidate, or whatever. So much for the American dream. So much for consolidation of wealth. How would you say this money ought to be taxed, somehow or other? My colleague from Texas already pointed out that income tax has been paid on it. But I don't think what our colleagues realize is, we don't just repeal the estate tax, we substitute another tax for that, the capital gains tax, but with a big difference. Most of us agree that death should not be a taxable event. You did not have any choice in the matter, of the timing of it, how it happened, when it happened, and so on. You do have a choice over when you sell something or don't sell it, and you know what the tax consequences are. So when your dad dies, instead of the kids having to pay a tax on half of the value of his estate, and having to sell assets to do it, and so on, under our proposal the estate passes to the heirs. They take the property. They do not pay the tax on death day. But when they sell any of it, they pay a tax. They pay a tax on the capital gains, and it is calculated on the basis of dad's purchase price. So that is how you pick up the revenue. Mr. President, 60 percent of the American people realize this is unfair, and three-fourths of them say they favor its repeal, even though they would not benefit at all. They understand the unfairness of the existing tax. We now have an opportunity to make permanent what we passed before, which is the repeal of the estate tax, and to substitute for us the very fair capital gains tax on the original basis of the property. That is what we have the opportunity to do. The House of Representatives has passed this measure. If we pass it today, it goes to the President, and he can sign it. He has asked us to send it to him so he can sign it, to end this unfair tax and replace it with a fair tax. I urge my colleagues to vote against the Conrad amendment, to vote for the Gramm-Kyl amendment, and to have a fair tax in the United States.

Mr. KYL. Mr. President, before yielding, I ask unanimous consent to have printed in the Record two editorials from the Wall Street Journal, dated June 10, 2002, and February 22, 2001, both of which demonstrate support for the permanent repeal of the death tax.

Mr. KYL. Mr. President, while the Senator from Connecticut is here, let me respond to the concern, or his expression that he is dumbfounded that we would even be considering this amendment. We passed this repeal already. I know the Senator from Connecticut didn't vote for it but a majority of us did--Democrats and Republicans. It passed in the House of Representatives, and the President signed it. This is not something extraordinarily odd that we are doing. This has already passed. The problem, as the Senator knows, is that under the rule in which it was considered, everything we did in the tax reform bill sunsets at the end of 10 years. As a result, the repeal of the estate tax comes in 10 years. The question for those of us who helped pass this legislation-- the majority in the House and Senate, and the President--is, Did we really mean to repeal the estate tax? What I understand the Senator to be saying when he says he is dumbfounded is that at a time when he says we need the money, we would be making permanent that which we intended to make permanent but wouldn't make it permanent before. I suppose it is a legitimate question, if he is saying we should revisit what we did before. I take it that is what he means. He just voted, as did the Senator from Rhode Island, who spoke earlier, for an amendment that costs more than the Gramm-Kyl amendment. The Dorgan amendment, according to the Joint Tax Committee's calculation, costs $110 billion in the 10 years, which is substantially higher than the Gramm-Kyl legislation. I am a little confused about the point with respect to fiscal demand. There are fiscal demands. The ones mentioned by the Senator from Rhode Island--drug benefits, missile defense, and so on--are all in the Bush budget. Those are things we are paying for; they are provided for in the budget. The budget was established on the basis that we had repealed the estate tax. The question was, Would it be made permanent? It is not as if great circumstances have changed. We do have the war on terror, that is true. I don't think any of us is going to deny that if we need to fund the war on terror, we will. We have already passed a supplemental appropriations bill to do exactly that. It is odd to argue that the 1 percent of Federal revenues that are collected by the estate tax are critical to the functioning of the U.S. Government in light of the trillions of dollars that we spend--that somehow or other we can't get along without this so-called estate tax. That is the real question. I think Senator Gramm was right earlier when he said what it really boils down to is a philosophical debate between those who do not want to allow people to keep their own money but believe the Federal Government needs that money, on the one hand, and those of us who believe this is an unfair tax and the Federal Government can get along without the money. There is another point. I have made it before. Most of us appreciate the fact that when we cut taxes, in the long run it actually improves the fiscal picture for the Government because more taxes are generated by a more vital economy. I cited yesterday the economists who made the case that reducing taxes will allow more job creation, more capital formation, and a better economy. In fact, there would be about $40 billion of growth in the economy if we were able to repeal the tax today. The other point made was that very few estates pay the tax, that it is only for the rich. This morning I read--and I will just briefly reiterate--who it is who pays the tax. Estates don't pay the tax, people pay the tax. Who are these people? This isn't the opinion of the Senator from Arizona, this is the IRS. They have the statistics on who actually pays. In the most recent report entitled ``Statistics Of Income Bulletins, Summer of 1999''--pages 72-76, if you want to look it up--here is what the IRS says. Here is who pays. It is divided between males and females. The largest group of filers of estate tax--27.7 percent--were men, administrators, upper management, and business owners. You could assume that. But the second biggest group--12.3 percent of filers--were schoolteachers, librarians, and guidance counselors. These are these filthy rich people from whom we have to take money--school guidance counselors, schoolteachers, and librarians. How about the female estate tax filers? The largest number--14.3 percent--were educators. If I were a member of the teachers union, I would be down here supporting the Gramm-Kyl amendment to make repeal of the death tax permanent because the largest group of women who file estate taxes are educators. These are the people who actually pay the estate tax. The first person who accumulated the wealth is dead. He hasn't paid the estate tax. His heirs paid the estate tax. Who are these people? Among women, the second largest group, of 9.6 percent, are in clerical and administrative support occupations. When you put it all together, here is what the IRS says: A significant number of estate tax filers were scientists. We really ought to penalize those scientists. They do not do us any good. Salespeople, airline pilots, military officers, and mechanics. The last category I can understand--entertainers. Of course, we get a lot of money from entertainers. And we should. I don't know why they should be penalized any more than anyone else. Scientists, sales people, airline pilots, military officers, mechanics, teachers, guidance counselors, and librarians are the people who pay the estate tax. Maybe their dad was fortunate in life to be able to work hard, save money, and accumulate some wealth. But their dad's dream probably was that they would have a better opportunity in life than he did. He probably sacrificed a lot to be able to leave them some money. These are the people we are penalizing. We are not penalizing, by and large, some fat cat out on a yacht somewhere. According to the IRS, we are penalizing schoolteachers, airline pilots, and guidance counselors. That is whom we are penalizing. The Senator from Rhode Island made a point on which I really want to focus. He was absolutely half right. Unrealized capital gains, the appreciation in value of an asset which is not taxed as income, because you don't sell the property and, therefore, have to file an income tax return--you bought some stock, and over the years you keep it, and it gains in value, significantly unrealized capital gains. Until you sell it, you don't pay any tax. Under the current law, a billionaire got rich by investing in some stock. He never sold any of it. It acquired great value. He dies. His wife inherits that. The way it works today is, because there is an exemption for spouses, she pays no estate tax on it. The next day, she sells it. Do you know what her capital gains tax is? Zero. Do you know why? Under current law, there is what we call a step-up in basis. That property acquires an original basis as if it were the day of death rather than 20 years ago when the dead person bought the asset. When it is sold, there is no gain because the value begins with this much higher value--the stepped-up basis. If you sell it the next day, there is essentially a 1-day gain on it. In other words, there is virtually no capital gains tax. That is the current law. That is what opponents are defending. That is why I say the Senator from Rhode Island was right. This is wrong. But does the proposal of the Senator from North Dakota, which we will vote on next, do anything about that? No. Does the existing law, if we don't make it permanent, do anything about that? No. It is the Gramm-Kyl amendment that fixes that problem. This is what isn't understood by many of our colleagues. We don't simply repeal the death tax. We substitute for the death tax the capital gains tax. And we eliminate the step-up in basis, except for an amount which would be equivalent to the exemption today, which is about $5.6 million. Nobody would pay a capital gains tax who would also be exempt from the estate tax. But except for that amount of stepped-up basis, there is no step-up in basis. If the person who died and bought the stock years ago bought it for, let us say, $1,000, that is the original basis. Let us say it is now worth $1 billion. All right. Subtract $1,000 from $1 billion, and that is the gain. That is on what they pay the capital gains tax. This is the proper way to tax unrealized capital gains. That is why our proposal really does not cost that much more, if you calculate it properly, than the existing law. When you eliminate the death tax and replace it with a capital gains tax, you have substituted good tax policy for the current bad tax policy. Death should not be a taxable event. We do not plan on that. We do not like that. It is not something that we cause to happen. It is like having your house burn down and collecting an insurance payment. We don't treat that as ordinary income because we realize you did not want your house to burn down. Even though you got an insurance payment for it, you should not have to pay that tax on that as ordinary income. It should be the same with what your father leaves you when he dies. You should not pay a death tax on that. What you should do is, when you sell that property, pay a capital gains tax on it, going back to its original value. That is how you tax unrealized capital gains. Now, just two final points. The Senator from Connecticut said only a small percentage of people are affected. That is not really true. There is truly a very large percentage of people affected, even though the number of people who actually pay the estate tax is relatively small. Let's take the average small business. I don't know what the size of the average small business is, but let's say it employs 50 people, just to use a number. Let's say you have an average family of four, plus other indirect beneficiaries, and so on. So instead of saying one person pays the estate tax, it affects all of the members of the family, and it affects all of the people in the business. There are twice as many people adversely affected as to who actually pays the tax. And in addition to the tax collected by the Government, an almost equal amount of money is paid by people to lawyers and accountants and for insurance to try to minimize their estate tax liability. So it is actually twice as much as people believe it is. I wonder. The bill that we considered before this bill had to do with hate crimes. Proponents of changing the hate crimes law acknowledged it affected a very few number of people. But the effect on them was significant, they said, and it was unfair that they would be treated as they were treated and, therefore, we needed to do something about this. In other words, this is a minority of people who are treated unfairly, and we need to have the Federal Government step in and do something about that. So, on the one hand, my colleagues on the Democratic side of the aisle are very concerned about a very small number of people, but when we bring to the floor the question of the death tax and its unfairness: Oh, we don't need to worry about that; that only affects a few people. Well, when something is unfair, and seriously wrong, it doesn't matter how many people it affects; we need to do something about it. The interesting thing to me is that 60 percent--this is a Gallup poll, and there are some polls that go up to 80 percent--at least 60 percent of the American people agree the death tax should be repealed-- not reduced, not have the exclusions made larger, but should be repealed. And the interesting thing to me about that number is two- thirds of those people believe it should be repealed even though it will never have any affect on them. In other words, they recognize it is not a large percentage of people who are adversely affected by the death tax directly, but they recognize it is unfair. To me, that says more about the American people than just about anything I can think of, when they say: Even though you have more wealth than I do, it is not fair for the Government to take half of it from your kids when you die. Therefore, even though it doesn't help me any, I am going to stand up for your right to be treated fairly. And I support the permanent repeal of the death tax. To me, that is a very good indication of the fact that the American people have a sense of fairness. And even though they are not directly benefitted by something, they are willing to support the elimination of that unfairness. Final point. The suggestion we have already taken care of the small businesses and family farmers and, therefore, we don't need to permanently repeal the death tax. We have been through that in debate earlier today. We have not taken care of the small businesses and family farmers. Unfortunately, as I said, something like two one- hundredths of 1 percent of taxpayers have ever qualified for the exclusion that would take care of them under this provision. And even then, the IRS is going to come after you. And the IRS wins two-thirds of the cases that are brought. It is not a fact that small businesses and farms have been taken care of and excluded from the impact of the estate tax. So who pays? Average Americans because the wealthier person, remember, died. And the question is, Is it fair to make them pay? Do we need the money? The things that have been discussed are in the budget. We can always find more things to spend money on. The question is, Should you leave money in the hands of Americans who can build our economy, create jobs and wealth, or should we make the decisions for them by spending the money here in the Government? I think it boils down to that, and when we have this vote, we are going to be asking one simple question: For those who voted for the bill last year to repeal the estate tax, did they mean it or not? If they meant what they said, they will vote for the Gramm-Kyl amendment, which is the real repeal. It makes the repeal of 1 year into a permanent repeal. That is what the American taxpayers and American people thought we did. It is what we intended to do. And today it is what we can do. I urge my colleagues to support the Gramm-Kyl amendment. I now yield 5 minutes to my colleague from the State of Arkansas.

Mr. KYL. Mr. President, if I can have the attention of the Senator from North Dakota, I ask unanimous consent to have printed in the Record a compilation of provisions of the so-called QFOBI tax provision that illustrate how that is calculated and administered.

Mr. KYL. Mr. President, I agree with the Senator from Nevada, except for some recent comments made by the Senator from North Dakota when he talked about a comedic approach and a bait-and-switch approach and asked the question: Why would we repeal the death tax and then reinstate it? The Senator knows full well why that was done. We did not do it. Those on his side of the aisle were responsible for that. The American people need to understand the reason is that, under the rule under which the Tax Reform Act of 1991 was taken up, we could only act for a 10-year period after which our actions were sunsetted. We didn't want that. We wanted to make the death tax repeal permanent, but it was not possible because of opposition from the other side. That is the answer to the question posed by the Senator from North Dakota. When he asked us, why did you repeal the death tax and then allow it to be reinstated, the answer is: We did not; you did. Now you have a chance to fix it. We all have a chance now to repeal the death tax permanently. This is the time for people to stand up. Do we really want it repealed? Do we want it repealed permanently? Or were we just kidding when this was done last year? A lot of Democrats and a lot of Republicans voted, not in a dark room but in this Chamber, a year ago to repeal the death tax. They wanted it repealed permanently. Only because of a parliamentary rule was that not possible. Now it is possible. This is our chance, and the only real repeal is the Gramm-Kyl repeal. The amendment of the Senator from North Dakota that we will be voting on in just a moment is fatally flawed because, while it makes an unlimited exemption, you have to walk through a gate--in order to get that unlimited exemption--that is closed. Very few, if any, small businesses or farms will be able to qualify. How do we know this? Because the Senator from North Dakota uses the very same qualifying language that is in the existing law. From the IRS itself we have the numbers of people who qualify out of the over 100,000 estate tax filers. Only a little over 1,000 qualified, even in the year with the largest number. In the first year in 1999, it was 173 people. In that year, 173 estates would get this wonderful relief proposed by the Senator from North Dakota. In 1998, it was 899 people. In the biggest year, 1,400 people would qualify. Of those, IRS is winning two-thirds of the cases with respect to the valuation of the assets. This is an amendment which has great promise and zero production. As the Senator from Missouri said, you can't make a flat tire roll just by making it bigger. The Dorgan amendment should be defeated because it cannot provide relief to anybody. Mr. President, I ask unanimous consent to have printed in the Record a paper on interest deductions.