Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, I concur in the admonition of the chairman and the manager on the Republican side that Members who have something to say should come down and speak because as we speak there are some discussions going on about some possible amendments that would move us much closer toward a time when the bill could be completed. In fact, some of us are meeting at 3:30 to try to resolve some issues that are pending right now. So I join in the comment made that people who wish to speak to the bill should do so as soon as possible. I will take this opportunity to highlight some of the issues, a couple of which might be the subject of a potential agreement that would be added to the bill and that might help to move it along to completion. As I said in my other remarks, there are some concerns about the way current agreements have been enforced or have not been enforced with respect to dual-technology items that have been sent to these countries. There is a provision in the bill that enables the United States to come down hard on a company which receives an item that is supposed to be used for commercial purposes--for research or university purposes, something such as that--and then in turn transfers that item to some kind of defense program that is unauthorized in the license. Just to use a purely hypothetical example, I said there might be some nuclear generation facility component which is sent to help build a nuclear generating plant, but the end user, instead of being that commercial reactor facility, sends it over to some defense plant, which then uses it in their nuclear program for weaponry. That would be a good example of an improper application of one of these dual-use items where the license had been granted for shipment for one purpose but it turns out to have been used for another. We have a postshipment verification requirement ordinarily. That means we have somebody who goes over and makes sure the item was used in the way and in the place they said it was going to be used. The problem is, in the past we have found those postverification shipment procedures are not followed all the time. Indeed, a lot of the time they are not followed, and there is not much the United States can do about it. I quoted the statistics earlier today--I am not sure I have them here--but the fact is, with respect to satellites, the United States has an agreement with China that was entered into in 1998 that provides some degree of postshipment verification that the satellite is being used where it is supposed to be used, and so on, but it turns out less than a fourth of the required verifications have been permitted. They have been delayed. There have been requests by the Chinese Government: Let us do the inspection rather than have you do it--this kind of thing. Clearly, if we are going to have a liberalization of our export control policy, and we are going to be granting more licenses to permit the shipment of dual-technology items which could be put to military use, and we are willing to say, look, if you will put it to commercial use, OK, but we don't want you to put it to military use, and we want to have somebody check that after the fact to make sure that is correct, if we are going to do that procedure, we have to make sure it works, and there has to be some penalty for those who violate it. The bill has a penalty if it is a company that violates the procedure, but there is no provision to deal with a country that violates it. So one of the proposals that is under active consideration right now as a possible amendment that could be agreed to would make a minor change, but it would have a major effect. In reference to the subsection on page 296 of the bill, the first seven lines in this case would read: If the country in which the end- user is located refuses to allow post-shipment verification of a controlled item, the Secretary--meaning the Secretary of Commerce--may deny a license for the export of any other controlled item until such post-shipment verification is allowed. It is very straightforward. It is not mandatory, so there is nothing that makes the Secretary of Commerce do this. But at least the Secretary would have an ability to say to a country, such as China, for example: Look, you have not allowed us to inspect the ultimate user of the last three items we sent you, so we are not going to approve any more licenses--at least of products A, B, and C--until you allow that. That might be one way to help get this provision of postshipment verification enforced. So that is one of the ideas we have. As I say, it is one that is being discussed right now. It is one on which possibly there could be some agreement. We hope so. If so, I think that will advance the time that we can get the bill resolved. Another question has to do with this matter of a product that is available in foreign markets. The concept of the proponents of the bill is if a product is available in a foreign market, then the cat is already out of the bag; we might as well let American companies compete for that business, too. I raised a lot of questions this morning about how that really works. But leaving that aside, at least one very modest addition which certainly would help somewhat would be to ensure that not only are the items comparable in the sense that if you can buy this particular kind of computer in country A, then why restrict American companies from selling the same kind of computer?--that what we would want to do is ensure that we are talking about computers of comparable quality, not just that they are sold for roughly the same price, not just that they have roughly the same capacity, but that they are truly of the same quality. The reason for that is most people would like to buy American products because of their quality. It is not enough to say you can buy a similar computer three other places in the world if you are not ready to establish that the computer you are talking about in those three other places is of comparable quality to the U.S. computer. It does not matter if it has the same capacity and if it costs roughly the same; if it is not as good, if it does not have the same quality, then it would not be a comparable item. We just want to make sure when we are talking about foreign availability we really mean the same basic kind of product is available in those foreign countries. To give you an illustration, you can buy two different cars that go just as fast. One goes just as fast as the other one. One has just as much acceleration as the other one. The air-conditioner is just as good. And it costs about the same amount of money. But what you might find if you read Consumer Reports is the first car will last you about 20,000 miles and then it becomes a piece of junk, whereas the second car has much better quality. It has a 50,000-mile warranty. It has a great service record. The company will always take care of it if there is something wrong, and so on. That is just a hypothetical example. But I think if we are going to say we are going to permit the export of items as long as they are available anywhere else in the world, even though they are products we would just as soon not fall into the hands of the wrong countries, if we are going to go that way, we have to make sure we are at least talking about goods that have comparable quality. I think the addition of some language in that regard would be very useful. Another idea that has been discussed--and there are others who, frankly, would be better able to discuss this than I because it has been their idea--is to have some kind of commission, a blue ribbon commission that would evaluate the success of this new regime after it has been put into place. Nobody knows for sure how this is going to work. I think almost everybody would concede we are in unchartered territory, that the stakes are enormous, and that what we do not want to do is find out 5 years down the road that something we put in place --locked into place in statutory form--is actually permitting the rogue countries of the world to acquire a lot of equipment or technology that we would rather not have fall into their hands simply because we were not careful enough in writing the legislation. I don't think most of us are smart enough to predict that far in the future exactly how we want do all of this. The notion has been that it would be good to have in place some kind of a blue ribbon commission which could be appointed in the not-too-distant future to examine how this is working and to make recommendations to the President and to the Congress on how to make improvements in that. We can talk about the details of how the commission is appointed and when it reports and all those kinds of things. This kind of idea is a good idea, and it would be useful to have that incorporated into the legislation as well. I believe there will be some kind of agreement on this. I think the parties are talking. Everybody recognizes the value, the utility of that. A fourth area I will mention is that in the past the Department of Commerce has added items and subtracted items to the so-called controlled commodity list. It has done so under its own rules and regulations which could in fact and maybe does involve some consultation with other departments of government. It is a little unclear exactly how the process works. In the past, the Department of Commerce has been the department in charge. I believe the list is some 2,400 items controlled right now. Part of the theory of the legislation is that some of those items would be taken off the controlled list so that a party wishing to export them would not have to come to the U.S. Government and obtain a license for the export of that item. That is probably appropriate with respect to many of these controlled items. Still we have to be careful that we are not taking items off the list which could in fact be used by a hostile country against the interests of the United States. Given the fact that the Department of Commerce has as its mission trade promotion, it is not exactly evident that that department is in the best position to judge whether or not an item should stay on the list. Obviously, it at least ought to be talking to the intelligence community, the Defense Department, the State Department, the Department of Energy, and so on. We want to have at least some recognition of the fact that as this is going to be administered in the future, the Department of Commerce will, to an extent appropriate, call upon the advice and counsel of these other departments in seeking to make determinations with respect to what items are on that control list or not. It may be that this is a matter the administration needs to think about and figure out how they want to handle. For my own part, I have, as I have said before, the utmost confidence in this administration and Secretary Don Evans and the other people who would be making the decisions. As a matter of fact, my only beef with Don Evans, the Secretary of Commerce, is that he hired away my chief of staff when he was confirmed. We have a great relationship. I have total confidence in him and in the people in his department. I believe they will, in fact, call upon the expertise of other people in government who may be in a better position to judge with respect to a particular item. They will have a lot of cross pressures, too. They will have folks in industry pushing them to decontrol as much as possible because obviously it is more costly and more difficult to export an item if you have to go get a license for the export than if you don't have to worry about that. Given these cross pressures, we would at least like to get some kind of commitment from the administration that it is going to look at this and try to find a way to ensure that the other departments of government are brought into the process as appropriate. There may be some other things, as the administration has indicated to us, that should be the subject of a subsequent Executive order to implement the legislation. Obviously, we will be interested in working with the administration on what some of those items might be as well. Some of them might be able to correct some of the problems I identified this morning and that some others have as well. We will be expressing that to the administration again. I am sure they will respond with an appropriate response. These are the kinds of items we are talking about now as possibly being resolved by some kind of amendment or series of amendments that could get us to a conclusion on this legislation. Since it is very evident from the standpoint of those of us who have concerns about it that in the end legislation is going to pass and we have no desire to delay or to stall it, we are not going to win very many amendments that we propose. Notwithstanding the fact we are very serious and concerned about it, there is no point in us taking up the Senate's time or persisting in a matter on which we are not likely to succeed, especially if, as has been conveyed to us, a few changes might be possible to be agreed to here fairly quickly, and then we could move on with the conclusion of the legislation. That is why I add my comments to those of the Senator from Maryland and suggest that if there are those who would like to come here to make an opening statement about the legislation or to express concerns or support for it or any particular amendment, this would be a good time to do so. I am hopeful that within the next several minutes we will be able to meet and we will be able to confer about some of the things I have talked about and perhaps come to some conclusion. I am sure it is the position of the managers that they would like to move fairly quickly after that, if we are able to do that. Therefore, it would be appropriate to discuss at this time any concerns or other items with respect to this bill people would like to take up. I had indicated this morning that I would just quickly detail sort of a list of potential amendments in case anybody is interested. These were proposals that were prepared before the legislation was taken up. I don't know how many people are still planning on offering any of these amendments. My own view is that if we are able to achieve consensus on the items I mentioned a moment ago, it will probably be doubtful that these amendments will be adopted. Therefore, people might want to consider dealing with the subjects in some other way. I will just run through them quickly. One of the problems has to do with deemed exports. Deemed exports are basically transfer of technology, of knowledge, rather than a particular product, but that can, of course, be just as important to a rogue nation in putting together some kind of weapons program or missile program as the export of a particular item. Some of us believe we should deal a little bit more specifically with the matter of deemed exports. Again, that matter might be at least handled for the time being through some communication with the administration, assurance that it intends to deal with the subject in some way. I talked about the matter of the controlled list and how other departments probably need to have a little more involvement in that than the legislation itself provides. The legislation itself provides no assurance that any other departments will be involved in the listing of items on the controlled list. We think it would be a good idea if there were some assurance that they would be included in the process. I mentioned the standard of finding for foreign availability. There are quite a few different ideas about how that might be strengthened. I mentioned the one about comparable quality. I hope we can do something on that. There is a question that we are not going to pursue here--at least I will not pursue--but it could be the subject of an amendment. It is important. I wish we could do something about it. It had to do with taking a little bit of extra time to deal with matters that are particularly complex. The Thompson amendment failed yesterday. There are other ideas about how to deal with that so that the Departments of Defense, State, and Energy, and any other agencies that are involved in a particular license would have enough time to review the license application beyond the limit of 30 days, which is currently provided for. The Thompson amendment provided an additional potentially 60 days. There are some other potential compromises that could be offered there. I doubt, since the Thompson amendment was defeated, that an amendment on this subject will be offered again. There is a question about the interagency dispute resolution process, and there have been some proposed changes that could come up as an amendment with respect thereto. This process requires any dispute over a license, application, or a commodity classification to be resolved by the various departments that should be involved and then to forward any disagreement up the chain of command. This is a recommendation of the Cox commission and frankly would strengthen the hand of individual departments in this interagency review process. I am not certain, but I believe the House bill addressed this in some fashion, and it may be that if the House holds to its position and we pass the bill before us today, that issue is going to have to be further visited. At least from my perspective, it would be a wise thing to do. There is another potential amendment relating to standardization of determination requirements. This is something others have brought up. This is not something that I would bring up. It has to do with the standard for waiving the foreign availability or mass market determinations. I did allude to this in my opening statement--the different standards of serious, significant, or merely a national threat. It may be wise to try to standardize those. Somebody else might bring that up. There could also be an amendment relating to a reporting requirement for key proliferators, requiring a report on certain items transferred to certain key proliferator countries. This is something that I think would be useful to the Congress as we continue to review how the act is working and, frankly, useful to a blue ribbon commission as well. It is not in the bill at this point. Somebody else may pursue that. Likewise, a license for key proliferators requiring that a license for certain items transferred to certain key proliferators be actually established in the legislation, rather than leaving it up to a question of what is on the control list. There is also a proposed amendment relating to congressional notification when changes are made in either the particular countries involved or the tiers--as you know, we have tier I, tier II, and tier III countries--or when violations of the Export Administration Act occur. I think, frankly, this would be a useful report, especially if we have a blue ribbon commission. They are going to want to collect this data anyway. Congress should be aware of the data. It is especially going to be important for countries that may continue to violate the postshipment verification procedures. I think it would be useful to have a congressional notification process. It is not in the bill now. I have not proposed that this be part of a managers' amendment. I wonder if people will consider that. Somebody may want to offer that amendment. There is also a different version of the blue ribbon commission which I understand might be proposed, and there may be other amendments. I think that is a list of at least several of the amendments that were being drafted for presentation a little later. Again, many might be obviated by the discussion I had before. There are a couple of other items that have to do with specific provisions of the bill, such as the 18-month limitation on the Presidential authority to grant a waiver from the foreign availability. That is too restrictive. I would eliminate that. There is another possibility in that same section for another change. This has to do with the fact that the President can't delegate his authority. You want the President making the ultimate determinations, but you want him making big determinations, not little ones. There are a lot of things in this bill that have to do with particular items that should not go up to the President. He could delegate that easily to one of his secretaries. I don't believe that will be a proposed amendment. I want to explain to my colleagues that notwithstanding the fact that an item or a concern may not be proposed here in the form of an amendment, that doesn't mean there are not additional concerns we have with the legislation that I hope eventually, between the House and Senate, will be addressed. Much of that was discussed in my opening comments. That is the list. I hope in the next few minutes we can try to resolve these remaining issues so we can move forward.

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

Mr. KYL. Mr. President, I ask unanimous consent to have printed in the Record at this point a document entitled ``Talking Points on High Performance Computers,'' which describes some of the difficulties we have encountered in the transfer of high-technology computers to other countries, and which basically says we should be more careful about liberalizing export controls on these items. There being on objection, the material was ordered to be printed in

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

Mr. KYL

Mr. KYL. Madam President, I say to the Senator from Maryland, yes, I have seen the letter. I agree with him the support is much more than pro forma; it is sincere and thought-out support. I do not know how many pages of this very complex legislation there are. There are numerous areas that represent room for improvement, and support for any legislation generally does not obviate the possibility of improvements and compromises. I hope, as this debate goes forward, we might consider the possibility that in this particular area a mechanism be found to provide for a waiver that is more realistic in its ability to be practically used than to require the President, not delegated to anyone else, as being the only person who could grant such a waiver. We will talk more about that later. The Senator from Virginia is here, and I do not want to impinge upon his time. Perhaps we can work that out. If we cannot, perhaps we will need to offer an amendment. I thank the Senator.

Mr. KYL. I noted that one of the subjects of discussion in the colloquy between the Senator from Maryland and the Senator from Tennessee had to do with the President's authority under this legislation to waive certain provisions, important provisions, because they deal with a question of whether or not an item that is on the control list--so-called commerce control list--should be waived or whether there should be a waiver of either the embedded product rule or the foreign availability and mass market rule under sections 204 and 211 of the act. The point was made by the Senator from Maryland that if there were a problem with one of the dual-use items on the list, the President had the authority to waive that. Therefore, those of us who have concerns about the legislation need not be concerned. The Senator from Wyoming made the further point that in this case we didn't want to turn this matter over to the bureaucrats so we gave the authority directly to the President. I appreciate the sentiment behind those vows. There is a problem with them however. That is, the President, with all of his other responsibilities, can't possibly exercise this authority without the help of the so-called bureaucrats, without the help of a staff. I have in my hand just a partial list of the commerce control list items. It specifically says at the top: This index is not an exhaustive list of the controlled items. I haven't bothered to count these. There are hundreds and hundreds of items. I don't know how many pages. It is single spaced, and there must be 60 or 80 items per page and probably 20, 30, 40 pages of an awful lot of items that could be the subject of the export regulations that are the subject of this bill. It would be impossible for the President to be able to devote his attention to this list and intelligently deal with it. In fact, it would be bad public policy for us to require that the President be the only person permitted to exercise the authority. Yet that is exactly what this proposed legislation does. A provision of the section being discussed that was not quoted occurs on page 184 of the printed version of S. 149. At the end of the section on enhanced controls, it reads as follows: The President may not delegate the authority provided for in this subsection. Well, usually we provide that the President may delegate responsibility because, frankly, he has better things to do than be a staffer going through all of these items with the background to know whether or not some of them should be taken off the list or not. It is simply unrealistic to expect any President, despite a President's intelligence and willingness to get into the details, to be able to exercise that authority with the limitation here. That is the primary reason for our concern. We appreciate the fact that the President has a waiver authority. But in most cases the President's waiver authority can be realistically administered and utilized. I think it is unrealistic to expect the President to be able to do that in this case. One of the possible amendments, I advise the Senator from Maryland, I will present--if not I, another Member will--is an amendment to try to solve this particular problem and conform this provision of the bill more to the type of legislation that ordinarily accompanies a Presidential waiver authority. We think that would improve the administration of this act and make the waiver authority really meaningful. I advise the Senator of that point. I intend to make a statement that generally speaks to this issue of the Export Control Administration reauthorization. I also want to speak specifically to the amendment offered by the Senator from Tennessee before we have a vote on that amendment. Given the fact that there are a couple of other Senators prepared to make remarks at this time, I am willing to stand back and let those Senators make those remarks and then I will come and make mine later. If there is anything I have just said that is subject to correction, I would be happy to stand for any questioning with respect to my comments, but perhaps we will have an opportunity to debate that at the time I offer an amendment, unless there is a possibility we might work that out between the proponents and opponents of the legislation in the meantime.

Mr. KYL. Madam President, I understand the Senator from Virginia wishes to speak. He will be ready in about 5 or 6 minutes. In the meantime, I thought I might respond, if it is in the schedule of the ranking member and chairman, to a point that was the subject of a colloquy with the Senator from Maryland and Senator Thompson. Is that all right?

Mr. KYL. Very similar thereto. There you have it. It seems to me we are already making changes to the legislation. We should not be so hidebound to every specific jot and tittle in a bill which is now 327 pages long, very complicated, that we can't make a few changes in this legislation. I urge my colleagues to consider exactly what Senator Thompson is proposing. It is simple and straightforward. It seems to me that for us to just say, no, there is going to be no extra time, no matter how complex the issue or how strongly the Department of Defense may want it, they are not going to get any more time, is not wise public policymaking. I urge my colleagues to support the Thompson amendment.

Mr. KYL. Mr. President, that includes the provision of the Senator's amendment in it; is that correct?

Mr. KYL. Mr. President, I very much appreciate that comment from the Senator from Maryland because that is the basis on which we should approach this legislation--our own evaluation. I know that because of the Senator's work on this issue. Prior to the strong expressions from the administration, the Senator from Maryland was very supportive of the legislation. I know that he is very truthful in what he just said. I appreciate that. That is the position each of us should take with respect to legislation regardless of which administration is in power at the time and whether or not that administration supports the legislation. My point is that it is not a sufficient argument that we should reject all the amendments because the administration supports the bill. We should debate each on the merits. And on the merits of this amendment, I see no real opposition. If because these matters of national security are so important to the United States and there is such a background of violations, particularly in this area of dual-use technology, of countries acquiring things and then selling them to somebody else or providing them in some other way to another country to proliferate weapons of mass destruction inimical to the interests of the United States, because we have such a history of that, so many examples of it, we should be bending over backward to ensure that we have proper control over the export of these dual-use technologies. And we should not simply be opening it up to essentially free license, and if an agency isn't able to complete its review within a 30-day period, the clock runs out and you are deemed to have supported the export of this particular item. That is putting it exactly backward because matters of national security should be our highest test. The rule should be exactly the opposite. If you can't complete the review in 30 days, then you should get a little more time to complete the review, not to be told: Sorry, the clock ran out; if you could not get it done in 30 days, no matter how complicated, no matter how important the national security interest, the export is allowed. That is the problem with taking an approach that if the administration supports the bill, it can't be changed in any respect. There are some things about this bill that should be changed. Representatives of the administration have made it clear to the Senator from Tennessee and myself and others that they recognize there will have to be implementation of this legislation by executive order. Some of the concerns we have expressed, they assured us, would be dealt with in this executive order in some way or other. I have absolute confidence in the administration with respect to that. Obviously, they have not issued any executive order yet. It would be premature to do so. But failing to understand what specific things might be addressed, we think it is important to try to fix those problems now, and one of the problems deals with this question of possibly needing a little more time. I just ask my colleague, what could be lost, what could be wrong with having a department--let's say the Department of Defense, if it says it needs more time--get a little more time? This is too serious to put an arbitrary 30-day clock on and say: Sorry, time is up, national security be damned; the 30 days ran out, and the export is allowed to go forward. This is the problem with this strict provision in the law with no ability to move out of it. That is why the Thompson amendment makes sense. That is why I hope my colleagues support the Thompson amendment. It is specifically recommended by the Cox Commission report. I believe--and I ask my colleague from Tennessee if my recollection is correct--the House of Representatives has already incorporated this recommendation of the Cox committee report in its legislation. I am not certain. I ask the Senator from Tennessee for his understanding of that.

Mr. KYL. I am delighted to yield to the Senator from Maryland.

Mr. KYL. Mr. President, I had indicated earlier that I wanted to speak in favor of the Thompson amendment. I do that at this time. It has been explained by the Senator from Tennessee. The point is, there are some matters that would be very complicated, very complex. Everyone acknowledges that. It may be that a 30-day time for review in that circumstance would be inadequate. All this amendment does is to say that the department, in that case, could ask for an additional period of time, up to 60 days, to review and be able to make its recommendation for export license under the legislation. This was the recommendation of the Cox committee report in 1999, when it indicated that the existing 30-day limit for departmental license review may be inadequate for complex requests that could have a lasting national security impact. And since the legislation before us allows only for extensions on a limited basis, and we think that it would be appropriate, for, for example, the Defense Department, should it deem it necessary to have a little more time, that that at least be written into the bill as a possibility. That is what Senator Thompson has sought to accomplish through his amendment. It seems to me to be eminently reasonable. Therefore, I urge my colleagues to support this very reasonable amendment. The primary argument I have heard about it relates to a political matter; that is, that the White House supports the legislation. We have been advised that the White House supports the legislation without change. I want to comment on that a moment. My friends on the Democratic side of the aisle, the Senator from Maryland, for example, in response to something I said earlier, wanted to be sure I was aware of the administration's support. Indeed, I was. I would like to make this offer to any of my Democratic colleagues. I will support this legislation based upon the fact that the administration supports it if my Democratic colleagues will commit to me today that they will do the same for legislation that the administration supports. In other words, if I can get a letter from the Secretary of Defense or the Secretary of Commerce or the Secretary of State on a matter that will come before the Senate in the future, since they regard the administration so highly with respect to the EAA and suggest that is the reason why this legislation should be adopted without change, then it seems to me, unless they are picking and choosing which opinion of the administration they regard so highly, they should also regard highly other opinions of the administration and be equally willing to support those positions. I am sure that as Senators we all like to pick and choose the things on which we agree or don't agree with any administration. I am a Republican. I happen to have a disagreement with the administration now and then--not very often; in fact, very seldom. On this matter I do have some disagreement. I think it is not a sufficient argument in and of itself to say that because the administration supports something, therefore we should vote for it and then turn around on a subsequent matter which the administration strongly supports and vote against them. I suspect that my Democratic friends more often than not will find themselves in that position in the future.

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

Mr. KYL

Mr. KYL. Mr. President, I regret that, once again, I was compelled to oppose this appropriations bill. At the outset, I should make it clear that there are many worthwhile items contained within it. Above all, I am pleased that the committee has provided significant increases in funding for veterans' health care, veterans' medical research, State veterans home construction and other vital programs that serve those who have sacrificed for our Nation. Nevertheless, I cannot endorse the order of priority accorded to the various programs funded within this bill. I object to leaving veterans' needs unmet while funding hundreds of earmarked projects. And I regret that our appropriations process compels Members to, in effect, choose between voting for rightly popular veterans' programs and voting against wasteful social spending. For a number of years, I have questioned the desirability of grouping agencies with unrelated missions into omnibus appropriations bills, and I have cited the VA-HUD bill as the best illustration of the problem. Despite my strong support for veterans benefits I have, more often than not, voted against the VA-HUD bill since I came to the Senate, because I believed that the spending levels and earmarks in the HUD portion could not be defended. We all know that HUD is a Department fraught with serious problems, as detailed repeatedly by the General Accounting Office, which to this day, classifies HUD as the only ``high risk'' executive branch agency at the Cabinet level. Yet the bill before us provides HUD with a robust nine percent increase, bigger than the increase provided for veterans. The HUD title also includes eleven pages of earmarked projects, the vast bulk of them in States represented by appropriators. If past history is any guide, the final list of earmarks will grow beyond what is in this bill, or the House bill. Last night, I reluctantly voted against the amendment offered by the senior Senator from Minnesota, because I believed that the additional funding for veterans' health it provided needed to be, and could have been, fully offset. The first $140 million could be found in those eleven pages of earmarks! Another $420 million could be found in the allocation for AmeriCorps, former President Clinton's program to pay salaries and benefits to ``volunteers.'' Nearly all of the remaining $90 million could be found by reclaiming for veterans money this bill allocates for federally-funded community computer centers, an unauthorized expenditure. It is all about priorities, you see, and the priorities in this bill are out of whack. Finally, I must reiterate my disappointment with the failure of the Senate to adopt needed reforms to restore equity in the formula used to distribute funding for wastewater needs to the various States. Although the managers graciously adopted my amendment urging the authorizing committee to act this year to address the need for reform, the Senate has lost a real opportunity to bring this outmoded formula into the 21st century.

Mr. KYL

Mr. KYL. Let me thank the Senator from Missouri and the Senator from Maryland for agreeing to accept as part of the managers' amendment an amendment which I was going to offer. They have done this in good faith. I especially appreciate the fact that they have expressed support for what I am trying to achieve. I will explain it very briefly. It was an amendment that expressed the sense of the Senate essentially that since we were not able to modify the formula for the wastewater treatment programs under EPA by an amendment on the floor on this appropriations bill, largely because of the argument that it is more appropriately done on the authorization bill, the authorizing committee, in September, should take up the reauthorization of the legislation, including an attempt to deal with this particular formula. The operative paragraph says: It is the sense of the Senate that the Committee on Environment and Public Works of the Senate should be prepared to enact authorizing legislation (including an equitable needs-based formula) for the State water pollution control revolving fund as soon as practicable after the Senate returns from recess in September. That is the result of the fact that my earlier amendment was defeated but, frankly, defeated on a technicality, as most of the individuals noted. There is a good case to be made for evaluating the current formula for distribution of these funds, that it can be done in the authorizing committee, that it should be done shortly after we return here, and I hope it can be done in time for changes to be made to affect the fiscal year 2002 numbers. That is the only way the formula can be made more fair for this next year. I express to my colleagues, the managers of this legislation, my thanks for their willingness to include this sense-of-the-Senate resolution in the managers' amendment as a way of at least moving forward on the reform that most people agreed to earlier but were not willing to make on the appropriations bill itself.

Mr. KYL. Might I inquire of the Senator from Missouri or Maryland if it would be all right if I take a couple minutes off the subject of the McCain amendment to simply talk about a part of what will be included in the managers' amendment?

Mr. KYL. Madam President, I started to comment earlier about the degree to which veterans organizations and individual veterans around the country have relied upon my colleague from Arizona, Senator McCain, to carry their flag in battles here in the Congress. It always personally impresses me when I see people come up to him, as I frequently do, and thank him for the work that he has done or their behalf. It always pains me when either of us--and sometimes both of us--have had to vote against the VA-HUD appropriations bill, which has money for many veterans programs, because of our concern that not enough of the money is allocated to veterans programs vis-a-vis the HUD programs. I have explained to my very good friend and colleague, Senator Bond from Missouri, on many occasions why I have cast that vote, wishing very much that I could support the good work that he and others have done in support of our veterans. I recognize that, as a result, this particular amendment is, in many respects, a symbolic amendment. It only takes half of the funding away from these projects that Senator McCain described. And it is a relatively small amount of the money that we believe will be necessary to supplement the funds that have been made available for the resolution of these veterans' claims. It is true that the committee has set forth an amount that was recommended for the resolution of those claims, but it is also true that this fall--when the blue ribbon task force established to make recommendations comes out with its recommendations--we anticipate that they will be for a lot more money that is needed to adjudicate the claims of the veterans. It will be too late by then to get that money in this appropriations bill. Senator McCain's effort was a modest attempt to put a very small amount of money, but symbolically important to our veterans, as he noted, back into the veterans part of this bill. It is for that reason I strongly support it. I will not go through all of the other arguments Senator McCain has so eloquently cited as the basis for his amendment. I appreciate very much what Senator Mikulski said. She has taken the amount recommended by the administration and put that in the bill. As I said, all of us recognize, as she noted, it is not nearly enough. The question is, do we exercise some independent judgment here, anticipate that there will be a recommendation for funding in the future, but that it will come too late in this appropriations process or do we put that money into projects Senator McCain has targeted for at least some treatment under his amendment? I agree with him. The choice is clear. I tell all of my veteran friends when they confront me and ask, why did you have to vote against that VA-HUD appropriations bill there is a process in Washington to put the sweet with the sour, to make sure that whatever you do that doesn't go down very easily, you put something sweet with it so it is hard to vote against it. Nobody wants to vote against veterans programs. We all want to support our veterans. That is why you take programs that can be subject to some criticism in the HUD portion of the bill, put them with the VA part of the bill and, voila, you have a recipe for success; Members will not dare vote against it. I have voted against it. I will probably vote against it again in the future. I hope my veteran friends, by observing what is occurring here today, appreciate the fact that when we try very hard to move some of that money from programs that we think are not as useful for people into the veterans part of the budget, you can see how hard that is going to be. That is why, at the end of the day, we fight as hard as we can to get as much support for the veterans in the bill. And if we can't get more than we have been getting, then in many cases we end up opposing the bill. While it is true and in some respects symbolic, I think the symbolism is very important. I urge my colleagues to support Senator McCain's amendment to begin to send two messages. The first message is to our veterans, that we understand your needs, we understand your requirements, and we support you. Secondly, to those who have the difficult job of putting together this bill, it is time to begin to exercise some discretion here, and with respect to these projects that each Member likes so much, all earmarked projects, put less money against those projects and transfer some of that money into the veterans part of the budget. As Senator McCain said with respect to these World War II veterans, they don't have much time left. I hope my colleagues will support his amendment.

Mr. KYL. I am happy to yield the floor to the Senator from Maryland. I did not realize she wished to speak.

Mr. KYL. Madam President, that is what I am doing, yes.

Mr. KYL. Madam President, on occasion I have an opportunity to travel with my colleague from Arizona and go through an airport somewhere in the country. I remember not too long ago going to Dallas, TX, on our way to Phoenix. Veterans coming up to my colleague--he is a lot more recognizable than I am--and saying, ``Thank you, Senator McCain, for fighting for us.'' Madam President, does the Senator from Maryland wish to speak at this moment? If I took her time, I apologize for doing that.

Mr. KYL. I ask unanimous consent that Senator Allen from Virginia be also listed as a cosponsor.

Mr. KYL. Mr. President, I thank the Senator from Maryland for her generosity.

Mr. KYL. I say to Senator Mikulski, if Senator Fitzgerald arrives, perhaps we can accommodate him in some way.

Mr. KYL. I inquire of the Senator from Maryland, maybe I misunderstood the unanimous consent request. I thought because the Schumer time had been yielded back that all the remaining time was divided.

Mr. KYL. Mr. President, I believe there is only one other speaker besides myself. I am informed Senator Fitzgerald is on his way. When he arrives, he will address the amendment, and after that, other than myself, as I said, I do not think there are any other speakers, unless the distinguished assistant majority leader wishes to be recognized to comment at this point. Mr. President, I apologize for one bit of confusion, and I thank the Senator from Maryland, the distinguished chairman of the subcommittee, for catching an error. The wrong section was cited in one part of the amendment. She correctly noted we had referred to the wrong section, and the modification which has just been adopted refers to the right section. I apologize for any confusion that might have caused. I do think it has caused some confusion because I am in receipt of one document which I understand has been circulated to some Members of the majority that criticizes the amendment in two primary ways, the first of which is a suggestion that this amendment uses the same formula as used in the drinking water section of the bill. I suspect the citing of the section might have created some of that confusion. It has been clear from the outset, as I have described this over and over and I went through the description with the Senator from Virginia, that the whole point of this amendment is to use a formula which is based upon a needs survey established by the Environmental Protection Agency relating to wastewater treatment. I pointed out that there are two such needs-based surveys: One relates to drinking water; one relates to wastewater. Obviously, the drinking water needs survey should relate to drinking water. That is exactly what the law provides. That is the survey that is used for the formula for drinking water. By the same token, the wastewater needs survey should apply to wastewater, but it does not. The law today has a different formula and it is very difficult to understand the origins. As near as anybody can figure out, it relates to a construction grants program that was in existence in the 1970s. It has nothing to do with this needs survey. We say, just as we should have a needs survey by EPA driving the decisions for drinking water, which we do, we should have a similar kind of formula for wastewater. The wastewater formula is not based on the drinking water needs survey, it is based on the wastewater needs survey. I note, in this document that has been circulated at least among some Members of the majority, that the criticism is we should not have the same formula apply to drinking water apply to wastewater. It does not. To the extent there was confusion because one of the sections was miscited in the amendment, I apologize for that, again. I thank the Senator from Maryland for allowing me to make that correction. We are talking about two different needs surveys, two different formulas. We simply want the type of needs survey EPA conducts to apply to the formula in this case. The second item I want to point out about the document is a complete error in one of its comments. I quote from this document: A number of other States, for example, Ohio, Illinois, Florida, Indiana, and New Jersey, would receive reduced allocations. I assure all my colleagues from those States that is not only true, but the reality is that the States cited are among the States that receive the highest benefits of the formula change--Ohio, Illinois, Florida, Indiana, and New Jersey. In fact, I think they are the highest. Let me go through the numbers precisely. For the State of Ohio, it would today receive $76,845,000. Under the formula, the pending amendment, it would receive $78,423,000. The net increase is $3,577,000, when you take the earmarks into account. For the State of Illinois, which I think receives the highest benefit--I confess to the Presiding Officer, I do not know why Illinois would have been so shortchanged in the past, but I appreciate his willingness to cosponsor the amendment because of the clear discrepancy--under the current allocation, the State of Illinois would receive $61,735,000. Under the pending amendment, Illinois would receive $108 million, which is a net gain of $48,764,000, again taking into account the $2.5 million earmarks. That is an increase from $61 to $108 million. The next State cited is Florida. Florida goes from $46 million to $55 million; Indiana goes from $32 million to $50 million; New Jersey goes from $55 million to almost $75 million. This document floating around titled ``Comments on Kyl Amendment,'' is not only in error; it is almost 180 degrees off. I can't explain why anyone would make this conclusion. The miscitation of the section number has nothing to do with these numbers. Somebody has grossly misunderstood the amendment, misunderstood the charts or the formula, or in some other way deliberately misstated the facts. I say to my Democratic colleagues who might have received this document, ``Comments on Kyl Amendment,'' this page-and-a-half document is wrong. It is wrong in the first half because we are not using the same formula as the safe drinking water formula. And it is wrong in the second half, for what reason I don't know, but it is grossly wrong. It could not be more wrong with respect to the States it claims are receiving reductions. Those States happen to be the States receiving the largest increases. For the benefit of my colleagues who were not here for the earlier part of the debate, let me explain what we are talking about while I am waiting for Senator Fitzgerald, a cosponsor of the amendment. The bill we are debating deals with, among other things, EPA, and it has sections dealing with funding from different funds for projects that the U.S. Government has mandated: To protect drinking water and to protect communities from problems relating to improper wastewater treatment. We provide those mandates. Congress, therefore, provides funding to help local communities create the proper infrastructure to meet the requirements of the statute and EPA. As Senator Mikulski and Senator Bond have eloquently pointed out, it is always a struggle to get the funding to fill these needs, but they have done a great job in getting additional funding this year for that purpose. The problem is, whereas the drinking water portion is allocated on the basis of EPA's recommendations and what they call the needs survey, there is no such reference to EPA recommendations with respect to wastewater treatment. Instead, we are reverting to a formula based on 1970s data. It has never been updated since the action was put into place in 1987. There is a legitimate suggestion we ought to go to the authorizing committee to try to fix this. The authorizing committee has had 14 years to try to correct this, and my staff has repeatedly tried to make contact with people to see if they would be interested in doing it. Thus far, we have not had any success. Despite the fact that the chairman of the committee has indicated his willingness to take up the reauthorization this fall, there is no commitment to take up a modification of the formula to meet the needs of the high gross States about which I have been talking. There is absolutely no reason to think we will succeed this year in modifying the formula through the authorizing committee. Even if we were to succeed in doing that, the States I named would receive tremendous shortfalls for the fiscal year 2002. There is no way to fix it for the fiscal year 2002. I have a couple of communities in my State that are in dire need of this funding. There is no way they can get it. We suggested this formula change, which is very simple. It says we should use the needs survey of the EPA and provide 97.5 percent of the funding available in accordance with that recommendation, and we have a minimum and a maximum so that no State gets more than 8 percent and no State gets less than the minimum we provide. That is similar to other formulas. It is very fair. It is very simple. It is easy to apply. The net result, based upon the charts I showed earlier, will go a significant degree toward not only providing funding for those States and localities that need it the most, but reducing the significant unfairness in the formula that exists today. That is what we are talking about. It is that simple. For those Senators from the following States, I hope since they will receive more money--again, let me note we are not affecting earmarks. We have included the earmarks.