Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, let me yield 2 minutes to the Senator from Arkansas.

Mr. KYL. Mr. President, is there anybody else on the Democratic side who wishes to speak at this point? Mr. LEVIN addressed the Chair.

Mr. KYL. Yes. I hope this will not come out of the 30 minutes.

Mr. KYL. Mr. President, absolutely. We will be pleased to answer any and all questions and discuss this at whatever length the Senator would like to discuss it.

Mr. KYL. Mr. President, I ask unanimous consent that the 30 minutes Senator Warner asked for begin at this time.

Mr. KYL. Mr. President, I express my gratitude to Senator Graham for permitting us to take this next half hour to at least lay this down to begin setting the framework for the discussion.

Mr. KYL. Mr. President, might I inquire, was the time on the Republican side equally divided, 10 minutes each, among Senators Murkowski, Domenici, and myself?

Mr. KYL. Thank you. Mr. President, let me briefly describe the purpose of this amendment. I will acknowledge right up front that Senator Domenici, from New Mexico, has been a primary motivating factor in addressing this subject, based upon his expertise with our National Laboratories and his concerns about national security. A lot of folks sat down to try to determine what the best course of action would be for us to begin to take steps to ensure the security of our National Laboratories. Certainly, Senator Domenici is the person one would first turn to for that kind of consideration. Next, Senator Murkowski, the chairman of the Energy Committee, is someone who has jurisdiction and who has held hearings and who has a great deal to offer with respect to the organization of the Department of Energy, in particular the weapons programs, so we can ensure that we have security over those programs. Naturally, Senator Shelby, the chairman of the Intelligence Committee, has also had his input into this amendment, as have others. It will be important that each of these key chairmen has an opportunity to discuss this bill. But I especially thank Senator Domenici for his efforts in doing literally hundreds of hours of research on the best possible approach to secure our National Laboratories. That is what this amendment is all about. This amendment is, actually, the second step we will have taken in this defense authorization bill to begin to rebuild the security of our National Laboratories. In the Armed Services Committee, a provision that deals with this subject was included in the bill. We have incorporated that part of their bill into this amendment. In addition to that, the Secretary of Energy, Secretary Richardson, has some ideas about his organization. The centerpiece of his ideas we have also incorporated into this amendment. What we are trying to do here is to get the best ideas that everybody has to offer, and thereby ensure that when we finally finish this legislative session, and finish discussing this with the administration, we will have the best possible approach to security at our National Laboratories. The essence of this amendment is to establish, in the Department of Energy, a new Office of Counterintelligence which would be headed by a senior executive from the FBI. I will come back to that. But that office has been identified in the defense authorization bill. We simply flush out the provisions of that office in that bill and ensure that that officer will have total authority here to deal with issues of counterintelligence at our National Laboratories. Then the second part of this amendment is to address the longstanding management problems of the Department of Energy, especially relating to the nuclear weapons complex and reorganizing the Department of Energy in such a way that there is a very clear line of authority over the nuclear weapons programs, with a person at the top of that, an administrator, who has the responsibility over all of these nuclear programs, and nothing else, within the Department. And, by the same token, nobody else in the Department, except those who are senior to him, including the Secretary of the Department of Energy, would have any authority over his programs. In effect, what we are replacing in the Department of Energy is a situation in which all of the rules and regulations and management policies, and everything else that applies to everybody within the Department--including the weapons complex--have created a situation in which, literally, they have not been able to focus on the management of the nuclear weapons complexes, especially with regard to security. So what this amendment does--in the intelligence community terminology--is to create a ``stovepipe'' within the Department of Energy. At the top, of course, is the Secretary of Energy. Below him is a person with the rank of Assistant Secretary, called the ``administrator,'' who would, within that stovepipe, have the total authority to operate the Department of Energy weapons programs, including the security functions of those programs. He would be doing this, of course, in coordination with the office that would be created by the language put in the bill by the Armed Services Committee relating to counterintelligence, with the FBI presence here, and the two of them would coordinate the national security portions of this program. In this way, you do not have people within the Department of Energy responsible for all kinds of other things. Somebody talked about refrigerator standards and powerplant issues and all of the rest of it. Those people would not have anything to do with this. This group would not have anything to do with them. This would be a discrete function within the Department that would have nothing to do except manage our nuclear weapons programs, including, first and foremost, the security of those programs. We will have much more to say about the details of this after a bit. Certainly Senator Domenici can go into many of the reasons he has helped to craft this in the way that organizationally it will work. Let me just make two concluding points. First of all, I do not think we can emphasize enough the need to do something about security at the Laboratories now. One of the concerns that has been raised about the amendment we have offered here is that it is premature, that we should hold hearings, and we should take a long time so we can ``do this right.'' We have since 1995. And this administration has not done it right. It is time for the Senate to get involved in this issue and begin the debate by putting this amendment out there. We will have plenty of time to deal with this before this bill ever goes to the President of the United States. This is our approach to the best management for this weapons program. We believe that to delay anymore is to engage in the same obfuscation and delay and, frankly, dereliction of duty that has characterized this administration's approach to national security at our Nation's Laboratories, our nuclear weapons programs. We can't delay any longer. If I were to go home over this Memorial Day recess, the first thing my constituents would talk to me about is, what about this Chinese espionage? What about security at the Laboratories? If I say to them, well, we were in such a hurry to get this Department of Defense authorization bill done that we didn't really do anything about security at our Nation's Laboratories, we are going to take our time and do that later, I think I would be pilloried, and so would all the rest of my colleagues. Our constituents expect us to act with alacrity. I don't see how we can complain about the Department of Energy and about the administration taking their sweet time to deal with this problem if we don't address it up front and right now. The second point I make in closing is, with regard to a previous draft of this legislation, the Secretary of Energy is indicating that he doesn't approve of everything in here and might even recommend a veto of the legislation. I am sure by the time he is done hearing the debate and conferring with us and reading the actual language of the amendment, he will be willing to cooperate with us rather than threaten vetoes. We need to work together on this. I commend Secretary Richardson because from the time he has come in, he has tried to do the job of making reforms at the Department of Energy. But it will not do to say that he is the only one who has any ideas that could work here and for the Congress to but out, thank you. The Congress has held numerous hearings, both in the House and the Senate. We have a lot of good ideas. Frankly, this management proposal, which has gone through a great deal of thought process about how to provide security at our National Laboratories, is going to be part of that reorganization. I know my colleagues and I look forward to working with the Secretary of Energy to make this work. As I conclude, might I ask how much time we have remaining?

Mr. KYL. Mr. President, let me just clarify about three things that were said by Members of the minority a moment ago. Senator Bingaman said we should not be playing politics with national security. We could not agree more with that. He, then, began discussing how these problems have been around a long time, under Republican administrations as well as Democrat administrations. That is true. It is not political; it is true. Of course, that is what the Cox Commission report said, but that has nothing to do with whether we should begin to solve those problems now. Once this administration became aware of the espionage in about 1995, it was important to begin the work of cleaning up the mess at the Department of Energy. What we are saying is if that is not going to be done by the administration, we are prepared to help do that with the amendment we have offered. Second, Senator Bingaman indicated that Democrats did not object to the Republican security amendments in the Armed Services Committee, which were then included in the bill and which Members of the Democratic side have been talking about as a good thing in this bill. I just asked staff to note a couple of the specifics to which there was objection. The minority, for example, objected to the requirement that DOE employees who have access to nuclear weapons data have a full background investigation. They watered it down by delaying implementation and also requiring an analysis of costs. They weakened the restrictions on the lab-to-lab program, section 3156 or 3158, I have forgotten. There were more. Not to quibble, but the point is the security provisions in this bill were put there by the Members of the Republican side, by and large. The primary section that was discussed was the section put in by Senator Lott, the majority leader. But there is one more important piece of unfinished business and that is the Kyl-Domenici-Murkowski amendment, and that is what the Democrats will not let each of us talk about let alone debate about, except for the unanimous consent to close the debate here this evening. Senator Reid concluded by saying he did not improperly hold up the bill. He, in fact, used the rules of the Senate to protect the prerogatives of one Senator and his side. That is certainly true. He knows the rules. He used the rules. He was able to use the rules to prevent us from speaking, from debating our amendment, and from voting on it. The only way we could bring the defense authorization bill to a close and conclude this very important piece of business for the American people was for us to withdraw this important amendment. I hope all of our colleagues and the American people understand what happened here. Because we could not discuss or vote on the Kyl- Domenici-Murkowski amendment, and because it was important to conclude the work on the defense authorization bill, we were required to withdraw our amendment. That important piece of unfinished business to protect the security of the National Laboratories, therefore, remains unfinished business and will have to be taken up in the future. I do not know of a higher priority for the Senate at this time than trying to ensure the security of our National Laboratories and our most sophisticated weapons. This amendment would go a long way toward doing that. It is not the total answer. I am just hopeful in the days and weeks to come we will not hear the continuing wails that it is not time, we do not have time to discuss this, we should have lots of hearings about it. We are prepared to have all kinds of discussions. We need to have those discussions. If we are not able to have those discussions in future times here, then the next time it will not be withdrawn and we will have to deal with it one way or the other. I urge my colleagues to work together, try to resolve these important security issues for the safety and defense of the United States of America.

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

Mr. KYL. Mr. President, will you advise us as to the time remaining?

Mr. KYL. The minority has yielded back its time?

Mr. KYL. Mr. President, I inquire how much time is remaining?

Mr. KYL. I ask unanimous consent Senator Domenici's time be folded in with my time and then I will close our side of the debate.

Mr. KYL. Mr. President, I suggest that the example of the FBI and the Department of Energy not knowing that this waiver existed that Senator Murkowski spoke about is the perfect case of the right hand not knowing what the left hand was doing, and it is precisely what this amendment seeks to correct. There is an old debate technique called the ``red herring.'' If you can't meet the real argument of your opponent, throw something out there that you can defeat and pretend like that is the issue. Members of the Democratic side have said, why, there are all kinds of security provisions in this bill. How dare the Republicans suggest that we haven't done anything about security in the bill. The security provisions in the bill were put there by Republicans. We know full well that we have security provisions in the bill. Virtually every one of them were put there by Republicans. And I am informed that in the Armed Services Committee, Democrats fought many of them. Now they come to the floor very proud of what is in the bill--not having sponsored them, having opposed some of them, but now contend that we have solved the problems, because the Republicans on the Armed Services Committee put some provisions in the bill, and because the Republican majority leader, Senator Lott, brought a whole series of things to the floor. Much of what was quoted by the Democrats came from the Lott amendment. In fact, Senator Levin even put into the Record a summary of the Lott amendment. I am glad. These are all very good provisions. Republicans are serious about our national security. But to suggest that what was done there is the end of it, now we can go home, is to quit way before this problem has been solved. The Kyl-Domenici-Murkowski amendment is an amendment that seeks to get to the core of the problem. As Senator Bingaman said, two-thirds of the Armed Services Committee amendments were incorporated into our amendment. That is true. We did that for stylistic purposes. What is the problem? It is the remaining one-third. They don't want to get to the core of the problem, which is the organization of the Department of Energy. Here is what it boils down to: Who do you trust? Do you trust the Clinton administration with the national security of the United States saying: Trust us; we will do the reorganization down here at the Department of Energy. We are going to get this figured out. Is that who you trust? I don't think the American people can afford to continue to put their trust in an administration which has known about this problem since 1995, and only in 1999 did it begin to do anything about it because of public pressure. From the management review report of the Department of Energy itself, as recently as last month, it recognized that, ``significant problems exist in that the roles and responsibilities are unclear.'' That is precisely what we are trying to fix--to get these roles and responsibilities straight. Only a month before, a congressionally created administration said, ``The Assistant Secretary of Defense programs should be given direct line management over all aspects of the nuclear weapons complex.'' That is our amendment. The GAO report--a whole list of reports, all highly critical of the management at the Department of Energy and the defense weapons complex. I finally conclude with this point: The GAO testified that the continuing management problems at the Department ``were a key factor contributing to security problems at the laboratories and a major reason why DOE has been unable to develop long-term solutions to the recurring problems reported by advisory groups.'' Is that who you want to trust to clean this up and fix it up, and make sure that we don't have any more problems? I think not. I think it is time for Congress to get involved. What is so amazing to me tonight is that the Democrat minority would hold up the defense authorization bill at a time when we are at war in Kosovo, because they don't even want to debate our amendment. They called a quorum call and wouldn't take it off so that Republican Members couldn't even come to the floor. Senator Domenici asked to be allowed to speak on our amendment. He is a coauthor. The minority refused him the opportunity even to speak. So not only will they not allow us to vote on our amendment, but they won't even allow it to be debated. Yet their ostensible reasoning for opposing it is not because they don't think it has some good ideas in it but because we have to have a lot more discussion and debate about this; we haven't had hearings; we need to talk about this. We have offered them the opportunity to talk about it, but they don't want to talk about it. They don't want to talk about it because it gets right to the guts of the problem--the Department of Energy has to be reformed. This amendment does that. The national security of the United States cannot be protected until we do that. And the suggestion of the distinguished minority whip that now is not the time, on the eve of the Memorial Day recess, is astounding. What is more important, that Members get to go home for the Memorial Day recess, or that we act with alacrity to fix the problems of national security at our laboratories? I am astonished that the Democratic minority would take this kind of cavalier approach to the national security of the United States--we need to talk about it more, but we are not going to let you talk about it. We need to get out of town for the recess. So withdraw your amendment. Only because the Department of Defense needs the authorization bill are the authors of this amendment willing to withdraw it at this time. There is a war in Kosovo. It is irresponsible for the minority to threaten to filibuster this bill until kingdom come while that war is going on, because they don't even want to talk about an amendment that would guarantee the security at our National Laboratories. This is a sad day for those who are opposing this amendment. It is a sad day when Members of this Senate won't let their colleagues talk about this amendment, won't allow a vote on it, and can't wait to get out of town to brag about whatever it is that they have done, but without doing the unfinished business of protecting the security of our National Laboratories. I retain the remainder of my time.

Mr. KYL. Within 1 minute, I will close. I will come back with more discussion of the rationale for the specific changes we have made in here. I close by saying this: The only way we are going to be able to guarantee security for the nuclear programs at our National Laboratories in the future is to have somebody with laser-like focus, full responsibility over those programs in the Department of Energy, responsible for nothing else, and nobody else in the Department responsible for these programs. This person should be able to report directly to the Secretary of Energy and to the President of the United States, which is what our amendment calls for. Finally, he should be able to work very closely with the Office of Counterintelligence established in the other part of this bill. That is the essence of what this does. It detracts nothing from what Secretary Richardson is trying to do. As a matter of fact, it fits very nicely with what the Secretary is trying to do. I believe that, working together, we can provide security at our Nation's Laboratories and, therefore, security for the people of the United States. I thank the Chair, and I yield to Senator Domenici from New Mexico.

Mr. KYL. I am happy to yield.

Mr. KYL. At this time I send an amendment to the desk on behalf of myself, Senator Domenici, Senator Murkowski, Senator Shelby, Senator Hutchinson, and Senator Helms.

Mr. KYL. Thank you. Under the agreement just announced by Senator Warner, it would be the intention of Senator Domenici and Senator Murkowski and myself to divide the next half-hour into roughly 10 minute segments. I would appreciate an indication from the Chair when we have achieved those three milestones, if the Chair would, please. Amendment No. 446

Mr. KYL. I object, Mr. President.

Mr. KYL. Thank you.

Mr. KYL

Mr. KYL. Mr. President, I rise today with my colleagues, Senators Bob Kerrey, Don Nickles, John Breaux, sConnie Mack, Chuck Robb, and Phil Gramm to introduce a bill that attempts to forge bipartisan consensus with regard to the future of the federal estate tax. The legislation we are offering today is titled the Estate Tax Elimination Act of 1999. Mr. President, we know that many Americans are troubled by the estate tax's complexity and high rates, and by the mere fact that it is triggered by a person's death rather than the realization of income. For a long time, I have advocated its repeal, because I believe death should not be a taxable event. Other people agree that the tax is problematic, but are concerned the appreciated value of certain assets might escape taxation forever if the estate tax is repealed while the step-up in basis allowed under Section 1014 of the Internal Revenue Code remains in effect. The legislation we are introducing today attempts to reconcile these positions by eliminating both the estate tax and the step-up, and attributing a carryover basis to inherited property so that all gains are taxed at the time the property is sold and income is realized. This is an explicit trade-off: estate-tax repeal for implementation of a carryover basis. Both must occur, or this plan will not work. The concept of a carryover basis is not new. It exists in current law with respect to gifts, Section 1015 of the Internal Revenue Code, and property transferred in cases of divorce, Section 1041, and in connection with involuntary conversions of property relating to theft, destruction, seizure, requisition, or condemnation. In the latter case, when an owner receives compensation for involuntarily converted property, a taxable gain normally results to the extent that the value of the compensation exceeds the basis of the converted property. However, Section 1033 of the Internal Revenue Code allows the taxpayer to defer the recognition of the gain until the property is sold. The Kyl-Kerrey bill would treat the transfer of property at death--perhaps the most involuntary conversion of all--the same way, deferring recognition of any gain until the inherited property is sold. Our bill would also establish a limited capital-gains exclusion for inherited property to ensure that small estates, which are currently exempt from tax by virtue of the unified credit and the step-up in basis, do not find themselves with a new tax liability when the proposed law takes effect. Mr. President, I have asked the Joint Tax Committee to review the proposal and provide an official revenue estimate. We are awaiting the results of that review now. I hope the members of the Finance Committee will take a serious and careful look at this bipartisan proposal. With it, we ought to be able to finally eliminate the estate tax--and do it this year. Mr. President, I ask unanimous consent that a section-by-section analysis of the bill be printed in the Record.

Mr. KYL

Mr. KYL. Mr. President, I just spoke with Senator Kerrey. I know he will want to say something in response to Senator Smith and what I will have to say. I will take my 5 minutes right now, with his indulgence. I appreciate the spirit of his amendment. In fact, I just advised Senator Kerrey I regretted very much having to speak in opposition to his amendment because I admire him as vice chairman of the Intelligence Committee on which I sit. We agree on a great many things. In fact, we are introducing legislation as cosponsors today on another matter. But on this matter, I do differ with his approach because it to me reflects the approach to defense preparedness, to national security, that has been characterized, as Charles Krauthammer has said, as ``peace through paper'' rather than peace through strength, which Ronald Reagan made popular and which we think helped to win the cold war--the notion, in other words, that treaties should define what the United States of America does to provide for its defense rather than the United States deciding what it must do to provide for its defense and then seek through treaties to limit what other countries might do and what we might do in the future as a part of that but following what our initial determination is with respect to necessities for our national security. This is true with respect to the START I and START II levels of nuclear weaponry, our strategic deterrents. The START I levels are where we are right now, and historically the administration and the Congress have taken the view that we need to maintain our START I levels as long as that is the prevailing status of treaties, and that is precisely where we are today. START II has not been ratified by the Russian Duma, and until it is and until Russia begins to comply with its obligations under START II to bring the number of warheads permitted under START I down to levels authorized by START II, we have viewed it important not to unilaterally bring our levels from START I down to START II, because holding out the possibility that we would stay at START I has been an effective way for us to deal with the Russians. Robert Bell, speaking for the administration, has testified that it has been helpful for us to let the Russians know that we are going to maintain our forces at the current levels. While we are willing to reduce them to START II levels, it is going to require concomitant action by the Russians for us to do that. In other words, if the Russians are prepared to go from START I down to START II, then the United States will be prepared to do that. But until then, we should not be taking the action unilaterally. As a matter of fact, I was going to offer an amendment to this bill which would ensure that our Trident forces would not be reduced, because that is also permitted under this bill. The Trident submarine forces are the most robust leg of our triad of strategic deterrence because they are the most secure. Our submarines are nearly impossible to track, so they are clearly the most survivable leg of the triad. The majority of our boats in the fleet can carry the D-5 missile, the most advanced missile we have. What I have focused on here is trying to make sure that our country maintains our START I level capability and that we do not begin to erode that, simply because it is expensive to do as long as Russia is not willing to reach those same levels. An example of why this is important is that if we were to reduce the Trident force, for example, we would be relying upon the B-52s--as a matter of fact, our plan, and I hope our American citizens appreciate that the current defense plan is to use an 80-year-old B-52 bomber into the future as part of the triad for our nuclear deterrence. That is relying upon a very old and not very survivable system, which is why I think we have to maintain the Trident system. Our vulnerable land-based ICBMs are the other leg, and they are also quite vulnerable to attack. We ought to be maintaining rather than giving up our Trident forces. Were it not for arms control considerations and a desire for the United States to implement the START II agreement that has not even been ratified by the Russian Duma, I do not think we would be taking the step that is being suggested by the Armed Services Committee today and the even larger or further step that Senator Kerrey takes to have it apply to all of our strategic forces. I have been concerned for a long time about the administration's desire to protect our Nation's security primarily by relying on arms control measures, and I said this has been described by Charles Krauthammer as ``peace through paper.'' Let me use the words of the administration. Under Secretary of State John Holum explained the administration philosophy in 1994. This is a revealing explanation. He said: The Clinton administration's policy aims to protect us first and foremost through arms control--by working hard to prevent new threats--and second, by legally pursuing development of theater defenses for those cases where arms control is not yet successful. That is exactly backward. First, you develop your security forces, and then, to the extent that you can do so, you cut back on those through arms control treaties that are agreed to and implemented by the other side. But what you do not do is start out by saying arms control is going to drive your development and deployment of national security measures. It is exactly backward. Arms control is not a new idea. In 1139, the Catholic church tried to ban the crossbow. Like a lot of other well-intentioned arms control measures, it did not work. The Kellogg-Briand treaty--I know the Senator from Virginia, the distinguished, esteemed chairman of the Armed Services Committee, is not quite old enough to remember that--in 1929 outlawed war. Well, it does not work. Peace through strength works. Then you do what you can with arms control. The main point I want to make is that our defense planning should proceed on the basis of assessing the threat, evaluating alternative means to defeat the threat, and funding the requisite weapons systems and force structure. We should not permit arms control agreements to drive our defense programs and our force structure. It is particularly true with respect to the START II treaty which this Senate ratified in December of 1995. Despite our action, the Russian Duma has refused to take action on it. The likelihood it will do so is highly uncertain. START II has become a political liability in Russia in spite of its advantages to them. As I said before, I would apply this not only to the amendment offered by Senator Kerrey but also to the language in the Senate bill which would permit the administration to withdraw our nuclear Trident force down to 14 boats. I quoted Robert Bell who stated that the provisions in law requiring the maintenance of the U.S. forces at START I levels are helpful in convincing the Russians that the only way that U.S. force levels will decline is if the Russian Duma ratified START II. While I understand he is going to be taking a new position soon, Bell is the President's Special Assistant for Arms Control and Defense Policy. I was going to offer an amendment to highlight my concern about a provision of the Defense authorization bill that I believe undermines the strength of America's strategic nuclear deterrent. The specific provision that I am concerned about is paragraph (2) of section 1041 of the bill, which would allow the Clinton administration to reduce the number of Trident nuclear submarines operated by the U.S. Navy from 18 to 14 boats. Unfortunately, I fear the acceptance of this cut by the Defense Department was driven primarily by a desire to conform to prospective arms control agreements rather than a hard-nosed assessment of the best way to respond to current threats, and the best means of compelling Russia to meet its commitments to reduce its nuclear arsenal. The Trident force, armed with nuclear-tipped submarine-launched ballistic missiles, forms a critical part of the United States nuclear triad, which also includes long-range bombers and land-based intercontinental ballistic missiles. When deployed at sea, Trident submarines are nearly impossible to track, making them most survivable leg of our nuclear triad. Furthermore, the majority of the boats in our Trident fleet carry America's most modern missile, the D-5, and our most advanced nuclear warhead, the W88. The bill before the Senate calls for the maintenance of U.S. nuclear forces at a level that closely approaches the limits imposed by the START I treaty. The bill, however, allows the Administration to reduce the number of Trident submarines and instead to rely more heavily on the current fleet of aging B-52 bombers and more vulnerable land-based ICBMs to maintain U.S. nuclear forces at START I levels. I do not believe a reasonable person could argue that placing greater reliance on the venerable fleet of B-52 bombers, which are approaching one half century old, instead of maintaining the current force of Trident submarines would enhance the effectiveness and survivability of the U.S. strategic nuclear deterrent. Were it not for arms control considerations and a desire to implement the START-2 agreement that has not even been ratified by our Russian treaty partners, I do not believe we would be taking this step. As many of my colleagues know, I have been concerned for some time about the Clinton administration's desire to protect our nation's security primarily by relying on arms control measures in a philosophy that Charles Krauthammer aptly describes as ``Peace thru Paper.'' Under Secretary of State John Holum explained this philosophy during a speech in 1994, stating, The Clinton Administration's policy aims to protect us first and foremost through arms control--by working hard to prevent new threats--and second, by legally pursuing the development of theater defenses for those cases where arms control is not yet successful. Of course, as I said before, arms control is not a new idea. After all, in the year 1139, the Catholic Church tried to ban the crossbow. Like so many other well intentioned arms control measures, this one was doomed to failure from the start. And who can forget the Kellogg-Briand treaty, ratified by the U.S. in 1929, that outlawed war as an instrument of national policy. This agreement and others spawned in its wake left the United States and Britain unable to deter and unprepared to fight World War II. Yet despite these and many other notable failures, the Clinton administration still looks to arms control as the best way to safeguard our security. The main point that I want to make is that our defense planning should proceed on the basis of assessing the threat, evaluating alternative means to deter and defeat the threat, and funding the requisite weapons systems and force structures. We should not permit arms control agreements to drive our defense programs and force structure. This is particularly true with respect to the START II treaty, which the Senate ratified in December, 1995. Despite the Senate's action, the Russian Duma has refused to take action on the accord. The likelihood that it will do so is highly uncertain. START II has become a political liability in Russia in spite of its advantages to them. Adherence to START I warhead limits, as called for by the Senate in its Resolution of Ratification for the START II treaty, and retention of the Trident fleet at 18 boats, gives us the best leverage we are likely to have to persuade Russia to move toward ratification and implementation. And the Clinton administration agrees with this point. During a briefing for Senate staff in January, the President's Special Assistant for Arms Control and Defense Policy, Robert Bell stated that the provisions in law requiring the maintenance of U.S. forces at START I levels are helpful in convincing the Russians that the only way U.S. force levels will decline is if the Duma ratifies START II. The U.S. repeatedly purchased START II ratification with aid or with concessions permitting Russia non-compliance with other arms control agreements or with unilateral limits on our own defense programs. In fact, Russia seems to be moving even further from the arms control framework so dear to this administration. Russian leaders have recently spoken of reconstituting Russia's tactical nuclear forces, potentially reversing moves that the U.S. and Russia undertook during the Bush administration. On April 30th of this year, the Washington Times reported that Russia's Security Council ordered its military to draw up plans for the development and use of tactical nuclear weapons in what may be a response to NATO's heightened profile due to its involvement in Kosovo. Russia also continues to channel a high proportion of its declining military budget into its strategic nuclear forces and now places greater reliance on nuclear forces in its military doctrine. And furthermore, Russia appears to be conducting tests on new nuclear weapons. As the Washington Post reported on January 24th of this year, ``Three small underground nuclear tests Russia conducted last fall have prompted some government intelligence analysts to suggest that Moscow may be trying to design a new generation of tactical nuclear weapons.'' Nor is Russia the only concern. China is also modernizing its strategic nuclear forces with the benefit of warhead designs stolen from our nuclear labs and missile technology sold by the Clinton administration. The Cox committee had concluded that these thefts enabled China to design, develop, and successfully test modern strategic nuclear weapons and that these designs will make it possible to develop multiple independent reentry vehicles or MIRV warheads for their missiles. As the summary of the Cox committee report notes, ``The People's Republic of China has stolen design information on the United States' most advanced thermonuclear warheads. Specifically, the W-88 (Trident D-5 SLBM); W-87 (Peacekeeper ICBM); W-78 (Minuteman III, Mark 12A, ICBM); W-76 (Trident C-4 SLBM); W-70 (Lance SRBM); W-62 (Minuteman III ICBM); W-56 (Minuteman II ICBM). These thefts, primarily from our national laboratories, began in the 1970s, continued in the 1980s and 1990s and almost certainly continue today.'' The Cox report concludes by saying, ``These thefts enabled the PRC to design, develop and successfully test modern strategic nuclear weapons.'' Furthermore, I would point out to my colleagues that rogue states and gangster regimes are also working hard on nuclear weapons and the means to deliver them. As the Rumsfeld Commission noted last year, the strategic threat to the U.S. from rogue nations is growing rapidly. And one need only look at last summer's launch of a North Korean missile that overflew Japan that has sufficient range to reach the United States for validation of the Rumsfeld Commission's conclusions. Mr. President, I have offered an amendment to retain the Trident fleet at 18 boats. We should remember that the world remains a dangerous place and should size our nuclear forces accordingly. As I have outlined before, the Trident fleet is vital to the maintenance of our strategic nuclear deterrent. This is too important a step to be entrusted to an administration in thrall to its bankrupt Russia policy and its naive approach to arms control. I ask unanimous consent that a copy of my amendment be printed in the Record.

Mr. KYL. Again, I fully respect the vice chairman of the Intelligence Committee and what he is attempting to accomplish. It is my view you first build your defense structure, and you stick with it until you see signs that the potential adversary has reduced his force structure in a competent way. Until you do that, you are better off keeping what you have in place rather than unilaterally giving it away. Mr. KERREY addressed the Chair.

Mr. KYL

Mr. KYL. Mr. President, I rise today with my colleagues, Senators Bob Kerrey, Don Nickles, John Breaux, sConnie Mack, Chuck Robb, and Phil Gramm to introduce a bill that attempts to forge bipartisan consensus with regard to the future of the federal estate tax. The legislation we are offering today is titled the Estate Tax Elimination Act of 1999. Mr. President, we know that many Americans are troubled by the estate tax's complexity and high rates, and by the mere fact that it is triggered by a person's death rather than the realization of income. For a long time, I have advocated its repeal, because I believe death should not be a taxable event. Other people agree that the tax is problematic, but are concerned the appreciated value of certain assets might escape taxation forever if the estate tax is repealed while the step-up in basis allowed under Section 1014 of the Internal Revenue Code remains in effect. The legislation we are introducing today attempts to reconcile these positions by eliminating both the estate tax and the step-up, and attributing a carryover basis to inherited property so that all gains are taxed at the time the property is sold and income is realized. This is an explicit trade-off: estate-tax repeal for implementation of a carryover basis. Both must occur, or this plan will not work. The concept of a carryover basis is not new. It exists in current law with respect to gifts, Section 1015 of the Internal Revenue Code, and property transferred in cases of divorce, Section 1041, and in connection with involuntary conversions of property relating to theft, destruction, seizure, requisition, or condemnation. In the latter case, when an owner receives compensation for involuntarily converted property, a taxable gain normally results to the extent that the value of the compensation exceeds the basis of the converted property. However, Section 1033 of the Internal Revenue Code allows the taxpayer to defer the recognition of the gain until the property is sold. The Kyl-Kerrey bill would treat the transfer of property at death--perhaps the most involuntary conversion of all--the same way, deferring recognition of any gain until the inherited property is sold. Our bill would also establish a limited capital-gains exclusion for inherited property to ensure that small estates, which are currently exempt from tax by virtue of the unified credit and the step-up in basis, do not find themselves with a new tax liability when the proposed law takes effect. Mr. President, I have asked the Joint Tax Committee to review the proposal and provide an official revenue estimate. We are awaiting the results of that review now. I hope the members of the Finance Committee will take a serious and careful look at this bipartisan proposal. With it, we ought to be able to finally eliminate the estate tax--and do it this year. Mr. President, I ask unanimous consent that a section-by-section analysis of the bill be printed in the Record.