Carl Levin

Mr. LEVIN

Mr. LEVIN. One question that has arisen is whether the definition of ``material information'' in the new Criminal Code section your amendment creates is intended to or could affect other parts of the STOCK Act since the same term also appears in a very different context in other parts of the bill.

Mr. LEVIN. I thank the Senator for that clarification. In addition to the precise wording of amendment 1483 and clear congressional intent that the phrase used in the new Criminal Code section not be imported to Federal securities law, the definition actually used in your amendment has no applicability or relevance to the materiality considerations that arise in insider trading cases. I ask Senator Cornyn, does he agree with Senator Leahy regarding our discussion of the amendment?

Mr. LEVIN. I thank both of my colleagues for working with me to address my questions about the Leahy-Cornyn amendment.

Mr. LEVIN

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. LEVIN

Mr. LEVIN. Mr. President, the lifeblood of our democratic government is the contract between the people and their elected representatives--a contract that must be based on trust that elected officials will act for the good of our Nation and in the interests of their constituents and not for personal gain. To ensure that we maintain that trust, our Nation has laws and our Congress has rules that establish clearly the responsibilities of government officials, Members of Congress, and their staffs and that provide for the enforcement of violations. The legislation that will be before us is, in a way, preventive maintenance to protect that trust. It is a tightening of our legal and ethical guidelines as part of what must be a constant effort to ensure that the interests of our Nation and our constituents come first. Our constituents must have confidence that Members of Congress and our staffs will not use our positions for our personal financial benefit. There should be no doubt that regardless of our action on this legislation, the STOCK Act, it is a violation of the trust our constituents placed in us, a violation of the democratic process, a violation of the securities laws, and a violation of congressional ethics rules for Members of Congress or their employees to engage in insider trading--the use of information not available to the public to make investment decisions. Insider trading is and will remain prohibited for Members of this body to seek private profit through their public responsibilities, no matter the fate of this bill. But questions have been raised about insider trading by Members of Congress. The legislation before us today is designed to ensure that those questions are answered. It removes any doubt that insider trading by Members and employees of Congress is against the law and against congressional rules. It is important to remove that doubt because any appearance of a breach in trust between Congress and our constituents is so corrosive to honest, open, and effective government. Back in December, the Homeland Security and Governmental Affairs Committee held extensive discussions on the need to preserve that trust, including a very productive hearing on December 1. Later in December, the committee held a markup and approved the Stop Trading on Congressional Knowledge Act, or the STOCK Act. I commend Chairman Senator Lieberman and our ranking member, Senator Collins, for their leadership and the many members of the committee, Democratic and Republican, who made contributions to that process. Two things became clear during our hearings and markup. First, there was consensus that we should remove any uncertainty about the prohibition on insider trading. The second thing that became clear was that there was a significant bipartisan desire to avoid any unintended consequences as we sought to remove any uncertainty. We reported out the legislation because of widespread agreement on our goals, but their remained concerns about the means, and it was understood that we would attempt to address those concerns before this bill came to the floor. So a number of us have worked in the weeks since to make sure our goals and our means are in concert. The revised legislation, which will be before us, meets that objective. It should remove any uncertainty over the prohibition on insider trading, and it avoids unintended, harmful consequences that concerned some of us. I will point to two provisions that I believe are important to achieving those goals. The first reassures the American people that there are no barriers to prosecuting Members and employees of Congress for insider trading. It does so through language establishing that Members and employees of Congress have a duty arising from ``a relationship of trust and confidence'' with the Congress, the government, and, most important, with the American people. Establishing such a duty removes any doubt as to whether insider trading prohibitions apply to Congress. It is also important that the bill language makes clear that in offering this new language, it does not in any way prevent enforcement of the anti- insider trading provisions contained in current law. Again, I am confident that, under current law, Members of Congress and our staffs are prohibited from insider trading. This bill will ensure that the current prohibition is unambiguous and thereby strengthened. The second major provision of the legislation instructs the ethics committees of both Chambers to issue clear guidance to Members and staffs on the prohibition on profiting from inside information. This guidance will clarify that existing rules in both Chambers relative to gifts and conflicts of interest also prohibit the use of nonpublic information gained in the conduct of official duties for private profit. Finally, one other provision I will briefly mention, which is unrelated to insider trading but nonetheless an important step forward in terms of gaining the confidence of our constituents. As one of the originators of the Lobbying Disclosure Act of 1995, I am well aware of the value of transparency in government. The bill before us improves congressional transparency by requiring that personal financial disclosure filings required of Members and certain staff are made available electronically to the public. I commend Senators Begich and Tester for offering a measure that improves that transparent governance. Mr. President, it is important we pass this legislation, that we clarify and strengthen our rules and our laws and end any uncertainty about insider trading by Members of Congress. I hope we can promptly pass this legislation. Again, I commend our chairman and ranking member and all the members of our committee for the work they have put into this bill. I yield the floor.

Mr. LEVIN

Mr. LEVIN. Mr. President, the State of my birth, the State I am honored to represent in the Senate, the great State of Michigan celebrates its 175th birthday today. This landmark occasion is cause to reflect on Michigan's contributions to the greatness of our nation. Michigan has never failed to excite imaginations. The great Civil War historian Bruce Catton, a Michigan native, once wrote that Michigan has always been less about the present than about our voyage to the future, ``to the fantastic reality that must lie beyond the mists.'' From the first European explorers who yearned to learn what they would find on the far lakeshore or around the next river bend, to the scientists and engineers who today are charting the technologies that will define our world for decades to come, Michigan has always helped to answer America's burning question: What comes next? To a large degree, that voyage of discovery has always been about the growth of America's economy and the prosperity of her people. The lumber that built great cities in New York and Chicago came from our forests. The ores that fed the Industrial Revolution came from our Copper Country and Iron Mountains. The cars that put the world on wheels, and helped build America's middle class, came from our factories--as did the bombers and tanks that helped win World War II. And today, the exploration of new technologies in energy and transportation is helping to shape America's economy so that we can prosper in an extraordinarily competitive global marketplace. Our State's identity is inextricably linked to the jewels that surround us: the Great Lakes. Their waters provide the drinking water that sustains us. They drive our economy. They help move goods to and from the far corners of the globe. They bring visitors to our shores. And they are a treasure trove of memories--of families sharing a picnic on the beach, of a kayaker's solo paddle through the mists of early morning, of a youngster's first successful cast of a fishing line or of a sunset walk along the water. We are custodians of the largest store of fresh water on the globe, and throughout our history, Michiganians have sought to exercise that responsibility with gratitude and care. Michiganians have left an indelible mark on history, a mark that reaches far beyond our borders. The cry ``Remember the Raisin!'' rallied American troops to win the War of 1812, and Custer's shout, ``Come on, you Wolverines!'' helped turn the tide at Gettysburg. From W.K. Kellogg's cereal to Thomas Edison's light bulb to Henry Ford's assembly line, Michigan innovators have shaped the world around us. Michiganians helped to run the Underground Railroad and to lead the fight for civil rights. A Michigan woman, Sojourner Truth, changed the world by asking, ``Ain't I a woman?'' And a Michigan man in the White House, Gerald Ford, helped heal the wounds of division in the dark days of Watergate. Michigan has given the world remarkable artists, from the poems of Philip Levine to the sounds of Motown. Michigan has given the world Magic Johnson's smile, Joe Louis's power and Derek Jeter's leadership. Michiganians look back with pride on these 175 years. And we look forward with hope and anticipation to that always-approaching future that Bruce Catton described, to the fantastic reality that awaits our State in the years ahead. I hope my colleagues will join me in celebrating the 175th anniversary of Michigan statehood and the greatness ahead for our State. I yield the floor.

Mr. LEVIN

Mr. LEVIN. Mr. President, the coming year is certain to be focused on two problems: the need to restore prosperity for American working families, and the need to reduce our budget deficit. Our challenge is to accomplish these goals together, and not to pursue one at the expense of the other. As I have said repeatedly to this Senate, I believe the only way we can successfully achieve both goals is to pursue deficit reduction strategies that do not rely solely on slashing federal spending and attacking programs that help build opportunity for the middle class. We must recognize that revenue, as well as spending cuts, must be part of our strategy, and we must ensure that the sacrifices that surely will be needed to reduce the deficit fall not just on middle-class Americans, but are spread equitably, and ask for contributions from those who have benefitted so greatly from policies enacted in the past. Today I introduce the Closing the Derivatives Blended Rate Loophole Act. This bill meets the twin tests of helping to reduce the deficit while promoting the interests of American families. It would put an end to a tax loophole that epitomizes how our tax code too often favors short-term speculation over investment in economic growth and job creation. This loophole showers benefits on short-term traders of certain financial instruments, but does nothing to promote economic growth and raises the tax burden on American families. What is the derivatives blended rate? It's an example of how the complexities of the tax code can grant breaks for the few at the expense of the many. Here is how it works. Generally speaking, taxpayers are allowed to claim the lower long- term capital gains tax rate on earnings only if those earnings come from the sale of assets that they have held for more than a year. The reason is simple: we tax longterm capital gains at a lower rate because we want to encourage the long-term investment that helps our economy grow. But under Section 1256 of the Internal Revenue Code, traders in certain derivatives contracts have managed to win themselves an exemption from the distinction between short-term and long-term capital gains. Under this section, traders in those derivatives can claim 60 percent of their income as long-term capital gains, no matter how briefly they hold the asset. This ``blended'' tax rate applies if the trader holds the asset for 11 months or 11 hours. The details may be complex, but the bottom line is that this treatment bestows a substantial tax break on those who typically hold the covered derivatives for only a brief period. It encourages and rewards short-term speculation in complicated financial products and does little, if anything, to help our economy grow and create jobs. In fact, the increasing focus of our financial markets on short-term profit through trades that last just minutes or seconds threatens real damage to our economy. This speculation is hardly the sort of activity that our tax code should subsidize. We also lose significant tax revenue by allowing this tax break--a revenue loss that means we must either ask for more from American families, or add to the deficit. What's more, this misguided policy contributes to the basic unfairness that characterizes too much of our tax code, by providing an unusual and unnecessary tax break to a small group of financial speculators. Instead of encouraging growth and investment, these loopholes contribute to what Warren Buffett has called the ``coddling'' of the wealthy and well-placed. Closing this loophole is a common-sense, mainstream idea. I ask my colleagues to heed the advice of the tax experts at the American Bar Association's Tax Section, who wrote in December to the tax-writing committees of the House and Senate: We are aware of no policy reason to provide preferential treatment for these gains and losses. Lower capital gains rates are intended to encourage long-term investments in capital assets such as stock. Whatever the merits of extending preferential rates to derivative financial instruments generally, we do not believe that there is a policy basis for providing those preferential rates to taxpayers who have not made such long-term investments. Ending this loophole by passage of the Closing the Derivatives Blended Rate Loophole Act would not solve all the problems in our tax code, nor end our deficit dilemma. But it would be another important step toward a saner, fairer tax code. It would demonstrate that Congress shares the concerns of so many Americans that the tax system is too often stacked against the interests of working families and in favor of the privileged few. It would end a policy that encourages short-term speculation over long-term investment in growth. It would provide a down-payment on the revenue we need to restore if we are to engage in serious deficit reduction and avoid slashing critical programs. I urge my colleagues to join me in the effort to pass it.

Mr. LEVIN

Mr. LEVIN. Mr. President, the coming year is certain to be focused on two problems: the need to restore prosperity for American working families, and the need to reduce our budget deficit. Our challenge is to accomplish these goals together, and not to pursue one at the expense of the other. As I have said repeatedly to this Senate, I believe the only way we can successfully achieve both goals is to pursue deficit reduction strategies that do not rely solely on slashing federal spending and attacking programs that help build opportunity for the middle class. We must recognize that revenue, as well as spending cuts, must be part of our strategy, and we must ensure that the sacrifices that surely will be needed to reduce the deficit fall not just on middle-class Americans, but are spread equitably, and ask for contributions from those who have benefitted so greatly from policies enacted in the past. Today I introduce the Closing the Derivatives Blended Rate Loophole Act. This bill meets the twin tests of helping to reduce the deficit while promoting the interests of American families. It would put an end to a tax loophole that epitomizes how our tax code too often favors short-term speculation over investment in economic growth and job creation. This loophole showers benefits on short-term traders of certain financial instruments, but does nothing to promote economic growth and raises the tax burden on American families. What is the derivatives blended rate? It's an example of how the complexities of the tax code can grant breaks for the few at the expense of the many. Here is how it works. Generally speaking, taxpayers are allowed to claim the lower long- term capital gains tax rate on earnings only if those earnings come from the sale of assets that they have held for more than a year. The reason is simple: we tax longterm capital gains at a lower rate because we want to encourage the long-term investment that helps our economy grow. But under Section 1256 of the Internal Revenue Code, traders in certain derivatives contracts have managed to win themselves an exemption from the distinction between short-term and long-term capital gains. Under this section, traders in those derivatives can claim 60 percent of their income as long-term capital gains, no matter how briefly they hold the asset. This ``blended'' tax rate applies if the trader holds the asset for 11 months or 11 hours. The details may be complex, but the bottom line is that this treatment bestows a substantial tax break on those who typically hold the covered derivatives for only a brief period. It encourages and rewards short-term speculation in complicated financial products and does little, if anything, to help our economy grow and create jobs. In fact, the increasing focus of our financial markets on short-term profit through trades that last just minutes or seconds threatens real damage to our economy. This speculation is hardly the sort of activity that our tax code should subsidize. We also lose significant tax revenue by allowing this tax break--a revenue loss that means we must either ask for more from American families, or add to the deficit. What's more, this misguided policy contributes to the basic unfairness that characterizes too much of our tax code, by providing an unusual and unnecessary tax break to a small group of financial speculators. Instead of encouraging growth and investment, these loopholes contribute to what Warren Buffett has called the ``coddling'' of the wealthy and well-placed. Closing this loophole is a common-sense, mainstream idea. I ask my colleagues to heed the advice of the tax experts at the American Bar Association's Tax Section, who wrote in December to the tax-writing committees of the House and Senate: We are aware of no policy reason to provide preferential treatment for these gains and losses. Lower capital gains rates are intended to encourage long-term investments in capital assets such as stock. Whatever the merits of extending preferential rates to derivative financial instruments generally, we do not believe that there is a policy basis for providing those preferential rates to taxpayers who have not made such long-term investments. Ending this loophole by passage of the Closing the Derivatives Blended Rate Loophole Act would not solve all the problems in our tax code, nor end our deficit dilemma. But it would be another important step toward a saner, fairer tax code. It would demonstrate that Congress shares the concerns of so many Americans that the tax system is too often stacked against the interests of working families and in favor of the privileged few. It would end a policy that encourages short-term speculation over long-term investment in growth. It would provide a down-payment on the revenue we need to restore if we are to engage in serious deficit reduction and avoid slashing critical programs. I urge my colleagues to join me in the effort to pass it.

Mr. LEVIN

Mr. LEVIN. Mr. President, I would like to announce for the information of the Senate and the public that the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs has scheduled a hearing entitled, ``Taxation of Mutual Fund Commodity Investments.'' The Subcommittee hearing will examine the issuance of over 70 private letter rulings by the Internal Revenue Service allowing mutual funds to make unlimited indirect investments in commodities through controlled foreign subsidiaries or commodity-linked notes, despite longstanding statutory restrictions on mutual fund investments in commodities. Hearing witnesses will include senior officials from the Department of the Treasury and the Internal Revenue Service. The Subcommittee hearing has been scheduled for Thursday, January 26, 2012, at 10:00 a.m., in room 342 of the Dirksen Senate Office Building. For further information, please contact Elise Bean of the Permanent Subcommittee on Investigations at (202) 224-9505.

Mr. LEVIN

Mr. LEVIN. Mr. President, once again, the Senate finds itself in an untenable situation. We can approve the legislation before us, which is inadequate to the needs of our Nation, or we can reject this legislation and make matters even worse. I will vote to approve this legislation, but I will do so knowing that we have missed yet another opportunity to do the right thing for the people we represent. Instead, we are doing some damage to important goals, in order to avoid doing even greater damage. We are in this position because our colleagues across the aisle, and their Republican allies in the House of Representatives, refuse to make even the most basic of concessions to reality. The truth is, more than 3 years after the beginning of a recession, too many Americans are still desperately in need of assistance. Those who are working need us to help support economic growth so their jobs are more secure and their incomes can grow. Millions are still without work not because they don't want it, but because the number of people seeking work is vastly greater than the number of available jobs and they need us to help support economic growth so they can find work to support themselves and their families. Yet what our colleagues have insisted upon is to present us with two choices. The legislation before us would continue middle-class tax relief, the only economic boosts Republicans have allowed us to even consider, but pay for it in a deeply misguided manner because Republicans refused to consider more equitable ways to offset its costs. It would extend unemployment benefits, but in a way that leaves thousands of Michigan families facing a sudden loss of their benefits, because it effectively eliminates 20 weeks of the current 99-week maximum benefit for Michigan and other States where, though unemployment remains high, it is beginning to fall. And these extensions would last for just 2 months. As bad as that is, the alternative rejecting this legislation is even worse. Without passage, economists tell us that the loss of middle- class tax relief could put our already slow economic recovery into even greater doubt. Without passage, even more families, in Michigan and elsewhere, will lose the economic lifeline of unemployment benefits. More than 26,000 Michigan families will lose their benefits under the inadequate provisions of this bill, but that number would grow to more than 100,000 by Spring without passage of this legislation. Michigan residents would lose eligibility for 73 weeks of emergency unemployment compensation if we do not act today, instead of the 20 weeks we would lose if we pass this bill. Mr. President, my State would suffer in other ways if this bill does not pass. It extends the so-called doc fix that is important to health care providers in Michigan and elsewhere. And this bill continues an adjustment to the Medicare Program that provides crucial aid to nearly half of all Michigan hospitals. This so-called section 508 fix is technical and complicated, but extending it is vitally important to Michigan hospitals. Without it, their ability to continue providing care to Michigan's people would be hampered. The method Republicans have demanded to pay for this legislation is also badly misguided. It uses fees paid to Fannie Mae and Freddie Mac to offset its costs. Those fees should be going to repair what we all, on both sides of the aisle, acknowledge is a massive financial problem at those enterprises. If we increase these fees, the money should be used to help stabilize the value of Americans' homes by reforming these enterprises. The very fact that we have had to find ways to pay for middle-class tax relief is a remarkable acknowledgement by Republicans, given that it has been an article of faith among many of our Republican colleagues that tax cuts pay for themselves. Repeatedly, for decades, they have pushed for massive tax cuts for the wealthy and sold them with the promise that they will pay for themselves. Now, when we face the expiration of tax relief that overwhelmingly benefits middle-class families, they tell us that this tax cut must be paid for. Hopefully this inconsistency will not escape the notice of the American people. It didn't have to be this way. Republicans had the chance to accept a fair alternative one that extended the payroll tax cut, unemployment insurance and other important tax and Medicare provisions, and that did so in a way that provides what our constituents demand from us: a balanced approach that asks all Americans to share in the sacrifices necessary to address our challenges. That approach would ask Americans making more than $1 million a year to pay slightly more in taxes. A solid majority of Americans see this as common sense: The wealthiest among us have done extraordinarily well in recent decades even as middle-class incomes have stagnated, and asking those fortunate few to contribute along with middle-class families is only fair. Yet Republicans again rejected that equitable option out of hand. We will continue to press for it in the challenging year that awaits us. Over the last few months, Republicans have been willing to risk the full faith and credit of the United States, the continued functioning of the government, tax relief for middle-income Americans, adequate funding for our military, health care for our seniors, and an economic lifeline for the unemployed, all in an effort to protect the interests of the wealthiest, most fortunate Americans. None of these threats would loom so large if Republicans would simply acknowledge what roughly two-thirds of our constituents now acknowledge: that the solutions to our fiscal problems must include a balanced approach that asks the wealthiest Americans to sacrifice along with working families. Today, they have demonstrated that they have not yet received that message, and they have once again forced us to choose between the unacceptable and the catastrophic.

Mr. LEVIN

Mr. LEVIN. Mr. President, I wish to comment on two specific issues regarding the conference report to H.R. 2055, the omnibus spending measure before us. First, I am pleased that the conference report includes $22 million for the Facility for Rare Isotope Beams, or FRIB, at Michigan State University. While this is less than the amount in the administration's budget request, it is a clear endorsement by Congress to move forward with this facility. FRIB is critical to maintaining America's worldwide preeminence in nuclear physics and a major component of Michigan's economic future. MSU has solid and well-known expertise in the field of rare isotopes and nuclear physics. It has the largest nuclear physics faculty in the Nation and a nuclear physics graduate program ranked No. 1 in the country. Those were some of the reasons it was selected by the Department of Energy for design, construction, and operation of FRIB after an extensive competition over a multiyear period. I am encouraged that particularly in these difficult budget times the Congress has endorsed the importance of this facility. Second, I would point to another critical component of my State's economic future, the Great Lakes. I am disappointed that Great Lakes Restoration Initiative funding has been reduced from the originally planned funding levels. I am relieved, however, that $300 million is included in the conference report, $50 million more than the amount in the House bill. The conference report includes two important provisions related to Asian carp and other invasive species that present significant threats to the Great Lakes. The conference report includes a provision I have requested authorizing the Army Corps of Engineers to implement emergency measures to prevent Asian carp and other invasive species from entering the Great Lakes. Also welcome is an increase of about $5 million in funding to operate electric dispersal barriers designed to prevent these fish from entering the Great Lakes, bringing funding for the barriers to $23.6 million. The conference report also includes about $3 million to continue study of possible separation of the Great Lakes from the Mississippi River watershed, which would significantly reduce risk to the Great Lakes from Asian carp. I will continue to work with colleagues to urge the Army Corps to accelerate this study. I am disappointed that projects enabling Great Lakes harbor dredging continue to receive reduced funding. The conference report acknowledges that funding levels are inadequate to meet existing needs. I welcome the conferees' decision to include an additional $173 million in funding for navigation projects nationwide, and I will work to ensure that the Great Lakes, which face a substantial backlog of dredging and other operations and maintenance needs, receive a share of this funding consistent with the high level of need.

Mr. LEVIN

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

Mr. LEVIN. Mr. President, I yield myself 20 minutes.

Mr. LEVIN. Mr. President, on behalf of the Senate Armed Services Committee, I am pleased to bring to the Senate the conference report on H.R. 1540, the National Defense Authorization Act for fiscal year 2012. This conference report, which was signed by all 26 Senate conferees, contains many provisions that are of critical importance to our troops. This will be the 50th consecutive year in which a National Defense Authorization Act has been enacted into law. I thank all of the members and staff of the Senate Armed Services Committee--and especially our subcommittee chairs and our ranking members--for the hard work they have done to get us to this stage. Every year we take on tough issues and we work through them on a bipartisan basis, consistent with the traditions of our committee. This year was a particularly difficult one because of the severely condensed timeline for floor consideration and conference on the bill. I particularly thank my friend Senator McCain, our ranking minority member, for his strong support throughout the process. I know both of us thank the chairman and ranking member of the House Armed Services Committee, Buck McKeon and Adam Smith, for their commitment to this bill and to the men and women of our Armed Forces. The conference report we bring to the floor today authorizes $662 billion for national defense programs. While it authorizes $27 billion less than the President's budget request and $43 billion less than the amount appropriated for fiscal year 2011, I am confident this conference report, nonetheless, provides adequate support for the men and women of the Armed Forces and their families and provides them with the means they need to accomplish their missions. This conference report contains many important provisions that will improve the quality of life of our men and women in uniform. It will provide needed support and assistance to our troops on the battlefield. It will make the investments we need to meet the challenges of the 21st century, and it will provide for needed reforms in the management of the Department of Defense. I ask unanimous consent that a list of some of the more significant provisions be printed in the Record at the close of my remarks.

Mr. LEVIN. Probably the most discussed provision in the conference report is the provision relative to military detention for foreign al- Qaida terrorists. This provision was written to be doubly sure there is no interference with civilian interrogations and other law enforcement activities and to ensure that the President has the flexibility he needs to use the most appropriate tools in each case. The bill as passed in the Senate addressed this issue by including language that: No. 1, left it to the President to adopt procedures to determine who is a foreign al-Qaida terrorist and therefore subject to presumed military detention; No. 2, required that those procedures not interfere with ongoing intelligence, surveillance, or interrogations by civilian law enforcement; No. 3, left it to the executive branch to determine whether a military detainee who will be tried is tried by a civilian court or a military court; and No. 4, gave the executive branch broad waiver authority. The conference report retains that language and adds additional assurances that there will be no interference with civilian interrogations or other law enforcement activities. In particular, the conferees added language that says the following: Nothing in this section shall be construed to affect the existing criminal enforcement and national security authorities of the Federal Bureau of Investigation or any other domestic law enforcement agency with respect to a covered person, regardless of whether such covered person is held in military custody. It also modifies the waiver language to give the President, rather than the Secretary of Defense, the authority to waive the requirements of the provision. Under the provision in the conference report, law enforcement agencies are not restrained in apprehending suspects or conducting any investigations or interrogations. If a suspect is apprehended and is in law enforcement custody, the suspect can be investigated and interrogated in accordance with existing procedures. If and when a determination is made that a suspect is a foreign al-Qaida terrorist, that person would be slated for transfer to military custody under rules written by the executive branch. Again, however, any ongoing interrogations are not to be interrupted, and the President also has a waiver authority. If the suspect is transferred to military custody, all existing law enforcement and national security tools remain available to the FBI and other law enforcement agencies, and even if the suspect is held in military custody, it would be up to the Attorney General, after consulting with the Secretary of Defense and the Director of National Intelligence, to determine whether the suspect will be tried in Federal court or before a military commission. The bill provides the Attorney General with broad discretion to ensure that whatever consultation is conducted does not impede operational judgments that may need to be made to pursue investigative leads, effect arrests or file charges. The language in the Senate bill and in the conference report is intended to preserve the operational flexibility of law enforcement and national security professionals in the executive branch. Nothing in the language limits the President as to when he can waive the provision or for whom he can waive it. For example, he is not required to wait for a coverage determination to be made before deciding to waive the requirements of the provision. Similarly, he is not precluded from waiving the provision with regard to more than one individual at a time--for example, with regard to a group of conspirators or potential codefendants. In short, the waiver language in the conference report is broad enough to reflect circumstances in which it is in the national security interests of the United States for a President to waive the requirements of the provision with respect to a category of covered persons, if he so determines, in order to preserve the flexibility of counterterrorism professionals and operators to take expeditious action. With the exception of those assurances, the detainee provisions in the conference report are largely unchanged from the provisions in the bill that was approved by the Senate on a 93-to-7 vote just 2 weeks ago. Those who say we have written into law a new authority to detain American citizens until the end of hostilities are wrong. Neither the Senate bill nor the conference report establishes new authority to detain American citizens--or anybody else. The issue of indefinite detention arises from the capture of an enemy combatant at war. According to the law of war, an enemy combatant may be held until the end of hostilities. Can an American citizen be held as an enemy combatant? According to the law of war, an enemy combatant may be held until the end of hostilities. But, again, can an American citizen be held as an enemy combatant? I believe that if an American citizen joins a foreign army or a hostile force such as al-Qaida that has declared war and organized a war against us and attacks us, that person can be captured and detained as an enemy combatant under the law of war. In 2004, the Supreme Court held in the Hamdi case that ``there is no bar to this Nation's holding one of its own citizens as an enemy combatant.'' The Court cited with approval its holding in the Quirin case, in which an earlier court held that ``citizens who associate themselves with the military arm of the enemy government, and with its aid, guidance and direction enter this country bent on hostile acts, are enemy belligerents within the meaning of . . . the law of war.'' But despite that view of mine, which I clearly expressed on the Senate floor a couple weeks ago, neither the Senate bill nor the conference report takes a position on this issue. Both the Senate bill and the conference report include the language of the Feinstein amendment, which we drafted together and passed 99 to 1. That amendment leaves this issue to the executive branch and the courts by providing the following: Nothing in this section shall be construed to affect existing law or authorities relating to the detention of United States citizens, lawful resident aliens of the United States, or any other persons who are captured or arrested in the United States. The more difficult issue for me--and I believe it goes to the heart of the concern of the detention policy--is the kind of war we are in with al-Qaida, and that issue is when does the detention end? In other words, when are the hostilities over? In this kind of nontraditional war, we are not likely to sign a peace treaty or receive a formal surrender or even reach an agreement on a cease-fire. Under these circumstances, it is appropriate for us to provide greater procedural rights to enemy detainees than we might in a more traditional war. We have done so in this conference report. The conference report, for instance, requires periodic reviews of detainee cases in accordance with an executive order issued earlier this year to determine whether detainees pose a continuing threat or safely can be released. Under the conference report, enemy combatants who will be held in long-term military detention are told, for the first time, they will get a military judge and a military lawyer for their status determination. The conference report includes many other important provisions. It includes new sanctions against the financial sector of Iran, including the Central Bank of Iran. These sanctions would, among other actions, require foreign financial institutions to choose between maintaining ties with the U.S. financial system or doing business with the Central Bank of Iran. It includes provisions addressing the problem of counterfeit parts that can undermine the performance of military weapons systems and endanger our men and women in uniform. This is one of the most important additional provisions we have in our bill; that is, the provisions relative to these counterfeit parts that are flooding our defense system with electronic parts that are counterfeited and come mainly from China. We were able to identify approximately 1,800 cases of suspect counterfeit electronic parts, covering more than 1 million individual parts, with most of them, again, coming from China. This conference report includes comprehensive reforms to keep counterfeit electronic parts out of the defense supply chain and provides proper accountability when suspect parts make it through that chain. In particular, the conference report relative to this subject does the following: It clarifies acquisition rules to ensure that the cost of replacement and rework that is required by the use of suspect counterfeit parts is paid by the contractor, not by the taxpayer. It requires the Department of Defense and Department of Defense suppliers to purchase electronic parts from manufacturers and their authorized dealers or from trusted, certified suppliers. It requires Department of Defense officials and Department of Defense contractors that become aware of counterfeit parts in the supply chain to provide written notification to the government. It requires the Department of Defense and its largest contractors to establish systems and procedures to detect and avoid counterfeit parts. It requires the Secretary of Homeland Security to consult with the Secretary of Defense on the sources of counterfeit electronic parts in the military supply chain and establish a risk-based program of enhanced inspection of imported electronic parts. It authorizes Customs to share information from electronic parts inspected at the border with manufacturers to help determine whether the parts are counterfeit. It strengthens criminal penalties for counterfeiting military goods or services. We are very grateful for the support of Members of this body for that provision. Relative to the strengthening of criminal penalties, I wish to add our thanks to Senator Whitehouse for his work on this subject, for his provisions relative to additional criminal penalties for counterfeiting military goods that are a part of this bill, and they are a very important part. The conference report requires sound planning--this is another provision of this bill--and justification before we spend more money on troop realignment from Okinawa to Guam and on tour normalization in Korea. Those provisions follow detailed oversight that Senators Webb, McCain, and I have conducted. On some other provisions: The conference report requires that the next lot of F-35 aircraft--lot 6--and all subsequent aircraft, be purchased under fixed-price contracts, with the contractor assuming full responsibility for any costs above the target cost specified in the contract. Our conference report fences 75 percent of the money available for the Medium Extended Air Defense System--MEADS--until the Secretary of Defense submits a detailed plan to use those funds to close out the program or pay contract termination costs. The conference report includes Senator Landrieu's bill to extend the Small Business Innovative Research--SBIR--Program for an additional 6 years. It has been about 6 years since we reauthorized this vitally important program, which provides a huge benefit to our small businesses so they can effectively participate in research programs that are funded by the Federal Government. In the defense arena, SBIR has successfully invested in innovative research and technologies that have contributed significantly to the expansion of the defense industrial base and the development of new military capabilities. As to Pakistan, the conference report limits to 40 percent the amount of the Pakistan Counterinsurgency Capability Fund that can be obligated until the Secretary of Defense provides Congress with a strategy on the use of the fund and on enhancing Pakistan's efforts to counter the threat of improvised explosive devices, those IEDs which kill so many of our troops and so many civilians. Finally, the Department of Defense has informed us it does not need an exemption from section 526 of the Energy Independence and Security Act of 2007 because that section does not apply to purchases at market prices from generally available fuel supplies and does not preclude the Department from purchasing any fuel it needs or expects to purchase in the foreseeable future. We are in the final stages of withdrawing our combat troops from Iraq, but we continue to have almost 100,000 U.S. soldiers, sailors, airmen, and marines on the ground in Afghanistan. While there are issues on which we may disagree, we all know we must provide our troops the support they need as long as they remain in harm's way. The enactment of this conference report will improve the quality of life for our men and women in uniform. It will give them the tools they need to remain the most effective fighting force in the world. Most important of all, it will send an important message that we as a nation stand behind our troops and we deeply appreciate their service. In conclusion, I would, once again, thank Senator McCain, all our Members, and our majority and minority staff, led by Rick DeBobes and Dave Morriss, for their hard work on this bill. We could not have done this without them. I ask unanimous consent that a full list of our majority and minority staff, who gave so much of themselves and their families, be printed in the Record.

Mr. LEVIN. I yield the floor. Exhibit 1 Selected Highlights of the National Defense Authorization Act for Fiscal Year 2012 --Authorizes a 1.6 percent across-the-board pay raise for all uniformed military personnel and extend over 30 types of bonuses and special pays aimed at encouraging enlistment, reenlistment, and continued service by active-duty and reserve military personnel; --Extends authorities needed to fairly compensate civilian employees and highly qualified experts who are assigned to work overseas in support of contingency operations; --Clarifies provisions of the Uniform Code of Military Justice relating to the offenses of rape, sexual assault, and other sexual misconduct to address constitutional deficiencies in the existing law; --Extends the authority of U.S. Special Operations Forces to provide support to regular forces, irregular forces, and individuals aiding U.S. special operations to combat terrorism; --Freezes the Department's spending on contract services at fiscal year 2010 levels, to ensure that cost reductions and savings are spread across all components of the DOD workforce; --Authorizes the Department to void a contract in Afghanistan, if the contractor or its employees are determined to be actively working with the enemy to oppose U.S. forces in that country; --Implements cost-saving programs to address rapidly escalating costs for the operation and support of weapon systems, including costs incurred as a result of corrosion; and --Enhances the role of the National Guard by including the Chief of the National Guard Bureau as a member of the Joint Chiefs of Staff.

Mr. LEVIN. I suggest the absence of a quorum.

Mr. LEVIN. Madam President, I spoke at some length before, but I want to repeat one sentiment in the statement that has to do with Senator McCain and his staff. The way in which he and our staff work together is in the finest tradition of this body. Our committee has had that reputation. It is a well-earned, well-deserved reputation that we are able to work on a bipartisan basis. Senator McCain continues in a great tradition on the Republican side, and I would hope I strive at least to do the same on our side. We have had some great leaders of our committee over the decades, and Senator McCain is one of those leaders in that tradition, and I want to say what a great pleasure it is to work with him. I know our staffs work beautifully together, and we are grateful for that. The Senator was right in pointing out who we are doing this for-- it is the men and women in uniform--but we couldn't do that without our great staffs, and I know he joins me, and has already in his statement, in a tribute to our staffs.

Mr. LEVIN. I think one on our side. While we are talking about rays of lightness, we thank Senator Hagan, our Presiding Officer, who is a member of our committee. She provides a ray of light--one of the many rays of light on our committee. I see her presiding and smiling over this effort, and I wanted to acknowledge that she is an important part of it and to recognize her contribution as well.

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

Mr. LEVIN. Mr. President, section 1022(d) of the conference report states that ``nothing in this section shall be construed to affect the existing criminal enforcement and national security authorities of the Federal Bureau of Investigation or any other domestic law enforcement agency with regard to a covered person, regardless whether such covered person is held in military custody.'' Would the Senator agree with me that this language is intended to ensure that the provision does not interfere with ongoing civilian interrogations and other law enforcement activities and that the President has the flexibility he needs to decide on the most appropriate law enforcement and intelligence tools for each individual case?

Mr. LEVIN. Section 1022 applies only to a person who is ``a member of, or part of, al-Qaeda or an associated force that acts in coordination with or pursuant to the direction of al-Qaeda.'' The statement of managers states that this language intentionally excluded the Taliban. Would the Senator agree with me that the requirements of section 1022--including the transfer restrictions applicable under that provision--do not apply to individuals detained by our forces in Afghanistan?

Mr. LEVIN. Madam President, I had not seen those remarks of Mr. Putin, but referring to his last comment, read by Senator McCain, I guess people would go nuts in the setting Senator McCain found himself in the Vietnam war. He probably is perhaps, only in that line, accurate that most people, indeed, could not have survived that experience. I know Senator McCain does not raise this matter, but those of us who work with him appreciate all he has done for this country and for this body. I wish we had a chance to straighten out Mr. Putin about Senator McCain. I don't think we will have that opportunity, but maybe his own people will do so in a free election someday. I suggest the absence of a quorum.

Mr. LEVIN. Mr. President, I now ask unanimous consent that the following Senators be recognized for up to 4 minutes each to address the depot provisions in the bill, and at the end of their remarks Senator McCain and I be recognized to address the same issue. This was the order we were given. They may want to change it: Senator Sessions, Senator Chambliss, Senator Inhofe, Senator Shaheen, Senator Ayotte, and Senator Hagan.

Mr. LEVIN. Mr. President, I appreciate and I understand the Senators' concerns about this issue as they have been expressed here this afternoon. I also very much appreciate their understanding relative to the extremely short period for conference this year where we worked through hundreds of provisions with our House colleagues in about a week, a process that usually takes a month or more. While I am proud of what we were able to accomplish in this bill as a whole, it was probably likely that some language would need more consideration because of the time constraints we were operating under. Before I continue, I want to state my appreciation to the Members who spoke here this afternoon and members of the Armed Services Committee. They make major contributions to this committee. I listened carefully to what our colleagues have had to say about the depot maintenance issue. I believe their concerns are substantive and merit careful consideration from the Armed Services Committee. This is an issue that was brought to our conference in the House bill. The depot maintenance provisions that were approved by the House last May arose out of a congressionally mandated independent review of the statutes, regulations, and policies guiding depot maintenance performance and reporting. The House conferees then proposed modifications to their own provisions based on the results of a series of discussions with stakeholders held throughout the summer at the National Defense University. We were told this process was comprehensive, that all stakeholders were invited, and that the resulting recommendations were widely accepted by all interested parties. In particular, we understood the Department of Defense, private industry, and the House Depot Caucus had reached consensus on the revised House language. While those statements were made in good faith, it turns out they were not accurate. A number of key players, including stakeholders in government, private industry, and labor, did not participate in the process at National Defense University and were apparently unaware of the results. Senators with a strong interest in the issue were not aware of the modified House language that was presented in our conference until it was too late to consider changes. I am aware that the depot maintenance issue has long been a sensitive one to our Nation and to many of our Members, and that the precise words in these provisions matter. The existing statutes, regulations, and practices have served to sustain both core logistics capabilities and the defense industrial base over the last decade, so any changes need to be fully understood. I understand there are a number of unanswered questions about the provisions in the conference report that could have significant effects. For example, first, the new language substitutes the term ``core depot level maintenance'' for the existing term ``core logistics.'' Does this change impact National Guard readiness, sustainment maintenance sites, and other DOD facilities that are not depots? Does the change impact requirements for supply chain management and other logistics functions that are not performed by depots? Second, the new language changes the wording regarding modifications in the definition of core depot level maintenance. Does this change impact planned public-private competitions for modifications and upgrades programs? Does the change preserve the distinction between modifications and upgrades on the one hand and acquisition programs on the other? Is this an expansion of core functions that will be required to be performed in the public sector with an adverse impact on the defense industrial base? Third, the new language changes the wording of the exclusion for commercial items. Is this a change to the existing exclusion or merely a recodification? Will it impact maintenance requirements for commercial derivative aircraft and other major defense systems that are based on commercial technology? Fourth, the new language includes a waiver rather than an exemption from core requirements for nuclear aircraft carriers. Will the new language result in any change in requirements for the maintenance and modifications of nuclear aircraft carriers? Fifth, the new language includes the authority to waive core requirements for any weapons system that is ``not an enduring element of the national defense strategy,'' rather than an exclusion for a workload that is ``no longer required for national defense reasons.'' Does this new language mean something different from the existing language? If so, will it change the balance of work between the depots and the private sector? I am committed to have the Armed Services Committee revisit the modifications to the depot maintenance laws included in this conference report and to give full consideration to the concerns our Members have raised. Over the coming months we will engage with interested Members and their staffs to review the language in detail. Together we will reach out to interested parties through a process that will include a full committee hearing if we determine one is needed. We will then take action to repeal or modify anything that needs to be repealed or modified in these provisions during our consideration of next year's National Defense Authorization Act. Many of my colleagues heard Chairman Buck McKeon make a similar commitment at our final conference meeting. During the next year, while this review process is underway, I join my colleagues in urging the Department of Defense to proceed with caution in implementing this legislation. In particular, I urge the Department to make as little change as possible in the status quo with regard to these functions during the next year. It would be unfortunate if the Department were to change significant functions from one form of performance to another this year only to be required to change the decision again the year later. Our objective has always been and always will be to ensure the Nation's depot maintenance system is structured and supported in a manner that efficiently and effectively provides for the readiness of our Armed Forces and our national security. I know this is a critically important issue. I look forward to working with Senators over the next year to take the steps we have discussed here today. I yield the floor.