Carl Levin

Mr. LEVIN

Mr. LEVIN. Madam President, in the midst of the ongoing upsurge of the violence in Iraq, President Bush has offered two options for the United States. The first option is to stay the course; the second option is to cut and run. That is a false choice between staying the course and cutting and running. It is too typical of the black and white approach that this administration has repeatedly and unwisely taken. For example, saying ``you are either with us or against us'' is a black and white choice--the stark choice the President laid down to allies. Well, it may make you feel good to say that, but it needlessly offends those who are certainly not hostile to the United States but may be unwilling to affirmatively endorse all of our actions. In addition to the President's stark two options--staying the course or cutting and running--there is a third way, and that is to correct the course we are on. The administration has belatedly begun this process, but there is much to be done, and it is much harder and more difficult because of the administration's stubborn insistence that no mistakes were made and its refusal to learn the lessons that need to be learned from those mistakes. For instance, after holding the United Nations at arm's length, the administration is now belatedly working with the U.N., asking them to help identify an entity to whom sovereignty could be restored by June 30--an entity which needs to have the confidence and credibility of the Iraqi people. I hope this will be the start of a true partnership at the U.N. in fostering Iraq's political and economic development. The administration has decided to retain some troops in Iraq that were scheduled to leave, despite the fact that the administration disparaged General Shinseki when he foretold the need for more troops for the stability phase. The administration decided to modify its policy on de-Baathification and reinstate about 11,000 teachers and hundreds of professors and is reportedly looking to reinstate others whose skills and support are needed for Iraq's development. I hope this revision is seen for what it is--acknowledgement that we went too far, acknowledgement that we made a mistake. I hope it will also include the removal of Ahmed Chalabi as the head of the de-Baathification program, as well. He is the wrong person for the job for a lot of reasons. While not reversing the mistaken decision to disband the Iraqi Army, the administration's decision to bring back some military officers who were not high Baathists to help guide the new Iraqi Army and other security forces is a practical first step--very late. We only have a few thousand in the Iraqi Army who are now trained but long overdue. One other mistake was perhaps the biggest mistake of all, in my judgment. Our uniformed military leadership was largely excluded from the planning for the potentially violent aftermath of the fall of Saddam Hussein's regime. The civilians in the Pentagon who were put in charge projected rose-colored scenarios in their planning for the aftermath: Our troops would be greeted with embraces and flowers. It would be a cakewalk. Had our uniformed military leadership been more deeply involved in that planning, it would have been very different, as our military plans for worst case scenarios. The worst case scenario is what turned out to be the case. But uniformed military were all but left out of the planning for the post-Saddam period. General Tommy Franks, the now retired commander of Central Command who planned the other phases of the operation, confirmed that to me and to Senator Warner a few weeks ago. On the matter of planning, I realize the administration is committed to the June 30 date for the restoration of Iraqi sovereignty. But I hope that commitment will not prevent it from planning for other options in the event Mr. Brahimi is not successful in identifying a credible entity to whom sovereignty can be restored by that date. If we have a chance of succeeding and bringing stability and democracy to Iraq, it will mean learning from our mistakes, not denying them and not ignoring them. I yield the floor.

Mr. LEVIN

Mr. LEVIN. Mr. President, the demise of the Soviet Union, in 1991, provided an opportunity for millions of people to chart their own destiny as people free from the yoke of repressive communism. At that time, there was great hope that a free and prosperous Ukraine could become a member of the Euro-Atlantic community that is united by democracy, free markets and the rule of law. In the past 12 years, Ukraine's transition to democracy and capitalism has been a difficult process marked by success and failure. The successes are many: Ukraine has given up nuclear weapons, peacefully changed power from Leonid Kravchuk to Leonid Kuchma, partnered with NATO's Partnership for Peace program, and has stationed roughly 1,600 troops in Iraq--one of whom, Private Ruslan Androshchuk paid the ultimate price for his service. Yet, in spite of these achievements, Ukraine faces a stark choice of leadership as it seeks to shape its second decade of freedom from communism. Those who would seek to forge a new and open Ukrainian identity aligned with the community of democratic nations stand in contrast to those who seek to return the nation to its repressive past by establishing a more authoritarian regime that avoids the needed reforms it must undertake. The choices facing the Ukrainian people are clear, and the upcoming October 2004 presidential election will play a critical role in determining the course that this proud and important nation will take. It is my hope that the presidential election will draw Ukraine closer to the West by cementing a strong and stable democracy. Unfortunately, a number of recent events and actions by the Ukrainian government have provided supporters of a democratic Ukraine with reason for concern. In the lead up to the fall's election, Ukrainian president Leonid Kuchma has pursued constitutional changes that would shift substantial powers from the presidency to the Ukrainian parliament, the Verkhovna Rada, on the eve of the presidential election in which a strong opponent of the President is currently leading in the polls. In response to concerns expressed by many nations, President Kuchma dropped the most egregious provision, which would have replaced the direct election of the president with an election by the Ukrainian parliament. Deliberations on constitutional reforms, especially reforms that would alter the political landscape and structure of the nation, should be discussed in a full and open parliamentary debate with the broad participation of the Ukrainian population. Yet, the proponents of this measure primarily relied on backroom maneuvering to push through their changes. Although President Kuchma argued that he was not advocating these changes to strengthen his position, since he has said he will not run for reelection, many concerns existed that he was doing so to fortify the position of his allies in the legislature. In a sign that true democratic aspirations in Ukraine are still alive, those changes to the Ukrainian constitution failed by six votes earlier this month. I am hopeful that President Kuchma will permit the election to go forward without further attempts to undermine Ukraine's constitution. The constitutional changes advocated by President Kuchma are just one facet of an increasingly authoritarian trend in Ukraine. Media repression that threatens the safety of Ukrainian journalists also limits the ability of citizens to obtain fair and accurate reporting prior to the October elections. A free press and open media are essential foundations for any open, democratic society. Yet the ability of the media to operate freely has been threatened in the past several years. The commercial FM Dovira network removed Radio Free Europe/Radio Liberty, RFE/RL, Ukrainian-language programs from its schedule in February of this year. This move came after the takeover of the network by a political supporter of President Kuchma. The network had previously served as the RFE/RL major affiliate, reaching roughly 60 percent of Ukraine's population. Apparently RFE/RL programming did not ``fit the envisioned new format of the radio network,'' despite the fact that these programs were the most popular shows on the station. When Radio Kontynent, an FM commercial station in Kyiv, started airing RFE/RL programming a couple of weeks later, the station was raided and closed by Ukrainian authorities. The station's transmission equipment and three employees were briefly detained. The former owner of the station fled to Poland fearing for his life and is awaiting political asylum. This action was not an isolated event, unfortunately. According to the Broadcasting Board of Governors, Ukrainian authorities continue an ongoing campaign against the independent media, including the harassment of journalists and the suppression of fact-based news and information and investigative reporting. Several journalists have been murdered and others have been killed in suspicious ``accidents.'' We must do more to support efforts in Ukraine by journalists and media organizations that fight for fundamental rights. Political repression and harassment apparently influenced the election for the mayor of Mukachevo, a town in southwestern Ukraine. Exit polls for this election indicated that Our Ukraine's candidate received 62.4% of the vote, yet a subsequent recount indicated that his opponent won by 5,000 votes. Reports trickling out after the election indicated that some of the election stations were raided and damaged by ``criminal elements'' and other ballots were summarily destroyed or ignored. Four members of the parliament were beaten and an election observer was hospitalized after being assaulted. In addition to this, prior to the election the Our Ukraine candidate temporarily was taken off the ballot and a theater director that allowed Our Ukraine to use his venue for a meeting was severely beaten. The Organization for Security and Cooperation in Europe, OSCE, expressed its concerns about this election, as well as recent legislation that bars domestic non-partisan observers from monitoring elections. Without the assurances of a free, open, and transparent election, there is little to hope that the fall election will, in fact, uphold true democratic values. The events in Mukachevo and the barring of domestic observers are reasons for great concern. Recent actions, such I described, raise the fear that this election will be stolen from the Ukrainian people. Ukraine has taken some positive steps toward the creation of democratic institutions and a free-market economy, though much more remains to be done. This is why a free and fair presidential election in October 2004 remains so important to determining the future path of Ukraine. Who emerges victorious from this election is a matter to be decided by the Ukrainian people. What is of concern to the United States is how these elections will be conducted. Both the election day and the pre-election period must meet international standards for a free and fair electoral process, including ensuring that candidates have unimpeded access to media outlets, citizens are guaranteed the opportunity to exercise their civil and political rights, free from intimidation and interference, and domestic and international monitors are allowed to observe the electoral process and report their findings. The numerous problems in Ukraine noted in elections in 1999 and 2002 by election observers only intensify everyone's concerns. Ukraine, if it is to realize its considerable potential, must take action now to protect the fundamental human rights of its citizens. There have been some achievements in the past twelve years, but much more remains to be done. I know that my Senate colleagues share my concerns about the upcoming presidential elections and stand ready to support the Ukrainian people as they continue with efforts to make their nation more free and democratic.

Mr. LEVIN

Mr. LEVIN. Mr. President, this week marks the 5-year anniversary of the tragic shooting of 12 students and one teacher at Columbine High School in Littleton, CO. The very mention of Columbine High School strikes a nerve with the American public. It reminds us of that horrendous scene of terrified children running from their assailants as SWAT teams descended on their school. Earlier this week, students, parents and residents of Littleton gathered at Columbine High School to remember those who died and renew their commitment to address school violence. The anniversary brought back painful memories. Michael Shoels, the father of student Isaiah Shoels, who was killed in the shooting, told the Associated Press, ``It's most definitely something I think about every day but, you know, we can't wallow in victimhood. Under the circumstances, we need to get out there and do something about it.'' In response to this massacre, many schools have implemented security measures such as posting in-school police officers, installing security cameras and metal detectors, and developing emergency response programs. But a recent report from the National School Safety and Security Services, a firm specializing in school security and school safety for K-12 schools, found an increase in school-related violent deaths in the 2003-2004 school year. According to the report, there have been 43 violent deaths nationwide this school year, more than the previous 2 years combined and more than any school year prior to Columbine. In addition, there have been more than 60 non-fatal shootings this year and more than 160 other incidents of high-profile violence, such as stabbings and riots. This is simply not acceptable. Despite continued school violence, the President has not led on this issue and Congress has also failed to enact sensible gun safety laws that could help to turn the tide. In fact, President Bush's budget proposes eliminating funding for the COPS school resource officer program. We have yet to close the gun show loophole, despite bipartisan support in the Senate. And, while the President has said he supports reauthorizing the assault weapons ban and a bipartisan majority in the Senate is on the record supporting reauthorization there are no plans to consider this important legislation before it expires on September 13 of this year. America's schools need our help and these are simple, commonsense steps we can take to improve school safety. I urge my colleagues to close the gun show loophole, keep the ban on assault weapons, and restore funding for COPS school resource officers. As the end of another school year approaches, the push to enact sensible gun safety legislation must continue.

Mr. LEVIN

Mr. LEVIN. Mr. President, this year I once again come before the Senate to pay tribute to those who lost their lives or were forced from their homeland as a result of the horrific genocide perpetrated against the Armenian people from 1915 through 1923. During those years, the Turkish Ottoman government used the outbreak of World War I as a pretext for subjecting its citizens of Armenian descent to deportation, abduction, torture, massacre, and starvation. The land on which some of the Armenians had lived for generations was expropriated from them. It is imperative for the American people and for people around the world to commemorate this tragedy, with the hope that by remembrance we will advance the day when the world will no longer witness such horrors. Over one million Armenians perished as part of a deliberate campaign of murder in the waning days of the Ottoman Empire. Armenians, given that they were neither Turks nor Muslims, were treated as threats, even though the Armenians had been exemplary citizens and had lived together peaceably with their Turkish neighbors for centuries. April 24th is the date chosen to commemorate this genocide, since it was on that day in 1915 that government leaders rounded up 300 Armenian leaders, writers, thinkers and professionals for their deportation and for many, their deaths. While the preeminent members of the Constantinople's Armenian community were being rounded up on that day, 5,000 others were slaughtered in their homes and on the streets. Many Western, democratic nations became aware of the ruthless targeting of the Armenian population yet did not act to stop it. In May 1915, Great Britain, France, and Russia advised the Turkish leaders that they would be held personally responsible for this crime against humanity. Later that year, Henry Morgenthau, the American Ambassador to the Ottoman Empire, cabled the State Department saying, ``Deportation of and excesses against peaceful Armenians is increasing and from harrowing reports of eye witnesses it appears that a campaign of race extermination is in progress under a pretext of reprisal against rebellion.'' His successor, Abram Elkus, wrote in 1816 that, ``. . . unchecked policy of extermination through starvation, exhaustion, and brutality of treatment hardly surpassed even in Turkish history.'' In addition to the government records decrying the events in the Ottoman Empire, historians have been able to record the memories of the victims. It is important to share these stories, to ensure that the subsequent generations can truly understand the appalling conditions under which their ancestors both perished and survived. The Genocide Project, an effort by the San Francisco Bay Area Armenian National Committee, has done a remarkable job of compiling oral and visual documentation from some of the survivors. Edward Racoubian told the project how when, ``We reached the Euphrates River and despite the hundreds of bodies floating in it, we drank from it like there was no tomorrow. We quenched our thirst for the first time since our departure. . . . Of a caravan of nearly 10,000 people, there were now only some 300 of us left. My aunt, my sisters, my brothers had all died or disappeared. Only my mother and I were left. We decided to hide and take refuge with some Arab nomads. My mother died there under their tents. They did not treat me well--they kept me hungry and beat me often and they branded me as their own.'' ``Sometime later, Turkish gendarmes came over and grabbed all the boys from 5 to 10 years old. I was about 7 or 8. They grabbed me too,'' Sam Kadorian said. ``They threw us all into a pile on the sandy beach and started jabbing us with their swords and bayonets. I must've been in the center because only one sword got me . . . nipped my cheek . . . here, my cheek. But, I couldn't cry. I was covered with blood from the other bodies on top of me, but I couldn't cry. If had, I would not be here today.'' I believe the highest tribute we can pay to the victims of a genocide is by acknowledging the horrors they faced and reaffirming our commitment to fight against such heinous acts in the future. In commemorating the tragedy of the genocide today, I would also like to recognize the fact that yesterday Canada's House of Commons, took the courageous step of officially recognizing that the events initiated on April 24, 1915, were in fact a genocide and crime against humanity. It is my hope that all people of goodwill will join in calling this tragedy by its correct name--a genocide. I hope that our colleagues will join me in commemorating this tragedy and vowing to honor and remember the innocent victims of the Armenian genocide.

Mr. LEVIN

Mr. LEVIN. Mr. President, I am pleased to recognize my Senate page today, Brittney Moraski of Bark River, MI, for achieving highest honors at the Senate Page School. Brittney's hard work earned her a 4.0 grade point average this semester, the highest in her class. Highest honors are nothing new for Brittney. At home in Michigan's Upper Peninsula, Brittney attends Bark River-Harris High School where she is a member of the National Honor Society and also maintains a 4.0 G.P.A. Brittney took advanced placement classes in U.S. Government and Politics and microeconomics and achieved the highest score possible on both A.P. exams. In addition, Brittney has taken college classes at Bay de Noc Community College. Brittney was the first Bark River-Harris High School student to earn the highest endorsement level possible on the senior-level Michigan Educational Assessment Program test as a sophomore. Complementing her school year work, Brittney has participated in activities that further nurtured her lifelong interest in government and politics. Last summer, Brittney spent three weeks in Washington as part of the Junior Statesmen Summer School at Georgetown University where she took a course on foreign policy and had the opportunity to meet with high-ranking officials in the Congress, State Department, Pentagon, White House and French Embassy. In addition to her exemplary academic achievements, Brittney stands out for her community involvement. She is the president of the Bark River-Harris Key Club and serves on the Community Foundation of Delta County's Youth Advisory Committee. During the past three years, she traveled to Honduras to volunteer at a soup kitchen, distribute food and clothing, and read and play with Honduran children. Brittney brings her idealism and achievements to her duties as a Senate page. In her application for the page program, Brittney wrote, ``I would not only grow as a student of government from the experience, but I would grow as an individual and as a potential future public servant.'' Later in her application, Brittney said, ``I believe in the U.S. government and in American values, and I would be honored to serve as a page in the epicenter of American lawmaking, the U.S. Congress.'' Mr. President, Brittney Moraski exemplifies all that is best in the Senate Page Program and in our young people, and I congratulate her on her outstanding achievements.

Mr. LEVIN

Mr. LEVIN. Mr. President, I would like to pay tribute to Assumption Greek Orthodox Church, the second Greek Orthodox congregation to be formed in the state of Michigan. Events celebrating the 75th anniversary of Assumption Church began in 2003 and will continue in 2004 with a grand banquet to be held on April 24. These events bring together members of the congregation, as well as thousands of others from throughout the metropolitan Detroit area and around the country, to mark this milestone in the history of Assumption Church. At the turn of the century, many Greek immigrants settled in cities and towns across the nation. Greek immigrants established a thriving community in Detroit, in what has become known as Greektown. Seventy- five years ago, seven men from the growing Greek community on Detroit's ``eastside'' met to lay plans for a parochial school and a place of worship that would be close to their homes. They sought to continue the tradition of teaching the Greek language and history to their community. In 1930, with the blessing of the Patriarch of Constantinople, the first Church Council established the Assumption Church at Hillger and Kercheval in Detroit. The Church was formally named ``Koimisis tis Theotokou'' meaning ``The Dormition of the Virgin Mary.'' The Church experienced steady growth in both the number of families that joined the parish and the number of new programs that served the needs of the parishioners. Beginning with its first Greek school ``Socrates,'' the Church added various programs for its youth, women, and senior citizens, and continued to expand its philanthropic and religious outreach. The parishioners' reputation as a thriving, caring congregation grew and attracted families from Detroit's suburbs and beyond. Today, more than 1,200 families belong to Assumption Church, making it the largest parish in the region and one of the largest parishes in the Archdiocese. The Assumption Greek Orthodox Church family moved several times over the years before building the current facilities in St. Clair Shores, which include the notable Assumption Cultural Center. They built churches at Beniteau and Vernor Highway and on Charlevoix that serve Protestant congregations today. Like these stalwart structures that are reminders of the congregation's vision and faithfulness, Assumption's spiritual leaders have been significant pillars in the community. The first priest, Father Christopher Makris, arrived in Detroit from Chicago. His service was followed by 11 clergy leaders and several laity, who have been represented in the highest positions of service nationally in matters of religious education, stewardship, athletics, the St. John Chrysostom Oratorical festival and various missionary activities. Father Demetrios Kavadas provided spiritual leadership for 39 years and is Assumption's longest serving clergyman. In 2003, Father Epihanios Perialas became interim pastor and honored the parish through his elevation to Metropolitan of Spain and Portugal. Father Michael Varlamos became pastor in 2003 and continues to serve in that capacity today. Unfortunately, the Church experienced a devastating fire on December 21, 2002, that destroyed the interior of the Church along with its beautiful iconography. The Church was promptly restored and re- opened its doors almost one year to the day, in December 2003. I know my colleagues join me in congratulating the congregation of Assumption Greek Orthodox Church for achieving 75 years of devotion to God, their faith, and excellence in serving their members and the surrounding communities.

Mr. LEVIN

Mr. LEVIN. Mr. President, with so many baby boomers nearing retirement age, increasing the likelihood and availability of secure retirement savings is more important than ever. Strengthening our private, employer-based pension system is a critical component of this effort. Right now, our Nation's companies are confronting real challenges in providing adequate, guaranteed retirement benefits as the number of retired workers grows and global competition increases. This is a big part of the crisis that we are experiencing in our manufacturing sector. Across the Nation, 2.8 million manufacturing jobs have been lost during the Bush administration. Michigan alone has lost over 180,000 manufacturing jobs since 2000. Our States and our Nation cannot continue to sustain such losses, and action is needed on many fronts to address the crisis. This bill is a small, but important, step toward helping with our manufacturing crisis. For the companies whose plans this bill helps, it will free up resources for equipment upgrades, new hires, R&D, and other investments in the future. I am troubled by the fact that the component of this bill dealing with most multiemployer pension plans that had overwhelming support in the Senate has been dropped out of this conference report. I am hopeful that we can provide relief to those multiemployer plans soon. That is why I will cosponsor Senator Kennedy's bill that would do just that. If I thought that defeating this bill would help the many pension recipients whose plans were left out of this conference report, that would be one thing. However, after careful thought, I have concluded that defeating this bill would not achieve that goal but would only hurt those who do get the much-needed relief in the bill.

Mr. LEVIN

Mr. LEVIN. Mr. President, last month the Senate considered and passed the Boxer trigger lock amendment by a 70-27 vote. Senator Boxer's amendment would require that all handguns sold by a dealer come with a child safety device, such as a lock, a lock box, or technology built into the gun itself. Further, it would direct the Consumer Product Safety Commission to develop standards for child safety devices. The need for this legislation is clear, and I supported its passage. According to the Brady Campaign to Prevent Gun Violence, each year teenagers and children are involved in more than 10,000 accidental shootings in which close to 800 people die. Further, about 1,500 children age 14 and under are treated in hospital emergency rooms for unintentional firearm injuries. About 38 percent of them have injuries severe enough to require hospitalization. In addition to accidental shootings, according to the Brady Campaign, every year 1,300 children use firearms to commit suicide. Unlike suicide attempts using other methods, suicide attempts with guns are nearly always fatal. These children are given no second chance. It does not have to be this way. If gun manufacturers put locking or other safety mechanisms on guns, or dealers sold handguns with safety devices, many shootings could be avoided, and fewer children would die each year. The gun industry immunity legislation, to which Senator Boxer's amendment was attached, would have provided unprecedented protection from liability to gun manufacturers and dealers, even in cases where their own gross negligence or recklessness led to someone being injured or killed. I opposed the immunity bill and was pleased that it failed to pass the Senate. However, Senator Boxer's trigger lock amendment passed with bipartisan support. Given that, I hope the Senate takes up and passes that legislation this year.

Mr. LEVIN

Mr. LEVIN. I thank the Chair.

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

Mr. LEVIN

Mr. LEVIN. Mr. President, two weeks ago, the Violence Policy Center released a report rebutting a number of assertions made by the Fifty Caliber Institute about the civilian sale of .50 caliber anti-armor sniper rifles. The .50 caliber sniper rifle is among the most powerful weapons legally available. According to the Violence Policy Center's report, a .50 caliber sniper rifle is capable of accurately hitting a target over 1,500 yards away, and the ammunition available for the .50 caliber includes armor-piercing, incendiary, and explosive bullets. The report also cites the U.S. Army's manual on urban combat, which states that .50 caliber sniper rifles are designed to attack bulk fuel tanks and other high-value targets from a distance, using ``their ability to break through all but the thickest shielding material.'' One of the most disturbing parts of the report quotes a brochure from the leading manufacturer, Barrett Firearms, advertising the .50 caliber sniper rifle. The Model 82A1 is designed to provide extreme accuracy at extended ranges with standard military ammunition. . . . The accuracy of the Model 82A1 makes possible the placement of the shot in the most vulnerable area of the target. The compressor sections of jet engines or the transmissions of helicopters are likely targets for the weapon, making it capable of destroying multi-million dollar aircraft with a single hit delivered to a vital area. The cost-effectiveness of the Model 82A1 cannot be overemphasized when a round of ammunition purchased for less than 10 USD [U.S. Dollars] can be used to destroy or disable a modern jet aircraft. I believe that information detailing the potential destruction these weapons can cause should alert us to the dangers to airline safety, as well as homeland security. That is why I cosponsored Senator Feinstein's Military Sniper Weapon Regulation Act, S. 429. This bill would change the way .50 caliber guns are regulated by placing them under the requirements of the National Firearms Act. This would subject these weapons to the same regimen of registration and background checks as those weapons regulated under the National Firearms Act. This is a necessary and commonsense step towards assuring the safety of all Americans. The .50 caliber sniper rifle is among the most powerful firearms legally available. Senator Feinstein's bill presents us with a simple solution to improving their regulation, and I urge my colleagues to support it.

Mr. LEVIN

Mr. LEVIN. Mr. President, earlier this week the OPEC cartel announced it would reduce oil production by 1 million barrels of oil per day starting April 1. This move is designed solely for one purpose: to keep pushing up oil prices in the United States and other oil-consuming countries. Most energy experts say that given current inventory levels in the United States and elsewhere and current consumption rates, OPEC's cuts mean that gasoline prices will likely stay high, hurting American families; jet fuel prices will stay high, hurting our airlines; and diesel fuel prices will stay high, hurting our truckers, manufacturers, and farmers. As OPEC was planning this price hike, what was the response of the administration? Just a few days before, the Secretary of Energy stated he was not about to go begging for oil. One step we should take immediately to counteract high prices and OPEC's action is to stop filling our Strategic Petroleum Reserve. This month, the administration is going to put about 200,000 barrels per day of oil into the Strategic Petroleum Reserve. If OPEC's cuts are distributed equally among its customers, this is about how much the OPEC cut will reduce U.S. supplies. Since the U.S. imports about 20 percent of OPEC's output and OPEC plans to cut production by about 1 million barrels per day, about 200,000 barrels per day will be the reduction in the supply to the United States. Holding off additional deposits into the Strategic Petroleum Reserve would keep about as much oil on the U.S. oil market as OPEC is taking off our market. One way to fight back is to cancel these additional deposits which will otherwise go into the Strategic Petroleum Reserve, which is already 93-percent filled. Mr. President, 200,000 barrels per day is a lot of oil. It is as much oil as is produced in several of our major oil-producing States. For instance, Oklahoma produces about 180,000 barrels a day. It is about as much as we import from Kuwait. Last year we imported about 205,000 barrels per day from Kuwait. Over time, 100,000 to 200,000 barrels per day adds up to a significant amount of oil. Over the course of the next year or so, these daily fills will add up to about 50 million barrels of oil. In other words, over the next year or so, the Department of Energy, if it sticks to its plan to continue to fill the Strategic Petroleum Reserve to 100 percent, the DOE will take about 50 million barrels of oil off the market and put them into the Strategic Petroleum Reserve. If we keep that oil in the market, in the private sector, we would get both short-term and long-term benefits. The day after the Senate passed the amendment which I offered with Senator Collins to cancel the planned delivery of 50 million barrels of oil into the Strategic Petroleum Reserve, prices on the New York and London crude oil exchanges fell by more than $1, just on the news that the Senate had acted, even before anyone knew whether the House would follow suit. Prices rose back to their previous levels when the Department of Energy and some key Members of Congress said that the DOE should keep putting that oil into the Strategic Petroleum Reserve. The market's reaction to the news that the Strategic Petroleum Reserve deliveries might be canceled is good evidence of how the market will react to the cancellation of those deliveries. We should listen to what the market is telling us. Keeping 50 million barrels of oil on the market rather than putting them into the reserve will enable our private sector inventories to build back to normal levels. They have not been at normal levels for some time now. They have been well-below normal and recently fell to historic lows. If we restore those private sector inventories, this will reduce prices substantially, and most experts agree that absent some type of additional supplies in the market, oil and gas prices are going to stay very high. I want to make it clear that we are not proposing removing oil from the Strategic Petroleum Reserve at this time. What we are talking about is simply to stop putting even more oil into the reserve which is already 93 percent of capacity. The administration says the daily addition is too small to make a difference in the price of oil. This is wrong for two reasons. First, the amount the DOE is putting into the reserve each day is a lot of oil. Second, the administration's position ignores the long-term effect of putting these barrels of oil into the Strategic Petroleum Reserve--and this is the DOE's own staff I am going to quote. This is what DOE's own staff said: Essentially, if the reserve inventory grows, and OPEC does not accommodate that growth by exporting more oil, the increase comes at the expense of commercial inventories. Most analysts agree that oil prices are directly correlated with inventories, and a drop of 20 million barrels over a 6-month period can substantially increase prices. In fact, commercial inventories did fall on average by 20 million barrels in each of the three successive 6-month periods following the DOE staff's warning. The Department of Energy's own staff who operates the Strategic Petroleum Reserve recommended against buying more oil for the Strategic Petroleum Reserve in tight markets. In the spring of 2002, as prices were rising and inventories in the private sector were falling, this is what the Department of Energy staff warned: Commercial petroleum inventories are low, retail product prices are high and economic growth is slow. This is DOE staff's bottom line: The Government should avoid acquiring oil for the Reserve under these circumstances. Commercial petroleum inventories are low,-- They are still at an all-time low. retail product prices are high-- They are at an all-time high now. and economic growth is slow. And it does continue to be sluggish. This is what their bottom line is: The Government should avoid acquiring oil for the Reserve under these circumstances. The administration chose to ignore those warnings. The reserve deliveries proceeded, and just as the DOE staff predicted, supplies tightened and prices climbed. The administration continues to ignore the advice of these experts at the reserve, and American consumers are paying the price. A wide variety of experts outside the Department of Energy has stated that filling the reserve during tight oil markets increases oil prices. This January, Goldman Sachs, which is the largest crude oil trader in the world, said the following: Government storage builds will provide persistent support to the markets-- meaning filling the reserve pushes prices up, and Government increases in storage lowered commercially available petroleum supplies. Bill Greehey, who is the chief executive of Valero Energy, the largest independent refiner in the United States, has criticized the administration for filling the reserve when commercial inventories were low, thereby preventing increases in the commercial inventories. Last September, when oil prices were at $29 a barrel, Greehey complained the reserve program was diverting oil from the marketplace. Here is what he said: If that was going into inventory, instead of the reserve, you would not be having $29 oil, you'd be having $25 oil. So, I think they've completely mismanaged the strategic reserve. Now that is the chief executive of the largest independent refiner in the United States. One of the top energy economists in the country, Phil Verleger, estimates the reserve program has added $8 to $10 to the price of a barrel of oil. Economist Larry Kudlow said: Normally, in Wall Street parlance, you're supposed to buy low and sell high, but in Strategic Petroleum Reserve actions, we're buying higher and higher and that has really helped keep oil prices high. Now that is from a conservative economist. In an article explaining why oil prices are so high, a recent issue of the Economist reported the following: Another factor . . . propping up oil prices may be what [a] trader calls ``supply disruption risk.'' Here is what the Economist went on to say: These worries have, in part, been fueled by a most unexpected source, the American government. Despite the high prices, American officials continue to buy oil on the open market to fill their country's strategic petroleum reserves. Why buy, you might ask, when prices are high, and thereby keep them up? The Senate has asked that question as well. It passed a nonbinding resolution this month calling on the Bush administration to stop SPR purchases, but Spencer Abraham, the Energy Secretary, has refused. In January, the Petroleum Argus, an energy industry newsletter, stated the following: The act of building up strategic stocks diverts crude supplies that would otherwise have entered the open market. The natural time to do this is when supplies are ample, commercial stocks are adequate and prices low. Yet the Bush administration, contrary to this logic, is forging ahead with plans to add [more oil] to the stockpile. After the Senate passed our amendment that said we should hold off further purchases, Todd Hultman, who is president of Dailyfutures.com, a commodity research provider, was quoted as saying the amendment: . . . makes good sense and is designed to make more crude oil available at a time when unleaded gasoline prices have been making new record highs. Last summer, Dr. Leo Drollas, chief economist at the Centre for Global Energy Studies, criticized the Strategic Petroleum Reserve program: They've continued filling the reserve, which is crazy, putting the oil under the ground when it is needed in refineries. Now that is why the Senate, with support from both Republicans and Democrats, recently approved an amendment, which I offered with Senator Collins, to stop Strategic Petroleum Reserve shipments, sell the oil that would have been placed in the reserve and use the money from those sales for important homeland security programs. Fifty-three House Members, 39 Republicans and 14 Democrats, recently wrote the President requesting a suspension of SPR petroleum reserve shipments. The House letter states the following: Filling the SPR, without regard to crude oil prices and the availability of supplies, drives oil prices higher and ultimately hurts consumers. The administration still chooses to ignore common sense and it adds oil to the Strategic Petroleum Reserve, no matter how high the price or how tight the supply of oil. Even though this discussion is about suspending additional deposits into the Strategic Petroleum Reserve when prices are high and private and commercial inventories are low, I would like to comment on a misimpression regarding what happened the last time the Strategic Petroleum Reserve was actually used to release oil. Again, we are now shifting the discussion from talking about not putting more oil to the reserve to what happened last time we took oil out of the reserve. This is what happened during the Clinton administration when 30 million barrels were taken from the reserve and put on the private market. This was in September of the year 2000. Here is what the Washington Post recently stated: The last time an administration tapped the Strategic Petroleum Reserve, the impact on price was negligible. When President Bill Clinton ordered the sale of 30 million barrels of oil on September 22, 2000, the average price of regular gas had climbed to more than $1.56. By October 24, when the oil began to hit the market, prices had slipped one penny, according to the Energy Department's Energy Information Administration. Well, that statement is highly misleading because it omits critical information. Here is the full story: On September 22, 2000, with crude oil prices at $37 a barrel, home heating oil stocks at historic lows and winter around the corner, President Clinton ordered the release of 30 million barrels from the Strategic Petroleum Reserve. Within a few days of the announcement of the release, crude oil prices had fallen by $6 a barrel. Within a week, home heating oil prices fell by 10 cents per gallon. Within 2 weeks, wholesale gasoline prices had fallen by 14 cents per gallon. So what the statement omitted is what happened to oil and gas prices immediately after the order for the release of that 30 million barrels from the Strategic Petroleum Reserve. There was an immediate impact downward on gasoline prices, wholesale prices for home heating oil, in the amounts of 10 cents a gallon for home heating oil and 14 cents a gallon for gasoline. So the statement that gasoline prices on October 24, a month later, were only a cent lower than on September 22 omits the critical information that oil and gasoline prices fell significantly immediately after the release but then rose later due to unrelated events in the Middle East. Two weeks after the release, crude oil prices were still $6 per barrel lower than the prerelease prices and wholesale gasoline prices were 14 cents per gallon lower. Only when a wave of violence hit the Middle East during the third week after the release did gasoline prices rise to their prerelease levels. So the release of 30 million barrels of reserve oil during the Clinton administration did have a significant, immediate effect on oil and gas prices downward. Just as taking oil out of the reserve can significantly affect prices, putting oil into the reserve can have a significant effect as well. That is what is going on now. The administration should listen to its energy experts and the economists and stop adding oil to the Strategic Petroleum Reserve which is already 93 percent full. The result will be lower oil and gasoline prices, a welcome relief to American consumers, manufacturers, and airlines. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. LEVIN

Mr. LEVIN. Mr. President, last night the University of Michigan Wolverines defeated the Rutgers University Scarlet Knights 62- 55 in the final game of the 2004 Men's Basketball National Invitation Tournament to complete a 23-11 season. The win was even sweeter for the Wolverines as they defeated Rutgers before a crowd of 16,064, largely cheering for the Scarlet Knights, at Madison Square Garden in New York City. Throughout the season and particularly during the NIT, a vocal home crowd at Crisler Arena cheered Michigan to victory. Cheering their team through the first three games of the tournament, Michigan's fans were truly the team's sixth man. For the season, Michigan won 16 of their 19 home games. Prior to the NIT, they had only won five of their 13 road games. Winning two games in Madison Square Garden proved the mettle of this young team that has relied heavily upon its many sophomores and freshmen. I know I speak for all of Michigan in extending my heartiest congratulations to University of Michigan men's basketball team on their championship. This was a hard fought victory and one that I'm sure Wolverines fans enjoyed immensely. Twenty years ago, Bill Frieder coached a young Wolverines team that won the NIT Championship. That team used their championship as a springboard to greater success: in each of the next two years they won the Big Ten Championship. I am sure that Michigan Coach Tommy Amaker and his players have similar hopes for a program that has not been to a postseason tournament since 2000. This banner will be raised in the rafters of Crisler Arena next to the 1989 NCAA championship and the 1984 NIT championship banners. For 68 years, the National Invitation Tournament has showcased some of the greatest talents in college basketball and this year was no exception. Last night, players from both teams displayed their excellent training and hard work. Michigan was led by tournament Most Valuable Player Daniel Horton, who led Michigan with 14 points and Dion Harris who had 13 points. Michigan opened a lead of 41-29, but a 15-2 Rutgers' run quickly nudged the Scarlet Knights in front, albeit briefly. The old adage ``the best offense is a good defense'' came true as Michigan constructed its win around a defensive strategy where defensive specialist Bernard Robinson, a senior whose leadership helped guide this young team, limited Rutgers' hot-shooting freshman to just two points. In his third year with the Wolverines, Coach Amaker not only assembled the winning game plan, but also brought together a team that will consistently compete with any team in the nation. Last night's victory is testament to a team that worked hard to salvage its season and reputation. While individual performances by Robinson, Daniel Horton and Dion Harris played a key role in this game, Michigan's championship was a team effort that has helped restore the pride in the Michigan basketball program. I congratulate Coach Amaker and his team for their selfless efforts in putting University of Michigan basketball back on the national map. I know my colleagues will join me in congratulating the University of Michigan men's basketball team on their victory, and I know we all look forward to next year when this team really comes of age. Mr. President, I ask that the players and coaches names be printed in the Record. The list follows: Players: Lester Abram; John Andrews; Amadou Ba; Ashtyn Bell; Graham Brown; Colin Dill; Sherrod Harrell; Dion Harris; Daniel Horton; Chris Hunter; J.C. Mathis; Brent Petway; Bernard Robinson Jr.; Courtney Sims; Dani Wohl. Coaches: Head Coach Tommy Amaker; Assistant Coach Charles E. Ramsey; Assistant Coach Chuck Swenson; Assistant Coach Andrew Moore.

Mr. LEVIN

Mr. LEVIN. Mr. President, I take a moment to recognize the International Association for Organ Donation, IAOD. The IAOD strives to increase awareness of organ donation and transplantation, as well as bone marrow and tissue donation. This organization provides educational and outreach programs to the general public, with a focus on racial and ethnic minorities. Each April, the International Association for Organ Donation celebrates National Donate Life Month. This year is especially important as it marks the 50th anniversary of the first successful liver transplant. In honor of this monumental occasion, the IAOD is sponsoring ``50 Years of Sharing Life'' to publicize the plight of those in need of an organ transplant. Today in America, 83,000 patients are currently awaiting an organ transplant. Although there are 68 successful organ transplants each day, an additional 100 patients are added to the waiting list and sadly, 18 people die each day as they wait for this life-saving procedure. Tissue donations, such as bone marrow, are also in short supply. Nearly 3,000 people are searching the National Marrow Donor Program Registry at any one time and an additional 3,000 patients are added to the registry each month. There is something we all can do to reduce these staggering statistics. Great strides could be made if the estimated 10,000 to 14,000 eligible Americans who die each year pledge to become organ donors. The IAOD is a driving force in sharing the message that life is a gift to share. It is with great pleasure that I offer my sincerest appreciation and support to the International Association for Organ Donation as it celebrates the 50th anniversary of the first successful liver transplant. I give my thanks to the organization, its staff, and its partners as they work to fulfill their lifesaving mission.

Mr. LEVIN

Mr. LEVIN. Mr. President, last Thursday a press release from the Department of Interior came across my desk that at first glance appeared to be the announcement of an April fool's joke. The press release stated beginning April 1, the Interior Department will deliver about 115,000 barrels of oil per day to the Department of Energy for the Strategic Petroleum Reserve. I thought this was an April fool's prank because this is about the worst possible time for the administration to be taking oil off the market for the Strategic Petroleum Reserve. Crude oil and gasoline prices are historic highs and inventory levels are near historic lows. Consumers are paying record prices at the gas pumps. Manufacturers and farmers and a whole lot of other folks are paying high prices for diesel fuel. Our airlines face soaring fuel costs and so does the trucking industry. Our economy, which has major problems, will be weakened further by high energy prices. To make the timing even worse, the Department of Interior plans to begin its oil deliveries to the DOE on April 1, the same date the OPEC cartel is scheduled to start cutting its oil production. The purpose and effect of OPEC's cuts are to raise oil prices further. The effect of the administration's stated plans to keep filling the Strategic Petroleum Reserve regardless of the price of oil, if implemented, will be the same, principally because tight supplies and private inventories will become even tighter due to the administration's additional demands for oil for the Strategic Petroleum Reserve. Regrettably, the Interior Department's announcement is no April fool's joke. To the contrary, it is another misstep in the administration's illogical and counterproductive practice of putting oil into the Strategic Petroleum Reserve, regardless of the price of crude oil. Over the past 2 years, this practice has pushed up oil prices with minimal improvement to our overall energy or national security and with great detriment to our economic security. Let's just review what has happened with energy prices. Crude oil prices have been steadily increasing over the past 2\1/2\ years. Last week crude oil reached a 13-year high of over $38 per barrel. So far this year, crude oil is averaging about $35 per barrel. In 2003, a barrel of crude oil cost on average over $31. That was a record at that point. Climbing crude oil prices have led to higher prices for refined products, including gasoline, home heating oil, jet fuel, and diesel fuel. Today, as well as four times in the last 10 days or so, the price of gasoline reached a record high. Nationally the average price of a gallon of gasoline is now $1.75. In Michigan, the average price of a gallon of unleaded is up to $1.78. There are fears prices could go over $2 if there is even a small interruption in supply. The DOE's Energy Information Administration, the EIA, projects prices will rise on average to $1.83 per gallon this spring, and that prices will remain at high levels throughout the year, averaging nearly $1.70 per gallon over the course of the entire year. These high oil and gasoline prices are hurting consumers and businesses. The EIA recently stated the average consumer paid $200 more for gasoline in 2003 than the previous year. Prices this year are already a dime per gallon more than in 2003. Over the course of a year, each 1-cent increase in the price of a gallon of gasoline takes $1 billion out of the pockets of American consumers. Following the laws of supply and demand, the principal reason oil prices are so high is the amount of crude oil in private sector inventories in the United States is so low. In fact, our private sector inventories are hovering around record low levels. In January, crude oil inventories fell to levels lower than at any time in the 28 years the Department of Energy has been tracking those inventories. Why are supplies so low? This administration's oil policies are partly responsible. Since late 2001, the Department of Energy has taken millions of barrels of oil off the market and put them into the Strategic Petroleum Reserve. In late 2001, the reserve held about 560 million barrels of oil. Since then, day after day, for over 2 years, the Department of Energy has added an average of about 100,000 barrels of oil per day to the Strategic Petroleum Reserve without regard to the price of oil. Today, the Strategic Petroleum Reserve holds nearly 650 million barrels, or 93 percent of its capacity of 700 million barrels. DOE plans to keep on adding oil to the Strategic Petroleum Reserve, no matter what the price, no matter how dangerously low private sector inventories are. In April, the DOE plans to add about 200,000 barrels per day to the Strategic Petroleum Reserve, just as it has been doing this month. By taking oil off the market and pushing up prices when supplies were tight and prices were high, filling the Strategic Petroleum Reserve has decreased the amount of oil in private inventories. That is because when current prices are high, companies with oil in inventory will draw from those inventories to supply oil to their customers--including the SPR--before they buy expensive new oil. From April 2002 through the end of last year--a period in which the oil markets were extremely tight, reflecting high prices and low supplies--oil inventories in the private sector decreased by almost as much as the petroleum reserve inventory increased. From April 2002 to December 2003, the Department of Energy deposited about 78 million barrels of oil in the petroleum reserve. During this same period, the United States private sector inventories declined by about 61 million barrels. So the 78 million barrels of oil that were deposited into the petroleum reserve are shown by this red line in the last approximately year and a half, the decline in the private inventories is shown by this white line over the same period. So you can see from the chart that the amount deposited in the reserve is almost the same--slightly more--as the decline in private inventories. That means, despite filling the reserve for almost 2 years, the total oil in inventory, private and public reserve, in the United States during this period increased by only 17 million barrels--under 2 percent. Several studies have demonstrated that the decrease in U.S. private inventories since April 2002 is directly related to filling of the Strategic Petroleum Reserve. While there are other factors as well, such as OPEC production limits and increased global demand for crude oil, especially in China, the filling of the Strategic Petroleum Reserve has been a major contributor to the decrease in private sector inventories. Goldman Sachs, one of the largest and most successful crude oil traders in the world, reported the following on January 16th of this year: Large speculative positions, builds in Strategic Petroleum Reserves, and low inventory coverage have contributed to current price levels. Goldman Sachs also stated: Past government storage builds [build-ups] will provide persistent support to the market and that current plans for the injection of 130,000 [barrels/day] of royalty-in-kind barrels into the petroleum U.S. Strategic Petroleum Reserve (SPR) between now and the end of September . . . will likely provide even further support. Here, the word ``support'' means keeping prices high. In early 2002, the Department of Energy's own staff warned that filling the Strategic Petroleum Reserve in a tight market would reduce private sector inventories and raise prices and tried to persuade the administration to postpone putting oil into the reserve so oil supplies would be more plentiful. In the spring of 2002, as prices were rising and inventories falling, the Department of Energy's own petroleum reserve staff warned the following: Commercial inventories are low, retail prices are high, and economic growth is slow. The Government should avoid acquiring oil for the Reserve under these circumstances. The administration chose to ignore those warnings. The reserve deliveries proceeded. As the DOE staff predicted, oil supplies tightened and prices climbed. Last week, the Secretary of Energy repeated the administration's position that it would not suspend shipments of oil into the Strategic Petroleum Reserve, despite the high prices and low private inventories of oil. The Secretary rejected criticism of the Energy Department's position by claiming that the amount of oil placed in the reserve is too small to make any difference in the price of oil. But in 2002, the Department of Energy's own staff refuted that very claim. The DOE Strategic Petroleum Reserve staff explained how taking these barrels off the market for an extended period of time would result in a large decrease to the overall supply of oil on the market. This is the DOE staff warning, which was ignored by the DOE and the administration: If we look at the Strategic Petroleum Reserve in the perspective of daily supply and demand, the SPR fill rates are inconsequential. The fill rate is 100,000 to 170,000 barrels per day compared to world production and consumption of 75 million barrels per day. However, when OPEC countries are determined to maintain discipline in their export quotas, the cumulative impact of filling the SPR becomes more significant when compared to U.S. and Atlantic basin inventories. Essentially, if the SPR inventory grows, and OPEC does not accommodate that growth by exporting more oil, the increase comes at the expense of commercial inventories. Most analysts agree that oil prices are directly correlated with inventories, and a drop of 20 million barrels over a 6- month period can substantially increase prices. In fact, commercial inventories did fall, on average, by 20 million barrels in each of the 3 successive 6-month periods. So what the DOE expert staff said is exactly what has come to pass. ``Most analysts agree,'' they said, ``that oil prices are directly correlated with inventories, and a drop of 20 million barrels over a 6- month period can substantially increase prices.'' The Strategic Petroleum Reserve holds by far the largest strategic oil reserves in the world. In contrast, U.S. private sector oil inventories have fallen well below normal levels. Private sector inventories of gasoline are also well below average. In an article explaining why oil prices are so high, this week's edition of The Economist reports the following: Another fact . . . propping up oil prices may be what [a] trader calls ``supply-disruption risk.'' And then The Economist goes on as follows: These worries have, in part, been fueled by a most unexpected source: the American Government. Despite the high prices, American officials continue to buy oil on the open market to fill their country's Strategic Petroleum Reserve. When prices are high, why buy, you might ask, and thereby keep them up? The Senate has asked that question as well. It passed a non-binding resolution this month calling on the Bush administration to stop SPR purchases; but Spencer Abraham, the Energy Secretary, has refused. Mr. President, I hope the Energy Secretary and this administration will reconsider that refusal because the day after the Senate adopted our amendment I cosponsored with Senator Collins to cancel the planned shipments of 53 million barrels to the SPR, oil prices in New York and London fell by $1 per barrel on the news that this oil might not be placed in the Strategic Petroleum Reserve. But after the Department of Energy and key Members of Congress announced opposition to our amendment, even though it was adopted in the Senate, oil prices went right back up. This real-world price change shows that the cancellation of the currently planned shipments to the Strategic Petroleum Reserve would provide some immediate relief from high oil and gasoline prices and also provide long-term relief, as the additional oil supplies would enable inventories to be built back up to normal levels. In his testimony before the Senate Armed Services Committee last week, the Secretary of Energy cited ``national security'' as the rationale for continuing to fill the SPR despite high oil prices and low supplies. This rationale is unpersuasive for two reasons. First, the 50 million barrels of oil that the administration plans to put into the SPR over the next year could be more productively used to replenish private sector inventories. Putting this oil into the SPR will raise our governmental inventories from 650 to 700 million barrels, an increase of about 8 percent; whereas keeping it on the market could boost our private inventories from 290 million barrels to 340 million barrels, an increase of about 17 percent. We, therefore, can get more bang for our buck--or, in this instance, bang for our barrel--by keeping this oil on the market. Typically, a variety of interruptions in oil supplies can occur in the commercial marketplace. These disruptions may be caused by bad weather, political unrest, or mechanical failure in the actual production of oil. Although any particular disruption may not be foreseeable, based on past history it can be predicted, in general, that some such disruption will occur sooner or later. Because our private inventories are so low, those inventories will not be available to cover any such disruptions. Since the SPR was established over a quarter century ago, we have never needed to release more than 30 million barrels from the SPR at any one time. At the outbreak of the first gulf war, in early 1991, we released 30 million barrels. In the fall of 2000, the last time we released oil from the SPR, we released around 30 million barrels. Even after we lost all oil production in Iraq last year, this administration did not release any oil from the SPR. It, therefore, appears, for the time being, that holding the SPR at the current level of 650 million barrels, which is 93 percent of capacity, would be sufficient security to cover events that are reasonably foreseeable. Because current inventory levels in the private sector may be inadequate to cover minor supply disruptions, in the event of such a disruption the price of oil would likely spike to well over $40 per barrel, gasoline prices would jump to well over $2 per gallon, and we might even have to tap into the SPR. The way to avoid this painful scenario is to raise private sector inventories by keeping millions of barrels of oil on the market rather than putting them into the SPR. It does not make sense to increase our ability to respond to the most unlikely events at the expense of our ability to respond to the more certain ones. Adding more oil to the SPR will increase our energy security only slightly while decreasing our economic security significantly. We cannot measure our national security solely by the number of barrels of oil in the SPR. Our economic well-being is also critical to our national security. In deciding whether or not to put oil into the SPR, the administration should adopt a broader view of what is important to our national security. Affordable gasoline for American consumers is important to our economic and national security. Affordable jet fuel and the health of our airline industry is important to our economic and national security. Affordable diesel fuel and the health of our manufacturing, trucking, chemical, and agricultural industries is important to our economic and national security. When oil, gasoline, jet fuel, and diesel fuel prices are at or near record high levels, we should consider the importance of increasing the supply of oil to these industries as well as to the SPR program. This real-world price change shows that cancellation of the currently planned shipments to the SPR would provide immediate relief in the oil and gasoline markets, and also provide long-term relief as the additional oil supplies would enable inventories to be built back to normal levels. It is bad enough that the Department of Energy has refused to suspend SPR deposits. To make matters worse, the Department of the Interior has now announced that it too will take even more barrels off the market starting April 1. Currently, the administration plans to remove 5.6 million barrels from the market and put them in the SPR during the month of April-- about 190,000 barrels per day. The latest announcement means that, beginning April 1, the administration will be taking even more barrels--for a total between 200,000 and 300,000 barrels per day--of oil off the market. How much oil is 200,000-300,000 barrels per day? A lot. It is as much oil as we import from many countries, or as much as we get domestically from major oil-producing states. In December 2003, for example, we imported 211,000 barrels per day from Kuwait. In the same month, the State of Louisiana produced 244,000 barrels daily. Oklahoma produced about 180,000 barrels a day. Moreover, by taking more oil off the market for the SPR when prices are high, the administration is needlessly increasing the cost of the SPR program for the taxpayers. In effect, the taxpayers will be paying over $35 per barrel for this oil for the SPR. By canceling these expensive deliveries, we could use the money obtained from the sale of this oil for our urgent homeland security needs. Indeed, this is just what the Levin-Collins amendment would do. The administration sometimes claims that if we suspend SPR deliveries to increase supplies, OPEC might reduce production to counter our efforts. This is not a very good reason for not doing anything to improve our situation. To begin with, we shouldn't avoid doing something that makes sense for our national interests because we're afraid that OPEC might respond by taking action adverse to those interests. We must determine our own security, and not act in fear of OPEC. If they act negatively to us, we should have a response ready. Second, OPEC has not threatened to take any such action. The administration shouldn't project actions that OPEC hasn't even hinted at. In fact, an article from last Friday's Oil Daily indicates that the effect of the Senate Budget Resolution amendment to postpone SPR deliveries is having a positive effect on OPEC--that in the wake of the passage of our amendment some OPEC members ``are doubly keen to reassure major consumers that they are happy to meet any shortfall [in supply].'' Finally, the same argument could be made against any proposal to increase our domestic oil supplies. If we accepted this argument, there would be no point in us trying to increase supplies in any manner whatsoever. It is always possible that OPEC will counter our measures to increase our energy supplies, but we cannot be paralyzed into inaction by fear of what OPEC might do. I support filling the SPR, but not at any price. It is time for the administration to consider the effect of filling the SPR on our economic security. It is time for the administration to protect American consumers and businesses rather than just the SPR program. It is time to count jobs and growth, not only barrels of oil. It's time to stop filling the SPR. I ask unanimous consent that the Department of the Interior press release regarding the reservation of oil for the SPR program, a recent article from The Economist on high oil prices, an article from last Friday's Oil Daily, and a bipartisan letter to the President from 53 House members urging the suspension of shipments to the SPR be printed in the Record.

Mr. LEVIN. Mr. President, the Senate has spoken. The administration should listen to common sense and to what the market says, that when supply in the private sector goes down, prices go up, and the Strategic Petroleum Reserve fills have made a major contribution to high oil and gasoline prices in this country. It adds little to our energy or economic security for the administration to pursue the course it is on. I hope it will reconsider the SPR deposits. I yield the floor.

Mr. LEVIN

Mr. LEVIN. Reserving the right to object, I wonder if as part of that agreement we could line up speakers as follows: That Senator Durbin be recognized in morning business for 15 minutes; followed by Senator Bennett for 20 minutes; followed by myself for 15 minutes; followed by the Senator from Minnesota, Mr. Dayton, for 15 minutes.

Mr. LEVIN

Mr. LEVIN. Mr. President, three weeks ago the Senate passed an amendment during consideration of the gun immunity bill which would close the gun show loophole. I supported this amendment because I believe it is common sense gun safety legislation. Under current law, when an individual buys a handgun from a licensed dealer, there are federal requirements for a background check to insure that the purchaser is not a person prohibited from purchasing or possessing a firearm. However, this is not the case for all gun purchases. For example, when an individual wants to buy a handgun from another private citizen who is not a licensed gun dealer, there is no requirement to ensure that the purchaser is not in a prohibited category. This creates a loophole in the law, which makes it easy for criminals, terrorists, and other prohibited buyers to evade background checks and buy guns. This loophole is the gateway to the illegal market because criminals know they are not subject to a background check and no record is made of the sale. I cosponsored the amendment offered by Senators Jack Reed and John McCain, which would close the gun show loophole, because I believe it is a critical tool in preventing guns from getting into the hands of criminals and other ineligible buyers. This amendment would have simply applied existing law governing background checks to individuals buying firearms at gun shows. Preventing easy and unchecked access to guns is critical in preventing gun violence. This amendment also had the support of major law enforcement organizations including the International Association of Chiefs of Police, the National Troopers Coalition, the International Brotherhood of Police Officers, the Police Executive Research Forum, the Major Cities Chiefs, the National Association of School Resource Officers, the National Black Police Association, the National Organization of Black Law Enforcement Executives, and the Hispanic American Police Command Officers Association. The gun industry immunity legislation would have provided unprecedented protection from liability to gun manufacturers and dealers, even in cases where their own gross negligence or recklessness led to someone being injured or killed. I opposed the bill and it was defeated in the Senate. However, before the bill was defeated, the gun show loophole amendment passed with bipartisan support. Given that, I hope the Senate will take up and pass gun show loophole legislation this year.

Mr. LEVIN

Mr. LEVIN. Mr. President, I take this opportunity to pay tribute to Pamela Lamar Jordan, a tireless advocate for families and the plight of children. She was committed to serving the needs of her community and to improving the quality of life for young people in Saginaw. Pamela received numerous community service awards throughout her life. She will be missed by those whose lives she has touched. Pamela Lamar Jordan was born in Saginaw, Michigan on June 24, 1961. She is a graduate of Arthur Hill High School and was in pursuit of her BSW at Saginaw Valley State University. She was a member of the Word of Faith International Ministries, where she worked with the Youth Department. She was also a 1999 graduate of the Spoken Word School of Ministry. In 1995, Pamela founded the New Alternatives Youth Service Center in Saginaw, Michigan. The Center's purpose is to educate young people and to provide an alternative to drugs, gangs, and violence. Pamela was also a mentor with the Family Youth Initiative, which is affiliated with the Bay Area Substance Abuse Coordinating Agency. Pamela was also the founder of the Saginaw Sister-2-Sister Spirit of Excellence Pageant. Sister-2-Sister promotes abstinence and works to decrease the rate of pregnancy among teenage girls in the Saginaw community. Pamela believed this program helps local teenagers better understand themselves, and provides them with the appropriate information necessary to make healthy life choices. Pamela Lamar Jordan passed away at the age of 42 on March 7, 2004. She was a woman of great faith who was devoted to her family and to her community. Pamela is mourned by her family, the members of her church, and many people across my home state of Michigan. Pamela is survived by her husband Cornelius Jordan and her four daughters: Melony, Janey, Terri and Brianna. This is, indeed, a great loss to all who knew her or for those who have benefitted from her work. I know my colleagues will join me in paying tribute to the life and work of Pamela Lamar Jordan. I hope her family takes comfort in knowing that her legacy will stand as an inspiration for generations to come.

Mr. LEVIN

Mr. LEVIN. Mr. President, I would like to introduce today, with Senator Norm Coleman, a comprehensive tax reform bill called the Tax Shelter and Tax Haven Reform Act. This bill is intended to respond to the ever increasing tax shelter and tax haven abuses that are undermining the integrity of our tax system, robbing the Treasury of tens of billions of dollars each year, and shifting the tax burden from high income corporations and individuals onto the backs of the middle class. Abusive tax shelters and the misuse of tax havens must be stopped. For more than a year, the Permanent Subcommittee on Investigations, on which I serve, has been conducting an investigation at my request into the design, sale, and implementation of abusive tax shelters. I initiated this investigation back in 2002, but it has since been carried out in a bipartisan fashion with the support of Senator Coleman, who is our current Subcommittee Chairman. What the subcommittee investigation has found is that many of the abusive tax shelters were not dreamed up by the taxpayers who used them. Instead, most were devised by tax professionals, like accountants, lawyers, bankers, and investment advisors, who then sold the tax shelter to clients for a fee. In fact, as our investigation widened, we found hordes of tax advisors cooking up one complex scheme after another, packaging them up as generic ``tax products'' with boiler-plate legal and tax opinions, and then undertaking elaborate marketing schemes to peddle these products to literally thousands of persons across the country. In return, these tax shelter promoters were getting hundreds of millions of dollars in fees, while diverting billions of dollars in tax revenues from the U.S. Treasury each year. In November 2003, our subcommittee held two days of hearings and released a report prepared by my staff which pulled back the curtain and provided an inside looks at how even some respected accounting firms, banks, investment advisors, and lawyers have become the engines pushing the design and sale of abusive tax shelters to corporations and individuals across this country. It was this investigative effort that inspired many of the provisions in the bill to combat abusive tax shelters and the professionals who promote them. Another part of this bill results from subcommittee investigations examining how tax havens around the globe help taxpayers dodge their U.S. tax obligations, using corporate, bank, and tax secrecy laws to impede U.S. tax enforcement efforts. At one subcommittee hearing in 2001, a former owner of an offshore bank in the Caribbean testified that he believed 100% of his bank clients were engaged in tax evasion. He said that almost all were from the United States, described elaborate measures taken to avoid IRS detection of his clients' money transfers, and expressed confidence that the Government would defend client secrecy in order to attract business to the island. For the past few years, the IRS has made detection of offshore bank accounts used by individuals to conceal taxable income an enforcement priority, estimating that as many as 1 to 2 million U.S. taxpayers are hiding funds in offshore tax havens. Corporations are also using tax havens to reduce their U.S. tax liability. A subcommittee hearing held in 2003, on an Enron tax shelter known as Slapshot, as well as Senate Finance Committee hearings on other Enron tax scams, show how corporations can utilize tax havens to avoid U.S. taxes. A GAO report recently released by Senator Dorgan and myself shows that nearly two-thirds of the top 100 companies doing business with the United States now have one or more subsidiaries in a tax haven. One company, Tyco International, has 115 tax haven subsidiaries. Data recently released by the Commerce Department further demonstrates the extent of U.S. corporate use of tax havens, indicating that, as of 2001, almost half of all foreign profits of U.S. corporations were in tax havens. Over the years, subcommittee investigations have uncovered numerous instances of how U.S. tax enforcement efforts examining transactions, bank accounts, and other activities in tax havens have been delayed or impeded by tax haven secrecy laws and practices. This bill is intended to give the U.S. Government new tools to stop uncooperative tax havens from continuing to help corporations and individuals dodge their U.S. tax obligations. Stop and think what is at stake here. Men and women in our military are putting their lives on the line every day for our Nation. They are in Iraq, Afghanistan, the Balkans, and now Haiti. To make sure we can provide them with the resources they need, all Americans need to contribute their fair share in taxes. Unfortunately, there are too many companies and individuals that finagle ways to avoid paying what they owe, despite the benefits they receive from this country. These tax dodgers deprive our Nation of billions of dollars in resources and add to the tax burdens of the rest of us. Companies benefit from so much here in America: our stock market, telecommunications infrastructure, patent protections, educated workforce, research support, sophisticated financial systems, and basic law enforcement. Yet, too many companies run to use tax avoidance schemes based on abusive tax shelters and tax havens like a car speeding through a tollbooth, leaving the rest of us to pitch in the required fare and subsidize their free ride. Corporate and individual tax dodges today take many forms. They include the following: Abusive tax shelters in which taxpayers use complex investment schemes with no real business purpose other than to evade tax; corporate inversions in which companies pretend to move their headquarters to an offshore tax haven just to avoid their U.S. tax bill; foreign tax havens in which taxpayers use bank accounts and shell entities in foreign tax havens to escape detection while dodging taxes; and structured financial transactions in which companies use shell entities in convoluted setups or improper transfer pricing schemes to avoid taxes. In most cases, these tax dodges are designed, sold and implemented by tax professionals who receive lucrative fees to help their clients avoid their tax obligations. To provide a better picture of some of these abuses, here are a few recent examples. Perhaps the best-known corporate inverter is Tyco International, which operates out of New Hampshire and New Jersey, but claims a mailing address in Bermuda to avoid U.S. taxes. This tax dodge is a slap in the face of U.S. taxpayers, especially in light of the $300 million in Federal defense and homeland security contracts awarded to Tyco in FY 2002, as well as the months-long, taxpayer-financed prosecution of Tyco's former officers for diverting $600 million in corporate assets to their personal use. Tyco, once a proud U.S. corporation, has sunk to new lows in its attempts to avoid paying its U.S. taxes. Corporate tax abuses aren't confined to large U.S. companies. One example of an abusive tax shelter being used by some small companies is called ``SC2,'' which was one of the tax shelters featured in our recent Subcommittee hearings and staff report. In this shelter, a closely-held corporation temporarily grants nonvoting stock to a tax- exempt charity and then allocates--on paper--a significant portion of the company's profits to that charity. Beforehand, the company takes steps to limit or suspend any obligation to actually distribute income allocated to its shareholders. The charity pays no tax on the paper profits allocated to it. When the original corporate owners eventually reclaim both the stock and undistributed profits, they claim that capital gains taxes, rather than higher ordinary income taxes, apply to the income previously allocated to the charity. The charity gets paid for its complicity, the corporate owners evade a lot of tax, and Uncle Sam is the loser. A third tax shelter example involves a massive, $20 billion transfer pricing tax scam recently disclosed in a report issued by the bankruptcy examiner for Worldcom-MCI. The report states that Worldcom avoided paying hundreds of millions of dollars in state and Federal taxes over a four-year period, from 1998 to 2001, by claiming questionable expenses from related shell companies, including for a bogus intangible asset called ``management foresight.'' The bankruptcy examiner, former Attorney General Richard Thornburgh, called on the company to sue its tax advisor and auditor, KPMG, for landing the company in this tax disaster, but Worldcom-MCI has, instead brazenly decided to continue using the tax dodge. This is the same company, by the way, that profits from billions of dollars in Federal and State contracts paid for--that's right--with taxpayer dollars. The tax chiseling seems endless. Some of the tax ploys are arguably technically legal and require a change in law or regulation. Others appear blatantly illegal, yet elicit little or no penalty. Companies keep using them, and their competitors are put at a disadvantage unless they join in. Too many respected accounting firms, financial institutions, and lawyers have joined in the sickening games by peddling tax dodges and taking a cut of the billions of dollars diverted from the U.S. Treasury. As IRS Commissioner Mark Everson has pointed out, accountants and lawyers should be the pillars of our system of voluntary tax compliance, not the architects of its circumvention. This tax chiseling hurts average taxpayers, not only by leaving them with the burden of making up the lost revenues, but also by constricting resources for essential government programs. It is a lack of resources that results in the new Medicare drug prescription plan having a huge gap in coverage that denies elderly help with their prescription drug bills when they most need it. It's why our schools are burdened with unfunded mandates. It's why we have a giant and deepening deficit ditch threatening our children's economic well-being. The list of harmful consequences of tax dodging is long and disquieting. The Tax Shelter and Tax Haven Reform Act we are introducing today contains a number of measures to put an end to these tax dodges: To curb abusive tax shelters, the bill strengthens the penalties on tax shelter promoters and codifies the economic substance doctrine eliminating tax benefits for transactions that have no real business purpose or real economic impact apart from those tax benefits. To crack down on the misuse of tax havens, we authorize Treasury to issue an annual list of ``uncooperative tax havens'' and suspend U.S. tax benefits for income attributed to those jurisdictions. We also require the Treasury Department to issue standards for tax shelter opinion letters, and give the IRS new tools to take tough enforcement action against the accounts, lawyers, bankers and other financial professionals promoting or facilitating deceptive tax schemes. Let me be more specific. Title I of the bill strengthens a host of tax shelter penalties, which are currently so weak they provide no deterrent effect at all. Tow examples demonstrate the problem: First, consider the penalty for promoting an abusive tax shelter, as set forth in section 6700 of the tax code. Currently, the penalty is the lesser of $1,000 or 100 percent of the promoter's gross income derived from the prohibited activity. That means in most cases, the maximum fine is $1,000. That figure is laughable, when many abusive tax shelters are selling for $100,000 or $250,000 a piece. Our investigation uncovered some tax shelters that were sold for $900,000 or even $2 million each, and instances in which the same cookie-cutter tax opinion letter was sold to 100 or even 200 clients. A $1,000 fine just doesn't cut it. If further proof were needed, one document uncovered by our investigation contains the cold calculation by a senior tax professional at KPMG comparing possible tax shelter fees with possible tax shelter penalties if the firm were caught promoting an illegal tax shelter. This senior tax professional wrote the following: ``[O]ur average deal would result in KPMG fees of $360,000 with a maximum penalty exposure of only $31,000.'' He then recommended the obvious-- going forward with sales of the abusive tax shelter on a cost-benefit basis. Proposals to increase the penalty for promoting abusive tax shelters have already passed the Senate three times and are included in the JOBS Act pending in the Senate. But these proposals are not tough enough to do the job that needs to be done. In general, they increase the penalty for promoting abusive tax shelters to a maximum of 50 percent of the promoters' gross income from the prohibited activity. Now, think about that. Why should anyone who illegally pushes an abusive tax shelter be allowed--if they get caught--to keep half of their profits? What deterrent effect is created by a penalty that allows promoters to keep half of their wages if caught, and all of them if they are not? Penalities for those who peddle abusive tax shelters need to be a lot tougher. They should, first, make sure a tax shelter promoter is deprived of every penny of the profits earned from selling or providing legal advice on the shelter, and then pay a fine on top of that. Only that way is the promoter actually penalized for misconduct. Secondly, tax shelter promoters ought to face a penalty that is at least as harsh as the penalty imposed on the taxpayer who purchased their tax product, not only because the promoter is usually as culpable as the taxpayer, but also so promoters think twice about pushing tax schemes. Specifically, section 101 of the bill would increase the penalty on tax shelter promoters to an amount up to the greater of either 150 percent of the promoters' gross income from the prohibited activity, or the amount assessed against the taxpayer--including backtaxes, interest and penalties--for using the abusive shelter. A second penalty provision in the bill involves what our investigation found to be one of the biggest problems--the knowing assistance of accounting firms, law firms, banks, and others helping taxpayers understate their taxes. Right now, under Section 6701 of the tax code, persons who knowingly aid and abet a taxpayer in understating their tax liability face a maximum penalty of $1,000 for assisting individual taxpayers and $10,000 for assisting corporate taxpayers. These paltry amounts provide no deterrent at all. Worse yet, the penalty applies only to so-called ``tax return preparers.'' Current law imposes no penalty at all on those who knowingly design and carry out the abusive tax shelter, so long as those persons don't actually prepare the taxpayer's return. Section 102 of the bill would strengthen this penalty significantly, subjecting aiders and abettors to a maximum fine up to the greater of either 150 percent of the aider and abettor's gross income from the prohibited activity, or the amount assessed against the taxpayer for using the abusive shelter. And this penalty would apply to all aiders and abettors, not just tax return preparers. These are just two of the penalties strengthened by the Tax Shelter and Tax Haven Reform Act. Others include stronger penalties for tax shelter promoters who fail to register a new shelter with the IRS or fail to provide the IRS with a client list when requested, and stronger penalties for taxpayers who fail to disclose a tax shelter on their tax return or fail to disclose an offshore bank account. Title II also contains many provisions to combat abusive tax shelters, but first I want to mention Title III, which focuses on the economic substance doctrine, and Title IV which addresses offshore tax havens. Title III of the bill would include in Federal tax statutes for the first time what is known as the economic substance doctrine. This anti- abuse doctrine was fashioned by Federal Courts asked to evaluate transactions which appeared to have little or no business purpose or economic substance apart from tax avoidance. It has become a powerful analytical tool used by courts to invalidate abusive tax shelters. At the same time, because there is no statute underlying this doctrine and the courts have developed and applied it differently in different judicial districts, the existing case law has many ambiguities and conflicting interpretations. Under the leadership of Senators Grassley and Baucus, the Chairman and Ranking Member of the Finance Committee, the Senate has voted three times to codify the economic substance doctrine, but it has yet to be enacted into law. Since no tax shelter legislation would be complete without addressing this issue, Title III of this comprehensive bill proposes once more to include the economic substance doctrine in the tax code. Sections 401 and 402 in the Tax Shelter and Tax Haven Reform Act also tackle the issue of tax havens by deterring use of tax havens that fail to cooperate with U.S. tax enforcement efforts. There are dozens of jurisdictions around the world that have enacted corporate, bank, and tax secrecy laws and then, in too many cases, used these laws to justify a failure to provide timely information to U.S. law enforcement about persons suspected of either hiding funds in the jurisdiction's offshore bank accounts or using offshore corporations and deceptive transactions to disguise their income or create phony losses to shelter their income from taxation. Section 401 of the bill would tackle the problem by giving the Treasury Secretary the discretion to designate offshore tax havens as ``uncooperative'' and to publish an annual list of these uncooperative tax havens. The Treasury Secretary is intended to develop this list by evaluating the actual record of cooperation experienced by the United States in its dealings with specific jurisdictions around the world. While many offshore tax havens have recently signed treaties with the United States promising for the first time to cooperate with U.S. civil and criminal tax enforcement, it is undetermined what level of cooperation will actually result. For example, after one country signed a tax treaty with the United States, the government that led the effort was voted out of office by treaty opponents. Treasury needs a way to ensure that tax treaty obligations are met and to send a message to jurisdictions that impede U.S. tax enforcement. This bill will help Treasury get the cooperation it needs. in addition to authorizing Treasury to publish an annual list of uncooperative tax havens, section 401 and 402 of the bill would deter use of uncooperative tax havens by imposing two types of restrictions on taxpayers doing business in the designated jurisdictions. First, taxpayers would be required to provide greater disclosure of their activities on their tax returns, including disclosing on their returns any payment above $10,000 to a person or account located in a designated tax haven. Second, the bill would disallow any tax benefits, such as foreign tax credits or deferral of taxation, for income attributable to a designated tax haven. These restrictions would provide the United States with powerful weapons to compel tax havens to begin to cooperate with U.S. tax enforcement efforts. In addition to addressing the need to increase tax shelter penalties, codify the economic substance doctrine and deter use of uncooperative tax havens, the bill includes a number of measures in Title II that would address other aspects of abusive tax shelters. I'd like to discuss a few of these. Title II of the bill includes a number of additional measures to crack down on abusive tax dodges. Section 201 of the bill would, in part, direct the Department of the Treasury to issue as part of Circular 230 new standards for tax practitioners issuing opinion letters on the tax implications of tax shelters. The public has traditionally relied on tax opinion letters to obtain informed and trustworthy advice about whether a tax-motivated transaction meets the requirements of the law. The investigation conducted by the Permanent Subcommittee on Investigations found that, in too many cases, tax opinion letters no longer contain disinterested and reliable tax advice, even when issued by supposedly reputable accounting or law firms. Instead, too many tax opinion letters have become marketing tools used by tax shelter promoters and their allies to sell clients on their latest tax products. In too many of these cases, financial interests and biases were concealed, unreasonable factual assumptions were used to justify dubious legal conclusions, and taxpayers were misled about the risks that the proposed transaction would later be designated an illegal tax shelter. Reforms are essential to address these abuses and restore the integrity of tax opinion letters issued by reputable firms. Treasury recently proposed standards that would address some of the ongoing abuses affecting tax shelter opinion letters; however, the proposed standards do not take all the steps needed. Our bill would require Treasury to issue standards addressing a wider spectrum of tax shelter opinion letter problems, including: (1) the independence of the opinion letter writer from tax shelter promoters, (2) collaboration among letter writers resulting in joint financial interest, (3) avoidance of conflicts of interest that would impair auditor independence, (4) review and approval procedures by a firm for opinion letters issued in the name of the firm, (5) reliance on reasonable factual representations, and (6) the appropriateness of fee charges. By addressing each of these areas, Circular 230 could help reduce the ongoing abusive practices related to tax shelter opinion letters. During the November tax shelter hearings before the Permanent Subcommittee on Investigations, IRS Commissioner Mark Everson testified that his agency was barred by section 6103 of the tax code from communicating information to other Federal agencies that would assist those agencies in their law enforcement duties. He indicated, for example, that the IRS was barred from providing tax return information to the SEC, Federal bank regulators, and the Public Company Accounting Oversight Board, or PCAOB, even when that information might assist a Federal agency in evaluating whether an abusive tax shelter resulted in deceptive accounting in a public company's financial statements, whether a bank selling tax products to its clients had violated the law against promoting abusive tax shelters, or whether an accounting firm had impaired its independence by selling tax shelters to its audit clients. These communication barriers between our key Federal civil enforcement agencies are outdated, inefficient, and ill-suited to stopping the torrent of tax shelter abuses now affecting or being promoted by so many of our public companies, banks, and accounting firms. To address this problem, section 203 of the bill would authorize the Treasury Secretary, with appropriate privacy safeguards, to disclose to the SEC, Federal banking agencies, and the PCAOB, upon request, tax return information related to abusive tax shelters, inappropriate tax avoidance, or tax evasion. The agencies could then use this information only for law enforcement purposes, such as preventing accounting firms or banks from promoting abusive tax shelters or aiding or abetting tax evasion, and detecting and punishing accounting fraud related to illegal tax shelters employed by public companies. Improved information sharing for law enforcement purposes would greatly aid our agencies in their enforcement efforts. The bill would also provide for increased disclosure to Congress. Section 204 of the bill would make it clear, for example, that companies providing tax return preparation services to taxpayers cannot refuse to comply with a Congressional document subpoena by citing a consumer protection provision in the tax code, section 7216, prohibiting tax return preparers from disclosing taxpayer information to third parties. Several accounting and law firms raised this claim in response to document subpoenas issued by the Permanent Subcommittee on Investigations, contending they were barred by the nondisclosure provision in section 721 from producing documents related to the sale of abusive tax shelters to clients for a fee. The accounting and law firms maintained this position despite an analysis provided by the Senate legal counsel showing that the nondisclosure provision was never intended to create a privilege or to override a Senate subpoena, as demonstrated in Federal regulations interpreting the provision. To clarify the law, the bill would codify the existing regulations interpreting section 7216 and make it clear that congressional document subpoenas must be honored. Section 204 would also ensure Congress has access to information about decisions by Treasury related to an organization's tax exempt status. A 2003 decision by the D.C. Circuit Court of Appeals, Tax Analysts v. IRS, struck down certain IRS regulations and held that the IRS must disclose letters denying or revoking an organization's tax exempt status to the public. The IRS has been reluctant to disclose such information, not only to the public, but also to Congress, including in response to requests by the Permanent Subcommittee on Investigations. This section of the bill would make it clear that, upon receipt of a request form a Congressional committee or subcommittee, the IRS must disclose documents, other than a tax return, related to the agency's determination to grant, deny, revoke or restore an organization's exemption from taxation. Still another finding of the subcommittee investigation is that tax practitioners are circumventing current State and Federal constraints on charging tax service fees that are contingent on actual or projected tax savings. Traditionally, accounting firms charged flat fees or hourly fees for their tax services. In the 1990s, however, they began charging ``value added'' fees based on, in the words of a one accounting firm's manual, ``the value of the services provided, as opposed to the time required to perform the services.'' In addition, some firms began charging ``contingent fees'' that were based on a client's obtaining specified results from the services offered, such as projected tax savings. In response, many States prohibited accounting firms from charging contingent fees for tax work to avoid creating incentives for these firms to devise ways to shelter substantial sums. The SEC and the American Institute of Certified Public Accountants also issued rules restricting contingent fees, allowing them in only limited circumstances. The subcommittee investigation found that tax shelter fees, which are typically substantial and sometimes exceed $1 million, are often linked to the taxpayer's projected tax savings or paper losses to be used to shelter income from taxation. For example, in three tax shelters examined by the Subcommittee, documents show that the fees were equal to a percentage of the paper loss to be generated by the transaction. In one case, the fees were typically set at 7 percent of the transaction's generated ``tax loss'' that clients could sue to shelter other taxable income. In addition, other evidence indicated that, in at least some instances, a tax advisor was willing to deliberately manipulate the way it handled certain tax products to circumvent the contingent fee prohibitions. One internal document at an accounting firm related to a specific tax shelter, for example, identified the states that prohibited contingent fees. Then, rather than prohibit the tax shelter transactions in those States or require an alternative fee structure, the memorandum directed the firm's tax professionals to make sure the engagement letter was signed, the engagement was managed, and the bulk of services was performed ``in a jurisdiction that does not prohibit contingency fees.'' Right now, the prohibitions on contingent fees are complex and must be evaluated in the context of a patchwork of Federal, State and professional ethics rules. Section 205 of the bill would simplify the existing prohibitions on contingency fees by putting into place a single enforceable rule, applicable nationwide, that would prohibit tax practitioners from charging fees which are ``contingent upon the actual or projected achievement of Federal tax savings or benefits, or of losses which can be used to offset other taxable income.'' Section 206 of the bill would establish that it is the sense of the Senate that additional funds should be appropriated for IRS enforcement, and that the IRS should devote proportionately more of its enforcement funds to combat rampant tax shelter and tax haven abuses. Specifically, the bill would direct increased funding toward enforcement efforts combating the promotion of abusive tax shelters for corporations and high net worth individuals and the aiding and abetting of tax evasion; the involvement of accounting, law and financial firms in such promotion and aiding and abetting; and the use of offshore financial account to conceal taxable income. In a bipartisan letter that was recently sent to the Senate appropriations committee by Senators Coleman, Collins, Lieberman and myself, we wrote that, ``Tax enforcement is one area where a relatively small increase in spending can pay for itself many times over.'' Tens of billions in revenues that should support this country would actually reach the Treasury if we would hire adequate enforcement personnel, close the tax loopholes, and put an end to tax dodges. It is past time to get serious about tax shelter abuses, uncooperative tax havens, and the tax dodgers who use them. This bill would send the message to tax dodgers that their shenanigans are unfair, unpatriotic, and unacceptable. We need to stop putting a disproportionate burden on the shoulders of the average American and make sure all taxpayers are paying their fair share. I ask unanimous consent that a summary of the bill and the text of the bill be printed in the Record.

Mr. LEVIN

Mr. LEVIN. Mr. President, last night the Senate voted to accept the amendment I offered with Senator Collins to the fiscal year 2005 budget resolution to lower oil prices by placing over 50 million barrels of oil on the open market rather than depositing it in the Strategic Petroleum Reserve--SPR--as the administration had planned. I would like to note for the record that this amendment already is accomplishing its objective of lowering oil prices. At 11:30 a.m. this morning, just hours after the news of this amendment reached the markets, oil prices fell. According to Reuters, ``NYMEX crude oil futures fell more than $1 Friday morning after a U.S. Senate vote seeking to bar more shipments of crude oil to the U.S. emergency stockpile.'' This amendment is a win-win for the American people. Low supplies of oil in private inventories are a main reason for high prices. With more oil on the open market, prices for gasoline, heating oil, jet fuel and diesel fuel will decline and consumers will benefit. At the same time, our cities and States will gain from additional funds for homeland security. The amendment directs the Department of Energy--DOE--to cancel delivery of 53 million barrels of crude oil currently planned for deposit into the SPR and to sell this oil on the open market. By selling oil on the open market, the Federal Government would generate over $1.7 billion in additional revenues. The amendment would allocate a portion of the $1.7 billion for deficit reduction and place the remainder in a reserve fund to be used for more homeland security funding for the States. I will continue to work within the Congress to persuade--or require, if necessary--the Administration to suspend shipments of oil to the SPR to lower prices further. I ask unanimous consent that the attached article on the drop in oil prices due to the Senate's action last night be printed in the Record.

Mr. LEVIN

Mr. LEVIN. Mr. President, last week, the Senate passed a 10-year extension of the assault weapons ban. We passed the assault weapons ban in 1994 because law enforcement agencies asked for it, and we extended it last week at their urging. Studies have shown that the assault weapons ban works. According to National Institute of Justice statistics reported by the Brady Campaign to Prevent Gun Violence, gun trace requests for assault weapons declined 20 percent in the first calendar year after the ban took effect, dropping from 4,077 in 1994 to 3,268 in 1995. This statistic indicates that fewer of these weapons were making it onto the streets. As my colleagues know, the 1994 law banned the production of certain semiautomatic assault weapons and high-capacity ammunition magazines. The 1994 law banned a list of 19 specific weapons as well as a number of other weapons incorporating certain design characteristics such as pistol grips, folding stocks, bayonet mounts, and flash suppressors. This law should not be allowed to sunset on September 13, 2004. This law does not need to sunset. Our Nation's law enforcement officers support this legislation, the President even has expressed his support, and the Senate passed an extension. If the law is not reauthorized, the production of assault weapons can legally resume. Restarting production of these weapons will increase their number and availability and inevitably lead to a rise in gun crimes committed with assault weapons. The Senate has shown bipartisan majorities for renewing the assault weapons ban. President Bush should demand that Congress act this year to extend the ban.

Mr. LEVIN

Mr. LEVIN. Mr. President, I cannot support final passage of this budget resolution. In my judgment, this budget, like the President's budget that it reflects, is divorced from the reality that working families in Michigan and across the country face every day. The challenges facing our country today are enormous. We are allocating resources around the globe to combat terrorism. Our troops are putting their lives on the line every day to secure and rebuild Iraq and Afghanistan. Social Security and Medicare face unprecedented strains as the baby boom generation nears retirement. At the same time, the Federal deficit is ballooning to historic proportions. Crafting a budget to accommodate these and other priorities requires a careful and balanced approach. But unfortunately, the administration's budget and the resolution before us today focus too heavily on promoting massive tax cuts mainly for the wealthiest Americans, adding a large amount to our national debt and forcing painful cuts in our Nation's priorities like education, health care and protection of the environment--cuts that have real consequences for all of us. This resolution, like the President's proposal, would make permanent the tax cuts pushed through Congress by the President in 2001 and 2003, which the Congressional Budget Office (CBO) estimates will cost $1.1 trillion over the next 10 years. Substantial revenue reductions like these have already left in their wake the largest annual deficit in our Nation's history, estimated by CBO to be a staggering $478 billion for this year and they are projected to continue. Moreover, this resolution hides its true future effects by failing to account for large expenses that we all know are coming. By using 5-year projections instead of the customary 10-year numbers, this budget disguises the size of our deficits. The cost of extending the tax cuts past 2010 explodes just outside of the 5-year window. It is also outside of this 5-year window that the surplus we have in the Social Security trust fund disappears, thereby making the unified budget figures even worse. When this budget plan is played out over 10 years, our deficits skyrocket and use up every penny of the Social Security surplus, funds that Social Security will need as our baby boomers start to retire. The President's budget blueprint also failed to include a number of inevitable costs, such as the cost of continued military operations in Iraq and Afghanistan. I am glad to see that the Budget Committee recognized this fact and placed into a special reserve fund $30 billion for military operations in Iraq and Afghanistan for 2005. However, it is clear that more will be needed; it is unrealistic to fail to reserve amounts for Iraq or Afghanistan in 2006 or subsequent years. This budget also doesn't take into account likely reforms to the Alternative Minimum Tax, reforms that are needed to keep tens of millions of middle class taxpayers from paying a tax that was originally meant to apply only to a small portion of high-income taxpayers. Because of these and other omissions, achieving the President's goal of cutting the deficit in half by 2009 is hollow rhetoric, especially if he continues to stick to his agenda. Following the path of continuing the President's tax breaks is fiscally irresponsible. The tax cuts are heavily slanted toward the wealthiest Americans. The average tax cut for the wealthiest 1 percent would be nearly 90 times larger than the average tax cut for middle- income households. In its attempt to accommodate these reckless and inequitable tax cuts, this budget proposes a significant number of cuts to vital programs. Despite the fact that millions of jobs have been lost since the beginning of the Bush Administration--many in the manufacturing industry--this budget offers little help to those looking for employment. I am disappointed that we couldn't pass the amendment offered by Senator Boxer that would have placed top priority on creating jobs in the U.S. now, discouraging the shipping of jobs overseas, and helping workers dislocated by global forces beyond their control. Instead this resolution contains significant cuts to one of the most successful federal/state partnerships in government, the Manufacturing Extension Program (MEP). The MEP creates programs to help our country's manufacturers be more productive and competitive, thus, keeping jobs here at home. The resolution also completely slashes funding for The National Institute of Standards and Technology's Advanced Technology Program (ATP), which focuses on improving the competitiveness of American companies in the global marketplace by encouraging R&D through public-private collaboration in the development of promising technologies. In the face of a loss of 2.6 million manufacturing jobs over the past few years, we should be doing all we can to promote programs that help create manufacturing and hi-tech jobs. Supporting the MEP and ATP programs is one way to do this. Additionally, I am extremely disappointed that this plan fails to extend unemployment insurance to workers who have exhausted their benefits. The number of individuals exhausting their regular State unemployment benefits and not qualifying for further benefits is higher than at any other time on record--about 90,000 workers a week; extending unemployment insurance is the right thing to do for displaced workers and for the economy because it provides an economic stimulus by putting money in the pockets of people who need it most. And the misguided priorities don't stop there. Despite our attempts to amend it, this budget inadequately addresses the needs of our children by failing to fund our education programs. The No Child Left Behind Act, approved overwhelmingly by this body just over 2 years ago, is intended to help our school children make progress toward reaching their full potential by providing things such as smaller classes, after-school programs, and technology and technology training for teachers. But the President's budget refuses to provide our school systems the funding they were promised. And now, despite attempts to change this, the budget resolution also inadequately addresses the need for increases in education funding to assist local schools. We cannot expect our schools to adequately meet the high academic standards that have been set if we neglect to provide them with the tools they need to succeed. Not only does this budget fail our young school children, it also fails our older children who seek financial assistance to attend college. The Pell grant program is the single largest source of Federal Government grant aid devoted to financing postsecondary education. This program reaches over one-fifth of all undergraduates each year. Despite the program's successes, this body opposed increasing the maximum Pell grant by a $1,050 by reducing tax breaks for the wealthiest among us. This budget also fails to meet the needs of our veterans by underfunding the Department of Veterans Affairs, forcing real cuts in the health services for America's veterans. Not only should we be redoubling our efforts to care for those who have already served in the military, but as a new generation of soldiers returns home from countries around the globe, we must ensure that they have access to a veterans' health system that is able to provide them with the care and services they have earned. Despite these obligations to the men and women who have been sent into harm's way to protect us and our way of life, I am disappointed that this body voted down more than an amendment to increase veterans' medical care, even when the cost was fully offset. Our veterans deserve not only our recognition and our gratitude, but also the appropriate funding for well-earned services and benefits. And the unwise cuts don't end there. This budget would make steep cuts in housing programs that provide assistance to low-income families, our seniors, and the disabled. The proposal also cuts foreign aid, environmental programs, health programs and the list goes on and on, calling for significant reductions in nearly every part of government in an attempt to pay for the President's tax cuts. I am pleased that the Senate passed the amendment offered by the Senator from North Dakota, Senator Baucus, to strike the reconciliation instructions requiring mandatory program cuts targeted at critical programs like Medicaid and the Earned Income Tax Credit (EITC). I hope this will end the attempts to cut these vital programs that serve low- income families and individuals, populations that are, unfortunately, growing. This is not the time to cut these critical and effective programs. Medicaid, as my colleagues know, is the largest source of funding for medical and health-related services for low-income individuals. In 2003, the program assisted 24.8 million children, and 13.6 disabled, blind, and elderly individuals. The EITC program has been highly successful in assisting persons in low-income families raising children to transition from welfare to work. EITC helps individuals and families, particularly single working mothers, meet essential needs, from putting food on the table to paying monthly rent to assisting in required educations expenditures. According to the U.S. Census Bureau, the EITC helps lift over four million people out of poverty annually, including more than 2.7 million children. Cuts to either of these programs are unacceptable. This budget is divorced from the reality that American families face every day. It burrows us deeper into the deficit ditch, continues our reckless reliance on the Social Security surplus and fails to provide vital programs with adequate funding. I cannot support it.

Mr. LEVIN. We would like perhaps 3 or 4 minutes on our side.

Mr. LEVIN. I will divide that time with the Senator from Maine.