Carl Levin

Mr. LEVIN

Mr. LEVIN. Mr. President, I move to reconsider the vote.

Mr. LEVIN. Mr. President, I will support the Graham-Smith amendment. However, I would have preferred a prescription drug benefit added to Medicare, like the Medicare Outpatient Prescription Drug Act of 2002, commonly referred to as the ``Graham-Miller proposal.'' The Graham-Miller amendment would have provided a comprehensive, voluntary, affordable and reliable prescription drug benefit to Medicare beneficiaries. I voted for the Graham-Miller amendment, which was supported by a majority of the United States Senate in a vote last week. Unfortunately, the proposal required sixty votes and subsequently failed. On balance, I will support the Graham-Smith compromise, even though I have some reservations. The bill has three major points. First, the Graham-Smith amendment provides all Medicare beneficiaries access to a prescription drug card which allows Medicare beneficiaries to pool their purchasing power and receive drug discounts of up to 35 percent. The Federal Government would add an additional 5 percent subsidy to any negotiated price. Second, low-income beneficiaries would receive full drug coverage--paying only a nominal copayment for their drugs. Third, ``catastrophic coverage'' would be available to Medicare beneficiaries so that someone doesn't have to spend more than $3,300 in out-of-pocket expenses on prescription drugs. After that, a beneficiary would only pay a $10 copayment for each prescription drug. However, I do have a number of reservations about the Graham-Smith proposal. First, a prescription drug card is no substitute for adding a prescription drug benefit to the Medicare Program. I am a strong advocate of making prescriptions drugs an entitlement for every Medicare beneficiary who wants it. A prescription drug card can be uncertain, relying on a possible negotiated benefit that might not materialize and is no substitute for a guaranteed prescription drug benefit. I am also opposed to a means test for Medicare. Medicare's beneficiaries receive services because they have paid into the system their entire working lives. It is unfair for Medicare beneficiaries to receive different benefits based on their respective incomes. This sends the wrong message to our Nation's 40 million Medicare beneficiaries who rely on its stability and its application to all eligible seniors. So, with reservation, I will be supporting the Graham-Smith proposal as the Senate's best chance to pass a Medicare prescription drug benefit this year and I urge my colleagues to do the same.

Mr. LEVIN

Mr. LEVIN. Mr. President, I rise today to congratulate General Joe Hoar on the occasion of his retirement as Chairman of the Board of Directors of The Retired Officers Association, TROA. Born in Boston, MA, General Hoar entered the Marine Corps as a Second Lieutenant in 1958, following his graduation from Tufts University. As an infantry officer, he commanded at all levels from platoon to regiment; he also commanded three Marine Corps Air Ground Task Forces. As a senior military officer, General Hoar became well-known to the members of the Armed Services Committee with his tours of duty as the Deputy Chief of Staff for Plans, Programs and Operations for the Marine Corps during the Gulf War, and, from 1991 to 1994, as the Commander in Chief, U.S. Central Command, the unified command that had the operational responsibilities for the Middle East, South Asia, and the Horn of Africa. He retired from active duty on September 1, 1994 after 37 years of commissioned service in the U.S. Marine Corps. General Hoar's dedication to service and excellence has not diminished since leaving active duty. He served as a Trustee for the Center for Naval Analyses at Suffolk University in Boston, and as a Fellow of the World Economic Forum in Geneva, Switzerland. General Hoar was elected to TROA's board of directors in 1996. For the last two years, he served as TROA's Chairman of the Board, the position from which he is now retiring. Through his stewardship, TROA continues to play a vital role as an advocate of legislative initiatives to maintain readiness and improve the quality of life for all members of the uniformed service community--active: reserve, and retired, plus their families and survivors. General Hoar has been a strong supporter of the Senate's efforts to improve military readiness and quality-of-life through a competitive compensation package for active and reserve forces, improving health care for retired personnel and their families, and enhancing protections for the survivors of deceased service members. Under his leadership, TROA has been an invaluable source of information during the Senate's deliberations on a long list of compensation and benefits issues during this extraordinarily productive period. General Joe Hoar has been a leader in every sense of the word in the U.S. Marine Corps, in TROA, and in the entire military retiree community. I know my colleagues join me in extending very best wishes to General Hoar for continued success in service to his Nation and the uniformed service members whom he has so capably led and served.

Mr. LEVIN

Mr. LEVIN. Mr. President, yesterday a report was released by the General Accounting Office, Gun Control: Potential Effects of Next-Day Destruction of NICS Background Check Records. The report provides evidence that one day is simply not enough time for law enforcement agencies to complete thorough and accurate analysis of purchase records. Under current National Instant Criminal Background Check System regulations, records of allowed firearms sales can be retained for up to 90 days, after which the records must be destroyed. On July 6, 2001, the Department of Justice published proposed changes to the NICS regulations that would reduce the maximum retention period from 90 days to only one day. Yesterday's GAO report found that during the first 6 months in which the 90-day retention policy was in effect, the Federal Bureau of Investigation used the records to launch 235 firearm-retrieval actions, an investigation and coordinated attempt to retrieve a firearm with state or local law enforcement assistance. Of the 235 firearm-retrieval actions, 228 or 97 percent could have not been initiated under the one- day record destruction policy. An additional 179 firearm-retrieval actions could have been initiated under the 90-day record retention policy, according to records, but the firearm had not yet been transferred to the buyer. The one-day destruction policy, according to the report, would make it difficult for the FBI to assist law enforcement agencies in gun-related investigations, and ultimately, compromise public safety. Internal Department of Justice memos further indicate that the FBI's 90-day retention policy is within the scope of the Brady Law. The retention of NICS Background Check Records for a 90-day period of time is critical, and I am greatly concerned by the Attorney General's action. I support the ``Use NICS in Terrorist Investigations Act'' introduced by Senators Kennedy and Schumer. This legislation would simply codify the 90-day period for law enforcement to retain and review NICS data. The GAO report provides further evidence that the Schumer-Kennedy bill is good policy. I urge my colleagues to support this common sense piece of gun-safety legislation.

Mr. LEVIN

Mr. LEVIN. Madam President, I am introducing legislation today with Congressman Dingell that will give a voice to the people of Michigan with regard to the importation of Canadian municipal waste. Over the past two years, imports from Canada have risen 152 percent and now constitute about half of the imported waste received at Michigan landfills. Currently, approximately 110-130 truckloads of waste come in to Michigan each day from Canada. And this problem isn't going to get any better. These shipments of waste are expected to continue as Toronto and other Ontario sources phase out local disposal sites. On December 4, 2001, the Toronto City Council voted 38-2 to approve a new solid waste disposal contract that would ship an additional 700,000 tons of waste per year to the Carleton Farms landfill in Wayne County, MI, in the near future. In addition, two other Ontario communities that generate hundreds of thousands of tons of waste annually have signed contracts to ship their waste to Carleton Farms. Based on current usage statistics, the Michigan Department of Environmental Quality estimates that Michigan has capacity for 15-17 years of disposal in landfills. However, with the proposed dramatic increase in the importation of waste, this capacity is less than 10 years. The Michigan Department of Environmental Quality estimates that, for every five years of disposal of Canadian waste at the current usage volume, Michigan is losing a full year of landfill capacity. We have protections contained in an international agreement with Canada. In 1986, the U.S. and Canada entered into an agreement allowing the shipment of hazardous waste across the U.S./Canadian border for treatment, storage or disposal. In 1992, the two countries decided to add municipal solid waste to the agreement. However, although the Agreement requires notification to the importing country and also allows the importing country to reject shipments, its provisions have not been enforced. Further, the EPA has said that it would not object to municipal waste shipments. We believe that in order to protect the health and welfare of the citizens of Michigan and their environment, the impact of the importation on State and local recycling efforts, landfill capacity, air emissions and road deterioration resulting from increased vehicular traffic and public health and the environment should all be considered. The shipments should be rejected by the EPA. Canada could not export waste to Michigan without the Agreement, but the U.S. refuses to implement the provisions that would protect the people of Michigan. We believe that the EPA has the authority to enforce this Agreement, but this legislation would put additional pressure on the EPA to enforce it.

Mr. LEVIN

Mr. LEVIN. Madam President, I am introducing legislation today with Congressman Dingell that will give a voice to the people of Michigan with regard to the importation of Canadian municipal waste. Over the past two years, imports from Canada have risen 152 percent and now constitute about half of the imported waste received at Michigan landfills. Currently, approximately 110-130 truckloads of waste come in to Michigan each day from Canada. And this problem isn't going to get any better. These shipments of waste are expected to continue as Toronto and other Ontario sources phase out local disposal sites. On December 4, 2001, the Toronto City Council voted 38-2 to approve a new solid waste disposal contract that would ship an additional 700,000 tons of waste per year to the Carleton Farms landfill in Wayne County, MI, in the near future. In addition, two other Ontario communities that generate hundreds of thousands of tons of waste annually have signed contracts to ship their waste to Carleton Farms. Based on current usage statistics, the Michigan Department of Environmental Quality estimates that Michigan has capacity for 15-17 years of disposal in landfills. However, with the proposed dramatic increase in the importation of waste, this capacity is less than 10 years. The Michigan Department of Environmental Quality estimates that, for every five years of disposal of Canadian waste at the current usage volume, Michigan is losing a full year of landfill capacity. We have protections contained in an international agreement with Canada. In 1986, the U.S. and Canada entered into an agreement allowing the shipment of hazardous waste across the U.S./Canadian border for treatment, storage or disposal. In 1992, the two countries decided to add municipal solid waste to the agreement. However, although the Agreement requires notification to the importing country and also allows the importing country to reject shipments, its provisions have not been enforced. Further, the EPA has said that it would not object to municipal waste shipments. We believe that in order to protect the health and welfare of the citizens of Michigan and their environment, the impact of the importation on State and local recycling efforts, landfill capacity, air emissions and road deterioration resulting from increased vehicular traffic and public health and the environment should all be considered. The shipments should be rejected by the EPA. Canada could not export waste to Michigan without the Agreement, but the U.S. refuses to implement the provisions that would protect the people of Michigan. We believe that the EPA has the authority to enforce this Agreement, but this legislation would put additional pressure on the EPA to enforce it.

Mr. LEVIN

Mr. LEVIN. Mr. President, I am proud to congratulate the Great Lakes Science Center on 75 years of service to Michigan and the Great Lakes region. This center provides the scientific information needed for restoring, enhancing, managing, and protecting wildlife and their habitat in the Great Lakes, Despite the importance of the Great Lakes, too few resources are devoted to researching and monitoring the ecosystem health. However, the Great Lakes Science Center has been at work for nearly eight decades--through the rise and fall of numerous species like lake trout, alewife, white fish, and sturgeon. After the collapse of the cisco fishery in Lake Erie in 1925, the Great Lakes Science Center, which was then called the Great Lakes Biological Laboratory, was created to study the causes of this collapse. Though the fisheries in the Great Lakes continued to suffer, it was not until 1950 that biological research was truly supported. At that time the Great Lakes were experiencing one of the worst disasters possible--the invasion of sea lamprey. The sea lamprey, which moved into the Great Lakes through the Welland Canal and spread throughout the Great Lakes, destroyed the lake trout and lake whitefish commercial fisheries. After testing over 4,000 chemicals, the Great Lakes Science Center found the compound that is still being used today to destroy the lamprey. In 1965, the center moved to its newly constructed headquarters on the North Campus of the University of Michigan at Ann Arbor. The center has been active in all areas of Great Lakes research including algal blooms, invasive species, near-shore habitat, fishery genetics and DDT levels in fish. The work of the dedicated staff has helped bring back the sturgeon and lake trout. Today, the Great Lakes Science Center has 107 staff members, 5 field stations, 1 vessel base, and 3 vessel base-field station combinations throughout the Great Lakes. I am proud of the long and distinguished history of the Great Lakes Science Center, and I wish all of the researchers at the Science Center great success for the next 75 years.

Mr. LEVIN

Mr. LEVIN. Mr. President, last month more than 25 cyclists made the 190-mile trip from Hampton, VA, to Washington, DC, to honor and remember victims of gun violence. According to the Brady Campaign to Prevent Gun Violence, the People Pedaling Peace cyclists rode not only in honor of the victims of gun violence, but they rode for stronger, more sensible gun safety laws in America. Sandra and Mike McSweeney started People Pedaling Peace last year after their daughter, Stephanie, was killed while walking out of a roller rink in Hampton, VA. Money raised by this year's bike ride will be used to build a new playground in Stephanie's neighborhood so children can have a safe place to play. Elisha Encinias, a Columbine survivor who narrowly escaped the two gunmen in her classroom that tragic day in 1999, and Amber Hensley, who witnessed the 1999 rampage at Thurston High School in Springfield, OR, also joined in this year's bike trip. Unfortunately, the number of people like them is likely to grow. They represent only a small number of Americans who have lost family and friends to gun violence. According to the Detroit Free Press, through July 14th of this year, 10 children under the age of 16 have been killed by gun fire and 25 children have been wounded by gunfire in metro Detroit. This past Sunday, a 3-year-old boy found a shotgun, picked it up, and it discharged. He wounded two other children, his 11-year-old sister and 9-year-old cousin. A week ago on Detroit's east side, an 11-year-old boy was accidentally shot in the chest by his 13-year-old neighbor after they found a handgun. Last month, a 14-year-old boy shot a 13- year-old girl while the two were arguing in a Detroit home. Thankfully, they all survived, but many have not. The need for sensible gun safety legislation and vigorous enforcement of our gun laws is desperately needed. I know my colleagues will join me in recognizing the participants in the People Pedaling Peace bike ride and expressing our thoughts and prayers to family, friends, and communities across America that have been affected by gun violence. And I urge my colleagues to join me in supporting sensible gun safety legislation.

Mr. LEVIN

Mr. LEVIN. Mr. President, I am pleased to join my colleague from Texas, Senator Hutchison, in introducing legislation to make part-time commuter students who are nationals of either Canada or Mexico and attend school in the United States eligible for student visas. Thousands of Canadian nationals commute to attend schools part time in the United States and hundreds of these part-time students commute to schools in Michigan. Between 35 and 40 part-time Canadian students attend Baker College, in Port Huron, MI, each semester. And more than 400 Canadian students plan to attend Wayne State University in Detroit part time this fall alone. Other schools in Michigan, including Lake Superior State University in Sault Saint Marie, also have a number of part-time Canadian students. Unfortunately, current law does not establish an appropriate visa for these part-time commuter students. Under the Immigration and Naturalization Act, aliens who reside in a foreign country and are pursuing a full course of study from a recognized vocational institution or an established college, university, or other academic institution in the United States are eligible for student visas. For purposes of granting student visas, the INS defines ``full course of study'' as 12 credits or more. Part-time commuter students, those who might be only taking a class or two, are not currently eligible for student visas. However, some INS district offices have permitted part-time commuter students to enter the United States as visitors to pursue their studies. However, the INS recently announced its intention to eliminate this practice and enforce the full time, 12 credit hour requirement. I agree with the INS that we need to tighten up enforcement of our immigration laws. However, achieving this goal does not mean that we have to prohibit all part-time commuter students from attending classes at schools in the United States. But absent a legislative remedy, that is exactly what will happen. Fortunately, the agency recently postponed enforcement of the policy until August 15, 2002, while administrative and legislative remedies are considered. The legislation we are introducing today appropriately addresses the problem facing part-time commuter students without opening new avenues for illegal immigration. Our bill would amend 18 U.S.C. 1101 to make certain part-time commuter students eligible for student visas. The bill would allow nationals of Canada or Mexico who both maintain a residence and a place of abode in their country or nationality and who commute to school to enroll part time in schools in the United States. Part-time commuter student visas are restricted to nationals of Canada or Mexico. Our bill would not make political asylees, residents, or others who are nationals of third countries but simply live in Canada or Mexico eligible for the visas. The legislation also enhances national security by ensuring that part-time commuter students are tracked through SEVIS, the Student and Exchange Visitor Information System. SEVIS was set up to make the Federal Government aware of changes in a foreign student's status that could affect their eligibility to remain in the United States. The Enhanced Border Security and Visa Entry Reform Act passed by the Senate in April and signed into law by the President on May 14, 2002, paved the way for full implementation of SEVIS. Certain schools began participating in a SEVIS this month and participation is mandatory by January 30, 2003. However, SEVIS only tracks nonimmigrant students and exchange visitors. Aliens admitted with visitor visas are not tracked through the system. Our bill will, for the first time, ensure that part-time commuter students from Canada and Mexico are tracked through SEVIS. Mr. President, the legislation we are introducing today is not only an improvement on current INS policy with regards to part-time commuter students but it closes an important loophole in INS's student tracking system. I am pleased to join Senator Hutchinson in introducing the bill and I look forward to seeing it pass the 107th Congress. Border Commuter Student Act of 2002

Mr. LEVIN

Mr. LEVIN. Madam President, I yield myself 5 minutes. The Dorgan amendment before the Senate has enormous potential to make more prescription drugs more affordable for more people. The amendment is particularly important for our seniors, most of whom live on fixed incomes and constantly have to decide whether they can afford to fill those prescriptions. We have a bizarre situation. We manufacture drugs in America, but they are sold at cheaper prices in other countries. Just a few examples: Brand name drugs cost an average of 31 percent less in the United Kingdom than they do in the United States; 35 percent less in Germany; 38 percent less in Canada; 45 percent less in France; 48 percent less in Italy. The General Accounting Office has studied 121 drugs and found that on average prescription drugs in the United States are priced 34 percent higher than the exact same products in Canada. I travel around Michigan, and I listen to the stories of citizens who are trying to pay for expensive prescriptions and wonder why their neighbors in Canada, just a few miles away, are able to buy the exact same drug, manufactured in America, often for half the price. We conducted a survey this last February of two of the most commonly prescribed prescription drugs. In every case, the prescription in Canada cost significantly less than the same drug in Michigan. For example, we looked at a number of pharmacies on both sides of the border. A 1-month supply of Prilosec, a gastrointestinal drug, costs about $126 in Michigan but only $71 in Canada. Similarly, a 1-month supply of Lipitor, a cholesterol-lowering drug, costs $74 in Michigan but $41 in Canada. As a result of these enormous price disparities, we have the spectacle of American citizens, mostly seniors, going into Canada by the busload to buy American-made prescription drugs at a fraction of what they have to pay here. It is absurd. It is unconscionable that we give pharmaceutical manufacturers tax breaks and direct grants to bring new drugs to the market, and then those drugs cost more in America, where they are made, than they do in other countries. We subsidize the drug costs for the rest of the planet, and that has to change. The Dorgan amendment fixes this problem in two fundamental ways: First, the amendment allows U.S. licensed pharmacists and drug wholesalers to import FDA-approved medications from Canada. Second, the amendment would allow individuals to import prescription drugs from Canada as long as the medicine is for their own personal use, as evidenced by a prescription, and is a 90-day supply or less. These provisions will allow American citizens, through the appropriate channels, to take advantage of lower prescription drug prices in Canada. According to a Boston University School of Public Health study, drug reimportation, just from Canada, could have saved consumers $38 billion in the year 2001, an enormous sum. In the year 2000, the Senate approved strikingly similar legislation by a strong bipartisan vote of 74 to 21. Unfortunately, a technical amendment blocked implementation of the legislation. Now the Senate can act again to bring lower priced prescription drugs to people who desperately need them. We can act to bring in some competition. We can act to bring in some free trade. American scientific know-how has led to the development of hundreds of lifesaving and life-enhancing prescription drugs. Some of the newer prescription drugs are modern-day medical miracles which help millions of Americans lead healthy lives well into their golden years. These drugs won't do any good if people can't afford them. It is that simple and that demanding. I hope our colleagues will support the Dorgan amendment and allow for the reimportation of prescription drugs. I yield the floor.

Mr. LEVIN

Mr. LEVIN. Mr. President, I am pleased to join my colleague from Texas, Senator Hutchison, in introducing legislation to make part-time commuter students who are nationals of either Canada or Mexico and attend school in the United States eligible for student visas. Thousands of Canadian nationals commute to attend schools part time in the United States and hundreds of these part-time students commute to schools in Michigan. Between 35 and 40 part-time Canadian students attend Baker College, in Port Huron, MI, each semester. And more than 400 Canadian students plan to attend Wayne State University in Detroit part time this fall alone. Other schools in Michigan, including Lake Superior State University in Sault Saint Marie, also have a number of part-time Canadian students. Unfortunately, current law does not establish an appropriate visa for these part-time commuter students. Under the Immigration and Naturalization Act, aliens who reside in a foreign country and are pursuing a full course of study from a recognized vocational institution or an established college, university, or other academic institution in the United States are eligible for student visas. For purposes of granting student visas, the INS defines ``full course of study'' as 12 credits or more. Part-time commuter students, those who might be only taking a class or two, are not currently eligible for student visas. However, some INS district offices have permitted part-time commuter students to enter the United States as visitors to pursue their studies. However, the INS recently announced its intention to eliminate this practice and enforce the full time, 12 credit hour requirement. I agree with the INS that we need to tighten up enforcement of our immigration laws. However, achieving this goal does not mean that we have to prohibit all part-time commuter students from attending classes at schools in the United States. But absent a legislative remedy, that is exactly what will happen. Fortunately, the agency recently postponed enforcement of the policy until August 15, 2002, while administrative and legislative remedies are considered. The legislation we are introducing today appropriately addresses the problem facing part-time commuter students without opening new avenues for illegal immigration. Our bill would amend 18 U.S.C. 1101 to make certain part-time commuter students eligible for student visas. The bill would allow nationals of Canada or Mexico who both maintain a residence and a place of abode in their country or nationality and who commute to school to enroll part time in schools in the United States. Part-time commuter student visas are restricted to nationals of Canada or Mexico. Our bill would not make political asylees, residents, or others who are nationals of third countries but simply live in Canada or Mexico eligible for the visas. The legislation also enhances national security by ensuring that part-time commuter students are tracked through SEVIS, the Student and Exchange Visitor Information System. SEVIS was set up to make the Federal Government aware of changes in a foreign student's status that could affect their eligibility to remain in the United States. The Enhanced Border Security and Visa Entry Reform Act passed by the Senate in April and signed into law by the President on May 14, 2002, paved the way for full implementation of SEVIS. Certain schools began participating in a SEVIS this month and participation is mandatory by January 30, 2003. However, SEVIS only tracks nonimmigrant students and exchange visitors. Aliens admitted with visitor visas are not tracked through the system. Our bill will, for the first time, ensure that part-time commuter students from Canada and Mexico are tracked through SEVIS. Mr. President, the legislation we are introducing today is not only an improvement on current INS policy with regards to part-time commuter students but it closes an important loophole in INS's student tracking system. I am pleased to join Senator Hutchinson in introducing the bill and I look forward to seeing it pass the 107th Congress. Border Commuter Student Act of 2002

Mr. LEVIN

Mr. LEVIN. I was not aware of that. But it surely adds an additional urgency, if we need additional urgency, for why we should do everything in our power to restore public confidence in the financial systems in this country. I left off one of my cosponsors before. Senator Biden is a cosponsor of the amendment, which is at the desk. I will ask unanimous consent we be able to vote on that at a later moment. I wonder if I could ask the Chair how much time I have remaining.

Mr. LEVIN. I will be happy to.

Mr. LEVIN. Mr. President, the Republican staff of the Joint Economic Committee put out a report called, ``Understanding the Stock Option Debate.'' They have gone through a lengthy analysis dated July 9, 2002, in which they conclude the following: Existing accounting principles provide an unambiguous answer. Stock option awards should indeed be treated as a cost in financial statements. It is quite clear to me that two things are true. No. 1, that how we treat stock options is an essential part of the post-Enron reform effort. That is No. 1. No. 2, it seems clear to me that there is at least a likelihood that a majority of this body, if allowed to vote on this amendment, will vote to refer this matter to an independent accounting standards board which has its own source of revenue, free from the kind of pressure which it was under in 1994 and 1995, to reach an appropriate conclusion. Do I believe that conclusion will be the same as they reached in 1994? I do. It is very clear to me they would reach such a conclusion and should reach such a conclusion. But as our colleagues have pointed out, that is up to the board under this amendment. We would not be adopting a standard. In all honesty, I expect they would continue on the same course they were on 8 years ago when they were violently thrown off course by people who had control over the purse strings of the organization. I would expect that would happen. But under this amendment, it is their call, not ours. I support the McCain amendment because I believe, as I believed then, that the accounting standards board wanted to expense options and that we, in executive pressure, interfered with that decision on their part. That is why I believe Senator McCain's amendment is also appropriate. But we cannot even get a vote on that amendment. Last week, we were not able to bring that amendment to a vote. But this amendment is different. This amendment says to the independent board: review this issue. Make an appropriate decision within a year. For the life of me I not only do not see how folks--regardless of the side of this particular issue that they are on--could vote against such an amendment when it does not tell them what to do but just asks them to review it and decide within a year as to what the appropriate accounting method is. I do not understand why, in the middle of a debate on the reforms which are essential to restore public confidence after the Enron fiasco, this Senate should not be allowed to vote on this issue on this bill. When the majority leader announced that one way or another we will get to a vote on this amendment, I was glad to hear that. I didn't know he was going to say that, but I certainly was glad he said that. But it seems to me that adds a reason we ought to vote for this amendment on this bill. This is the right place. Surely it is the right time. There has perhaps never been a more critical moment in our economic history in the last few decades than we are facing right now, to help us restore public confidence. It will be an additional contribution to that restoration of public confidence if we take this action. If we say yes, 8 years ago we did intervene, but now we don't want to tell the accounting standards board that they should not expense options. That was 8 years ago. What we are telling them now is: Do the right thing. We know what they tried to do 8 years ago. It is laid out in the record by them. They wanted to do what they believed was the right thing. If they had done so, they would have been put out of business. Now we have an opportunity, it seems to me, to do the right thing ourselves, which is to tell the board that has the responsibility to adopt accounting standards, to adopt what they believe is the appropriate standard. That is the right thing to do.

Mr. LEVIN. I understand Senator McCain would like to speak at this time. I see the Republican manager on the floor, so I do not know if this fits his particular timetable or not. I ask unanimous consent I be allowed to yield to Senator McCain on his----

Mr. LEVIN. Mr. President, at this time I ask unanimous consent to lay aside the pending second-degree amendment, No. 4286, and call up for consideration my amendment 4283, on stock options, which is a second- degree amendment to the Edwards amendment No. 4187.

Mr. LEVIN. Mr. President, the only way we are going to get to debate and votes is if we allow the pending amendments which are the first- and second-degree amendments to be voted on so we can move to other amendments without having one gatekeeper denying opportunity for all the others on this floor to offer amendments and have them voted on. That is not the intention of cloture and postcloture. I do not believe this process has been used in this way before, where, postcloture, germane amendments are supposed to be taken up and voted on, where first- and second-degree amendments have not been disposed of so they can be used, not with the consent of their sponsors, but they are used by others to block consideration of the amendments. The Senator from Texas says he would like to have a debate and vote. There is one way to do it. Let's dispose of the second-degree amendment, take up the Carnahan amendment and vote on it, take up the Edwards amendment and vote on it.

Mr. LEVIN. I will be happy to yield on the Senator's time.

Mr. LEVIN. Mr. President, I quote from a few observers what the stakes are in this vote and what the stakes have been in terms of the way in which stock options have not been expensed, have been stealth compensation, have fueled the incredible increase in terms of executive pay, and have been a driving force behind the deceptive accounting practices which have bedeviled this Nation and undermined public confidence in the credibility of our financial statements. Robert Samuelson, an economist, said the following: The point is that the growth of stock options has created huge conflicts of interest that executives will be hard- pressed to avoid. Indeed, many executives will coax as many options as possible from their compensation committees, typically composed of ``outside'' directors. But because ``directors are [manipulated] by management, sympathetic to them, or simply ineffectual,'' the amounts may well be excessive. . . . Stock options are not evil, but unless we curb the present madness, we are courting continual trouble. This is what a retired vice president at J.P. Morgan and Company said: There can be no real reform without honest accounting for stock options. A decade ago, the Financial Accounting Standards Board recommended options be counted as a cost against earnings like all other forms of compensation, but corporate lobbyists resisted and Congress did their bidding. Alan Greenspan and Warren Buffett, among others, are calling for the same change now, but it remains to be seen whether the accounting profession can act without congressional interference. Treating options like other forms of pay would make executive compensation transparent, diminish the temptation to cook the books, and make managers less inclined towards excessive risk taking. Warren Buffett, who was quoted by Senator McCain last week, said the following: If options aren't a form of compensation, what are they? If compensation isn't an expense, what is it? If expenses shouldn't go into the calculation of earnings, where in the world should they go? A New York Times editorial of March 31 of this year stated: We have no quarrel with the business lobby's claim that stock options have helped fuel America's entrepreneurship, particularly in Silicon Valley. But in the interest of truthful accounting and greater financial integrity, options should be treated as what they are, a worthy form of compensation that companies must report as an expense. Robert Felton, director of McKinsey & Company's Seattle office, said: Because they have so much at stake with these huge grants, options are likely to have encouraged some managers to cheat and cook the books. Allan Sloan of Newsweek: . . . options are a free lunch for companies. . . . I'm all in favor of employees becoming millionaires via options--I'm an employee, after all--but I'm also in favor of companies providing profit-and-loss statements that show the real profit and loss. Ignoring options' costs and low-balling CEO packages are simply outrageous. When campaigns start expensing options and disclosing true CEO and director compensation numbers, I'll believe that they've seen the light. According to the Economist, last year, stock options accounted for 58 percent of the pay of chief executives of large American companies. So over half the compensation of our CEOs of major companies now comes from stock options. To leave that expense off the financial statements' bottom line is to distort what is going on at companies. It is part of the reason we have not had accurately reflective financial statements at our corporations. It is part of the reason for the soup we are in right now. Where financial statements have been giving a false picture of what a company's financial situation is, it has provided stealth compensation in huge amounts to executives, it has watered down the value of stock to the owners of a corporation. That is why now we have such tremendous support from the organizations which represent stockholders. That is why, for instance, TIAA-CREF, the largest pension fund in the United States for teachers is supportive of changing the accounting for stock options. It is why the Council for Institutional Investors, which is the leading shareholders organization for pension funds, now favors expensing stock options in order to give an accurate reflection of what a company's financial statement is. It is why the AFL-CIO supports the amendments offered last week and the amendment which hopefully will be offered today if we are allowed to have a vote on this. Alan Greenspan says this is the top post-Enron reform. Expensing stock options is the top post-Enron reform. That is the Chairman of the Federal Reserve. Paul Volcker, former Federal Reserve Chairman, supports a change in stock option accounting. Arthur Levitt, former SEC Chairman, supports the change; Warren Buffett, as we mentioned; and a host of economists. Standard & Poor's believes you have to expense stock options if you are going to show an accurate earnings calculation; Citizens for Tax Justice; Consumer Federation of America; Consumers Union, and on and on. The Washington Post of April 18 says the following: . . . expert consensus favors treating options as a corporate expense, which would mean that reported earnings might actually reflect reality. . . . But nobody wants to ban this form of compensation; the goal is merely to have it counted as an expense. That is the end of that particular quote. I would like the entire quote printed in the Record, and I ask unanimous consent that all the editorials and comments that I referred to be printed in the Record in full.

Mr. LEVIN. I yield the floor.

Mr. LEVIN. Will the Senator yield for a question?

Mr. LEVIN. Is the Senator aware that the Levin-McCain amendment he is referring to is not the amendment being offered at this time? There is another amendment, and they are totally different matters involving the taxation issue. This is not a taxation amendment at all. Hopefully, it will come before the Senate today.

Mr. LEVIN. And that neither one addresses tax issues. That is a totally separate bill, not in either the McCain-Levin or the Levin- McCain accounting standard.

Mr. LEVIN. Thank you.

Mr. LEVIN

Mr. LEVIN. Mr. President, I would like to announce for the information of the Senate and the public that the Permanent Subcommittee on Investigations of the Committee on Government Affairs will hold hearings entitled ``The Role of the Financial Institutions In Enron's Collapse.'' These hearings are a continuation of Subcommittee hearings on the collapse of Enron Corp., focusing on the role of major financial institutions and how they contributed to Enron's use of complex transactions to make the company look better financially than it actually was. The hearing will take place on Tuesday, July 23, and Tuesday, July 30, 2002, at 9:30 a.m. each day, in room 342 of the Dirksen Senate Office Building. For further information, please contact Elise J. Bean of the Subcommittee staff at 224-9505.