Joseph Lieberman

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to introduce legislation to provide an incentive for capital formation for entrepreneurs. This incentive is tailor-made to form capital for entrepreneurial firms so they can spur economic growth, create high wage jobs, and ensure American competitiveness into the 21st Century. It focuses on equity investments as this is the only form of capital most entrepreneurial firms secure to fund research and development; most such firms are unable to secure debt capital. Because this incentive applies to founders stock and employee stock options, and not just stock offered to outside investors, it provides a powerful incentive for the human infrastructure and culture that drives and grows our nation's entrepreneurial firms. This legislation could not be more timely given the drought we see in equity capital for entrepreneurs. Nationwide we saw 850 Initial Public Offerings of stock, IPOs, in 1996, 610 in 1997, 362 in 1998, 501 in 1999, and 379 in 2000. So far in 2001 we have seen only 50. The total value of these offerings was $47 billion in 1996, $39 billion in 1997, $37 billion in 1998, $53 billion in 1999, and $54 billion in 2000. So far in 2001, it's only $20 billion. Entrepreneurs are starved for capital and this incentive is tailor made to provide an incentive to investors to provide it to them. The details of our proposal are straight forward. They call for a 100 percent exclusion, a zero capital gains rate, for new, direct, long- term investments in the stock of a small corporation. ``New'' means that the stock must be offered after the effective date of the bill and does not apply to sale of previously acquired equity shares. ``Direct'' means the stock must have been acquired from the firm and not in secondary markets, so it includes founders stock, stock options, venture capital placements, IPOs, and subsequent public stock offerings. ``Long-term'' means the stock must be held for three years. ``Stock'' includes any type of stock, including convertible preferred shares. ``Small corporation'' means a corporation with $300 million or less in capitalization (not valuation, but paid-in capital). The incentive applies to both individual and corporate taxpayers. And the excluded gains are not a preference item for the Alternative Minimum Tax. I am pleased that Senator Hatch has agreed to serve as the lead cosponsor of the legislation. He and I worked closely together from 1995 through 1997 to restore the capital gains incentive. There were many Members involved with that effort, but Senator Hatch and I were pleased to be the leaders of the legislative coalition that proved to be so effective. Our work now on this venture capital gains legislation is a continuation of that long and successful partnership. I am pleased that Representatives Jennifer Dunn and Robert Matsui are introducing the same bill in the other body. I have long championed this approach to capital gains incentives. Most recently, this proposal was included as Section 4 of S. 798, the Productivity, Opportunity, and Prosperity Act of 2001. The first proposal on this subject was introduced on April 7, 1987 in the 100th Congress by Senator Dale Bumpers as S. 932. I was an early supporter of this proposal and I cosponsored a version of this proposal introduced in 1991 by Senator Bumpers as S.1932. A version of that bill was enacted as part of the 1993 tax bill, Section 1202, but it was laden with technical requirements that limited its effectiveness. In the 104th Congress sent amendments to strengthen Section 1202 to President Clinton in the tax bill vetoed he vetoed in 1996. In the 105th Congress these amendments were included in all of the key capital gains, including S. 2 (Roth), S. 20 (Daschle), S. 66 (Hatch-Lieberman), S. 501 (Mack), and S. 745 (Bumpers). These amendments were sent to the conference on that bill but did not emerge from it. A broad-based capital gains incentive, which I supported, was enacted into law and a rollover provision was enacted with regard to Section 1202 stock. In the 106th Congress, amendments to strengthen Section 1202 were introduced in the House by Representatives Jennifer Dunn and Bob Matsui, H.R. 2331. Then I introduced the incentive as part of S. 798 and we are today introducing it again as a stand-alone bill. Today I am pleased to cosponsor S. 818, the capital gains proposal introduced by Senator Hatch and Torricelli and others. That proposal calls for a reduction in the current 20 percent capital gains tax rate for a broad class of investments, simplifies the capital gains tax, and provides special benefits to low income taxpayers. This bill and the bill we introduce today are complementary and should both be enacted. I recognize that the Joint Committee on Taxation, which determines the ``cost'' of all tax proposals, will determine that our proposal today, and S. 818, will lose revenue. I believe this finding to be short-sighted given the dramatic effect that these incentives will have on entrepreneurs and therefore on economic growth, but there is no way to appeal these determinations. There is no revenue remaining available under the budget resolution to tap to finance these proposals. Accordingly, I fully accept the obligation to find a way to pay for these and other tax proposals, an offset, so that we do not adversely affect the deficit. The reasons for setting a special capital gains rate for venture capital are compelling. Entrepreneurial firms are the ones which can dramatically change our whole health care system, clean up our environment, link us in international telecommunication networks, and increase our capacity to understand our world. The firms are founded by dreamers, adventurers, and risk-takers who embody the best we have to offer in our free-enterprise economy. Entrepreneurship drives growth and small, emerging companies need capital investment to innovate, create jobs, and create wealth. According to the National Commission on Entrepreneurship, a small subset of entrepreneurial firms that comprise only 5-15 percent of all U.S. businesses created about two-thirds of new jobs between 1993-96. Although venture capital is critical to the transition from a fledgling company to a growth company, only a small share of it is associated with small and new firms. In addition, we are currently experiencing a venture capital slow down that makes it even more difficult for small and new firms to attract capital. According to the National Venture Capital Association, NCVA, investment in the fourth quarter of last year slowed by more than 30 percent from the previous quarter. The primary goal of the Productivity, Opportunity, and Prosperity Act and this venture capital incentive is to protect, stimulate and expand economic growth. Government's role is not to create jobs but to help create the environment in which the private sector will create jobs. This legislation helps to create the right context for private sector growth by providing incentives for investment in training, technology, and small entrepreneurial firms. These investments are critical to economic growth and the creation of jobs and wealth. The Productivity, Opportunity, and Prosperity Act of 2001, including this venture capital proposal, is a tax plan with a purpose. And that purpose is, above all else, to stimulate private sector economic growth, to raise the tide that lifts the lot of all Americans. In the spirit of the ``New Economy,'' where the fundamentals of our economy have changed through entrepreneurship and innovation, this package includes business tax incentives that will spur the real drivers of growth: innovation, investment, a skilled workforce, and productivity. Ten years from now we will be judged by the economic policy decisions we make today. People will ask, did we fully understand the awesome changes taking place in our economy and in our society? Did we give our industry and workers the environment and the tools they need to seize the opportunities that an innovation economy offers? I believe that a true Prosperity Agenda is within our grasp. Never before has America been in a stronger position, economically, socially, or politically, to shape our future. But it will take strong and focused leadership. I am confident that if we in the public sector in Washington work in partnership with the private sector throughout our country, we can truly say of America's future that the best is yet to come. I believe that the Productivity, Opportunity, and Prosperity Act and this venture capital incentive are an important step toward that future. Mr. President, I ask unanimous consent that the text of the bill and section analysis be printed in the Record. There being no objection the material was ordered to be printed in the Record as follows:

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to introduce legislation to provide an incentive for capital formation for entrepreneurs. This incentive is tailor-made to form capital for entrepreneurial firms so they can spur economic growth, create high wage jobs, and ensure American competitiveness into the 21st Century. It focuses on equity investments as this is the only form of capital most entrepreneurial firms secure to fund research and development; most such firms are unable to secure debt capital. Because this incentive applies to founders stock and employee stock options, and not just stock offered to outside investors, it provides a powerful incentive for the human infrastructure and culture that drives and grows our nation's entrepreneurial firms. This legislation could not be more timely given the drought we see in equity capital for entrepreneurs. Nationwide we saw 850 Initial Public Offerings of stock, IPOs, in 1996, 610 in 1997, 362 in 1998, 501 in 1999, and 379 in 2000. So far in 2001 we have seen only 50. The total value of these offerings was $47 billion in 1996, $39 billion in 1997, $37 billion in 1998, $53 billion in 1999, and $54 billion in 2000. So far in 2001, it's only $20 billion. Entrepreneurs are starved for capital and this incentive is tailor made to provide an incentive to investors to provide it to them. The details of our proposal are straight forward. They call for a 100 percent exclusion, a zero capital gains rate, for new, direct, long- term investments in the stock of a small corporation. ``New'' means that the stock must be offered after the effective date of the bill and does not apply to sale of previously acquired equity shares. ``Direct'' means the stock must have been acquired from the firm and not in secondary markets, so it includes founders stock, stock options, venture capital placements, IPOs, and subsequent public stock offerings. ``Long-term'' means the stock must be held for three years. ``Stock'' includes any type of stock, including convertible preferred shares. ``Small corporation'' means a corporation with $300 million or less in capitalization (not valuation, but paid-in capital). The incentive applies to both individual and corporate taxpayers. And the excluded gains are not a preference item for the Alternative Minimum Tax. I am pleased that Senator Hatch has agreed to serve as the lead cosponsor of the legislation. He and I worked closely together from 1995 through 1997 to restore the capital gains incentive. There were many Members involved with that effort, but Senator Hatch and I were pleased to be the leaders of the legislative coalition that proved to be so effective. Our work now on this venture capital gains legislation is a continuation of that long and successful partnership. I am pleased that Representatives Jennifer Dunn and Robert Matsui are introducing the same bill in the other body. I have long championed this approach to capital gains incentives. Most recently, this proposal was included as Section 4 of S. 798, the Productivity, Opportunity, and Prosperity Act of 2001. The first proposal on this subject was introduced on April 7, 1987 in the 100th Congress by Senator Dale Bumpers as S. 932. I was an early supporter of this proposal and I cosponsored a version of this proposal introduced in 1991 by Senator Bumpers as S.1932. A version of that bill was enacted as part of the 1993 tax bill, Section 1202, but it was laden with technical requirements that limited its effectiveness. In the 104th Congress sent amendments to strengthen Section 1202 to President Clinton in the tax bill vetoed he vetoed in 1996. In the 105th Congress these amendments were included in all of the key capital gains, including S. 2 (Roth), S. 20 (Daschle), S. 66 (Hatch-Lieberman), S. 501 (Mack), and S. 745 (Bumpers). These amendments were sent to the conference on that bill but did not emerge from it. A broad-based capital gains incentive, which I supported, was enacted into law and a rollover provision was enacted with regard to Section 1202 stock. In the 106th Congress, amendments to strengthen Section 1202 were introduced in the House by Representatives Jennifer Dunn and Bob Matsui, H.R. 2331. Then I introduced the incentive as part of S. 798 and we are today introducing it again as a stand-alone bill. Today I am pleased to cosponsor S. 818, the capital gains proposal introduced by Senator Hatch and Torricelli and others. That proposal calls for a reduction in the current 20 percent capital gains tax rate for a broad class of investments, simplifies the capital gains tax, and provides special benefits to low income taxpayers. This bill and the bill we introduce today are complementary and should both be enacted. I recognize that the Joint Committee on Taxation, which determines the ``cost'' of all tax proposals, will determine that our proposal today, and S. 818, will lose revenue. I believe this finding to be short-sighted given the dramatic effect that these incentives will have on entrepreneurs and therefore on economic growth, but there is no way to appeal these determinations. There is no revenue remaining available under the budget resolution to tap to finance these proposals. Accordingly, I fully accept the obligation to find a way to pay for these and other tax proposals, an offset, so that we do not adversely affect the deficit. The reasons for setting a special capital gains rate for venture capital are compelling. Entrepreneurial firms are the ones which can dramatically change our whole health care system, clean up our environment, link us in international telecommunication networks, and increase our capacity to understand our world. The firms are founded by dreamers, adventurers, and risk-takers who embody the best we have to offer in our free-enterprise economy. Entrepreneurship drives growth and small, emerging companies need capital investment to innovate, create jobs, and create wealth. According to the National Commission on Entrepreneurship, a small subset of entrepreneurial firms that comprise only 5-15 percent of all U.S. businesses created about two-thirds of new jobs between 1993-96. Although venture capital is critical to the transition from a fledgling company to a growth company, only a small share of it is associated with small and new firms. In addition, we are currently experiencing a venture capital slow down that makes it even more difficult for small and new firms to attract capital. According to the National Venture Capital Association, NCVA, investment in the fourth quarter of last year slowed by more than 30 percent from the previous quarter. The primary goal of the Productivity, Opportunity, and Prosperity Act and this venture capital incentive is to protect, stimulate and expand economic growth. Government's role is not to create jobs but to help create the environment in which the private sector will create jobs. This legislation helps to create the right context for private sector growth by providing incentives for investment in training, technology, and small entrepreneurial firms. These investments are critical to economic growth and the creation of jobs and wealth. The Productivity, Opportunity, and Prosperity Act of 2001, including this venture capital proposal, is a tax plan with a purpose. And that purpose is, above all else, to stimulate private sector economic growth, to raise the tide that lifts the lot of all Americans. In the spirit of the ``New Economy,'' where the fundamentals of our economy have changed through entrepreneurship and innovation, this package includes business tax incentives that will spur the real drivers of growth: innovation, investment, a skilled workforce, and productivity. Ten years from now we will be judged by the economic policy decisions we make today. People will ask, did we fully understand the awesome changes taking place in our economy and in our society? Did we give our industry and workers the environment and the tools they need to seize the opportunities that an innovation economy offers? I believe that a true Prosperity Agenda is within our grasp. Never before has America been in a stronger position, economically, socially, or politically, to shape our future. But it will take strong and focused leadership. I am confident that if we in the public sector in Washington work in partnership with the private sector throughout our country, we can truly say of America's future that the best is yet to come. I believe that the Productivity, Opportunity, and Prosperity Act and this venture capital incentive are an important step toward that future. Mr. President, I ask unanimous consent that the text of the bill and section analysis be printed in the Record. There being no objection the material was ordered to be printed in the Record as follows:

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to clarify why I voted against the Voinvich amendment No. 443 to the ESEA reauthorization bill dealing with loan forgiveness for Head Start teachers. It amends the Higher Education Act of 1965 to extend loan forgiveness for certain loans to Head Start teachers. I thoroughly agree with the ideas expressed in this amendment and have supported incentives for teachers in the past. However, I could not support the amendment because it was not germane to the ESEA reauthorization. I would have supported such an amendment in the context of the Higher Education Act. The amendment provided a tax credit for those individuals who agree to be employed as a Head Start teacher for 5 consecutive years and have demonstrated knowledge and teaching skills in reading, writing, and early childhood development. I strongly believe that it is essential that we have qualified individuals employed in our Head Start programs and working with our youngest children. However, I voted against the amendment, because it was not germane to the ESEA legislation. I did so because together with other leaders on the bipartisan negotiated education compromise bill, I have agreed to vote against non germane amendments so that we will have a better chance to complete and pass this all- important ESEA reauthorization. The amendment passed 76-24 and I am happy with the results.

Mr. LIEBERMAN. Mr. President, I rise to give an explanation for votes that I made earlier today on the amendment offered by my colleague Senator Sessions and the second degree amendment offered by Senator Harkins. I voted against these amendments because ultimately I believe that we should consider such proposals when the Senate debates the reauthorization of the Individuals with Disabilities Education Act, IDEA, next year. I support the provisions in the Harkin amendment that would allow States and local education agencies to establish and implement uniform policies regarding discipline applicable to all children. This would allow school personnel to remove students from school for disruptive behavior, if such behavior is determined not to be a manifestation of the student's disability. The amendment further states that school districts must provide education services to such students in an alternative setting. Although I agree with my colleague that schools should strive to uphold such provisions, I believe there may be special exemptions to this, such as when a student poses a violent threat to educators and other students. I share the concern raised by my colleague from Alabama and have voted in the past to reform discipline provisions to ensure safe and orderly learning environments. However, such an important issue deserves our full consideration and attention and I believe we should deal with this in the context of IDEA reauthorization so we can have a fuller debate and adopt a more comprehensive approach. I look foward to working with both of my esteemed colleagues on these and other important elements of the IDEA when it is reauthorized next year.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise to speak today in memory of Mrs. Barbara L. Bailey, a great and gracious lady, the first lady of Connecticut Democratic politics, who passed away this past Monday. As my colleague Senator Clinton said when she introduced Mrs. Bailey at the White House a few years back, Mrs. Bailey ``has been a stalwart of the Democratic Party in Connecticut and progressive politics . . . in the country.'' I first met Barbara Bailey when I was writing my senior thesis at college on her husband, John Bailey, former Democratic National Committee Chairman under President Kennedy and legendary Connecticut political leader. Mrs. Bailey was an astute political advisor and partner to her husband. She was known as a gracious host to politicians at all levels of government. Mrs. Bailey entertained such political luminaries as President John F. Kennedy and Vice President Hubert H. Humphrey and many, many others. After her husband died in 1975 Mrs. Bailey continued to follow Democratic politics closely and actively. In fact, a few years ago four generations of Baileys gathered at the White House when Barbara spoke about the importance of health care and introduced President Clinton at the White House on Mother's Day. Mrs. Bailey has also spent her life devoted to public service, especially on issues concerning women. Just last month, the 93-year-old Mrs. Bailey received a lifetime achievement award from the Ladies Auxiliary of Saint Francis Hospital and Medical Center in Hartford. She also spent ten years as a trustee of the University of Connecticut. Mrs. Bailey is known to Connecticut as the matriarch of a distinguished political family. Her family has always been most important to her and I know it was a joy for her to see her children and grandchildren continue the tradition of civic involvement that she and her husband believed in so deeply. Her daughter, Barbara Bailey Kennelly, is the former U.S. Representative from Connecticut's first district and has run for Governor of the Nutmeg State. Her son, Jack Bailey, is currently the chief State's attorney. And just this summer Mrs. Bailey's grandson, Austin Perkins, represented Connecticut as a delegate to the Democratic National Convention in Los Angeles, CA. Barbara Bailey's death is a loss for me personally and for the whole of Connecticut. We will remember her fondly as a gracious woman of principle, a champion of good causes and a beloved mother, grandmother and friend.

Mr. LIEBERMAN

Mr. LIEBERMAN. Madam President, with all respect to my friend and colleague from South Carolina, I rise to oppose the amendment. This amendment, if passed, will cut out the heart of the bipartisan agreement on educational reform in this underlying bill. The heart of it is that we are going to demand results; we are going to ask for evidence that we can present to educators, to parents, indeed to students and public officials, that the vast amounts of money that we at the Federal level and those at the State and local level are investing in the education of our children is actually working. The important thing to say is that in the requirement that the underlying bipartisan agreement makes for testing of schoolchildren from grades 3- 8, we set the rules, but we leave it to the States to determine the standards. It is the States that will decide each year what is adequate yearly progress. It is the States that will determine how well their students are doing. So this is a national set of rules, but it is the States that will decide how each of them goes forward in implementing the rules. Second, we require an arcane term, but it means a lot, disaggregation of data, so that people in the State, in the local area, parents, can see how each group of children is doing so we will be sure in that evidence that we will not overlook the educational needs of the neediest of our children. I ask my colleagues to oppose this amendment and thereby stand by the bipartisan agreement for educational reform.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I thank my friend from New Hampshire. I rise this afternoon to express my support for the amendment offered by my colleague from New Hampshire which would create a Federal private school choice demonstration project. This amendment closely tracks choice proposals that I have cosponsored myself, both with Senator Gregg and, before him, with Senator Coats of Indiana. This is an experimental program. It is designed to test an idea that can help some of our children get a better education. It is focused exclusively on low-income families. It does not take any money that otherwise would go to our public schools, and it includes a strong evaluation component to determine what impact this program has both on academic achievement of participating students and on the public schools they leave behind. It constructively answers a question that in too many places has gone unanswered for too long; namely, the question that parents have asked me--and I am sure others in this Chamber--parents whose children are trapped in failing public schools and yet who cannot afford to send them to a nonpublic school that the parents are confident would be better for their children. How do we answer that question? How do we justify telling them to wait for their public schools to improve when their children may well be grown up or certainly have moved along in the school system by then, and particularly when other parents who can afford to do so are taking their children out of similar public schools? Those are questions policymakers and politicians and educators around the country have been struggling with for some time. The struggle is a real one. It is based on conflicting values, each of them strong and good, and conflicting loyalties, if you will. We share a common devotion to our public schools and the ideal of equal opportunity that they have made real for so many tens of millions of American citizens. But we also realize, as the underlying bill we are debating now acknowledges, that too many of our public schools, particularly in low- income areas, have not been realizing the promise of equal opportunity, that that promise has become effectively hollow. On the one hand, we obviously cannot and will not abandon those public schools and certainly not abandon public education in general because it is the great democratizing force in American history. It is the great ladder up in American life. The public schools will always be the primary source of learning for most of our children. We also don't want to abandon those disadvantaged children trapped in schools that their parents conclude are not adequately educating them and thereby sacrifice their hopes for a better life for their children to our vision of an idealized world. The answer ultimately is, of course, to make our public schools better. That, as I will state in a moment, is the purpose of the underlying bill. I have struggled with the question and the dilemma, the question that parents have asked, for a long period of time. I have talked to many parents, visited many public schools in Connecticut where a lot of extraordinary good work and reform is going on. I have also talked with parents of children in schools where the kids are not receiving the education the parents believe they deserve and need. And those parents want to take their children and put them in a nonpublic school. I visited many of the nonpublic schools, particularly in Connecticut--those run by the Roman Catholic diocese in our State; they are run in some of Connecticut's poorest neighborhoods--accepting children. In many cases, most of the kids are not Catholic. The parents are very satisfied with the quality of education those children are receiving. After all that inquiry, I decided--this goes back years ago--that school choice is a reform idea worth testing on a larger stage but not the one answer to all of our educational challenges and shortcomings. There is no one answer. This is an idea worth testing. That is when I began working with Senator Coats to develop a national demonstration project very similar--almost exactly similar--to that proposed in the amendment Senator Gregg has introduced today. It was my belief then, and still is my belief, that we have an obligation to try everything we can to improve educational opportunities for all of our children, to never refuse to open a single door behind which there may be a constructive answer that will help us better educate all of America's children. The growing national demand for choice has, I believe, helped to awaken us to the educational crisis that has been plaguing our poorest urban and rural neighborhoods. We have watched the standards movement take off in States around the country and listened to Governors and reformers of both parties demand accountability for results, saying we can no longer tolerate failure in our attempts to educate our children. We have been heartened by the academic achievement gains made in communities all across America. I think of Chicago and Hartford and districts throughout America that were once declared educational disaster areas and today are beacons of hope for the future of our children. Now we in this body are considering the most sweeping Federal education reform plan in a generation. This has taken on the challenge of ending what the President has called ``the soft bigotry of low expectations'' and closing the achievement gap into which too many poor minority children are falling. Part of what makes the reform plan in the underlying bill so encouraging is that it provides a series of strong answers to that same tough question I am sure many of my colleagues have heard from parents of children in public schools that they believe are not adequately answering it. This bill provides answers to that question because it will force districts to take bold steps to turn around failing schools, including radically reconstituting them, converting them into charter schools or, in the worst cases, actually closing them down and opening them as new schools. It will significantly expand the options for poor parents within the public school framework, guaranteeing that their children can transfer to higher performing public schools and providing them with transportation assistance to make that choice meaningful. For those children who do not or cannot leave a failing school, this bill gives their parents the right to demand outside tutorial or supplemental services to ensure that their children are not being left behind. The amendment Senator Gregg has offered would offer yet another option in the communities across America chosen to carry out this demonstration project for parents of children in schools that are failing. The fact is that all of the reforms I have described that are in the underlying bill before us are going to take some time to yield results. I am very optimistic about them. But even at the best, we have to be restless and unsatisfied in our continuing pursuit of a better education for our children. The truth is, the journey to a better education for all of America's children has no final destination point; it will go on and on and on. That is why I support the idea embodied in Senator Gregg's amendment which will test the school choice concept in a way that can benefit all of us who care about our children's education and at the same time provide a short-term educational lifeline for children involved in this demonstration program who are trapped in a school that is found to be failing, according to the accountability provisions of this underlying ESEA reform.

Mr. LIEBERMAN. Mr. President, I understand there is no guarantee that if this amendment were adopted, the projects authorized under it would succeed. But that is the very point of the amendment. It is a test. It is saying that we are restless and unafraid in pursuit of the best education for each of America's children. In fact, the research about the limited voucher programs that exist in cities across America today, such as in Milwaukee and Cleveland, is as controversial, in some ways, as the programs themselves. Some of the evidence is promising, suggesting that private school choice could improve achievement and drive change in the local public schools. And the fact that so much research is in dispute itself is an argument for a larger experiment, a national experiment, fully evaluated and reported on to provide us with better facts, better information, to make more informed judgments as we continue tirelessly, fearlessly, to explore every avenue to a better education for each and every one of America's children. Mr. President, I will support the Gregg amendment. I thank the Chair and I yield the floor.

Mr. LIEBERMAN. Mr. President, I ask unanimous consent to have an additional moment to finish my statement.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to join Senators Landrieu and DeWine in offering an amendment that we believe is essential to the success of the sweeping reforms included in this reauthorization of the Elementary and Secondary Education Act, ESEA and to our paramount goal of helping all children learn at a high level. This bill has the potential to be truly transformational, to change not only the way we administer Federal programs but the way we educate our children across this country, to help close the persistent and pernicious achievement gap separating the haves from the have nots in this country, and in time to help realize the promise of equal opportunity for every American child. But we are afraid that potential could be squandered if we do not also change the way we distribute Federal education funding to target our attention and resources on the schools and students with the greatest needs. As my colleagues know, that was the original intent of ESEA and its programmatic heart, Title I--to compensate for local funding inequities within states and help level the educational playing field for disadvantaged children. But the reality is, as we intend to show today, Title I is not working in practice as it was designed in principle. The reality is that Title I is not nearly as focused on serving high- poverty communities as it is perceived to be, and that many poor children are not getting the aid and attention they deserve and need as a result. Our amendment aims to fix that imbalance, to renew the true mission of Title I, and to do so in a way that will make the bill before us make good on its promise. We as New Democrats fought for the tough new accountability system included in this proposal. We fought to hold our educators responsible for meeting high standards, and to impose real consequences for chronic failure. But this engine of reform for schools could turn into a form of punishment for children if we do not back up these demands with new dollars, and channel those funds to the most disadvantaged cities and towns, to the places that have the most ground to make up. And that is exactly what our amendment would do--target most of the new Title I dollars to the districts with the highest concentration of poor children. I suspect that many of our colleagues are under the impression that this is already the case and that our amendment is therefore unnecessary. But the fact of the matter is that we have and continue to spread Title I dollars thin and wide. According to a CRS report, 58 percent of all schools receive at least some Title I funding, including many suburban schools with predominantly well-off students, from Beverly Hills in California to Greenwich in my home State of Connecticut. Of the schools that receive no Title I support at all, on the other hand, a disturbing number have high concentrations of poor students. In fact, one out every five schools with poverty rates between 50 percent and 75 percent do not receive any Title I funding at all. How does this happen? The answer lies in the fact that we do not provide enough funding to serve every eligible student, creating a zero-sum game played through formulas, and that the formulas we use are poorly targeted to need. Most Title I funds are distributed through the Basic Grants formula--in the current fiscal year, 85 percent of the $8.6 billion appropriated went through this channel. Under this formula, any district in which at least 2 percent of its students live below the poverty level qualifies for funding. This threshold is so low that more than 9 out of every 10 districts in America receive some Title I dollars. And, as a result, not nearly enough funding is leftover to meet the burdens of the highest-poverty districts. To dramatize the inequities of this distribution system, the Progressive Policy Institute prepared what it calls a tale of two cities, a comparison of the Title I profiles of Beverly Hills and Compton in South Central Los Angeles. On the one hand, Compton has 97 percent of its children eligible for free and reduced lunch, compared to 8 percent in Beverly Hills; and Compton has 43 percent of its students from families on welfare, compared to 4 percent in Beverly Hills. On the other hand, Beverly Hills has a tax revenue base that is 400 percent higher than Compton; Beverly Hills has 90 percent of its teaching force certified, while Compton has 37 percent; Beverly Hills students rank consistently in the 80th percentile on national math and reading tests in 4th and 8th grade, while Compton students hover around the 25th percentile. Yet when it comes to Title I funding, Beverly Hills receives $597 per eligible student, while Compton receives $720. Those figures just don't add up, logically or morally. How can we expect Compton to compensate for all its disadvantages with just $123 more per student? Congress recognized this problem and sought to begin fixing it in the reauthorization of the ESEA in 1994. With broad bipartisan support, we adopted a new formula, the Targeted Grants formula, which is the only one of four Title I funding formulas that is specifically designed to address the unique needs and challenges of school districts with high concentrations of poverty. And as an indication of the high priority we placed on this new formula, the 1994 reauthorization further directed that all new funding above the FY 1994 level be allocated under this formula. Unfortunately, Congress has yet to abide by this requirement, and not one dime of funding has yet to pass through the Targeted formula. This is a choice that the appropriators have consistently made, but I would say to my colleagues that we are all complicit in it. We have all voted to approve these appropriations bills for the past seven years. We have all overlooked the inequities of this system. And we are all responsible for the consequences of this funding system that promises one thing and delivers another. We are speaking out today because those consequences are too serious and the stakes for this bill too high to tolerate the status quo any longer. We must realize that by spreading Title I funds so thin and wide, we are seriously diluting their impact, undermining the effectiveness of this critical program, and undercutting the promise of equal opportunity for all children. This dilution is evident in my own State, where in the 1999-2000 school year, 74 percent of Connecticut's school districts had student poverty percentages of less than 15 percent, and received a combined total of about $8 million in Title I funds. In addition, 30 percent of the school districts had student poverty percentages of less than 5 percent and received a combined total of about $2.5 million in Title I funds. Our point is not that poor children living in those more middle class and affluent areas do not need help. They certainly do. We are simply saying that given our limited Federal resources, we have an obligation to focus first on those communities that have the greatest needs and the least capability to meet them on their own. The fact of the matter is that 40 percent of all students eligible for Title I live in the Nation's 200 poorest communities. It is those communities where the achievement gap is most pronounced. And it is those communities that must be our priority if we are going to ensure that no child is left behind. This is more than a matter of basic equity. Studies show us that poor children living in areas with high concentrations of poverty are at far more risk of educational failure than poor children living in more affluent areas. A comparison of Texas Assessment of Academic Skills, TAAS, results, for example, found that after controlling for income, low-income students in Alamo Heights Schools District, with only 17 percent poverty, had much higher rates of passage than those in San Antonio, with 88 percent poverty. Sixty-one percent of Alamo Heights' low-income students passed the TAAS, versus only 39 percent in San Antonio. And looking more broadly, a study from the U.S. Department of Education concluded that ``the relationship between family poverty status and student achievement is not as strong as the relationship between school poverty concentrations and school achievement averages.'' It is particularly in places like San Antonio and Compton that we are hoping to drive real change with the reform plan before us. Many of these disadvantaged districts are already making significant progress in turning around underperforming schools and turning up their academic achievement. I am particularly proud of what Hartford has accomplished since the State declared it an educational disaster area and took over the school system. We want to encourage other districts to pursue the same kind of bold reforms. We want to provide them with the resources and the freedom to make those reforms work. And at the end of the day, we are for the first time going to hold them accountable for producing results. But we have good reason to be skeptical about this bill's effectiveness if we do not target funding to those communities that need it most. Indeed, we may be setting up many poor students and disadvantaged schools to fail. This is basic math. We cannot realistically expect high-poverty schools, who have the farthest to climb, to fill acute shortages of qualified math and science teachers, to invest in innovative curricula and teaching methods, and to do whatever else it takes to meet the ambitious goals set out in this new system without substantial additional support. That means not only more Title I funding, but far better targeting. Thanks to my friend and colleague from Connecticut, Senator Dodd, we have met half the challenge. This bill, through the Dodd amendment, calls for full funding of Title I, and that is a significant statement, which I hope the President will heed as we continue to negotiate on appropriation levels. Our amendment would meet the second half of the challenge. It would put the Senate on record again in support of funding the Targeted formula, by saying that no new Title I dollars can be allocated until we sufficiently fund the Targeted formula. We know this formula, like any formula, is far from perfect, and it is going to have its own quirks in equity. But it's the best we have got, and until we find a better way, which I hope we will, we need to fund it. Several prominent groups and advocates for disadvantaged children are joining us in this effort--Congressional Black Caucus, Congressional Hispanic Caucus, the American Federation of Teachers, Education Trust, National League of Cities, National Urban League, National Alliance of Black School Educators, and the U.S. Chamber of Commerce. They have said publicly that they believe better targeting is critical to closing the achievement gap. We know some of our colleagues who may agree with our principle will be reluctant to support this amendment because they do not want to get caught up in a formula fight. To them I would simply say we already had this fight. It was settled seven years ago when Congress stated unequivocally that all new Title I funding should be channeled through the Targeted formula. All we are doing with this amendment is trying to get us to abide by that peace treaty. This is just restating what is already the law. But there is an important principle at issue here that we cannot forget. This is not about number runs or State aggregates, or who wins or who loses. This is about the lives of children who depend on us to do what is best for them, not our political fortunes. Ultimately, we do not fund States or districts or even schools. We fund children. And at the Federal level, it has been our special mission to help the nation's poorest children to see that they get a fair shot at the American dream. As of today that's not happening. Not when 63 percent of African- American and 58 percent of Latino fourth-graders are reading below basic levels, according to the most recent NAEP results, compared to 27 percent of whites. Not when 60 percent of disadvantaged fourth-graders are reading below basic, compared to 26 percent of advantaged. And not when African-American and Hispanic 12th-graders on average read and do math at the same level as 8th-grade white students. What we do today is not going to singlehandedly erase this achievement gap, which is a national disgrace. That is going to take a lot of hard work by dedicated educators, most of which will occur school by school, classroom by classroom. But it will make a real difference, and for that reason I strongly urge my colleagues to support this amendment and the larger cause of targeting.

Mr. LIEBERMAN. In an effort to maintain order, we now have the sponsor, and I yield to Senator Landrieu.

Mr. LIEBERMAN. I am pleased to rise today to support the amendment offered by Senators Landrieu and DeWine, a bipartisan amendment. I particularly express my appreciation to the junior Senator from Louisiana for her persistent and principled pursuit of this ideal, which we believe is essential to the success of the sweeping reforms we have included in this measure and to our paramount goal of helping all of America's children, regardless of income, learn at the highest possible level. We have said this bill could be described in a phrase that might go like this: ``Invest in reform and insist on results.'' I think we have the insistence on results in the bill now. The question is whether we are going to invest in reform. And the question is whether we are going to not just put more money into the bill, but as Senator Landrieu has said, make sure it gets to the kids in America who need it most. That is what this amendment aims to do. The underlying bill has the potential to be truly transformational, to change not just the way we administer Federal programs but, more importantly, the way we educate our children to help close the persistent and pernicious achievement gap separating the haves and have-nots in our country and thereby help better realize the promise of equal opportunity, which is the ideal, the driving ideal of American life. All that potential in this bill will be squandered if we do not also change the way we distribute Federal education funding, to target our resources on the schools and particularly on the students with the greatest needs. As my colleagues know and Senator Landrieu just indicated, that was the original intent of the ESEA at its programmatic heart, to compensate for local funding inequities within States and help level the educational playing field for disadvantaged children. But the reality is that after all these years, 36 years since title I was adopted, it is not working in practice as it was designed in principle. The reality is that title I is not nearly as focused on serving high- poverty communities and children as it is supposed to be and that many poor children, therefore, are not getting the aid and attention they deserve and need. Our amendment aims to fix that imbalance, to renew the true mission of title I, and do so in a way that will enable the bill before us to make good on its promise. Across party lines, as we have worked on this bill, we fought for the tough new accountability system included in the proposal to hold our educators responsible for meeting high standards and to impose real consequences for chronic failure--in fact, not to accept failure in the education of our children. But this engine of reform--accountability--could turn into a form of punishment for our children if we do not back up these demands with new dollars and channel those dollars to the most disadvantaged cities and towns, to the places that have the most ground to make up. That is exactly what this amendment would do. I suspect many people are under the impression this is already the case and wonder why this amendment is necessary. The fact is, we continue to spread title I dollars too thin and too wide. According to a report by the CRS, 58 percent of all schools in our country receive at least some title I funding, including many suburban schools with predominantly well-off students. Of the schools that receive no title I support at all, on the other hand, a disturbing number have a high concentration of poor students. In fact, one out of every five schools with poverty rates between 50 percent and 75 percent do not get a dime of title I funding--not any title I funding at all. That happens, of course, because of the formulas. We do not provide enough funding to serve every eligible student creating a zero-sum game played through formulas, and the formulas we use are poorly targeted to need. Most title I funds are distributed through the basic grants formula. In the current year, 85 percent of the $8.6 billion appropriated went through that channel. But under that channel, any district with at least 2 percent of its students living below the poverty level qualifies for funding. That threshold is so low that more than 9 out of every 10 school districts in America receive some title I dollars. As a result, not nearly enough funding is left over to meet the burdens of the highest poverty districts. Congress recognized the problem and sought to begin to fix it in the reauthorization of this legislation in 1994 with broad bipartisan support. We adopted a new formula, the targeted grants formula, which is the only one of the four title I funding formulas that is specifically designed to address the unique needs of school districts with high concentrations of poverty. As an indication of the high priority we have placed on that formula, the 1994 reauthorization directed that all new funding above the fiscal year 1994 level be allocated under that formula. Unfortunately, we have not abided by that requirement and not one dime of funding has yet to pass through that targeted formula. In the first instance, the appropriators made that choice, but I would say to my colleagues, we are all complicit in it. We have all voted to approve those bills. We have all overlooked the inequities in the system. We are all responsible for the consequences of a funding system that promises one thing and delivers quite another. There is more than a matter of basic equity here because studies show us that poor children, living in areas with high concentrations of poverty, are at far more risk of educational failure than poor children living in more affluent areas. Therefore, those areas of concentration need more help. Thanks to my friend and colleague from Connecticut, Senator Dodd, I think we have met half the challenge facing us. This bill, through the Dodd amendment, calls for funding of title I, full funding of title I. That is a very significant statement, which I hope the President will embrace as we continue to negotiate on appropriations levels. This amendment would meet the second half of the challenge and make the first half work as the bill originally was intended to do. It would put the Senate on record again in support of funding the targeted formula, but would do so with some teeth by saying that no new title I dollars could be allocated under this bill until we sufficiently fund the targeted formula. This is a matter not of parochial interest but of national interest because of the critical national interest we have in developing all of America's human capital to realize the promise of opportunity but also to benefit our society and our economy. That is why several prominent and diverse groups are joining in backing this amendment that we are offering, including: the United States Chamber of Commerce, the Congressional Black Caucus, the Congressional Hispanic Caucus, the Education Trust, the American Federation of Teachers, the National Education Association, the National League of Cities, the National Urban League, and the National Alliance of Black School Educators. They have said publicly that they believe better targeting is critical to closing the achievement gap. We know some of our colleagues who may agree with us in principle may be reluctant to support this amendment, perhaps because they do not want to get the bill caught up in a formula fight. But without the formula debate, without guaranteeing that the funds flow to the most needy children, this bill will ultimately not mean very much. I would also say the fight occurred 7 years ago and Congress stated unequivocally that all new title I funding should be channeled through the title I formula. All we are doing with this amendment is trying to get us to abide by the agreement that was made and adopted 7 years ago. There is an important principle at issue here that I hope we do not forget. This bill is ultimately not about number runs or aggregate State dollars received. It is not about who wins or who loses in States and districts. This is about the lives of children across America who depend on us to do what is best for them. Ultimately, we do not fund States or districts, or even schools. We fund children and their education. At the Federal level it has been our special mission to help the Nation's poorest children, to see that they get a fair shot at the American dream. I appeal to my colleagues in this Chamber and in the other body not to judge this bill by how much it does for our particular States or how much it does for a particular House district but by how much it does for our neediest children. This amendment will take us a long way in that principal direction. I thank my fellow cosponsors. I thank President Bush who on numerous occasions--most recently in a bipartisan meeting at the White House last week on this underlying bill before us--said he understands that to realize the goal he has set, which is to leave no child behind in our education system, we can't just put the money out there, we have to target the money to the kids who need it most. I thank the Chair. I yield the floor.

Mr. LIEBERMAN. If the Senator has up to 10 minutes, I will be grateful for that.

Mr. LIEBERMAN. Mr. President, who is controlling the time?

Mr. LIEBERMAN. I speak in the absence of the Senator from Louisiana who is privileged to be off the floor with her mother and father. On behalf of this amendment, which Senator Landrieu, Senator DeWine, and I have cosponsored, we have come together on a bipartisan basis on the policy in this bill to demand educational results for the children of our country.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to applaud the leadership shown by Senator Byrd and Senator Stevens with their introduction of the Climate Change Strategy and Technology Innovation Act of 2001. Senator Byrd has shown great courage by taking action to address global warming in such a forthright and courageous manner. As Livy once wrote of the great general Hannibal, Senator Byrd is preferred ``in any action which called for vigor and courage, and under his leadership the men''--or in this case his colleagues in the Senate--``invariably showed the best advantage of both dash and confidence.'' Senator Byrd's vigor and wisdom in introducing this bill are on historic parallel with the acts of Hannibal. I have been informed that the bill will likely be referred to the Government Affairs Committee, and as chairman of that committee, I look forward to reviewing it in detail. As I understand it, this legislation will create an aggressive comprehensive effort within the executive branch that will provide the scrutiny and creative thought that global warming requires. I hope that it will be the tree off of which other climate change measures will branch. As Senator Byrd has said, it is meant to complement, not replace, other mitigation measures--measures that must include binding targets for emissions reductions. The timing for the introduction of this bill could not be better. On Wednesday, the National Academy of Sciences released their latest report on climate change at the request of the White House. The White House asked the questions, and the answer was clear: global warming is ``real,'' is caused by human activity, and has potentially disastrous consequences. Now, as President Bush prepares to go to Europe next week, he must heed these disturbing findings and propose meaningful, binding measures to address climate change. The mandate is clear, we must take action and take action now to stop the overheating of our planet. We must be aggressive and we must be creative. We must harness one of our great American traditions, which is an unparalleled capacity for innovation, and lead the world in doing so. We must use flexible market structures in order to allow that innovation to flourish, we must set the strict caps on emissions that are necessary to drive that innovation. As I understand their bill, Senators Stevens and Byrd have laid out a program that will provide the framework for the United States to address the dire problem of climate change. We must accept this challenge and begin to take serious measures to reverse this troubling trend, or future generations will suffer the consequences and remember us with disappointment.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today with great pride to honor my friend and a friend of working families, Mr. George C. Springer, who is retiring as president of the Connecticut State Federation of Teachers. For more than 20 years, George fought valiantly to ensure that our educators had the tools and resources necessary to provide the best possible education to our most prized possession, our children. Widely known for his leadership, George united teachers and administrators in seeking ways to improve our schools. His innovative style led to compromise and understanding and opened a dialogue that generated ideas aimed at helping our children. During his tenure, Connecticut's public schools have attained a reputation of excellence that continues today. George's calm, well thought out ways of handling the issues facing our teachers and schools is testament of his visionary leadership style. Further, his abilities in bringing people together to work for an important goal serve as a model for labor union leadership across our nation. On behalf of the people of Connecticut, I thank George for his leadership in making Connecticut's schools better places to teach and learn and for making our community a better place for everyone.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I am deeply disappointed with the tax bill that we are voting on today. As I have expressed for some months now, I believe that we can afford a significant and responsible tax cut and I would very much like to vote for one. However, the bill that we are considering today has come back to us from the conference committee as an even more irresponsible piece of legislation than the already bloated and gimmicky bill that we passed out of the Senate earlier this week. With a wink and a nod, this legislation backloads and sunsets provisions in order to squeeze a tax cut of at least $1.7 trillion into a reconciliation package requiring a much smaller $1.35 trillion tax cut. Even more alarming, because so many provisions of this bill are heavily backloaded, the full cost can really be seen only by examining the cost in the second 10 years, from 2012 to 2021. This is the first period in which all of the measures in the bill would be fully effective. This bill would cost more than $4 trillion during its second ten years. This tax cut squanders the hard-earned prosperity that our country has built over the last several years of historic economic growth. It returns us to the fiscal nightmare of the 1980s. This huge tax cut will bust the budget, resurrect the deep deficits of the past, and drive our economy into a ditch. For these reasons I will vote against this bill and urge my colleagues to do so as well.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, this is a sad day for the U.S. Senate and America's economic future. Yesterday we rushed through an unbalanced, backloaded, overbloated tax-cut that we literally cannot afford, that runs a substantial risk of driving us back into the ditch of deficits and higher interest rates, and in the end could affect our long-term prosperity which we have worked so hard to build. And for what purpose? To meet the arbitrary deadline of passing a bill by Memorial Day. This bill and the whole process for considering it is a case study in irresponsibility, not just fiscally but governmentally. By squandering the surplus this way, we are squandering an historic opportunity to meet a number of national needs and to strengthen our economic security in the coming years. We lost an opportunity to pass not just a tax plan but a prosperity plan, geared to long-term economic growth. We lost an opportunity to pay down the debt and keep interest rates low. We may well have lost an opportunity to pass a strong prescription drug benefit and strengthen the long-term stability of Medicare and Social Security for the retirement of the baby boom generation. And we may have lost an opportunity to make strategic investments in education, job training, scientific research--all of which we know are critical to expanding the winners' circle in this innovation economy. In short, we lost an opportunity to make the surplus work for us. Instead, we have given it all away in a tax cut tilted to give the most help to those who need it least. I support tax cuts, and have voted for tax cuts, but they should be cuts we can afford. Some of the tax reductions for which I have advocated were included in this bill as part of the manager's amendment. Specifically, this amendment makes the R&D tax credit permanent, an issue on which I have been working for many years, makes a start on college tuition deductibility, and accelerates the wage credits for Round II Enterprise Zones, a program I have supported from its inception. These provisions, however, do not make up for the fiscal irresponsibility and lack of vision this bill represents. I cautioned earlier this year that ten years from now, we will be judged by the decisions we make today. People will ask, did we fully understand the awesome changes taking place in our economy and in our society? Did we create a plan to assure our ongoing prosperity? Did we direct our unprecedented surpluses into investments with the greatest returns? Did we give our workers the tools they needed to seize the opportunities an innovation economy offers? And, were we guided by the fiscal discipline and values that had brought us so far in the past decade? Much to my chagrin, I am no longer confident that these questions will be answered affirmatively. Indeed, we have passed a bill that relies heavily on a surplus whose size six months down the road is unclear, to say nothing of its dimensions ten years from now. The inflated size of this tax cut may well force us to set discretionary spending at levels that don't keep pace with inflation. We may be forced to return to the fiscally- destructive practice of deficit spending by borrowing from the Social Security and Medicare trust funds. Additionally, this tax cut pays nothing but lip service to reducing the national debt, the very step that has proven to be so valuable to the health of our economy in recent years by keeping the cost of capital and interest rates low. In fact, this bill crowds our ability to devote a single dollar, aside from funds already committed to the Medicare and Social Security Trust Funds, toward debt reduction. I am especially concerned that the idea of an immediate economic stimulus has been abandoned. During the debate on the budget resolution last month, we Democrats argued that the economy needed a jump-start and our colleagues on both sides of the aisle agreed to adopt a stimulus package. Our plan was fair. It was fast. And it was fiscally responsible. It was fair because it was directed at every American who paid any taxes--payroll or income. It was fast because it would go into effect immediately, with rebate checks being cut within weeks. And not least of all, it was fiscally responsible because it fit into a balanced budget that did not spend money we do not have. Unfortunately, the so-called stimulus included in the tax bill we just passed does none of those things. This bill may prove to be nothing but a one trick pony, and, if so, it's a bad trick to play on the American people. No matter the well- intentioned claims of my colleagues, this bill promises something we cannot deliver. It abandons fiscal discipline, fails to invest the wealth our Nation has earned over the past eight years, and may send us back down the road to debt, higher interest rates, and higher unemployment. It is not what the American people deserve, nor is it what they expected it to be.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I was pleased to cosponsor Senator Schumer's amendment which was offered last week to help families with the cost of college tuition. Although the amendment did not pass, I wanted to state for the record the reasons for my support. The decisions we make today must reflect the enduring values we hold as a society. Two of those values are the ideas of opportunity and equality for every citizen. In today's complicated society, opportunity and equality depend in large part upon the level of a person's education. In other words, the more and the better an education one gets, the greater the chances that person will succeed economically. The College Board tells us that ``while the cost of college may be imposing to many families, the cost associated with not going to college is likely to be much greater.'' Indeed, over a lifetime, the gap in earning potential between a high school diploma and a college degree exceeds $1 million. In addition, higher education is absolutely central to our ability to maintain our nation's global competitiveness. Highly trained, skilled workers making good wages are the engine that powers our economy, both because of the work they do and the revenue they generate as buyers and sellers of goods and services. Yet, the cost of higher education is an increasing burden for American families. Since 1980, tuition at both public and private four- year colleges has increased on average more than 115 percent over inflation. A middle-income family spends an average of 17 percent of its annual income to send a child to a four-year public college today. If the family sends a child to a private college, the cost increases to an average of 44 percent of the family's income. A family's financial status should not be the determining factor in whether a young person joins society with the advantages of higher education or not. Yet, families are understandably anxious about whether they will be able to provide their children with that educational advantage. They are similarly anxious about the debt burden their children may have to bear after graduation to pay off student loans. America's families need help. This is why I introduced S. 888, the College Tuition Assistance Act of 2001, which is designed to provide tax relief to middle and lower income families who are struggling to pay these costs, both while a student is in school and after graduation when student loans come due. Senator Schumer's amendment is an important step toward providing families with this type of help compared to what is now in the Finance Committee's bill. It increases the size of the tax deduction families may take to offset the burden of tuition payments. Senator Schumer's amendment also provides a larger tax credit for graduates paying interest on their student loans. Although the amendment failed, it recognized a critical issue. Educational costs are difficult to bear, even for families who make a decent living. My bill would provide more relief to middle income families and would also extend a hand to lower income families, whose needs are far greater than the aid they receive to put their children through college. My bill also would provide relief sooner. So, I was pleased to support Senator Schumer's amendment and I intend to continue to fight for these provisions which would make a real difference for America's families.

Mr. LIEBERMAN

Mr. LIEBERMAN. I thank the Chair. Mr. President, I call up amendment No. 693 and ask for the yeas and nays.

Mr. LIEBERMAN. I thank the Chair. Mr. President, this amendment aims at dealing with the current uncertainty in our economy and, in fact, obviously the intention of the Members of the Senate during debate on the budget resolution last month where, on a bipartisan basis, we adopted a stimulus package that was fair, fast, and fiscally responsible. Unfortunately, the so-called stimulus plan in this bill that came out of the Finance Committee is not fair, fast, or fiscally responsible. Simply put, the stimulus package in this plan will be hundreds of days late and hundreds of millions of dollars short of what America's families need, and that is a real economic stimulus now. The Federal Reserve recognized that again a few days ago in lowering interest rates. That is why we have to do this in Congress. That is why this amendment will replace the semistimulus that is in the tax bill. It will offer cash, $300 to every American taxpayer, payroll and income tax. I urge its adoption.

Mr. LIEBERMAN

Mr. LIEBERMAN. I was, indeed, calling up amendment No. 693.

Mr. LIEBERMAN. Madam President, I rise to speak on amendment No. 693 which would offer a rebate of $300 to every taxpayer, income tax and payroll taxpayer, in the United States within weeks of its passage. Labels like conservative, liberal, or moderate are used very loosely in our politics and take on a new meaning from moment to moment. For example, the tax plan in the bill before us has been described as moderate or conservative. I have always understood the definition of ``fiscal conservatism'' or ``moderation'' to be centered on fiscal responsibility and balanced budgets. This tax plan is not fiscally responsible because it wastes the projected surpluses the American people have earned on a too big tax cut, more than we can afford, a tax cut that will take us back into deficits and raise interest rates and, I fear, raise unemployment, and a tax cut that commits nothing of the non-Social Security and Medicare surpluses to pay down our national debt, which is still over $3 trillion. Because I consider myself a fiscal conservative or fiscal moderate, I will therefore vote against this tax bill. I have been thinking of the bill in nutritional terms lately: The old line ``you can have too much of a good thing,'' ``you can eat too much of a good thing''--ice cream, for instance. It ultimately is not good for your system. We strive for a balanced diet. This is an imbalanced budget proposal. Tax cuts are a good thing, but our economy can have too much of them. That is exactly what this bill does. It leaves out business tax incentives, growth incentives, and it leaves out the kind of genuine short-term fiscal stimulus that our uncertain economy needs today and that was part of the budget resolution we adopted last month. Our plan adopted in the budget resolution was fair, fast, and fiscally responsible. Unfortunately, the so-called stimulus included in this bill that is on the floor today does none of those things. It is not fair because it provides no relief to millions of Americans who do not pay income taxes. It is not fast because it is phased in over 11 years. And it is certainly not fiscally responsible because it is part of a budget- busting tax cut. That is why this amendment offers a stimulus that is the real thing, a plan that will get cash into the hands of America's consumers and into the veins of our economy in a matter of weeks. This amendment will reduce, as of July 1, the 15-percent rate for all income-tax payers to 10 percent, but it goes beyond that and sends a $300 check to every American taxpayer, income tax or payroll tax. That means individuals would receive $300; joint filers, husband and wife, couple, $600; and it creates a separate category of rebate which is $450 this year in a check to single heads of households. This is the kind of relief and rebate America's workers and taxpayers and families need now. I urge my colleagues to support this amendment. I thank the Chair.

Mr. LIEBERMAN. I ask unanimous consent that reading of the amendment be dispensed with.