Joseph Lieberman

Mr. LIEBERMAN

Mr. LIEBERMAN. Madam President, I ask for the yeas and nays on the amendment.

Mr. LIEBERMAN. Mr. President, I rise to explain my vote in favor of amendment No. 656 to the tax bill that we are debating today. The record clearly shows my strong support for fiscal discipline and responsible tax reduction. It also shows my strong opposition to the underlying tax cut because it is too large and too careless. However, I am voting in favor of this amendment even though it contains no offsets and could potentially raise the overall cost of the tax cut. I vote for this amendment because I believe it is imperative that this tax bill should contain some provisions directed to business and industry and supportive of economic growth. By voting in favor of this amendment, one of the few that will directly influence investment and economic growth, it is my intent to get it before the Conference Committee where it will be a part of the discussion of what will be the final version of this tax bill. It is my hope that in Conference, our colleagues will recognize that capital formation is a key to economic growth and prosperity. In addition, history has proven that a cut in the capital gains tax not only stimulates the economy, but also raises revenue for the federal government. In fact, one of the reasons I am voting in favor of this temporary reduction in the capital gains tax rate, is that the Joint Tax Committee score does show it raising revenue this year and through 2004 before losing revenue in out years. I am voting for this amendment because I am confident that its cost is justified when compared to its economic benefits and because it is my hope that the Conference Committee will add it to the tax bill without raising the bill's overall cost.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise to explain my vote against this amendment to the tax bill that we are debating today. The record clearly shows my strong support for the Internet, which is still in its infancy. I believe that Congress needs to give it the time and space to continue to grow and evolve without complex and burdensome taxation. In October 1998 Congress enacted the Internet Tax Freedom Act. At that time, I supported placing a three year moratorium on the imposition of any new state and local sales tax on Internet access and precluding charging sales tax for purchases over the Internet that do not apply to other mediums. I was also very supporting of the 19 member Advisory Commission on Electronic Commerce that the Act created to review a variety of tax issues relating to electronic commerce, including the taxation of all interstate commerce whether by the Internet or more traditional methods. I must say that I was disappointed that the Commission was not able to make substantive recommendations on most of the key issues before it. However, I am hopeful that current negotiations now ongoing here in the Senate will produce legislation to address this issue in an effective and equitable manner. For that reason, I am voting against this amendment. I think that the amendment is well intentional, but that we need to give the current negotiations more time to play out in the Commerce Committee before taking action. Amendment No. 680

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise with my esteemed colleague, Senator Chris Dodd, to offer congratulations to Phoenix Home Life Mutual Insurance Company, which is celebrating its 150th anniversary today. Phoenix is actively engaged in so many facets of our society. This company embodies social leadership through charitable contributions and community involvement. The corporate infrastructure of Phoenix is permeated with a sense of compassion that looks beyond the bottom line and stresses to its employees the importance of investing in human capital as a means of promoting community development. For example, Phoenix encourages employees to volunteer through a policy that allows them to devote 40 hours of company time per year to community activities, provided it is matched by the same amount of personal time. The company also rewards its top 20 professional advisors through its Donor's Award, a program that enables employees to designate up to $2,000 to a local charity. Since it's inception, the award has benefited many organizations, including the Juvenile Diabetes Foundation, Lou Gehrig Baseball, and the Make-a-Wish Foundation. Through this emphasis on community commitment, Phoenix employees adopt their favorite charities, lending their expertise, their leadership, and their time to a variety of local outreach initiatives. The Loaves and Fishes soup kitchen is one such beneficiary. Each summer, Phoenix home office employees in Hartford team up with Foodshare to harvest vegetables donated by Connecticut farmers for area soup kitchens and shelters. Another example is the planning and organization, by a group of employees in 1999, of Connecticut's first Adoption and Foster Care Exposition, sponsored by Phoenix. Additionally, Phoenix has spearheaded a three-million-dollar ``Legacy Campaign'' to sustain and promote the Doc Hurley Foundation. Through financial scholarships, mentoring from foundation trustees, and help with purchasing books, the campaign's endowment will help city high school students go to college. Phoenix will contribute a total of $500,000 over the course of the campaign. One of Phoenix's greatest investments in our communities and in society has been its commitment to Special Olympics. In 1995, Phoenix made an eight-year commitment to Special Olympics International as its first Official Worldwide Partner, setting a standard for volunteerism few companies can match. Approximately 60 percent of home office employees volunteered at the Special Olympics World Games. Field offices also provided volunteers and raised money to assist local chapters with travel and lodging expenses, enabling athletes across the country to participate in a once-in-a-lifetime event. Phoenix has proven itself to be an indispensable asset to Connecticut. By making community involvement a priority, Phoenix demonstrates that an alliance between the business sector and the community is not just possible, it is necessary. At the end of the day, Phoenix is not a faceless multi-national corporation. Through its selfless endeavors within Connecticut's communities, it has proven itself to be the consummate good neighbor. Phoenix is a leader in the competitive world of business and a winner in the hearts of countless Connecticut residents. It is with great appreciation and honor that I ask my colleagues to join me in offering congratulations to Phoenix Home Life Mutual Insurance Company on its 150th anniversary.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I am proud to join Senator McCain, Senator DeWine, Senator Schumer, and Senator Carper in introducing this important legislation. This bill aims to build common ground on gun violence, a problem that has too often divided Members of Congress. And we are going to build that common ground on commonly held American values. As citizens of this great Democracy, we have rights and we have responsibilities. We have the right to own guns, but we have a responsibility not to sell them to criminals. That is the simple but important set of values on which the legislation we introduce today is founded. For several decades, our nation has had a clear policy against allowing convicted felons to buy guns, because we know that mixing criminals and guns far too often yields violent results. Through the Brady law, we established what seems like an obvious corollary to that policy--a requirement that those selling guns determine whether someone trying to buy a firearm isn't supposed to get one before they sell it to them. The Brady law has been an enormous success. Since its enactment, background checks have kept well over half a million people who by law are not allowed to own guns from getting guns, saving an untold number of our citizens from the violence, injury or death the sale of many of these guns would have brought. The Brady law, however, contained an unfortunate loophole that has since been exploited to allow convicted felons and other people who shouldn't own guns to evade the background check requirement by buying their guns at gun shows. The problem is that Brady applies only to Federal Firearms Licensees, so-called FFLs, people who are in the business of selling guns. Brady explicitly exempts from the background check requirement anyone ``who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms.'' As a result, any person selling guns as a hobby or only occasionally, whether at a gun show, flea market or elsewhere, need not obtain a federal license and therefore has no obligation to conduct a background check. This means that any person wanting to avoid a background check can go to a gun show, find out which vendors are not FFLs, and buy a gun. And this is dangerous not only because it allows convicted felons and other prohibited persons to buy guns, but also because, in contrast to FFLs, non-FFLs have no obligation to keep records of the transaction, thereby depriving law enforcement of the ability to trace the gun if it later turns up at a crime scene. Our bill will change that. We will make sure that no one will be able to buy a gun at a gun show without it first being determined whether that person is a convicted felon or is a member of one of the other categories of people we all agree should not be allowed to buy guns. Senator McCain and I have heard the concerns expressed about past proposals to close the gun show loophole, and we have tried hard in our bill to make sure those concerns are addressed. First, our bill has a simple definition of a gun show, an event where 75 or more guns are offered or exhibited for sale--and we make clear that that definition doesn't include sales from a private collection by nonlicensed sellers out of their homes. Second, to respond to the argument that previous proposals made it too difficult for nonlicensed sellers to fulfill the background check requirement, our bill makes sure that nonlicensed sellers will have easy access to someone who can initiate background checks for them, by creating a new class of licensee whose sole purpose will be to initiate background checks at gun shows. Third, we have tried to respond to those who say that a three-day check is too long for gun shows, because those events only last a couple of days. It is worth noting that the length allowed for the check doesn't affect the majority of gun purchasers, because 72 percent of checks are completed within 30 seconds and almost 95 percent are done within two hours. We have come up with a compromise that authorizes a State to move to a 24-hour check for nonlicensed dealers at gun shows--when the State can prove that a 24-hour check is feasible. A State can prove that by showing that 95 percent of the records that would disqualify people in that State from buying guns are computerized and searchable by the NICS system. Now I know that there are many, including President Bush, who argue that what we need to solve the gun violence problem are not new laws but the enforcement of existing ones. I agree with part of that statement. Our bill authorizes significant increases in funding for a number of gun enforcement programs, including state and local gun crime prosecutors, Project Exile, additional ATF agents, gun tracing and smart gun technology. I am pleased that the President said yesterday that he supported a large chunk of what we are proposing today. But I believe we must go farther than that, because we will never be able to enforce existing laws unless we close the loopholes in them that criminals exploit. And we all know that there is a big loophole in the provision saying that felons aren't supposed to buy guns, and that is that criminals know that if they go to a gun show, they will be able to avoid the background check that was set up to keep them from getting guns. Gun crime remains a critical public safety problem. For too long, it has unnecessarily divided the Congress, and the American people have been left to suffer the violent consequences. But the reality is that most of us agree on most of the critical questions. We agree that the laws on the books should be enforced, that the rights of law-abiding gun owners should be protected, and that convicted felons shouldn't be able to get guns. The bill we are introducing today would write those principles into law. I hope all of my colleagues support it.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to note that due to the need to fulfill a long-scheduled speaking engagement at a university made in the expectation there would not be votes, I unfortunately was not able to be here in the Senate last night to vote on two amendments to the education bill, S. 1. I would like to say for the record that I would have voted for both amendments and am pleased that they both passed with broad bipartisan approval. I support Senator Reid's amendment, #460 to expand the 21st Century Community Learning Centers to include projects with emphasis on language and life skills programs for limited English proficient students. We know that assisting students to acquire English proficiency is becoming increasingly important as many of our communities are receiving immigrant children from many different countries. Limited English proficient students are at greatest risk for dropping out of school and are among some of our lowest performing subgroups of students. I have long been an advocate for investing increased Federal resources and greater attention on limited English proficient students. My own ESEA reauthorization bill, S. 303, calls for $1 billion in formula funds focused on increasing the English proficiency and raising the academic performance in all core subjects of our immigrant children. One of the primary risk factors for low academic performance and dropping out of school among immigrant students is their lack of English proficiency. Students that are proficient in English have a much greater chance to reach higher levels of academic achievement and fully participate in our society. The Reid amendment would help many immigrant children receive the extra help they need for English language acquisition through after-school programs. The Senate clearly recognized the value of this amendment by approving it 96 to 0. I also support Senator Cleland's amendment, #376 on school safety. It makes funds available to establish a center to offer emergency assistance to schools and local communities by providing information and best practices on how to respond to school safety crises, including counseling for victims, advice on how to enhance school safety and would operate a toll-free nationwide hotline for students to report criminal activity, threats of criminal activity and other high-risk behaviors. It also would provide grants to help communities develop community-wide safety programs involving students, parents, educators, and civic leaders. This amendment would further help to forge a crucial partnership between the Department of Education and the Attorney General so that these two departments may work together to ensure that our schools have the resources and tools they need to create safe learning environments for our nation's youth. In addition, the amendment would provide flexible funding, something that I have long fought for, to enable localities to design school safety programs that best meet their specific needs. For all of these reasons, I would have voted for the Cleland amendment and am pleased it passed by a strong vote of 74 to 23. (The original statement of Senator Feinstein which was delivered on Monday, May 14, but omitted is as follows:) Amendment No. 443

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, today I am pleased to introduce the College Tuition Assistance Act of 2001, a bill that will provide tax relief to middle and lower income American families struggling to pay the rising cost of college tuition for their children. Last year, at my request, the Committee on Governmental Affairs held two days of hearings on the affordability of higher education. Those hearings showed that the price of college tuition continues to rise at a pace that exceeds the rate of inflation. In fact, the most recent data released by the College Board show that since 1980, both public and private four-year college tuitions have increased on average more than 115 percent over inflation. It's no wonder families are worried about their ability to afford a college education for their children, and about the student loan debt burden their children may have to bear after graduation. We should be worried too--ensuring that higher education is affordable is critical to our nation's ability to maintain its competitiveness in a global economy. 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 both buyers and sellers of goods and services. The College Tuition Assistance Act will help families in four key ways: First, it will help them pay tuition expenses while students are in school, by increasing the value of the current Lifetime Learning Credit. Under my bill, while a student is in college, a family would be eligible for a tax credit or tax deduction worth as much as $2,800 toward the first $10,000 in tuition and fees they pay each year. In addition, the adjusted income levels at which individuals and families qualify for the credit are raised so that more families would be eligible to receive this credit. Second, my bill would remove the requirement that Pell grants and other need-based government aid be subtracted from a family's eligible college expenses, allowing those families to qualify for some portion of the Lifetime Learning Credit. A problem under current law is that the value of need-based aid, such as a Pell grant, received by the child of a lower income family may reduce or even eliminate the family's eligibility for a tax credit based on tuition expenses. However, a recent study by the Congressionally-created Advisory Committee on Student Financial Assistance showed that, even after receiving need-based aid, students from low-income families have as much as $3,800 a year in ``unmet need,'' that is, college expenses that are not covered by assistance and which the family may be unable to afford. If families are permitted to subtract the value of their government aid from their eligible college expenses, they may qualify for the first time for the Lifetime Learning Credit and apply this money toward the costs of their college student's education. Without this help, many students from low-income families might not attend college; the Advisory Committee's report says that, because of the financial barriers, even the most highly qualified students from low- income families attend college at a rate that is 20 percent lower than equally qualified students from the wealthiest families. For less qualified students, this differential is nearly 40 percent. Third, the costs of higher education continue to be a burden for many students even after graduation, as their student loans come due and they find a significant portion of their disposable income going to pay interest on these loans. Some graduates find that, even with their higher salary, they cannot afford many of the basic things they would like to acquire as adults, such as home or car purchases or even starting a new family. The College Tuition Assistance Act will expand the current tax law in three ways to provide more help offsetting the interest costs associated with repayment of student loans after graduation. This bill will remove the current five year limit on deductions of student loan interest, it will raise the adjusted income levels so more individuals and families can qualify for this deduction, and it will allow the deduction to be taken for each student in the family who owes interest on college loans. Finally, studies repeatedly show that the purchasing power of the Pell grant itself has been significantly eroded. Recent reports issued by the College Board and the American Council on Education show that in academic year 1975-1976, the maximum Pell grant covered 78 percent of the price of attending a public four-year college; for the current academic year, the maximum grant is enough to cover only 39 percent of these costs. We must do a better job of funding this crucial assistance to low-income students. President Bush, during last year's campaign, pledged to increase the maximum Pell grant for first-year students to $5,100 from its current level of $3,300. While many experts do not support the notion of ``front-loading'' by increasing aid only to first-year students, this was at least a significant proposed increase in Pell grant funding. The College Tuition Assistance Act will encourage meaningful increases in the maximum Pell grant by raising the authorization level for academic years 2001-2002 and 2002- 2003 to $5,800. A college degree is a basic necessity in our Innovation Economy and 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. I hope, with the support of my colleagues, that we can pass the College Tuition Assistance Act in order to ease the burden middle and lower income families and their children bear on their way to success. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. LIEBERMAN. Mr. President, I am proud to join Senator McCain, Senator DeWine, Senator Schumer, and Senator Carper in introducing this important legislation. This bill aims to build common ground on gun violence, a problem that has too often divided Members of Congress. And we are going to build that common ground on commonly held American values. As citizens of this great Democracy, we have rights and we have responsibilities. We have the right to own guns, but we have a responsibility not to sell them to criminals. That is the simple but important set of values on which the legislation we introduce today is founded. For several decades, our nation has had a clear policy against allowing convicted felons to buy guns, because we know that mixing criminals and guns far too often yields violent results. Through the Brady law, we established what seems like an obvious corollary to that policy--a requirement that those selling guns determine whether someone trying to buy a firearm isn't supposed to get one before they sell it to them. The Brady law has been an enormous success. Since its enactment, background checks have kept well over half a million people who by law are not allowed to own guns from getting guns, saving an untold number of our citizens from the violence, injury or death the sale of many of these guns would have brought. The Brady law, however, contained an unfortunate loophole that has since been exploited to allow convicted felons and other people who shouldn't own guns to evade the background check requirement by buying their guns at gun shows. The problem is that Brady applies only to Federal Firearms Licensees, so-called FFLs, people who are in the business of selling guns. Brady explicitly exempts from the background check requirement anyone ``who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms.'' As a result, any person selling guns as a hobby or only occasionally, whether at a gun show, flea market or elsewhere, need not obtain a federal license and therefore has no obligation to conduct a background check. This means that any person wanting to avoid a background check can go to a gun show, find out which vendors are not FFLs, and buy a gun. And this is dangerous not only because it allows convicted felons and other prohibited persons to buy guns, but also because, in contrast to FFLs, non-FFLs have no obligation to keep records of the transaction, thereby depriving law enforcement of the ability to trace the gun if it later turns up at a crime scene. Our bill will change that. We will make sure that no one will be able to buy a gun at a gun show without it first being determined whether that person is a convicted felon or is a member of one of the other categories of people we all agree should not be allowed to buy guns. Senator McCain and I have heard the concerns expressed about past proposals to close the gun show loophole, and we have tried hard in our bill to make sure those concerns are addressed. First, our bill has a simple definition of a gun show, an event where 75 or more guns are offered or exhibited for sale--and we make clear that that definition doesn't include sales from a private collection by nonlicensed sellers out of their homes. Second, to respond to the argument that previous proposals made it too difficult for nonlicensed sellers to fulfill the background check requirement, our bill makes sure that nonlicensed sellers will have easy access to someone who can initiate background checks for them, by creating a new class of licensee whose sole purpose will be to initiate background checks at gun shows. Third, we have tried to respond to those who say that a three-day check is too long for gun shows, because those events only last a couple of days. It is worth noting that the length allowed for the check doesn't affect the majority of gun purchasers, because 72 percent of checks are completed within 30 seconds and almost 95 percent are done within two hours. We have come up with a compromise that authorizes a State to move to a 24-hour check for nonlicensed dealers at gun shows--when the State can prove that a 24-hour check is feasible. A State can prove that by showing that 95 percent of the records that would disqualify people in that State from buying guns are computerized and searchable by the NICS system. Now I know that there are many, including President Bush, who argue that what we need to solve the gun violence problem are not new laws but the enforcement of existing ones. I agree with part of that statement. Our bill authorizes significant increases in funding for a number of gun enforcement programs, including state and local gun crime prosecutors, Project Exile, additional ATF agents, gun tracing and smart gun technology. I am pleased that the President said yesterday that he supported a large chunk of what we are proposing today. But I believe we must go farther than that, because we will never be able to enforce existing laws unless we close the loopholes in them that criminals exploit. And we all know that there is a big loophole in the provision saying that felons aren't supposed to buy guns, and that is that criminals know that if they go to a gun show, they will be able to avoid the background check that was set up to keep them from getting guns. Gun crime remains a critical public safety problem. For too long, it has unnecessarily divided the Congress, and the American people have been left to suffer the violent consequences. But the reality is that most of us agree on most of the critical questions. We agree that the laws on the books should be enforced, that the rights of law-abiding gun owners should be protected, and that convicted felons shouldn't be able to get guns. The bill we are introducing today would write those principles into law. I hope all of my colleagues support it.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, today I am pleased to introduce the College Tuition Assistance Act of 2001, a bill that will provide tax relief to middle and lower income American families struggling to pay the rising cost of college tuition for their children. Last year, at my request, the Committee on Governmental Affairs held two days of hearings on the affordability of higher education. Those hearings showed that the price of college tuition continues to rise at a pace that exceeds the rate of inflation. In fact, the most recent data released by the College Board show that since 1980, both public and private four-year college tuitions have increased on average more than 115 percent over inflation. It's no wonder families are worried about their ability to afford a college education for their children, and about the student loan debt burden their children may have to bear after graduation. We should be worried too--ensuring that higher education is affordable is critical to our nation's ability to maintain its competitiveness in a global economy. 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 both buyers and sellers of goods and services. The College Tuition Assistance Act will help families in four key ways: First, it will help them pay tuition expenses while students are in school, by increasing the value of the current Lifetime Learning Credit. Under my bill, while a student is in college, a family would be eligible for a tax credit or tax deduction worth as much as $2,800 toward the first $10,000 in tuition and fees they pay each year. In addition, the adjusted income levels at which individuals and families qualify for the credit are raised so that more families would be eligible to receive this credit. Second, my bill would remove the requirement that Pell grants and other need-based government aid be subtracted from a family's eligible college expenses, allowing those families to qualify for some portion of the Lifetime Learning Credit. A problem under current law is that the value of need-based aid, such as a Pell grant, received by the child of a lower income family may reduce or even eliminate the family's eligibility for a tax credit based on tuition expenses. However, a recent study by the Congressionally-created Advisory Committee on Student Financial Assistance showed that, even after receiving need-based aid, students from low-income families have as much as $3,800 a year in ``unmet need,'' that is, college expenses that are not covered by assistance and which the family may be unable to afford. If families are permitted to subtract the value of their government aid from their eligible college expenses, they may qualify for the first time for the Lifetime Learning Credit and apply this money toward the costs of their college student's education. Without this help, many students from low-income families might not attend college; the Advisory Committee's report says that, because of the financial barriers, even the most highly qualified students from low- income families attend college at a rate that is 20 percent lower than equally qualified students from the wealthiest families. For less qualified students, this differential is nearly 40 percent. Third, the costs of higher education continue to be a burden for many students even after graduation, as their student loans come due and they find a significant portion of their disposable income going to pay interest on these loans. Some graduates find that, even with their higher salary, they cannot afford many of the basic things they would like to acquire as adults, such as home or car purchases or even starting a new family. The College Tuition Assistance Act will expand the current tax law in three ways to provide more help offsetting the interest costs associated with repayment of student loans after graduation. This bill will remove the current five year limit on deductions of student loan interest, it will raise the adjusted income levels so more individuals and families can qualify for this deduction, and it will allow the deduction to be taken for each student in the family who owes interest on college loans. Finally, studies repeatedly show that the purchasing power of the Pell grant itself has been significantly eroded. Recent reports issued by the College Board and the American Council on Education show that in academic year 1975-1976, the maximum Pell grant covered 78 percent of the price of attending a public four-year college; for the current academic year, the maximum grant is enough to cover only 39 percent of these costs. We must do a better job of funding this crucial assistance to low-income students. President Bush, during last year's campaign, pledged to increase the maximum Pell grant for first-year students to $5,100 from its current level of $3,300. While many experts do not support the notion of ``front-loading'' by increasing aid only to first-year students, this was at least a significant proposed increase in Pell grant funding. The College Tuition Assistance Act will encourage meaningful increases in the maximum Pell grant by raising the authorization level for academic years 2001-2002 and 2002- 2003 to $5,800. A college degree is a basic necessity in our Innovation Economy and 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. I hope, with the support of my colleagues, that we can pass the College Tuition Assistance Act in order to ease the burden middle and lower income families and their children bear on their way to success. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to introduce a concurrent resolution calling attention to global e-commerce, a trade issue of great economic interest to this country. My esteemed colleague Senator McCain and I have drafted this legislation to express the sense of Congress on the importance of promoting global electronic commerce. In the House of Representatives, Congresswoman Tauscher and Congressman Dreier will introduce the very same legislation. I am honored to be joined on this resolution by these three knowledgeable and distinguished leaders on technology issues. Our economic landscape is undergoing a fundamental transformation. We are transitioning into a ``new economy'', a rapidly evolving, global marketplace that is governed by new rules and driven largely by new forces. Those new forces include information technology and the Internet. We all recognize that we are witnessing an electronic revolution. There is no shortage of statistics to prove what we are seeing all around us. According to a recent U.S. Department of Commerce report, approximately one third of the U.S. economic growth in the past few years has come from information technologies. Worldwide, there are more than 200 countries connected to the Internet today. That is up from 165 in 1996 and just eight in 1988. Today, more than 300 million people worldwide, more than half in North America, use the Internet. With Internet traffic continuing to double every 100 days, by 2005 more than one billion people will be connected. Importantly, more than three-quarters of them will be outside North America. This digital age brought about by the Internet and information technology is opening new markets and growth opportunities for all types of U.S. companies in every corner of this vast country. ``Digital Trade'', including cross-border e-commerce transactions for goods and services, global business relationships enabled by electronic networks, and the goods and services that enable those transactions and relationships, can help new companies to emerge and existing companies to flourish. For example, according to a study done for Cisco by the Gartner Group, Europe's Internet economy is set to grow twenty-fold, from $53 billion in 1999 to $1.2 trillion in 2004. That growth presents real opportunities for millions of American companies and consumers. We are seeing industry adjust to these new realities and seize these new opportunities. Last year, 60 percent of B-to-B companies were building globalized websites designed to reach audiences in many countries and across different cultures. By 2004, the level of globalization is expected to reach 80 percent. Those companies that choose not to globalize their websites project foreign revenue earnings this year of 12 percent. Those companies that do globalize expect foreign revenue earnings of 35 percent. To make this picture of the digital age more real, let me move closer to home and talk about one of my favorite New Economy companies, Coastal Tool. Coastal Tool is a small family-owned business with 12 employees. They are in a very traditional industry, hardware retail, in a very traditional location, the heart of New England, West Hartford, CT. However, Coastal Tool is anything but traditional in its approach to business. Early on in the Internet revolution, Coastal Tool adopted information technology to improve its sales and marketing efforts. They understood back in the early 1990s what Alan Greenspan speaks of today when he testifies here on the Hill that there is a strong and undeniable link between the adoption of information technology, rising productivity, and increasing economic prosperity. Today, this small company does 20-30 percent of its business online, selling hand and power tools like biscuit joiners and disc grinders. It generates 15-20 percent of its revenue from online sales to overseas customers and is now exporting to more than 50 countries. By competing online and overseas, Coastal Tool, on the web at www.Coastaltool.com, is a true new economy success story and but one example of how an exponential growth in information technology adoption and e-commerce are reshaping the global economy. But the global economy and digital trade also present us with challenges. While there are few if any technology barriers to global e- commerce, there are actual and potential policy and political barriers. For example, according to a recent survey of chief information officers across the country by CIO Magazine, approximately one third of the respondents feel that current barriers limit their company's ability to conduct e-commerce across international borders. Clearly this is a reality and a challenge with which we here in Washington must be concerned. That is why we have worked closely with industry, including the Information Technology Association of American, the Business Software Alliance, The Information Technology Industry Council, and the Semiconductor Industry Association, to draft this very important resolution. This resolution describes the incredible opportunity that global e- commerce presents for the U.S. It calls on the Administration to make digital trade, the promotion of cross-border e-commerce, a high priority on its trade agenda and to work in good faith with our trading partners to encourage its continued growth. More specifically, it states that the U.S. should encourage members of the World Trade Organization to promote the development of infrastructures necessary for e-commerce and refrain from adopting measures that would constitute actual or potential trade barriers to electronic commerce. The resolution does not take policy positions on specific issues of international trade. It does take a first step in making sure that global e-commerce is an issue and an opportunity with which members of this body are familiar. I respectfully urge all of my colleagues here in the Senate to show their support for U.S. consumer and commercial interests by joining Senator McCain and me in sponsoring and working to pass this very important concurrent resolution.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to express my serious disappointment with the budget resolution and to explain why I cannot vote for it. This resolution is irresponsible. It is irresponsible to the citizens and businesses of this nation, to the fundamental economic principles for which we stand, and to the values that define us as Americans. As I have stated often, the government does not create jobs or economic success. However, through fiscal discipline the government can create an environment in which the private sector thrives. Fiscal responsibility produced an environment that enabled the historic economic growth of the past several years and the unprecedented surplus we have today. I am sorry to say this resolution abandons that discipline. Government should tend to the people's money with the same care and consideration that individuals, families, and businesses demonstrate when handling their own dollars and cents. As I look at the budget resolution that we are voting on, I conclude that it lacks not only fiscal responsibility, but also a sense of reality. It is based entirely on large projected surpluses that we are not confident will materialize. And, if these surpluses are not realized, this budget resolution puts us at risk of returning to deficit spending financed by borrowing from the Social Security and Medicare Trust Funds. The tax cut provided for in this budget resolution is simply too large. At the very least, it will cost $1.35 trillion over 11 years. In addition, if you add in other required or likely to pass tax provisions, including AMT reform, increased interest payments, extension of expiring tax provisions, pension reforms and business tax cuts, this package easily rises to above $2 trillion. While I support significant tax cuts, that amount is more than we can afford. This budget resolution spends too much of the projected surplus on a tax cut that is too large and it uses too little of the surplus for other priorities. Additionally, this resolution does not seriously address debt reduction. Aside from funds already committed to the Medicare and Social Security Trust Funds, this budget does not devote a single dollar over the entire decade towards paying down our national debt. Because this resolution is so irresponsible, it is not at all clear that even the Medicare and Social Security Trust funds will be available for debt reduction if they are used instead to pay for the tax cut. Sadly, this budget resolution sacrifices the unique opportunity that we have at this point in time to successfully pay down our publicly held debt--the key to low interest rates and economic growth. This budget resolution sets us on course for an appropriations train wreck later this year and in the future. The spending levels do not even keep up with inflation. The resolution provides total discretionary spending levels for FY02 that are $2 billion below CBO's baseline with inflation. For the 10-year period, they are $24 billion below inflation. Despite the rhetoric, it removes nearly $300 billion in additional education funding that the Senate had added to its budget resolution. It provides an increase of only $3.3 billion above inflation for defense in FY02 and only $40 billion over ten years--$22 billion less than the President's request prior to the Rumsfeld review. According to the resolution, any increased spending as a result of the Rumsfeld review which is likely to be at least $250 billion over 10 years--would come out of the contingency reserve fund. This fund may not even exist if surplus projections do not materialize or if Congress taps it for other purposes, including additional tax cuts. This budget resolution does not represent reality, but fantasy. It abandons fiscal discipline and blithely overspends a surplus whose size six months down the road or six years down the road is at best theoretical. This agreement sets our country on a dangerous path toward resurrecting the deficits we worked so hard to eliminate over the past several years. Finally, this resolution does not add up because the Administration and the Majority here in Congress prefer to sound the call for compassionate conservatism rather than engage in honest accounting. It is ``dejavoodoo economics.'' It commits us to the same fiscal mistakes of the early 1980s that had a horrendous and long- lasting impact on our economy. So I call on centrists of both parties here in the Senate to not waste a decade's worth of hard work invested in re-building our economy. I urge my colleagues to look closely at this resolution. It is not what the American people deserve, nor is it what they expect it to be. In support of progress and prosperity, I must vote no and I encourage my centrist colleagues to do the same.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I am voting in favor of John Bolton for the position of Undersecretary of State for Arms Control and International Security Affairs. Mr. Bolton is the President's choice, and I have generally supported the tradition of respect by the Senate for confirming the President's nominees except in rare instances. I disagree with some of the positions Mr. Bolton holds, particularly his opposition to some of the arms control treaties that were negotiated over many years by his predecessors at the Arms Control and Disarmament Agency. But I also agree with other positions Mr. Bolton has taken regarding America's foreign policy. He explained his positions during his confirmation hearing and gave assurances that he accepts and will respect America's obligations under international law. He is especially intent on working to control the spread of weapons of mass destruction to rogue states. I therefore conclude that Mr. Bolton falls within the criteria of acceptability for confirmation to the job for which he has been nominated by the President.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, am I correct that the Senate is now in a period of morning business?

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

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to speak about the deliberations that are now going on in both Houses of the Congress about the budget resolution, which will be before the Senate certainly some time this week. This is a most important time in this session and, I believe, is a moment of historic opportunity for our economy. As I have followed the debate, I have seen questions raised about, where is the Centrist Coalition in the Senate? Where are the so-called moderates? I know some voted for the Senate-passed budget resolution when it came up in the Senate earlier. I think some of those moderates are having second thoughts or are raising questions about the state in which that resolution came out of the conference committee, from which, as we know, Members of the Democratic Party were excluded. I want to speak with my colleagues today about my own feelings on this budget resolution. I do so as someone who has been a proud founding member of the Senate bipartisan Centrist Coalition, a founding member of the Senate New Democratic Coalition, because I truly believe this budget resolution, as it has come out of the conference committee, challenges and tests each of us on our fundamental views about what Government is about and what, most of all, fiscal responsibility is about. I have always believed that at the heart of being a so-called centrist or moderate is fiscal responsibility--that we will take care of the people's money here--more than a trillion dollars of it that we have charge of every year--with the same fiscal responsibility that the American people handle their own money in their personal lives, in their families, and in their businesses. As I looked at this budget resolution that has emerged from the conference committee, it is my strong feeling that it lacks more than just the two missing pages that are now being retrieved. This budget resolution profoundly lacks fiscal responsibility. It will not only do nothing to address the economic downturn that more and more Americans are feeling the pinch and pain of right now; I fear that it will set us on the road back to increasing debt, to budget deficits, to increasing interest rates that go with increasing deficits and debt, and to the rising unemployment and falling investment that go with higher interest rates. This budget resolution is fiscally irresponsible. It is a tax plan, as colleagues have said, that is trying to look like a budget plan. I will put it this way: It is a tax plan, but it is not what we need, which is a prosperity and progress plan. It does not answer the question of how we continue the prosperity and progress of the last several years. I want to cite a few concerns I have about this budget resolution as it has emerged from the conference committee, which we will debate this week. First, to the best of my understanding, there is no longer a short-term, immediate economic stimulus component to this budget. During the recent debate on the Senate-passed budget resolution, several of us in both parties spoke to the need for an economic stimulus, as we watched important economic indicators going down. When the budget resolution came up in the Senate, our colleague, Senator Hollings from South Carolina, and several of the rest of us, sponsored and passed an amendment that set aside $85 billion of the current year's surplus for an economic stimulus in order to get money out to the taxpayers--every one of them, whether they pay the payroll tax or the income tax, as soon as humanly possible. We believed it was and still is important to put money in the pockets of all taxpayers this fiscal year so they can go spend it, boost the economy, and raise consumer confidence. It is my understanding that the conference committee has effectively removed the stimulus component from the budget resolution that will come before us this week. It is gone even as the economic indicators from the official bureaus of our Government and other organizations tell us that we need that economic stimulus even more today than when we voted in this Chamber just a few short weeks ago to adopt it. But it is not there. Just last week we learned that the unemployment rate for April shot up to 4.5 percent. That is the highest level of unemployment in America in more than 2\1/2\ years. Even more troubling, last month U.S. businesses cut their payrolls by the largest amount, 223,000 jobs, since the recession year of 1991. That is as clear an alarm bell as we could have and as clear a call for a short-term economic stimulus as we should need. Yet, it is not in this resolution. In addition, the University of Michigan, which has been measuring consumer sentiment in this country for many years, reported that consumer confidence fell last month to the lowest level it has been in 7 years. This is not some political group, some partisan group; these are credible indicators. They cry out for the short-term economic stimulus--to get the money back into the pockets of America's consumers to spend and raise consumer confidence. And it is not there in this budget resolution. Secondly, the tax cut in this conference report seems to be growing well beyond the Senate-passed figure of $1.18 billion and even beyond the $1.25 billion that the Republican conferees claim is in this budget resolution. It seems that the $100 billion that was supposed to go towards an immediate economic stimulus is being rolled back into the larger Bush tax plan, bringing the real total to $1.350 trillion. Add to that an additional $50 billion in this budget resolution for other revenue reductions and you are up to $1.4 billion. That number doesn't include some of the automatic tax extenders that get renewed on a regular basis. It doesn't include necessary reforms to the alternative minimum tax that will be necessitated by this $1.4 trillion tax plan. It doesn't include increased interest payments on the debt that will have to be paid because we are spending so much of the surplus. Mr. President, I predict to you that if we should adopt this unfortunate, mistaken and, in my opinion, threatening-to-our-economy budget resolution, the tax plan will cost, at a minimum, $1.6 trillion. It will probably cost much closer to $1.8 trillion. I am sure when we get the resolution on the floor, we will have a clearer estimate of that. That tax cut will be taken out of what remains of a projected of $2.5 trillion 10-year on-budget surplus. But that $2.5 trillion surplus is based in part on an economic growth rate of 2.4 percent this year. However, the Congressional Budget Office has actually run some numbers on what would happen to that projected surplus if the growth rate slows this year. Some economists do think we are going into a recession this year, where at the end of the year we will actually have negative growth. I hope and pray not. According to the Congressional Budget Office, if that happened, if the growth rate for this year alone dropped to .1%, there would be a $47 billion drop in the projected surplus this year and a total reduction in the surplus of $133 billion over the following 10 years. That analysis even assumes that there would be continued robust 3.1- percent growth over the following 9 years, which no one can assume. So you take whatever the tax cut ends up being--$1.7 trillion or $1.8 trillion--out of that, and then you look at the spending side of this budget resolution, next year's domestic discretionary spending in the budget resolutions coming out of the conference committee does not keep up with the expected rate of inflation. So at a time when we are looking forward to surpluses, when we know from our families and our businesses that you have to make responsible investments to continue to grow, this budget is spending it almost all on the tax plan and saving very little for the kinds of investments that we need to make to keep our country strong, to continue the prosperity and the progress. Where are we going to get the money after this enormous tax plan proposal by President Bush and our colleagues in Congress is taken out of the surplus that we hope will exist--where are we going to get the money to invest in education, which every conversation I have had with people in my State of Connecticut, and every public opinion survey says is the No. 1 priority of the American people? Where are we going to get the money to invest in keeping our Nation strong, our national defenses? The numbers that are coming out of the Pentagon--rumored at this point--are quite high. I am a member of the Senate Armed Services Committee. I am privileged to serve with the distinguished occupant of the Chair, the Senator from Florida. One could make a case for some of these numbers, in my opinion. We need to invest more in our defense, but where is that money going to come from if domestic discretionary spending is held below the rate of inflation and so much goes to that tax plan? We are going to do serious harm to our economic future if we pass this fiscally irresponsible budget resolution. There is no way we can continue the operations of our Government in a realistic and responsible way if we adopt this budget. That is even assuming that good economic times return soon again next year and that this current downturn does not develop into a longer recession. There is no way we are going to pay the bills that are part of this budget resolution without dipping into the Social Security and Medicare trust funds. What happened to the lockbox everybody was talking about for Social Security and Medicare? Our seniors and those in the baby boom generation who are going to be coming into their senior years are expecting Social Security and Medicare to be there. With this conference report, they are going to find the viability of those funds have been hurt by a fiscally irresponsible budget. These are pivotal considerations and votes we are going to have this week. We have learned a lot in the last decade about the role of Government in the economy. One of the things we have learned, certainly centrist, New Democrats know, is that the Government does not create jobs. The private sector creates jobs. But Government can create an environment for growth, an environment in which the private sector can flourish. The first and most important thing that Government can do is to be fiscally responsible. The second thing is to have some money to invest in what creates growth, particularly in the high-tech information age. Nothing creates growth more than an educated public. We need to invest in our schools. We need to invest in training and retraining of existing workers. Yes, we ought to have tax cuts. We ought to have some tax cuts that help working families deduct the cost of higher education for their children or the cost of retraining programs for themselves. I am afraid this budget resolution, which carries out a campaign promise the President made in New Hampshire more than a year and a half ago when the economy was not in a downturn, when others he was running against were proposing flat taxes and he responded, will take us down the road to exactly where our history should tell us we do not want to go. This budget resolution is fiscally irresponsible. The economics do not make any sense. I am tempted to call it voodoo economics, Mr. President. The numbers do not add up and America's economy will suffer for it. Even more to the point, and personally, what will be hurt if we do not gather together, centrists of both parties, to speak for fiscal responsibility and reasonable investments and fiscally responsible tax cuts is the quality of life of millions of American families and the strength and stability of millions of American businesses. I urge my colleagues to look closely at this budget. Let us work across party lines on it and let us make it what the American people deserve and expect it to be: a fiscally responsible progress and prosperity budget. I thank the Chair, and I yield the floor.

Mr. LIEBERMAN

Mr. LIEBERMAN. I rise to express my dismay at the Economic and Social Council's vote yesterday removing the United States from membership on the United Nations Human Rights Commission for the first time since its inception in 1946. The United States was a founding member of this distinguished body and has been an active member since its establishment. Under the chairmanship of Eleanor Roosevelt, the U.S. was instrumental in helping to draft the Universal Declaration of Human Rights, the very first work of the Commission and one that deeply reflects longstanding and treasured American values. For over 50 years, the United States has worked within the Commission to codify fundamental human rights and practices. Through the Commission we have also fought for vigorous investigations of grave breaches of human rights wherever they occurred and have raised our voice in defense of freedom on behalf of those whose own voices were silenced. The Commission's membership has grown along with the membership in the United Nations as newly independent nations have joined the world bodies. However, the inclusion of countries with extremely poor human rights records, such as Sudan and Cuba, on the Commission is troubling. And it means that we will have to work even harder to promote universal standards so that one day all people can enjoy the freedom, liberty and equality we too often take for granted here at home. We may never know why so many countries voted against us in the secret balloting. I am afraid, however, that it may reflect widespread dissatisfaction with what is perceived to be a go-it-alone attitude in foreign affairs by the new administration. Our friends and allies have reacted negatively to a number of President Bush's pronouncements and policies, including rejection of the Kyoto Climate Change Treaty, his opposition to the International Criminal Court, and his willingness to abandon the ABM Treaty before we have a workable missile defense plan in place. This vote clearly demonstrates that there can be unanticipated and damaging consequences to our actions on the world stage. The U.S. cannot take our friends for granted and must remain vigilant against the anti-U.S. efforts of our enemies. The United States now becomes an observer on the U.N. Human Rights Commission but we can, indeed we must, remain actively engaged in defending human rights throughout the world. We have lost our vote but not our voice. The Commission will be weaker without our membership and our leadership. But the real losers in yesterday's election were the oppressed, people in many parts of the world who desperately need the support of the United States and the United Nations to stop abuses of their basic rights and to bring the light of freedom into their lives. I am terribly disappointed by the vote against U.S. membership on the Commission. However, we must not allow this vote to deter our efforts to promote and defend human rights around the world. Our commitment and leadership in advancing freedom, equality and justice for all people derives from the principles on which our Nation was founded and which continue to guide us today.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I am pleased today to join a bipartisan coalition of Senators in introducing environmentally friendly legislation to encourage the use of fuel cells, a clean and cutting- edge energy source. If adopted, this bill would provide tax incentives to consumers for purchasing residential and commercial fuel cell systems to power their electricity. The $1,000-per-kilowatt tax credit applies to all types of stationary fuel cell systems and would be applicable for 5 years. This is a Senate companion piece to legislation introduced in the House of Representatives by Representative Nancy Johnson last month. With oil and gas prices now reaching record highs, I believe fuel cells are one excellent answer to our heightened energy demand and dependence on foreign oil. The benefits of fuel cell technology are many. They are a nearly pollution-free power supply because they operate without combustion; they can run on any hydrogen-rich source, including propane, natural gas, methane or diesel; they can operate independently of a power grid, which is ideal for remote locations, and they provide highly reliable, uninterrupted power, making them very attractive for applications highly sensitive to power interruptions. Currently they are being used at a variety of locations, including a New York City police station in Central Park, a major postal facility in Alaska, a hotel on Mohegan tribal lands in Connecticut, and in a hospital in California. Fuel cells have been successfully used since the 1960s. Initially they were developed for space applications and have provided all of the water and electricity needs in every manned U.S. space mission, including the Apollo and Gemini spacecraft. Since this time, they have been developed for a wide variety of other applications, including commercial, residential, and transportation uses. I am pleased to join Senators Snowe, Schumer, Dodd, Hutchinson, Clinton, Cantwell, Carper, Dorgan, Leahy, Levin, Harkin, Akaka, and Mikulski on this important bill.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I am pleased today to join a bipartisan coalition of Senators in introducing environmentally friendly legislation to encourage the use of fuel cells, a clean and cutting- edge energy source. If adopted, this bill would provide tax incentives to consumers for purchasing residential and commercial fuel cell systems to power their electricity. The $1,000-per-kilowatt tax credit applies to all types of stationary fuel cell systems and would be applicable for 5 years. This is a Senate companion piece to legislation introduced in the House of Representatives by Representative Nancy Johnson last month. With oil and gas prices now reaching record highs, I believe fuel cells are one excellent answer to our heightened energy demand and dependence on foreign oil. The benefits of fuel cell technology are many. They are a nearly pollution-free power supply because they operate without combustion; they can run on any hydrogen-rich source, including propane, natural gas, methane or diesel; they can operate independently of a power grid, which is ideal for remote locations, and they provide highly reliable, uninterrupted power, making them very attractive for applications highly sensitive to power interruptions. Currently they are being used at a variety of locations, including a New York City police station in Central Park, a major postal facility in Alaska, a hotel on Mohegan tribal lands in Connecticut, and in a hospital in California. Fuel cells have been successfully used since the 1960s. Initially they were developed for space applications and have provided all of the water and electricity needs in every manned U.S. space mission, including the Apollo and Gemini spacecraft. Since this time, they have been developed for a wide variety of other applications, including commercial, residential, and transportation uses. I am pleased to join Senators Snowe, Schumer, Dodd, Hutchinson, Clinton, Cantwell, Carper, Dorgan, Leahy, Levin, Harkin, Akaka, and Mikulski on this important bill.

Mr. LIEBERMAN

Mr. LIEBERMAN. Madam President, I thank my colleague from Tennessee. Madam President, I rise today to speak about the landmark educational reform bill and plan we are currently debating, and in fact are currently negotiating, a plan that, I think, if it reaches its proper drafting conclusion and, most importantly, is adequately funded, will spur bold changes and innovations in our public schools and will ultimately help improve the quality of education for every child in Connecticut and every child in America. It is premature at this moment to talk about this comprehensive legislation with total certainty and in all of its details, so I intend to make a fuller statement about the bill once the negotiations are complete. But I did want to come to the floor today as we work out the final pieces of this complicated policy puzzle to offer both a few congratulations and a few concerns about what I would call this important near agreement on reauthorization of the Elementary and Secondary Education Act. Let me start by saying how encouraged I am about the process we have followed for formulating this plan to reauthorize ESEA and its prospects for stirring a real revolution in our public educational system. The discussions we have had over the last several weeks involving Senate Democrats and Republicans and the White House have been a model of how this place should work. There has been civility. There has been healthy debate. There has been disagreement from time to time. But there has also ultimately been a shared sense of common purpose. We have had our disagreements--some of them profound--but the Members and our staff have negotiated in good faith and with good will. In doing so, I think we have demonstrated that we can find common ground on a consequential issue and move this country forward as we do so. This can be a real breakthrough given some of the rancor and division that have plagued the education debate too often in recent years. I commend our leaders, my colleagues from both parties, the President, and representatives from the White House who participated in these negotiations. I think we all want to realize the same goal, which is the best public educational system in the world. We all understand that today we have significant challenges ahead of us if we are going to achieve that goal. We all want to close the persistent achievement gap separating the haves in our society from the have-nots. That is by far the biggest hurdle I think we have to overcome. We all want to deliver on the promise of equality and opportunity for every child. We all want to increase the supply of highly skilled workers, which we all know is critical to our future economic competitiveness and the long-term prosperity and security of this Nation. Now, through the reforms in this bill, we are not just talking the same points of principle; we are actually walking the same path to progress. I am particularly encouraged and gratified that a number of the ideals and ideas that Senator Bayh and I and so many other Members of the new Senate Democratic coalition have been advocating for the past few years through our three R's reform bill and that so many of these ideas presented by the distinguished occupant of the Chair, and other colleagues, are reflected in the historic agreement on a core bipartisan amendment to ESEA that we are very close to achieving. As some of my colleagues know, we started out with the three R's bill with the new vision of education policy, one that focuses not on progress but on performance, not on rules and regulations but on results, not so much on what we put into the system, although obviously that is important, but ultimately on the real test, which is what we get out of the system. What are the results? How well are our children being educated? We drew up a reform blueprint that translates these principles into policies, calling for increased investments to help our public schools, help every child learn at a high level, for greater flexibility to allow the local educators to decide, as they know best, how best to spend their Federal dollars to meet the specific needs of their students, and also to encourage innovation and experimentation with different educational reform models at the local level. We have in this bill stronger accountability. That is the way we test the results. That is the way we make sure we are not giving up on any child in America and that we are going to take them to the highest level their God-given potential gives them to achieve in education. That is particularly true of low-income and minority students. We propose this new equation, which we call invest in reform, and insist on results, as a possible bridge to a bipartisan compromise. Last year, President Bush went across a bridge of his own and embraced some of those same goals and values and articulated a similar reform plan for realizing them, and for encouraging and accelerating the growing movement in many States towards standards and accountability--focus on results. What are our children learning? This year, the President made that plan a legislative priority and signaled his seriousness not just on the subject of education but on the kind of educational reform that is embraced in our three R's bill. It was focused on transforming the Federal Government into a catalyst for change, on demanding results, and on no longer tolerating failure, so that this bill, about which we are now debating a motion to proceed and around which negotiations are continuing and coming ever closer to a bipartisan agreement, builds on that common ground we have forged on those critical innovative ingredients to the recipe of reform. The centerpiece of the three R's plan and of the President's blueprint was a tough new accountability system that would reward States in making real progress in meeting high standards while sanctioning those that did not and would require local districts to take strong remedial action to fix chronically failing schools. We are not going to sit back and let schools continue to fail to educate our kids. We are not going to continue to push kids ahead from one grade to another just because a year has passed, regardless of whether the school has taught them anything or whether they have made progress. This is a system that tracks the progressive reform that State leaders around America, including my own State of Connecticut, have already implemented. It has proven effective. I will say that in the negotiations that have gone on over the last few weeks, we have had some differences on how to set those standards for judging performance, which is to say, How do we define progress for our students? How do we strike the right balance between truly holding schools and States accountable for raising academic achievement, and particularly closing the achievement, without setting the bar so high that we end up grading most schools as failing? We have worked through those problems over the last few weeks. I want my colleagues to know that we have reached an agreement certainly on policy on a reasonable and realistic middle ground. That agreement is now being drafted. Hopefully, we will have the opportunity to present it in this Chamber before very long. But it is a significant, real, and hopeful agreement. While I would have liked, in some ways, to have made the provisions stronger, I have not given up hope of enhancing them in our discussions with the House. I do think this agreement is suitably explicit and demanding, as well as suitably fair, and will achieve our goal of driving real change and bold reform. I hope soon to be able to share the details of that agreement with our colleagues. But as much as I appreciate this significant bipartisan achievement, I remain deeply concerned--as I believe almost all my colleagues on this side of the aisle do--about one missing, indispensable ingredient to the recipe for genuine educational reform in America, and that is investment. It is clear to us that these reforms will not work without a significant increase in resources from the Federal Government. To date, the Federal Government supplies only about 7 cents of every dollar spent on public schools in America. Under the President's current budget, we will not provide much more than that. Some would go a step further and suggest we may, in fact, be setting up schools and children to fail if we do not back up the new demands for results that are in this bill--which we all agree are critically important--with new dollars to meet those demands. If that becomes the case, then we do not have a system of genuine accountability; we have a system that sets standards and does not help the local school districts meet those standards. We clearly recognize, of course, that money alone will not solve the problems plaguing our public schools. Money will not spur innovation and lasting reform, and it will not streamline inert and inefficient bureaucracies. Money will not set high standards and hold schools responsible for meeting them. That is why we New Democrats pushed so hard in this bill to shift our Federal focus from process to performance, to streamline duplicative and ineffective programs, to accentuate the freedom of local teachers to innovate--they are the heart of our whole educational system--to have principals enact reforms, superintendents to set new standards, and try new, bold ideas. That is why we pushed so hard to recognize that we cannot have more blue ribbon schools without less redtape. And not least of all, that is why we who advanced the three R's bill decided that imposing real consequences on schools and districts that chronically fail to educate disadvantaged children is a necessary and critical element of a true educational reform proposal. But we also recognize that money is a crucial part of the equation. We simply cannot expect States and local districts to improve the quality of teaching and reduce class size to help every child--for instance, an immigrant child to master English, to reconstitute chronically underperforming schools, and in particular to end the national disgrace of having African American and Latino American children reading and doing math, on the average around our country, at a level that is substantially below their fellow students in America's schools--if we do not substantially increase our investments in our public schools. This is something most Americans recognize, which is why there is overwhelming support for significantly increasing our national investment in education. At home, in conversations I have had with people in Connecticut, and from public opinion surveys I read about American attitudes, it is clear that the American people put education at the top of their priority list, and sensibly so. The American people know you cannot bring millions of children, particularly low-income children who cannot read, up to grade level on the cheap. It cannot be done. Consider a few specific examples, such as teacher quality. The reality is that we must hire, train, and ultimately retrain about 2 million new teachers over the next several years--2 million new teachers over the next several years. The reality is, 95 percent of urban school districts are experiencing a shortage of qualified math and science teachers and that 50 percent of new teachers quit high-need schools during the first 3 years of their teaching there. The reality is, educational reform will not succeed if we do not provide every child with a good teacher. Many people in our society do important work, but no one in our society today does more important work than a good teacher. We learned that lesson in Connecticut, which has invested millions of dollars--tens of millions, hundreds of millions--over the last several years to raise teachers' salaries, to attract and train high-quality professionals, and develop a nationally recognized mentoring program to nurture young teachers in their early years in the profession. That has produced, I am proud to say, one of the best teaching forces in the Nation. In turn, they have helped to produce consistently high scores by Connecticut students on national education tests. The bill we are working on will push all of America in all of America's school districts to take similarly strong steps to strengthen the quality of their teaching force, setting a firm goal of having all teachers in the highest poverty districts highly qualified within 4 years. But reaching that benchmark is clearly going to take a significant increase in funding for recruitment, retention, and professional development. We have an obligation--since we are making these demands on the local school districts and on the schools and on the teachers--to help States meet those high standards by giving them adequate financial resources to do so. Also, consider title I, the heart of our traditional Federal focus on disadvantaged children. Here again, the distinguished occupant of the Chair, the junior Senator from Arkansas, and I have talked often about this problem. It is real, from the cities of Connecticut to the cities and towns of Arkansas. The reality is that one-fifth of urban and rural districts, with 50 to 75 percent of their students living in poverty, receive no title I funding today. It is hard to believe. Title I was a program established 35 years ago to help disadvantaged kids, low-income kids. Yet today, I repeat, one-fifth of urban and rural districts, with 50 and 75 percent of their students living in poverty, receive no title I funding. That is, in good part, because we do not target those dollars well with the formulas we are using today. That is a shortcoming we are working very hard to fix in these negotiations that are ongoing. But it is also because we are not providing the resources--enough money--to fully serve disadvantaged children and carry out our responsibilities under the Elementary and Secondary Education Act. According to independent estimates, it would take $17 billion to fully fund title I, an increase of about 100 percent above current funding levels. That is an annual number. The accountability system we are working on now will help make title I a much more effective program for kids in high-poverty districts-- whether they live in Connecticut, Arkansas, or anywhere else throughout America--requiring States and local districts to turn around chronically underperforming schools, empowering parents whose children are trapped in those failing schools with new choices and new options to help their kids get a better education, sanctioning States that do not make progress in raising the academic achievement of disadvantaged students, and closing the gap between the haves and the have-nots. Again, we cannot expect those interventions to succeed, those choices to be meaningful, or those sanctions to be fair if we do not invest in reform while we are insisting on results. That means infusing title I with substantial increases in funding. Unfortunately, the Bush administration has to date been unwilling to match their commitment to reform that we are so near agreement on with commensurate resources on which we are still some distance from agreement. The President's initial proposal for ESEA programs included only a $700 million increase for the next fiscal year and less than $500 million for title I. In the last few days, the White House has increased that now to a total number of more than $2 billion. But this counteroffer is still far from sufficient to meet either the needs we have identified or the demands we will place on America's schools with this legislation. That is particularly hard to justify when we know that we are projecting a $200 billion surplus for next year, $69 billion of which apparently will be spent on the President's tax plan. That is almost 35 percent of the projected surplus next year for the tax plan and a little more than 1 percent for additional funding for education. We can do better. Hopefully, together, as we have come some substantial distance on most of the critical policy issues facing American education over the last several weeks in our bipartisan negotiations, we can similarly close the gap when it comes to our remaining disagreement on resources to make reform real. In the same spirit in which we have negotiated this agreement to insist on results, we appeal today to the President to join us in investing in reform. We have a unique opportunity at this moment, and we cannot afford to let it slip away. The truth is, we can afford to give every child in America a quality education. That is our responsibility and, if we do it right, that will guarantee that our future is brighter.

Mr. LIEBERMAN. I certainly would.

Mr. LIEBERMAN. Responding, if I may, to the Senator from Massachusetts, this Senator certainly is troubled by that. Let me say, before I respond directly, what a pleasure it has been to work with the Senator from Massachusetts on this bill. There is not a better lawmaker/legislator in the literal meaning of that word in this Chamber than the Senator from Massachusetts. I have seen his talents, his persistence, his knowledge, and his great skill as an advocate at work. I have actually enjoyed the experience. I thank him for his leadership. He has been responsible for successive advances in the quality of life in our country, particularly for our children. If we can bring this one to a conclusion, it will be yet another extraordinary accomplishment that he has led, working not just with members of this party but across the aisle and, in fact, with the White House. The numbers the Senator from Massachusetts cites are troubling to me. They are particularly troubling today, as the two of us have said, because we have essentially reached agreement on the core issues relating to this bill. Our staffs are drafting and we will meet again later in the day, but this is a substantial accomplishment. It shows that we have common purposes, and we can reach common ground across party lines, across Pennsylvania Avenue, because what is on the line here is the well-being of our children and the future of our country. All of these agreements we have now reached and are drafting are just not going to mean anything much unless we help the States and local governments and school districts meet the additional responsibilities we are placing on them through this bill. The Senator from Massachusetts has spoken about the amendment to the budget resolution introduced by Senator Harkin, our colleague from Iowa. It passed with bipartisan support. It took over $200 billion from the tax plan, used it to pay down the debt, took a similar amount, over $200 billion, and asked that it be invested in education. This expresses the concern across the aisle here in the priority placed on education. In that amendment, as I read it, over the 10 years there was approximately $100 billion of that money that was to go through the Elementary and Secondary Education Act that we are considering now, about $50 billion there for the first 5 years which we are considering as part of this authorization; therefore, $10 billion a year. That is what was voted by this Senate in a bipartisan vote. Here we are with the President saying to us that the most he can do at this point, as I understand it, is somewhat over $2 billion. And while so much more next year--$69 billion--is being put into the tax cut, 35 percent of the projected surplus in the tax cut, 1 percent is in education. I agree with the Senator. It doesn't make any sense to say we can't make a long-range commitment to the children of America for their education, but we can, in the budget resolution, somehow make a long-range commitment to the wealthiest taxpayers who, if I may say so personally, don't need the help as much as the children of America. So the Senator is right. I say, again, when you think about the plenty that we have available to us, when you think about the strong economy we have had for the last several years, and the restraint we have shown at the Federal Government level that produces these extraordinary surpluses ahead, the likes of which we have never seen before, this all comes down to priorities and choices. How do we want to invest this money? I say proudly, with the Senator from Massachusetts, who has been the leader, we want to invest it in our children's education.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I am pleased to introduce with my colleagues the ``Electronic Government Act of 2001''. Members of both parties understand that using new information technologies wisely can create a better government more in touch with the needs of the public. That's why I am happy to be joined in this endeavor by such a distinguished group of original co-sponsors, namely Senators Burns, Bingaman, Fitzgerald, Daschle, McCain, Carper, Durbin, Johnson, Kerry, Leahy, and Levin. Our legislation will provide the leadership, coordination, expertise, and resources necessary to utilize the Internet and create a more efficient, citizen-oriented government. Harnessing the Internet and other information technologies to deliver government programs, services, and information more effectively is critical to ensure that the Federal government remains a vital, positive presence in society. Efforts to promote electronic government, which is still in its infancy, are advancing around the world. Federal, state, and local governments are using web-based technologies to enhance citizen access to information, provide round-the-clock services, save money on procurement and other transactions, and stimulate citizen participation. Citizens who have discovered the benefits of conducting business with government from their homes, and when it is convenient for them, are using the Internet to file their taxes, renew licenses and registrations, apply for college loans, and bid on government contracts. In some cases businesses are able to use the Internet to get advice about existing regulatory requirements and citizens to comment on proposed rules. These examples are exciting and encouraging. However, the reality is that all but a handful of the applications now being put online by Federal agencies are developed in relative isolation. E-Government currently is a loose-knit mix of ideas, projects, and affiliations often not well coordinated, sometimes overlapping in its goals and redundant in its expenditures. Though there are some remarkable innovations championed by visionary government employees, many other efforts are hampered by traditional models of government management, and ``stove-pipe'' conceptions of agency jurisdiction. We are in essence taking the often confusing, overlapping and inefficient maze of government programs as they now exist and simply transferring them onto the Internet. This is not the best way forward. We can and must take full advantage of information technologies to overcome the often arbitrary boundaries that exist between agencies, and to provide the public with seamless, secure online services. A functional approach focuses on delivering services to the citizen, organized according to the citizens' needs, and without regard to where the jurisdiction of one agency stops and another begins. The greatest challenge in many cases is realizing how the new technologies have created new opportunities, and reconfiguring government processes accordingly. Seizing these opportunities will require leadership, coordination, and meaningful communication with agency decision-makers. This legislation is designed to help accomplish that goal, first by establishing a Federal Chief Information Officer, or CIO, in the Office of Management and Budget. As many have pointed out, a Federal CIO is essential to provide government-wide coordination, leadership, and visibility to e-Government efforts. In fact, a recent survey revealed that 49 state governments already have Chief Information Officers to address government-wide information technology issues. The Federal CIO will have the necessary ties to relevant government agencies so that she or he is able to lead e-Government efforts, and will also work closely with state and local governments, with the private and non- profit sectors, and with the public. The Federal CIO will review agencies' information technology planning and performance, will ensure compliance with existing information statutes, and will be empowered to address other issues of concern such as online privacy and computer security. The CIO will also direct expenditures from an E-Government Fund, which would promote the innovative, cross-agency projects that are extremely difficult to fund at present but absolutely necessary for the kind of integrated service delivery possible today. The legislation authorizes $200 million for each of the next three years for the Fund, and contains criteria governing its use. Every year the federal government spends $40 billion on information technology, and not always efficiently. In comparison the E-Government Fund represents a modest investment in a new kind of government venture: the virtual realignment of government services and information in pursuit of citizen-centered government. Many of the improvements achieved by this legislation will be accessible from a centralized online government portal, which will build on the FirstGov website launched last year by the General Services Administration. The FirstGov website is an important first step, but there is much room for improvement. In those instances where agencies have cooperated to create truly integrated websites, as with Students.gov, the portal provides a demonstration of how citizens accessing the government through a single website may easily reach a wide range of information and services. But this type of site is the exception. Our E-Government bill will lead to more integrated sites, linked to the centralized portal. It will also create a directory of government web pages, so that citizens can easily find the help they need with a few clicks of the mouse rather than with cumbersome searches that often produce hundreds of thousands of results, sometimes in no discernable order. New information technologies can be harnessed in many creative ways to better serve the public. Among other provisions, the legislation will expand online access to judicial information, establish an online national library, and promote research into how information technologies can be used to improve our planning for and response to natural disasters. The Internet can also be used to facilitate public participation in democratic processes, as the Department of Transportation has proven; its docketing system has been placed entirely on-line, so that individuals can easily find the rulemaking that interests them, review comments, and file comments of their own from a home computer. Our bill requires other regulatory agencies to establish similar systems. Of course, the provisions in our bill only scratch the surface of what is possible. More importantly, the legislation establishes a process by which our government can transform itself. Our citizens will not be fully comfortable engaging in transactions over the Internet unless they are confident that their personal information is kept secure and private. That's why the E-Government Act contains strong new protections requiring agencies to complete detailed assessments of privacy considerations when they procure new information systems or initiate new collections of personal information. The bill also empowers the Federal CIO to review agencies' computer security plans. This legislation is a work in progress. The bill already reflects the input and insights of many individuals and organizations, including those who participated in the E-Government interactive web site launched by Senator Thompson and myself last year. I also want to acknowledge the important contribution made by Senator Bingaman; we have incorporated his share-in-savings legislation from the last Congress as a provision. Because this is a work in progress, we will continue to seek comments and feedback on the legislation, and I expect that this bill's provisions will change as we work to achieve a broad consensus. E-Government should not be a partisan issue; it concerns how we will respond to the opportunities of today and tomorrow to achieve a more responsive government for us all. I hope to work with the Administration, which has already expressed an interest in e- government, with Senators from both parties, and with others committed to this issue, to develop a bill that we can all support. I ask unanimous consent that the text of the legislation and a section by section analysis be printed in the Record.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I am pleased to introduce with my colleagues the ``Electronic Government Act of 2001''. Members of both parties understand that using new information technologies wisely can create a better government more in touch with the needs of the public. That's why I am happy to be joined in this endeavor by such a distinguished group of original co-sponsors, namely Senators Burns, Bingaman, Fitzgerald, Daschle, McCain, Carper, Durbin, Johnson, Kerry, Leahy, and Levin. Our legislation will provide the leadership, coordination, expertise, and resources necessary to utilize the Internet and create a more efficient, citizen-oriented government. Harnessing the Internet and other information technologies to deliver government programs, services, and information more effectively is critical to ensure that the Federal government remains a vital, positive presence in society. Efforts to promote electronic government, which is still in its infancy, are advancing around the world. Federal, state, and local governments are using web-based technologies to enhance citizen access to information, provide round-the-clock services, save money on procurement and other transactions, and stimulate citizen participation. Citizens who have discovered the benefits of conducting business with government from their homes, and when it is convenient for them, are using the Internet to file their taxes, renew licenses and registrations, apply for college loans, and bid on government contracts. In some cases businesses are able to use the Internet to get advice about existing regulatory requirements and citizens to comment on proposed rules. These examples are exciting and encouraging. However, the reality is that all but a handful of the applications now being put online by Federal agencies are developed in relative isolation. E-Government currently is a loose-knit mix of ideas, projects, and affiliations often not well coordinated, sometimes overlapping in its goals and redundant in its expenditures. Though there are some remarkable innovations championed by visionary government employees, many other efforts are hampered by traditional models of government management, and ``stove-pipe'' conceptions of agency jurisdiction. We are in essence taking the often confusing, overlapping and inefficient maze of government programs as they now exist and simply transferring them onto the Internet. This is not the best way forward. We can and must take full advantage of information technologies to overcome the often arbitrary boundaries that exist between agencies, and to provide the public with seamless, secure online services. A functional approach focuses on delivering services to the citizen, organized according to the citizens' needs, and without regard to where the jurisdiction of one agency stops and another begins. The greatest challenge in many cases is realizing how the new technologies have created new opportunities, and reconfiguring government processes accordingly. Seizing these opportunities will require leadership, coordination, and meaningful communication with agency decision-makers. This legislation is designed to help accomplish that goal, first by establishing a Federal Chief Information Officer, or CIO, in the Office of Management and Budget. As many have pointed out, a Federal CIO is essential to provide government-wide coordination, leadership, and visibility to e-Government efforts. In fact, a recent survey revealed that 49 state governments already have Chief Information Officers to address government-wide information technology issues. The Federal CIO will have the necessary ties to relevant government agencies so that she or he is able to lead e-Government efforts, and will also work closely with state and local governments, with the private and non- profit sectors, and with the public. The Federal CIO will review agencies' information technology planning and performance, will ensure compliance with existing information statutes, and will be empowered to address other issues of concern such as online privacy and computer security. The CIO will also direct expenditures from an E-Government Fund, which would promote the innovative, cross-agency projects that are extremely difficult to fund at present but absolutely necessary for the kind of integrated service delivery possible today. The legislation authorizes $200 million for each of the next three years for the Fund, and contains criteria governing its use. Every year the federal government spends $40 billion on information technology, and not always efficiently. In comparison the E-Government Fund represents a modest investment in a new kind of government venture: the virtual realignment of government services and information in pursuit of citizen-centered government. Many of the improvements achieved by this legislation will be accessible from a centralized online government portal, which will build on the FirstGov website launched last year by the General Services Administration. The FirstGov website is an important first step, but there is much room for improvement. In those instances where agencies have cooperated to create truly integrated websites, as with Students.gov, the portal provides a demonstration of how citizens accessing the government through a single website may easily reach a wide range of information and services. But this type of site is the exception. Our E-Government bill will lead to more integrated sites, linked to the centralized portal. It will also create a directory of government web pages, so that citizens can easily find the help they need with a few clicks of the mouse rather than with cumbersome searches that often produce hundreds of thousands of results, sometimes in no discernable order. New information technologies can be harnessed in many creative ways to better serve the public. Among other provisions, the legislation will expand online access to judicial information, establish an online national library, and promote research into how information technologies can be used to improve our planning for and response to natural disasters. The Internet can also be used to facilitate public participation in democratic processes, as the Department of Transportation has proven; its docketing system has been placed entirely on-line, so that individuals can easily find the rulemaking that interests them, review comments, and file comments of their own from a home computer. Our bill requires other regulatory agencies to establish similar systems. Of course, the provisions in our bill only scratch the surface of what is possible. More importantly, the legislation establishes a process by which our government can transform itself. Our citizens will not be fully comfortable engaging in transactions over the Internet unless they are confident that their personal information is kept secure and private. That's why the E-Government Act contains strong new protections requiring agencies to complete detailed assessments of privacy considerations when they procure new information systems or initiate new collections of personal information. The bill also empowers the Federal CIO to review agencies' computer security plans. This legislation is a work in progress. The bill already reflects the input and insights of many individuals and organizations, including those who participated in the E-Government interactive web site launched by Senator Thompson and myself last year. I also want to acknowledge the important contribution made by Senator Bingaman; we have incorporated his share-in-savings legislation from the last Congress as a provision. Because this is a work in progress, we will continue to seek comments and feedback on the legislation, and I expect that this bill's provisions will change as we work to achieve a broad consensus. E-Government should not be a partisan issue; it concerns how we will respond to the opportunities of today and tomorrow to achieve a more responsive government for us all. I hope to work with the Administration, which has already expressed an interest in e- government, with Senators from both parties, and with others committed to this issue, to develop a bill that we can all support. I ask unanimous consent that the text of the legislation and a section by section analysis be printed in the Record.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to introduce legislation, the Productivity, Opportunity, and Prosperity Act of 2001, that I believe will add some needed POP to our economy and that must be an integral component of any strategy to extend our historic economic growth. The primary goal of the Productivity, Opportunity, and Prosperity Act 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 is a tax package 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. The first component of this bill is a 30 percent tax credit for companies that invest in remedial education for their employees. Many companies today recognize that a skilled workforce is critical to success and they are eager to invest continuously in their employees. However, too often those companies seeking to upgrade worker skills are having to first make sizeable investments to simply make up for the skill deficits produced by the K-12 education system. For example, in my home state of Connecticut, I am aware of one small manufacturer with 25 employees that will train 20 of them in English as a Second Language at a cost of up to $15,000. That is a significant investment and commitment by that company. Because too many workers did not learn the basic math, reading, and language skills in school, companies have to fix these deficiencies first, before they can train their workers on more advanced skills. This credit will help to offset those investments. The bill's second component is a Small Business Digital Divide Tax Credit. It would create a 10 percent tax credit for small businesses, those with fewer than 100 employees, to encourage investment in information technology, for example servers, network hardware, initial broadband hookup, PCs, and e-Business software. This credit is critical for two reasons. First, because there is truly a small business digital divide in this country. Small firms are lagging in the productivity growth that has driven the economic boom of the late 90s. While small businesses account for 40 percent of our economy and 60 percent of the new jobs, less than one-third of them are wired to the Internet today. Those that are wired have grown 46 percent faster than their counterparts who are unplugged. A recent study by the National Association of Manufacturers, NAM, shows that those small manufacturers surveyed averaged only about 2 percent of their sales over internet and less than 1 percent were in the advanced stages of e-commerce. Without expanding productivity improvements to small businesses, we cannot hope to sustain the economic growth of the last several years. The second reason this credit is so important, is that it provides an immediate stimulus to our slowing economy. We know today that there has been a sharp downturn in technology-related capital spending that has helped power our economic growth. For example, Cisco Systems, whose products provide the foundation for our digital environment, estimates that its sales for the current quarter would be about 30 percent lower than the previous quarter and that they would fall again next quarter. By some projections, PC sales in this country this year will slow dramatically to virtually zero growth. In order to spur near term investment and provide an economic stimulus, this credit would be available immediately after enactment and through the end of 2002. This bill's third component recognizes that entrepreneurship drives growth and that 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. For these reasons, the bill creates a zero capital gains rate for new, direct, long term investments by individuals and corporations in the stock of small businesses, those emerging, entrepreneurial companies that are core to our economic growth. Specifically, this legislation excludes from capital gains taxes 100 percent of new, long- term investments in these capital-intensive small businesses. It also changes the eligibility definition of a small business from $50 million in capitalization to $300 million while reducing the holding period for investments from 5 to 3 years. In addition, it also eliminates incentive stock options from the calculation of the Alternative Minimum Tax to help high tech employers recruit and retain the skilled professionals that are critical to competitiveness in a knowledge economy. Finally, the bill's fourth component reduces the tax depreciation period for semiconductor manufacturing equipment from five years to three years, which more closely reflects the actual life of the equipment. I believe this component is essential because we know that advances in semiconductor technology improve productivity throughout the economy. The pace of innovation in the semiconductor industry is among the fastest of any U.S. or global industry. Following Moore's Law, the semiconductor industry has been quadrupling the number of transistors on a chip every three years and studies show that chip manufacturing equipment quickly becomes obsolete as these new generations of chips are introduced. Semiconductor companies spend a greater percentage of their sales on R&D and capital equipment than any other industry. Last year, the U.S. semiconductor industry spent 18 percent of its sales on capital investment and 14 percent on R&D. More than 30 percent of this sector's revenue are invested in the future and building the New Economy. To promote economic strength, we can no longer afford to penalize the semiconductor manufacturing equipment industry with tax law that requires a five year cost recovery. 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 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 of 2001 is an important step toward that future.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I rise today to introduce legislation, the Productivity, Opportunity, and Prosperity Act of 2001, that I believe will add some needed POP to our economy and that must be an integral component of any strategy to extend our historic economic growth. The primary goal of the Productivity, Opportunity, and Prosperity Act 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 is a tax package 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. The first component of this bill is a 30 percent tax credit for companies that invest in remedial education for their employees. Many companies today recognize that a skilled workforce is critical to success and they are eager to invest continuously in their employees. However, too often those companies seeking to upgrade worker skills are having to first make sizeable investments to simply make up for the skill deficits produced by the K-12 education system. For example, in my home state of Connecticut, I am aware of one small manufacturer with 25 employees that will train 20 of them in English as a Second Language at a cost of up to $15,000. That is a significant investment and commitment by that company. Because too many workers did not learn the basic math, reading, and language skills in school, companies have to fix these deficiencies first, before they can train their workers on more advanced skills. This credit will help to offset those investments. The bill's second component is a Small Business Digital Divide Tax Credit. It would create a 10 percent tax credit for small businesses, those with fewer than 100 employees, to encourage investment in information technology, for example servers, network hardware, initial broadband hookup, PCs, and e-Business software. This credit is critical for two reasons. First, because there is truly a small business digital divide in this country. Small firms are lagging in the productivity growth that has driven the economic boom of the late 90s. While small businesses account for 40 percent of our economy and 60 percent of the new jobs, less than one-third of them are wired to the Internet today. Those that are wired have grown 46 percent faster than their counterparts who are unplugged. A recent study by the National Association of Manufacturers, NAM, shows that those small manufacturers surveyed averaged only about 2 percent of their sales over internet and less than 1 percent were in the advanced stages of e-commerce. Without expanding productivity improvements to small businesses, we cannot hope to sustain the economic growth of the last several years. The second reason this credit is so important, is that it provides an immediate stimulus to our slowing economy. We know today that there has been a sharp downturn in technology-related capital spending that has helped power our economic growth. For example, Cisco Systems, whose products provide the foundation for our digital environment, estimates that its sales for the current quarter would be about 30 percent lower than the previous quarter and that they would fall again next quarter. By some projections, PC sales in this country this year will slow dramatically to virtually zero growth. In order to spur near term investment and provide an economic stimulus, this credit would be available immediately after enactment and through the end of 2002. This bill's third component recognizes that entrepreneurship drives growth and that 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. For these reasons, the bill creates a zero capital gains rate for new, direct, long term investments by individuals and corporations in the stock of small businesses, those emerging, entrepreneurial companies that are core to our economic growth. Specifically, this legislation excludes from capital gains taxes 100 percent of new, long- term investments in these capital-intensive small businesses. It also changes the eligibility definition of a small business from $50 million in capitalization to $300 million while reducing the holding period for investments from 5 to 3 years. In addition, it also eliminates incentive stock options from the calculation of the Alternative Minimum Tax to help high tech employers recruit and retain the skilled professionals that are critical to competitiveness in a knowledge economy. Finally, the bill's fourth component reduces the tax depreciation period for semiconductor manufacturing equipment from five years to three years, which more closely reflects the actual life of the equipment. I believe this component is essential because we know that advances in semiconductor technology improve productivity throughout the economy. The pace of innovation in the semiconductor industry is among the fastest of any U.S. or global industry. Following Moore's Law, the semiconductor industry has been quadrupling the number of transistors on a chip every three years and studies show that chip manufacturing equipment quickly becomes obsolete as these new generations of chips are introduced. Semiconductor companies spend a greater percentage of their sales on R&D and capital equipment than any other industry. Last year, the U.S. semiconductor industry spent 18 percent of its sales on capital investment and 14 percent on R&D. More than 30 percent of this sector's revenue are invested in the future and building the New Economy. To promote economic strength, we can no longer afford to penalize the semiconductor manufacturing equipment industry with tax law that requires a five year cost recovery. 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 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 of 2001 is an important step toward that future.