John McCain

Mr. McCAIN

Mr. McCAIN. Mr. President, here we go again. We have now been through this on several occasions in the past. These are tough decisions. I think people realize this could have significant impact on the economies of their States, and of their districts in the case of Members of the House. But I think we need to again remind people that we are in a situation where the defense spending increases and our requirements to fight the war on terror in general and increased costs of the war in Iraq absolutely mandate that we do everything we can to institute savings for the American taxpayers as far as the expenditure of their tax dollars are concerned. I don't in any way dispute the fact that when a base is closed it has a very significant and sometimes short-term devastating impact on a State or locality in which that base is located. I do think it is well to point out that Taxpayers With Common Sense and the Center for Defense Information prepared an independent report which was released in October of 2001. There may be some surprise by those of my colleagues who are citing economic concerns as to why they oppose further base closure rounds. Of the 97 bases closed in four base closure rounds, 88 percent experienced per capita personal income growth as high as 36 percent, and averaging nearly 10 percent; 75 percent experienced gains in average earnings per job; 87 percent had positive employment rates; 68 percent beat the national average; the average job replacement rate of all bases closed is 102 percent; by the beginning of 2001, only 3 of the 97 counties had higher unemployment rates than the BRAC announcement year; and 53 percent had unemployment rates lower than the national average. I think it is important to put it in that economic context. Far, far more important than that is the fact that we are going through a significant realignment to meet the post-cold-war needs and challenges. The Department of Defense is well on its way to establishing an integrated commonsense basing strategy that will feed directly into the BRAC process. The Office of the Secretary of Defense is finalizing the decisions in the integrated global presence and basing strategy that will specify who will be coming back and who will be going forward as we transition away from a cold-war posture to a global war on terror posture. The decisions from the new global lay-down would be precursors to and will greatly influence the BRAC process. It will take both processes acting in a close manner to optimize the deployment of our forces around the world. Delaying BRAC or disrupting the symbiotic relationship between the integrated global presence, basing strategy, and BRAC processes will ultimately minimize our efficiency in the combat effectiveness of our forces in fighting the global war on terrorism. That is why the Joint Chiefs of Staff and the Secretary of Defense-- all knowledgeable people who could be viewed as objective outside observers--agree that we have to move forward with this process. We have voted on it before. We will vote on it again, maybe, although I hope not between now and the time that is appointed. I don't think there is any doubt that at this particular time it would be a serious mistake for us to delay. I add again that the economic benefits associated with base closure are generally very much more positive than negative. I hope my colleagues will understand the views of the Chairman of the Joint Chiefs of Staff, the Secretary of Defense, the President of the United States, and all others who strongly feel that we need to move forward with this process. I look forward to seeing a list of the bases in my State when the Senator from Mississippi hands it out. As he handed out a list the last time, he left my State off the list. I hope he corrects that oversight this time.

Mr. McCAIN

Mr. McCAIN. I thank the sponsor of this important legislation and greatly appreciate his willingness to ensure that these important issues are addressed as this measure continues through the legislative process.

Mr. McCAIN. I would like to commend the bill managers for reaching a bipartisan compromise on this important issue. Recognizing the substantial challenges the current law has posed to many schools and school districts, this bill seeks to strike a very difficult balance between the interests of disabled children and their families and the schools and school districts. However, despite the substantial improvements this legislation makes over current law, issues of concern remain among a number of interested parties, including education groups in Arizona. I am also concerned about some of the unintended consequences that have arisen as a result of the Federal restrictions placed on school districts concerning the manner in which they are allowed to discipline students with special needs. For example, an Arizona school district recently identified a number of students involved in the sale and distribution of illegal drugs on school property, a very serious incident that placed the other students and the teachers at that school at great risk. All of the students involved in the incident were expelled, with the exception of one student who has a mild disability. I recognize the Senator from New Hampshire already has worked to include language in this bill to reverse the ``stay put rule,'' which schools, school districts, and the Arizona Superintendent of Education, Tom Horne, have expressed substantial frustration over. I want to commend the sponsor's efforts and hope to work with him to ensure that schools are not prevented from taking action to discipline children as appropriate, including those enrolled in IDEA. I know this issue is also of concern to my colleague from Arizona.

Mr. McCAIN. I thank the Senator. IDEA is centered on an individualized approach to educating children with special needs. Disciplining those students whose actions endanger other students and faculty also should be done on an individual basis--a one size-fits-all Federal approach to discipline disregards the individual nature of the actions of the students involved, and is not the best approach. Another issue that concerns schools and administrators in Arizona is Section 616, regarding monitoring, technical assistance, and enforcement. It would allow the Secretary of Education to refer a case to the Department of Justice if the Secretary determines the State has shown a ``significant lack of progress'' or is in ``substantial noncompliance'' or ``egregious noncompliance'' with IDEA. Schools from across Arizona are concerned that the language in this bill is too vague and could lead to excessively burdensome litigation if a State is labeled to be ``significantly noncompliant'' or ``egregiously noncompliant.''

Mr. McCAIN. I have also heard substantial concern from groups in Arizona regarding language that may compel states to pay for lawsuits against State or local education entities. I know these concerns also have been expressed to my colleague from Arizona.

Mr. McCAIN

Mr. McCAIN. Mr. President, I am pleased to join my colleague from Illinois, Senator Fitzgerald, and several other members of the Senate in sponsoring S. 2059, the Mutual Fund Reform Act of 2004. Mutual funds traditionally have been seen as safe havens for long- term investments. This perception of mutual funds as secure investment vehicles has certainly contributed to the industry's grow. Two decades ago, the mutual fund industry was relatively small; only a small percentage of Americans invested in mutual funds, and the assets of the industry were $115 billion. Today, the mutual fund industry has $7.5 trillion in assets, over 90 million investors, and more than 10,000 funds. Unfortunately, as the industry has grown, some mutual fund managers and boards of directors have ignored their most basic role as fiduciaries. Recent State and Federal investigations have revealed trading irregularities at several of funds, including many that are well known. These scandals have shed light on the disregard shown by many mutual fund managers and directors for the individuals who invest their hard-earned money in mutual funds. They have also drawn attention to inflated mutual fund fees that often are not in the best interests of mutual fund shareholders and too frequently are not properly disclosed to such shareholders. The Mutual Fund Reform Act would improve the integrity of the mutual fund industry by restoring investors' trust in the mutual fund managers and boards that are responsible for investing much of our citizens' household, college, and retirement savings. Most importantly, the act would strengthen the governance of mutual funds by, among other things, ensuring that mutual fund company boards would be truly independent and empowered. In addition, the act would establish disclosure requirements designed to provide mutual fund investors with a clearer picture of fund management and fund fees. I thank Senator Fitzgerald for introducing this important bill, and I urge my colleagues to support this legislation in order to further encourage investor confidence in the mutual fund industry and in our capital markets.

Mr. McCAIN

Mr. McCAIN. Mr. President, I am joined on the floor today by my good friend from Wisconsin, Senator Feingold, to speak briefly about a recent recommendation by the general counsel of the Federal Election Commission, FEC, to delay the 527 rulemaking another 90 days. Additionally, we would like to express support for an excellent bipartisan proposal by two members of the FEC to resolve the issue of 527 groups spending illegal soft money to influence Federal elections. As my colleagues know, the problem of 527 groups raising and spending soft money has somehow become a very contentious and partisan issue. That is unfortunate, because it need not be, and the Toner/Thomas proposal proves the point. As my colleagues know, the general counsel of the FEC made a recommendation yesterday to delay the 527 rulemaking which the commission is to rule on tomorrow. This is a terrible idea. There is simply no reason for the commission to continue fiddling while Rome burns. The commissioners need to decide the 527 issue tomorrow, on schedule, without more pointless delays. Everyday, 527 groups whose purpose is to influence the presidential election are breaking the law. They are spending millions of dollars in soft money to influence Federal elections in plain violation of the Federal Election Campaign Act of 1974, which the commission has failed to enforce for a generation. And these groups are now using the FEC inaction to blow a hole in the soft money ban upheld by the Supreme Court. In the middle of an election cycle, the FEC is considering taking a pass on the most critical issue on its plate. If they do, it will be just one more example of the agency's utter inability to enforce election law. My colleague, Trent Lott, recently said he was considering hearings on FEC reform, and if this absurd delay happens, I think we may be talking about hearings sooner rather than later. The FEC is responsible for the start of soft money in the first place. They must not get away with it again. This is particularly galling because the main reason the general counsel office gives for its delay--the size and complexity of the rulemaking, and the possible impact on 501(c) organizations--is a canard. There is an excellent, bipartisan proposal on the table from Commissioners Toner and Thomas that would deal with the 527s in a simple, straightforward way. With their proposal, the commission has the perfect opportunity to prove they can uphold the election laws that were passed by Congress more than 25 years ago, signed by the President, and upheld by the Supreme Court. It may sound a little odd to be excited at the prospect of a Federal agency properly upholding existing law, but in the case of the FEC, it would be something of a new phenomenon. There is absolutely nothing in the general counsel's rationale for delaying action here that justifies refusing to act now to fix the FEC's absurd allocation regulations that are being used to spend 98 percent soft money to influence the presidential election. The general counsel's recommendation provides no excuse for failing to act tomorrow on the portion of the Toner/Thomas proposal that would fix the allocation rules and correct the FEC's mistake in adopting them, a mistake made clear by the Supreme Court decision McConnell v. FEC. The only conclusion that can be reached if action to correct the allocation rules is rejected by the FEC is that the commission wants to protect and license the illegal use by 527 groups of soft money to finance partisan voter mobilization efforts to influence the 2004 presidential election. The bipartisan proposal by Commissioner Michael Toner, a Republican, and Commissioner Scott Thomas, a Democrat provides a clear, effective and immediate solution to the soft money problems that have arisen with these 527 groups. The FEC is supposed to meet tomorrow to consider this proposal, and I strongly urge them to adopt the proposal and seize this opportunity to enforce the law. First, I note that their proposal would explicitly apply only to 527 political committees, and not to 501(c) nonprofit groups, which should take care of the concerns of those in the nonprofit community that the FEC would overreach, and affect their own important work. That is simply no longer an issue, and the commission can act tomorrow, rather than waiting around until a more convenient moment to enforce the law. The Toner/Thomas proposal deals with what we believe to be the two main problems with the 527 groups. First, their plan would fix the commission's absurd allocation rules, which control the mix of soft and hard money these groups can spend. Under the current rules, 527s can simply claim that they're involved in both Federal and State elections, even though they're obviously and admittedly clearly working for the sole purpose of defeating or electing a presidential candidate. That claim, and the absurd FEC rules that currently exist, has led one such 527 group to use 98 percent soft money for their partisan vote mobilization activities to influence the presidential election and only 2 percent hard money. That is an obvious circumvention of the longstanding Federal Election Campaign Act, FECA, as well as the new ban on soft money in Federal elections, and a hole in the dike that absolutely must be plugged. The Toner/Thomas plan would deal with this by simply requiring groups involved in partisan voter mobilization activities in Federal elections to use a minimum of 50 percent hard money to pay for those activities. that straightforward, easy to understand rule will have the effect of substantially limiting the amount of soft money a 527 group can use on these activities, and I believe it is an effective way to deal with the problem at this time. The second issue the two commissioners' plan would address is the use of soft money by these 527 groups to run attack ads attacking and promoting presidential candidates. These groups are claiming that they are exempt from the normal Federal rules prohibiting the use of soft money to fund such ads because they are not political committees under FEC rules. In essence, these political organizations are claiming that as long as their ads do not use words like ``vote for'' or ``vote against,'' they can spend as much soft money as they please attacking and promoting Federal candidates. That argument is simply absurd, even though the FEC's failure to properly enforce the law has allowed it to gain currency over the years. In order to qualify for their 527 tax status, these organizations have to meet the IRS test of being groups that are ``organized and operated primarily'' to influence elections. And under the Federal Election Campaign Act, which has been around since 1974, groups that have a primary purpose of influencing Federal elections and raise or spend $1,000 to do so have to register as political committees and comply with Federal campaign finance laws. 527 political groups have sprung up in this election with the clear and sole purpose of influencing the presidential election. Under existing laws and Supreme Court rulings these groups can run whatever ads they want--but they have to register as Federal political committees and they do have to abide by the same Federal campaign finance rules as all other political committees and candidates have to play by, and pay for those ads with hard money. The Toner/Thomas proposal clears up this issue by correctly deeming any organization operating as a political group under section 527 of the tax code to have a ``major purpose'' of influencing Federal elections, unless the group falls within certain specified exemptions. This common-sense approach simply corrects the FEC failure to properly interpret the law in the past as it applies to 527 groups. It makes it clear that 527 political groups that have a major purpose to influence Federal elections and spend more than $1,000 to influence a Federal election have to comply with Federal campaign finance rules, regardless of whether their communications contain express advocacy. Again, we have a golden opportunity here to fix an emerging problem before it gets out of hand. The Commission should take this rare opportunity to show they can do their job in a bipartisan way. They should approve the Toner/Thomas proposal on Thursday.

Mr. McCAIN

Mr. McCAIN. Mr. President, the amendment is rather straightforward. It strikes the energy tax provisions in this bill which are estimated to cost nearly $18 billion. I read from an April 19 article from the Washington Post: Congress's task seemed simple enough: Repeal an illegal $5 billion-a-year export subsidy and replace it with some modest tax breaks to ease the pain on United States exporters. This article is entitled ``Special-Interest Add-Ons Weigh Down Tax- Cut Bill.'' But out of that imperative has emerged one of the most complex, special-interest-riddled corporate tax bills in years, lawmakers, Senate aides and lobbyists say. The 930- page epic is packed with $170 billion in tax cuts aimed at cruise-ship operators, NASCAR track owners, bow-and-arrow makers, and Oldsmobile dealers, to name a few. There is even a $94 million break for a single hotel in Sioux City, Iowa. Even one of the tax lobbyists involved in drafting it conceded the bill ``has risen to a new level of sleaze.'' I agree with that lobbyist. This has risen to a new level of sleaze. The lobbyist goes on to say: ``I said a few months ago, any lobbyist worth his salt has something in this bill,'' said the lobbyist, who would only speak on condition of anonymity. ``Now you see what I'm talking about.'' The Wall Street Journal, Wednesday, May 5, in an article entitled ``Export Tax Follies:'' But instead of solving the problem, congressmen are engaging in one of their epic tax-bidding wars . . . including a $482 million sop to the insurance company, $189 million in ``transitional assistance'' for Oldsmobile dealers, and an $8 million tax break for makers of children's bow and arrows. Not only that . . . $15 billion in energy tax breaks were thrown in as an added sweetener. The Senate couldn't pass the energy bill as a stand alone measure, so he's looking for any shipwrecks that will sail this year. The measure includes an overhaul of tax treatment for ethanol and subsidies for ``clean'' fuels. . . . Mr. President, there is an abundance of media coverage of this legislation. It reaches, as the lobbyist said, in my view, a new level of sleaze. We have to consider what we are doing. We had a $170 billion tax break, which really is $170 billion that will not go into the U.S. Treasury. So Alan Greenspan, last week, says the greatest threat to our Nation's economy is the deficit, and that a free lunch you don't have to pay for hasn't been invented yet. Yet here we are with $170 billion worth of tax breaks, tacking on to it $18 billion in tax breaks on an energy bill that this body could not pass. It is remarkable, with a half trillion deficit, and we are enacting new tax credits, for--guess who--the oil and gas industry in America which, the last time I checked, is doing pretty well. The majority of my colleagues on this side of the aisle just voted against an extension of the unemployment benefits for Americans who remain unemployed and haven't profited by this reemerging and strengthening economy. My God, we won't give them an extension of their unemployment benefits. But if the ethanol people of Archer Daniels Midland need it, by God, we will give it to them. Mr. President, $170 billion in tax credits but no extension of unemployment benefits for people who have been out of work, it is a remarkable commentary. Out of all the provisions that have been added to this bill since it was first brought to the floor of the Senate on March 3, I find the energy tax title the most egregious. That is why I am offering this amendment to strike it. What do these provisions have to do with the underlying bill? Nothing. What do they have to do with ensuring that tariffs that have been placed on our Nation's manufacturers since March 1 are lifted? The answer is nothing. I understand how sweet this is--how sweet this is--for these lobbyists who are doing so well here in Washington. But if the Senate is to consider an energy tax incentive bill or an energy authorizing bill, we should be following regular order, bringing legislation to the Senate floor, and debating it in its own right. Instead, a 319-page energy tax title was incorporated without a vote. The proponents of this bill contend it is ``revenue neutral'' and that all the tax cuts in the bill are paid for with offsets. How many times have we played that game? How many times have we used the same old offsets on the same old bills, and somehow, with all these offsets, we now have a half-trillion-dollar deficit? It is hard to imagine. For example, 66 provisions of offsets are identical to provisions that were included in the highway bill. So we are using the same offsets for the highway bill, the same offsets for the energy bill. And as some more pork comes rolling in here--squealing in here--we will probably use those same offsets again. I understand the duplicative offsets total about $5 billion. Of course, if these bills ever get to conference and conference agreements are reached, only one measure could include these offsets. Again, the amendment I am offering would strike title VIII of the pending bill. By the way, I have no illusion as to how this vote is going to turn out. The Senator from Michigan just came up to me and said: Well, don't take away my tax break. I want to take away every tax break, I say to the Senator from Michigan. The oil and gas subsidies are estimated to cost about $5 billion and are illustrative of what TIME magazine referred to as the great energy scam on the American taxpayers. This graphic is from an investigative report on synthetic fuel credits which appeared in the October 2003 issue of TIME magazine. While synthetic fuel credits are only one indefensible part of this energy tax title, the entire oil and gas subtitle is a shameless scam that benefits the already enormously profitable oil and gas industries with little or no benefit to the American public. I would like to highlight a few provisions that defy both fiscal and common sense. First, there is about $835 million provided to wealthy oil and gas corporations to write off the cost of looking for domestic oil and gas reserves. As if the oil and gas companies do not have sufficient incentives or resources of their own, we are going to make the taxpayers pay for the basic cost of doing business. This provision sweetens the already generous tax treatment and would allow businesses to recoup their costs for both successful and unsuccessful projects. So failure will be as financially sweet as success. I suppose some of my colleagues may maintain that providing this opportunity for greater riches to oil and gas corporations could result in more supply for the American public. Well, the Energy Information Administration reports that such claims are not backed by the facts. According to a February 2004 EIA report, these subsidies do not impact supply. The EIA report states: The tax provision is expected to have a negligible impact on oil and gas production because . . . year-to-year cash flow can be at least 35 times larger than the tax value and consequently the provision is unlikely to appreciably sway drilling decisions. In other words, these companies are too rich to pay attention to a paltry $835 million. Another provision of this bill, which is perhaps even more egregious than picking up the tab for oil and gas exploration, would provide nearly $2 billion for the extension and modification of tax credits for producing fuel from a nonconventional source. ``Nonconventional'' is the operative word when we talk about synthetic fuels. There is nothing conventional about this so-called fuel, a creation of Congress in 1980. Now that this tax credit scam has been exposed by not only TIME but by our own IRS, Congress has no excuse to perpetuate this expensive hoax, which has cost the taxpayers $4 billion since 1999. If there is anyone who does not know how synthetic fuel is made, the process conjures up images of Rumplestiltskin turning straw into gold, except in this case it is not turning something into anything different. But this is not a fairytale. Here is how the process goes. First, you start with coal, and then, since IRS rules require a chemical change to occur, you must spray the coal with something other than water--usually it is diesel fuel or pine tar--and, magically, you now have a ``synthetic fuel,'' which sounds better than ``sprinkled'' coal, I guess. The company then sells the coal to a user, such as a powerplant, for a slightly lower cost than untreated--or unsprinkled--coal and claims a huge tax credit for ``manufacturing a synthetic fuel.'' If anyone missed a step of this miraculous process, it is coal, to sprayed coal, to gold. I would like to show you how golden this tax credit can be. This graphic shows the reduced tax rate of one multinational hotel corporation that also produces synthetic fuel. This corporation is not the biggest beneficiary of the synthetic shelter, but it is illustrative of the point that one does not need to be in the oil or gas business to strike it rich with synthetic fuels. The IRS has struggled mightily with this tax shelter that grows ever more expansive and expensive. It has undertaken two formal reviews of synthetic fuel production and testing facilities and concluded that there is not any synthetic fuel being produced. This remarkable finding is presented in a November 2003 IRS bulletin, and I quote: The Service believes that the processes approved under its long-standing ruling (that a synthetic fuel must differ significantly in chemical composition from the substance used to produce it) do not produce the level of chemical change required. Incredibly it goes on to say: Nevertheless, the Service continues to recognize that many taxpayers and their investors have relied on its long- standing ruling to make investments. So basically the IRS is going to give this lucrative hoax a ``wink and a nod'' while it waits for Congress to end this sham, which is very unlikely. Another objectional provision would provide subsidies for the highly profitable gas production method called coalbed methane. According to the Department of Energy, coalbed methane accounted for 57 percent of the growth in U.S. natural gas production between 1990 and 1999. Coalbed methane wells are proliferating in western coalfields and wherever else coalbeds exist, without a tax incentive. As you can see from these tables, the number of wells drilled in the Powder River Basin in Wyoming has skyrocketed. The tremendous growth in production from 1993 to 2002, with 10,718 wells in this Wyoming field, occurred without a tax credit, and the BLM expects that another 40,000 new wells will be drilled in this area over the next decade. So I think it is clear that this industry has not been waiting around for taxpayer dollars. If any of my colleagues believe that by making a very profitable industry even more profitable, these tax breaks will help increase gas supply and bring down prices, they are wrong. According to the Congressional Research Service: [V]irtually all of the added gas output (from coalbed methane) has substituted for domestic conventional gas rather than imported petroleum, meaning that the credit has basically not achieved its underlying policy objective of enhancing energy security. In other words, the gas industry has turned from conventional production to coalbed methane with its higher margin of profitability without an increase in total supply. Additionally, the Congressional Research Service found: that from an economic perspective, the Sec. 29 credits compound distortions in the energy markets rather than correcting for preexisting distortions due to pollution, oil import dependence, ``excessive'' market risk, and other factors. Therefore, one must ask, what is the American public actually receiving from these tax incentives? Economic distortions which translate into higher gas prices. I am certain my colleagues do not want to perpetuate the perverse price effect of this tax credit. In the Western U.S., most lands operate on the doctrine of ``split estates'' with different owners of the surface property rights and underlying mineral rights. As the number of coalbed methane wells has skyrocketed, the conflicts with thousands of property owners has intensified. That is due to the extensive environmental damage caused by coalbed methane production, which involves pumping massive volumes of groundwater to release the methane held by hydraulic pressure. Clean coal. The energy tax title would provide an estimated $1.6 billion for the so-called clean coal program. Since 1984, the Department of Energy has already invested $1.8 billion in the clean coal program to ``explore technologies,'' making it the largest environmental technology development effort the Federal Government has ever conducted. But we cannot stop there. This bill would provide an additional $1.6 billion toward the development of still more clean coal technologies. Before we require the taxpayers to pay even more for this program, should we not first consider what we have received in return for the first $1.8 billion? According to the Department of Energy, the $1.8 billion worth of investments went to Bechtel, Westinghouse, General Electric, Texaco, and other companies that produced technology patents and products that have been sold around the world, generating billions of dollars for these companies. Besides the enormous profits these companies made by using taxpayer dollars for their research and development, serious deficiencies in the program explain why a new project has not been added in the last 5 years, and why this program should not be funded again. One of the primary goals of the clean coal program was to produce technologies that scrub emissions from powerplants that result in cleaner air. However, according to a 2001 GAO report, new technologies produced from the $1.8 billion allocated for new clean air technologies have ``limited potential for achieving nationwide emission reductions when used at existing coal-burning facilities.'' The clean coal program management shows more deficiencies. The GAO reports many of the clean coal technology demonstration programs have shown severe problems in meeting costs, schedule, and performance goals. Biomass. Nestled within the provisions of this bill is one of the more ironic and bizarre U.S. policies to be considered. Under the false guise of exploring environmentally friendly alternative energy sources, this bill extends and expands a subsidy offered to facilities that burn animal droppings. I realize a handful of States are facing legitimate environmental challenges stemming from massive amounts of poultry manure and need to find a way to manage the toxic substances that are a byproduct of these droppings. I favor determining the most effective method of addressing this environmental concern within the proper land management context. However, it would be ironic indeed if, in ordinary to satisfy the need for a clean, renewable energy source, the Senate passes legislation subsidizing the burning of animal droppings, a process which has been found to emit toxic heavy metals such as lead, mercury, and arsenic. No less green an organization than Friends of the Earth opposes burning these droppings as an energy source because the process ``cause[s] serious environment and community health problems.'' Moreover, EPA studies have suggested these facilities have the potential to cause more air pollution than a coal plant. On top of all this, these facilities drive up prices on natural fertilizers used on American farms, actually detracting from an environmentally friendly farming process that requires no Government subsidy. Why on earth are we wasting valuable money on such a ridiculous, irrational program, especially when such dire financial and energy needs are facing this country today? Another interesting provision concerns the proposed Alaska natural gas pipeline. There is a good deal of support for this new pipeline from Alaska to the lower 48 States, but to what extent are we willing to mortgage the Federal budget to help ensure its reality? The energy tax title would provide a huge subsidy to the natural gas companies proposing the construction of the Alaska natural gas pipeline. In the case of a drop in the price of natural gas, the energy title establishes a price floor--how many manufacturers in America would like to have a price floor for their product?--of $1.35 per thousand cubic feet. If the market price falls below that amount, the Federal Government would have to pay the difference to the private companies for a maximum benefit of 52 cents per thousand cubic feet. The credit would be in effect for the next 25 years. Even the conferees on the energy conference committee refused to include this provision in its final agreement on H.R. 6, which, considering the wasteful special interest giveaways included, should make one wonder about the merits of this provision. I could go on and on about this bill. I could cite many examples, such as dog-track owners and all the other provisions. But this is probably the most egregious we have and it is quite remarkable. It is a very unfortunate way of doing business, because if we establish this precedent of tacking on anything we want to legislation that is totally irrelevant, then I fear the process has broken down even more badly than I first suspected. Let me again put this in the context of the environment in which we exist today. This bill, which was designed to provide $5 billion in order to satisfy our European friends' concerns, has now grown into a $170 billion ``Christmas tree'' of goodies for every conceivable special interest. When we are running multitrillion-dollar surpluses, I guess you could argue it wasn't such a bad idea. Last week Alan Greenspan said the greatest danger to America's economy is these burgeoning multitrillion-dollar deficits. We have never enacted tax cuts while we are in a war. If one thing has been made abundantly clear, it is the cost of the Iraq war is going to be incredibly high--far higher than we ever anticipated. Around here, it is business as usual--well, it is not business as usual; this is probably about the worst I have seen. I won't say the worst because I probably could think of something. It is as bad as anything I have ever seen. We have no fiscal discipline in this body, and our kids are going to pay a very high price for it. When the bow-and-arrow manufacturers and all of the other things that are stuffed into this, such as horse and dog-track owners, and all of the others--cars, automobiles, Oldsmobiles, all of these things are now amassing. I urge my colleagues to vote for the amendment. I yield the floor.

Mr. McCAIN. I have an amendment at the desk, and I ask for its immediate consideration.

Mr. McCAIN

Mr. McCAIN. Mr. President, we continue to be increasingly reliant on the men and women of our Reserve forces and National Guard. In fact, 40 percent of all the ground troops in Iraq and Afghanistan are composed of National Guard and Reserve forces as well as nearly all of the ground forces in Kosovo, Bosnia, and the Sinai. Many of these soldiers, sailors, airmen, and marines leave behind friends, families, and careers to defend our Nation. Accordingly, it is the responsibility of policy makers to ensure we look after the needs of our patriots. Many reservists that are called to active duty end up making less money with the military than they did in their civilian job. This drop in pay has placed a hardship on many of the men and women serving in the Reserve components who are called to active duty. When the military calls reservists and guardsmen to active duty, the last thing our Nation wants is to hurt the reservist's families as a result. This amendment is designed to address this problem by allowing private companies to pay the difference between the servicemember's Reserve pay and his civilian pay. If the employer chooses to pay this benefit, the Federal Government will give the company a tax credit of 50 percent of the difference in pay, up to $3,000. Our Nation's reservists and guardsmen are an amazing resource of experience, knowledge and dedication. If we are going to continue to rely on our citizen soldiers, we must make sure that they receive their fair share of benefits and that their families are provided for in their absence. I will always support responsible legislation that accomplishes this important goal.

Mr. McCAIN

Mr. McCAIN. Mr. President, I am pleased to join Senators Dodd and DeWine and my other colleagues in introducing the Assistance to Firefighters Act of 2004, which will reauthorize the Assistance to Firefighters Grant Program. This program, which is also know as the FIRE Grant program, addresses a critical need by ensuring that our Nation's firefighters have adequate funding for training and equipment to deal with the many hazards that they face. As Chairman of the authorizing committee of jurisdiction, I am familiar with the success of the Assistance to Firefighters Grant Program. Funding under the FIRE grant program is provided directly to local jurisdictions. Applications undergo a competitive, merit-based process, which helps to ensure that funding is spent responsibily and productively. The grant program includes a matching requirement to ensure that the local community is committed to spending the grant. It also includes a ``maintenance of expenditures'' provision to ensure that the grant will supplement, not replace, local firefighting funds. In addition, the program ensures that new technology that is bought with FIRE Grant funds meet standards set by voluntary consensus organizations, so that local fire departments will buy effective equipment. For Fiscal Year 2004, the program received over 20,000 applications from local fire departments across the country. These requests totaled approximately $2.3 billion. The program also received around 20,000 applications in 2001, 2002, and 2003, which clearly demonstrates the need and importance of this program to the firefighting community. The Assistance to Firefighters Grant program recipients use such funds to help meet their basic needs. The uses for these grants include: personal protection and firefighting equipment; training; firefighting vehicles; fire prevention campaigns; fire code enforcement; and arson detection and prevention. I would like to emphasize that these grants are dedicated to improving the local response to ``all-hazards,'' including natural disasters, structural fires, and acts of terrorism. I thank my colleagues for their leadership on this issue, and urge the Senate to support passage of this legislation this year. As we have witnessed recently, our Nation's fire services face a myriad of threats, and we should work to ensure that they are adequately trained and equipped to meet them.

Mr. McCAIN

Mr. McCAIN. Mr. President, I am pleased to join Senators Dodd and DeWine and my other colleagues in introducing the Assistance to Firefighters Act of 2004, which will reauthorize the Assistance to Firefighters Grant Program. This program, which is also know as the FIRE Grant program, addresses a critical need by ensuring that our Nation's firefighters have adequate funding for training and equipment to deal with the many hazards that they face. As Chairman of the authorizing committee of jurisdiction, I am familiar with the success of the Assistance to Firefighters Grant Program. Funding under the FIRE grant program is provided directly to local jurisdictions. Applications undergo a competitive, merit-based process, which helps to ensure that funding is spent responsibily and productively. The grant program includes a matching requirement to ensure that the local community is committed to spending the grant. It also includes a ``maintenance of expenditures'' provision to ensure that the grant will supplement, not replace, local firefighting funds. In addition, the program ensures that new technology that is bought with FIRE Grant funds meet standards set by voluntary consensus organizations, so that local fire departments will buy effective equipment. For Fiscal Year 2004, the program received over 20,000 applications from local fire departments across the country. These requests totaled approximately $2.3 billion. The program also received around 20,000 applications in 2001, 2002, and 2003, which clearly demonstrates the need and importance of this program to the firefighting community. The Assistance to Firefighters Grant program recipients use such funds to help meet their basic needs. The uses for these grants include: personal protection and firefighting equipment; training; firefighting vehicles; fire prevention campaigns; fire code enforcement; and arson detection and prevention. I would like to emphasize that these grants are dedicated to improving the local response to ``all-hazards,'' including natural disasters, structural fires, and acts of terrorism. I thank my colleagues for their leadership on this issue, and urge the Senate to support passage of this legislation this year. As we have witnessed recently, our Nation's fire services face a myriad of threats, and we should work to ensure that they are adequately trained and equipped to meet them.

Mr. McCAIN

Mr. McCAIN. Mr. President, I am unavoidably absent from the Senate this afternoon, but would like to express my strong support for S. Res. 356. The photos and reports of abuse at Abu Ghraib prison that have emerged over the past week defy description. I condemn, as must all Americans, these horrific acts. It saddens and shames our country to see Americans perpetrate these abuses on other human beings. Their actions do not reflect the principles for which this country stands. We have fought to liberate Iraq, and to free the Iraqi people from the murderous rule of Saddam Hussein. We have achieved great things in Iraq, but we have much work to do. The sickening images of abuse that have emerged in the media threaten to undermine much of the good we have done. These incidents have marred the reputation of our country abroad, and have made the tasks of the brave Americans fighting and working in Iraq harder. But I am confident that the vast majority of men and women working to bring freedom to Iraq will conduct their noble mission with integrity and distinction. Toward that end, we need to have all the facts about the abuses at Abu Ghraib and elsewhere, and we need them immediately. We cannot wait months for a new commission to issue a report, nor for new photos and details to dribble out over weeks. The American people need to know, at once, the abuses committed, punish those guilty of these crimes, and ensure that they never again occur. We must also ensure that similar abuses are not occurring elsewhere in detention centers outside Iraq. Our venture in Iraq is moral, and must be conducted with moral means. We must ensure that we are treating all prisoners and detainees humanely and in accordance with U.S. and international laws and regulations. Mr. President, as Americans we are defined not just by the way in which we deal with our friends but by how we treat our enemies. I know that in many countries around the world, abuse of prisoners is commonplace and brutal interrogation is the norm, rather than the exception. But American, a Nation that was founded on the idea of liberty and justice for all, must hold itself to a higher standard. We liberate, not torture, and we free, not oppress. Burned into our minds are terrible images: a hooded man standing on a box, a prisoner on a leash. These photos represent humanity at its worst, and represent everything that America is not. We must show the country and the world another image--that of Americans working with Iraqis to topple the statute of Saddam Hussein, to free the Iraqi people--truly represents who we are.

Mr. McCAIN

Mr. McCAIN. Reserving the right to object, 5 minutes?

Mr. McCAIN. I do not object.

Mr. McCAIN. Mr. President, I thank my friend from California. I do remember our conversation. I also remember she and I discussed the fact that the post-conflict era was going to be extremely difficult. She made a very balanced statement today, and I thank her for that as we all go through this very difficult time in the history of our country. Mr. President, we will be having a hearing tomorrow with Secretary Rumsfeld, and after that hearing, a lot of us, I hope, will be better informed, not just members of the committee, but others will be better informed as to the dimensions of this terrible situation which we have seen so graphically demonstrated on the abuse of human rights. I also am convinced again that the sooner we get this issue resolved and move forward and make sure it never happens again, it is very important because we have to go about the business of winning this conflict. We cannot let this terrible situation, as tragic as it is, divert us from our purpose of winning this conflict which we cannot afford to lose. We have plenty of time to debate and discuss that in the future. I also would like to comment on my friend John Negroponte. I have known John Negroponte ever since he was ambassador to Mexico, where he did an outstanding job. He has held a broad variety of positions in both Republican and Democrat administrations. I believe he will perform admirably in the position for which the President of the United States has nominated him. There probably would have been a lot less discussion about Mr. Negroponte's qualifications if it had not been for the difficulties we are experiencing in Iraq at the moment, but I would also point out it also lends some urgency to getting this highly qualified, patriotic American in position as we prepare to turn over the government of Iraq to the Iraqi people, which I think all of us are in agreement should be done as quickly as possible.

Mr. McCAIN. Mr. President, I ask unanimous consent that the Senator from California be allowed 2 additional minutes to finish up.

Mr. McCAIN

Mr. McCAIN. Mr. President, on May 1, 2004, in a truly historic move, the European Union welcomed 10 new member states. On this momentous occasion, I offer my congratulations and best wishes to the people of the Czech Republic, Cyprus, Estonia, Hungary, Lithuania, Latvia, Malta, Poland, Slovakia, and Slovenia. These countries have made great achievements, and America benefits from our close ties to these nations. EU expansion represents yet another victory for freedom in Central and Eastern Europe, together with the fall of the Berlin Wall in 1989, the Soviet Union's last gasp in 1991, and the two NATO expansions. Europe is divided no longer, and the United States enjoys an unprecedented relationship with the 10 new EU members. I hope that our excellent relations with these countries will continue, and that we will continue to pursue our common goals of freedom, democracy, and prosperity throughout the world.

Mr. McCAIN

Mr. McCAIN. Senator Lautenberg's amendment calls for a GAO study on broadband for the effects of tax moratorium on State and local economies and other impacts of this Internet tax moratorium. I find it a very valuable amendment. It would be very helpful because this is a moratorium, not a permanent ban. It would be very helpful as we debate this issue, which I imagine will start again in a year or so. The Lautenberg amendment is a good amendment. Senator Lautenberg is a conferee, and I know Senator Dorgan will agree we will fight to make sure this GAO study is included. I yield the floor.

Mr. McCAIN

Mr. McCAIN. I thank the Senator. Mr. President, I ask unanimous consent that the Senator from Kentucky and I be allowed to engage in a dialog.

Mr. McCAIN. Americans are great people. We are providing a service today with your and Senator Feinstein's legislation to bring attention to the plight of the people halfway around the world and their noble and courageous leader who has been a Nobel Peace Prize winner. Every once in a while we do something very worthwhile around here and I thank the Senator for his leadership.

Mr. McCAIN

Mr. McCAIN. Senator McConnell, I thank you and Senator Feinstein for your leadership on this issue. What you have done last year is important. It is very important again this year. Senator McConnell, you put your finger on one of the real tough aspects of this. People all over Burma, including the members of the National League for Democracy, the party that was overwhelmingly elected to take power and run the country of Burma, are grateful to us. It is very tough for opposition within a country to support sanctions which hurt that country economically. Yet this organization, which she leads, supports sanctions because of the terrible things this group of gangsters have done to their country. Senator McConnell, you point out very importantly, apartheid was overthrown in South Africa because of a united front which the United States led, an issue in which you were heavily involved. Now the Europeans seem to be dragging their feet. We have quite often heard--sometimes justified, sometimes unjustified--criticism from our European friends about our lack of attention to human rights, too much attention to politics, et cetera. This is an opportunity for our European friends to join us and bring about the freedom of the Burmese people--I refuse to call it Myanmar-- the Burmese people, free this great Nobel Peace Prize winner and spread democracy and freedom through the world. I thank again Senator McConnell for his leadership. This legislation would not have been passed without the leadership of you and Senator Feinstein. I am very grateful.

Mr. McCAIN. Americans are great people. We are providing a service today with your and Senator Feinstein's legislation to bring attention to the plight of the people halfway around the world and their noble and courageous leader who has been a Nobel Peace Prize winner. Every once in a while we do something very worthwhile around here and I thank the Senator for his leadership.

Mr. McCAIN. Mr. President, I would like to commend Senators McConnell and Feinstein for introducing legislation that will renew sanctions contained in last year's Burmese Freedom and Democracy Act. I am proud to be an original cosponsor of this resolution. The world's democracies have a common moral obligation to promote human rights. In few places is the lack of freedom and justice more appalling than in Burma, a country in which a band of thugs, led by General Than Shwe, controls the population through violence and terror. The Burmese regime has a record of unchecked repression. It has murdered political opponents, used child soldiers and forced labor, and employed rape as a weapon of war. Nearly one year ago the Burmese military junta launched an orchestrated, violent attack against democracy leader Aung San Suu Kyi and hundreds of her supporters. Since then the regime has kept more than 1,000 political activists imprisoned, including elected members of parliament. It also recently sentenced three Burmese citizens to death for contacting representatives of the International Labor Organization. And Aung San Suu Kyi remains a captive. Because she stands for democracy, this heroic woman has endured attacks, arrest, captivity, and untold sufferings at the hands of the regime. The junta fears Aung San Suu Kyi because of what she represents--peace, freedom and justice for all Burmese people. The thugs who run Burma have tried to stifle her voice, but they will never extinguish her moral courage. Her leadership and example shines brightly for the millions of Burmese who hunger for freedom, and for those of us outside Burma who seek justice for its people. The work of Aung San Suu Kyi and the members of the National League for Democracy must be the world's work. In recognition of this, last year the Congress overwhelmingly passed the Burmese Freedom and Democracy Act. In doing so, we took active steps to pressure the military junta, and we sent a signal to the Burmese people that they are not forgotten--that the American people care about their freedom and will stand up for justice in their country. The State Department released just this week a new report on U.S. trade sanctions against Burma. This report notes that the Freedom and Democracy Act encouraged ASEAN nations to take a critical stance on Burma, and that these pressures were likely a factor behind the junta's August announcement of a ``roadmap'' toward democratic transition. While this roadmap is sorely lacking, it does point to the tangible effect that our efforts are having inside the country. Yet since we passed our bill last year, the ruling State Peace and Development Council has failed to make substantial progress toward implementing a democratic government in Burma. The new State Department report indicates that Burma's ``extremely poor human rights record has worsened over the past year, and it continued to commit serious abuses.'' Pro-democracy activists remain in detention, the National League for Democracy offices remain closed, and citizens do not have the right to change their government. Security forces continue to commit extrajudicial killings and rape, forcibly relocate persons, and use forced labor. The military junta refuses to tolerate any form of political opposition. On top of this, the dismal economic polices implemented by Burma's rulers have led to widespread poverty and the flight of most foreign investors. Sadly, the picture is clear. So long as this band of thugs rules Burma, its people will be never be free. They will remain mired in poverty and suffering, cut off from the world, with only their indomitable spirit to keep them moving forward. For this reason I stand in support of the joint resolution that will renew the import restrictions contained in last year's legislation-- sanctions that are supported by the National League for Democracy. These restrictions must remain until Burma embarks on a true path of reconciliation--a process that must include the NLD and Burmese ethnic minorities. I note, however, that while the American people have spoken with one voice in support of freedom in Burma, it is past time that the leaders of other nations do the same. No other country has yet implemented U.S.-style economic sanctions. The Europeans should reject half measures and join the United States in targeted sanctions against the military regime. China, Thailand, India and other Asian nations uncomfortable with a tougher response to the junta's crimes must understand that diplomatic obfuscation and obstruction on Burma will profoundly affect their broader bilateral relationships with the Western democracies. Mr. President, this week I co-authored with former Secretary of State Madeleine Albright an editorial on Burma for the Washington Post. This article enumerates several of the points that I have made here, and illustrates the bipartisan consensus that we must act to promote democracy and human rights in Burma. I ask unanimous consent that a copy of our editorial be printed in the Record at the end of my remarks.

Mr. McCAIN. In this article, we quote Archbishop Desmond Tutu, a man who knows quite a bit about life under tyranny and oppression. The Archbishop said that ``Apathy in the face of systematic human rights abuses is immoral. One either supports justice and freedom or one supports injustice and bondage.'' Mr. President, today we support justice and freedom. Exhibit 1 [From the Washington Post, April 27, 2004] A Need To Act on Burma ``Apathy in the face of systematic human rights abuses is immoral. One either supports justice and freedom or one supports injustice and bondage.'' So said Archbishop Desmond Tutu, the South African Nobel laureate and anti-apartheid leader, who knows something about the struggle for human freedom in the face of tyranny. The world's democracies have a common moral obligation to promote justice and freedom. In few places is this obligation more acute than in Burma, a country in which a band of thugs, led by Gen. Than Shwe, controls the population through violence and terror. The regime has a record of unchecked repression. It has murdered political opponents, used child soldiers and forced labor, and employed rape as a weapon of war. Nearly one year ago the Burmese military junta launched an orchestrated, violent attack against democracy leader Aung San Suu Kyi and hundreds of her supporters. Since then the regime has kept more than 1,000 political activists imprisoned, including elected members of parliament. It recently sentenced three Burmese citizens to death for contacting representatives of the International Labor Organization. The Burmese junta, with the cynical support of neighboring governments, has announced a ``road map to democracy,'' beginning with a constitutional convention in May. The convention is expected to be stage-managed by the junta, which has offered no meaningful participation to Suu Kyi's National League for Democracy, no timetable for progress toward a political transition, no release of political prisoners and no guarantee that the military will cede control to democratically elected leaders. Instead, the junta's proposals seem designed to institutionalize military control by creating a veneer of civilian authority, while meeting only the minimum expectations of Western democracies in order to avoid further sanctions. The Burmese regime's recent actions demonstrate that years of international engagement and patience have not made the dictatorship more humane, reasonable or open to accommodation with its political opponents. On the contrary, it is only in response to international pressure that the regime has made even the smallest moves toward a political settlement with the democratic opposition. The lesson is clear: The world's democracies and Burma's neighbors must press the junta until it is willing to negotiate an irreversible transition to democratic rule. The legitimacy, authority and commitment of Burma's democratic leaders to govern their country is not in doubt. But the international commitment to Burma's democratic transformation remains uncertain. The Western democracies and Burma's neighbors should immediately take three steps to bolster Burma's legitimate democratic leaders. First, Congress should promptly renew, and the president sign into law, the ban on Burma's imports enacted into law last July. These sanctions, which are set to expire after a review period beginning Friday, are supported by Burma's National League for Democracy. The restrictions have made it more difficult for the Burmese military to tap financial assets abroad, travel or accumulate revenue through trade. The European Union, whose member democracies care deeply about protecting human rights, and whose trade and assistance programs give it critical leverage in Southeast Asia, are set to announce a new Common Position on Burma on Thursday. As part of this new policy, the EU should also initiate target sanctions against the regime. Second, the EU and the United States, with support from Asian nations, should urge the junta to implement immediately the provisions of the U.N. Commission for Human Rights and the U.N. General Assembly resolutions--including democracy, the rule of law and respect for human rights. The United States and the EU should also formally place the issue on the agenda of the U.N. Security Council, and work urgently toward a resolution threatening credible sanctions against the Burmese regime unless it initiates meaningful progress toward democracy. Third, China, Thailand, India and other Asian nations uncomfortable with a tougher response to the junta's crimes must understand that diplomatic obfuscation and obstruction on Burma will profoundly affect their broader bilateral relationships with the Western democracies. Thailand in particular should consider this point when it convenes its planned international conference to discuss what it optimistically calls ``Burma's progress toward democracy.'' Beyond these steps, the United States, Europe and Asian countries must demand the unconditional release of Aung San Suu Kyi and her fellow political prisoners, but make clear that the releases, while necessary, are insufficient. In addition, they should continue calls for a political settlement that reflects the results of the free and fair elections held in 1990. This settlement must include a central, determinative role for the National League for Democracy. In another era, a dissident playwright named Vaclav Havel wrote of the ``power of the powerless'' to overcome rule by fear and force, at a time when such a revolution in human freedom seemed impossible. The international community today has the power to help the powerless inside Burma throw off the shackles of tyranny. It is time to assume this moral responsibility. It is time to act.