John McCain

Mr. McCAIN

Mr. McCAIN. Actually, 11:15.

Mr. McCAIN

Mr. McCAIN. Madam President, Congressional action to send comprehensive pipeline safety legislation to the President is long overdue. The Senate has worked long and hard during both the 106th and the 107th Congresses on this important issue and we should not let any more time pass without taking needed action to improve pipeline safety. I am hopeful we will finally achieve final passage on this issue before adjournment. The Office of Pipeline Safety, OPS, within the Department of Transportation's Research and Special Programs Administration, RSPA, oversees the transportation of about 65 percent of the petroleum and most of the natural gas transported in the United States. OPS regulates the day-to-day safety of 3,000 gas pipeline operators with more than 1.6 million miles of pipeline. It also regulates more than 200 hazardous liquid operators with 155,000 miles of pipelines. Given the immense array of pipelines that traverse our nation, reauthorization of our pipeline safety programs is critical to the safety and security of thousands of communities and millions of Americans nationwide. As my colleagues know, the Senate has approved pipeline safety legislation three times in the last three years. Twice we passed stand alone bills, in 2000 and again in 2001. Beginning in the 106th Congress, we worked on a bipartisan basis to develop and approve legislation to promote both public and environmental safety by reauthorizing and strengthening our Federal pipeline safety programs which expired in September 2000. In particular, the efforts of Senators Slade Gorton and Patty Murray were instrumental to the Senate's efforts to address this important safety issue. In our protracted effort to enact pipeline safety legislation--the House had not approved its version of a related measure--we resorted to adding the pipeline safety bill to the Energy bill during its floor consideration last March. Subsequently, the House approved its pipeline safety legislation in July. While the House-passed energy bill did not include pipeline safety provisions, the House agreed to try to reach a consensus on the important issue in the context of the energy conference. As a result, the measure before us today is the sound, pro- safety agreement that was achieved during the energy conference deliberations. The members of the energy conference are to be commended for their commitment to this important issue. They developed a consensus pipeline safety title that includes the best provisions from both the Senate- and House-passed bills. Although I did not serve as a formal member of that conference, we shared a goal of enacting comprehensive legislation to promote pipeline safety for the public, the environment, and the economy. I want to commend Representatives Billy Tauzin, John Dingell, and Don Young and Senators Jeff Bingaman and Frank Murkowski for their leadership and hard work on this issue and their courtesies to ensure the Senate authorizing committee was fully consulted during the process. Given that a consensus on a comprehensive energy package will not be achieved during this Congress, it is time to move forward and approve the agreement that was reached regarding pipeline safety. In large part, the legislation before us is the result of several tragic pipeline accidents that have occurred in recent years. Since 1999, pipeline accidents have resulted in 78 fatalities. In June 1999, a fatal accident occurred in Bellingham, Washington, when gasoline leaked from an underground pipeline and was subsequently ignited. That accident resulted in three deaths, a number of injuries, and severe environmental damage to the area. On August 19, 2000, a natural gas transmission line ruptured in Carlsbad, New Mexico, killing 12 members of two families. These were two very serious accidents and they helped spur the Senate's action to address identified safety shortcomings. As I mentioned, the Senate has worked at length to improve pipeline safety and reduce the risk of future accidents. During the last Congress, with the assistance of a bipartisan group of Senators, the Senate passed the Pipeline Safety Improvement Act of 2000. Since the House failed to approve pipeline safety legislation, we were never able to send a measure to the President. When the 107th Congress convened, one of the first legislative actions taken by the Senate was to consider and pass S. 235, the Pipeline Safety Improvement Act of 2001, a measure nearly identical to what we passed in the prior Congress. Early attention by the Senate demonstrated our firm commitment to improving pipeline safety. Although it has taken far longer than I would have hoped, it is important that we are taking this action today as we work to finish our legislative activities for the year. Despite the tragic accidents I highlighted earlier, the safety record of the pipeline industry has generally improved significantly and compares favorably to other forms of transportation. According to the Department of Transportation, pipeline related incidents dropped nearly 80 percent between 1975 and 1998, and the loss of product due to accidental ruptures has been cut in half. From 1989 through 2001, pipeline accidents resulted in about 24 fatalities per year, far fewer than the number of fatal accidents experienced among other modes of transportation. But this record must not be used as an excuse for inaction on legislation to strengthen pipeline safety. The pipeline safety program expired more than two years ago. It is essential that the Congress take final action on this critical public and environmental safety issue. This legislation reauthorizes and strengthens Federal pipeline safety programs, providing additional funding for safety enforcement and research and development efforts. It also provides for increased State oversight authority and facilitates greater public education efforts at the local community level. This pending pipeline safety legislation includes many important provisions. I urge my colleagues to support final passage of this critical safety improvement legislation.

Mr. McCAIN

Mr. McCAIN. Mr. President, I rise today in support of H.R. 4546, the National Defense Authorization Act for Fiscal Year 2003. Overall, the House and Senate Armed Services Committee Conferees have produced a bill which is deserving of approval and is generally supportive of the brave servicemen and women in our armed forces, in terms of training, pay, family quality-of-life benefits, and providing modern equipment and weapon systems. Building upon evaluations and recommendations regarding growing readiness and modernization problems throughout the services, the Conference Committee has done an admirable job of addressing some of the more pressing issues contributing to the multiple problems that have been brought to Congress' attention over the past several years. Unfortunately, there are areas that the Conference Committee did not adequately address. First and foremost is Concurrent Receipt. It was tremendously important to me that the Senate version of the defense authorization bill and report would authorize, at a minimum, payment of retired pay and disability pay for all military retirees with disabilities, a practice known as Concurrent Receipt. For the past eleven years, I have offered legislation on this issue. This matter is of great significance to many of our country's military retirees, because it would reverse existing, unfair regulations that strip retirement pay from military retirees who are also disabled, and costs them any realistic opportunity for post-service earnings. While I commend the Chairmen and Ranking Members of the Armed Service Committees for going further in addressing a longstanding inequity in the compensation of military retirees' pay, this bill does not go far enough and falls far short of the much broader provision that was included in the Senate, or even the House. However, it was important that a compromise was reached with regards to Concurrent Receipt. The defense authorization bill provides many critical quality-of-life and pay benefits for our servicemen and women. Foregoing a defense authorization bill because full Concurrent Receipt was not included would be wrong because I believe we would be hurting an even greater number of servicemembers who are currently serving, reservists who have been mobilized in support of Operations Noble Eagle and Enduring Freedom, and their families who endure long periods without a spouse or parent during periods of training or deployment. More must be done on Concurrent Receipt. More will be done. The compromise legislation, in effect, de facto Concurrent Receipt would increase payments under legislation I previously introduced in 1999, Special Compensation for Severely Disabled Military Retirees, in an amount equaling the monthly disability compensation prescribed by the VA for disabling conditions of that percentage. Eligible recipients would include those military retirees with 20- years military service who have a disability, 10 to 100 percent, that is a result of an injury for which the member was awarded the Purple Heart; or have a 60 percent or more combat-related disability to include disabling conditions incurred as a result of armed conflict, including, PTSD, Agent Orange, and Persian Gulf War disease; while engaged in hazardous service such as atomic veterans; under conditions simulating war such as military training; or caused by an instrumentality of war like accidents involving military equipment. Again, while this legislative compromise will provide critical help to an additional 35,000 disabled military retirees, it is not good enough to only correct this injustice for a select few no matter how deserving. We must do more to restore retirement pay for those military retirees who are disabled. I have stated this before, and I am compelled to reiterate now; retirement pay and disability pay are distinct types of pay. Retirement pay is for service rendered through 20 years of military service. Disability pay is for physical or mental pain or suffering that occurs during and as a result of military service. In this case, members with decades of military service receive the same compensation as similarly disabled members who served only a few years. This practice fails to recognize their extended, more demanding careers of service to our country. This is patently unfair, and I will continue to work diligently to correct this inequity for all career military servicemembers who are disabled. Fully enacting concurrent receipt, for all who deserve it, is the next step to ensuring that we recognize the military service of those military retirees who by no fault of their own become disabled during their career military service. Another disappointing action was the removal of language I sponsored, modifying the calculation of back pay for persons who were approved for promotion as members of the Navy and Marine Corps while interned as prisoners of war during World War II. Last year's Defense authorization bill authorized back pay to World War II veterans who were not promoted on time due to the arcane Navy Department rules of the early 1900s. Unfortunately, when the law was changed, an adjustment for inflation was not taken into account. While these men received the back pay they deserved, it was not adjusted for inflation. A simple fix to this problem would be to take into account changes in the Consumer Price Index. Though included in the original version of this year's Defense Authorization Act, the language was removed from the final version of the legislation. I also am disappointed that the Conferees dropped the Senate Armed Services Committee's recommendation submitted by the Administration to waive certain buy America restrictions. The Senate authorized the Secretary of Defense to waive domestic source or content requirements for close defense allies that provide reciprocal treatment for our defense products. ``Buy America'' restrictions divert necessary funds to ensure our military is properly equipped. An additional $5 billion can be saved per year by eliminating ``Buy America'' restrictions that are protected by the Berry amendment that only undermine U.S. competitiveness overseas. Every dollar we spend on archaic procurement policies, such as ``Buy America,'' is a dollar we cannot spend on training our troops, keeping personnel quality of life at an appropriate level, paying full concurrent receipt, maintaining force structure, replacing old weapons systems, and advancing our military technology. Although I have shown that there are numerous examples of why this bill is far from perfect, I am putting my reservations aside to support the final passage of the Fiscal Year 2003 National Defense Authorization Act Conference Report. I feel that taken as a whole this legislation represents a step forward for our Nation's military. The bill contains a package of benefits for servicemembers and their families that would go a long way toward addressing the readiness problems facing all the services. It includes a 4.1 percent across-the- board pay raise for all active and reserve servicemembers, with an additional targeted pay raise ranging from 5.5 percent to 6.5 percent for sergeants, petty officers and chiefs. Military pay, by almost all accounts, has fallen considerably behind civilian pay. Arguments can be made as to the precise pay differential, and at which pay grades and mission areas the gap is greatest, but there is no credible argument as to whether or not we need to address the issue of compensation. Additionally, the Committee approved a provision that would authorize a new assignment incentive pay of up to $1,500 per month to encourage servicemembers to serve in difficult-to-fill assignments, like Korea or the Persian Gulf region. The Committee approved a significant legislative provision directing the Secretary of Defense to review personnel compensation laws and policies, including the Reserve retirement system, to determine how well they address the needs of Guard and Reserve servicemembers. This provision is particularly noteworthy since the Secretary of Defense recalled nearly 95,000 Reserve Component servicemembers for Operations Enduring Freedom and Noble Eagle. Oftentimes the collective memory of our active duty, including active duty reserve servicemembers, is short and a comprehensive examination of reserve force policies, if done right, will help address waning retention of reservists and continued support by employers of reservists. I forcefully endorse the Conference Committee's inclusion of an amendment that will direct the Secretary of the Air Force to obtain specific authorization and appropriation to lease 100 Boeing 767 tanker aircraft that was previously approved by the Department of Defense Appropriations Act of Fiscal Year 2002. Many Senate Armed Services Committee Members expressed concern that the payment of leasing of major weapon systems, aircraft, vessels, and combat vehicles, should not come from critical funds providing for readiness spending, such as training, spare parts, flying hours, and maintenance of weapons systems and barracks. There appeared to be a sense of agreement that any lease for major weapon systems should instead be funded from the procurement accounts. During posture hearings, the Service Secretaries and Chiefs confirmed that readiness unfunded requirements still exist and submitted lists to meet their readiness requirements. Robbing ``Peter to pay Paul'' so that Air Force Secretary Jim Roche can modernize the tanker fleet is questionable at best and several reports by the GAO, OMB and CBO bear this out. I will not take the time of this body today to again articulate the reasons why Secretary Roche's and the Appropriations' Committee Boeing 767 leasing scheme is a rip-off of the taxpayers as I have stated on the floor of the Senate in the past. However, servicemen and women will someday look at this lease of aerial tankers and wonder how Congress was duped into agreeing to a provision that was so costly and in the end irresponsible. I fully support the Conference Committee's inclusion of the ``National Call to Service Act,'' which provides for strong incentives to encourage young Americans to enlist in the Armed Services. The Committee adopted provision is the military component of the ``Call to Service Act,'' introduced by Senator Evan Bayh (D-IN) and myself, which also expands civilian service opportunities in AmeriCorps and SeniorCorps and in other service organizations. This is a very significant boost to a bill that will give Americans concrete opportunities to serve in causes greater than self interest. By encouraging more military enlistments, this legislation could greatly assist our war against terror. Under the ``National Call to Service Act,'' individuals who volunteer to serve under this new program would be required to serve on active duty for 15 months in the Armed Services after completion of initial entry training and could complete the remainder of their military service obligation by choosing service on active duty, in the Selected Reserve or in the Individual Ready Reserve. The reserve obligation could also be fulfilled by serving in a civilian national service program such as the Peace Corps or AmeriCorps. In return for service, the legislation provides the choice of incentives including a $5,000 bonus, repayment of a student loan up to $18,000, an educational allowance under the Montgomery GI Bill. At this time of national challenge, Americans are yearning for opportunities to serve. I hope Congress will expeditiously take action on this entire legislation to create more options in both the areas of military and civilian service. In conclusion, I would like to reiterate my belief in the importance of enacting meaningful improvements for active duty and Reserve service members. They risk their lives in Afghanistan and elsewhere to defend our shores and preserve democracy, and we cannot thank them enough for their service. But, we can and should pay them more, improve the benefits for their families, and support the Reserve Components in a manner similar to the active forces. Our service members past, present, and future need these improvements. We also cannot continue with this ``business as usual'' mindset. We must reform the Department of Defense and not fall prey to the special interest groups that attempt to warp our perspective and misdirect our spending. We owe so much more to our men and women in uniform who defend our country. They are our greatest resource, and I believe they are woefully underrepresented. We must continue to do better.

Mr. McCAIN

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

Mr. McCAIN. Mr. President, I ask unanimous consent to speak for 5 minutes as in morning business.

Mr. McCAIN

Mr. McCAIN. Mr. President, the legislation Senator Lieberman and I introduced last year to create an independent commission to investigate the September 11 attacks passed the Senate as an amendment to the homeland security bill by a vote of 90 to 8 in September. Days before the vote, the administration issued a letter supporting the creation of an independent commission. But Congress is about to adjourn without having done so, to get it done. The agreement that was reached on the homeland security bill is a welcome development and will make our Nation more secure. But the agreed text does not include our independent commission proposal, despite an overwhelming Senate vote in September and despite its previous inclusion in both the Lieberman and Gramm-Miller bills. I believe President bush and his team have responded admirably and with a sense of purpose to the terrorist attacks, and the joint intelligence committee investigation into the associated intelligence failings has added to our understanding of what went wrong. But neither the administration nor Congress is alone capable of conducting a thorough, nonpartisan, independent inquiry into what happened on September 11, or to propose far-reaching measures to protect our people and our institutions against such assault in the future. To this day, we have little information on how 19 men armed with boxcutters could have so effectively struck America. After every other such tragedy in our Nation's history, like Pearl Harbor and President Kennedy's assassination, independent investigations were immediately appointed to examine what went wrong and recommend needed reforms to prevent such tragedies from happening again. There has been no such review since September 11. This is what our proposed commission would do. Its goal would be to make a full accounting of the circumstances surrounding the attacks, including how prepared we were, and how well we responded to this unprecedented assault. The commission would also make comprehensive recommendations on how to protect our homeland in the future. It would examine not just intelligence but the range of Government agencies and policies, from border control to aviation security to diplomacy. Learning the lessons of September 11 will require asking hard questions. It will require digging deep into the resources of the full range of Government agencies. It will demand objective judgment into what went wrong, what we did right, and what else we need to do to deter and defeat depraved assaults by our enemies in the future. No such review has occurred to date. Passage of the homeland security legislation is a good start to making needed reforms, but to some extent we are flying blind in our efforts to reform our approach to homeland defense because we still do not know what parts and policies of the Government failed the American people last September 11. We do know, thanks to press leaks and the work of the joint intelligence committee, that significant failures occurred. The chairman and ranking member of the Senate Intelligence Committee have suggested we might have prevented the September 11 attacks had we properly analyzed available information. They strongly support our independent commission legislation to carry on the work their joint intelligence investigation started. Together with Senators Bob Graham and Dick Shelby, we have been negotiating intensively with the White House and remain hopeful we might reach an agreement with them to create a commission, but we believe Congress must speak on this issue. The families of September 11 will not rest until they have answers about how their Government let them down and what we can do to make sure such tragedy never strikes America again. This is not a witch hunt. It is a search for the answers that will enable us to better protect our Nation against future attack by terrorists. It is about the future, not the past. It is worthy of the strong bipartisan support it has already received. I urge my colleagues to support this amendment. I want to thank my friend from Connecticut for his efforts on behalf of this commission. I want to thank him for his efforts on behalf of the families, and I want to thank the White House for their continued negotiations. It is time we wrapped up these negotiations so this commission can be part of the Homeland Security bill.

Mr. McCAIN. Will the Senator yield?

Mr. McCAIN. Will the Senator agree it is a bit surprising we have not been able to make greater progress on this commission since there was a recorded vote in the Senate of 90 to 8, and it was included in the Homeland Security bills prior to this latest iteration? Again, I want to thank the White House for their active participation, but I hope that mandate would be felt by one and all. A 90-to-8 vote usually does not seem to have difficulty, at least from the Senate side, in becoming a part of legislation. Interestingly, we do not find it in the Homeland Security bill. In the interest of straight talk, if there is a cloture vote and it is not in there at that time, then the amendment for a commission will fall because of nongermaneness, a situation which I do not think is really what was intended when we had a 90-to-8 vote on this issue in the Senate.

Mr. McCAIN. Will the Senator yield for one more question?

Mr. McCAIN. Is it not true, from conversations with the families, that the families do not want this commission created by executive order because then it would not have the input of the legislative branch? And second of all, that other commissions in the past have all been created by acts of Congress, not by executive order? Is that the Senator's understanding?

Mr. McCAIN

Mr. McCAIN. Mr. President, I ask unanimous consent that the text of the resolution be printed in the Record.

Mr. McCAIN

Mr. McCAIN. Mr. President, I ask unanimous consent that the text of the resolution be printed in the Record.

Mr. McCAIN

Mr. McCAIN. Mr. President, I rise yet again to address the Senate on the subject of military construction projects added to an appropriations bill that were not requested by the Department of Defense. This bill contains over $900 million in unrequested military construction projects. I did not object to the unanimous consent request to proceed to a voice vote on the fiscal year 2003 Department of Defense Military Construction appropriations conference report because on the day that this funding bill passed, I had managed the floor for more than 16 hours while the Senate proceeded with the serious matter of debating and finally approving the Iraqi War Resolution. America remains at war, a war that continues to unite Americans in pursuit of a common goal, to defeat terrorism. All Americans have, and undoubtably in the future will make sacrifices for this war. Many have been deeply affected by it and at times harmed by difficult, related economic circumstances. Our servicemen and women in particular are truly on the front lines in this war, separated from their families, risking their lives, and working extraordinarily long hours under the most difficult conditions to accomplish the ambitious but necessary task their country has set for them. Every year, I come to the Senate floor to highlight programs and projects added to spending bills for primarily parochial reasons. While I recognize that many of the projects added to this bill may be worthwhile, the process by which they were selected is not. There are 26 conferees of the Appropriations Military Construction Conference report who represent 19 States. Of those 19 States only one, Wisconsin, did not have projects added on this appropriations bill. Of 119 projects added to this bill, 60 projects are in the states represented by the MILCON Appropriations Conferees, totaling over $530 million. Those numbers, needless to say, go well beyond the realm of mere coincidence. By adding over $900 million above the President's request, the Appropriations Conference Committee is further draining away funds desperately needed for enhancing our warfighting capability. Commonsense reforms, closing military bases, consolidating and privatizing depot maintenance, ending ``Buy American'' restrictions, and ending pork-barrel spending--that I have long supported would free up nearly $20 billion per year which could be used to begin our long- needed military transformation. We are waging a war against a new enemy and at the same time undertaking a long-term process to transform our military from its cold war structure to a force ready for the challenges of tomorrow. A lack of political will had previously hamstrung the transformation process, but the President and his team have pledged to transform our military structure and operations to meet future threats. The reorganization of our armed services was an extremely important subject before September 11, and it is all the more so now. The threats to the security of the United States, to the very lives and property of Americans, have changed in the last decade. In the months ahead, no task before the Administration and the Congress will be more important or require greater care and deliberation than making the changes necessary to strengthen our national defense in this new, uncertain era. Needless to say, this transformation process will require enlightened, thoughtful leadership, and not the pork-barreling of military funds if we are to best serve America in this time of rapid change in the global security environment. I look forward to the day when my appearances on the Senate floor for this purpose are no longer necessary. I reiterate, over $900 million in unrequested military construction projects were added by the Committee to the defense appropriations bill. Consider how that $900 million, when added to the savings gained through additional base closings and more cost-effective business practices, could be used so much more effectively. The problems of our Armed Forces, whether in terms of force structure or modernization, could be more assuredly addressed and our warfighting ability greatly enhanced. The American taxpayers expect more of us, as do our brave servicemen and women who are, without question, fighting this war on global terrorism on our behalf. But for now, unfortunately, they must witness us, seemingly blind to our responsibilities at this time of war, going about our business as usual.

Mr. McCAIN

Mr. McCAIN. Mr. President, I am pleased to have joined Senator Durbin in introducing the Driver's License Fraud Prevention Act. Today's patchwork of State laws, regulations, and procedures for the issuance of driver's licenses makes it all too easy for problem drivers and criminals to obtain multiple licenses to hide traffic convictions and other criminal activity. The extent of the problem became painfully clear following the terrorist attacks of September 11, 2001, when we learned that a number of the terrorists had obtained State-issued driver's licenses or identification cards using fraudulent documents. Almost half the States have taken action since the terrorist attacks to tighten licensing procedures and I am encouraged that the National Governors Association has formed a homeland security task force that, among other things, will be working to determine the best way for States to strengthen their driver's license standards and authority. However, Senator Durbin and I believe there is a legitimate role for the Federal Government to play in leading and coordinating State efforts to improve driver's license security. In addition, because of the estimated costs and coordination required to improve driver's license security, the States cannot resolve the issue on their own. The proposal we introduced would require the Department of Transportation, DOT, to work in consultation with the States to establish minimum standards for proof of identity by driver's license applicants. Currently, personnel in departments of motor vehicles are called upon to perform the difficult task of verifying numerous different types of birth certificates, licenses from other States, proof of residency, and other documents. Only 18 States verify an applicant's social security number with the Social Security Administration and there is no system today to verify the validity of a driver's license being surrendered to obtain a license in another State. This legislation would also require DOT, in consultation with the States, to establish minimum standards for the license itself to make it more tamper-proof and less susceptible to counterfeiting. DOT would also be directed to complete a study of the feasibility, costs, benefits and impact on personal privacy of using a biometric identifier on driver's licenses. The intent is not to create a national driver's license or identification card, but to improve the security of State- issued licenses through the use of digital photographs, holograms and other devices. In addition, the bill would use the existing database for commercial motor vehicle drivers as the platform for creating a driver record information system on all licensed drivers. The new system, like the current one, would be a pointer system to State records, rather than a national database of information on drivers. It is this new system that would help States verify the validity of licenses previously held, determine whether an individual holds more than one license, and provide information on the individual's driving record. Further, the bill would prohibit the disclosure or display of an individual's social security number of a driver's license, increase criminal penalties for fraudulently issuing, obtaining or facilitating the issuance of fraudulent licenses, and call for the timely posting of convictions incurred in any State on the driver's license. Driver's licenses are used by minors to purchase alcohol and cigarettes, by criminals involved in identity theft, and for many other illegal purposes. Improving the security of the license is a matter of common sense. I am confident that this legislation will provoke meaningful and lively debate, as well as more ideas about how to approach driver's license security. It may not be possible, given the press of other business, for the bill to be passed this year. Nevertheless, this proposal will provide a foundation for discussion and deliberations next year as we work to reauthorize the Transportation Equity Act for the 21st Century, TEA-21.

Mr. McCAIN

Mr. McCAIN. Mr. President, I would like to urge my colleagues to support the conference report to H.R. 3295, the ``Help America Vote Act of 2002.'' I congratulate the conferees on their dedicated and persistent effort in reaching a compromise agreement on this issue. I believe that this historic legislation will play a major role in correcting many of the problems that the country suffered during the Year 2000 elections. In my judgment, this legislation is inextricably linked with the campaign finance reform bill that became law earlier this year. Both of these pieces of legislation are aimed at the heart of any successful democracy: restoring the voters' trust in their government. The new campaign finance reform law is intended to reduce the influences of special interests by eliminating the large flow of unregulated soft money. This election reform legislation is designed to assure voters that votes will be counted accurately, and that legally registered voters will not be disenfranchised. I am especially proud that this legislation will ensure for the first time in history that voters who are blind or visually-impaired will be able to cast a vote privately and confidentially. However, I would urge my colleagues not to treat this legislation as the conclusion of our work on the issue of election reform. The Congress must ensure that this legislation is implemented fairly and effectively. I know that concerns have been raised about the identification requirements for first-time voters who have registered by mail. While I applaud the goal of eliminating instances of fraud, it is important that these provisions be implemented equitably to prevent the disenfranchisement of minority or disabled voters. In addition, I also would like to make a few recommendations regarding the implementation of this legislation. As the states develop their plans for meeting the new federal voting requirements and receiving grant funding, I would urge them to solicit advice on solutions to address the needs of disabled voters and others who have historically faced impediments at polling places. I also urge the Secretary of Health and Human Services to consult closely with the Election Assistance Commission on the grant program to help states making polling places accessible to disabled voters. The applications for grant funding and reports on the uses of these funds may be helpful to the Commission as it studies accessibility-related issues and develops voluntary voting system guidelines. It is also important to emphasize that concerns have been raised about the legislation's enforcement provisions. I appreciate that the Department of Justice has a role in bringing civil actions against states that are not in compliance with the mandatory requirements. We will have to be diligent in ensuring that these enforcement provisions are implemented. On this historic day, I look forward to passage of this significant piece of legislation. As the recent events in Florida show, our voters still face major challenges in getting their votes counted at the polling place. This legislation will present solutions to these problems and reassure the American public that the best system of government ever created continues to function in its 226th year.

Mr. McCAIN

Mr. McCAIN. Mr. President, I rise again to address the issue of wasteful spending in appropriations measures, in this case, the Appropriations Committee Conference Report to accompany H.R. 5010, a bill to fund the Department of Defense for fiscal year 2003. This legislation would provide $355.1 billion to the Department of Defense. This year's defense appropriations bill adds 1,760 programs not requested by the President, at a further cost of $7.4 billion with questionable relationships to national defense at a time of scarce resources, budget deficits, and underfunded, urgent defense priorities. Just last week the Senate passed the Iraqi War Resolution by a vote of 77 to 23, authorizing the President of the United States to commit the United States Armed Forces to achieve a regime change in Iraq. America remains at war, a war that continues to unite Americans in pursuit of a common goal, to defeat international terrorism. All Americans have, and undoubtably in the future will make sacrifices for this war. Many have been deeply affected by it and at times harmed by difficult, related economic circumstances. Our servicemen and women in particular are truly on the front lines in this war, separated from their families, risking their lives, and working extraordinarily long hours under the most difficult conditions to accomplish the ambitious but necessary task their country has set for them. Despite the realities of war, and the serious responsibilities the situation imposes on Congress and the President, the House and Senate Appropriations Committees have not seen fit to change in any degree its blatant use of defense dollars for projects that may or may not serve some worthy purpose. Furthermore, some of the add-ons clearly impair our national defense by depriving legitimate defense needs of adequate funding. Even in the middle of a war against terrorism, a war of monumental consequences that is expected to last for some time, the Appropriations Committees remain intent on ensuring that part of the Department of Defense's mission is to dispense corporate welfare. It is a shame that at such a critical time, the United States Senate persists in spending money requested and authorized only for our Armed Forces to satisfy the needs or the desires of interests that are unrelated to defense and even, in truth, unconcerned about the true needs of our military. If the war against terrorism is taken to the Iraqi theater there will be bills to pay. White House economist, Lawrence Lindsey, estimates that a full scale mobilization in Iraq could cost as much as $100 to $200 billion. A lower estimate reported in the Washington Post puts the cost of committing United States forces in Iraq at $30 to $50 billion. This lower estimate assumes, quoting the September 24, 2002 Washington Post, a war `` . . . with inept enemy forces, no use of chemical or biological weapons, access to bases and airspace in most Gulf states and Turkey, and low casualties on our side.'' It is quite obvious that the costs of the use of force in Iraq will be substantial. With the possibility of such a large expenditure in our future how can Appropriators spend our precious defense dollars so foolishly? An Investor's Business Daily article published late last year entitled At the Trough: Welfare Checks to Big Business Make No Sense, stated, ``[a]mong the least justified outlays [in the federal budget] is corporate welfare. Budget analyst Stephen Slivinski estimates that business subsidies will run $87 billion [in 2001], up a third since 1997. Although President Bush proposed $12 billion in cuts to corporate welfare [in 2001], Congress has proved resistant. Indeed many post- September 11 bailouts have gone to big business. Boeing is one of the biggest beneficiaries. . . . While corporate America gets the profits, taxpayers get the losses. . . . The Constitution authorizes a Congress to promote the general welfare, not enrich Boeing and other corporate behemoths. There is no warrant to take from Peter so Paul can pay higher dividends. In the aftermath of September 11, the American people can ill afford budget profligacy in Washington. If Congress is not willing to cut corporate welfare at a time of national crisis, what is it willing to cut?'' Yet, Congress didn't get the message this year. In the Fiscal Year 2003 Defense Appropriations conference report that we are considering today, the Appropriations Committees added nearly $500 million in aircraft procurement that the Department of Defense did not request. There were funds appropriated for twenty-four types of aircraft; unfortunately none of these were identified by the military as requirements. It staggers the mind to think of what programs the services desperately need could have been funded by $500 million. Here is a very short list of just some of the more egregious examples of Defense appropriations $12 million for the 21st Century Truck. This program has been around for years and not once has the Department of Defense requested funding for it. While I'm sure we all would love to jump into a truck that could be in a James Bond movie, I'm not sure it is appropriate for the Department of Defense to pay for it. $3.4 million for the Next Generation Smart Truck. I suppose this is what we will drive before the 21st Century Truck is ready. $1 million for Canola Oil Fuel Cells. I would think that the only canola oil the Department of Defense should be investing in should be used for salad dressing for our troops, not inventing batteries. $4.5 million for a Coastal Cancer Research Center. A worthwhile expenditure, but the Defense Appropriations Bill is not the place for these funds to come from. $1 million for Math Teacher Leadership. $3 million in Impact Aid for Children with Disabilities. $19 million for International Sporting Competitions. $7.7 million for the Alaska Wide Mobile Radio Program. $1 million for Animal Modeling Genetics Research. $2.6 million for the Pacific Rim Corrosion Project. $6 million for the Pacific Disaster Center Project. $1 million for the Rural Telemedicine Demonstration Project. These are just a few glaring examples of the more than 1,760 Member additions that leave many people scratching their heads trying to find the link to defense program funding. Here is a very abbreviated list of some of the member additions that, while at least connected to the Department of Defense, were still not requested in the President's budget nor were they on any of the service's unfunded priority lists. Remember, every one of these additions come at the expense of programs that our services need to carry out their missions. For every dollar spent on these additions, it is one taken out of priority programs. $53 million in Distance Learning. $101.3 million in Defense Wide Administration Activities. $44 million for Multi-Purpose Vehicles. $58.5 million for Automated Data Processing Equipment. $30.8 million for Non-System Training Devices. $14 million for Drones and Decoys. $6.7 million in Base Information Infrastructure. $1 million in Polar Fleece Shirts. $5 million for the Institute for Creative Technology. $2 million for the Center for Geo-Sciences. $3 million for the Concepts Experimentation Program. $2 million for the Consortium for Military Personnel Research. I will not list the rest of the additions as that would take hours. A larger list of Defense Appropriations Conference Committee earmarks is available on my website. I find it incredible that we are funding these unrequested and unneeded programs when we have more than 500 items that the Department of Defense says they need on their ``Unfunded Priority Lists''. You will recall that last year, during conference negotiations on the Department of Defense Appropriations Act for Fiscal Year 2002, the Senate Appropriations Committee inserted into the bill unprecedented language to allow the U.S. Air Force to lease 100 Boeing 767 commercial aircraft and convert them to tankers, and to lease four Boeing 737 commercial aircraft for passenger airlift to be used by congressional and Executive Branch officials. Congress did not authorize these leasing provisions in the fiscal year 2002 National Defense Authorization Act, and in fact, the Senate Armed Services Committee was not advised of this effort by Air Force Secretary Jim Roche during consideration of that authorization measure. Again this year, without benefit of authorization committee debate or input--the Senate Appropriations Committee has added funding in the Fiscal Year 2003 Department of Defense Appropriations bill in the amount of $3 million for the ``Tanker Lease Pilot Program'' for the proposed Boeing 767 aerial tanker leasing scheme. Furthermore, additional language in the bill modifies a provision that had been carefully negotiated by the Office of Management and Budget, OMB, with appropriators last year, and may now permit the Air Force to circumvent law, OMB and standard leasing arrangements and, with respect to the 100 Boeing 767s, will allow the Air Force to defer the termination liability costs up-front, unprecedented in leasing arrangements according to leasing experts and certainly against good business practices. In multi-year contracts such as leases there is a statuary requirement to obligate money for termination liability payments in the first year of the contract. The reason is quite simple. If the government, the Air Force in this case, cancels the contract then the Air Force is required to pay Boeing for breaking the terms of the contract. What would happen if a Boeing 767 tanker was hit by hostile fire which caused a catastrophic fire onboard and the Boeing 767 tanker crashed. Under a similar leasing arrangement like the one that the Air Force signed with the Boeing Company for Boeing 737 VIP Executive aircraft, ``loss or destruction of the aircraft constitutes a notice of cancellation'' and under the terms of the lease the Air Force would be required to make a termination liability payment. Not planning for this is irresponsible, especially concerning military aircraft which operate in harms way with great regularity. This deferment of termination liability payment is an unfunded federal liability. This leaves Congress with no recourse but to foot the cost of this unfunded liability with the Boeing Company and leaves the taxpayer stuck with a big bill without any say in the matter. Boeing gets paid under this termination liability clause, yet the taxpayer is out an aircraft. Particularly disconcerting is a provision that would allow the Air Force to fund the Boeing 767 aerial tanker lease from Air Force readiness appropriations rather than the ususal procurement accounts already committed to purchase $72 billion worth of other new weapons systems, aircraft and ships. According to statute, readiness appropriations or operations and maintenance accounts, finance the cost of operating and maintaining the Armed Forces. Specifically, included are the amounts for training and operation costs, pay of civilians, contract services for maintenance of equipment and facilities, fuel, supplies, and repair parts for weapons and equipment. Using critical readiness dollars to pay to lease 100 Boeing 767 tankers, under a new start program, can only be properly referred to as a mistake of great proportions that will eventually have great consequences for all of our Armed Forces and not just for the Air Force. Since 1999, the defense budgets have made strides to reverse years of under-funding in the readiness accounts, however, I have serious concerns about the future state of preparedness of our units and our men and women in the military if we continue to follow the advice of the Secretary of the Air Force under some ``rob Peter to pay Paul'' leasing scheme. There is yet another egregious legislative provision included in the appropriations bill that certainly could be regarded as a bail out for Boeing. This provision would authorize the Air Force to pay annual advance payments, up to one year in advance, for leasing Boeing 767 tanker aircraft. I would like to have one of my colleagues from the Appropriations Committee explain to me how is this provision in the best interest of the government or the taxpayer for that matter. This Boeing leasing arrangement is projected to cost $20 billion, that means the Air Force may have to pay up front, each year, literally billions of dollars to Boeing with the promise to deliver aircraft later what a deal, courtesy of the Appropriations Committee. As a senior member of the Armed Services Committee, I would have liked to have heard some testimony regarding this significant change in acquisition policy. In fact, the Armed Services Committee is the proper committee to make recommendations as to reforming defense procurement policy, not the Appropriations Committee. The truth is there is no gain to the government for this provision the gain is all on the side of the ledger of the Boeing Company. This is waste that borders on gross negligence. Does the appropriations committee have any respect for the authorizing committees in the Senate? I don't think so. I believe this expensive aerial tanker lease program to be a new start that has been estimated by the Office of Management and Budget to cost between $20-$30 billion over six years. A program of this magnitude should require considerable consultation with the Secretary of Defense directly, not just that of Air Force Secretary Jim Roche or his staff or a nebulous entity know as the Leasing Review Panel that was recently organized by the DOD acquisition secretary and DOD comptroller for the sole purpose to recommend leasing major weapons platforms such as aircraft, vessels, and combat vehicles according to the Project on Government Oversight. I am deeply concerned that the Armed Services Committees have not been given adequate time for review, inspection or comment on this significant, unprecedented proposal and that we do not have the advice of the Defense Secretary that this program is warranted. Recall, however, that we did hear from the Defense Secretary about the Army's Crusader that would have had a total program cost of only a half to a third as much as Air Force's scheme to lease Boeing 767 aerial tankers. I appreciate the Secretary of Defense's strong support for the practice of using American taxpayers' money in a cost-effective manner to procure the best weapon system, at the best price for our men and women in uniform. I strongly endorse this practice. On June 28, 2001, in testimony before the Senate Armed Services Committee, the Defense Secretary said, ``[w]e have an obligation to taxpayers to spend their money wisely. Today, . . . there is no real incentive to save a nickel. To the contrary, the way the Department operates today, there are disincentives to saving money. We need to ask ourselves: how should we be spending taxpayers dollars? We are doing two things: First, we are not treating the taxpayers' dollars with respect--and by not doing so, we risk losing their support; second, we are depriving the men and women of our Armed Forces of the training, equipment and facilities they need to accomplish their missions. They deserve better. We need to invest that money wisely.'' The tanker leasing debate has not benefited from authorization committee input or a clear understanding of the Secretary of Defense's views on the requirement for this large procurement plan and the alleged Department of Air Force's change in policy to procure major weapons platforms, such as aircraft, through leasing schemes. I am concerned the impact of these provisions has not been adequately scrutinized, and the full cost to taxpayers has not been sufficiently considered. I would like to note that OMB Director Mitch Daniels has often indicated his preference to maintain scrutiny of government leasing practices out of regard for U.S. taxpayers. Just last year, in a letter from the OMB Director to Senator Kent Conrad, OMB cautioned against eliminating rules intended to reduce leasing abuses. OMB's letter emphasized that the Budget Enforcement Act (BEA) scoring rules ``were specifically designed to encourage the use of financing mechanisms that minimize taxpayers' costs by eliminating the unfair advantage provided to lease-purchases by the previous scoring rules. Prior to the BEA, agencies only needed budget authority for the first year's lease payment, even though the agreement was a legally enforceable commitment to fully pay for the asset over time.'' OMB's letter continued by explaining that this loophole had permitted the General Services Administration to agree to 11 lease-purchase agreements with a total, full-term cost of $1.7 billion, but to budget only the first year of lease payments. OMB's letter stated, ``[t]he scoring hid the fact that these agreements had a higher economic cost than traditional direct purchases and in some cases allowed projects to go forward despite significant cost overruns. . . .'' Sounds very familiar. As I mentioned before on the Senate floor when the Fiscal Year 2002 Defense Appropriations Conference Report was being debated, this is a sweet deal for the Boeing Company that I'm sure is the envy of corporate lobbyists from one end of K Street to the other. The Project on Government Oversight a politically independent, non-profit watchdog organization called Secretary Roche's Boeing tanker lease deal `` . . . a textbook case of bad procurement policy and favoritism to a single defense contractor.'' Let me review some of the highlights of the information and costs of this leasing scheme that have been provided to the Congress by the Office of Management and Budget, the General Accounting Office, the Department of Defense Inspector General, the Congressional Budget Office, the Department of Defense, and other important outside independent experts: GAO estimates the cost to lease 100 Boeing 767 tankers for 6 years to be $20 to $30 billion. GAO estimates that the cost to modernize and upgrade 127 KC-135 Es to ``R'' Models is $3.6 billion; a $22.4 billion savings to leasing 100 tankers. GAO estimates the cost for building new infrastructure for 100 Boeing 767 tankers to be $1.7 billion, the same cost to modernize 59 older KC- 135 tankers. The Air Force estimates that their current fleet of KC-135s have between 12,000 to 14,000 flying hours on them only 33 percent of the lifetime flying hour limit and no KC-135E's will meet the limit until 2040. According to the Air Force, the Mission Capable Rate for KC-135 tankers is 80 percent the highest in the Air Force inventory. The B-2 Mission Capable Rate by comparison is 39 percent. According to the Air Force Air Mobility Command, there is no requirement to begin replacing KC-135's before fiscal year 2013. OMB reports that the current fleet of KC-135s is in good condition. According to OMB, leasing 100 Boeing 767 tankers, cost $26 billion, will result in an overall decrease of total tanker fleet capacity of 2 million pounds of fuel; whereas upgrading 126 KC-135 Es to ``R'' models, cost $3.2 billion, will result in an increase of total tanker fleet capacity of 1.7 million pounds of fuel over and above existing capacity. According to the Air Force ``Tanker Requirement Study 05,'' replacing the KC-135E fleet with leased Boeing 767 tankers would not solve, and could exacerbate, the shortfalls identified in the TRS-05. According to the DOD IG, the Air Force competition/Request for Information, RFI, on leasing tankers was only 14 days, not the ususal length of time of 90 days constituting a concern regarding the true nature of the competition. The Congressional Budget Office has reported that a long-term lease of tanker aircraft would be significantly more expensive than a direct purchase of such aircraft. According to DOD, while the KC-135 is an average of 35 years old, its airframe hours and cycles are low with proper maintenance and upgrades the KC-135 may be sustainable for another 35 years. But this is just another example of Congress' political meddling and of how outside special interest groups have obstructed the military's ability to channel resources where they are most needed. I will repeat what I've said many, many times before, the military needs less money spent on pork and more spent to redress the serious problems caused by a decade of declining defense budgets. This defense appropriations bill also includes provisions to mandate domestic source restrictions; these ``Buy America'' provisions directly harm the United States and our allies. ``Buy America'' protectionist procurement policies, enacted by Congress to protect pork barrel projects in each Member's State or District, hurt military readiness, personnel funding, modernization of military equipment, and cost the taxpayer $5.5 billion annually. In many instances, we are driving the military to buy higher-priced, inferior products when we do not allow foreign competition. ``Buy America'' restrictions undermine DOD's ability to procure the best systems at the least cost and impede greater interoperability and armaments cooperation with our allies. They are not only less cost-effective, they also constitute bad policy, particularly at a time when our allies' support in the war on terrorism is so important. Secretary Rumsfeld and his predecessor, Bill Cohen, oppose this protectionist and costly appropriations policy. However, the appropriations' staff ignores this expert advice when preparing the legislative draft of the appropriations bills each year. The defense appropriations bill include several examples of ``Buy America'' pork, prohibitions on procuring anchor and mooring chain components for Navy warships; main propulsion diesel engines and propellers for a new class of Navy dry-stores and ammunition supply ships; supercomputers; carbon, alloy, or armor steel plate; ball and roller bearings; construction or conversion of any naval vessel; and, other naval auxiliary equipment, including pumps for all shipboard services, propulsion system components such as engines, reduction gears, and propellers, shipboard cranes, and spreaders for shipboard cranes. I am pleased that an amendment that I introduced on the Senate floor carried through Conference Section 8147. This legislative provision would prohibit spending $30.6 million for leasing of Boeing 737 VIP Executive aircraft under any contract entered into under any procurement procedures other than pursuant to the Competition and Contracting Act which promotes full and open competition procedures in conducting a procurement for property or services. I believe this amendment would ensure full and open competition with respect to Boeing 737 VIP Executive aircraft. Although last year's DOD Appropriations bill specified 4 Boeing 737 aircraft, it did not authorize the lease solely from the Boeing Company. Yet the Air Force only negotiated a sole source contract totaling nearly $400 million with the Boeing Company, seemingly in direct violation of this statutory language if they disburse funds for this VIP Executive aircraft lease without a fair and open competition. In today's failing economy, I imagine there are many leasing entities that would like to compete for this lucrative leasing arrangement with the Air Force. With the downturn in the commercial aviation industry and the serious financial condition of most airlines in the United States, it is very likely that there are more than a few airlines that would like to participate in a full and open competition to provide excess Boeing 737 transport aircraft under some leasing arrangement with the Air Force. I look forward to the day when my appearances on the Senate floor for this purpose are no longer necessary. I reiterate, over $7.4 billion in unrequested defense programs have been added by the Committee to the defense appropriations bill. Consider how that $7.4 billion, when added to the savings gained through additional base closings and more cost- effective business practices, could be used so much more effectively. The problems of our Armed Forces, whether in terms of force structure or modernization, could be more assuredly addressed and our warfighting ability greatly enhanced. The American taxpayers expect more of us, as do our brave servicemen and women who are, without question, fighting this war on global terrorism on our behalf. But for now, unfortunately, they must witness us, seemingly blind to our responsibilities at this time of war, going about our business as usual.

Mr. McCAIN

Mr. McCAIN. Mr. President, today we begin another chapter in the effort to reform our political campaign system. I am proud to be joined by Senator Russ Feingold, my longtime colleague on campaign finance reform, and Senator Richard Durbin, in introducing the Political Campaign Broadcast Activity Improvements Act. The bill establishes a program to provide candidates and national committees of political parties, with vouchers that they may use for political advertisements on radio and television broadcast stations. An annual spectrum use fee paid by broadcasters would fund the voucher system. In addition, the bill requires broadcast television and radio stations to provide candidates and parties with the lowest rate provided to any other advertiser in the previous 120 days, and in most cases, would prohibit states from preempting advertisements purchased by candidates or parties. Finally, the bill requires these stations to air a minimum of two hours per week of candidate-centered or issue- centered programming before a primary or general federal election. This legislation builds on the long history of requiring broadcasters to serve the public interest in exchange for the privilege of obtaining an exclusive license to use a scarce public resource: the electromagnetic spectrum. The burden imposed on broadcasters pales in comparison to the enormous value of this spectrum, which recent estimates suggest is worth as much as $367 billion. The purpose of the legislation is to increase the flow of political information in broadcast media and to reduce the cost to candidates of reaching voters. Our democracy is stronger when a candidate's success is achieved by ideas, and not by dollars. The benefits of free airtime are not only for candidates, however. By increasing the flow of political information, free airtime can better inform the public about candidates and invite viewers to become more engaged in their government by learning more about the individuals seeking to represent them. We recognize that the bill will not be considered during the 107th Congress. We look forward, however, to hearing how we might improve the approach when we reintroduce it in the future. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. McCAIN

Mr. McCAIN. Mr. President, today we begin another chapter in the effort to reform our political campaign system. I am proud to be joined by Senator Russ Feingold, my longtime colleague on campaign finance reform, and Senator Richard Durbin, in introducing the Political Campaign Broadcast Activity Improvements Act. The bill establishes a program to provide candidates and national committees of political parties, with vouchers that they may use for political advertisements on radio and television broadcast stations. An annual spectrum use fee paid by broadcasters would fund the voucher system. In addition, the bill requires broadcast television and radio stations to provide candidates and parties with the lowest rate provided to any other advertiser in the previous 120 days, and in most cases, would prohibit states from preempting advertisements purchased by candidates or parties. Finally, the bill requires these stations to air a minimum of two hours per week of candidate-centered or issue- centered programming before a primary or general federal election. This legislation builds on the long history of requiring broadcasters to serve the public interest in exchange for the privilege of obtaining an exclusive license to use a scarce public resource: the electromagnetic spectrum. The burden imposed on broadcasters pales in comparison to the enormous value of this spectrum, which recent estimates suggest is worth as much as $367 billion. The purpose of the legislation is to increase the flow of political information in broadcast media and to reduce the cost to candidates of reaching voters. Our democracy is stronger when a candidate's success is achieved by ideas, and not by dollars. The benefits of free airtime are not only for candidates, however. By increasing the flow of political information, free airtime can better inform the public about candidates and invite viewers to become more engaged in their government by learning more about the individuals seeking to represent them. We recognize that the bill will not be considered during the 107th Congress. We look forward, however, to hearing how we might improve the approach when we reintroduce it in the future. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. McCAIN

Mr. McCAIN. Mr. President, today I am introducing The Telecommunications Ownership Diversity Act of 2002. This legislation is designed to ensure that new entrants and small businesses will have the chance to participate in today's telecommunications marketplace. At a time when the telecommunications industry is economically depressed, this bill promotes the entry of new competitors and small businesses into the field by providing carefully limited changes to the tax law. Too often today, new entrants and small businesses lose out on opportunities to purchase telecom assets because they don't offer sellers the same tax treatment as their larger competitors. Specifically, a small purchaser's cash offer triggers tax liability, while a larger purchaser's cash offer triggers tax liability, while a larger purchaser's stock offer may be accepted effectively tax-free. When an entity chooses to sell a telecom business, our tax laws should not make one bidder more attractive than another. This legislation would give sellers of telecommunications businesses a tax deferral when their assets are bought for cash by small business telecom companies. It would also encourage the entry of new players and the growth of existing small businesses by enabling the seller of a telecom business to claim a tax deferral on capital gains if it invests the proceeds of any sale of its business in purchasing an interest in an eligible small telecom business. While large companies continue to merge into even larger companies, small businesses have faced substantial barriers in trying to become long-term players in the telecommunications market. These barriers can be even more formidable for members of minority groups and for women, for whom it has historically been more difficult to obtain necessary capital. Since new entry and the ability to grow existing businesses are key components of competition, and since competition is usually the most successful way to achieve the goals of better service and lower prices, restricting small business' ownership opportunities does not serve consumers' interests. It's easy to forget that telecommunications industry transactions are routinely valued in the billions. Even radio, which has traditionally been a comparatively easier telecom segment to enter, has been priced out of range of most would-be entrants. In addition to these monetary barriers, the tax code makes cash sales less attractive to sellers than stock-swaps. So new entrants and smaller incumbents, which typically must finance telecom acquisitions with cash rather than stock, are less-preferred purchasers than large incumbents. As a result, telecom business sellers have little incentive to sell their businesses to new entrants and small incumbents. But what should Congress do? Clamp down on merger activity? Insist that hopelessly-outdated ownership restrictions set by the Federal Communications Commission be retained? Rush to concoct new telecom ownership ``opportunities'' from government programs or regulations that, in the real world, present small business with only one real opportunity, the opportunity to fail? None of these proposals would succeed because all of them, like the Telecommunications Act of 1996, ignore marketplace realities instead of working with them. One answer is to level the playing field and give established telecom industry players the same economic incentives to deal with new entrants and small businesses as they currently have with respect to larger companies. And that's what this legislation would do. Specifically, the bill would amend the Internal Revenue Code by adding a new Section 1071 entitled ``Nonrecognition of gain on certain sales of telecommunications business.'' This new section of the tax code would allow a telecom business seller to elect to have capital gains deferred under the existing Section 1033 rules for any ``qualified telecommunications sale.'' The aggregate amount of any gain deferred under the qualified sale would be limited to $250 million per transaction, and less than $84 million per taxable year. A qualified telecommunications sale would be defined in two ways. The first type of qualified sale would be sales to an ``eligible purchaser'' of either the assets of a telecom business or the stock that makes up a controlling interest in a corporation with substantially all of its assets in one or more telecom businesses. Eligible purchasers would include economically and socially disadvantaged businesses that qualify under a carefully drawn three- part test. The second type of qualified sale would be the sale of any telecom business to any purchaser, as long as the seller reinvests the proceeds in equity interests in eligible small telecom businesses. To account for the variety of telecommunications services available today, the legislation would broadly define telecommunications businesses eligible for capital gains tax deferral to include not only radio, broadcast TV, DBS, and cable TV, but also wireline and wireless telephone service providers and resellers. Some may be concerned that this legislation could potentially allow entities seeking to ``game the system'' to set up eligible purchasers to take advantage of the bill's provisions. In order to eliminate the potential for abuse, the bill would require the eligible purchaser to hold any property acquired for three years, during which time it could only so sold to an unrelated eligible purchaser. Moreover, the bill would require the General Accounting Office to thoroughly audit and report on the administration and effect of the law every two years. By sharing with smaller companies a portion of the investment benefits our tax laws give to the major telecom companies we have a chance to make sure that, at the end of the day, we won't regret what ``might have been'' for small business. By enabling individuals and small businesses to use industry restructurings as opportunities for expansion, we will keep faith with those who have been, and remain, enduringly valuable contributors to our free-market system. Over the next several months, I look forward to working with interested organizations to further improve this legislation. In particular, I welcome comments on how to further refine the concepts of ``qualified telecommunications business'' and ``eligible purchaser'' to ensure that this legislation can meet its goals in the most fair and effective manner. Revolutionary developments in the telecommunications industry have been made by gifted individuals with small companies and unlimited vision. In this sense, the telecommunciaitons industry is a true microcosm of the American free-market system. New entrants and small businesses should have a fair chance to participate across the broad spectrum of industries that will make up the telecommunications industry in the Information Age. This legislation will help them do that. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. McCAIN

Mr. McCAIN. Mr. President, today I am introducing The Telecommunications Ownership Diversity Act of 2002. This legislation is designed to ensure that new entrants and small businesses will have the chance to participate in today's telecommunications marketplace. At a time when the telecommunications industry is economically depressed, this bill promotes the entry of new competitors and small businesses into the field by providing carefully limited changes to the tax law. Too often today, new entrants and small businesses lose out on opportunities to purchase telecom assets because they don't offer sellers the same tax treatment as their larger competitors. Specifically, a small purchaser's cash offer triggers tax liability, while a larger purchaser's cash offer triggers tax liability, while a larger purchaser's stock offer may be accepted effectively tax-free. When an entity chooses to sell a telecom business, our tax laws should not make one bidder more attractive than another. This legislation would give sellers of telecommunications businesses a tax deferral when their assets are bought for cash by small business telecom companies. It would also encourage the entry of new players and the growth of existing small businesses by enabling the seller of a telecom business to claim a tax deferral on capital gains if it invests the proceeds of any sale of its business in purchasing an interest in an eligible small telecom business. While large companies continue to merge into even larger companies, small businesses have faced substantial barriers in trying to become long-term players in the telecommunications market. These barriers can be even more formidable for members of minority groups and for women, for whom it has historically been more difficult to obtain necessary capital. Since new entry and the ability to grow existing businesses are key components of competition, and since competition is usually the most successful way to achieve the goals of better service and lower prices, restricting small business' ownership opportunities does not serve consumers' interests. It's easy to forget that telecommunications industry transactions are routinely valued in the billions. Even radio, which has traditionally been a comparatively easier telecom segment to enter, has been priced out of range of most would-be entrants. In addition to these monetary barriers, the tax code makes cash sales less attractive to sellers than stock-swaps. So new entrants and smaller incumbents, which typically must finance telecom acquisitions with cash rather than stock, are less-preferred purchasers than large incumbents. As a result, telecom business sellers have little incentive to sell their businesses to new entrants and small incumbents. But what should Congress do? Clamp down on merger activity? Insist that hopelessly-outdated ownership restrictions set by the Federal Communications Commission be retained? Rush to concoct new telecom ownership ``opportunities'' from government programs or regulations that, in the real world, present small business with only one real opportunity, the opportunity to fail? None of these proposals would succeed because all of them, like the Telecommunications Act of 1996, ignore marketplace realities instead of working with them. One answer is to level the playing field and give established telecom industry players the same economic incentives to deal with new entrants and small businesses as they currently have with respect to larger companies. And that's what this legislation would do. Specifically, the bill would amend the Internal Revenue Code by adding a new Section 1071 entitled ``Nonrecognition of gain on certain sales of telecommunications business.'' This new section of the tax code would allow a telecom business seller to elect to have capital gains deferred under the existing Section 1033 rules for any ``qualified telecommunications sale.'' The aggregate amount of any gain deferred under the qualified sale would be limited to $250 million per transaction, and less than $84 million per taxable year. A qualified telecommunications sale would be defined in two ways. The first type of qualified sale would be sales to an ``eligible purchaser'' of either the assets of a telecom business or the stock that makes up a controlling interest in a corporation with substantially all of its assets in one or more telecom businesses. Eligible purchasers would include economically and socially disadvantaged businesses that qualify under a carefully drawn three- part test. The second type of qualified sale would be the sale of any telecom business to any purchaser, as long as the seller reinvests the proceeds in equity interests in eligible small telecom businesses. To account for the variety of telecommunications services available today, the legislation would broadly define telecommunications businesses eligible for capital gains tax deferral to include not only radio, broadcast TV, DBS, and cable TV, but also wireline and wireless telephone service providers and resellers. Some may be concerned that this legislation could potentially allow entities seeking to ``game the system'' to set up eligible purchasers to take advantage of the bill's provisions. In order to eliminate the potential for abuse, the bill would require the eligible purchaser to hold any property acquired for three years, during which time it could only so sold to an unrelated eligible purchaser. Moreover, the bill would require the General Accounting Office to thoroughly audit and report on the administration and effect of the law every two years. By sharing with smaller companies a portion of the investment benefits our tax laws give to the major telecom companies we have a chance to make sure that, at the end of the day, we won't regret what ``might have been'' for small business. By enabling individuals and small businesses to use industry restructurings as opportunities for expansion, we will keep faith with those who have been, and remain, enduringly valuable contributors to our free-market system. Over the next several months, I look forward to working with interested organizations to further improve this legislation. In particular, I welcome comments on how to further refine the concepts of ``qualified telecommunications business'' and ``eligible purchaser'' to ensure that this legislation can meet its goals in the most fair and effective manner. Revolutionary developments in the telecommunications industry have been made by gifted individuals with small companies and unlimited vision. In this sense, the telecommunciaitons industry is a true microcosm of the American free-market system. New entrants and small businesses should have a fair chance to participate across the broad spectrum of industries that will make up the telecommunications industry in the Information Age. This legislation will help them do that. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. McCAIN

Mr. McCAIN. Forty-five.

Mr. McCAIN. Mr. President, what is the parliamentary situation? Amendment No. 4869, As Modified

Mr. McCAIN. And the time is running; is that correct?

Mr. McCAIN. No.

Mr. McCAIN. Mr. President, I understand we have 5 minutes. I yield that 5 minutes to the Senator from Connecticut however he chooses to use it.