John McCain

Mr. McCAIN

Mr. McCAIN. Madam President, I rise today to speak about the conference report for the Supplemental Appropriations bill for fiscal year 2002. When we debated the Senate version of this bill in June, I stated my strong opposition to any item included that was not for the stated purpose of the bill: the ``further recovery from and response to terrorist attacks on the United States.'' As I said before, using the guise of responding to the terrorist attacks of September 11th to spend federal funds on items that obviously have nothing to do with fighting terrorism is war profiteering. The conference report before us today contains $28.9 billion in federal spending. That is about $1.8 billion over the President's budget request of $27.1 billion--a request, I might add, he made over three months ago--but at least it is lower than the $31.4 billion in the Senate-passed bill. Even so, I have reviewed the conference report to determine whether the bill contains items that are low-priority, unnecessary, wasteful, or have not been appropriately reviewed in the normal, merit-based prioritization process. I understand that some of these provisions may be meritorious, or included in unfunded priority lists for certain agencies. However, I have listed them because they were not requested by the President or should not be considered an ``emergency'' for funding purposes on this bill or are unrelated to our war on terrorism and should be considered for funding in the regular appropriations process. All told, I have identified approximately $5 billion in such spending in the conference report. Before I proceed, I want to especially commend the Director of the Office of Management and Budget, Mitch Daniels, for his valiant charge to reign-in the free-spending ways of Congressional appropriators. In this town, the louder the opposition gets, the more sense you are making, so keep up the good work Mr. Daniels--and let them howl. In the absence of a Senate-passed budget resolution, we need fiscal discipline now more than ever. Where we once saw surpluses as far as the eye could see, now we have mounting deficits, a national debt clock that is again ticking, and both houses of Congress voting to raise the government's debt limit by $450 billion. You don't have to be a five- time Jeopardy winner to grasp the bottom line: With the tremendous demands on the federal budget today and with the coming retirement of the Baby Boom generation, we must be even more prudent about where we devote limited taxpayers' dollars. According to the Congressional Budget Office, the government is running a deficit of $122 billion for the first nine months of this fiscal year, a sharp reversal from the $169 billion surplus recorded for the same period a year ago. And the Office of Management and Budget recently unveiled their mid-year review of the budget showing that there will be a $165 billion deficit for the entire fiscal year. It doesn't take an Nobel Prize-winning economist to conclude that at the rate we are increasing spending, this sizable deficit will increase proportionately in the years to follow. It is unfortunate that in a time of war, my colleagues cannot curb their appetite for non-emergency, wasteful spending. At this moment, the national interest must prevail over politicians' parochial concerns. Unfortunately, as this conference report and the recent Farm Bill attests, this message has still not gotten through to Congress. For example, the recent Farm Bill contained an astounding $83 billion above the baseline in new spending for farm programs. This increase brought the total level of spending in the legislation to a mammoth $183 billion for the 10-year life of that bill. It ranks amongst the most expensive in recent history for farm legislation. As has been the trend of previous farm bills, this legislation lacked any payment restrictions to prevent most of the subsidy funding from continuing to benefit large farms and agribusinesses. Widely available information has also shown the overwhelming disparity of farm payment distributions. The General Accounting Office has shown that over 80 percent of farm payments primarily benefited large and medium-sized farms. Other studies have similarly found that the top 10 percent of big farmers and agribusiness consumed about 80 percent of farm benefits, leaving small farmers out in the cold. And yet, despite the evidence of the great inequity in distribution of the farm payments and their whopping price tag, the Senate passed it by a vote of 64-35. Now the bulk of the supplemental conference report does contain provisions that have been designated as emergencies in response to the terrorist attacks of September 11th, but the story doesn't end there, Mr. President. Can anyone say with a straight face that everything in this conference report, which is officially titled the ``2002 Supplemental Appropriations Act for Further Recovery From and Response To Terrorist Attacks on the United States,'' is directly related to the bill's stated purpose? There is a long list of items under the Commerce Committee's jurisdiction that were not requested by the President or have been earmarked. I am particularly concerned about the funding allocation and directives made by the appropriators with respect to the Transportation Security Administration, TSA. The funding level provided falls short of the President's request for $4.4 billion. Further, the conference agreement would take away the TSA's flexibility to allocate the funds to areas its considers to be transportation security priorities and instead earmarks nearly $1 billion for expenditures considered important to the appropriators. While these directives may not sound unreasonable, much of the funding is being directed toward unauthorized programs. How do the appropriators know if these are the most important transportation security priorities and that the level of funding they provided is correct? The conference report goes so far as to prohibit TSA from using federal funds to recruit or hire the personnel the Administration says it needs to meet the statutory directives in the Aviation Security Act, including the directive to, by year end, inspect all baggage. If we do not give them the resources, how can we possibly expect the TSA to meet its statutory directives? Yesterday, Secretary Mineta testified before the House Aviation Subcommittee expressing grave concerns over the fact that TSA is not being provided its full request and that the earmarks will have a serious impact on TSA's ability to meet its statutory obligations with regard to baggage screening and other directives. Specifically, Secretary Mineta said in his prepared statement: The Administration's Emergency Supplemental request was the amount we needed to do the job. No more, no less. Last Friday, the appropriations Conference Committee voted to cut $1 billion from the $4.4 billion requested by President Bush and to impose new restrictions on our ability to get the job done. Here are five facts about the Conference report: First, it eliminates $550 million off the top; second, it sets aside $480 million in a so-called contingency fund that may not be available to TSA; third, it imposes $445 million in numerous earmarks not requested or supported by the Administration; fourth, it limits the total number of full- time TSA employees to 45,000--at least 20,000 employees short of what TSA needs to meet its statutory mission; and finally, report language severely restricts my discretionary authority to manage TSA. In short: TSA's budget was cut by at least $1 billion, possibly up to $1.5 billion. That is a whopping 34 percent cut from the President's request. Here is the dilemma Congress has created. You have not yet changed TSA's mission, yet the budget to do the job is apparently on the way to being radically diminished while new restrictions and mandates are being imposed. What can be done? The amount of money Congress is about to approve simply will not support the mandates and timetables for aviation security that Congress set last Fall for TSA. Less money with no flexibility means fewer TSA employees, less equipment, longer lines, delay in reducing the hassle factor at airports, and/or diminished security at our nation's airports. Frankly, these conflicting signals sent by Congress have forced us to regroup and revise the TSA business plan. That will likely take several more weeks. It will involve complex negotiations, and a review of literally thousands of TSA commitments and plans. These are not my words. These are the words of the Secretary of Transportation. I hope my colleagues pay close attention to the Secretary's concerns. When the TSA is unable to meet its statutory deadlines and fully address critical security issues, we should all know it will largely come back to this funding measure. Other questionable provisions regarding the TSA should also be mentioned. For example, in the Statement of Managers, the appropriators have earmarked money for the field testing of a particular security technology referred to as Pulsed Fast Neutron Analysis (PFNA). There is only one company that has developed this technology: Ancore Corporation of Santa Clara, California. Unfortunately, earlier this month, the National Research Council (NRC), concluded that PFNA is not ready for airport deployment or testing. Even though the main role for PFNA is the detection of explosives in full cargo containers, the appropriators are directing money for field testing on checked bags. This earmark could be a total waste of critical research money that should be contributing to our effort to increase aviation security. Further, the Statement of Managers directs that the TSA ``be attentive to the needs'' of Seattle-Tacoma International Airport, Anchorage International Airport, and Kansas City International Airport when allocating resources provided above the Administration's request for the costs of physical modifications of airports for installing explosive detection systems. This directive is just another thinly veiled attempt at earmarking. I am sure there are many airports that have significant needs in terms of physical alterations that must be made to permit the effective use of bomb detection machines. We should not elevate three airports for special attention. The TSA should be attentive to the needs of all airports and should have the flexibility to establish priorities on how best to meet those needs. I note that the conference report would take $150 million out of the Airport and Airway Trust Fund to reimburse airports for costs associated with new security requirements imposed on or after September 11. Let me point out there is no statutory authorization to use the Trust Fund for such purposes, nor was this funding requested by the President. While I'm not opposed to reimbursing airports, if it is for emergency purposes it should come out of the General Fund, as was authorized in last year's aviation security bill. Once again, the jurisdiction of the Commerce Committee is being circumvented. It comes as no surprise that there is funding in the bill for Amtrak $205 million to keep Amtrak operating through September. We all know Amtrak is again in financial crisis, nearly $4.6 billion in debt. Amtrak's independent accountant concluded this year--after 31 years of losses--that a company that loses over a billion dollars annually is not a going concern. Imagine. The upshot is that Amtrak hasn't been able to access a line of credit from its banker, so once again, Congress must make up the shortfall. I accept, although reluctantly, that Congress must provide assistance. It would not be in the best interest of the country for Amtrak to shut down its entire system in the next few weeks, particularly since Amtrak has not prepared any type of contingency plan to keep its corridor trains, which are paid for by the states, and commuter operations, which are also paid by the states, in operation even if it were to shut down its intercity service. But I regret that the conferees opted to give more money directly to Amtrak in the form of a straight appropriation. After providing a $100 million loan earlier this month, the Administration requested that it be allowed to provide Amtrak another loan in the amount of $170 million. By providing a loan rather than a grant, the Administration could better control how the funds are used and at least try to protect the interests of the American taxpayers. Instead, Amtrak is being given another infusion of cash without any real restrictions on how it is spent. Not only are we not holding Amtrak and its Board of Directors responsible for the current crisis, we're not even making an attempt to ensure these funds are spent wisely. I question the need to expend emergency funds for planning a new route to Las Vegas or investing in high-speed rail projects when the Northeast Corridor has a capital backlog of over $5 billion and the tunnels under New York's Penn Station need $1 billion in safety and reliability improvements. But Amtrak is spending its emergency funds on the Las Vegas route and other projects that sure don't sound like emergency expenditures to me. While I support the intent of the conferees to ensure that Amtrak provides Congress the same information it is now required to supply DOT as a condition of its $100 million loan, I believe this information should also be coming to the authorization committees, not just the appropriators. The Senate Commerce Committee and the House Transportation and Infrastructure Committee are responsible for setting policy with respect to Amtrak not the Appropriations Committees. Perhaps one of the more egregious provisions in the conference report deals with earmarked highway projects. My colleagues may recall the enormous controversy raised late last year when the appropriators took the unprecedented action in the FY 2002 DOT Appropriations Bill in which every state lost a portion of their highway funding that was to be allocated by formula under the Transportation Equity Act for the 21st Century, TEA-21. The appropriators redirected the states' formula funding to projects primarily in the appropriators' home states. Well, they are at it once again. The conference report includes language making eligible 49 projects earmarked in the FY 2002 DOT Appropriations Bill that, under TEA-21, are not eligible to receive the earmarked funds. It is very troubling that the authorizing Committee of jurisdiction is not more concerned about maintaining the integrity of the multi-year highway funding formula law. Even more than I, the members whose states lost the predominant share of their formula and RABA funds to projects in the appropriators' states, should be vehemently objecting to this latest overreach. Does anyone even know how their state fared as a result of the appropriators' handiwork last year? Of course, it should come as no surprise that the big winner was the state of West Virginia, which received $96.7 million in highway funding earmarks through the funding re-directives. This is followed by Kentucky which received $70 million; Washington which received $61 million; Mississippi which received $60.7 million; and Alabama which received $60.6 million. Compare this to other states, such as Delaware, which received $100,000 but suffered a reduction of its formula funds of $2.496 million. Many other states also took substantial hits because of the appropriators' funding redirection efforts, including: ------------------------------------------------------------------------ Cut in Formula/ State New Earmarks RABA funds (millions) (millions) ------------------------------------------------------------------------ Wyoming................................. +$1 -$4.387 Georgia................................. +8.2 -22.4 Michigan................................ +17.3 -21.397 New Jersey.............................. +16.1 -18.153 North Carolina.......................... +15.9 -17.598 North Dakota............................ +2.9 -3.684 Ohio.................................... +20.5 -24.624 Oregon.................................. +7.750 -9.815 Pennsylvania............................ +13.97 -40.325 Tennessee............................... +10.6 -16.656 ------------------------------------------------------------------------ I will ask at the end of my remarks that two charts showing the winners and losers based on information provided by the Federal Highway Administration be printed in the Record. I will also include the list of the projects being deemed TEA-21 eligible projects in the conference report. The conference report would also ensure funding distributed under the highway trust fund for the upcoming fiscal year will not be reduced by the statutory requirements under TEA-21 to adjust the program based on adjustments to the revenue aligned budget authority provisions of the Act. Instead of following the law, the conference report provides for an additional $4.4 billion over the President's budget request for fiscal year 2003. I think all of us have known this funding would be provided even though the President's budget request actually fulfilled the requirements that so many members voted for when TEA-21 was passed in 1998. But why does this provision need to be included in this emergency supplemental legislation? With respect to funding provided for the Coast Guard, the conference report directs $12.1 million, above the President's request of $26 million, to acquire, repair, renovate or improve vessels, small boats and related equipment. The Statement of Managers further indicates the funding shall be used for the procurement of additional 87-foot Barracuda class coastal patrol boats. The conference report further directs $200 million, not requested by the President, to acquire new aircraft and increase aviation capability; and $50.171 million above the President's request of $12 million, for shore facilities and aids to navigation facilities. Unfortunately, we are provided little other information to explain the purpose of these funds. $200 million is a significant funding level and we have no clear understanding of this provision. The conference report provides $33.1 million over the President's request for ``Scientific and Technical Research and Services'' for emergency expenses resulting from new homeland security activities and increased security requirements of which $20 million is for a cyber- security initiative. It is also worth noting that a provision pertaining to the Advanced Technology Program at the Department of Commerce was also included. The supplemental bill would change the program which currently imposes a ceiling of $60.7 million on the amount of new grants that can be awarded by the end of the fiscal year, to establishing a floor of $60.7 million that can be awarded in new grants by the end fiscal year 2002. The President did not request this change and why it is necessary, I do not know. The conference report also includes $400 million for election administration reform, contingent upon completion of the ongoing conference on election reform legislation. Since it is highly unlikely a conference agreement can be reached before the August recess, I question why we need to include this funding in this emergency supplemental measure. Instead, we should appropriate the funding upon completion of the conference report and as part of the Fiscal Year 2003 Appropriations process. The conference report would provide so-called technical corrections for the Fisheries Finance Program Account. Specifically, it would authorize up to $5 million for Individual Fishing Quota Loans and up to $19 million for traditional loans under the direct loan program authorized by the Merchant Marine Act of 1926. As I mentioned when the Senate considered the supplemental in June, these are authorizations which have not been considered by the Senate Commerce Committee. Further, with some limited exceptions, Individual Fishing Quota Programs are not allowed under current law. Therefore, this funding will only help fisheries where a Quota Program already exists, such as the halibut fishery in Alaska. The conference report also amends the Oceans Act of 2000 to extend the deadline for the Ocean Commission's report by an additional 11 months. The Oceans Act of 2000 was drafted in the Commerce Committee and any amendments should start there, yet we were not even consulted on this provision. The conference report directs $2.5 million of funding provided in the Commerce, Justice State Appropriations Bill for Fiscal Year 2002 to now be dedicated to conducting coral mapping in the waters of the Hawaiian Islands. We debated this issue on the floor in June. While my amendment to strike the earmark failed, that doesn't mean the funding proposal is meritorious. This directive was not requested by the President and the funding would be earmarked for the National Defense Center of Excellence for Research in Ocean Sciences. The conference report also includes $2 million to address what the appropriators call ``critical mapping and charting backlog requirements'' and $2.8 million for backup capability of the National Ocean and Atmospheric Administration, NOAA, satellite products and services. None of this funding was requested by the President and even though it falls within the jurisdiction of the Senate Commerce Committee, again we were not consulted. Moreover, this funding has no relation that I can see to address emergency homeland security needs which is the purported purpose of this bill. The conference report also includes a total of $11 million for economic assistance to New England fishermen and fishing communities. This funding was not requested by the President, although I understand it is in response to unforeseen circumstances resulting from a federal court order which restricts the number of days that fisherman can fish. The Statement of Managers then earmarks that funding based on the Senate report, as follows: Maine, $2 million; New Hampshire, $2 million; Massachusetts, $5.5 million; and Rhode Island, $1.5 million. The conference report places a limitation on apparel articles that are eligible for preferential treatment under the Caribbean Basin Initiative, CBI, and the Andean Trade Preferences Act, ATPA. Under this provision, all dyeing, printing, and finishing of knit and woven fabrics must take place in the United States in order for nations under CBI and ATPA to benefit from reduced-rate treatment. This measure is one in a series of protectionist actions recently undertaken by the United States. The U.S. textile industry has carved out a protective shell around itself to avoid competition at all costs. In this case, the Caribbean Basin and the Andean region nations are the victims along with American consumers. Due to recent political and special interest pressures, House appropriators inserted this protectionist provision into the supplemental limiting the dyeing, printing and finishing of certain apparel articles to United States manufacturers, with no objection from the Senate appropriators. Caribbean nations received greater access to the United States' apparel market through the Caribbean Basin Economic Recovery Act. This law granted the Caribbean Basin nations similar privileges as those afforded Mexico under the North American Free Trade Agreement, NAFTA. This provision will scale back the Caribbean Basin Initiative, preventing their growing industry access to the U.S. apparel market. In addition, it would preclude the Andean Trade Preferences Act, ATPA, beneficiary nations from entering the apparel market to begin with. Moreover, this is yet another example of the appropriators legislating on an appropriations bill. While a trade bill that would, among other things, extend and expand the expired ATPA, sits mired in conference, the appropriators have reached their own conclusions regarding provisions of that bill which would hopefully allow Andean beneficiary nations greater access to U.S. apparel markets. Despite a letter objecting to the actions of the appropriators from the Chairman and Ranking Member of the Senate Finance Committee, the Committee that holds jurisdiction over ATPA, this provision remained. This is an unfortunate turn of events that is becoming all too common: Leaders of the U.S. rhetorically expounding their commitment to free trade while actively pursuing protectionist policies. The reorganization of our armed services was, of course, an extremely important subject before September 11th, and it is all the more so now. 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. Again, I question the requirement for certain items in the defense portion of this supplemental appropriations bill. We are waging war against a new enemy. The dangers in Afghanistan to our service members are real. However, I do not believe that our ``special forces'' units are threatened by any perceived torpedo attack that would cause the appropriators to include in the conference Report a provision to include $1 million for the Tripwire Torpedo Defense Program or $1 million for the Undersea Warfare Support Equipment AN/SLQ 25A. The conference report improves on the Senate-passed language regarding U.S. policy in Colombia by providing the Departments of State and Defense with the authority to support the Colombian government's unified campaign against narcotics trafficking and terrorism. However, I regret that the final language imposes a burdensome requirement on the President of Colombia to commit in writing to a series of benchmarks regarding his policy and reform plans. I also regret that the conferees have seen fit to cut the President's peacekeeping requests by nearly $28 million--at a time when America's global presence, and the importance of standing shoulder to shoulder with our allies in defense of our common interests, matters. I do applaud this legislation's requirement for reports setting forth a strategy for meeting the security needs of Afghanistan to ensure effective delivery of humanitarian aid, build the rule of law and civil order, and support the Afghan government's efforts to bring stability and security to its people. History shows that America cannot walk away from Afghanistan if we are to protect our interests there. Our first requirement in this post-war phase must be to help the Afghan government bring basic security and order to all parts of the country. America must do more, not less, to consolidate our victory in Afghanistan by helping to build an environment in which our values can flourish. Let there be no doubt that this war will be long. Therefore, we should not frivolously spend today like there is no tomorrow. For when tomorrow comes, we must have the fiscal resources to not only fight this war to victory, but to provide for our nation's other priorities including tax relief for the lower- and middle-income Americans, adequate funding for Social Security and Medicare, and significant debt reduction. I ask unanimous consent to print in the Record the information I earlier referenced.

Mr. McCAIN

Mr. McCAIN. I thank my colleague from Nevada. I intend to be brief. I do believe this is an important issue. The other body is going out at the end of this week--in just 3 days. Unless we act on the Andean Trade Preference Act, it will have significant consequences, both socio and economic, in our hemisphere. I thank my colleague from Nevada for allowing me this time. Today, as we look south, the picture is altogether more bleak, and deeply troubling in the eyes of both Americans and the people of Latin America. Free market reforms are undergoing a crisis of legitimacy as a result of political mismanagement, corruption and cronyism, and because many of the easy reforms have already been made. It is fair to place part of the blame on a failure of national leadership in parts of Latin America. But almost every government in the hemisphere has been democratically elected, and will be held democratically accountable. What is more worrisome, and within our power to change, is Washington's hands-off policy toward some of the very partners we touted only a few years ago as a symbol of Latin America's success, their policy accomplishments made possible with the support of the United States. Today, as our friends in the Andean region grapple with the problems of poverty, terrorism, drug trafficking, and the forces of political extremism, leaders in Washington squabble over unrelated issues that hold up speedy passage of the Andean Trade Preference Expansion Act. This trade measure is not controversial. Were it to face an up-or-down vote, it would probably garner 90 votes of support. But a political decision made with no consideration of the plight of our Andean partners--to bundle the noncontroversial ATPA into a trade package including trade promotion authority and trade adjustment assistance--is having stark consequences in Latin America at exactly the same time as the backlash against reformist economic Ecuador, Colombia, and Peru. In Bolivia, the president of the country's coca-growers' association, an avid opponent of free market policies, won enough votes in the next presidential election to force a runoff against a more mainstream candidate, in defiance of all pollsters' predictions. In Colombia, a new President with a historic mandate for change needs our support against the narcoterrorists that threaten his government; strangely, we provide the aid his government needs But not the trade that is so important to his people, and that costs America nothing. In Ecuador, political instability grows as the spillover from Colombia's war and the depth of poverty threaten state institutions. In Peru, a democratically elected president who, as an opposition leader, stood down a dictatorship has been forced by popular pressure to fire the very reformers within his cabinet who hold the key to his country's development. America is not to blame for every setback on the road to free market, democratic governance in Latin America. But we are to blame when we abdicate our responsibility to advance our interests and support our friends with the trade preferences that they believe to be critical to their economic future. Madam President, on Friday the New York Times ran a front-page story highlighting the growing political instability that increasingly haunts Latin American leaders who understand that their country's development hinges on a reform agenda supported by the United States. The article traces a political rift over free-market reforms that runs straight down the continent, from Venezuela to Argentina, and whose consequences threaten to upend the extraordinary progress Latin American reformers have made since they ended the era of military dictatorship and statist economics. I ask unanimous consent the Times article be printed in the Record, as well as an opinion piece by John Walters, our drug czar, entitled ``Just Say Yes to ATPA.''

Mr. McCAIN. Renewing the Andean Trade bill is the most immediate action we could take to remind our partners in the region of our commitment to reform and free markets. Unfortunately, Congress' inaction on ATPA is rightly viewed by our friends in the region as a symbol of America's unfortunate disregard for their plight in this difficult time. It is time we paid attention. I urge immediate action from the conferees to the trade bill to separate out and pass ATPA. This issue is critical to American leadership and economic growth in the Andean region, as its leaders will tell anyone who listens. America has too much at stake to turn our back on our Andean partners, who confront threats from terrorists, drugs, and poverty that threaten their governments and their people's future. Our friends in Peru, Colombia, Ecuador, and Bolivia cannot wait much longer. Madam President, I do not want to hold up the progress of the Senate on this important prescription drug bill. But I think it is generally regarded as factual that we will probably not provide trade promotion authority or trade adjustment authority to the President of the United States before the other body goes out at the end of this week. That would be a terrible mistake. I will come to the floor on Wednesday or Thursday and ask consent that we move, take up, and pass the Andean Trade Preference Act. I believe that is probably the only way we will get this done before the Congress goes out for the August recess. We have a serious situation in our hemisphere from Mexico to the Tierra del Fuego. Argentina, once the fifth largest economy in the world, is facing an economic crisis of incredible proportions. Venezuela is in a chaotic socioeconomic situation. Peru, Bolivia, and Ecuador are all in various stages of extreme difficulties. Colombia is in the midst of a civil war which at least, if they are not losing, they are probably not winning either. This is a modest proposal. I have been visited by the leaders of these countries, and they say the following: We do not want aid, but we do want trade. This is a trade agreement that was made by the first Bush administration. It should clearly be passed. It would get 90 votes in this body if it were up by itself. We should address it, move it forward, and do these nations a small favor. We could pay a very heavy penalty in terms of socioeconomic difficulties in our own hemisphere if we do not act quickly on this issue.

Mr. McCAIN. I thank my friend from Oklahoma. I hope we won't have to do it. We owe it to these very great allies of ours in a very difficult time to act before we go out. The other body goes out at the end of this week. I thank my colleague from Nevada for his indulgence. I thank my colleagues for their indulgence, and I yield the remainder of my time.

Mr. McCAIN. What is that?

Mr. McCAIN. Madam President, I rise in strong support of the nomination of Dr. Richard Carmona to be Surgeon General of the United States. Dr. Carmona's inspiring story is the living embodiment of the American dream. A high school dropout, Richard Carmona first served our nation with the Special Forces in Vietnam, where he became a decorated Green Beret. Upon his return, he obtained his high school equivalency and became the first member of his family to graduate from college. He went on to become a nurse and later enrolled in medical school, specializing in trauma surgery. When he graduated, Dr. Carmona relocated in Tucson, Arizona, and established southern Arizona's first trauma center. Later he continued his education, obtaining a master's degree in public health from the University of Arizona, where he now serves as a member of the faculty. As a professor, Dr. Carmona shares his knowledge and experience in clinical surgery, public health and community medicine with our nation's future doctors. Always in pursuit of more challenges, in 1986, Dr. Carmona joined the Pima County Sheriff's Department as a surgeon and a part-time SWAT team leader. Today, Dr. Carmona is a celebrated Deputy Sheriff. In fact, he has received the honor of ``Top Cop'' from the National Association of Police Organizations, and is one of the most decorated policemen in Arizona. In addition to his service, Dr. Carmona is a motivating community leader. He has stressed the importance of local preparedness, and warned of the dangers of a biological assault long before September 11. After the terrorist attacks, Dr. Carmona recognized the psychological impact of the events on Tucson residents, and coordinated a team of mental health experts to assist them in dealing with the associated trauma. Due to his bioterrorism experience, he was also put in charge of implementing southern Arizona's bioterror and emergency preparedness plans. Although Arizona will surely miss this phenomenal man, and I know he will miss Arizona, in Richard Carmona, our nation will gain an invaluable leader. With his military and law enforcement background, coupled with his demonstrated commitment to public health and community preparedness, Dr. Carmona is extraordinarily, perhaps uniquely qualified to address the needs of our nation as Surgeon General. I urge all of my colleagues to favorably support this outstanding nominee.

Mr. McCAIN. Madam President, I have the floor.

Mr. McCAIN. Madam President, I want to take a few minutes to talk about the failure of the Congress to enact the Andean Trade Preference Act, the importance of this issue in our hemisphere, and the absolute criticality of us acting before we go out for the August recess on the Andean Trade Preference Act. Madam President, America is facing a crisis in its relations with our Latin neighbors. Political instability and a fierce backlash against free market reforms are hobbling friendly democratic governments across the region, with consequences that clearly endanger the democratic and free market tide that has swept the continent in the past decade. Yet partisan wrangling over other issues has prevented Congress from renewing the Andean Trade Preference Act, even though both Houses have approved it. It is time to stop the politics and send the President an Andean trade bill, immediately. Madam President, wrongly, the Andean Trade Preference Act has been linked to the larger issues of trade adjustment authority and other trade issues. I do not know why that is the case.

Mr. McCAIN. Expanded trade policies, including the Andean Trade Preference Act and America's vision of a hemispheric trade area----

Mr. McCAIN. I decline to yield. I remind my colleagues that only a few years ago we in Washington were congratulating ourselves on living in a hemisphere that, with the exceptions of Cuba and Haiti, had embraced freedom and free markets after long years of military rule and statist economic policies. Although there remained deep poverty, aggressive free market reforms were seen as the best way to improve the welfare of people across Latin America.

Mr. McCAIN. Lent momentum to the Latin reform agenda, which produced real gains in people's daily lives and provided a critical base for the consolidation of democratic institutions and free markets.

Mr. McCAIN. Do I have the floor, Madam President?

Mr. McCAIN. I suggest the absence of a quorum.

Mr. McCAIN. I am glad to yield.

Mr. McCAIN

Mr. McCAIN. Thank you, Madam President. It is my understanding we are now in postcloture debate time; is that correct?

Mr. McCAIN

Mr. McCAIN. Mr. President, I regret that the managers are not in the Chamber, but I will proceed with my statement. Regretfully, 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 and are strongly opposed by the Office of Management and Budget. This bill contains over $1 billion in unrequested military construction projects and includes hundreds of millions of dollars for Army and Air Force infrastructure projects relating to Interim Brigade Combat Teams, IBCTs, and C-17 Globemaster aircraft bed-down military construction projects that the Senate Armed Services Committee has neither approved nor authorized for this purpose. There are 29 members of the Appropriations Committee. Only one committee member has not added projects to this appropriations bill. Those numbers, needless to say, go well beyond the realm of mere coincidence. Of 116 projects added to this bill, 91 projects, representing 80 percent of all projects, are in the States represented by the Senators on the Appropriation Committees, totaling over $728.1 million. 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. By adding over $1 billion above the President's request, the Appropriations Committee is further draining away funds desperately needed for transformation. But such short-sightedness is pretty much the norm for Congress. Common-sense 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. But all too often Congress fights these reforms because of home-State politics. As a result, the Defense Department looks elsewhere to find the resources. For example, according to a Baltimore Sun article, ``Pentagon To Consider Large-Scale Troop Cuts,'' the Department is considering cutting nearly 100,000 troops ``to free up money'' for transformation. I would oppose this and we will debate this another day, but I certainly understand the pressure that Secretary Rumsfeld and the Joint Chiefs are under because of Congress' continuing parochialism as evidenced once again by the military construction bill before us. Included in the Senate Appropriations Committee's report are the words: ``The Committee strongly supports the authorization- appropriation process.'' That is news to many of my colleagues. If that statement is true why would over $550 million in military construction projects be added without prior Senate Armed Services Committee authorization. It could be that many of these projects would be acceptable after going through the normal, merit-based prioritization process. But the Appropriations Committee decided to do otherwise. Two rather large additions--totaling $200 million--for large military construction projects for Interim Brigade Combat Teams, IBCTs, facilities and the C-17 Air Mobility Modernization Program are examples of the committee's disregard for the authorization process. The committee report justifies these add-ons on the grounds that ``the war on terror has placed new demands on all elements of the military'' and ``military construction timetables developed prior to September 11 are no longer sufficient.'' War profiting is what it is all about. Because of this, the report continues, ``the committee believes that it is imperative to accelerate the Army and Air Force transformation programs.'' There is no mention of Navy and Marine Corps transformation programs. The committee report leads one to ask how the Navy and Marine Corps got it right and the Army and Air Force missed the boat. The committee's justification for adding $200 million for the IBCTs facilities and new hangars for C-17s, C-5s and C-130s under the Air Force Air Mobility Modernization program is at odds with the facts. The President's budget was sent to the House and the Senate in February--a full 5 months after September 11. Since September 11, the President and his Secretary of Defense have officially forwarded to Congress the Fiscal Year 2002 Supplemental Appropriations bill--which we have not passed--and recently a formal description of how the Defense Department will spend the $10 billion war reserve fund set-aside in the Defense Emergency Response Fund that the President requested for the war on terrorism. Let me ask: did anyone on the Appropriations Committee inform the President that his budget proposal was not ``sufficient''? I know the answer is no. Let me share some critical facts that were left out of the committee report related to the $200 million in additional funding added for these key programs. It is common knowledge that nearly all the IBCTs will initially be stationed in Alaska and Hawaii and will require a significant increase of infrastructure. General Shinseki has supported testing the IBCT concept in Alaska and Hawaii and then expanding the concept elsewhere. However, in putting together the Army budget, the Chief of Staff of the Army, the Secretary of the Army, and the Secretary of Defense weighed all the other Army priorities and decided that their were more critical funding issues than to accelerate an already robust IBCT program and adding $100 million more for facilities construction. Likewise, other facts left out of the Appropriations report related to the $100 million in accelerated funding for the Air Force Air Mobility program should be known: The Air Force did not request this funding; The requirement for accelerating funding is not on the Air Force Chief of Staff's ``Unfunded Requirements List''; Nor does it appear in the Secretary of Defense's Wartime Fiscal Year 2002 Emergency Supplemental Appropriations request; Nor does the requirement to accelerate funding for C-17 hangars show up on the war reserve fund set-aside in the Defense Emergency Response Fund (DERF) that the President recently submitted to Congress as an Fiscal Year 2003 budget amendment for the Department of Defense for expenses relating to the war against terrorism; and Moreover, over 80 percent of the total $1.6 billion military construction projects under the Air Force C-17 Air Mobility Modernization program will be built in just 4 states: surprise, surprise California, West Virginia, Alaska, and Hawaii--how surprising. Funding $200 million for IBCTs and C-17, C-5 and C-130 hangars--as part of a larger 4-5 billion dollar program--was simply not authorized by the Armed Services Committee in its recently passed bill. I attended more than 10 hearings on Armed Services this year, and I cannot remember a single instance in which an argument was made in support of accelerating this funding. Separately, I am at a loss as to the rationale for including in this bill certain site-specific earmarks and directive language. For example, in time- honored fashion, the Appropriations Committee continues to earmark projects under the heading ``Unspecified Minor Construction.'' According to Title 10, Section 2805 of the United States Code, these ``military construction projects are intended solely to correct a deficiency that is life-threatening, health-threatening, or safety- threatening.'' However, I believe that certain earmarks in this Appropriations bill are in violation of this statute, including provisions that would provide: Up to $1.5 million in funding for a storage facility for military police emergency vehicles in Fort Wainwright, AK; Up to $1.5 million in funding for a similar storage facility in Fort Richardson, AK; $1.5 million in funding for a Kinetic Energy Missile Complex at the White Sands Missile Range in New Mexico; $1.5 million in funding for a force protection facility at the Naval Air Station in Corpus Christi, TX; $1 million in funding for a training facility at the Corpus Christi Army Deport in Texas; $1.5 million in funding for a UAV facility at the Fallon Naval Air Station in Nevada; $1 million in funding to replace and bury electrical infrastructure at Lackland Air Force Base in Texas; $1.5 million in funding for a barracks for the Army National Guard in Chillicothe, OH; $1.5 million in funding for Federal Scout Readiness Centers/Armories for the Army National Guard in Alakanuk, Quinhagak, and Kwigillingok, AK; $1.5 million in funding for a maintenance facility for the Army National Guard at Fort Harrison in Montana; Up to $2.5 million in funding for various facilities for the Army National Guard Weapons of Mass Destruction/Civil Support Teams; Up to $1 million in funding for a warehouse for the Air Force Reserve at the Lackland Air Force Base in Texas; $1 million in funding for a Multiple Threat Emitter System, MUTES, Facility for the Army National Guard at the Smoky Hill Range in Kansas; $1.5 million in funding for a Bachelor Officer/Enlisted Quarters for the Army National Guard at Fort Meade in South Dakota; and $1.5 million in funding for an ammunition supply plant for the Army National Guard at Camp Grafton in North Dakota. I could go on and on. Without a doubt, each of these provisions unabashedly expands the definition of unspecified minor construction. Sadly, yet significantly, the American taxpayer is once again at the losing end of such reckless congressional action. I also find objectionable language in this bill requiring that only American firms, or American firms in joint venture with host nation firms, be eligible for architecture and engineering contracts for all overseas projects exceeding $500,000. Similarly restrictive language bans the awarding of any contract over $1 million to any foreign contractor in U.S. territories and possessions in the Pacific, on Kwajalein Atoll, and in countries bordering the Arabian Sea. American firms are among the best in the world; advocating a level playing field for them to compete overseas is appropriate. However, it is both inappropriate and harmful to the best interests of our Armed Forces to mandate that construction projects overseas not be subject to the kind of competitive process that best serves the taxpayer and the service member by providing the best product at the lowest cost. We are waging 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, of course, 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 to 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 thank the President for this opportunity to address the Senate. I ask unanimous consent that the list of unrequested military construction projects that were added by the Appropriations Committee be printed in the Record.

Mr. McCAIN. Mr. President, I ask to be recognized for my 5 minutes.

Mr. McCAIN. Mr. President, I regret that at a time when our defense dollars need to be spent efficiently, we now continue the pork- barreling of the military construction appropriations bill. I yield the floor.

Mr. McCAIN

Mr. McCAIN. Mr. President, may I ask what the parliamentary situation is at this time?

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

Mr. McCAIN

Mr. McCAIN. I will read the last paragraph of Mr. Grove's column. He said: Our society faces huge problems. Many of our citizens have no access to health care; some of our essential infrastructure is deteriorating; the war on terror and our domestic security require additional resources. Attacking these problems requires a vital economy. Shouldn't we take time to think through how we can address the very real problems in our corporations without demonizing and demoralizing the managers whose entrepreneurial energy is needed to drive our economy? I might point out that a number of the proposals Mr. Grove has made are not incorporated in the Sarbanes bill, and if we have to go back and revisit this issue, which I am afraid we might, I hope everyone will pay attention to some of his proposals. As is well known to most of us, Mr. Grove grew up in Communist Hungary, escaped at a very early age. He wrote a marvelous book about it. It is a great American success story. I think he is one of the most respected men in America. He has been at Intel since its inception 34 years ago, and it has become the world's largest chip manufacturer and grown to employ 50,000 workers in the United States, whose average pay is around $70,000 a year. So I hope we will pay attention to Mr. Grove's recommendations, as well as his statements of principle. I thank my colleagues for allowing me to debate the bill, and I yield back the remainder of my time.

Mr. McCAIN. Madam President, I thank the Senator from Nevada. It is time to talk about the bill that is before us which, as we all know, is going to be used as a vehicle to attempt to address the very controversial issue of prescription drug benefits for Medicare. I also thank the Senator from Massachusetts for passing this bill through his committee and reporting it to the floor. I thank especially Senator Schumer who really is the person responsible for this legislation. All of us like to take credit for things in this body. The fact is, the reality is, Senator Schumer brought this issue, certainly the idea for this legislation, to my attention. He is the one who really worked on it. I am grateful he included me in this very important issue. It is important to the people of my State and to all Americans. As we all know, there are large numbers of retirees who have been intelligent enough to move from New York to Arizona, and they are deeply affected by the cost of prescription drugs.

Mr. McCAIN. I thank my friend from New York. Again, I reiterate that he really is the one who has been the leader in this issue and in this legislation. He is also well known for his tenacity. Madam President, first of all, I think we also ought to understand that this issue alone--that of getting affordable drugs to all Americans--obviously, as I spoke of before, particularly seniors and those on fixed retirement incomes are the ones most dramatically affected. That is a critical issue in America today. I don't claim that this bill before us solves the problem of providing prescription drugs for all Americans, particularly seniors, but I do argue that this is a very important step in the right direction in lowering the cost of prescription drugs to all Americans. Now, the drug companies have mounted a massive attack on this legislation. They were the major contributors in recent fundraisers on both sides of the aisle. It is not complicated. The bill is not complicated. It only has three or four provisions. Basically, what it achieves is an ability to do what the Hatch-Waxman bill was intended to do, and that is to make available generic drugs as early as possible, with respect for the rights of those who invested massive amounts of money, in many cases, in research and development and testing, and for them to have an adequate return on their investment. There is no intent here to harm the drug companies. What it is intended to do is to get drugs to the market in the generic fashion so people would only have to pay less. Madam President, Allen Feezor, CalPERS' Assistant Executive Officer for Health Benefits, said: In two of the past three years, pharmaceutical costs have increased more than any other component in our CalPERS health rate. CalPERS is the retirement plan for California employees, which are very large in number. In our Medicare Choice/Supplemental plans, pharmacy trend can account for over 50 percent of the increase in premium rates that we see in our retiree plans one year to the next. The obvious result is very clear. Every year, prescription drugs become less and less affordable to all Americans but especially retirees. It should be noted. He goes on to say: It should be noted that in both our hospital and [prescription drug] trends, a measurable portion of the trend is due to increased utilization by our enrollees, but this cannot take away from the extraordinarily high trends in both pharmacy and hospital pricing. The rising cost of prescription drugs is also playing a significant role in the growing financial burden companies experience as they struggle to provide employees with health care coverage. For example, General Motors, the largest provider of private sector health care coverage, spends over $4 billion a year to insure over 1.2 million workers, retirees and their dependents, $1.3 billion of which is on prescription drugs alone. Even with aggressive cost-saving mechanisms in place, GM's prescription drug costs continue to rise between 15 percent and 20 percent per year. Given the crises in both corporate America and our Nation's health care system, anticompetitive behavior in the marketplace is particularly onerous. That is what we are trying to get at, the anticompetitive behavior. This legislation is intended not to weaken patent laws to the detriment of the pharmaceutical industry, nor is it to impede the tremendous investments they make in the research and development of new drugs. The purpose of the underlying legislation is to close loopholes in the Hatch-Waxman act, and to ensure more timely access to generic medications. This is an important distinction which must be made clear. However, to believe that patent laws are not being abused is to ignore the mountain of testimony from consumers, industry analysts, and the Federal Trade Commission. The Commerce Committee heard testimony regarding the extent by which pharmaceutical companies, including generic manufacturers, engage in anticompetitive activities and impede access to affordable medications. During that hearing, Chairman Muris, of the FTC, testified: In spite of this remarkable record of success, the Hatch- Waxman amendments have also been subject to abuse. Although many drug manufacturers, including both branded companies and generics, have acted in good faith, some have attempted to ``game'' the system, securing greater profits for themselves without providing a corresponding benefit to consumers. The intent of the Hatch-Waxman act was to address the escalating costs of prescription drugs by encouraging generic competition, while at the same time providing incentives for brand name drug companies to continue research and development into new and more advanced drugs. To a large extent, Hatch-Waxman has succeeded in striking that difficult balance between bringing new lower cost alternatives to consumers, while encouraging more investment in U.S. pharmaceutical research and development. In the 15 years since the enactment of Hatch-Waxman, research and development has increased from $3 billion to $21 billion. However, some bad actors have manipulated the law in a manner that delays and, at times, prohibits generics from entering the marketplace. I believe this legislation will improve the current system while preserving the intent of Hatch-Waxman. This legislation is not an attempt to jeopardize the patent rights of innovative companies, nor does it seek to provide unfair advantage to generic manufacturers. Rather, the intent of this legislation is to strike a balance between these two interests so that we can close the loopholes that allow some companies to engage in anticompetitive actions by unfairly prolonging patents or eliminating fair competition. In doing so, we offer consumers more choice in the marketplace. It is imperative that Congress build upon the strengths of our current health care system while addressing its weaknesses. This should not be done by imposing price controls or creating a universal, Government-run health care system. Rather, a balance must be found that protects consumers with market-based, competitive solutions without allowing those protections to be manipulated at the consumers' expense, particularly senior citizens and working families without health care insurance. Madam President, today, there are probably buses leaving places in the Northeast and in the Southwest, loaded with seniors who are going either to Mexico or Canada to purchase drugs, which will probably cost them around half of what they would at their local pharmacy. There are people today, as we speak, who are making a choice between their health and their income. That is wrong. It is wrong. It is wrong when patent drug companies game the system by doing things like bringing suits, which then delays the implementation. It is wrong when the patent drug companies actually pay generic drug companies not to produce a particular prescription drug while they continue their profits, and it is wrong to game this system. So here we are with a bill that with proper debate and perhaps amendments, could be passed by this body and is supported by an overwhelming number of consumer organizations. Even the patent drug companies and the generic drug companies themselves will admit that we need to make reforms. Unfortunately, this statement that I have made and those made by Senator Schumer may be the only debate we have on this legislation which could be passed between now and September. So what are we going to do? What we are really going to do is have a debate over the prescription drug issue, Medicare, and that will bog us down with competing proposals, all of which will require 60 votes, and none of which has the 60 votes. At the end of 2 weeks, rather than passing this bill, which we should, we are going to say, oops, we really cannot come to an agreement, and if we did have an agreement, the House bill is very different, and we would have to go to a conference, from which bills would never emerge. I think the American people deserve better. Why do we not pass this underlying bill, or at least make a commitment to pass this underlying bill, if the competing proposals that will be before us on Medicare prescription drugs do not receive 60 votes? What I am afraid is going to happen is that none of the three will receive 60 votes. Then we will drop the bill and move on to other issues, and I think that is wrong. I think we know that with this approach, this underlying legislation, with some changes, absent, of course, the huge campaign contributions of the drug companies, we could reach an agreement which would be fair to the prescription drug companies, fair to the generics, and fair to the American public, and, indeed, in the view of anyone, including a recent study by the Federal Trade Commission that shows that these abuses are having a direct impact on the increasing costs of prescription drugs to all Americans particularly. I remind my colleagues that we may be doing an injustice and a disservice to Americans for this year by not addressing this particular aspect of it and having it encumbered and bogged down by competing proposals. I believe this legislation is fairly simple. It passed through the committee of jurisdiction with half of the Republican members voting for it. I know Senator Gregg, the ranking member, has some problems with it. I think with debate, amendment, and discussion, we could resolve those concerns that we might have and move forward.

Mr. McCAIN. I would be glad to yield.

Mr. McCAIN. I ask unanimous consent for an additional 5 minutes, for debate purposes only.