John McCain

Mr. McCAIN

Mr. McCAIN. Mr. President, I don't have anything more to say. On behalf of myself and Senator Rockefeller, I offer this amendment. I yield the floor.

Mr. McCAIN

Mr. McCAIN. Mr. President, I thank both the Senator from New York and the Senator from Maine for their courtesy. I ask unanimous consent to set aside the pending amendment and call up amendment No. 1471.

Mr. McCAIN. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. McCAIN. Mr. President, this bipartisan amendment is very simple. It would prohibit bonuses for senior executives at Fannie Mae and Freddie Mac while they are in a taxpayer-backed conservatorship. I am joined in this effort by Senators Rockefeller, Enzi, McCaskill, Johanns, Barrasso, Blunt, Graham, Coburn, and Thune. Since they were placed in conservatorship in 2008, these two government-sponsored entities have soaked the American taxpayer for nearly $170 billion in bailouts. Recently Freddie Mac requested an additional $6 billion and Fannie Mae requested an additional $7.8 billion. That is $13.8 billion more coming out of the pockets of hard- working Americans, many of whom are underwater on their mortgages. I wish to read an article from Politico from back in October entitled ``Fannie, Freddie dole out big bonuses.'' The Federal Housing Finance Agency, the government regulator for Fannie and Freddie, approved $12.79 million in bonus pay after 10 executives from the two government sponsored corporations last year met modest performance targets tied to modifying mortgages in jeopardy of foreclosure. The executives got the bonuses about two years after the federally backed mortgage giants received nearly $170 billion in taxpayer bailouts--and despite pledges by FHFA, the office tasked with keeping them solvent, that it would adjust the level of CEO-level pay after critics slammed huge compensation packages paid out to former Fannie Mae CEO Franklin Raines and others. Securities and Exchange Commission documents show that Ed Haldeman, who announced last week that he is stepping down as Freddie Mac's CEO, received a base salary of $900,000 last year, yet took home an additional $2.3 million in bonus pay. Records show other Fannie and Freddie executives got similar Wall Street-style compensation packages. Fannie Mae CEO Michael Williams, for example, got $2.37 million in performance bonuses. Including Haldeman, the top five officers at Freddie banked a combined $6.46 million in performance pay alone last year, though a second bonus installment for 2010 has yet to be reported to the SEC, according to agency records. Williams and others at Fannie pocketed $6.33 million in incentives for what SEC records described as meeting the primary goal of providing ``liquidity, stability and affordability'' to the national market. I think it is important to ask the question, is it necessary for these bonuses to be provided to these executives when we have men and women who are literally in harm's way, who are compensated far less? Is it possible that there aren't some patriotic Americans who would be willing to serve and head up these organizations and try to get them cleaned up? The primary causes of the collapse of our economy still plague us to this day. I ask unanimous consent that an article from Politico be printed in the Record.

Mr. McCAIN. For decades, the American taxpayer has been the victim of outright corruption and blatant abuse at the hands of Fannie Mae and Freddie Mac. There have been countless warnings over the mismanagement of both Freddie and Fannie over the years. In May 2006, after a 27- month investigation into the corrupt corporate culture and accounting practices at Fannie Mae, the Office of Federal Housing Enterprise Oversight, the Federal regulator which oversees Fannie Mae, issued a blistering 348-page report which stated in part that ``Fannie Mae senior management promoted an image of the enterprise as one of the lowest-risk financial institutions in the world, as ``best in class'' in terms of risk management financial reporting, internal control, and corporate governance. The findings in this report show that risks at Fannie Mae are greatly understated and the image was false. During the period covered by that report, Fannie Mae reported extremely smooth profit growth and had announced targets for earnings per share precisely each quarter. Those achievements were illusions deliberately and systematically created by the enterprise's senior management with the aid of inappropriate accounting and improper earnings management. A large number of Fannie Mae's accounting policies and practices did not comply with generally accepted accounting principles. The enterprise also had serious problems with internal control and corporate governance. These errors resulted in Fannie Mae overstating reported income and capital by a currently estimated $10.6 billion. By deliberately and intentionally manipulating accounting to hit earnings targets, senior management maximized the bonuses and other executive compensation they received at the expense of the shareholders. Earnings management made a significant contribution to the compensation of Fannie Mae chairman CEO Franklin Raines, which totaled--Franklin Raines' bonus totaled over $90 million from 1998 through 2003. Of that total, over $52 million was directly tied to achieving earnings per share targets, which turned out to be totally false. The list goes on and on. Mr. President, I recommend to my colleagues, before I go too much further, this book. The title is ``Reckless Endangerment,'' by Gretchen Morgenson, who happens to be a columnist and writer for the New York Times, and Joshua Rosner. ``How Outside Ambition, Greed and Corruption Led to Economic Armageddon.'' In this book it points the finger directly at Fannie and Freddie. I will quote one part of it: Because bonuses at Fannie Mae were largely based on per share earnings growth, it was paramount to keep profits escalating to guarantee bonus payouts. And in 1998, top Fannie officials had begun manipulating the company's results by dipping into various profit cookie jars to produce the level of income necessary to generate bonus payouts to top management. Federal investigators later found that you could predict what Fannie's earnings-per-share would be at year-end, almost to the penny, if you knew the maximum earnings-per-share bonus payout target set by management at the beginning of each year. Between 1998 and 2002, actual earnings and the bonus payout target differed only by a fraction of the cent, the investigators found. Investigators uncovered documents from 1998 detailing the tactics used by Leanne Spencer, a finance official at Fannie, to make the company's $2.48 per-share bonus payout target. That year, Fannie Mae earned $2.4764 per share. In a mid-November memo to her superiors, Spencer forecast that the company was on track to earn $2.4744 per share, just shy of what was needed to generate maximum bonus payments to executives. She described various ways she could juice the company's profits if need be. It goes on and on, and then it says this: That month, Thomas Nides, Fannie's executive vice president for human resources, warned a swath of top managers that earnings growth was coming in weak as the year-end approached. ``You know that as a management group member, you help drive the performance of the company,'' Nides wrote in a memo. ``That's why your total compensation is tied to how well Fannie Mae does each year. In other words, he was jacking them up, telling them that they have to cook the books some more. It says: The memo achieved the desired result. Fannie Mae executives wound up exceeding their target in 1998 by accounting improperly for low-income housing tax credits the company received. The result: 547 people shared in $27.1 million in bonuses. This was a record--the bonuses represented 0.79 percent of Fannie Mae's after-tax profits, more than ever before in the company's history. The list goes on and on. By the way, executive pay at Fannie Mae was a well-kept secret, and the company successfully blocked some in Congress, such as Congressman Richard Baker of Louisiana, from receiving information about salaries and bonuses paid by the company. It was only after Fannie was caught cooking its books that details of the lavish pay came out. The accounting fraud went undiscovered until 2005, when an investigation by OFHEO unearthed it in a voluminous and detailed 2006 report. OFHEO noted that if Fannie Mae had used the appropriate accounting methods in 1998, the company's performance would have generated no executive bonuses at all. Although a highly kept secret at the time, Johnson's bonus for 1998 was $1.9 million. Investigators returned and it later emerged that the company made inaccurate disclosures when it said Johnson earned a total of almost $7 million in 1998. In actuality, his total compensation that year was more like $21 million. None of these people, to my knowledge, have ever been punished--ever. It is one of the great scandals of our time. What steps were taken by Congress at that time to punish Fannie Mae? None. According to published reports, including Fannie Mae's own news release, Daniel Mudd, the President and CEO of Fannie Mae at the time, was awarded over $14.4 million in 2006 and over $12.2 million in 2007 in salary, bonuses, and stock, and Fannie Mae continued their risky behavior, successfully posting profits of $4.1 billion in 2006. Well, I fully understand that the corrupt individuals who cooked the books in order to meet the targets necessary for maximum executive compensation are no longer in place at Fannie Mae and Freddie Mac. For that, we can be thankful. But let's be clear about one thing: the structure for executive bonuses remains in place. There is still incentives for executives at Fannie and Freddie to meet certain goals in order to be rewarded with millions of dollars in bonuses. I am not suggesting that either one of these GSEs is using fraudulent accounting methods, but the taxpayer remains at risk if an unscrupulous individual or a group of individuals decides to put their own self- interests above that of the American people. It has happened at Fannie and Freddie before, and it can happen again. It is unconscionable. It has been proven time and again that Fannie Mae and Freddie Mac are synonymous with mismanagement, waste, and outright corruption and fraud, and their Federal regulator had the audacity to approve $12.8 million in executive bonuses to people who make $900,000 a year. This body should be ashamed if we let this happen again, especially in these tough economic times. Every day more and more Americans are losing their jobs and their homes, and we are allowing these people to take home annual salaries of $900,000 and bonuses of $12.8 million, all while they ask the taxpayers for $6 billion more in bailout money. Many of my colleagues sent a letter to Edward DeMarco, the Acting Director of the FHFA, asking for an explanation for his decision to award millions in bonuses to executives at Fannie and Freddie. In his response, Mr. DeMarco echoed what has become an increasingly popular theme used to defend the big payouts. Essentially, Mr. DeMarco argues that in order to get the best people in place, we need to pay them outrageous amounts of taxpayer dollars. Well, I don't buy that argument. It is ridiculous to tell the American taxpayer: Look, we lost hundreds of billions of your money, so we need to pay these smart guys millions of dollars of your money so that we don't lose the rest of your money. The American people are smart enough to see through that sham logic and they are angry. As I have previously stated on the Senate floor, I find it hard to believe that we cannot find talented people with the skills necessary to manage Fannie and Freddie for good money--$900,000--without the incentive of multimillion-dollar bonuses. There are many examples of intelligent, well-qualified, patriotic individuals working in our Federal Government who make significantly less than the top executives at Fannie and Freddie, with just as much responsibility. For example, the basic pay for a four-star general is $179,700. Including the basic allowance for housing, that figure rises to $214,980. Chief Justice Roberts makes $223,500 a year. The President's Cabinet Members make $199,700 a year. Today, to add a little insult to injury--or a lot of insult to injury--here is today's story from NPR. Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates. This is the same outfit we are paying all this money to in these bonuses; so they decided to bet against the homeowners of America. Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages. No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are ``walled off'' from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules. Freddie's charter calls for the company to make home loans more accessible. Its chief executive, Charles Haldeman, Jr., recently told Congress that his company is ``helping financially strapped families reduce their mortgage costs through refinancing their mortgages.'' But the trades, uncovered for the first time in an investigation by ProPublica and NPR, give Freddie a powerful incentive to do the opposite, highlighting a conflict of interest at the heart of the company. Do we need this company around? Can't we find something better? In addition to being an instrument of government policy dedicated to making home loans more accessible, Freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance. . . . Freddie Mac's trades, while perfectly legal, came during a period when the company was supposed to be reducing its investment portfolio, according to the terms of its government takeover agreement. But these trades escalate the risk of its portfolio, because the securities Freddie has purchased are volatile and hard to sell, mortgage securities experts say. The financial crisis in 2008 was made worse when Wall Street traders made bets against their customers and the American people. Now, some see similar behavior, only this time by traders at a government-owned company who are using leverage, which increases the potential profits but also the risk of big losses, and other Wall Street strategums. ``More than three years into the government takeover, we have Freddie Mac pursuing highly levered, complicated transactions seemingly with the purpose of trading against homeowners,'' says Mayer. ``These are the kinds of things that got us into trouble in the first place.'' You can't make it up. So it seems to me that the first thing we ought to do, as I and others have recommended, is get these GSEs on the track to going out of business as quickly as possible. Their track record is outrageous. The second thing, let's not give millions of dollars in bonuses to people who are betting against the homeowners of America. I yield the floor.

Mr. McCAIN

Mr. McCAIN. Mr. President, I would like to yield 2 minutes of my 5 minutes to the Senator from Oklahoma. Here we are again, a bill that is 1,221 pages long that not one Member of this body has read. These 1,221 pages represent $915 billion in taxpayer money. Yet here we are with not one amendment. We do, however, have 15 minutes of debate in which to consider a document that is 1,221 pages long, representing $915 billion of taxpayer money, which is filled with unauthorized, unrequested money. Now, I haven't had a chance, like the rest of my colleagues, to look at all of this 1,200-page bill, but we have looked at the defense section. There is $3.5 billion of unrequested, unauthorized funding by the authorizing committee--projects such as this one for Guam. Here are a couple of my favorites. You thought the bridge to nowhere was bad? Well, there are 53 civilian schoolbuses and 53 repair kits for $10.7 million and $12.7 million for a cultural artifacts repository. That is in the name of defense. That is in the name of defense-- schoolbuses and a cultural artifact repository. Here is $100 million for the Next Generation Bomber, which the Air Force says they do not want and they do not need. How about this cockamamie outfit--the Combat Dragon, which will be crop dusters equipped with weapons. Or the C-17s--$225 million additional for C-17s that long ago the military said they did not need. There is $3.5 billion just in the DOD provisions alone. It is outrageous. It is outrageous. I have amendments associated with this bill that will save the taxpayers billions of dollars. But, never mind, because we are going to go home for Christmas. Well, let me tell you, I am going home to a State where they do not have enough in the food banks to take care of the homeless this year. I am going home to a State where half of the homes are underwater. Yet what have we done? We have just wasted billions and billions and billions of taxpayer money on projects that are unneeded, unwanted, and unrequested. This system is broken. This system is broken. We should have taken up these bills one by one, with amendments, with debate and discussion. I want to tell the majority leader and the Republican leader that next year, we will have a plan, a group of us, to say we must do that. We owe it to the taxpayers of America. I yield to the Senator from Oklahoma.

Mr. McCAIN

Mr. McCAIN. I would just mention, I say to my colleague from Oklahoma, the issue of this cutting of the budget of the Government Accountability Office. It seems rather strange to me. And I would be curious, with this cut to the Government Accountability Office, what will the effect be on our ability to have this watchdog organization give us the reports and information we need as far as the functions of government are concerned?

Mr. McCAIN. Mr. President, this is not the way Congress is supposed to work. Authorizing committees exist to provide specific congressional approval of Federal spending. Appropriations committees and subcommittees exist to take the available Federal dollars and allocate them to programs consistent with the authorizations that have been provided by the authorizing committees. In no way do appropriations committees have the legitimate authority to override the specific direction of authorizing committees when those authorizing committees have spoken to a matter and denied authority for a specific type or level of funding. This is why the approval rating of Congress is in single digits. The American people have seen through this. They see this kind of abuse and waste and they have had enough of it. If you don't understand the rise of the tea party, you can start by looking right here. It is not as if this issue was somehow hidden from the leadership of the Appropriations Committee. I wrote to the chairman and ranking member of the Appropriations Committee. Let me give a few examples of what the Appropriations Committee has done. There is a program called MEADS--the Medium Extended Air Defense System. The program was supposed to have been terminated as originally proposed in the Senate version of the bill. The Defense appropriations portion of the bill is at $390 million, nearly the entire $406 million requested. We found out the Appropriations Committee was going to fund the program, and I felt compelled to ensure the final Defense authorization conference report prohibits any funding beyond 2012. Under the requirements imposed by the Defense authorization conference report, this year's funding will be restrained by prohibiting the Department from spending more than 25 percent until the Secretary of Defense provides a plan to either restructure the program in a way that requires no additional funding or terminates the program. So we wanted to get this report from the Secretary. But what did the Appropriations Committee do? The full $406 million. I think my colleagues should understand, they have decided to never put this system--the Medium Extended Air Defense System--into operation. They want to have a corporate memory, a memory of what they have learned in spending what ends up to be a couple of billion dollars. The Next-Generation Bomber. The President asked there not be money proposed for the Next-Generation Bomber, but the appropriators chose to add $100 million--$100 million. This is money for the Next Generation Bomber that was not requested by the Air Force nor was there any testimony by the Air Force leadership, either civilian or military, in support of this additional huge addition in funding. It magically appeared here. This morning, I tried to find out if this money would be wisely spent, and the answer is no. We called the Air Force Chief of Staff. They said they didn't request the funding. They do not want it. The money is ahead of need, meaning it could not be applied to the program in an effective or efficient manner. The analysis of alternatives, which helps determine what the capability of the bomber should be, will not be completed for another year and a half. The capabilities requirement document, which is key to ensuring the new bomber design is stable--which is needed to determine if increased taxpayer dollars should be invested in the new bomber--is not complete and will not be complete for a couple of years. Finally, they wanted to use this money to sustain the bomber force they have. So why? Why? Why would we add $100 million when there is absolutely no way it could be used? Well, I can only say there are reasons for it. I will not make allegations, but it is not magic. It is not something that appears out of thin air. There is a program called Combat Dragon. Of approximately 100 unrequested and unauthorized additions above the President's budget request found in the appropriations bill, one of the more interesting ones is a $20 million allocation for an obscure aircraft program called Combat Dragon II. The name is interesting. Sounds pretty exciting. You won't find it in the President's budget request. It didn't appear in our authorization bill. So I asked my staff to find out what happened. The purpose of the program: Combat Dragon II is to lease up to four crop-duster-type aircraft and to outfit them with machine gun pods, laser-guided bombs, rockets, and air-to-air missiles. I asked if this request was justified, vetted, approved in any way. The answer was no, no, no. There is no urgent operational requirement for this type of aircraft. After a little investigation, we found this aircraft lease will not be--surprise, surprise--competitively awarded. As such, it is effectively earmarked for a particular aircraft manufacturer that has the corner on this particularly obscure part of the aviation market. The C-17. The Defense appropriations bill adds $225 million--only $225 million--for an unrequested, unauthorized C-17 aircraft that no one in the U.S. Air Force or the Pentagon thought we needed. According to every strategic planning document, the Air Force has an excess capacity of large cargo aircraft, and the Air Force already has 222 C- 17 cargo aircraft and more than 80 C-5s. The key reason for an overage of large cargo aircraft is because the Appropriations Committee over the past several years added 44 C-17s that were not authorized--that we neither needed nor could afford--at a cost of $14 billion above the Department's request. The OMB, five Secretaries of Defense, the Commander of Transportation Command, and the current Secretary of the Air Force have all unanimously stated they do not need nor can they afford to operate any more C-17 aircraft. In fact, the President appealed to the Congress and said the Nation cannot afford any more. You would think after $14 billion and 44 C-17s, averaging over $250 million each, that would be enough of an earmark. Obviously, not so for the Appropriations Committee. There are others in here. Some of my old favorites. There is $25 million for unrequested helicopter upgrades, an increase to the Civil Air Patrol Program of $7 million, unrequested, unauthorized; $273 million in unrequested, unauthorized research on everything from Parkinson's disease and HIV to alternative energy and nanotechnology. Speaking of alternate energy, the appropriators tucked unrequested, unauthorized funding throughout a certain division of the bill, and $130 million in ambiguously named ``alternative energy research'' is scattered for the same sort of programs that brought us the recent achievement of the Department of the Navy, which proudly announced the purchase of 450,000 gallons of alternative fuels for $12 million. My friends, that equates to $26 a gallon. I am certain our constituents will be glad to know their tax dollars are now going toward paying $26 a gallon for aviation fuel. But, no, no, they need more money--$262 million in unauthorized Navy research and development programs. The list of Navy adds is eerily similar to the Army's, and as you would expect, it covers a familiar set of Member interest items--nanotechnology, alternative energy, and giveaways to home-State interests. There are increases for Space Situational Awareness. I repeat, $50 million in increases for Space Situational Awareness in two funding lines--just two lines--with no justification. No argument for it. Maybe it is good. It may be good, but we won't know. We won't know for months and months and months, and maybe years. For those who are interested in the compelling national security issue of space situational awareness, you will be glad to know $50 million of your tax dollars is going to be spent there. The budget requested $86 million for Operationally Responsive Space. This bill adds $26 million more, just for fun. The Armed Services Committee authorized, and the Congress will soon appropriate, some $290 million for research into post-traumatic stress disorder, prosthetics, blast injury, and psychological health. These are critical to improving our actual battlefield medicine. Yet once again, the appropriators inserted unrequested money for medical research, this time to the tune of $600 million. Let me remind my colleagues that these unrequested projects are funded at the expense of other military priorities. I agree that research on multiple sclerosis is necessary, and Alzheimer's and cancer. But why should it have to come out of the Defense funding? I will tell you why it does. It is the same reason why Willie Sutton robbed banks. When they asked him why, he said, that is because the money is there. So this money, which may be meritorious to spend on Alzheimer's and cancer and other medical issues, should not come out of the Defense appropriations bill. Of course, the Guard and Reserve always come in and get additional money. They got $1 billion in unrequested, unauthorized funding for ``miscellaneous equipment.'' I repeat: $1 billion for ``miscellaneous equipment.'' I am sure certain States on the appropriators' short list will be very pleased to have the money directed their way. I am not so sure about the taxpayers. Some have merit, some don't. None of the ones I talked about were requested. And this is just in Defense. The tragedy of all this is, except for the Senator from Oklahoma and myself and a few others, all this will slide through and the American people--obviously, the taxpayers--will pick up the tab. We won't have a chance to address the issue of the bonuses that have gone to the executives of Fannie Mae and Freddie Mac that have cost the American citizens so many hundreds of billions of dollars. We are going to let these people--because this won't be appropriated--we are going to let them take home annual salaries of $900,000 and bonuses of $12.08 million, while they ask the taxpayers for more bail-out money. Mr. Edward DeMarco says that is the only way you can get good people to serve the country. I am sure the men and women in the military would be interested to know that is what is required to serve. The base pay of a four-star general is $179,000. The Chief Justice of the U.S. Supreme Court makes $223,000. But Mr. DeMarco feels people who are working at Fannie Mae and Freddie Mac deserve $900,000, and millions of dollars in bonuses. After all, they are doing such a great job. The Alaska Native corporations is one of my favorites. We need to be especially mindful of how taxpayer dollars are appropriated. The Army Corps, in light of a recent Justice Department investigation, revealed what prosecutors called one of the largest bribery scandals in U.S. history involving Army Corps contracting officials and the contracting director of Eyak Technology, an ANC-owned company. In the authorization bill, we are trying to have all of these small business funding issues, no matter whether it be in an ANC or others, looked at. And, of course, we won't be able to address the Solyndra issue. Private investors will collect the first $69 million that can be recovered from the company, with taxpayers placed in second position by the Department of Energy. If we had been able to amend this bill, I would have worked with my colleague, Dr. Coburn, to restore much needed funding to the Government Accountability Office. In a recent report released by Dr. Coburn, he highlights that ``just this year GAO identified hundreds of billions of dollars of duplicative and overlapping programs that, if addressed by Congress, could both save money and improve services for taxpayers. For every $1 spent on the GAO, the agency provides $90 in savings recommendations. Yet, instead of adopting those good-government reforms, the Senate Appropriations Committee has responded by proposing dramatic budget cuts to the GAO.'' I don't want to go through all this pork that I just described again, but we can afford all that and yet we are going to cut the only watchdog organization that really gives us an objective view of what we do here in Congress. I am sure that it is a coincidence. So here we are again. Here we are again, the same thing as last year, the same thing for years--a few Members of the House and Senate making decisions on hundreds of billions of dollars, perhaps over $1 trillion, and we, the other Members, because of our desire--understandable--to leave this body and return to our homes for the holidays, after a few hours of debate, no amendments, no changes in the bill, not having had the ability to even examine it, we will be voting. I ask unanimous consent to engage in a colloquy with the Senator from Oklahoma.

Mr. McCAIN. Mr. President, I rise to discuss the Omnibus appropriations conference report that I guess will be before this body at the pleasure of the members of the Appropriations Committee. I call my colleagues' attention to the size of this bill. There are 13 agencies of government, all appropriations bills, and none of this, because of the pressing issues of the calendar, will be open to any amendments--no amendments regarding all these functions of government and a cost of, in this particular bill, it is $915 billion. These are 9 appropriations bills of the 12. This contains $915 billion that we will probably be considering, and because of the fact that we all have to get out of town--and I am one of those--we will vote sometime tomorrow, and we will be able to tell our constituents we have completed our task for the year, at least as far as funding the government to continue--as we seem to threaten to do every year, although I am not sure people are as frightened as they used to be. This bill before me is 1,221 pages long and contains funding for nine of the annual appropriations bills, for a grand total of $915 billion. If you add the three appropriations bills already enacted, we are going to spend $1.043 trillion. That is a fantastic improvement because last year it was $1.1 trillion. So I am glad our constituents, whom we promised, when some of us, such as myself, ran in 2010 for reelection, that we would get this $15 trillion debt under control--and we go back to Washington and eliminate the reckless and out-of-control spending, I am sure they will be pleased to know that instead of $1.1 trillion, we are now down to $1.043 trillion--a reduction of approximately 5 percent. We can get a better deal than that at the Macy's Christmas sale. Of course, not to forget the earmarks--here it is. I am confident no average Member of the Senate--what I mean by that is not a member of the Appropriations Committee has had a chance to peruse this hernia-inducing piece of legislation. If it sounds like I am a little cynical and a little angry, it is because I am, and the American people are cynical and angry. There are 535 Members of Congress. All of us are sent by our constituents to represent them. But I think the American people and our constituents should know this is a report on a bill that is signed by 37 Members of the House and 17 Members of the Senate. There are 535 Members, and these are the ones who put this together. It is full of hundreds of earmarks, pork, unnecessary spending, and projects in the defense portion of the bill, which I will be talking a fair amount about, which are neither requested nor needed by the men and women serving in the military. It is full of things I will talk about later on, such as artifact museums for Guam, medical research--this is in the Defense appropriations bill and has nothing to do with defense. Then we begin to wonder why the American people have such a low opinion of our performance in our Nation's Capital. I saw a poll that says it is as low as 9 percent. Hopefully, that is not representative-- maybe it is a 10-, 11-, 12-percent approval rating. We were debating a bill last year that had $1.1 trillion and contained 6,488 earmarks that totaled $8.3 billion. Now we have a bill that is $915 billion, and this year we have no traditional earmarks, but there is $3.5 billion in unauthorized spending in the Department of Defense portion of the bill alone--the Defense appropriations part of it is $3.5 billion, on which there has never been a hearing, and it has never been considered by the Armed Services Committee. If it was, it was rejected. So we have $3.5 billion just in the defense part of the bill. Nobody wanted it or asked for it, neither the military, nor the services, nor was there a hearing. They added $3.5 billion in the Department of Defense alone. I think the men and women in the military deserve better than some of these earmarks that I will talk about. Here we are, we are going to rush and beat the clock, and we haven't even moved to this piece of legislation yet. In case some of our constituents don't know, a call will be made to everybody saying please agree to a few hours' time agreement so we can vote tomorrow and we can all go home, and we will. There will not be a single amendment debated and voted on, on this bill on this floor. I would like to say we didn't see it coming, but the fact is we did see it coming. In keeping with the regular order and legislating requirements of the Senate, the Armed Services Committee--of which I have been a proud member for many years--scheduled and conducted more than 70 hearings, vetted the President's budget request, and reported a bill out. Seven months later, we moved to the floor of the Senate and we did authorize funding and hundreds of millions of dollars and the appropriators decided they knew better. We have a fundamental problem in the Senate, and we are unable to engage in the process of authorizing prior to the regular appropriations. What is the outcome? A handful of people--all good, honest, decent people, I am sure--and unelected staff disburse hundreds of billions of dollars, often in a manner that directly contradicts the will of the authorizers--those who are entrusted in their Committee assignments to authorize what is necessary to defend this Nation. So here we are at the eleventh hour ramming through a measure so we can get out of town for the holidays. I will talk about some of the provisions, most of which are in the Defense appropriations portion of this conference report. Section 8083 of the bill permits the Secretary of Defense to transfer operations and maintenance funds. Operations and maintenance funds are supposed to buy the gas and the spare parts--the things that keep the military machine moving. That is what it is. So $33 million goes to Guam, and this funding is in direct contradiction of the explicit direction that was in the conference report that prevented this because we knew it was coming. If this omnibus bill were subject to amendment, I would immediately seek to strip the funding from this bill. Let me be clear. This funding I am talking about for Guam is a ``bridge to nowhere.'' The money, in part, is to provide the Government of Guam funds to buy 53 civilian schoolbuses. They put money in the Defense bill for 53 schoolbuses and 53 repair kits for the buses for $10.7 million. That is to buy schoolbuses and repair kits for Guam. Why? Why would we want to do that? Their reasoning is because we are redeploying marines from Japan. But we have paused that redeployment in the authorization bill because we don't know exactly how to do it. So we are pausing the redeployment of marines; meanwhile, the appropriators move forward and put $10.7 million in to buy civilian schoolbuses, and not one single marine, sailor or airman has been assigned to Guam as part of the intended buildup that would justify in any way using that money. What else are we buying with this $33 million? Well, $12.7 million is intended to be used for a cultural artifacts repository. I am not making that up--$12.7 million of your tax dollars is buying a cultural artifacts repository in Guam, in the name of the redeployment of the U.S. marines from Japan, which is not taking place. They claim it is related to artifacts that will be dug up during the major military construction projects that have been planned for Guam as part of the buildup. But with the agreement of the Pentagon, we have put it on hold. I guess it is important when you are doing a military construction project to preserve the artifacts. The money intended for this cultural artifacts repository is, at best, early, and much less if it were ever needed. So here we are with an investment of at least $33 million on a ``bridge to nowhere'' to hold artifacts that will never be dug out of the Earth. The money in this Defense appropriations bill for this cultural artifacts repository is actually going to be spent to build a 20,000- square-foot museum, most of which will be used for the storage of existing artifacts and existing administration, completely unrelated to the major military construction projects associated with the buildup on Guam. They get the benefits of $12.5 million in Federal largess for a new museum, which otherwise they could not get. I would like to say there are many citizens of Arizona who are out of work, whose homes have been lost, and who would benefit from any sort of action by the Federal Government--the holiday season is approaching in my State and all over America where there is not enough money to fund the food banks, and we are going to spend money on schoolbuses and cultural repositories in Guam. That is not the end of the story. This initial funding grant to Guam of $33 million includes $9.6 million for the first phase of a mental health facility. They claim that is somehow related to the proposed military buildup on Guam. I am still trying to sort that one out. Without one additional marine or his family being stationed on Guam, how does a proposed buildup not happening for years help with a mental health facility on Guam? It might not surprise you to learn this money for a new mental health facility has nothing to do with any marines coming to Guam but is required to satisfy a current Federal injunction that mandates the construction of a new facility. So take it out of Defense. Take it out of the hardware and the operations and maintenance our men and women in the military need. Our committee did the research for these projects. We reviewed the working papers of the Department of Defense's Economic Adjustment Committee and found this funding would not go to its priorities and decided, as a conference, not to support the authorization. Mr. President, I ask unanimous consent to have printed in the Record the Working Papers Excerpt of DOD's Economic Adjustment Committee.

Mr. McCAIN. I would ask my colleague, I identified $3.5 billion unrequested, unauthorized, no-hearing-on projects--$3.5 billion. Since Dr. Coburn has taken a broader view of things, I wonder how many billions he would estimate totally there are of these unauthorized, unrequested projects in the entire bill.

Mr. McCAIN. May I also point out, as my colleague did, that all of us as Members of the Senate are guided to some degree by seniority, which means assignment and ranking in various committees. But we should have an equal opportunity to represent our constituents and our priorities and our views and our goals. This document was signed by 37 Members of the House and 17 Members of the Senate, so really this system hands the important decisions that all 535 Members of the House and Senate are responsible for over to 37 in the House and 17 in the Senate. Neither the Senator from Oklahoma nor I had a single time to discuss with our colleagues all that is in this bill. Not a single time did we have a chance to say: Wait a minute, let's not put in that cultural repository for Guam. Not a single time did we have a chance to say: Hey, this Combat Dragon II is not really something we need to fund. You know, the Civil Air Patrol is really a great outfit, but we don't think we need to add $7 million in these difficult times. We think helicopters needed to be upgraded, but why should we add $25 million to helicopter upgrades when the military says we don't need $25 million for helicopter upgrades? This is what is wrong with this system.

Mr. McCAIN. So the system now has deteriorated to the point where these decisions are made--by the way, I would like to correct the record. There are 37 total Members in the House and Senate, so 37 out of 535 who would be making these decisions. So we really are in a kind of situation where we come down and all we can do is complain about it. That seems to me a deprivation of all of us who are not in that group of 37 of the ability to make our input into the future of this country. I do not think the American people are going to stand for it too much longer. I really don't. I say to my colleague, I think a couple of things are going to happen. I think in the next election--I say this to all my colleagues. I think in the next election no incumbent is safe. But I also say, one way or another there is going to be a third party in the political arena of the United States. We cannot keep doing these things, Republican and Democrat, without sooner or later a response by the very well-informed electorate--thanks to devices like this. I believe we have done this long enough. For long enough the American people, who now are in more dire economic straits than they have been since the Great Depression, are fed up with spending a few million dollars on schoolbuses in Guam that have nothing to do with our Nation's defense. I hope the Senator from Oklahoma will not give up. I certainly will not. But I think, frankly, the American people deserve a lot better than they are getting out of this process. If they are cynical and if they are angry and if they are frustrated, they have every reason to be so. I yield the floor. Mr. President, I suggest the absence of a quorum.

Mr. McCAIN

Mr. McCAIN. Mr. President, I ask unanimous consent to speak for as long as I may consume.

Mr. McCAIN

Mr. McCAIN. Mr. President, shortly we will begin debate on the conference report of the Defense authorization bill, the 50th year the Congress of the United States has authorized the equipment, the programs, and all that is necessary to defend this Nation's security. I want to talk today about a very important aspect of our national security, and that is the problem we are having with out-of-control spending which has, in its own way, endangered our national security as almost any threat that we face. It is unsustainable, it is unacceptable, and it is a stain on our Nation's honor. Fifty years ago, on January 17, 1961, Dwight David Eisenhower bid farewell to the Nation as the President of the United States. At the heart of his farewell address was a warning, one keenly insightful in its sense how, in a way new to the American experience, an immense military establishment and large arms industry had developed in the 20th century post-war period. While acknowledging the need for a strong national defense, President Eisenhower called for the American people to understand the grave implications of this new aggregation of political and industrial power. In particular he warned: In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. The 50th anniversary of President Eisenhower's address gives us an opportunity to carefully consider have we considered President Eisenhower's admonition. Regrettably and categorically the answer is no. In fact, the military-industrial complex has become much worse than President Eisenhower originally envisioned. It has evolved to capture Congress. So the phenomenon should now rightly be called the military-industrial- congressional complex. On July 16, 2009, in a speech to the Economic Club of Chicago, then- Secretary Gates described the military-industrial-congressional complex in this way: First, there is the Congress, which is understandably concerned . . . about protecting jobs in certain states and congressional districts. There is the defense and aerospace industry, which has an obvious financial stake in the survival and growth of these programs. And there is the institutional military itself--within the Pentagon, and as expressed through an influential network of retired generals and admirals. . . . One aspect of the military-industrial-congressional complex I have focused on considerably over the last few years is its role in congressional earmarks, congressional pet projects, unwanted by the administration but amounting to billions of dollars annually that frequently take on a life of their own in a way that continues to waste taxpayer resources for years and sometimes decades. In the military- industrial-congressional complex, earmarks are the currency of corruption. Another manifestation of the military-industrial-congressional complex I have called attention to is the revolving door that exists between the Pentagon and the defense industry. In 1969, then-Senator William Proxmire said this about the revolving door in the context of defense procurement: The easy movement of high-ranking military officers into jobs with major defense contractors and the reverse movement of top executives in major defense contractors into high Pentagon jobs is solid evidence of the military-industrial complex in operation. It is a real threat to the public interest because it increases the chances of abuse. . . . How hard a bargain will officers involved in procurement planning or specifications drive when they are one or two years from retirement and have the example to look at over 2,000 fellow officers doing well on the outside after retirement? Probably the most recently publicized example of the revolving door between the Department of Defense and private industry and the prevalence of the military-industrial-congressional complex in the Department's planning and procurement processes is its mentorship program. In its most recent story in a series exposing this program, USA Today reported that the Air Force allowed a retired general officer who was then serving as an executive in the Boeing Company to participate as a mentor in a war game involving the aerial refueling tanker that Boeing was at the same time competing to build for the Air Force under a multibillion dollar procurement program. Over the last 2 years, I have exercised keen oversight of the mentorship program, which I understand has been essentially shut down under the weight of newly promulgated public disclosure requirements. In other words, former general and flag officers serving as Department mentors prefer to exit the program rather than publicly disclose their corporate affiliations and compensation. I ask unanimous consent my most recent investigative letter on the issue be printed in the Record.

Mr. McCAIN. The aspect of the military-industrial-congressional complex I would like to focus on relates to how the Pentagon buys its very largest weapons systems. That covers the top 100 or so of the Defense Department's weapons procurement programs into which taxpayers have invested to date about $1.7 trillion. In particular, I would like to focus on how the military-industrial-congressional complex has kept even some of the most poorly performing programs funded, siphoning off precious resources even while they go over budget, face years of schedule delays, and fail to deliver promised capability to the war fighter. To be clear, the military-industrial-congressional complex does not cause programs to fail, but it does help create poorly conceived programs, programs that are so fundamentally unsound that they are doomed to be poorly executed. It does help keep them alive long after they should have been ended or restructured. By ``poorly conceived,'' I mean major programs that are allowed to begin, despite having insufficiently defined requirements, unrealistic cost or schedule estimates, immature technology or too much manufacturing and integration risk or unrealistic performance expectations. By ``poorly executed,'' I am referring to programs that poorly perform because of, among other things, unanticipated design, engineering, manufacturing or technology problems. These sorts of programs should never have been started to begin with or should have been significantly restructured or terminated at the end of the day. Yet through the influence of the military-industrial-congressional complex, they are allowed to enter the defense procurement process and to persist, often under the guise of a concurrent development acquisition strategy and executed under cost-plus contracts. Specifically, the military-industrial-congressional complex helps ensure that poorly conceived programs get on rails and stay there with production money when they are supposed to be still in development. For industry and many of their sponsors in the Pentagon and on the Hill, that is desirable because it is far more difficult to restructure or terminate a production program, even one that is performing poorly, than one that is in development. In the military-industrial- congressional complex, if excessive concurrency is a drug, then the cost-plus contracts used to facilitate it are its delivery vehicles. Over the last decade or so, what I have described has resulted in a massive windfall for industry. But for the taxpayer and the war fighter, it has been an absolute recipe for disaster. With the Federal budget deficit having hit $1.3 trillion for the 2011 budget year and facing the fact that the defense budget will likely not grow to any significant extent in the near term, we in Congress must be mindful of how the military-industrial-congressional complex can negatively affect decisions to buy and keep major weapons systems. How does the military-industrial-congressional complex help create problem programs and keep them going long after they should have been canceled or restructured? A review of some of the problems with the original Air Force tanker lease deal is instructive. From that first attempt by the Air Force to replace its aging airborne tanker aircraft, which started nearly a decade ago, we now know, very early in the planning of a major defense acquisition program, senior officials from industry and the relevant services work with senior Members of Congress to ensure that the economic and therefore political benefits of the programs would be distributed widely among key congressional States or districts. That ensures long-term political buy-in and support. How much could the military-industrial-congressional complex's negative influence ultimately cost taxpayers? Once again, consider the original tanker lease deal as just one example. That deal would have had new aerial refueling aircraft developed under a cost-plus contract, which exposes the taxpayer to and protects the contractor from the negative impacts of cost overruns and schedule delays. Once developed, those new tanker aircraft were supposed to be leased--leased, not bought outright--from a sole-source contractor, as provided under a multibillion dollar earmark stuck in a defense appropriations bill, without having been vetted by the administration or reviewed by the relevant congressional oversight committees. That unusual acquisition strategy was based on a case that the Air Force presented at that time, which the deal's congressional sponsor roundly endorsed, that the legacy fleet of tankers needed to be replaced urgently. Needless to say, that case was proven false. There can be no doubt that the original tanker lease deal was a classic creation of the military-industrial-congressional complex. When we compare the likely costs of the sole-source tanker lease with the costs of the recently concluded tanker competition, which calls for fixed-price development and a purchase under full and open competition, the difference is dramatic. According to recent analysis by the Department of Defense, the original tanker lease deal would have, over the lifecycle of the aircraft, cost taxpayers billions of dollars more for a less-capable airplane. Those billions that could have been lost under the original tanker lease deal are effectively the cost associated with the military-industrial- congressional complex when it is allowed to run unchecked and unchallenged, and they are, particularly in the current fiscal environment, utterly unsustainable. The lesson of the original tanker lease deal is that the powerful combination of interests that comprise the military-industrial- congressional complex can be strong enough to both give birth to procurement programs that should never have been started in the first place and nurture programs that should have been killed or fundamentally restructured early on to the grave detriment of the taxpayer and our service men and women. While over the last couple years former Secretary Gates ended some of the most poorly performing major programs in the defense enterprise, the situation remains serious. The new national military strategy calls the growing national debt a ``significant security risk,'' and as the Government Accountability Office noted in its March 2011 report, since 2008, the total acquisition costs of the Pentagon's major defense acquisitions programs in its current portfolio has increased by $135 billion, about half of which is attributed to pure cost growth and the other half due to cuts in the intended number of weapons we plan to buy. It should not come as a surprise that as a result, about half the Pentagon's very largest weapons procurement programs exceed cost- performance goals agreed to by the Pentagon, the Office of Management and Budget, and the Government Accountability Office. In fact, the Government Accountability Office's March report found that about one- third of all major weapons systems since 1997 have had cost overruns of as much as 50 percent over their original projections. Noting that ``the costs of developing and buying weapons have historically been, on average, 20 to 30 percent higher'' than Pentagon estimates, the Congressional Budget Office recently projected that in addition to health care, higher costs for weapons systems will increase the Pentagon budget by about $40 billion over the next 5 years. Congress and current leadership at the Department of Defense have tried to attack these problems, but they have not been successful in changing the prevailing culture yet. For example: After several attempts to change the Pentagon's buying approach--which, as CBO noted rarely, if ever, correctly predicts how much a program will likely cost--the Weapons Systems Acquisition Reform Act of 2009 created the Office of Cost Assessment and Program Evaluation to analyze the cost of new programs and why they fail. It also required the Pentagon to keep closer tabs on technology maturity and emphasized testing new weapons before they entered production. As a result of that act, some newer major programs are not making the mistake of relying on overly optimistic cost estimates provided by the contractor or staking too much production money too early--before critical technologies, design drawings, and manufacturing processes have stabilized and matured. But even this new law will be judged well only if the Pentagon can demonstrate some success with its largest acquisition programs, even those that went into development before the law's enactment. The F-35 Lightning II Joint Strike Fighter Program is a good example of one such program. Last week I spoke at length about this program, so today I will keep my remarks about it brief. Currently, the F-35 is the Pentagon's largest weapons procurement program. It was originally intended as a revolutionary, affordable solution to the Navy, Marine Corps, and Air Force's tactical aviation needs for the future. With three different versions of the aircraft for each service and commonality in design among those versions, the Pentagon sold this program as a fifth generation strike fighter that would--more so than any other major defense procurement program--be cost effectively developed, procured, operated, and supported. According to the Pentagon, the program ``was structured from the beginning to be a model of acquisition reform.'' This has not been the case. When the program was first launched, the Pentagon planned to buy over 3,000 Joint Strike Fighters, but the development effort was performed so poorly that we can now only afford to buy 2,457. Given recent delays in restructuring rules, that number could go down further. To date, the total cost to buy all of the aircraft as intended has grown by about $150 billion to $385 billion. The cost of each Joint Strike Fighter is now 80 percent over the original baseline estimate, and that is expected to increase. It would be hard to buy a car at 80 percent over the original sticker price without looking for major tradeoffs. Currently, the Joint Strike Fighter costs an average of about $133 million each, and that is without an engine. We have invested about $56 billion in R&D costs in this project through fiscal year 2010. Over the nearly 10-year life of the F-35 program, Congress has authorized and appropriated funds for 135 of these aircraft. But as of today, the program has delivered just 20 flying aircraft with most of them being used for testing. Early production aircraft just started to be delivered a few months ago--3 years late. The main problem with the program has been this: Before the Pentagon went all in on the F-35 program, it never understood the risk associated with developing and integrating the F-35's critical technologies and manufacturing each version of the plane, much less how much money and time would be needed to overcome these risks. So ever since the Pentagon awarded Lockheed Martin a contract to develop the Joint Strike Fighter contract in 2001, and despite having signed several follow-on contracts for blocks of production aircraft, the program has effectively been stuck in development. Experts call what the Pentagon has been trying to do ``concurrent development.'' I call it a mess. Using a concurrent development strategy to procure high-risk weapon systems that promise generational leaps in capability when, one, their underlying design is unstable; two, the risks associated with developing their critical technologies and integration are not fully known; and, three, their manufacturing processes are immature is a very bad idea. Trying to do this under cost-plus contracts is a recipe for disaster. In July 2011, the Department revealed that the cost for the first three lots of early production aircraft amounting to 28 aircraft bought under cost-plus contracts exceeded by about $1 billion the original estimate of about $7 billion. The Department also indicated that the taxpayers' share of this overrun amounted to $771 million. The program's prime contractor would absorb approximately $283 million. By the way, that program's prime contractor, Lockheed Martin, declared record profits of $3 billion last year. Moreover, just a few days ago, the Department indicated the cost of the fourth lot of the early production aircraft bought for the first time in the program's history under a fixed-price-type contract may be as high as 10 percent over that contract's $3.46 billion target cost. This is a $350 million overrun with only about 40 percent of that work completed to date. This suggests the costs of the program have still not been contained despite 2 years of concentrated effort by the Pentagon to bring costs under control. Just last week the executive officer of the Joint Strike Fighter Program indicated in a media interview that the Joint Strike Fighter Program needs to slow down production and deliveries of the aircraft. He attributed this to the need to open the aircraft and install fixes to numerous structural cracks in ``hot spots'' that the program has discovered in the plane over the last year or so. He estimated the work needed to remedy these cracks could add an additional $3 million to $5 million per aircraft. From these comments, I understand the overlap between development and production, called ``concurrency,'' that persists in the program is still too great to assure taxpayers they will not have to continue paying for costly redesigns or retrofits due to discoveries late in production. My frustration--and, more importantly, the taxpayers' frustration-- with the chronic failure of this program to deliver required combat capability on time and on schedule cannot be overstated. This frustration is conveyed well in a provision in the conference report accompanying the Fiscal Year 2012 National Defense Authorization Act that would require that the sixth lot of early production aircraft be procured on a firm fixed-price basis. Apparently, the fixed-price contract used for the fourth lot, which provides the overruns between a ``target cost'' and ``ceiling price'' be shared between the government and prime contractor is failing to incentivize the contractor to control its costs, so tougher measures are warranted. We should all hope they work. Another example is the Marine Corps' Expeditionary Fighting Vehicle, the EFV. The Marine Corps and General Dynamics originally promised that the EFV was going to be the most advanced and operationally effective amphibious assault vehicle ever produced. It was originally designed to be an over-the-horizon platform to protect the Navy ships from mines and shore-based missiles and maximize our flexibility and the enemy's difficulty in planning a defense. The EFV was intended to be capable of being launched from a ship up to 25 miles away from shore and speed to a landing zone at 25 knots. Once ashore, the EFV would then be able to travel at speeds equal to those of the Abrams tank. The Marines were originally supposed to buy over 1,000 of these vehicles, which were to be initially operable by 2010, at a total cost of $7.3 billion. Needless to say, things did not turn out that way. Prototypes of the EFV were tested and were about 1,900 pounds too heavy and blew past original cost estimates for research and development. Testing also revealed significant problems in terms of limited visibility, excessive noise, breakdowns in the loading system of the 30-millimeter gun, and concerns about the hull's vulnerability to IED attacks. From its start in 1996 to about 2007, the Marine Corps and General Dynamics said, ``Don't worry.'' But at the end of the day, the program's cost rose by 55 percent to over $14 billion, and initial capability was pushed back to 2016. At the start of this year, the cost of each EFV was expected to be as much as $23 million, and the estimated cost to operate and maintain the vehicle went up with the increase in that price. The Commandant of the Marine Corps estimated that the EFV would consume over 90 percent of the Marine Corps' total ground combat vehicle budget. Against that backdrop, former Secretary Gates and the Commandant called for this program to be terminated. Unfortunately, the taxpayers had invested about $3 billion and the Marine Corps had waited 15 years for an improved amphibious vehicle that simply became too costly to buy. Another example of a legacy acquisition program in trouble is the V- 22 Osprey. Inspired by the failure to rescue hostages from Iran in 1980, the V-22 was originally designed to be a revolution in vertical takeoff aircraft. It was intended to improve, beyond anything currently in the arsenal, the ability of the Marine Corps' and our Special Forces' capability to get in, get out, and resupply from long range at high speeds in hostile landing zones. What we ended up with has been great expectations and enormous costs. Since it was first deployed, the Marine Corps' version of the V-22 has had a mission-capable rate in the middle to high 60-percent range as compared to the latest version of the Army's heavy-lift helicopters, the CH-47s, which had readiness rates in the high eighties to low nineties. During its recent deployment in Afghanistan, in fact, the V- 22's engine saw a service life of just above 200 hours, well short of the 500 to 600 hours that the program's managers originally estimated. That has caused the cost-per-flying hour to more than double to over $10,000 an hour as compared to about $4,600 per hour for the much older CH-46 it was intended to replace or about $2,600 per hour for a new, modern MH-60 Blackhawk helicopter. When it is not being repaired, the V-22 performs its missions impressively, but the sustainment cost of keeping the V-22 flying is eating up the Marine Corps' budget and causing aircraft maintainers to work much harder than should be required for a brandnew aircraft. While the V-22 program was supposed to cost just over $39 billion, independent estimates are that it will come in at $56 billion, a 43- percent increase. Mr. President, I ask unanimous consent for 10 additional minutes.

Mr. McCAIN. The price per aircraft has risen by 186 percent from $42.8 million to $122.5 million. You will notice this hybrid helicopter airplane's unit cost is approaching that of the troubled F-35 priced at about $133 million a copy, as I mentioned earlier. But the budget- strapped Marine Corps may have to afford both of them. Recently, the Marine Corps conceded that over the last 3 years, the lifetime cost of operating its V-22 aircraft had increased 64 percent to $121.5 billion. I want to talk about military space procurement for a minute. They are among the most notorious for chronically performing poorly. The Space-Based Infrared System program is a particularly good example. It has been a problem since its inception in 1996. In fact, 5 years into the program--in 2001--an independent review cited the program as ``too immature to enter the system design and development phase'' and observed that the program was based on faulty and overly optimistic assumptions with respect to, among other things, ``management stability and the level of understanding requirements.'' That was 2001, when it was determined that total program costs could exceed $2 billion--a 70-percent increase in cost. And, here we are today, 10 years later, and the system has still not achieved its objectives. In fact, it was just launched, for the first time, recently, on May 7, 2011. Originally estimated to cost $2.4 billion, it is now expected to cost nearly $16 billion, roughly 7 times the initial estimate. The Defense Department reported to Congress recently that the next pair of these satellites built by Lockheed Martin could cost $438 million more than previously estimated and could be delivered a year late. Many of the space programs are facing these same kinds of overruns. In the area of military space procurement, the Air Force's Advanced Extremely High Frequency satellite is worth mentioning. This system of satellites is supposed to replenish the existing Milstar system with more robust and secure communication capabilities for strategic and tactical warfighters. While the first of six of these was launched in August 2010, glitches with its thruster delayed the satellite from reaching its planned orbit by more than a year and significantly affected when the other two satellites will launch. In connection with how the prime contractor, Lockheed Martin Space Systems, has performed on this program, the Air Force penalized Lockheed Martin by reducing its award fee under the contract by $15 million. One space acquisition program I have focused on is the Evolved Expendable Launch Vehicle Program. Largely because of lack of competition and the Department's reliance on a sole incumbent provider, by some estimates EELV's costs may increase by more than 50 percent over the next 5 years. I don't want to overlook the Army. Among all services the Army has had the poorest record of pumping billions of dollars into weapons systems that were never deployed. A recent Army study indicated that since 1995, almost 40 percent of research dollars the Army spent did not result in the procurement of any product. The Army spent at least $32 billion on development, testing, and evaluation of 22 weapons programs that were later canceled--almost a third of its budget for creating new weapons. Every year since 1995, the Army has spent $1 billion on doomed programs. Since 2004, canceled Army programs have consumed between $3.3 billion and $3.8 billion. This represents an average of 35 to 45 percent of the Army's annual budget for development, testing, and engineering when factoring in the cancellation of the hugely expensive Future Combat Systems Program. This brings us right to the FCS Program. To say that this program was a spectacular, shameful failure would not do it justice. First envisioned in 1999 by then-Army Chief of Staff GEN Eric Shinseki, FCS was intended to be a revolution in capability--the centerpiece in the Army's effort to transform itself into a lighter, more modular, and more deployable fighting force. Originally and erroneously executed under a type of contract more fitting for smaller programs, the FCS was supposed to develop 18 manned and unmanned ground systems, including sensors, robots, UAVs, and vehicles, all connected by a complicated mobile electronic network. When work began on this program in 2000, the Army estimated that the first combat units would be equipped by 2011 and that all the Army's ground combat formations would be equipped by 2032. The Army initially estimated the entire effort would cost about $160 billion. By 2006, independent cost estimators at the Pentagon pegged total procurement costs at upwards of $300 billion. And, from there, with the assistance of a fundamentally flawed fee structure that was not focused on objective results, FCS total costs kept growing. To make a long story short, in April 2009, then-Secretary Gates terminated most of the program and the problem. While the Army has had its problems, the Navy's Littoral Combat Ship is another example of a fundamentally flawed acquisition process. Originally conceived by former Chief of Naval Operations Vern Clark as a revolutionary, new, affordable class of surface combatant--about the size of a light frigate or Coast Guard cutter--the LCS was to be able to conduct shallow-water and near-shore operations. The first two LCS contracts set the cost of the sea frame at $188 million each. After spiking to over $730 million, the cost is now about $400 million per hull. In December of 2010, the Pentagon's chief tester gave LCS poor performance ratings, saying that ``LCS is not expected to be survivable in terms of maintaining a mission capability in a hostile combat environment.'' I continue to be very troubled by the Navy's decision late last year to set aside then-pending competition and award contracts to each of the bidders on this program. The F-22 raptor program. The F-22 was supposed to maintain air superiority in the face of the Soviet threat during the Cold War. The F-22 obtained full operational capability 20 years later, well after the Soviet Union dissolved. When it finally emerged from its extended testing and development phase, the F-22 was recognized as a very capable tactical fighter, probably the best in the world for some time to come. But plagued with development and technical issues that caused the costs of buying to go through the roof, not only was the F-22 20 years in the making, but the process has proved so costly that the Pentagon could ultimately afford only 187 of the planes rather than the 750 it originally planned to buy. To make a long story short, the F-22 has not flown in combat since its inception. The DDG-1000 Zumwalt Class Destroyer was supposed to cost $1.1 billion each. It is now expected to cost $3.5 billion each. The Airborne Laser effort is to be canceled. The fantastic story of the VH-71 new Presidential Helicopter Replacement Program was canceled only after it became more expensive than a full-size 747. What can we do? I know it is time for us to get on with the Defense authorization bill. We need to have transparency. We need to have accountability. We have to use competition to encourage industry to produce desired outcomes and better incentivize the acquisition workforce to do more with less. We have to do a lot of things. We have clearly failed to abide by the warning President Eisenhower issued in his speech 50 years ago, but I do find some comfort that times of fiscal restraint and austerity can drive desired change, even in the face of daunting systemic obstacles such as the military-industrial-congressional complex. We must do better. Mr. President, I yield the floor. I thank my friend from Michigan for his indulgence. Exhibit 1 U.S. Senate, Committee on Armed Services, Washington, DC, December 1, 2011. Hon. Leon Panetta, Secretary of Defense, Pentagon, Washington, DC. Dear Secretary Panetta: I was very troubled to read recently in USA Today that the Air Force allowed a retired general officer who was then-serving as an executive in The Boeing Company to participate as a ``mentor'' in a war game involving the aerial refueling tanker that Boeing was at the same time competing to build for the Air Force under a multibillion dollar procurement program. This, in my view, warrants serious inquiry. According to the article, the retired general officer previously served as the chief of U.S. Transportation Command and Air Force Mobility Command, which would have given him keen insight into the Air Force's plans to replace its aerial refueling tanker fleet. It appears that what this mentor did for the Air Force in this case directly related to one of Boeing's largest potential contracts with the Air Force. This makes the story particularly alarming. No less disturbing is that the Air Force apparently withheld publicly disclosing this information from a Freedom of Information Act (FOIA) request for approximately two years. This latest revelation plainly validates my concerns that I conveyed last year about the potential for conflicts-of- interests associated with military mentor programs. It is also another example of the revolving door between the Department and private industry and the prevalence of the military-industrial complex in the Department's planning and procurement processes, which has plagued the Air Force's attempts to replace its aerial refueling tanker fleet from day-one. Although there appears to be general comfort that the contract for the KC-46A was awarded properly and that the contracting strategy for the development of these tankers is viable, whether any misconduct somehow biased the program at its inception towards a particular outcome must be taken very seriously. With this in mind, please answer the following questions. 1. After the individual cited in the article, retired Lieutenant General Charles Robertson, retired from the Air Force, during what period of time did he serve as an advisor, consultant or mentor, or in any other similar capacity, to the Air Force? 2. Describe, with specificity, General Robertson's duties, responsibilities and activities while serving in the foregoing capacity during this period. 3. Identify, with specificity, what project(s) General Robertson served on in the foregoing capacity, including but not limited to, as a mentor. 4. Describe, with specificity, what relationship these projects had with any program or process in which Boeing had a direct or indirect interest. 5. Describe, with specificity, the activity cited in the article described above (i.e., a ``war game'') and what relationship, if any, that this activity had with the pending Air Force program to replace its aerial refueling tanker fleet. 6. Describe what was happening with the Air Force's program to replace its aerial refueling tanker fleet while the foregoing activity was conducted. 7. What direct or indirect input or influence did General Robertson have in the outcome of the activity for which he was serving as a mentor (or in any similar capacity) or the overall program or process that this activity was intended to support? 8. How much per year and in total compensation was General Robertson paid for his service as an advisor, consultant or mentor, or in any other similar capacity, to the Air Force? 9. Please provide a copy of his employment contract(s) with the Air Force for his service in the foregoing capacity. 10. Explain why it reportedly took two years to provide the information described above where this information was responsive to a properly presented FOIA request. 11. What is the current status or the Department of Defense's mentor program? 12. If the program is still extant at all, what controls are in place today that will ensure against conflicts-of- interests and the appearance of impropriety by its participants? Thank you for your cooperation and your attention to this serious matter. Sincerely, John McCain, Ranking Member.

Mr. McCAIN

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

Mr. McCAIN. Madam President, I fully support the conference report and the national defense authorization bill for fiscal year 2012. This is the 50th year the Congress will pass this, and I am now confident this bill will be signed into law by the President of the United States. It is an important piece of legislation. I appreciate the participation of all Members, as we went through this bill in a relatively short period of time. There certainly was a lot of participation by almost every Member. I am most appreciative, of course, of Senator Levin, whom I have had the honor of serving with for many years. Quite often we have spirited discussions on various issues, but my admiration and appreciation for his leadership is very large. He is a man of incredible patience--a quality some accuse me of lacking, I think correctly. Senator Levin and his staff and our staff work very closely together throughout the year as we bring forth this Defense authorization bill. Obviously this bill provides for defense policy guidance and funding that is vital to our national security, provides the clearest indication to our men and women in uniform that the Congress cares about them and their families. In testament to the importance of this legislation, as I mentioned, we have passed a defense authorization bill every year since 1961. Let me remind my colleagues of the hard work that went into this bill. The bill is a product of 11 months of legislative effort in the Senate, 71 hearings and meetings on the full range of national security priorities. We reported our bill out of the committee with a 26-to-0 vote. We debated nearly 40 hours, disposed of 139 amendments, and the bill was overwhelmingly passed 93 to 7. After Senate passage on December 1, our staffs have worked around the clock for 9 days to put this together. As Senator Levin mentioned, it authorizes $662.4 billion for national defense, which is $26.6 billion less than the President's request. It authorizes $530 billion for the base budget for the Department of Defense, and it goes on. We authorize a 6-percent increase in funding over last year's request for our special operations forces, who play a lead role in counterterrorism operations. We authorize over $2.4 billion to counter improvised explosive device activities. The IEDs still plague the men and women who are serving in Afghanistan. Let me also mention some noteworthy provisions in this legislation. The conference report includes strong, unambiguous language that recognizes that the war on terror extends to us at home and that we must address it as such. The language the Senate adopted regarding detainees recognizes both that we must treat enemy combatants who seek to do us harm as such and that we must be able to gain as much information from such individuals as possible regarding their plans to wage war against our citizens--I want to emphasize--without violating the rules of war, without violating the Geneva Conventions, without engaging in torture or waterboarding or any of the kinds of techniques that have stained America's honor in the 21st century. I strongly believe the detainee provisions in the bill are constitutional and in no way infringe upon the rights of law-abiding Americans. Unfortunately, rarely in my time have I seen legislation so consistently misunderstood and misrepresented as these detainee provisions. The hyperbole used by both the left and the right regarding this language is false and misleading. Let me be clear. The language in this bill will not affect any Americans engaging in the pursuits of their constitutional rights. The language does recognize that those people who seek to wage war against the United States will be stopped, and we will use all ethical, moral, and legal methods to do so. I am very pleased that the administration has finally recognized that the language we have adopted merits the President's signature and will soon be signed into law. While we have made some technical changes to the detainee provisions, they remain substantially the same as passed by the Senate Armed Services Committee. The Congress, in strong bipartisan majorities, especially in the Committee on Armed Services, is deeply concerned by the administration's flawed handling of detainees in the fight against terrorism. It was Congress that took up this vital national security issue and drafted all the versions of these provisions and led the negotiations on all of the major compromises. Yes, we listened to the administration's concerns, as we should, and we took many of them into account. Unfortunately, the administration has fought these provisions every step of the way. They tried to have these provisions stripped from the Senate bill as a condition for bringing it to the floor for debate. When that did not work, they tried to have these provisions dropped from the bill through amendments on the floor. When that did not work, they urged the conferees to drop these provisions in conference or at least water them down into nothingness. Again and again, the administration failed. So for them now to try to claim credit for these provisions flies in the face of the historical record. Facts are stubborn, and when it comes to these detainee provisions, the fact is this: Congress has led and defined the debate, and the administration has finally conceded to that reality. Let's establish once again what these detainee provisions do and do not do. They would, among other things, reaffirm the military's existing authority to detain individuals captured in the course of hostilities conducted pursuant to the authorization of the use of military force. The ``authority to detain provision'' in the conference report confirms that nothing in this section of the bill should be ``construed to affect existing law or authorities relating to the detention of United States citizens, lawful resident aliens of the United States, or any other persons who are captured or arrested in the United States.'' There could be nothing clearer than that statement. This confirmation of the intent of the bill was inserted as a result of floor debate and negotiations with the Senator from California, Mrs. Feinstein, to make absolutely clear what Chairman Levin and I and members of the committee who have supported this legislation have said throughout--that this provision does not and is not intended to change the existing state of the law with regard to detention of U.S. citizens. This section simply restates the authority to detain what has already been upheld by the Federal courts. We are not expanding or limiting the authority to detain as established by the 2001 authorization for the use of military force. The conference report also includes a provision requiring military detention for foreign al-Qaida terrorists who attack the United States--something this administration has been not only hesitant but completely unwilling to even consider until this legislation highlighted the inconsistency between claiming the authority to kill an al-Qaida member with drones overseas but not being willing to hold a captured al-Qaida member in military custody in the United States, even in a situation where the al-Qaida terrorist had penetrated our defenses and had carried out or attempted an attack inside the United States. The authority to hold al-Qaida members in military custody, while completely consistent with the law of war that applies to enemy combatants, is not a straitjacket but is as flexible as the President desires to make it. While we in Congress have given the President a statutory authority to use military custody for al-Qaida members as a tool to ensure that we are able to obtain timely, actionable intelligence, the President can exercise a broad national security waiver to this requirement--a broad national security waiver. Most important, this provision requiring military detention explicitly excludes U.S. citizens and lawful resident aliens. The military custody provision in the final compromise authorizes the transfer of any detainee to civilian custody for trial in civilian court and leaves it up to the President to establish procedures for determining how and when persons determined to be subject to military custody would be transferred. The provision adopted in the conference report requires that such determination must not interfere with ongoing intelligence, surveillance, or interrogation operations. All of this flexibility was added to the bill even before we began negotiations with the White House to make it clear that the intent of the Senate's provisions was not to tie the administration's hands but to give them additional means to defeat the most serious type of threat from al-Qaida to our country. The result of these Senate modifications to the original form of the provisions ensures that the executive branch has complete flexibility in how it first determines and then how it applies military custody for al-Qaida members who are captured after having attacked the United States or while planning or attempting such an attack. Moreover, after meeting with FBI Director Robert Mueller, the Senate conferees added language in conference in response to his concerns about the impact on FBI operations confirming that nothing in this provision may be ``construed to affect the existing criminal enforcement and national security authorities of the Federal Bureau of Investigation, or any other domestic law enforcement agency, with regard to a covered person, regardless whether such covered person is held in military custody.'' It is the intent of the Senate conferees, in agreement with House colleagues on a bipartisan basis, that the FBI continue to execute the full range of its investigative and counterterrorism responsibilities and that any shift to military custody will be an administrative measure that does not limit in any way the FBI's authority. I acknowledge that these issues were very controversial with some Members. These provisions were debated extensively--as thoroughly as any matter I have seen in recent memory--but I believe we have addressed in a positive way and have been responsive to concerns raised by the administration. Indeed, the Senate made changes both on the floor and during conference to ensure that the intent of the provisions was fully understood by the administration and others even before negotiations over the final form of the text began. In many ways, as Chairman Levin has pointed out in many of his public statements and speeches on these detainee provisions, rarely has such misinformation, speculation, and outright misrepresentation been greater over what a bill actually does compared to what some from the left and right claim it does than has been the case with these detainee provisions. Whether 2012 campaign politics played a role in the characterization of these provisions or whether this was simply a case of not fully understanding the intent of the authors of these provisions I will leave to others to decide. I point out again that I think my friend from Michigan Senator Levin displayed a great deal of courage in formulating what he thought was best for our Nation's security. Regardless of the motivation that may have colored the debate until now, I believe that, by any responsible reading, these provisions will not impair the flexibility of the President or national security officials in protecting the United States and its citizens. The military custody provision, which has been the focus of much of this debate, provides flexibility to use either a civilian track or a military track for custody and eventual trial and leaves the details of implementation in the hands of the executive branch, as it is appropriate to do so. It preserves the current state of the law as it applies to the rights of U.S. citizens and lawful resident aliens. In terms of FBI authority to conduct investigations and interrogations, as well as use other instruments of the investigative and criminal process, these provisions preserve all of the FBI's role and authority under existing law. The conference report also includes, virtually unchanged, the Senate provision requiring a plan to normalize U.S. defense cooperation with Georgia and the sale of defensive weapons. U.S. defense cooperation with the Republic of Georgia has been stalled ever since Russia invaded that country 3 years ago. While there has been slow and minor progress to enable Georgia's armed forces to deploy to Afghanistan--which they have done in greater numbers than most of our NATO allies--precious little has been done to strengthen Georgia's ability to defend its government, people, and territory. This provision would require the Secretary of Defense, in consultation with the Secretary of State, to develop a plan for the normalization of our defense cooperation with Georgia, especially the reestablishment of U.S. sales of defensive weapons. It puts the Congress on record as demanding a more normal U.S. defense relationship with Georgia, particularly on defensive arms sales. The conference report includes a strong and important provision to sanction the Central Bank of Iran, to curtail Iran's ability to buy and sell petroleum through its Central Bank, and to prevent foreign financial institutions that deal with the Central Bank of Iran from continuing their access to the U.S. financial system. This provision, which was adopted on the Senate floor by a vote of 100 to 0, and the attempted assassination of the Saudi Ambassador here in Washington, DC, had a very positive and forceful effect on this bill being enacted by the Senate. This provision would force foreign financial institutions to make an important choice: Do they want to deal with the U.S. economy or with Iran's Central Bank? The Treasury Department urged the conferees to make a series of changes to this provision, some of which would have narrowed its scope and weakened it. We rejected that course of action. We made some minor technical changes but kept the provision as the authors, Senators Menendez and Kirk, intended. The conferees did, however, provide the Treasury Department the ability to more effectively implement this legislation by imposing strict conditions on foreign financial institutions that maintain ties to the Central Bank of Iran. The conference report directs the Secretary of Defense to pause further spending on Guam in support of the relocation of 8,500 U.S. marines from Okinawa until Congress and the administration have had an opportunity to review and assess the impact of an estimated $20 billion spending initiative on Guam in the context of the full range of our national interests in the Pacific region. This pause will allow Congress to ensure that the taxpayer funds invested in overseas military force posture and basing will afford us the best opportunity to continue our strong alliances in the region, while pursuing new arrangements with emerging partners that support security and economic development. The final agreed-upon provision includes a requirement for an independent study to offer views and suggestions from a range of regional experts on current and emerging U.S. national security interests in the Pacific and options for the realignment of U.S. military forces in the region. The conference report would restrict the use of $33 million in operation and maintenance funds for items on Guam that do not directly support military requirements, such as civilian schoolbuses, the construction of museums, and mental health facilities. This provision should not be interpreted as a lack of U.S. commitment to realignment. The President has stated that we are shifting a lot of our attention to the Pacific region, and we understand the importance of the Pacific region in the 21st century. Finally, the conference report includes a provision to require that the contract for the sixth slot of ``low-rate initial production'' for the Joint Strike Fighter be executed on a firm fixed-price basis. The Pentagon has thus far failed to incentivize the prime contractor to control costs. So a tougher measure, as embodied in the report, is warranted. While I would have preferred the original Senate position that would have made the fixed-price requirement apply to the fifth lot currently being negotiated, I strongly support this provision. The chairman and I are committed to a close monitoring of this weapons system. We understand its importance. We also understand that the kinds of cost overruns that have characterized this system cannot be continued. I am gratified that there are no earmarks in this bill. Unfortunately, it still contains over $1.4 billion in spending that was never requested by the President or by our military and civilian leaders in the Pentagon. Examples of funding authorized by this conference report include $255 million for additional M-1 tank upgrades the Army didn't want in order to keep the M-1 production line hot despite no compelling need to upgrade more tanks at this time; $325 million for Army National Guard and Reserve equipment not requested by the Army; $8.5 million for an Air Force R&D program called the Metals Affordability Initiative that the Air Force didn't consider a high enough priority to fund; $30 million for an industrial base innovation fund that the Pentagon didn't ask for; $200 million for the Rapid Innovation Program--created by Congress in last year's Defense authorization bill--that the Pentagon never asked for and which has about $439 million in funds left over from last year it hasn't figured out how to spend. The bottom line is this: Congress will pump over $1.4 billion into things the Pentagon never requested and didn't think were a priority. The American taxpayers are not fooled by this exercise, and they have long ago lost patience with it. For all the many good things this conference report did, we still fell short of providing only the most essential needs and priorities of the Department of Defense as identified by our civilian and military leaders. A total of $1.4 billion is real money and could make an enormous difference to many Americans if properly applied to real priorities. Those criticisms aside, as we look forward to the holidays ahead, I want all Senators to think about whom this report is really for--the men and women of our Armed Forces, who have served our Nation so bravely and so selflessly during the past 10 years of war. We owe it to them to pass this bill to demonstrate our support for them and the burden they carry for all of us and to show in a concrete way that the American people and the Congress stand with them and appreciate what they do for us. Passing this bill is really the very least we can do for so many who are willing to give all they have to defend us and our great country. Finally, I thank Chairman Levin and Chairman McKeon and Ranking Member Smith for their dedication and cooperation in getting through the conference in a rapid but comprehensive and collegial manner. It is an honor to work with Senator Levin on such an important cause for the American people and for our men and women serving around the world in the Department of Defense, who risk their lives for us every day. They deserve positive action and your vote on this conference report. I urge my colleagues to vote for the conference report of the fiscal year 2012 national defense authorization bill.

Mr. McCAIN. Madam President, I say to my friend from Michigan, I guess in our many years together we have seen the ups and downs and back and forth, but during our more than a quarter of a century of service we have always seen the bill coming to fruition and we have carried on in that tradition. I wish also to point out to my colleagues, in a rather drab and dreary landscape of gridlock and acrimony, it is kind of nice to show that every once in a while there is a little ray of sunshine. So I hope we have been able to provide it for our colleagues, and I look forward to a unanimous, if not near unanimous, vote on the part of this body. I hope if there are other colleagues who wish to come and speak on the bill--I know we have planned a colloquy on a provision of the bill concerning depots--so, hopefully, our colleagues who are very concerned about that issue might want to arrange to come to the floor so we can dispose of that. I don't know of any other except, I think, Senator Udall, who wishes to come.

Mr. McCAIN. I happen to know for a fact that Senator Hagan is a strong defender of the men and women who serve her State, which has a very large military presence. I know they are very appreciative of her advocacy and service. Before we get too hokey around here, maybe we should suggest the absence of a quorum.

Mr. McCAIN. Yes. That was the intention of the provision we wrote in committee, and it has been clarified by the addition of subsection (d). The statement of managers specifically states that the law enforcement and national security tools that are not affected by the provision include, but are not limited to, grand jury subpoenas, national security letters, and actions pursuant to the Foreign Intelligence Surveillance Act.

Mr. McCAIN. Yes. Our forces in Afghanistan can continue to transfer detainees to the host nation in accordance with existing agreements. This provision does not apply to battlefield transfers in--Afghanistan.

Mr. McCAIN. Madam President, for the benefit of my colleagues, there is a bit of interesting news today. When the demonstrations began in Moscow, I tweeted--I am a big believer in tweets--and said, ``Dear Vlad, the Arab Spring is coming to a neighborhood near you.'' Apparently, Mr. Putin was not amused, because an Associated Press headline read: ``Putin rejects any redo of fraud-tainted vote.'' The article also mentioned he was apparently on a program where he answered some questions. To quote the article: The harsh comments and his insistence that the December 4 election was valid will likely fuel anger and may draw even bigger crowds of protest later this month. Putin also lashed out at U.S. Senator John McCain, who had goaded him with a Twitter post saying ``the Arab Spring is coming to a neighborhood near you.'' Quoting Putin now, the article continues: ``He has the blood of peaceful civilians on his hands, and he can't live without the kind of disgusting, repulsive scenes like the killing of Gadhafi,'' Putin said, referring to McCain's role as a combat pilot and prisoner of war in Vietnam. He went on to say: ``Mr. McCain was captured and they kept him not just in prison, but in a pit for several years,'' he said. ``Anyone (in his place) would go nuts.'' I know my friend from Michigan may think there is some veracity to the last sentence from Putin's comments, but I would mention that, in the context of the National Defense bill, in my view, the reset with Russia has not gone as we had hoped and it is an argument for some missile defense provisions in this bill in particular. I think the reason why Mr. Putin reacted in the way he did is that I believe he has been shaken, as he should have been, by the massive demonstrations that have taken place in Moscow and other cities in Russia. It will be very interesting on December 24 to see how large or whether there will be demonstrations concerning a government that in many ways has turned into a cryptocracy, and the abuse of human rights, including the case of Mr. Magnitsky, who died in prison; and Mr. Khodorkovsky, who was again sentenced to more time in prison, and what Mr. Khodorkovsky and others have described as a death sentence. These are very interesting times in which we live, and the world is a very interesting place. I think it argues for the United States of America to maintain its defenses, as we have in the consideration of this bill.

Mr. McCAIN. Mr. President, I join the chairman in the acknowledgment that many Members of the Senate have concerns with both the process and substance of the changes adopted in the Defense authorization conference report regarding statutes for depot activities in the Department of Defense. The protection of a core logistics capability within the Department has been a very controversial issue for many years, as the Department's depot enterprise employs over 77,000 personnel with an annual operating budget exceeding $30 billion. As we draw down from two wars which have consumed so much in resources and equipment, there will be much concern and debate about the continued workload and jobs at depots, shipyards, and arsenals, particularly in light of declining defense budgets. I agree this debate and deliberation should have included all interested parties. While I support legislation that would have the clear intent of improving the effectiveness and efficiency of the Department's industrial activities, I was not and am not in support of moving forward on changes that have not been addressed with all members of the committee. The concerns expressed to us by Senator Inhofe, Senator Chambliss, Senator Collins, Senator Ayotte, Senator Shaheen, and others need to be reviewed in an open and transparent process. As to the substance of the concerns, from what I can tell, there are opinions on the impact of these two provisions on both sides of the issue--from private industry and from the depots and their government civilian workers and unions. I am aware some are very concerned that the changes in the conference report will upset the balance currently maintained between public and private performance of these activities, which could affect readiness. Changes to the definition of depot-level maintenance and repair have the potential to result in the shift of workload at shipyards. Changes to this provision should not be construed to restrict competition or to create any incentive to favor the public or the private sector as it relates to acquisition programs. The narrowing of the statutes from core logistics to corps depot- level maintenance could be interpreted as congressional intent to eliminate the identification of core activities in the defense supply chain affecting arsenals and ammunition plants. On the other hand, the inclusion of an expansive waiver provided to the Secretary of Defense to waive core requirements is very unsettling for every depot activity. Such a waiver could move significant amounts of depot work to the private sector. Revisions to the definitions of ``commercial items'' to be exempted from core determinations could have an immediate detrimental impact to those depots that work on commercially available items of equipment, such as engines and transmissions of ground combat vehicles. So many depots that do this sort of work are concerned about the impact. I agree we need to fully understand the impacts, real and unintended, from the implementation of these provisions. We will need to work closely with the Department of Defense to ensure that whatever changes or repeals we make are in the best interests of our military with the priority placed on readiness as well as efficiency of operations and fiscal responsibility. I support the chairman and commit to giving this issue focused attention in the year ahead to ensure the measures taken in this year's bill are the right outcome for the Department of Defense and the taxpayers. I yield the floor.

Mr. McCAIN

Mr. McCAIN. Mr. President, I ask unanimous consent that MAJ James Long, an Air Force fellow in Senator Thune's office, be granted floor privileges during today's and tomorrow's sessions of the Senate.