Don Nickles

Mr. NICKLES

Mr. NICKLES. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 91, which was submitted earlier today by Senators Santorum and Brownback.

Mr. NICKLES. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motion to reconsider be laid upon the table, and any statements relating to this matter be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, I ask unanimous consent that when the Senate completes its business today it stand in adjournment until 9:30 a.m., Tuesday, March 18; I further ask that following the prayer and the pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time for the two leaders be reserved for their use later in the day, and the Senate resume consideration of S. Con. Res. 23, the concurrent budget resolution; provided further that there be 20\1/2\ hours remaining under the control of the chairman of the Budget Committee and 21\1/2\ hours remaining under the control of the ranking member. I further ask unanimous consent that at 12 noon, the Senate return to executive session and immediately proceed to the cloture vote on the Estrada nomination, provided that, regardless of the outcome, following the vote the Senate return to legislative session and resume consideration of S. Con. Res. 23.

Mr. NICKLES. Mr. President, I thank my friend and colleague. This week will be a challenging week, to say the least. I look forward to working with him, and I would very much like to have an orderly consideration of the budget, the resolution, and the amendments in the process and avoid the so-called vote-arama that in years past we have found ourselves in with a lot of very important votes, with very little time for consideration. I do not think it makes the Senate look very good.

Mr. NICKLES

Mr. NICKLES. Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that the Senate stand in adjournment under the previous order following the remarks of Senator Allard.

Mr. NICKLES

Mr. NICKLES. Mr. President, today I am joining my colleague from North Dakota, Mr. Conrad, in introducing legislation to provide that leasehold improvements are depreciated over 10 years instead of the current-law 39 years. Leasehold improvements are modifications to the interior of rental space, either office or retail space, not residential real estate, made by a building owner as part of a lease agreement with a tenant. These improvements include electrical and communications outlets, data ports, floor coverings, fire and security systems, and internal walls. Under the current depreciation system, leasehold improvements to rental property are depreciated over the same time period as the building itself--39 years. However, this 39 year depreciable life does not reflect the actual life of these improvements. Lease terms average 7 to 10 years for office space and 3 to 5 years for retail space. Building owners typically must remove any leasehold improvements they have made to a property at the end of the lease term. Or, in the case of a lease renewal, tenants frequently demand that owners make improvements to the property as a condition of renewing the lease. Requiring business owners to depreciate these improvements over 39 years leads to a mismatch of income and expenses, thereby increasing the tax consequence of making such improvements. The long depreciation period simply makes no economic sense. I believe that our tax laws should be updated to treat leasehold improvements in a more rational manner. That is why my colleague and I are introducing legislation to reduce the depreciable life of these improvements from 39 years to 10 years. By reducing the time period over which leasehold improvements are depreciated, our bill will more accurately align income and expenses related to rental property, and will mitigate the tax disincentives to modernizing commercial buildings. In last year's economic stimulus bill Congress provided some relief to owners of rental property by allowing a 30 percent depreciation bonus for qualified leasehold improvements. However, this relief is only partial and is temporary. I look forward to working with my colleagues to enact my legislation that will provide more rational tax- treatment of leasehold improvements on a permanent basis. By so doing, we will take an incremental step toward modernizing the tax code's outdated depreciation rules.

Mr. NICKLES

Mr. NICKLES. Mr. President, today I am joining my colleague from North Dakota, Mr. Conrad, in introducing legislation to provide that leasehold improvements are depreciated over 10 years instead of the current-law 39 years. Leasehold improvements are modifications to the interior of rental space, either office or retail space, not residential real estate, made by a building owner as part of a lease agreement with a tenant. These improvements include electrical and communications outlets, data ports, floor coverings, fire and security systems, and internal walls. Under the current depreciation system, leasehold improvements to rental property are depreciated over the same time period as the building itself--39 years. However, this 39 year depreciable life does not reflect the actual life of these improvements. Lease terms average 7 to 10 years for office space and 3 to 5 years for retail space. Building owners typically must remove any leasehold improvements they have made to a property at the end of the lease term. Or, in the case of a lease renewal, tenants frequently demand that owners make improvements to the property as a condition of renewing the lease. Requiring business owners to depreciate these improvements over 39 years leads to a mismatch of income and expenses, thereby increasing the tax consequence of making such improvements. The long depreciation period simply makes no economic sense. I believe that our tax laws should be updated to treat leasehold improvements in a more rational manner. That is why my colleague and I are introducing legislation to reduce the depreciable life of these improvements from 39 years to 10 years. By reducing the time period over which leasehold improvements are depreciated, our bill will more accurately align income and expenses related to rental property, and will mitigate the tax disincentives to modernizing commercial buildings. In last year's economic stimulus bill Congress provided some relief to owners of rental property by allowing a 30 percent depreciation bonus for qualified leasehold improvements. However, this relief is only partial and is temporary. I look forward to working with my colleagues to enact my legislation that will provide more rational tax- treatment of leasehold improvements on a permanent basis. By so doing, we will take an incremental step toward modernizing the tax code's outdated depreciation rules.

Mr. NICKLES

Mr. NICKLES. Madam President, I ask unanimous consent to proceed as if in morning business.

Mr. NICKLES

Mr. NICKLES. Mr. President, today I am sending to the desk a bill by myself and Senator Miller to amend the IRS Code. It is a bill to provide jobs and economic growth for our country.

Mr. NICKLES. Mr. President, this bill Senator Miller and I are introducing is the President's economic and growth package. This is a package the President has put together that would help American families. This is a package that is profamilial and progrowth. It is a bill that will create jobs. It is a bill that will create an incentive to invest. It is a bill to eliminate unfair punitive taxes on corporate earnings that are distributed to the owners of the corporation. It is a bill that will help stimulate and grow our economy. I compliment the President for his work in proposing this. I am happy to introduce it. Let me talk about a couple of the provisions of the bill. This bill will expand the 10-percent bracket. This is to help people of all incomes. But the lowest income people will be the true beneficiaries of this package. It will accelerate reductions in the individual income tax rates that were passed in 2001. You might remember the 2001 tax bill that we passed which had individual rate reductions phased in over the years. There was a 1 percent reduction in most of the rates in 2004, and another percent reduction in 2006. These are accelerated to 2003. It means that the maximum personal income tax bracket would be 35 percent instead of the present 38.6 percent. It means that individuals would not have to pay taxes at rates greater than corporations. The bulk of the benefit of this will come to individuals who are self- employed, individuals who are sole proprietors, and individuals who own or operate their own business. They will receive the bulk of the benefit of this rate reduction. Some people may want to demagog some of the estimates that benefit primarily the wealthy. I disagree. We also might keep in perspective that when President Clinton was elected, the maximum rate was 31 percent. He increased it to 39.4 percent. When we totally implement President Bush's tax reduction, the maximum rate will be 35 percent, which is still significantly higher than the 31 percent just 10 years ago. The President's proposal that we are introducing today would also accelerate the reduction in the marriage penalty. This is a very big item to help married couples reduce their taxes. The net impact of this is it would double the 15-percent bracket that individuals have for couples. To give you an example, individuals presently pay 15 percent, I believe, on income up to about $28,000. But couples have to start paying a 28-percent or 27-percent bracket when they have income above $47,000. We say that instead of paying 27 percent for taxable income above $47,000, no, that should be double the individual amount. So couples don't have to pay above the 15-percent bracket unless their income exceeds $56,000. It is not very complicated. Couples should have for the 15-percent bracket twice what individuals have. Individuals pay 15 percent up to $28,000. So we doubled that amount for couples. The net impact of that is you pay 15 percent instead of 27 percent for a total of about $9,000. It saves couples a total of $1,022. If the couples have two children, they would get additional child credit. We increase the child credit, which is presently $600, to $1,000. That is an increase of $400 per child. If you have two children, that is $800 of tax credit--not deductions, tax credit. It reduces your tax bill by $800. If you have a taxable income of $56,000, you also get the $1,122 of marriage penalty relief. You get $100 savings from the 10-percent bracket expansion. Total tax relief for a family that has taxable income of $56,800 totals over $2,000. Actually, it is $2,022. That is about a 22-percent tax cut for middle-income families. That will help thousands--millions--of families all across the country. Also, this bill would eliminate the double taxation on corporate earnings. Presently, in the United States, unfortunately, unbelievably, we tax corporate earnings that are distributed to the owners more than almost any other country in the world. Only one country, Japan, taxes corporate earnings distributed to the owners higher than the United States. Our combined tax rate of 35 percent corporate and the individual tax percentage, depending on the individual's income tax bracket--it could be 15 percent, it could be 30 percent, it could be 38.6 percent--if you add the 38.6 percent plus the 35 percent, it is over 70 percent. If it is 30 percent for the individual rate, and the corporation rate is 35, it is 65 percent. So for a corporation that makes $1,000 and wants to distribute that to the owners, the Federal Government gets 65 percent; and the beneficiary, the owner of the company, gets 35 percent. That is absurd. That is embarrassing. That is indefensible. And countless people--economists, the President, candidates and others--said we should eliminate this unfair double taxation of dividends. The President has come up with a proposal to do that. I am happy to introduce it for him. I urge my colleagues--before they demagog it, before they castigate it--to look at the facts. Does it really make sense for us to be taxing corporate distributions to all owners--incidently, the majority of owners are senior citizens-- does it really make sense for us to be taxing these proceeds higher than any other country in the world but one? It makes no sense. Does it really make sense to have the Tax Code skewed to where it really is beneficial to go into debt because you can expense your interest expense? But, oh, yes, if you go the equity route, you have to pay taxes on anything that is generated in the company. And the individual who receives the benefits pays taxes, so the Government gets two-thirds of the money, two-thirds of the distribution. That does not make sense. It discourages investment. It encourages debt. Not a good corporate policy. Present law encourages a lot of corporate shenanigans and corporate games trying to get around taxes when they realize that such a great percentage of the distribution to owners is going to be paid in taxes-- ``Let's figure out other ways.'' Maybe they do it through bonuses, but they might do it through all kinds of schemes. And we have seen some of those. This would be great corporate reform, very positive, well-needed reform, and long overdue--long overdue. In this package that the President has proposed, it also has something I am very much in favor of: expensing for small business. I used to have a small business. But it triples the amount a small businessperson can expense from $25,000 to $75,000. In other words, if they write a check for that amount, they can expense it in the year that the check is written. That will greatly encourage investment because they get to recoup the investment that is made in the same year the check is written--a very positive, progrowth proposal. Most jobs are created in small businesses, and this is a good, positive small business provision that will create jobs. So we reduce taxes on business owners, sole proprietors. They would not have to pay taxes more than corporations. We would reduce taxes on married couples. We would discontinue the present policy of penalizing them for being married and filing joint returns. We would allow them to keep more of their own money. We would allow them to keep more of their own money if they have kids. Certainly, if you have kids, it costs a lot of money to raise them. We say you should have a $1,000 tax credit per child. So for every child you have, you get to save $1,000 in taxes. I have four kids, so that is $4,000 per year. A couple with four kids would get to save $4,000 per year. That is significant. That is profamily. That is positive. That allows people who really need the money raising families to keep it. One, we eliminate the marriage penalty, and, two, we allow them to keep more for their own kids. Very significant benefits. When you add all the benefits together, it really makes the income tax even more progressive. The upper income groups would still pay a greater percentage of income tax, even after we pass this proposal. I can just envision people saying: Well, this is class warfare. I hope they do not play those arguments because this is very family friendly and also investment friendly and will create jobs. We need to do some things. Revenues have been declining for the last 2 years. We need to figure out ways to get revenues to grow. That means a growing economy. It means the stock market needs to move up instead of down. This proposal will do that. This proposal is investment friendly. And the main beneficiaries will not be just the owners, it will be the people who get a job because the investment was not going to be made without it. So let's do some things that will create an incentive for investment, for expensing, for people to go to work, and for people who are working to be able to keep more of their own money so they can take care of their families. That is what the President's proposal is all about. So I am delighted to introduce this today with my colleague and friend, Senator Zell Miller of Georgia. I ask unanimous consent to have printed in the Record two charts to further explain the breakout of this proposal.

Mr. NICKLES. I urge my colleagues to seriously consider this proposal. And I welcome their support of it. I yield the floor.

Mr. NICKLES

Mr. NICKLES. Mr. President, I compliment my friend and colleague from Arizona and wish to join him in urging our colleagues to vote in favor of Miguel Estrada to be on the DC Circuit Court of Appeals. Senator Kyl said it all and said it well. I compliment him. I compliment Senator Hatch for his leadership. I urge my colleagues to support Miguel Estrada. I did something I haven't done in my many years in the Senate. I suggested to some of our colleagues that because, in the last couple of years, we had had a hard time moving forward circuit court nominees before the Senate, that we individually take one or two of these nominees and more or less adopt them, get to know them well and encourage their nomination. We had good success. I thank my friend, the former chairman of the Judiciary Committee. We had good success in moving through a lot of the district court nominees. Senator Leahy was very accommodating with us. We moved through four Oklahoma judges to serve on the district court. It didn't take very long. A lot of district court nominees were confirmed. But on the appellate level, on the circuit court level, it wasn't the same. In fact, I believe in the last 2 years, the first 2 years, or the 107th Congress, President Bush submitted 32 nominees to the circuit court and only 17 were confirmed--53 percent. That compares to President Clinton. In his first 2 years he got 87 percent; President Bush, 96 percent; and President Reagan, 95 percent. This President Bush in the 107th Congress only got 53 percent. I suggested to our colleagues, let's take special attention, individual Senators take special attention to some of the nominees and then encourage that they be confirmed. The reason I would do that is obviously home State Senators are going to encourage their particular nominees for district court, but maybe when you talk about the circuit court, since it applies to many States, many areas, it doesn't have quite the same degree of support from an individual Senator. It so happens on Miguel Estrada, Senator Pete Domenici and I both decided that we would take particular interest in Miguel Estrada. By that we got to know him. We had meetings with him. We had press conferences on his behalf. We encouraged others to join in the effort to confirm Miguel Estrada. We were not successful in the last 2 years. He was eventually approved by the committee but not on the floor of the Senate. That is with great regret. Now we are before the Senate trying to confirm Miguel Estrada. We haven't been able to get a vote. We have been talking for a long time. Now people want to talk, I don't know how long, but we will spend some time because this is an outstanding nominee. I got to know him. He is a truly a success story. He immigrated to this country from Honduras at age 17. Then he graduated magna cum laude and Phi Beta Kappa from Columbia. He also graduated magna cum laude from Harvard Law School where he distinguished himself as editor of the Harvard Law Review. What a remarkable accomplishment for somebody who immigrated to this country at age 17 and could hardly speak English. Since then he has argued 15 cases before the U.S. Supreme Court. He won 10 of those cases. Find the number of attorneys in the United States who have argued 15 cases before the Supreme Court. It is a pretty elite group. Almost by definition he is an outstanding attorney or he would not have argued 15 cases before the Supreme Court. He was rated unanimously well qualified by the American Bar Association, its highest possible rating. President Clinton's Solicitor General, a Democrat, Seth Waxman, had this to say about Miguel Estrada: During the time Mr. Estrada and I worked together, he was a model of professionalism and competence. In no way did I ever discern that the recommendations Mr. Estrada made or the [views] he propounded were colored in any way by his personal views--or indeed that they reflected anything other than the long-term interests of the United States. That is from President Clinton's Solicitor General. Some people are saying, we want to see his notes when he was giving advice or memos as Assistant Solicitor General. That should not be done. Ron Klain, former counsel to Vice President Gore, wrote to Senator Leahy on January 16, 2002: Miguel is a person of outstanding character, tremendous intellect, and with a deep commitment to the faithful application of precedent. Miguel will rule justly towards all without showing favor towards any group or individual. Is there any higher standard that we should hold our judges to than that? This is from the counsel to former Vice President Gore, also a Democrat. Mr. Estrada has extensive appellate practice, and he is widely regarded as one of the country's best appellate lawyers. He is currently a partner in the prestigious Washington, DC, law firm of Gibson, Dunn & Crutcher. He also clerked for Judge Kearse, President Carter's well-respected appointee to the Second Circuit Court of Appeals. In 1998 and 1999, he clerked for Supreme Court Justice Anthony Kennedy. It goes without saying that somebody who clerks for a Supreme Court Justice is an exceptionally talented individual. He served as Assistant Solicitor General of the United States under both Presidents Clinton and Bush. He held that position for 5 years. This is an exceptionally well-qualified individual. He has performed significant pro bono service, including representation of a death row inmate before the Supreme Court, a case to which he dedicated approximately 400 hours. So I don't think anyone can dispute that he is well qualified, and he is an outstanding success story. I find no legitimate reason whatsoever to oppose his nomination. I am very concerned about colleagues trying to say, ``Now, you are going to have to get 60 votes to confirm Miguel Estrada as a Federal judge.'' I am concerned about that. I have been in the Senate for 22 years. I have heard people talk about filibustering judges, but it has never happened in my Senate career. We have filed cloture a few times--maybe for procedural reasons, or whatever; but most of the time, even when cloture was filed, it was granted overwhelmingly, with 85 or 90 votes in most cases. Those were not filibusters. The only successful filibuster goes back to 1968. So that is the only filibuster of a judicial nominee that has happened in the history of the United States. That was on Abe Fortas' nomination. It was filibustered by Democrats and Republicans. I am not saying it was right. I think it was probably wrong. But this hasn't been done since 1968. I think it has been implied that many people in the Democrat Party are talking about filibustering several judges. So we are going to have a new standard now--that confirmation of judges is not 50 or 51, but it is going to be 60. We didn't do that with Judge Bork, Justice Thomas, or Justice Rehnquist, or in previous nominations that were fairly controversial. I urge my colleagues to think about this. If they are going to march down this road and say you need 60 votes to confirm Mr. Estrada and others, that may be a serious mistake. One may look back on his or her Senate career and say we made a mistake. Both sides can play that game. I don't want this side to play that game, and I don't want the other side to play that game. Two wrongs don't make a right. We should not make the first bad mistake on Miguel Estrada. Other people have said they want to have more information. They don't know enough about this young man. Compare. What did we know about many of the judges who have been confirmed? They don't commit themselves on how they would rule on a future case. Well, I hope they don't. They should not. He is not turning over his memoranda that he did as Assistant Solicitor General. First, those are confidential attorney- client memoranda, which were not requested by the seven previous nominees who worked in the Solicitor General's Office. We didn't request them previously, and we should not today. Every former Solicitor General, including Democrats Archibald Cox, Seth Waxman, Drew Days, and Walter Dellinger, signed a letter to the Judiciary Committee stating their opposition to the production of these documents, saying, ``By doing that, they would have a debilitating effect on the ability of the Department of Justice to represent the United States before the Supreme Court.'' Heaven forbid, if you have somebody working for a client saying, I cannot give a memo because it might not be politically correct, or it might not help me if I wish to be confirmed before the Senate in the future, that is a terrible idea. Seth Waxman, a Democrat Solicitor General under President Clinton, already said he represented the interests of the United States. That may not have coincided with his interest. It was in the interest of his client on whose behalf he was advocating. Also, it so happens--I believe Mr. Estrada has said he would be willing to come forward with those, but the Justice Department rightly says that would be a very negative precedent to set, and they are rightfully saying they should be withheld, as all the former living Solicitors General have said. They are correct. Again, we didn't request these memoranda from the seven other nominees who worked as Assistant Solicitors General. We should not do it in this case. Somebody said: What about Judge Paez and Judge Berzon? They were both on the Ninth Circuit Court of Appeals, the most liberal circuit court in the country. Yes, there was a cloture vote on both of them. I will note that the cloture vote on both of them was--first, Marsha Berzon's was 86 to 13. Cloture on Richard Paez was 85 to 14. So there wasn't a filibuster on those two judges. We had a vote. I voted against them. I think I made a good vote. They were confirmed. We should vote on Miguel Estrada, and if people don't wish to confirm him, they can vote no. The fact is, they know he would be confirmed, so they are trying to deny him a vote. I urge my colleagues to step back a little bit and ask what would this be doing to the Senate? The Constitution gives the right to the Senate in the confirmation to give advice and consent. That implies a vote. We should vote on Miguel Estrada and we should confirm Miguel Estrada. I have every confidence, having known him probably better than almost any circuit court nominee in my 22 years, that he will make an outstanding circuit court judge, one that we will be proud to have confirmed, one that the people who are obstructing his confirmation will regret. I think they will soon find out that he is an outstanding nominee and he will make an outstanding judge. I urge my colleagues who have maybe participated in dragging this thing on--and we have been on it for a couple weeks--after talking to Majority Leader Frist, I think we will be on it for a long time. Mr. Estrada deserves a vote. He deserves our vote of confidence, and he deserves to be confirmed by the Senate. I suggest the absence of a quorum.

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

Mr. NICKLES. Mr. President, I submit for the Record a table which summarizes the conference agreement on H.J. Res. 2, the fiscal year 2003 omnibus appropriations resolution. This table was prepared by my staff based upon the estimates of the Congressional Budget Office. I congratulate our majority leader and the chairman of the Appropriations Committee for working to provide no more in total appropriations for fiscal year 2003 than was requested by the President. The conference agreement on H.J. Res. 2 contains $397.855 billion in discretionary spending which, when added to amounts in the Defense and military construction appropriations bills already enacted, totals $763.184 billion in fiscal year 2003 discretionary spending. These totals increased from the Senate-passed levels primarily to accommodate additional defense spending requested by the President. The totals also include a 0.65 percent across-the-board reduction, amounting to $2.622 billion, from most accounts in the 11 appropriation bills included in the conference agreement. Compared to fiscal year 2002, total discretionary spending after enactment of H.J. Res. 2 will grow by 3.9 percent. Defense discretionary spending will grow by 8.7 percent, and domestic discretionary spending will decline by 0.7 percent. Compared to fiscal year 2002 less spending for one-time nonrecurring projects, total discretionary spending after enactment of H.J. Res. 2 will grow by 6.2 percent, defense discretionary spending will grow by 9.1 percent, and domestic discretionary spending will grow by 3.4 percent. The conference agreement includes $25.385 billion in advance appropriations, an increase of $2.227 billion over the level of advance appropriations provide in fiscal year 2002 appropriations bills. The conference agreement on H.J. Res. 2 also includes several increases in mandatory spending programs. The increased spending, which totals $4.257 billion in 2003 and $54.792 billion from 2003 to 2013 includes changes in agriculture payments for drought, payments to physicians and rural hospitals, and TANF payments to States. Mr. President, I ask for unanimous consent that a table displaying the Budget Committee scoring of the conference agreement on H.J. Res. 2 and enacted appropriations, with a comparison to 2002, be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Madam President, pursuant to paragraph 2 of Rule XXVI of the Standing Rules of the Senate, I ask unanimous consent to print in the Record, the rules of the Committee on the Budget for the 108th Congress as adopted by the committee.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise today to introduce a bill and to speak about a litigation crisis affecting both the overall well-being of our nation and our ability to stimulate economic recovery. I'm speaking of the out-of-control explosion of asbestos litigation. Asbestos litigation has become a disease in our economy. It threatens to drive scores of companies into bankruptcy. It discourages investment in companies under suit. It drives stock value down. It diverts funds away from expansion and growth. It results in job loss and, in short, it has become an obstacle to economic recovery. The cost of asbestos litigation and burden on business has been devastating. Over 8,400 companies have been named as defendants in suits. At least $54 billion has been paid on more than 6000,000 claims. U.S. Insurers have paid over $22 billion. Insurers outside U.S. have paid $8-12. Defendant companies have already expended between $20-24 billion in claims and transaction costs associated with asbestos litigation. The total cost of asbestos litigation could reach between $200-265 billion. This is revenue not invested in the economy, not invested in new jobs. Some companies are hit with multiple suits involving thousands of plaintiffs. The weight of claims and settlements has resulted in an alarming increase in Chapter 11 bankruptcies. Over sixty companies have filed Chapter 11 bankruptcy due to asbestos claims. This trend toward bankruptcy has had an alarming domino effect. As companies declare Chapter 11 reorganization, the litigation burden shifts to other defendant companies only encouraging them to declare bankruptcy as well. At least 5 major companies have each spent more than $1 billion. Thirty-eight of the nations top 100 contractors to the DoD are now asbestos defendants. This crisis threatens to impact our national security industry at the worst possible time in our history. But it also prevents us from aggressively stimulating the economy. The bottom- line is: the cost of litigation and/or bankruptcy siphons away critical business revenue needed for growth and the creation of new jobs. What is frightening, is that only about half the number of potential claimants have come forward thus far. If left unchecked, we have only seen the tip of this crisis. It's not only business that suffers. Employees of defendant companies suffer a great deal from a damaging ripple effect. The Rand Institute of Civil Justice estimates that 100,000 jobs were not created as a result of asbestos litigation. Bankruptcies related to asbestos litigation have led to 52,000-60,000 people losing their jobs, according to a SEBAGO study. It is estimated that each displaced worker will lose, on average, $25,000-$50,000 in wages before finding a job, or in reduced salary following finding a new job. It does not stop there. Approximately 42 percent of displaced manufacturing workers participate in retraining programs, costing about $2,000-$3,000 per worker. Local communities also bear the brunt of job reductions due to asbestos-related lay-offs. It is estimated that there have been between $.6 and $2.1 billion in additional indirect local costs and loss. On average, there are eight additional jobs lost locally for every initial job lost. Additional multiplier effects include lowered property values, population decline and lost Federal and State tax revenue. Those employees fortunate enough not to lose their jobs in asbestos- related cut-backs, also suffer due to the weakened position of their employer. Studies show that reduced stock value in defendant companies results in a 25 percent reduction in employees' 401(k) plan value. The average worker loses, on average $8,300 in pension devaluation. This is a situation that has been exploited by the non-injured. Over 65 percent of plaintiffs, estimates as high as 90 percent, have no medical injury, but have filed suit on the basis that they ``may'' develop illness in the future. To date, most claims have been paid to non-injured claimants. Some plaintiffs' attorneys are signing up thousands of individual plaintiffs onto suits where there may be no evidence of injury or no evidence of exposure to asbestos products. The effect is that the largest portion of the claim pool is being paid to non-injured claimants. As a result, this adversely affects the ability of truly injured plaintiffs to collect damages. Claimants with malignant injuries are being lost in the stampede of those not injured. There is not only less money for those who really need it, the courts are swamped with a flood of questionable claims. It is not surprising that the U.S. Supreme Court has twice called out for Congress to find a solution. Congress must indeed act. We must find a solution that both protects the economy and the legal rights of those truly injured by asbestos or who will develop asbestos-related injuries in the future. That is why today I introduce a bill that will not only introduce criteria to reassert some control over an out-of-control litigation process, but will come to the assistance of those truly injured and who need help. It is also intended to put a halt to the severe damage asbestos litigation has been wrecking on our economy, so that we can get on with the process of economic recovery. My bill, entitled the Asbestos Claims Criteria and Compensation Act of 2003, establishes medical criteria that a claimant must meet prior to filing a suit. It will also toll the statute of limitations, so that those who develop an asbestos-related disease years down the road will still retain their right of legal action. It also will limit abusive venue shopping, but provides an exception of venue choice for those terminally-ill and facing a shortened life expectancy. In conclusion, I believe this bill offers a reasonable approach to resolving this serious problem. I believe it offers a solid bipartisan approach that many of my colleagues on both sides of the aisle will come to support. If ever we hope to stimulate our economy into recovery and achieve sustained growth, we must also address and eliminate those factors that tend to drag the economy in the opposite direction. Asbestos litigation is one of those inhibitors of the economy, and this bill is a good step toward recovery. I encourage my colleagues to lend their support to this bill and I thank you, Mr. President. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Will the Senator yield?

Mr. NICKLES. Mr. President, will the Senator from Utah yield for a question?

Mr. NICKLES. When the Senator was talking about judicial experience or legal experience, correct me if I am wrong, but didn't Miguel Estrada argue 15 cases before the Supreme Court? And doesn't that mean he has a lot of experience, legal experience, and that he must be held in highest esteem to be able to argue 15 cases before the Supreme Court?

Mr. NICKLES

Mr. NICKLES. I thank Chairman Grassley for bringing this issue to the attention of Senators today. I appreciate the work of Senator Snowe, Senator Chafee, and Senator Rockefeller to resolve this, however I agree that the omnibus appropriations bill is not the appropriate vehicle to address the issue of the S-CHIP redistribution system. The legislation does affect spending for the next fiscal year and, as such must be addressed within the fiscal year 2004 budget resolution. I have spoken with Senator Snowe and would be happy to work with her to address this issue. I will work closely with Senator Grassley and others as we craft that resolution to secure the funds necessary for the Finance Committee to consider this S-CHIP proposal.

Mr. NICKLES

Mr. NICKLES. Mr. President, I compliment my colleague, Senator Domenici, for his speech and also for many of the comments he made relating to the economy, the budget, and Iraq. I think the Senator from New Mexico is exactly right. The issue with Iraq is not whether the arms control inspectors can find a few weapons. It is whether or not Saddam Hussein is going to disarm and whether he is going to comply with the United Nations and whether the United Nations is going to enforce compliance. We can pass 17 resolutions, all of which say the international community says he must disarm, but if we do not compel him to disarm, it makes the United Nations somewhat irrelevant to the whole proposal. Do those resolutions mean anything besides rhetoric or are we going to enforce them? The previous administration did not enforce them. As a result, we did not even have arms control inspectors, much less enforcing the existing resolutions. Now we have a President who is going to lead the world, who says we should enforce these resolutions, and we should compel his disarmament. When we think of the dangerousness of these weapons, I mentioned earlier today that two envelopes with anthrax that unfortunately were destined to the Senate killed a few people. They were not even opened in the post office. Yet they still killed people. They are very deadly materials. He happens to have tons of similar-type weapons, some even more dangerous such as VX. I think the President is right in drawing a line in the sand and saying he must comply. The world community, the United Nations, agreed with the President last year. I hope they continue to support compelling Saddam Hussein to comply with existing U.N. resolutions. I will submit for the Record a table which summarizes the Senate's action on H.J. Res. 2, the fiscal year 2003 omnibus appropriations resolution. This table was prepared by my staff based upon estimates of the Congressional Budget Office. I also wish to congratulate the chairman of the Appropriations Committee, Senator Stevens, for working to limit the total fiscal year 2003 appropriations bills to amounts requested by the President. As adopted by the Senate, H.J. Res. 2 contains $386.864 billion in discretionary spending when added to the amounts in the defense and military construction appropriations bills already enacted, which total $752.193 billion in fiscal year 2003 discretionary spending. These totals include a 1.6 percent across-the-board reduction amounting to $6.4 billion from all accounts funded in the other 11 appropriations bills, plus amounts for classified defense programs, $3.9 billion in fire and management, $825 million for which the President submitted separate requests. Compared to fiscal year 2002, total discretionary spending under H.J. Res. 2 would grow by 2.4 percent, defense discretionary spending would grow by 6.9 percent, and domestic discretionary spending would decrease by 1.9 percent; compared to fiscal year 2002, less spending for one- time nonrecurring projects. Total discretionary spending under H.J. Res. 2 would grow by 4.7 percent, defense discretionary spending would grow by 7.3 percent, and domestic discretionary spending would grow by 2.1 percent. H.J. Res. 2 also includes several changes in mandatory programs not counted on the discretionary side of the budget. The increased spending, which would total $4.221 billion in 2003, includes changes in agriculture payments for drought, payments to physicians in rural hospitals, and TANF payments to States. I ask unanimous consent a table displaying the Budget Committee scoring of H.J. Res. 2 and enacted appropriations with comparison to 2002 be printed in the Record.

Mr. NICKLES. Mr. President, this is more fiscally responsible than any appropriations bills we have passed in the last many years. I compliment the chairman of the Appropriations Committee, Chairman Stevens, as well as Senator Frist and all of our colleagues who worked aggressively to contain the growth of these bills. That was not easy. We had a lot of votes. We voted down over half a trillion in additional spending amendments. I compliment my colleagues for showing some fiscal discipline. In order to show fiscal discipline in the future, we have to pass a budget. Last year we did not pass a budget and we did not pass 11 of 13 appropriations bills. I hope this year we will be able to pass a budget; that we will be able to pass it on time; and that it will also allow for us to pass a growth package in addition to a package that would improve and enhance Medicare. Passing a budget makes it possible to do all those things. Without passing a budget we may not do any. We may not get appropriations done; we may not do a growth package; we may not do a prescription drug proposal or a Medicare enhancement proposal. I speak just for a moment now on the President's proposal for economic growth and job creation. I have heard some colleagues coming to the floor criticizing it. I am also bewildered by statements they are making. Many have criticized the President's effort to eliminate double taxation on dividends, saying it benefits one group or another. I have not heard anyone say this is really good tax policy. Let's tax dividends twice. Let's tax it on the corporate level and tax it on the individual level so the net effective rate of taxation is anywhere from 65 percent to 73 percent, maybe 73.6 percent. Now, with tax rates as high as two thirds or more, we more than discourage dividends. Dividends are basically rewarding the owners of the company with the fruits or profits of the company. With the double taxation, we are telling companies not to do this. I used to run a company. It makes no sense to do it. For corporations, particularly privately held corporations--I used to run one--why pay dividends if the Government is going to take, at least in present law, 35 percent automatically; and then individuals who may be paying rates of 28 percent or 27 percent, or maybe they are paying rates of 32 percent or 35 percent or 38 percent. If you add 35 percent and 35 percent, that is 70 percent. If a corporation makes $1,000 in earnings and they want to distribute it to their employees, the government gets $700 and the stock owner gets 30 percent. That is absurd. It makes no sense. Corporations are greatly discouraged from distributing their earnings to their owners. That is bad tax policy. And the present Tax Code encourages corporations to go into debt. We encourage corporations to pile up the debt because they get to expense it, but we do not tell them if they go the equity route, to build financing, to obtain financing, they can expense dividends. I hope we would do it. I would think expensing dividends from a corporate side would be the better way to eliminate double taxation. There are two or three different ways it can be done. I mention that to my colleagues. The President has good tax policy--one that will help grow the economy, one that will encourage investment, one that would eliminate some of the gross distortions we have in the present Tax Code. I make a couple of other comments concerning the President's tax proposal. I have heard a few people allude to the fact that it only benefits the wealthy. They have not read the President's proposal. The President's proposal is that we would have a $1,000 tax credit per child. Part of that was passed in 2001 and earlier where he said we will increase it. Right now the Tax Code has a $600 tax credit per child. He wants to make it $1,000. I have four kids. They are grown now so they will not qualify unless we include grandkids and maybe we should do that, too. One thousand dollars per child is $4,000 for four kids, $1,600 more than present law. One does not have to be wealthy to get it. If you have four kids, you get $1,600 more, a tax credit, where you do not have to pay taxes. That will take a lot of taxpayers to a zero tax bracket. The President says, let's eliminate the marriage penalties by doubling the 15 percent tax bracket for an individual or a couple. The net impact of that, if a couple has a combined income of $55,000, they get to save about $1,000 per couple. If you want to do something to help middle income taxpayers, married couples, families, the President has it. He has a child tax credit, and he also has elimination of the marriage penalties. That is in his proposal. He also says individuals should not pay taxes at rates higher than corporations. I agree. Let's accelerate the tax cuts now for 2004 and 2006. And when you finish with that, the maximum income tax bracket, personal income taxes, is 35 percent. It just so happens 70 or 80 percent of the people who are paying that highest tax bracket are sole proprietorships, entrepreneurs, self-employed. Why should they pay a tax rate higher than General Motors? Presently, they do. General Motors pays a tax rate of 35 percent right now. Those individuals pay a tax rate of 38.6 percent. I don't think they should have to pay a tax rate higher than General Motors. They have a smaller business. Let's have a little equity. Some say this is not doing enough for low-income. We have helped individuals and families. We have reduced tax rates for taxpayers in income tax brackets. The President expands the 10 percent tax bracket which he created 2 years ago. There was 15 percent tax brackets and the President made it retroactive on lowest income people. He took a lot of individuals in the 15 percent tax bracket and made their rate 10 percent. That was a 33 percent reduction in their tax bracket. We made it retroactive. That was equal to a benefit of about $600 for a couple. Now the President says let's expand the 10 percent bracket further. I compliment him for that, as well. There is a lot of benefit in here for all income groups. A lot of people are throwing rocks at this without looking at the substance of it. I hope maybe they would look a little closer and maybe we should work a little more together and have a little bipartisan cooperation and see if we cannot do something to help grow the economy. It is vitally important we grow the economy. The President has a good proposal, a good package, one that will be, I am sure, thoroughly scrutinized by the Ways and Means Committee, by the Finance Committee. We have a tradition in the Finance Committee reporting out bipartisan packages, whether in taxes or whether it be in the health care. I hope we will do both this year. We can. The President has given us a good proposal to do so. I look forward to working with my colleagues, Democrats and Republicans, to pass a budget and to pass a growth package that will help grow the economy. It is important that Congress enact both this year. I yield the floor.

Mr. NICKLES

Mr. NICKLES. Mr. President, will the Senator yield?

Mr. NICKLES. Mr. President, I compliment the chairman of the Finance Committee. I will work with him. I tell the chairman of the Appropriations Committee, if these amendments had come up, we would have had problems. There were about three S-CHIP amendments. We will not do the amendments on the appropriations bill. We will work to try to make it possible to do them through the Budget Committee. If we did pass one, it would go over to the House, and the House--which did pass a budget, and they have exceeded their authorization--they would stop it. I think this is the best way to work. When we pass a new budget resolution, we will supersede last year's budget resolution. We will be able to do this in regular order through the Finance Committee. I look forward to working with the chairman, and also Senator Snowe, Senator Collins, Senator Rockefeller, and others who have strong interests in trying to make sure these unexpended funds that are set aside for S-CHIP can be appropriately used.

Mr. NICKLES. Mr. President, will the Senator from New York yield?