Earl Pomeroy

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I rise in opposition to the Miller substitute and in support of the underlying bill. Earlier in this debate, I indicated my support for the Miller amendment. In many respects, it does improve on the underlying bill. After further reviewing the substitute, however, I have found legal liability provisions that I believe will seriously discourage employers from offering retirement plans, to detriment of workers. Setting aside the Enron fiasco, employer-sponsored retirement plans are a great success story of the American workplace. Such plans help employees accrue the assets they will need to live comfortably in retirement. Unfortunately, only half of American workers have access to employer-sponsored plans. Therefore, as we seek to address the problems revealed by the collapse of Enron, we must both increase worker protection and encourage employers to expand pension coverage. We should protect workers by allowing them to diversify their retirement portfolio rather than keeping them locked into company stock. We should provide workers with adequate notification of impending black-out periods so that they may make changes in their portfolios before the temporary freeze occurs. Both the substitute and the underlying bill include these worker protections. We should encourage the expansion of pension coverage by providing the type of rational, regulatory relief that is found in the underlying bill. What we should not do is increase employers' exposure to litigation arising from their retirement plan. Regrettably, the substitute does so in significant fashion. Rather than limiting liability to the fiduciary, who exercises control over the assets in the plan, the substitute expands liability to other parties who have no such control or responsibility. In addition, it greatly expands damage awards beyond simple losses to the plan. This increase in legal exposure would at least retard the growth of employer-sponsored plans and could even result in the contraction of retirement plans. For these reasons, I must oppose the Miller substitute.

Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding me this time. The security of retirement programs of America's workers is about as important a thing as I think we are going to tackle. It has been my pleasure to work with people on both sides of the aisle on this issue for many years. I want to commend, in particular, the gentleman from Ohio (Mr. Portman) for the substantive and serious-minded work he has put into this topic. He is truly one of the experts in the Congress, House and Senate, on this issue; and his leadership has been important. Let us look at where we are today. Only half the people in the workforce today have access to workplace retirement savings. We have absolutely a collapse in the number of defined benefit plans providing reliable pensions to workers. The plans are not collapsing; they are converting to defined contribution plans, a different arrangement, in my opinion, over the long run, one not likely to serve the worker quite as well. We have 401(k) choices, a bewildering array, facing workers, without having provided them sufficient information to best steer their interests in light of their new responsibilities. And, obviously, as the Enron case has so sadly shown, we have insufficient protections that protect workers from the kind of abuse that occurred by an employer acting in what, I believe, will be very actionable ways in the Enron circumstance. So what we have before us are two approaches to try and fix some of these issues. Sometimes the choices before us are dumb and dumber. Today, I think they are good and better. I am going to vote for the underlying bill. I am going to vote for the substitute, in any event. I think we are making a step forward with the passage of either one of these choices today. Let us take a look at, first, the underlying bill. It allows diversification protection that we do not have today. The 3-year rolling average is not as good as the Committee on Ways and Means' 3- year provision, which is a distinct advantage in the underlying substitute; but it is an advantage, and it will protect workers, allow them to be able to put a more healthy investment balance into their retirement funds; the 30-day notice on blackout periods and an absolute guarantee they will have a right to trade and diversify within that period of time. That was in the underlying bill that was obviously tragically not in the Enron circumstance, to the abuse of many of those employees. A big step forward with that one. A big step forward in my opinion on providing investment advise, much greater availability of investment advice to workers facing these 401(k) choices. I am very pleased that the gentleman from Ohio (Mr. Boehner), the chairman of the Committee on Education and the Workforce, incorporated into this draft changes that I proposed that make sure that a fiduciary standard applies in the providing of that advice; and it discloses fees in a clear and uniform way, and that it has all of the advisors providing this advice, subject to administrative penalties in those circumstances where they have a vested interest in the sale. I believe that this will go a long way in a very secure format to provide them the advice they need. This is a choice; two good choices. Yes on the substitute is the preferred choice. The other one is good too.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, on May 4-6, 2002, more than 1,200 students from across the United States will visit Washington, D.C. to compete in the national finals of the We the People . . . The Citizen and the Constitution program, the most extensive educational program in the country developed specifically to educate young people about the Constitution and the Bill of Rights. I am proud to announce that the class from La Moure High School from the city of La Moure will represent the state of North Dakota in this national event. These young scholars have worked diligently to reach the national finals and through their experience have gained a deep knowledge and understanding of the fundamental principles and values of our constitutional democracy. It is inspiring to see these young people advocate the fundamental ideals and principles of our government in the aftermath of the tragedy on September 11. These are ideas that identify us as a people and bind us together as a nation. It is important for our next generation to understand these values and principles which we hold as standards in our endeavor to preserve and realize the promise of our constitutional democracy. The class from La Moure High School is currently conducting research and preparing for their upcoming participation in the national competition in Washington, D.C. Mr. Speaker, I would like to recognize these young scholars by name: Emily Anderson, Michael Anderson, Derek Ardnt, Lacey Boehm, Justine Dathe, John Doehler, Sandra Eastley, Cassie Exner, Christina Hanson, Tonya Jacobson, Naomi Janke, Donald Ketterling, Levi Ketterling, Travis Ketterling, Michelle Koval, Kyle Kranda, Cody Larson, Lucas Larson, Loren Podoll, Aaron Potts, Spencer Potts, Ambra Premo, Bethany Roscoe, Clara Sandness, Savannah Sandness, Heather Schmidt, Casey Shockman, Michael Ulmer and Kyle Westgard. I would also like to recognize and thank their teacher, Mr. Brian Ham, for his critical role in these students' success and their interest in American government. I wish Lamoure High School the best of luck in the national competition.

Mr. POMEROY

Mr. POMEROY. Mr. Chairman, I rise In reluctant opposition to H.R. 2341, the Class Action Fairness Act. Our system of class action litigation is in dire need of reform. Most class action cases are national in scope and should be heard in federal court, where like claims may be combined and uniform decisions rendered. Under the current system, however, these interstate suits are often filed in state or county court, where the decision of a local judge and jury may affect the laws of all 50 states. As a former state insurance commissioner, I am deeply troubled that a jury panel in a class action case in Mississippi or New Mexico could effectively overturn state regulations in my home state of North Dakota. In addition, by allowing interstate class action claims to be filed in any of the thousands of local courts across the country, the likelihood is increased that a plaintiffs lawyer will find at least one judge who is willing to entertain a claim that most people would consider to be without merit. Once a sympathetic judge is found, the plaintiffs' attorney can leverage nationwide settlements that all too often provide little benefit to the actual plaintiffs but enormous benefit to the attorney. As important as it is to reform class action litigation, I am concerned that this legislation could have the effect of closing the courthouse door to even meritorious class action suits. The bill places a significant new responsibility on federal courts without providing the resources necessary to carry out that responsibility. The only study on record indicates that this legislation would burden federal courts to the point that class action cases could not be heard a timely fashion. As serious as the abuses are in the current system, we cannot risk denying access to our civil justice system for people who are the victims of wrongdoing. With additional time, we could have further evaluated the workload of the federal courts and crafted legislation that would ensure that class reform did not result in class action repeal. In scheduling this legislation, I regret that the majority leadership did not allow us that time. We have not heard the last of this issue. I took forward to continuing to work on this issue so that we have reform the class action system without denying the opportunity for worthy class action cases to be heard.

Mr. POMEROY

Mr. POMEROY. Mr. Chairman, the reality behind this budget is that we are going to be spending Social Security cash on functions other than Social Security for the next decade. The second reality is that most of that reflects budget choices that have nothing to do with the war in Afghanistan, the war our brave troops are fighting against the scourge of global terror. I believe the majority does a terrible disservice to our troops to try and hide behind their valor in selling budgets that raid Social Security. The ultimate effect of the raid on Social Security will in all likelihood be higher taxes for the very men and women fighting this war as they are forced to support baby boomers in retirement years, because the baby boomers passed budgets that ran these terrible deficits. Reject the majority budget and stop the raid on Social Security.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I rise in strong support of H.R. 3090, the Job Creation and Worker Assistance Act of 2002. I only regret that it took five months for the majority to bring forward a responsible, bipartisan bill that provides assistance to unemployed workers, helps stimulate investment in our economy, but does not further harm our long-term budget outlook. Although the delay is unfortunate, we have a good bill on the floor today and I urge my colleagues to support it. First, the bill helps unemployed workers by extending the limit on unemployment insurance from 26 to 39 weeks. Importantly, the bill also expands UI benefits by providing funds to assist part-time workers who have lost their jobs. At a time when 80,000 workers per week are exhausting their UI benefits, the 13-week extension in this bill is sorely needed. This Congress has been promising for months to help displaced workers; the bill before us finally delivers on that promise. Second, the bill encourages new investment to help lift our sputtering economy. It provides businesses with a 30 percent bonus depreciation for plant and equipment placed in service after the terrorist attack of September 11. This will give businesses a powerful incentive to expand their operations and grow the economy. In addition, the bill extends the net operating loss carry-back from two years to five, so that businesses can take advantage of their loss deductions, freeing up funds for new investment. Third, the bill extends expiring tax credits, including the Welfare- to-Work Tax Credit and the Work Opportunity Tax Credit. Importantly for North Dakota, the bill extends the taxable income limit for oil production from marginal wells and the tax credit for wind energy production. North Dakota is not only a major producer of oil, it is number one in the nation in the potential for energy generation from wind. Both of these provisions will be of significant benefit to my home state. Finally, the provisions of this bill are temporary, which has two benefits. First, it will encourage businesses to act now, when new investment is needed most to boost the economy. Second, it will minimize the harm to the long-term budget outlook. As each of us knows, the 10-year budget is projected to divert $1.56 trillion from the Social Security trust fund. By limiting the term of these provisions, we stimulate the economy without setting back our efforts to balance the budget without using Social Security. Mr. Speaker, I support this legislation and urge its adoption.

Mr. POMEROY

Mr. POMEROY. Mr. Chairman, I rise today in opposition to H.R. 1542, the Internet Freedom and Broadband Deployment Act. As a member representing one of the most rural states in our nation, I believe that this bill will do nothing to spur broadband deployment in rural America, while destroying the ability of the FCC and state regulatory commissions to provide valuable consumer protections. The Bell companies say they are eager to deploy broadband in rural areas, but their actions speak louder than their words: for years, the Bells have sold off millions of lines in rural America. These companies have no commitment to rural America, and passing this bill will not change that. In fact, the Bells can easily evade the rural broadband development provisions of this bill simply by selling off additional rural exchanges. Rather than encouraging Bells to invest in rural America, this bill increases their incentives to accelerate their rural sell-off. Small carriers and local providers have long been the lifeblood of communications services in rural America, yet this bill allows the Bells to deny these companies access to their networks. The very small competitors which today provide outstanding communications services in rural North Dakota and throughout the country could be quickly put out of business by this bill. Thousands of jobs at these competitive carriers would be lost. What's more, H.R. 1542 preempts states from regulating high-speed data service altogether. This provision would prohibit states and the FCC from providing basic consumer protections, such as restrictions on unsolicited email and child pornography. The Bell companies pay millions of dollars in fines each year for violating state and federal laws, yet H.R. 1542 would remove almost all oversight of their high- speed activities, putting consumers at risk. Rather than guaranteeing rural broadband service to rural America, H.R. 1542 simply provides the Bells with a tool to destroy their smaller competitors and avoid state and federal regulatory agencies. This bill is bad for competition and bad for consumers. I urge my colleagues to vote no.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I thank the gentleman from New York (Mr. Rangel) for yielding me the time, and I thank the gentleman from Alabama (Mr. Bachus) for bringing this motion to the floor. I think it is very helpful. When we passed the tax bill in May, we all agreed that Social Security and Medicare funds would be held inviolate. In fact, that was the terms of the consideration of the tax bill as put forward by the President. He said, to make sure the retirement savings of American seniors are not diverted to any other program, my budget protects all $2.6 million. This was elaborated on by members of the majority as they advanced the budget, including the tax plan. In fact, the gentleman from Texas (Mr. Armey) said we must understand that it is inviolate to intrude against either Social Security or Medicare, and if that means foregoing or, as it were, paying for the tax cuts, then we will do that. Now we know, however, that the actual budget plan this year involves all future phase-ins of this tax cut coming out of Social Security funds. If we look at the green line on this chart, we will note that for each of the next 10 years, we are into Social Security funds to fund any future dimension of this tax cut. So it is a very different picture than we had when we passed the bill in May. It is not funded from general funds. This is a raid on Social Security. In fact, the President's budget reveals that up to $2 trillion will be diverted from Social Security and Medicare in order to fund all future aspects of the tax cut. So the question before us today is really a restatement of May's tax cut vote, but done in light of what we now know. In May, we voted saying it would not touch Social Security. Today, we know in light of the President's budget plan that it raids Social Security to the tune of $2 trillion. Under those circumstances, Mr. Speaker, I cannot support this resolution. I could support this resolution if there were a credible budget plan advanced by the majority that showed we were not touching Social Security and we were not touching Medicare. But to over the next 10 years, and not just in this period of war and recession, as the majority says, but over the next 10 years launch us on a plan that diverts $2 trillion of funds coming in for Social Security and Medicare jeopardizes our Nation, jeopardizes a future commitment to our seniors, and jeopardizes those in the work force today paying for the retirement. It is wrong to use Social Security monies in this way. They ought to put a plan forward that holds harmless Social Security. The vote today is whether we want to use Social Security on all future aspects of the tax cut.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I thank the gentleman very much for his comments and even more for his ongoing leadership. We have major work ahead of us trying to once again dig out of the hole that we put ourselves into, and I appreciate working with him. Finally, Mr. Speaker, with about 2\1/2\ minutes remaining, I would yield the balance of the time to the other gentleman from Texas (Mr. Doggett) that has joined us, an excellent colleague of mine on the Committee on Ways and Means.

Mr. POMEROY. Mr. Speaker, I thank my colleague, and as a member of the Committee on the Budget, he has a very important role because we have got to get this debt under control. I appreciate his very intelligent, committed approach to this central question of the government. Will we or will we not pay for the operations that we fund? If we do not, our children will, and that is simply not fair. I very much appreciate his observations. Mr. Speaker, I yield to the gentleman.

Mr. POMEROY. Reclaiming my time, the gentleman has made an important announcement. The discharge petition for campaign finance reform has hit the mark; 218 Members have signed it and this bill will now come to the House floor. This is a tremendous achievement for this body. At a time when the country is sickened by what has happened with the Enron Corporation and is looking carefully, as we all are, at what political shenanigans occurred in the process of this bankruptcy, this large company using phony books and pouring tens of thousands of dollars into the political system, the hue and the cry, enough is enough, address campaign finance reform grew louder and louder and louder. We have been stymied by a very determined Republican majority leadership that has done everything possible to keep the body from joining the Senate in passing campaign finance reform. And yet, tirelessly the work went on to get the signatures. We have a provision that majority rules around here. And when you have got most of the Members to sign a discharge petition to bring something to the floor it comes to the floor whether the majority leadership likes it or whether they do not. Just now, moments ago, very important signatures of the last remaining Members were placed onto the campaign finance reform discharge petition, 218 signatures were reached. This bill will come to the House floor. The House will act like the Senate will act and we will send to the President a campaign finance reform bill. I yield with this happy news to my colleague from Maine (Mr. Allen), who has been a leader in the effort to get campaign finance reform.

Mr. POMEROY. I thank my colleague, reclaiming my time, Mr. Speaker, for his very thoughtful comments. The newspapers today carried a discussion about how the stimulus package will be put together. We also have to acknowledge this stimulus package is all funded from the debt. We have shown the Members where the surplus has gone, so any stimulus passed is debt-funded. That means it has to be put together in a way that really makes it worthwhile in terms of addressing the economic slowdown, because otherwise we are just running up the tab some more. When we are in a hole, the best way to try and reverse it is to first stop digging, and passing a stimulus package on the debt reflects more digging. The majority proposal embraced by the President, pursuing an agenda of permanent tax breaks which go mostly to the affluent, and addressing the corporate AMT repeal, would have the least bang for the buck and do the least to stimulate the economy, even though it would cost the budget and continue to be funded, again, from the debt. This budget business can get pretty arcane. We are challenged sometimes to get Members to focus on the long-term debt, even while they think about something as exciting as passing a new stimulus bill, spending more money, passing another tax cut. I think Members as a collective body here in Congress need to really evaluate how American families conduct themselves. We ought to try and follow the example of American families. The people I represent are concerned about putting together something that they might pass on to the children. They do not, in their elderly years, try and run up their credit cards, double-mortgage the home, roar a bunch of debt up that will ultimate be a burden on their children when they are gone. Far from it. They do not want anything about how they have conducted themselves to fall as a burden on their children. That is how families conduct themselves. How have we conducted ourselves in management of the Federal Government? Let us look again at this chart. We were on a path to pay off the national debt. We were even on a path to leave something in a positive balance, leaving something for our children. Last year came and last year went, and now the situation is totally different: red ink as far as the eye can see. We are going to leave our children debt. We are running up the debt before we pass on this country to our children. If we do not come squarely to terms that that is not the thing to do, that we owe our children more than that, we are going to have a hellacious debt that they will have that will limit the dimensions this great country of ours will be during their lifetimes when we are gone. I yield to my friend and colleague, the gentleman from New Jersey (Mr. Holt), for his comments on this issue.

Mr. POMEROY. Mr. Speaker, well, here we are. It is a new year, we are all back from our districts, from time with our families; and it is time to take a fresh look at where we are as we begin a new legislative Congress. You know, to many of us things might look very much the same as they did in December when we left; the same people representing the American citizens across the country, largely the same dynamics in place. In fact, with much of the debate that I have heard this week, it is almost like we picked up mid-conversation, even though there has been a period of several weeks where we have been gone. In one facet, however, there is very sharp difference of reality compared with where we were as we got to town one year ago, and it is trying to explain this significant different development that I will address in the course of my remarks. What is different? What is different is the Federal budget. One year ago, we looked at tremendous budget surpluses of a historic nature. We were on the cusp of a plan to march toward reducing and then eliminating the debt held by the people of the United States to their Federal Government, eliminating that debt for the first time since Andrew Jackson was President. We were debating how we might use these surpluses to advance Social Security reform before the baby boomers move into Social Security in the next decade. We were discussing how we might use these surpluses to bring on to the Medicare program a prescriptive drug benefit so desperately needed by so many then and continuing today. All of these discussions were made possible because of a steady disciplined march toward establishing sound fiscal policy, generating elimination of the annual budget deficit, and then producing these record surpluses. This march began in 1993 with the budget bill passed by one vote in the House, without any participation by the Republican side, I might add, and passed by one vote in the Senate; and it set the course for tackling the deficit. The course was certainly assisted by the fact that the economy went from a significant recession into a wonderful boom run through the decade; and as the economy grew faster than expectations, the revenues coming into the Federal Government grew faster than expectations. Now, in the face of good times on a bipartisan level, this Congress held pretty steady with spending. I think Republicans and Democrats alike can take some pride in showing some discipline on the spending side and the contributory role that it had in producing the much brighter budget situation. So as we convened one year ago, we could look at the product of years of hard work, gut-wrenching choices, but take some satisfaction in a job well done. We tackled the deficits and eliminated them. We built surpluses and had actually the prospect before us of eliminating the national debt. What a wonderful legacy for members of my generation, the baby boom generation, to leave for their children. Well, that was then. Unfortunately, the situation now could not be more different. The 10-year projection from a surplus standpoint was $5.6 trillion a year ago. This year, it has been revised and revised in one of the most significant dramatic reductions ever. This chart shows the vanishing budget surplus over 10 years, and it truly is staggering: $5.6 trillion projected 1 year ago. Based on the economic forecasting, the slowing economy reduced this $5.6 trillion to $3.3 trillion. The biggest development between those forecasts were the slowing economy and the enactment of a tax cut last May that absolutely committed all of these surplus revenues. Yesterday, the Congressional Budget Office further reduced the 10- year unified budget surplus to $1.6 trillion. Now, you may say that sounds like a surplus; I thought you were talking about deficits. That counts the Social Security surplus, the Medicare Trust Fund, and the general fund; so on a unified budget basis we are at $1.6 trillion. If you just count the general fund alone, it is deficits for each of the next 10 years. We have gone back to debt as the way we fund our operations, which means we do not pay for what we spend. We run it up on the tab, and we are going to pass that tab on to our children. You might wonder how in the world did this happen. I think it is worth understanding where the error occurred so that we might learn from it as we face the difficult policy decisions that we now confront. This chart shows what I believe was a mistake, a legislative mistake of historic proportion. When we passed the budget bill, which included the President's tax cut, last May, we committed every dollar of budget projection. We left no rainy day fund. We left no room for error. We left no possibility that things would not turn out in anything but the rosy projection that we looked at. We made no room to deal with the slowing economy, and we certainly had no contingency for something as devastating as what hit us with the terrorist attack of September 11. The result was we built a plan that required everything to work perfectly in order to not slide into deficits. I used to be an insurance commissioner, and there was no way I would let insurance companies price their product in a way that just predicted the rosy upside scenario. The way my constituents work is they deal with reality. Their family budgets are based on the fact that things may not work out perfectly. Well, we made a bad mistake betting the ranch that the country was going to have a perfect run. It has not had a perfect run, and now you can see the consequences from the reversal of fortune. This chart shows what has happened as we have gone from the prospect of eliminating the debt and actually developing on a unified basis a budget surplus, to just more deficit spending, continuing the debt at the extraordinarily high levels, driving up interest rates, and leaving a legacy of red ink for our children. The non-Social Security budget has fallen from $3.1 trillion surplus to $760 billion worth of deficit. Again, according to the Congressional Budget Office, the Federal budget, excluding Social Security, will be in deficit every year between now and 2010. Again, take a look at this chart. This was our opportunity. We passed a tax cut that is irresponsible in its dimensions. We face a slowing economy. We have a God-awful terrorist attack. Now, as we reconvene 1 year later, we are looking at a sea of red ink from the ongoing deficits that we face. What are the implications then going forward of these budget deficits? Well, instead of saving the Social Security surplus and taking every dollar coming in on Social Security and paying down the national debt so you have a better fiscal position of the country to meet the Social Security obligations when baby boomers retire, instead of that, we are going to spend more than $700 billion of revenue coming in from Social Security money. We are going to spend that on running the Federal Government, money coming in for Social Security spent on general government spending. We have seen this before. It is that era of deficits we worked so hard to climb out of, and, dang it all, we are back in the very same mess. Instead of saving the Medicare surplus, leaving us the opportunity to enhance the program, leaving us the opportunity to at least make sure we could meet the existing obligations of the program, all of the $400 billion of Medicare surplus, all of it, is committed right out the door in government spending. It could have been used to pay down the debt, to position the Federal Treasury for when baby boomers retire. Now every nickel is spent on the general spending of government. Instead of strengthening and adding to Social Security and baby boomers' retirement, we drain the trust funds of hundreds of billions of dollars. Instead of eliminating the publicly held debt, we will pass on to our children under existing projections $2.8 trillion in debt. Instead of paying $600 billion in interest costs, even if we had continued to reduce borrowing at this rate, there was a very large interest cost associated, given the trillions of dollars of national debt that we have. We were projected to spend $600 billion this decade on interest costs alone. That figure now is now $1.6 trillion, a $1 trillion increase in government spending just to pay the interest. Interest costs do not pave roads, interest costs do not help schools, interest costs do not put forth prescription drug coverage to help our seniors. Interest costs do not do anything. And we have put ourselves in a fiscal position where we are now going to have to spend $1 trillion more in these interest costs over the next 10 years because of the fiscal foolishness of that tax cut, compounded with the difficult circumstances of the recession and terrorist attack. All of this means that instead of reducing long-term interest rates, allowing you to get a better deal on your home mortgage, allowing businesses structuring long-term debt to operate at significantly lower expense levels, the Federal budget is going to put upward pressure on rates. The markets will know the Federal Government, the big interest hog at the trough, is once more gulping up credit; and it is going to cost more for everybody else relative to long-term lending. As bad as the situation I have told you is, it is worse, because the Congressional Budget Office did not account for some things that we all know are going to happen; and I will tell you what some of them are. The President has asked for $18.5 billion to increase homeland security. He announced that just this morning. I will tell you what, I cannot speak for my colleagues, but I am inclined to look very favorably toward the President's request. We have to do what we need to do to get security for the people of this country. The President also announced yesterday morning a $48 billion increase for defense. So on top of these figures, $18 billion yesterday, $48 billion today, and that is just in additional expenses announced by the President on homeland security and defense. The President continues to support, in the face of this red ink, a very expensive economic stimulus bill; whether one will pass or not remains to be seen. The cost to fully fund the recently enacted education bill, not a nickel of it is anticipated under the debt situation I have outlined. We are going to fund that education bill, at least in large part, and it is going to drive this debt situation higher. We will extend expiring tax breaks, and that is going to drive the debt situation higher. Those of us representing rural America are bound and determined to pass a farm bill so badly needed by our farmers, and that is not included in the CBO budget projections. That means the budget projection is going to be worse on that one as well. Mr. Speaker, when all of these actions are taken into account, and probably some more as well, the tax bill with many expiring provisions, those are likely to be extended, the alternative minimum tax, which will impact millions of Americans, an additional 35 million Americans will be hit with a tax increase under alternative minimum tax if we do not address that, and that has additional expense as well. The long and the short of it, then, is that we have gone from surplus and wonderful opportunity to deficits in a single year. Mr. Speaker, I say to my colleagues, we have to come to grips with this new fiscal reality as we start looking at what is to be accomplished with this Congress this year. We have to understand that any stimulus bill is going to be funded 100 percent from revenue coming in for Social Security. We have to understand that we are going to drive the deficit situation worse. As we look at these new spending areas, including those outlined by the President or those championed by many Members of the House, we have to understand that they are funded on debt and that we are basically sticking our children with the tab. We have to have a whole new dimension of fiscal responsibility, because the sunny days of surplus are behind us and the damnably dark days of deficits are once again with us. I see a couple of colleagues that have joined me on the House floor, and each of them I have had the pleasure of working with on budget matters. I recognize at this time the gentleman from Pennsylvania (Mr. Hoeffel), my friend and colleague.

Mr. POMEROY. I appreciate very much the gentleman's comments, as well as his ongoing participation in the Budget Group and his advocacy for sound fiscal policies in this country. Mr. Speaker, I yield the balance of my time, about 4 minutes remaining as our time is expiring, to the gentleman from Texas (Mr. Stenholm), who year in and year out has been the leading proponent for balanced budgets and sound fiscal policy. I am very pleased he has joined me for the conclusion of the special order, and I yield to the gentleman at this time.

Mr. POMEROY. Mr. Speaker, I thank the gentleman for his comments, and I very much appreciate his ongoing leadership on budget issues. They are at the core. I have a chart which illustrates the point the gentleman was making about how did we get in this hole? We have to be candid about assessing what happened because that is how we are going to learn how to go forward. This part, looking out 10 years, is lost revenue due to the tax cut. So as we can see, the tax cut played a very major role in this sharp change in the fiscal fortune of our country. It certainly was not the only factor. The green shows the effect of the slowing economy. We slipped into a recession, and that has certainly made a bad situation worse. The blue and the purple underscore additional adjustments, including expenditures that will be made, not anticipated, in the budget forecast. Combine all of these and we see that the Republican tax cut was perhaps the largest driver in putting us back into deficits, but it has been joined by a number of other considerations as well. It just goes to prove the point, we do not bet the ranch on everything working out perfectly. The budget bill did, and things have not worked perfectly, and now we have deficits to work with as a result. I see that the gentleman from North Carolina (Mr. Price), my cochair of the Democratic Budget Group, has joined me on the floor. I do not think the body has a more astute student of the budget than the gentleman from North Carolina, and I yield to him for his comments at this time.

Mr. POMEROY. Mr. Speaker, reclaiming my time, I thank the gentleman for his comments. The Congressional Budget Office I think did a good piece of work in their analysis which was published yesterday forecasting the loss of the surplus, the 10-year run into deficit that we will now have. They, however, in their forecasting, are bound to very formalized models, and these models cannot capture some of the extraordinarily likely and, in fact, inevitable actions that this Congress will take. Let us just review them again. First, $18.5 billion announced by the President this morning in homeland defense is likely to be added to the tab; next, $48 billion announced yesterday for defense, certainly likely to be added to the tab; $73 billion presently in the farm bill budget commitment likely to be added to the tab. That is on the spending side. Are we going to do anything to fund the education bill we have just passed with such fanfare? You bet we are going to spend some money there. That is an addition on the spending side. Then there is the tax side, because there are tax issues that simply have to be addressed, tax cuts that have to be advanced. These include extending the tax cuts that were time-limited and expired at the end of the last year. They include fixing the alternative minimum tax so that 35 million Americans do not find that they are seeing their taxes on the one hand go down under their existing tax form, but the alternative minimum tax raising significantly their tax liability on the other hand. We are going to fix that. It is going to be expensive to fix that. That is in addition to all of this. I actually believe that on a unified budget basis, which means all the revenues of the general fund, all the revenues coming in from Medicare and all the revenues of Social Security will be committed and spent and exceeded if we do not sober up to this new fiscal reality and collectively work together to address it. I have been disappointed in my time in this body at the very small common ground we can find between the partisan aisle. One area where I would have thought we might have found common ground is that red ink is bad, balancing the budget is good. We have seen this attacked, frankly, on both sides of the aisle, but attacked most vigorously by the Republican tax cut that passed last May. Last year is last year; what is done is done. But let us understand what happened as a result of that action and move together to fix it. We have got to reject that we are going to languish for the next 10 years in deficits, because our children will pay a terrible price if we act so irresponsibly as to run government on the red ink.

Mr. POMEROY. Reclaiming my time for a minute just before we leave this wonderful breaking news, we have got to credit the minority leadership for their role in getting the signatures. We do not have a majority here on the Democrat side, so we surely would not hit the target without some very brave participation from the Republican side of the aisle. And, after all, the very name McCain-Feingold represents on the bill that passed the Senate it is a bipartisan provision there. It ought to be a bipartisan provision here. But what our leadership had to encounter was a very different posture from the majority leadership. We believe the time came for campaign finance reform and the gentleman from Missouri (Mr. Gephardt) drove it as hard as he could. He has met the absolutely unyielding opposition, to even allow for a vote by majority leadership, the idea of campaign finance reform. I did not fault them for opposing it, but at least let us vote. The people want campaign finance reform. Let us vote. They did everything they could to stop it, but finally the people will have their way. This House gets to vote on campaign finance reform. And I applaud every single Member that put their signature on that discharge petition. This was not to be denied and now it no longer will be. Mr. Speaker, I yield to the gentleman from Maine (Mr. Allen).

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I rise in reluctant opposition to the conference report for the defense authorization act. This bill contains many valuable provisions but also one serious flaw--a new round of base closures, which I believe serves neither the best interests of our national security nor the best interest of communities throughout the country that host military installations. I strongly supported the defense authorization bill when it was approved by the House. I believe that Chairman Stump and Ranking Member Skelton of the Armed Services Committee correctly decided not to authorize additional base closures in the House bill. I am disappointed that they were forced under the treat of a presidential veto to accept a provision authorizing a new round in 2005. First, the purported cost savings associated with base closure are dramatically overstated at best, and, more likely, are illusory. The reality is that base closures cause significant short-term costs in exchange for marginal long-term savings. Contrary to the claims of base closure proponents, another round will not relieve the genuine budget pressures being experienced by our military. Second, we should not embark on a new round of base closures when the Armed Forces are still processing the more than 100 closures and realignments undertaken in the previous four rounds. We should not underestimate the upheaval these actions create for our men and women in uniform and their families. Nor should we ignore the impact of these transitions on our military readiness. Third, it makes little sense to permanently shutter more installations when we are still grappling with the question of how best to match defense resources to the evolving threats to our national security. We are currently engaged in a war against terrorism that the President has said could last for some time. We should leave ourselves the flexibility to meet these new threats by preserving needed basing capacity. Finally, for host communities, this base closure provision is perhaps the worst-cast scenario. By authorizing a new round but postponing it for four years, this bill well cast a long, dark cloud over base communities across the country. The threat of closure stifles new investment, which is especially threatening during these difficult economic times. In North Dakota, despite our well-founded confidence in the long-term future of our bases at Minot and Grand Forks, the specter of base closure will have severe economic impacts for our state. As I said, this bill contains many positive provisions, including a significant pay raise for our men and women in uniform, needed investments in modernization, and funds to upgrade our infrastructure. I strongly support each of these items, but, because the bill also includes an ill-advised authorization of more base closures, I am compelled to vote ``no.''

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I rise in opposition to H.R. 3005, a bill to provide the President with the authority to negotiate international agreements and submit them to Congress for and up-or-down vote, without amendment. Last month, the United States and other members of the World Trade Organizations launched a new round of trade negotiations. The members agreed to a far-reaching agenda, covering topics from e-commerce to manufactured goods to financial services and, most importantly to North Dakota, agriculture. With such an ambitious agenda to tackle, an agreement is not expected for at least four years. For agriculture, the new agenda gives us cause for both hope and concern. On the positive side, the agenda calls for the eventual elimination of export subsidies, which the Europeans have used to rob market share from U.S. farmers. In addition, the efforts of some countries to reopen prior agreements in order to erect scientifically unjustified barriers to U.S. commodities were rejected. The agenda's commitment to achieve substantial new market opening measures also stands to benefit U.S. farmers, who earn $1 out of very $3 from export sales. On the hand, I am troubled that U.S. trade officials have so freely offered to negotiate our export credit guarantee program, which is not an export subsidy but a program to help finance U.S agriculture exports at commercial rates. I am concerned that the new round of negotiations could expose our sugar beet industry--worth $1 billion annually to the Red River Valley--to unlimited imports of subsidized product sold dump market prices. What's worse, even as our government was putting the export credit and sugar programs squarely on the table, the Europeans were staunchly defending their own subsidies and the Canadian government was declaring the Wheat Board to be off-limits. Although U.S. attempts to ``lead by example'' in trade negotiations may win points with free-trade theorists, it will not in win trade agreements. We should vigorously defend our programs and yield concessions only when we receive concessions in exchange. The farm bill debate has also reflected what I believe to be the Administration's flawed approach to trade policy. Among its reasons for opposing the House farm bill, the Administration said that restoring a price safety net for family farmers would undermine our trade negotiating position. I believe, quite the contrary, that a renewed commitment to our farmers in the form of strong farm bill improves our negotiating position. If the U.S. withdraws support for our farmers unilaterally, what incentive do the Europeans have to negotiate away their tremendous subsidy advantage? The negotiations launched earlier this month have a long way to go. Only time will tell whether our hopes for American agriculture will be realized or our concerns will prove well founded. Before these negotiations have even begun, however, Congress is being asked to approve fast track, a bill authorizing the President to negotiate trade agreements and submit them to Congress for an up-or-down vote, without amendment. I believe it would be unwise to approve fast track before we know whether these negotiations are headed in a positive direction for American agriculture. Let's make sure that the Europeans will not be allowed to maintain their overwhelming subsidy advantage and that the Canadian Wheat Board won't be able to continue to exploit its monopoly position to the detriment of our farmers. Let's make sure that our sugar industry won't be hung out to dry and that the Administration won't try to undo our domestic farm program in trade negotiations. Once we have greater confidence that these trade negotiations are serving the interests of our farmers, we can move forward with fast track authority. Until our concerns have been addressed, however, we should not give our trade negotiators the blank-check they are seeking. For now, there are too many open questions for us to give up our right to amend future trade agreements.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I thank the gentlewoman for yielding me time. Mr. Speaker, I want to begin by commending the Committee on Financial Services leadership, the gentleman from Ohio (Chairman Oxley) and the gentleman from Louisiana (Mr. Baker), the subcommittee chairman, as well as the ranking members, the gentleman from New York (Mr. LaFalce) and the gentleman from Pennsylvania (Mr. Kanjorski). This committee has done a very serious effort at trying to address an urgent problem. We must act. We simply must act. Those are the words of the gentleman from Louisiana (Chairman Baker) to the Committee on Rules yesterday in describing the urgency of moving this legislation. Well, what a shame, what an incredible shame that majority leadership would then stomp all over the work product brought out of the Committee on Financial Services to address this issue by drafting onto the bill an unrelated, partisan, highly ideological agenda. Sometimes we just need to put our partisan roles aside and deal in a bipartisan way to address the concerns of this Nation, especially the urgent needs of this Nation. There was no need to make a political issue out of this. Both sides recognize the need to act, both sides can find an agreement in terms of how to get this terrorism coverage out there through this Federal legislation. Instead, the majority leadership dramatically complicates this whole effort to address and get enacted legislation in the few remaining weeks. My friend, the gentleman from Ohio (Chairman Oxley) has described this as a fair and equitable rule. What is fair and equitable about a rule that prohibits us from offering an amendment that would restore his own work product, the Committee on Financial Services' work product, in place of the new language dropped on the bill by majority leadership? We wanted to get this and get it right. I used to be an insurance commissioner. I can tell you, this is a very technically demanding, tricky piece of work we are attempting to do here, and to sidetrack the whole discussion by slapping the red herring of tort reform unnecessarily onto this legislation detracts considerably from our efforts and our ability to get this right. This was a time when the House could have provided leadership to the Senate by passing a bill setting the framework for how this tort reform could have been established. We could improve this today significantly if the rule would allow us to put on the bill the committee's own work products. Reject this rule. We need to do a better job.

Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding me this time, and I commend him and the rest of the leadership of the committee, including Chairman Oxley, ranking member LaFalce, Subcommittee Chairman Baker, and ranking member Kanjorski for their really terrific work on this matter. This should be the finest hour for the Committee on Financial Services. We have an issue where there is broad bipartisan agreement. We need to act. We need to act now. Because without enactment before we go home, there will be significant capacity consequences in the availability of coverage for terrorism. The ripple effect of that through the economy will be significant. And that is why we have to act. Now, under these circumstances, committee leadership undertook this difficult assignment of creating some kind of public mechanism to wrap around the private insurance capacity to continue to insure this risk, a risk that has grown infinitely more grave and significant. Out of this long, rather intense legislative process came a bill that, after committee markup, passed by voice vote, virtually capturing all of the members of the committee. Now, it was recognized by committee leadership not to be the perfect bill, that more work would be required; but it was the legislative format for the congressional response that, I believe, would have provided direction to the Senate and would have been the principal way in the end we enact this legislation. Well, what happened? This work product was taken away from the committee. It was ripped up and rewritten. It was wrecked and brought forward. And the irony of ironies is that now the chairman of the Committee on Financial Services has to lead the debate for its enactment. I believe the committee leadership deserved better than this in light of the fair-minded effort they made to get a solution created. There are two reasons to oppose this bill: substance and process. And the argument as to substance, I believe, has been very well advanced by previous speakers; and I will not reiterate that part. But I do want to speak a bit on process. This is one of the most technically difficult assignments this body has undertaken, and to do it in a tight time frame makes it particularly difficult. There are lots of ways that have been advanced in terms of how we construct this assistance to keep terrorism coverage available. The administration took a whack at it. They had one approach. A bipartisan effort between Senator Dodd and Senator Gramm in the Senate took another approach. Chairman Baker worked with Chairman Oxley to construct an approach that, in the end, was quite a bit like the approach taken by ranking members LaFalce and Kanjorski. Out of all these approaches, none of them have the offending provisions slapped on in a kind of a haphazard, almost cavalier way by House majority leadership in bringing this form. What they have done is thrown a red herring into this whole debate as to how we construct the package. I believe passage of this bill does not advance completion of the terrorism insurance assignment; I think it makes it even more difficult. Because rather than focusing on the technically demanding issues before us, we are also going to be debating unrelated, ideological points of agenda that really have no place, especially when considering the dwindling hours we have to get this bill into place. I believe that, in the end, we have to act; but we can best act by rejecting the flawed proposal that has been put before us and going back to the committee, bring their bill forward to get this on the track that we need to go.

Mr. POMEROY. Mr. Speaker, I had hoped the motion to recommit would offer us the opportunity to fix this bill. I believe the bill is flawed, and I will be voting against it. Unfortunately, minority leadership staff has fouled up, in my opinion, the motion to recommit. I will be voting against the motion to recommit, and voting against the bill as well.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I rise today with my friend and colleague from Illinois to introduce a bill that will provide Medicare beneficiaries with direct access to qualified physical therapists. I join Mr. Crane today in introducing the ``Medicare Patient Access to Physical Therapists Act of 2001,'' a bill that is patient-focused, patient-friendly, and puts the patient first. This legislation will enhance access to quality health care services for Medicare beneficiaries under Part B and expand choices for Medicare beneficiaries. The time is right for this legislation, Mr. Speaker. Thirty-four states currently allow direct access to physical therapists without a referral requirement. The citizens of my own State of North Dakota have been able to directly access their physical therapists since 1989 without limitation. Under this provision of State law, my constitutes have enjoyed nearly unfettered access to the expertise of licensed physical therapists without the delay or added cost of a physician referral. This is especially important to rural areas of this country where we are frequently underserved by health care professionals. Physical therapists in North Dakota are able to treat many impairments, functional limitations, disabilities, and changes in health status for our residents, and as such, they contribute to making our population more productive and healthy. Access to physical therapist services without a referral requirement already has been successful around the country. Studies conducted by Johns Hopkins and Georgetown University researchers demonstrate that utilization of services was actually lower in episodes of care initiated without referral than episodes initiated with a physician referral. My constituents--who incidentally make up the largest population of seniors per capita--are entitled to the same access under Medicare as the rest of the citizens in North Dakota and across the country. North Dakotans and all Medicare beneficiaries should have better access to qualified health care providers, and physical therapists can be instrumental in this role. Finally, I think it is important to recognize that this bill will raise the standard, domestically and internationally in effect, for qualified physical therapists. The new standard endorsed by the American Physical Therapy Association requires a master's or doctoral degree, which I believe will serve to improve patient care across the country. Through better access to highly qualified health care professionals, we ensure enhanced care and services for all Americans. Mr. Speaker, I ask for my colleagues' consideration and support for this important legislation to provide direct access to physical therapists under Medicare.

Mr. POMEROY

Mr. POMEROY. I thank the gentleman for yielding time. Mr. Speaker, I think the biggest problem today for plan participants of 401(k)s is that they have been given responsibility for the investment of their retirement funds without being given access to information to help them make informed decisions as they deal with something as important as trying to find optimal earnings on their retirement savings. I think many of us in puzzling with our Thrift Savings Plan options think, This is hard, this is confusing, I don't quite know if I am doing this in the right way. I will tell my colleagues, looking at my returns from the last little while, I am quite sure I am not doing it the right way. I could use more advice. An awful lot of people in the workforce today are thinking exactly the same thing. And so we need a strategy to get them more advice. I think the chairman's strategy represents a very excellent and constructive way of approaching it. The chairman and I are in strong agreement that as we try and get more advice to plan participants, we do not want to put people at risk of heavy sales practices that might be against their interest and have them investing in funds that are inappropriate for their situations. Therefore, if we have the following standards in a new investment advice regimen advanced by this legislation, I think you can actually get more advice and still protect the employee's interest. You need to have the fiduciary standard apply so that the advisor must be providing advice solely for the interest of the plan participant or the employee. You have got to have some type of administrative recourse so that if the individual violates that advice, you can withdraw that individual's license. You can take away their employment. You can put them out of business. I used to be an insurance regulator. There is not a better policing mechanism than being able to put the guy out of business to make certain that they are providing advice that is appropriate and comports with the legal requirements. Thirdly, you need to have fee disclosure. These things have cost loads. Increasingly, employers have shifted all of the expense to the employees on the loads of 401(k)s. Employees need to know what it is going to cost them as they look at these different options. Having a disclosure plan and in fact having a uniform disclosure format of fees is going to help the individual make sure they know what they are getting into as they make various investment options. And so with this legislation, subject to some further amendment, we are able actually to achieve the goal of getting more investment advice out there and helping people with their choices. I do not think that the opponents of this legislation have reflected enough upon the disservice we do to those in the workforce by giving them the responsibility of investing their own money but depriving them of the information to do it. Defined contribution plans presently represent 90 percent of all retirement savings plans in the workforce. There are $1.5 trillion worth of investment in 401(k) plans. But still we have less than a quarter of employer-sponsored defined contribution plans provide for advice to the workers in terms of how to invest within those plans. I have held a number of round tables across North Dakota visiting with employees, visiting with employers, about how we can do a better job with facilitating retirement savings in this country. Information in terms of how to best handle their retirement money is a constant theme raised not by the big bad industry that some on this side of the aisle would talk about, but by employees themselves or by employers reflecting what employees are asking for. We can do a better job, and this legislation will do it.

Mr. POMEROY. I thank the gentleman for yielding. Mr. Speaker, defined contribution plans which place the burden of investment decisions on workers will be the primary source of retirement income for an increasing number of workers. Unfortunately, these workers have little access to professional investment advice which could help them grow their retirement savings in a prudent manner. Current law restricts many sources of advice to workers. We must get additional advice to participants. I salute the gentleman from Ohio for his earnest efforts in trying to achieve this goal. This bill goes a long way in giving workers access to professional investment advice. In addition, it provides two important features that will help insulate workers from advisors who may otherwise pose a conflict of interest, a fiduciary duty owed to the worker and a disclosure of all fees and conflicts. We agree that the fiduciary duty of an advisor is a high standard not to be taken lightly and that any advisor breaching this duty should not be able to continue to give advice. We also agree that the bill's disclosure requirements will give workers a clear picture of what fees would impact their accounts and what conflicts the advisor has with any offered recommendation. However, this bill, with a few modifications, can provide further protections to workers without burdening financial institutions. I am glad that we have been able to reach an agreement in regard to these modifications. Unfortunately, we are considering this bill under a modified closed rule and cannot make these modifications on the floor today. These modifications would require the disclosure of the availability of independent advice providers and require the Secretary to draft model disclosure forms for fees. The disclosure would remind participants that independent advice can be sought outside of the plan context and the model disclosure forms will assist service providers in complying with the disclosure requirements. Furthermore, these models will ensure uniformity among the disclosures to the reasonable understanding of the average plan participant. Lastly, we have agreed to provide further clarity in this bill with regard to banks by restricting the provision of investment advice to their trust departments. It is my belief that every advisor giving advice under this bill should be individually licensed by a Federal or State regulatory agency so that when an advisor breaches his fiduciary duty to a participant, the regulator will have the authority to put the bad actor out of business. However, I understand that banks operate under a special regulatory scheme in which some investment advisors are not individually licensed but work within their bank's trust department. I am satisfied that these investment advisors working within trust departments under an umbrella trust license can be subject to the same administrative sanctions as registered investment advisors, insurance agents and broker dealers under this bill. Therefore, with these three modifications, we can provide further protections to workers without burdening financial institutions. As this bill moves through the legislative process, I ask for the chairman's support to make these modifications.