Jack Reed

Mr. REED

Mr. REED. Mr. President, I believe on the amendment that I offered earlier today on missile defense, we have reached agreement. It might be appropriate at this time to call up the amendment.

Mr. REED. Mr. President, I will lay aside the pending amendment. We are trying to identify the numbers so we can call up the amendment. I suggest the absence of a quorum.

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. REED. Mr. President, I ask unanimous consent to lay aside the pending amendment and call up amendment No. 711.

Mr. REED. I ask unanimous consent to add as cosponsors Senators Feingold and Feinstein.

Mr. REED. Mr. President, I ask unanimous consent that the amendment be modified with the changes at the desk.

Mr. REED. The staffs have been collaborating all day. They have reached an agreement. The modifications make it clear that goals will be established with respect to the National Missile Defense Program. The modifications are acceptable to the majority and minority. I believe we have a meeting of the minds on all the details.

Mr. REED. I urge acceptance of the amendment at this time.

Mr. REED

Mr. REED. I thank the Chair. Mr. President, I rise to express my support for the Defense authorization bill that we are debating today and for the remainder of this week. I first want to thank the chairman and the ranking member for their courtesy, for their thoughtfulness, and for their collegiality in the conduct of the committee in the preparation of this bill. They are two Senators I respect and admire greatly. I thank them for their help and participation. This is, overall, a very good bill that meets the needs of our fighting men and women. I have some reservations which I will talk about tonight, and during the course of the week I will suggest some improvements in the bill. But overall, this represents a thorough and consistent and appropriate discharge of our responsibility to ensure that the men and women of our Armed Forces are the best prepared and best cared for in the world. Let me also say this year I had the privilege and the opportunity to serve as the ranking member of the Emerging Threat and Capability Subcommittee. I had the pleasure of working with Senator Pat Roberts of Kansas. I also want to thank Senator Roberts for his courtesy and thoughtfulness and for his collegiality. He created a cooperative spirit on the committee which resulted in legislation that is both thoughtful and which I think is a vast improvement for the men and women of our military services. The package supported and presented by the subcommittee dealt with a range of subjects. The subcommittee itself was created 4 years ago to deal with new emerging threats and our response to these threats. The subcommittee looked at issues such as the proliferation of weapons of mass destruction, terrorism, and information warfare, and it also focused on ways in which we can respond to these threats. One of the areas, for example, is the Defense Science and Technology Program--providing the research and the analysis that makes our forces the most technologically advanced in the world. Another area we are concerned about is the Cooperative Threat Reduction Program. There is a rather simple and obvious point: If we can reduce the threats, that is a better way than to respond to those threats if they are poised against us. We are also concerned about our special operations forces. I think we have all seen in the past few months how effective and how important these forces are. They really are the tip of the spear when it comes to our efforts on the war on terrorism. Needless to say, the Emerging Threats Subcommittee is obviously involved in many issues that are of critical importance today. Let me speak just briefly about some of the issues as we approach the committee markup. Science and technology is a critical component of our warfighting capability. This was brought home to me graphically in August of 2001. About 20-plus years ago, I commanded an infantry company--a parachute company--of the 82nd Airborne Division. And in August of 2001, I went back to Fort Bragg to watch a live fire demonstration by a division of the 82nd Airborne Division. I was, of course, very pleased with the toughness and skills of the paratroopers. But I was also impressed with the technology. Each soldier had a night vision device, and each soldier had a laser-aiming device on their weapon. Twenty-five years ago, there was one star-light scope for the whole platoon. It was a big, bulky device which we carried around and used sparingly. There was no laser-aiming device on their weapons. These are graphic examples of the impact of science and technology on our ability to fight. They have made our soldiers, marines, and airmen the most formidable in the world because when we couple this technology with their skills and spirit and their courage, they are unstoppable. I am pleased this bill includes provisions that strengthen the coordination between the Science and Technology Program. We really want to ensure that we get the maximum value from our technological investment. I am also very pleased the bill includes Senator Lieberman's legislation which will increase research on technologies to help improve communications and networking and to help address our bandwidth crisis in the field. Again, 25 years ago when I commanded troops, bandwidth was a concept which no one talked about. Today, it is an item that is critical to the success of any military force. When members of the committee go out--as I know my colleagues do--and visit troops and talk to commanding officers, one of their consistent complaints is, We just do not have enough bandwidth. We don't have enough space on the spectrum to push out all the digital information we have to all of our warfighters instantaneously. So I think Senator Lieberman's proposal will give us an added impetus to examine these issues of bandwidth and conductivity. It is literally the electronic backbone of our military forces. There are some issues of concern which I have with respect to science and technology. All of our experts looking at the appropriate level of funding for science and technology suggest that we should be investing about 3 percent of the defense budget in those programs. Secretary Rumsfeld has said the Quadrennial Defense Review made that point, and the Defense Science Board has endorsed this laudable goal of 3 percent expenditure on science and technology. However, last year the final defense budget did not reach 3 percent, and this year the President's request was $1 billion below last year's vital defense budget. While I am pleased to note that this bill adds nearly $500 million to the Defense Science and Technology Program and supports significant investments in university research, advanced research to support special operations, and advanced undersea warfare technologies, the funding levels fall short of this 3 percent. I think we have to maintain robust investment in our science and technology. We tried to close the gap, but there is still a gap. I hope in the next reauthorization--indeed in the conference--we can try to close this gap. In the area of nonproliferation programs, we all understand that weapons of mass destruction is one of the key threats, particularly if they get into the hands of terrorists. One of the most cost-effective ways to deal with this issue of nonproliferation is to support the Threat Reduction Program. I am pleased to report again that this bill authorizes full funding of these threat reduction and nonproliferation programs, including the Nunn-Lugar program. This full funding is critical if we are going to eliminate the proliferation threat and if we are going to lower the danger that these materials pose to us, particularly if they get into the hands of terrorists. Also, the bill includes authority to use Cooperative Threat Reduction Program funds outside the former Soviet Union under appropriate circumstances, as requested by the President. Again, I think we have to recognize there are many places in the world, regrettably, where material could fall into the wrong hands. This gives the President authority for a much wider geographic approach on proliferation. One of the problems we particularly worry about is the presence of a vast stockpile of lethal, chemical weapons--some of them small enough to fit into a briefcase--in Russia. This is the residue of years and years of Soviet research. Under the Nunn-Lugar program, we have a project to destroy all those weapons so they cannot be used and do not fall into the hands of terrorists. There is a set of conditions that requires a Presidential certification before the money can be spent, but this bill provides the President a 1-year waiver of the certification so funds can be used to destroy these chemical weapons. Again, I thank Chairman Roberts, particularly, for his consideration of this request and for his willingness to provide this 1-year waiver. As I said before, our special operations community each day demonstrates their incredible value in our war against terrorism. In recognition of the expanded role of the special operations forces, the Secretary of Defense has declared that rather than simply being a supporting command, special operations would be a command in itself. Let me try to parse that. Before special operations command supported the CINCs, CENTCOM, SOUTHCOM. Today, they not only support these CINCs, but they are their own command in and of themselves with new responsibilities. I applaud this decision, but I believe Congress should have a better appreciation of the new role that special operations command is taking on. Therefore, the committee included, at my suggestion, a recommendation so the Secretary of Defense can report to us information regarding this new role. The information would include items such as the military strategy for utilizing special operations troops to fight the global war on terrorism and how the proposal contributes to the overall national security strategy with regard to the war on terrorism; the scope of the authorities granted to the commander of the special operations command by the Secretary of Defense; the operational and legal parameters within which special operations forces will exercise these authorities; the impact on existing special operations missions; the decisionmaking mechanisms, to include consultation with Congress, that will be involved in authorizing, planning, and conducting these operations; and future organizational and resource requirements for conducting the global counterterrorism mission. I believe the answers to these questions will help us frame our oversight responsibility, and I also think it will help provide the details for the special operations commander and the Department of Defense in relation to their responsibilities and their missions in this new responsibility they have been given. These are just some of the highlights with respect to the Emerging Threats and Capabilities Subcommittee. I want my colleagues to know of these threats. There are other issues I would like to comment upon in addition to those related to my responsibilities on the subcommittee. There was, in the committee, a proposal to, in my view, change the McKinney-Vento Homeless Assistance Act. I thank my colleagues because, through collaboration with Senators Ensign, Allen, and others, we were able to do what I think the committee wanted to do: to provide the opportunity to temporarily suspend these regulations if property is needed by a State for emergency purposes but not to undermine completely and irrevocably the responsibility we have to provide suitable excess Government facilities for homeless purposes. I am very pleased and proud the committee was so responsive and so cooperative in that regard. I also included in the bill an amendment which again was adopted unanimously--I thank my colleagues--that would direct the Secretary of Defense to provide guidelines to the Defense Policy Board. This is an advisory committee consisting of distinguished Americans who provide advice and insight, without compensation, to the Secretary of Defense. It is a very important board but recently it has come under some criticism. I think in order to dispel that criticism but also to convince and assure the public that access to information and access to key decisionmakers is not being used for profit-making purposes but solely is an exercise in the patriotism of the individual members of the board, I ask that the Secretary of Defense provide guidelines. I hope these guidelines are forthcoming. I think they will be useful. I am pleased they are now included within the bill. Let me turn to several other topics quickly because I see my colleagues are also in the Chamber to speak. Within the context of missile defense is an area of the bill that I have some grave reservations. We have decided to pursue missile defense. The President has made the decision, and it is his prerogative to do so, to withdraw from the ABM Treaty. The question before us today is, will we do this in a logical, thorough, systematic way? Will we do it in a way in which we can assure the American public we are proceeding with all deliberate speed but also in a way that we can justify a product that eventually will be useful to national defense? These are the basic issues that come before us today. The President has announced, however, that he intends to field a national missile defense system by September 2004, despite the fact the Pentagon's Director of Operational Test and Evaluation concluded, in his fiscal year 2002 annual report, that the system ``has yet to demonstrate significant operational capability.'' So the plan, in effect, is to field the system before we even know if it will work. I think that raises grave questions about the usefulness of such a system and grave questions about the level of funding that is going to support a system if we are not ready to declare it operationally useful yet we are ready to declare it will be deployed. We also understand after 9/11 there are other ways to attack the homeland of the United States and that it is not just through the use of long-range missiles. We have to, in our debate and our discussions and our decisions, be very careful with resources that could be spent in other ways to protect our country and our homeland, particularly. One of the other aspects of the system that is proposed for deployment is that the decision has been made to field this system without a radar capable of distinguishing between a warhead and a decoy. The radar is a key aspect of any missile defense system. Indeed, the Clinton administration was criticized very harshly for their national Missile Defense Program, yet this administration has decided to deploy a system that appears, at least on the surface, to be far less capable than the one proposed by President Clinton, particularly when it comes to the radar architecture. Another issue, with respect to missile defense, is the decision to significantly reduce the number of tests. Ironically, it seems that one of the byproducts of the President's decision to rapidly field a national missile defense is a concomitant reduction in the amount of testing. It seems to me that is sort of doing things exactly the wrong way; that if you are going to accelerate deployment, you would accelerate testing also. I believe if we are going to have confidence in a system that we field, we have to make the investment in testing now, and not just simply reply upon our faith in technology that has not yet been adequately tested. Originally, 20 national missile defense tests had been scheduled to occur between mid-2002 and 2007, but after the President's deployment decision, 9 of these 20 tests were canceled without explanation. Furthermore, the scheduled date to complete this new, very minimal test plan is now 2009 instead of 2007. That is 5 years after the advertised deployment of this system in 2004. We have to recognize this Missile Defense Program is the largest single acquisition program in the Department of Defense, with a budget request of more than $9 billion in fiscal year 2004 alone. For perspective, this funding could buy 9 DDG-51-class destroyers, 45 F-22 Raptor fighter aircraft, or more than 2,800 Stryker armored vehicles. So the decisions we make are not without cost, not without opportunity costs. The investment we make in missiles means, quite literally, we cannot buy new destroyers; today we cannot buy more F-22 Raptor fighter aircraft; we cannot buy more Stryker armored vehicles. So again, I think we have to look very carefully at the deployment, at the testing. I think we are all committed to the notion of someday putting in place a missile defense system that will effectively defend the United States, but we cannot do it hastily, and we cannot do it simply on a wish that it works. I believe we have to prove it works before we deploy it or simply declare it is deployed. Over the last several years, we have tried to put some structure, if you will, in the Missile Defense Program. For example, at the beginning of fiscal year 2002, Congress required that the Bush administration establish cost, schedule, testing, and performance goals for missile defense, and we directed the General Accounting Office to review whether progress was being made toward these established goals. By the end of 2002, the Bush administration had still not established any meaningful goals for missile defense. Consequently, in November 2002, the Director of Acquisition and Sourcing Management at the GAO wrote to the committee to say that since no goals had been established, GAO could not complete its review. I think, at a minimum, there should be costs, there should be schedules, there should be goals, certainly at a level so the GAO can at least offer a preliminary assessment of whether these goals are being achieved or what effort must be expended to achieve these goals. That is something that has not been done. I support prudent research and development and testing on national missile defense, but I think ultimately we all want to assure the American people that when we put something in the field, it will work, and that we know precisely what it will do when it is in the field. I don't think that is too much to ask the administration. Finally, let me cover a topic that will receive a great deal of attention over the next couple days. That is the issue of nuclear policy. I have grave concerns over some of the provisions in the bill. Under the guise of maintaining flexibility and keeping all options open, this bill approves and encourages the administration to continue its push to develop, test, deploy, and possibly use nuclear weapons. I heard my colleague Senator Levin earlier today referencing the quote by former Ambassador Brooks, the head of NSSA, who said his bias is to something that can be used. For many decades, our bias was against even thinking about the use of nuclear weapons if we could avoid it. One of the consequences of the proposal for a low-yield nuclear weapon, for a robust nuclear earth penetrator is, if not a fact, an observation that as you make weapons such that their collateral damage is minimal, there is a tendency to use them. We have to ask ourselves in our recent conflict in Baghdad, would we have dropped dumb bombs in the middle of crowded neighborhoods in an attempt to attack the leadership of Iraq? It would have been a much harder call. But because we had precision weapons with low collateral damage, as a result the call was much easier--a tough call, nevertheless, but easier. I fear that as we move down this path for low-yield nuclear weapons, more usable nuclear weapons, the threshold, the inhibition against use will come down also. This is just not another tool in our tool kit. Nuclear weapons have been, since Hiroshima and Nagasaki, a weapon every nation has tried to avoid using in combat. I hope we can continue that effort, but I fear the language, the momentum, the incentives that have created these exceptions in the bill are driving us down the wrong path. We should respond by amending the legislation to reflect the continuing desire to put nuclear weapons outside of use, to delegitimize their use in conflict. We will have opportunity over the next several days to debate in much more detail the issue of nuclear weapons, the issue of missile defense. I believe this legislation overall is sound. If we could make successful amendments to some of the provisions with respect to missile defense and particularly the provisions with respect to nuclear weapons, we can send to conference a bill of which we will all be very proud. I hope in the next few days we can do that. I thank the chairman and ranking member for their thoughtful approach and for their continued efforts over the next few days. I yield the floor.

Mr. REED

Mr. REED. Mr. President, I ask unanimous consent to include Senators Landrieu and Sarbanes as cosponsors.

Mr. REED. Mr. President, I send an amendment to the desk.

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

Mr. REED. Mr. President, I offer this amendment along with Senators Corzine, Mikulski, Kerry, and Rockefeller. It is a sense-of-the-Senate amendment. It addresses the potential detrimental effect on the low-income housing tax credit by proposing to reduce or eliminate taxes on dividends. If those proposals with respect to dividends are passed, they could provide a disincentive for corporations to invest in the low-income tax credit, which is the major form of support for low- income and moderate-income housing, and rental housing in particular, in the United States. I understand this amendment is acceptable to the other side. I urge its adoption.

Mr. REED

Mr. REED. Mr. President, today I joined 49 of my colleagues in voting to waive the Congressional Budget Act in support of Senator Dorgan's amendment to restore the pre-1993 tax treatment of Social Security benefits. In 1993, I joined a majority of Congress in voting for the Omnibus Budget Reconciliation Act, which combined with subsequent similar laws, eliminated the deficits of the early 1990s and the debt that had grown exponentially under Presidents Reagan and Bush. Included in this 1993 Act was a provision that changed the way Social Security benefits for individuals making over $25,000 and couples with income over $32,000 were taxed. Like many of my colleagues at that time, I believed there were more appropriate ways to eliminate the deficit, but budget procedures prevented them from being considered, and, while there were partisan amendments offered at later dates to reverse this policy, they did so by increasing the deficit, so I and a majority of my colleagues opposed these proposals. Today's vote was different. It was different because the President and the Republican majority have brought about a striking reversal in our Nation's fiscal policies. In the span of less than 3 years, the government's fiscal situation has deteriorated from budget surpluses to near record budget deficits. We have gone from concerns that we would retire our mountains of public debt too quickly to considering the President's request to increase our debt limit to its highest level ever. And, today we are voting on a tax bill that will only exacerbate both of these problems. Indeed, it appears that the majority is resolutely determined to cut dividend taxes for the most affluent in our society. These actions are being taken without regard for fiscal soundness and without any consideration of the impact and the burden decisions we make today place on future generations. In this environment, Senator Dorgan's amendment to aid senior citizens rather than the wealthiest 1 percent of Americans, is the appropriate policy because at the very least if we are going to deficit spend, we should direct those resources to those individuals who have already contributed in so many ways to this great Nation. It would be my hope that we can find a way to address 1993 OBRA in a manner that aids deserving seniors while protecting the long term solvency of Social Security and restoring some sense of discipline to the Federal budget process.

Mr. REED

Mr. REED. Mr. President, we find ourselves here, yet again, confronted with the third tax cut package in 3 years from the President. As a recent Washington Post article pointed out, President Bush seems dead set on ramming through tax cuts every year he is in the Presidency---regardless of the economy, regardless of the budget deficit, regardless of its competition with much-needed programs like a universal and comprehensive prescription drug benefit for Medicare. In fact, after years of harping on budget deficits, the Republican Party has now jettisoned its sense of fiscal responsibility, but only after President Clinton adopted that same fiscal responsibility and successfully delivered budget surpluses. Now, Republicans are silent on the issue. But only when we put all of these concerns aside do we get to the most fundamental question---the question of fairness. President Bush has taken great strides to launch preemptive rhetorical attacks, claiming Democrats are engaging in class warfare with opposition to tax cuts. But when we consider the facts, it is the President who is engaging in class warfare by pushing through a package that steals from the poor and then gives to the rich. His preemptive rhetorical attacks will not measure up to the facts. So, with all the challenges we have ahead, we are being asked to vote on another tax cut that will not help the average American family. It is incumbent on us to separate the myth of Republican rhetoric from reality in how this tax cut will affect our constituents, our families, and our country. It is time to set the record straight. Myth 1: The Republican tax proposals are best at generating new jobs and promoting a strong sustainable recovery. The reality is that the Republican tax proposals are poorly targeted to the problems facing the economy. They generate fewer jobs and less economic growth this year when they are needed most than does the Democratic alternative. The economy is in a slump now, with 2.7 million fewer private sector jobs than in March 2001, and even the Fed's outlook for the near future is weak. Economic forecasters expect that the economy will eventually bounce back, but they have been expecting a recovery ``soon'' for over a year and it has not come yet. With the economy still in a slump, with excess unemployment and underutilized factories, the policy we need now is job-creating stimulus that restores full employment quickly. Republicans still insist that long-term tax cuts for the wealthy somehow create jobs, despite the poor track record that 1.7 million jobs have been lost since passage of the 2001 tax cut. Their program is so backloaded that it doesn't take effect until past the time when it is needed. Such a policy is not just ineffective but counterproductive, because it creates large deficits and an increase in the public debt that is a drag on long-term growth. Additionally, most of the Republicans' proposed capital income tax cuts reward capital owners without directly encouraging new capital formation or higher output. Such tax cuts can't be expected to create new jobs if they don't encourage output. In fact, to the extent that the tax cuts effectively reduce the cost of capital facing businesses, some businesses may be encouraged to substitute capital for labor without increasing their output, so that jobs are lost rather than gained. If the goal of the tax cut is really job creation, the tax cuts should be designed to directly encourage businesses to hire more workers. The Democratic proposal adheres to the basic principles of sound policy: it provides a boost to job creation and economic growth now when it is needed and does not create large future deficits or increases in debt that are a drag on growth. The Democratic plan just has ``more taste'' and is ``less filling.'' When the JEC Democratic staff compared the impact on jobs and growth of the President's $726 billion ``Jobs and Growth Initiative'' and a much smaller but more targeted Democratic alternative, they found that the Democratic proposal generated roughly twice the additional jobs and growth by the end of this year than the President's plan but at one- seventh the cost. The Republican proposal provides less growth and fewer jobs in the first year when they are really needed than the Democratic proposal. Myth 2: The Republican tax proposals are good for economic growth. The reality is that the Republican tax proposals hurt economic growth and depress national income in the long run. An analysis by the JEC Democratic staff found that because of its long-run budgetary costs, the President's plan had adverse long-run supply-side effects that lowered national income in 2013 by 0.4 to 0.6 percent. In their most recent analysis of the President's budget, the CBO found adverse macroeconomic effects if tax cuts are not paid for-- that a proper ``dynamic scoring'' would raise, not lower, the costs of the administration's tax proposals. Economic theories that claim that private saving should fully make up for drops in public saving are unsupported by experience. What did we learn from the Reagan era and the fiscal discipline of the 1990s? The Reagan tax cuts pulled down both public saving and national saving; the tax cuts failed to generate the large supply-side responses that had been claimed by the proponents of the cuts. Myth 3: The Republican proposals are fair and are aimed at the middle class. In reality, the Republican proposals are unfair and are heavily tilted toward the very top of the income distribution. The lion's share of the tax cuts enacted in 2001 already went to the very richest of households, particularly the tax cuts scheduled to take effect after 2002. Before the 2001 tax cut, the justification for large tax cuts for the wealthy was that we were simply ``returning the people's money'' and getting rid of surpluses that were too big, and the wealthy were the ones who paid the most in taxes. But that is clearly not the case because now we have no surpluses. By 2010 when the tax cut is fully phased in, over a third of the tax cut goes to the richest 1 percent of households, while less than one- fourth goes to the entire bottom 60 percent. Despite this, the administration has proposed additional tax cuts that would clearly benefit only high-income households: the dividend tax exclusion and the new savings incentives. As part of their growth and jobs package, the administration also proposes to accelerate the portions of the 2001 Tax Act that highest-income households benefit the most, while leaving unchanged, continuing to phase in slowly, elements of the 2001 tax cut that most benefit lowest income families with children. The plan truly keeps the spirit of the administration's proposals--``leave no millionaire behind.'' In advertising just how ``fair'' their growth package is, the administration has repeatedly relied on the average tax cut statistic, stating that households will ``on average'' receive a tax cut of over $1,000 in 2003. But this is far greater than what a typical household near the middle of the income distribution would receive; in fact, four-fifths of households would receive less than this amount. According to the Urban-Brookings Tax Policy Center, the middle 20 percent of households would get tax cuts averaging only $200 in 2003 from the President's plan. Meanwhile, households in the top 1 percent would enjoy an average tax cut of over $20,000, and millionaires would get tax cuts averaging about $90,000. The compromise tax cut package crafted by Senator Grassley limits the dividend exemption to the first $500 of a family's dividends in fiscal year 2003, increasing by 10 percent of dividend income above $500 from 2004 to 2007, and 20 percent above $500 from 2008 to 2012. Still, even in the first year with the $500 limit, the great bulk of the dividend tax cuts will go to highest income households simply because they are most likely to have dividend income, and among those with dividend income are the most likely to have at least $500 of dividend income. In later years as the tax break for higher dividend income increases, the share of the dividend tax cut benefiting highest income households will increase. Overall, the Grassley plan would still provide a disproportionately large tax cut to the highest income households. But most importantly, even though the low- and moderate-income families need the most help in this troubled economy, Republican proposals assist them the least. Myth 4: The Republican tax plan is the best way to address the problems of long-term unemployment. The reality is that the Republican tax plan ignores the plight of the unemployed and the long-term unemployed. Although the temporary Federal unemployment insurance program will expire at the end of May for workers exhausting regular state UI benefits, currently the Republican plan does not extend the program. Nor does the plan provide any further assistance to the approximately 1.1 million workers who have exhausted all of their unemployment benefits and still have not found work. The unemployment rate today is 6.0 percent, higher than when the temporary Federal UI program was created in March, 2002, or extended in January, 2003. During the last 3 months, over 540,000 private-sector jobs have been lost and the economy has lost 2.7 million private-sector jobs since the recession began. On average, job losses in a recession bottom out after about 15 months and are erased within 2 years. The persistence of job losses at the 25-month mark in this recession is the most severe since the 1930s. These workers have carried the brunt of this recession, there are simply no jobs out there for them. Myth 5: The Republican tax plan is fiscally responsible, but the reality is that the Republican plan leads to deficits as far as the eye can see and exacerbates the fiscal pressures posed by the imminent retirement of the baby boom generation. What was a $5.6 trillion 10-year surplus when the President took office has virtually disappeared, even without counting any current proposals. The administration has repeatedly claimed that the deterioration was largely out of their control, but the fact is that even including the effects of the recession and other technical changes to the CBO budget forecast, the tax cuts already passed are responsible for over a third of the deterioration in the budget. Enactment of the President's new budget proposals would result in a $2.1 trillion 10- year deficit--a turnaround of an astounding $7.7 trillion. A particularly large bias in administration estimates comes from assuming that expiring tax provisions will indeed expire and that the alternative minimum tax will continue to affect a larger and larger segment of the population without any fix. Deficits reduce national saving, reduce the resources available for productive investments, and hence reduce future economic growth. Even Chairman Greenspan recently warned of the danger to our nation's long- term economic health: ``I support the program to reduce double taxation on dividends and the necessary other actions in the federal budget to make it revenue-neutral . . . it should be done in the context of paygo rules, which means that the deficit must be maintained at minimal levels.'' Myth 6: States will benefit from the Republican tax plan. The reality is that the Republican tax plan ignores the fiscal crisis of the States and probably makes it worse. The Senate Republican plan established a $20 billion fund to be equally divided between State governments and local governments, to be used for education and job training, health care including Medicaid, infrastructure, law enforcement, and other essential services. However, at the same time, the Federal tax changes will reduce State revenues by approximately $10 billion, leaving States on net with no additional funds. The recession that began in March 2001 has hit State budgets from both sides. Income and sales tax revenues have fallen with reduced economic activity, while the demands on social services have grown as joblessness has increased and family incomes have declined. Every week brings a new headline--or two--announcing another State's proposed cutbacks in services or program eligibility as it responds to a worsening budget crisis. Numerous spending cuts in social programs, including Medicaid, have been announced by States as they work to close their widening funding gaps. Some 22 States have proposed or adopted cuts in Medicaid and the SCHIP that would drop coverage for at least 1.7 million people if all the proposals were adopted. Prospects for 2004 are worse: the National Conference of State Legislators estimates that 41 States will face a cumulative budget shortfall of $78 billion. The Democratic proposal requires that the Federal Government provide twice as much money to help States mitigate the negative impacts of the recession on poor and working families. This will also aid job creation. Myth 7: The congressional Republican tax plans adhere to the limits set in the budget resolution. The reality is that the Republican tax plans are full of ``smoke and mirrors'' gimmicks that hide their true costs. The true cost of the 2001 tax cut is much greater than the official cost because of the gimmicks of phase-ins and sunsets and because the tax cut allowed the alternative minimum tax to pick up additional revenue from more and more over time--a situation that is not likely to be tolerated for too long. The official cost ignores interest costs as well. As a result, a more realistic estimate of the cost of the 2001 tax cut is much greater than the official cost--nearly $2.5 trillion over the first 10 years, not the $1.35 trillion as officially scored. A fully phased in version of the tax cut would cost even more over 10 years, over $4 trillion, even before counting interest payments. Myth 8: Republican tax and budget proposals are no threat to Social Security and Medicare. In reality the Republican tax and budget proposals break our promises on Social Security and Medicare. Tax cuts now mean even bigger tax increases later. The Bush tax cut agenda gambles away the income security of future generations, and for what? Current tax cuts to the wealthy, which Republicans claim will ultimately benefit everyone. Instead, those tax cuts will ultimately cost everyone. Our country's impending demographic challenge and corresponding fiscal pressures are a certainty. We were already faced with tough decisions ahead about how the retirement of the baby boomers would be made ``affordable'' to our Government budget: either taxes will have to rise in the future, spending cuts, or some combination of both. The Bush tax cut agenda is not responsible for that situation, but it surely and dramatically has made the tough problem even tougher. It makes the fiscal hole even deeper, and it unjustly pushes off most of the financial responsibility for the tax cuts and government programs we now enjoy, onto our children and grandchildren. We're putting our tax cuts on a credit card that our kids will have to pay off. In the end, tax reform should be considered in a time of surpluses and not in a time during record budget deficits. Most importantly, we as a Congress have responsibility to act fairly and effectively to combat our Nation's economic crises. The Republican plans do not live up to that responsibility and I can only hope that my words today have separated the rhetorical myths from the facts.

Mr. REED

Mr. REED. Madam President, I rise in strong support of the Kennedy amendment. I am amazed that at a time when there are over 1.1 million workers who have exhausted all their unemployment benefits--who are looking for work, who are not finding work--at a time when our fund to pay for these benefits is in surplus by billions of dollars, we are not extending this program. This is perhaps the last chance we will have. The program expires in just a few days. Yet we are here on the floor of the Senate talking about many other things: tax benefits for affluent Americans who are doing quite well. But we are not responding to the demands, the needs of countless numbers of our fellow citizens. I am just amazed this would happen. This UI, temporary Federal unemployment insurance program, will expire at the end of May. What is happening in our economy today is that people are desperately looking for jobs, but the economy is changing. As I go about Rhode Island, I do not find lots of people who say: Well, I don't want to take a job because these benefits are so good. These benefits are a fraction of what these people were making when they were working. They are hardly sufficient to pay the mortgage, to pay for their children's needs, to pay for all the items they have to buy each and every day. What has happened in the economy, in our case in Rhode Island, is we used to be a manufacturing center where there were 20 or 30 or 40 different manufacturing plants all requiring foremen and supervisors and vice presidents for human resources. Those factories have been closing. Work has been going overseas. In many cases, it is not a question of losing a job nowadays; it is a question of the company going away, leaving the small towns of Rhode Island and southern New England and the small towns of North Carolina and South Carolina, leaving people highly skilled but with no place to work. These are the true victims of this current economic malaise and recession. And we are not responding by simply giving them some more time, giving them resources to pay the debts that pile up every day in every family in this country? I think it is just appalling. Madam President, 1.1 million workers have exhausted their benefits and have not found work. That is the current situation. We have to help them. The unemployment rate today is 6 percent. That rate is higher than when this temporary program was initiated in March of 2002. It is higher today than when the program was extended in January 2003. Yet we are not extending the program. The situation is worse, but our response is not appropriate to that situation. Over the last 3 months, 540,000 private sector jobs have been lost and the economy has lost, since the beginning of the recession, a total of 2.7 million private sector jobs. This is not a question of jobs being there and workers being unwilling to take those jobs. As a result, we only have one recourse--frankly, they only have one recourse: They must have these benefits. And we must provide these benefits. Private payrolls are 2.4 percent below their level in March 2001 at the beginning of this recession. The job losses in this recession now exceed those in the recession of 1990. One other very compelling point is, on average, if you look at the recessions in this century, at least, job losses tend to bottom out after 15 months and are erased within 2 years. The persistent job losses in this recession are at the 25-month mark--25 months, not 15 months--and as a result, in that dimension, this is the worst recession, most severe recession since the 1930s in terms of the duration of long-term unemployment. The latest employment report paints a bleak labor market picture for the future. There are 8.8 million unemployed Americans, but we only count on our unemployment rolls those Americans who are actively seeking employment. There are millions more who are unable or so frustrated by the lack of jobs that they are not actively seeking--4.4 million Americans. They want a job. There is no real prospect, and as a result they are not even counted. Then add to that the number of Americans--4.8 million--who work part time. They want to work full time but they work part time because there are no full-time jobs. Then throughout these numbers, there is this persistent overhanging population of long-term unemployed Americans, about 1.9 million jobless for more than 26 weeks, about 20 percent of the total unemployed. This is a number that is not going down; it is persistent. These are the individuals who need our help, and we should help. We must help. Yet the bill that comes before us today, the bill that is supposed to stimulate the economy, ignores all of these millions of Americans. Frankly, I can't think of a more efficient way to stimulate the economy than to continue extended unemployment benefits. It puts money in the hands of working families. That money is not going to be hoarded. That money will not be spent on impressionist art. That money is going to be spent immediately at Kmart and Target and Wal-Mart. So this is not just about fairness. This is about getting the economy moving again, at least in a very direct way. I believe we have to do this. We have to do it now. The time literally is running out. As Senator Kennedy pointed out, even today's program is less generous than programs in the past. Indeed, the fund has over $20 billion of assets that were contributed by these people when they worked. They paid into these funds. Now they are simply asking in their time of need to be supported, to be helped. It is not fair to ignore them. There is no good economic argument to say we should not do this. First, it is stimulative. It puts money directly in the hands of Americans who will spend it. That is the best stimulation we can find. Second, the notion that these people are just sitting around because they don't want to work is preposterous. These people, many of them our contemporaries, in their forties and fifties, would love to work simply for the sake of working but, more importantly, because their expenses far exceed whatever payment they will receive from this unemployment compensation fund. We have to do something and we have to do it now. Alan Greenspan, in January of 2002, dispelled this whole myth that the administration is trying to foster that this program is not any good, it is not worthwhile; they are just sitting around; it discourages people from finding jobs. He said: [C]learly, you cannot argue that somebody who runs past the 26-week level is slow for not looking for a job or not actively seeking to get re-employed. There are just no jobs out there. This is January 2002. The situation is worse today. And consequently, to adhere to the 26-week limit doesn't serve its actual purpose, which is essentially to prevent a misuse of the unemployment insurance system. So I've always been in favor of extending benefits when the job market itself begins to dry up. Frankly, this is the Sahara of the job market that we see today. It is very dried up. That was January 2002. It is worse today. Yet we are not responding today. Since January 2002, we have lost over three-quarters of a million more jobs. There is no economic argument against this amendment. In fact, all of the economic arguments, all the arguments on fairness, all the arguments about letting people get access to the benefits before they find work again argue strenuously for this amendment. I urge my colleagues to support the Kennedy amendment. I yield back whatever time I have to the Senator from Massachusetts.

Mr. REED

Mr. REED. Mr. President, I join my colleagues on both sides of the aisle to express my support for the ratification of the protocols to the North Atlantic Treaty of 1949 on the accession of Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia. NATO has been perhaps the most successful military alliance in history, ensuring the peace and security of Europe for over fifty years. I believe these seven countries will not only benefit immeasurably from their inclusion in NATO, but they will all serve to further strengthen the alliance in ways that we could not have imagined in 1949. Though they are all fledgling democracies, they bring with them a zeal for the democratic process that we all share. In 1997, I had concerns about admitting the last three nations into NATO--Hungary, Poland, and the Czech Republic. I had significant concerns about the cost we as a nation might incur by allowing these countries with immature political and social structures and outdated militaries to enter the alliance. But time has proven that these costs are less than we imagined, and I believe that the cost required to bring these next seven nations into the alliance should be well worth the investment. At the same time, I continue to have reservations about the likelihood of true interoperability with these seven new nations. These seven nations use military hardware that is a product of the Soviet armed forces, and it is rapidly reaching the end of its useful life. Very little of this equipment is compatible with the latest hardware, weapons, and ammunition currently utilized by the United States. The militaries of the seven new nations are also top heavy with senior officers who were trained under the old Soviet regime. As with the ground forces, their air forces are also products of the Soviet era, and are greatly outdated. Finally, interoperability within the communications arena will be extremely challenging, at best, until these militaries become proficient in English. Despite these misgivings, I still believe that we should admit these seven nations into the NATO alliance. The NATO alliance ensured victory in the Cold War and has preserved the peace in Europe for over fifty years. But in order to survive for the next fifty years, the alliance must be willing to make much-needed changes to its charter. I support the Warner-Levin-Roberts amendment and its two major provisions that the President of the United States placed on the agenda at the North Atlantic Council. First, I agree that we must eliminate the ``consensus rule,'' the antiquated requirement in the NATO charter that nearly prevented NATO from protecting one of its own members, Turkey, before the commencement of Operation Iraqi Freedom. This rule may have worked when the alliance was first formed in 1949 with its original 12 members, but it cannot work any longer. Secondly, I support the need for a new rule in NATO that authorizes the members of the alliance to suspend the membership of any country in NATO which no longer supports the ideals of the alliance. The recent refusal of support on the part of some of our NATO allies during the build-up for and execution of Operation Iraqi Freedom has again shown the need for such a change. Only with these two critical steps will NATO continue to thrive and be as critical to peace and security in the 21st Century as it was in the 20th Century.

Mr. REED

Mr. REED. Judge Prado has served 19 years in the United States district court. As some of my colleagues have noted, it is sometimes more challenging to review nominees who come to us from private practice and universities. We have to extrapolate from their record in those different roles as to how they would perform as a judge. With Judge Prado, we certainly do not have that problem. We know how he has performed as a judge. With the nomination of Priscilla Owen, the same applies. We have the Priscilla Owen and Judge Prado judicial records we can directly evaluate. In the case of Justice Owen, it is a record many on our side find troubling. If all the Members had been present today, it would have been 47 people voting against cloture. In the case of Judge Prado, it is a record we find evinces an evenhandedness and fairness befitting a circuit court judge. Not that I would decide every case the way Judge Prado has--I would not--but overall he has won the support of all Democratic Senators, as far as I know, on the Judiciary Committee, and other Democratic Senators, because they found his record one of balance and fairness. Unlike Justice Owen and Mr. Estrada, no colleague or supervisor has questioned his ability to apply the law faithfully. Unlike Justice Owen and Mr. Estrada, no single person or organization has submitted a letter of concern or opposition to Judge Prado's nomination. Judge Prado has generated no controversy. He is experienced. While I am sure he is conservative, it does not matter; He is an evenhanded judge. There is something to be said for conservative judges. If conservatism means the law is followed, stare decisis, the precedent set, I think that is good. Judge Prado will be confirmed today because he is a fine person and an excellent judge. As I have noted in the past, eight of the sitting Latino judges were appointed by President Clinton. Several of these judges were denied Senate consideration for years while the Republicans controlled the Senate. Judge Richard Paez, nominee for the Ninth Circuit, waited over 1,500 days. He was well qualified, had the support of his hometown Senators, and 39 Republicans voted against his nomination. There is nothing wrong with that. They had different views as to how he would serve as a judge. Judge Sonia Sotomayor, a nominee to the Second Circuit, was similarly stalled. Her confirmation took 433 days. Then there were the Hispanic nominees who were denied hearings or votes by Republicans during the Clinton administration: Jorge Rangel, Enrique Moreno, Christine Arguello, Richard Morado, Anabelle Rodriquez. These facts and the expected confirmation of Judge Prado belie the anti-Hispanic charges some have made in the context of the Estrada debate. The extended debate Democrats have sought to have on just a handful of judicial nominees affects our constitutional advice and consent duty. While the number of judges who have been confirmed demonstrates our good faith in working with our colleagues and the President, we will not simply rubberstamp ideologically driven individuals for lifetime seats on our Federal courts. I am pleased that today we are moving forward on this qualified judge, Edward Prado. I believe the way Judge Prado's nomination has been received in the Senate points the way through some of the conflict that has occurred in the Senate over a very small number of judicial nominees. If my math is correct, by today's end there will be 121 versus 2. That is a good record in anyone's book. I suggest the absence of a quorum.

Mr. REED

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

Mr. REED

Mr. REED. Mr. President, today I rise to join Senators Gregg, Kennedy, Frist, and others in introducing the Museum and Library Services Act. This legislation, which extends the authorization of museum and library services through fiscal year 2009 and makes several important improvements to current law, is a compromise based on S. 238, bipartisan legislation I introduced with Senators Kennedy, Cochran, Collins, Snowe, and others in January. Like S. 238, this bill ensures that library activities are coordinated with the school library program I authored, which is now part of the No child Left Behind Act of 2001. It also doubles the minimum State allotment under the Library Program, which will enable smaller States such as Rhode Island to benefit and implement the valuable services and programs that larger States have been able to put in place. It includes an increase in the indemnity limits under the Arts and Artifacts Indemnity Act to ensure continued support for American museums as they facilitate international cultural exchanges through touring exhibitions here in the U.S. and loans of American art around the world. The bill also updates the uses of funds for library and museum programs and increases the authorization under the Library services and Technology Act, LSTA, from $150 million to $250 million and the Museum Services Act from $28.7 million to $41.5 million. We should meet these funding levels in the appropriations process due to the strong bipartisan nature of the bill we are introducing today. I personally believe that our libraries and museums should be more robustly funded, particularly as these institutions play increasingly important roles in our lives. Indeed, the bipartisan bill that Senator Kennedy and I put forward earlier this year included even higher funding levels. But, in an effort to move this bill forward, I have agreed to support this compromise. I urge my colleagues to cosponsor this important legislation and work for its swift passage.

Mr. REED

Mr. REED. Mr. President, today I rise to join Senators Gregg, Kennedy, Frist, and others in introducing the Museum and Library Services Act. This legislation, which extends the authorization of museum and library services through fiscal year 2009 and makes several important improvements to current law, is a compromise based on S. 238, bipartisan legislation I introduced with Senators Kennedy, Cochran, Collins, Snowe, and others in January. Like S. 238, this bill ensures that library activities are coordinated with the school library program I authored, which is now part of the No child Left Behind Act of 2001. It also doubles the minimum State allotment under the Library Program, which will enable smaller States such as Rhode Island to benefit and implement the valuable services and programs that larger States have been able to put in place. It includes an increase in the indemnity limits under the Arts and Artifacts Indemnity Act to ensure continued support for American museums as they facilitate international cultural exchanges through touring exhibitions here in the U.S. and loans of American art around the world. The bill also updates the uses of funds for library and museum programs and increases the authorization under the Library services and Technology Act, LSTA, from $150 million to $250 million and the Museum Services Act from $28.7 million to $41.5 million. We should meet these funding levels in the appropriations process due to the strong bipartisan nature of the bill we are introducing today. I personally believe that our libraries and museums should be more robustly funded, particularly as these institutions play increasingly important roles in our lives. Indeed, the bipartisan bill that Senator Kennedy and I put forward earlier this year included even higher funding levels. But, in an effort to move this bill forward, I have agreed to support this compromise. I urge my colleagues to cosponsor this important legislation and work for its swift passage.

Mr. REED

Mr. REED. Madam President, today I rise in the special recognition of the students of West Warwick Senior High School for representing the State of Rhode Island in the national competition for the ``We the People: The Citizen and the Constitution'' program. This year's national competition will take place on April 26 to 28, 2003. The ``We the People'' program and competition are administered by the Center for Civic Education. The program is an extensive one, developed to educate students about the Constitution and the Bill of Rights. The competition is modeled after hearings in Congress and consists of oral presentations by high school students before a panel of adult judges on constitutional topics. The students' testimony is followed by a period of questioning by the judges who probe their depth of understanding and ability to apply their constitutional knowledge. Our current global situation has increased the importance of initiatives which help young people to understand the fundamental ideals and principles of our government. We cannot take these ideals and principles for granted. Instead, we must hold them as standards in our endeavor to preserve and realize the promise of our constitutional democracy. It is of vital importance for future generations to understand the convictions that bind us together as a nation. I believe that these students from West Warwick deserve added recognition. Not only is this their second consecutive State championship, this year's State competition took place just 2 weeks after the tragic fire in West Warwick that injured and took the lives of almost 290 family, friends, and neighbors of these young adults. In spite of their hometown's mourning, these students were able to continue their diligent preparation for the statewide ``We the People'' competition, and win. The West Warwick High School students will be joining 1,200 others from across the United States. On behalf of all Rhode Islanders, I would like to congratulate the following students: Carly Alvernaz, Linzy Alvernaz, Jennifer Bartley, Stacy Costa, Sara Dalton, Ryan Desrochers, Megan Dougherty, Jillian Drummond, Elizabeth Duggan, Katheryn Flynn, Ashley Iasimone, Thomas Kelly, Paris Legault, Paul Piacitelli, Daniel Politelli, Lisa Powers, Ali Shihadeh, Nicholas St. Germain, Christen Varin, Russell Venditto, and Meaghan Whitford. In addition, I would like to acknowledge their teacher Marc Leblanc, the Rhode Island State coordinator, Michael Trofi, and the district coordinator, Henry Cote, for their dedication to this program over the years. I wish the students from West Warwick High School the best of luck at the ``We the People'' national finals.

Mr. REED

Mr. REED. Mr. President, in 2001, at the President's urging, Congress passed the Economic Growth and Tax Relief Reconciliation Act, which provided $1.35 trillion in tax cuts over 10 years. While I have consistently voted to reduce the tax burden of working families, I voted against the President's tax cut because it left too few resources for debt reduction and came at the expense of reforming Medicare and Social Security, providing a prescription drug benefit, and supporting critical investments like education, the environment, and national defense. A year later, the economic evidence indicates that the President's 2001 tax breaks have had little positive effect on the economy. The economy continues to be in a slump and, now, we are in the midst of considering another large round of tax cuts that would help wealthy Americans. These tax cuts would also come at a time of record budget deficits and would break from the longstanding congressional practice of not passing tax cuts in times of war. The Republican budget resolution calls for $1.3 trillion in additional tax cuts over the next 11 years. In an unprecedented move, the House and Senate Republicans are including two reconciliation tax numbers--rather than one so they can use the reconciliation procedure to pass a bigger $550 billion tax cut. These tax cuts will add to long-term deficits and further impede economic growth. Last week, the newly released labor market data confirmed again that there is a crisis facing America's working families. Mr. President, 108,000 more jobs were lost in March, including 68,000 in the private sector. There are 2.6 million fewer private payroll jobs than there were when the recession began. Nationally, the number of long-term unemployed rose to 1.8 million in March, far higher than the 660,000 long-term unemployed in January 2001. There were 445,000 new unemployment insurance claims filed last week, up from 407,000 the prior week. The economy is in as much trouble as it was in the early 1990s, if not worse. The latest study by the Joint Economic Committee shows that during the last 4 months that private sector job loss in the current recession is now larger and more serious than the private sector job loss in the 1990 recession. With so many Americans out of work for far too long, the persistence of job losses and the clear signs of no economic recovery anytime soon, the need to pass another extension of unemployment insurance benefits is overwhelming. These benefits are set to expire on May 31, and the last time the extension was passed, it did not even include assistance to approximately one million workers who had exhausted all of their unemployment benefits and still found no work. Yet the budget conference report fails to provide for further extensions to help victims of this recession who are struggling to take care of their families and struggling to find work. Furthermore, just yesterday the IMF, in its annual report, projected that the world economy would grow 3.2 percent this year, down from its previous projections. It expects the U.S. economy to grow 2.2 percent this year and 3.6 percent next year. Commenting on the current administration's economic plans, IMF research director Kenneth Rogoff said, ``Suppose for a moment we were talking about a developing country that had a gaping trade deficit year after year as far as the eye can see, a budget ink spinning from black into red, open-ended security costs and an exchange rate that has been inflated by capital inflows. With all that I think it's fair to say we'd be pretty concerned. The U.S. isn't a developing country, but nonetheless, for the global economy, the tax cut . . . on top of ongoing security expenditures seems awkwardly timed.'' This comes from the IMF that was supportive of President Bush's first round of tax cuts. With all this negative data and with no upturn in the economy in sight, this budget resolution also makes too many cuts to vital programs and services to pay for the administration's oversized tax cuts. The conference agreement endorses a majority of the tax cuts that were in the President's proposal at the expense of domestic investments that are integral to the recovery of the economy and the welfare of our citizens. As columnist Bob Herbert observed in the New York Times last week, ``With the eyes of most Americans focused on the war, the Bush administration and its allies in Congress are getting close to agreeing on a set of budget policies that will take an awful toll on the poor, the young, the elderly, the disabled and others in need of assistance and support from their government . . . It mugs the poor and the helpless while giving unstintingly to the rich.'' The Senate budget includes a reduction of approximately $168 billion in funding for domestic discretionary programs in fiscal year 2004. Approximately two- fifths of this funding consists of grants in aid to State and local governments. These cuts will worsen the already severe budget crises that States are facing. This is a restrictive funding level for domestic discretionary spending, given the continued needs in the homeland security area, the underfunding of the education reforms in the No Child Left Behind Act, need for aid to the States, and the severe structural burdens facing Medicare and Social Security. The administration and the majority need to stop pushing economic plans that reward the wealthiest Americans and abandon fiscal responsibility. Instead, they need to support real economic stimulus that would provide immediate one-time tax relief for working families, extend unemployment benefits and provide desperately needed fiscal relief to the States. Lastly, this conference report includes a gross misuse of the reconciliation process which was intended to facilitate deficit reduction not deficit increases. Due to the majority's obsession with supersized tax cuts, they have devised a heretofore, unheralded mechanism, to subvert the Senate's right to amend legislation. Indeed, while many of my colleagues can say that while the Senate can enact only $350 tax cut, the sad truth is that this contrivance paves the way for a tax cut that is much larger than many of my colleagues on both sides of the aisle are willing to support. The budget before us is lamentable, and I only hope that those who support it today will reassess their positions in the weeks ahead.

Mr. REED

Mr. REED. Mr. President, I commend Senators Grassley and Baucus for bringing this important legislation to the floor, but I particularly commend and thank Senators Santorum and Lieberman for their principled and tireless efforts to bring this legislation to the floor and for recognizing that original versions of this legislation contained elements that were, to say the least, controversial. Senator Santorum particularly recognized the need to provide additional resources to faith-based organizations and other charitable organizations through new incentives in the tax code to encourage people to contribute to charities. All of these issues compelled him to make a very difficult choice, a very important choice, and I think a very statesmanlike choice to send to the floor today a version of the bill that I assume will get the unanimous approval of this Senate. It recognizes our shared belief that the more resources we can direct to organizations that are committed to helping people, the better off we will be. The increase in the social service block grant is a tremendous step forward and is something I know I am proud of, but certainly the Senator from Pennsylvania has to be very proud of because he is the principal architect of this effort, and the new tax advantages also are very important. Indeed, Senator Santorum and Senator Lieberman worked very hard to improve legislation that in the other body was submitted as the Community Solutions Act of 2001, known as H.R. 7 in the 107th Congress. That legislation contained a number of controversial and potentially unconstitutional provisions, but they worked very diligently, very carefully, very thoughtfully to eliminate those provisions from their bill and ultimately today to bring this legislation to the floor, which I think and believe will get, as I said, unanimous approval by this body. Certainly I approve of it. The CARE Act is going to provide increased resources for needed social services, and it is going to do so without including at this juncture troubling provisions that were in the original House bill. I know the Senator from Pennsylvania reserves his right to engage again on this issue--in fact, I believe he will exercise his right in all forums, and that is the glory of this body, and we shall engage in more extended debate, I think, in the future. But this afternoon is an opportunity to commend him, thank him, and recognize his wise and statesmanlike conduct. I again thank Senator Santorum. The debate about church and state in this land precedes, indeed, the Constitution of the United States. It has been ongoing since the early days of the American experience. Religion has been an important part of our national life throughout our history. Indeed, European immigration in large part was motivated by the search for an environment conducive to freedom of conscience and religious exercise unhampered by State involvement. Today, in the year 2003, religion remains a vital force in our national life and religiously affiliated institutions play a critical role in the provision of social services. For example, in 1996, Federal, State, and local governments granted $1.3 billion to Catholic Charities USA, comprising 64 percent of its budget. In 1999, 53 percent of Catholic Charities' budget came from State and local governments, and an additional 9 percent came from the Federal Government. In 2001, United Jewish Communities received a Federal grant of $59.8 million. If indirect payments were included--for example, Medicaid, Medicare, vouchers, or food stamps--the amount flowing through religious organizations would be significantly higher. Both of these mission-driven, faith-based groups are independently or separately incorporated as nonprofits and both are able to distinguish their religious activities from their secular social services activities. So an initial point we must recognize in the debate about faith-based initiatives is that it is not whether religious groups will or should play a role in the spiritual and temporal lives of Americans--they do, and they will continue to do so--nor is the question about whether the government discriminates against faith-based charitable groups. The question is how the important roles faith-based organizations play can continue to meet the constitutional requirement of separation between church and state, both as a matter of law and as wise public policy. This constitutional standard has strengthened religion in America compared to other countries around the world. We can see on the nightly newscasts the effects of intolerance across the globe, of established religions battling other beliefs. In America, we have been spared much of that. I believe it is directly attributable to the wise condition included in the First Amendment. My awareness and sensitivity to these issues might spring in large part from my roots growing up in Rhode Island. As a child, I learned the history of Roger Williams and the founding of the colony of Rhode Island and Providence Plantation. Upon leaving the enforced orthodoxy of the Massachusetts Bay Colony, Roger Williams started a settlement that ultimately became Rhode Island. This settlement was founded on his belief, in his words: ``that no man should be molested for his conscience.'' The spirit of Roger Williams was captured by his contemporary, John Clarke, in the petition for a new royal charter by the people of Rhode Island in 1663. In his words, the people of Narragansett Bay: have it much in their hearts, if they may be permitted, to hold forth a lively experiment, that a flourishing and civil state my stand, yea, and best be maintained. . . . with a full liberty in religious commitments. As a result of this religious liberty, Rhode Island became a refuge for people persecuted for their religious beliefs elsewhere. And Anabaptists, Quakers, and Jews settled in Rhode Island because of its commitment to religious liberty and tolerance. This lively experiment became a model for the Founding Fathers and helped lead to the drafting of the First Amendment: ``Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.'' In explaining what the First Amendment meant to the Danbury Baptist Association in 1802, Thomas Jefferson wrote that the combined effect of the establishment and free exercise clauses of the Constitution was a ``wall of separation between church and state.'' Jefferson's comments were not unique to him. Senator Durbin has already made a reference to President James Madison. President Madison what was meant by this separation of church and state extremely clear in several messages he delivered on Government funding of religious endeavors. In 1811, he vetoed a congressional bill granting the use of some Federal land to a church in the Mississippi territory. President Madison stated: Because the bill in reserving a certain parcel of land in the United States for the use of said Baptist Church comprises a principle and precedent for the appropriation of funds to the United States for the use and support of religious societies, contrary to the article of the Constitution which declares that ``Congress shall make no law respecting a religious establishment''. . . Resolved. That the said bill does not pass. Indeed, I find it interesting that conservatives would so cavalierly dismiss so much of the history of this country and disregard so many of the fundamental principles of the Founding Fathers. President Bush and his conservative followers want to transform the relationship between church and state by directly funding pervasively sectarian organizations. He has done this by regulation and by Executive order, since he has largely been unsuccessful in accomplishing these tasks through the legislative process. Just consider some of the changes that he has advanced thus far. In a June 2001 Department of Justice memorandum, the Department of Justice took the legal position that faith-based organizations that are given Federal taxpayer dollars to run governmental programs should be able to engage in employment discrimination on the basis of religion. Subsequent to this memorandum, the President by Executive order overrode a rule first enunciated by President Franklin Roosevelt that the Federal Government should not give contracts to employers who engage in discrimination on the basis of religion. Thus, it is now the position of the White House that government contractors can discriminate. The President believes the government should fund faith-based organizations who use proselytization and prayer to cure drug addiction and other social programs. In his State of the Union Address, President Bush cited one such program in Louisiana that expressly combats drug abuse with faith. The head of another often-cited religious program, Teen Challenge, boasted to Congress that he was not only able to get kids to stop using drugs, he converted Jews into Christians in the process. In newly proposed HUD regulations, the Administration says that Federal funds can be used to construct a religious building used for religious activities if the building also can be used for a public purpose such as counseling or a food pantry. At least that is the proposal. With these and other initiatives, the President is attempting to breach the wall the Founding Fathers set up between church and state. These initiatives are clearly designed to fund proselytization and to promote certain types of religion. There are legal challenges being raised to many of these proposals. But the long and short of it is, we have an opportunity to debate and to decide these issues through the legislative process, and we have an obligation to do so. And when there is a more robust, more extensive attempt to legislatively condone or sanction these faith-based initiatives, I believe there are going to be three major areas we will need to address. One area is effective restraints on proselytization with taxpayer funds. The second is compliance with local regulatory standards in the delivery of public programs. And the third is prohibiting the use of public funds in employment discrimination. First, with respect to proselytization. If the separation of church and state means anything, then in my mind, it must mean that no American should be compelled to pass a sectarian test or participate in sectarian exercises to receive a public benefit. This principle should be included in legislation and not left to the more shifting sands of regulatory pronouncements. Second, many advocates of faith-based initiatives argue that they simply want a level playing field. Let's take them at their word. If State licensing arrangements are appropriate and necessary to protect children in publicly funded programs, why should religious providers be exempt from such licensing requirements? If we consider this issue, we will need to look for the even application of local and state laws, particularly laws with respect to the protection of children and public health. This is what we will need to do in order to truly create an even playing field. Finally, we must address the issue of employment discrimination. Title VII provides an exemption for religious groups in certain situations. In the Amos case, the Supreme Court held that a religious group using its own funds may claim the Title VII exemption. In the words of the Court, the purpose of the exemption was to alleviate ``significant governmental interference with the ability of religious organizations to define and carry out their religious missions.'' Today, with respect to the Administration's proposal, we must recognize that rather than seeking autonomy from governmental interference, religious groups are seeking taxpayer funds to carry out governmental responsibilities. Indeed, in the one unreported case that has ruled on the use of public funds in this way, the court, in this labor case, concluded that the title VII exception does not apply. As James Madison said in 1785, in his ``Memorial and Remonstrance Against Religious Assessments,'' in opposition to a proposal by Patrick Henry that all Virginians be taxed to support teachers of the Christian religion: If ``all men are by nature equally free and independent,'' . . . above all are they to be considered as retaining an ``equal title to the free exercise of Religion according to the dictates of conscience.'' Whilst we assert for ourselves a freedom to embrace, to profess and to observe the Religion which we believe to be of divine origin, we cannot deny an equal freedom to those whose minds have not yet yielded to the evidence which has convinced us. If this freedom be abused, it is an offense against God, not against man: To God, therefore, not to man, must an account be rendered. All of this leads me to my final point. In the words of the New England poet, Robert Frost, ``Good fences make good neighbors.'' What might be permissible under the law does not always guarantee the wisest policy. We need to remember that as we debate the President's faith-based initiative, religion has thrived in America because few people confuse religion with government. Religion has been a citadel of conscience and a check on government because it draws its strength and its support from its adherents, not from bureaucratic patrons. The religious communities of America that have been unequivocally supporting the President's attempts to allow discrimination with Federal dollars might be mindful of the old saying: Be careful of what you pray for. As the House of Representatives has made clear, we are going to be discussing this issue in the upcoming months on welfare, SAMSHA, National Service, and other programs. It is my hope the Senate will undertake a more careful look at how the charitable choice provisions in these bills inhibit the free exercise of religion, rather than encourage it. Again, I thank the sponsors and the chairman and ranking member of the Finance Committee for bringing this bill to the floor. This is something we will all support, and we will do so with the notion and the idea and the commitment to provide resources for people who want to help other people, and do so consistent with the spirit and the letter of the Constitution. I yield the floor.

Mr. REED

Mr. REED. The understanding I had with the Senator from Pennsylvania, to be fair and accurate, did not reach the contents of the managers' amendment. It was my impression that the managers' amendment would simply be tax amendments with respect to the Internal Revenue Code and the jurisdiction of the Finance Committee. I am a bit surprised, frankly, coming this evening and seeing something that is not within the traditional scope of the Finance Committee. Perhaps I might be wrong. This is something I didn't expect, but I must be very fair and accurate that this was not an issue we even discussed. My presumption was that all the amendments would be strictly related to tax provisions and not to this Compassionate Capital Fund. I must say, I understand that the funds have been appropriated under the context of this Compassionate Capital Fund. This is an attempt to provide legislative language. I have not had a chance to look at the language. It is included within a managers' amendment without any opportunity to amend the managers' amendment. I am in an awkward position.