John Shadegg

Mr. SHADEGG

Mr. SHADEGG. Just quit digging. Quit stealing that Social Security surplus and spending it on other things.

Mr. SHADEGG. I think it is a fair question for us to ask as Members of Congress today, and I think the gentleman from Texas was very fair on that point, both Republican Congresses and Democrat Congresses have used the Social Security surplus for non-Social Security purposes. I guess the question, though, that I want to ask you and a question that I have thought about is, could I go home to my constituents and justify to them that it is appropriate for me to take their Social Security taxes and spend them on some other purpose? I think the answer for me is no. Have you given that question some thought?

Mr. SHADEGG. Madam Speaker, I would like to engage in a brief discussion to make this a little more followable or reasonable for our listeners to understand. Like me, I assume the gentleman has done town halls at home on this topic.

Mr. SHADEGG. Madam Speaker, I rise today to engage, I hope, in a discussion with my colleagues about an important issue confronting our country, and it is an issue on which we have already begun a national dialogue. It is an issue that, at least before the last few months, was an issue of bipartisan concern, and that is reforming Social Security. As you know, Madam Speaker, the former President of this Nation, Bill Clinton, raised this issue during his tenure in office and noted that the Social Security program in its current structure is in trouble and in need of reform. It is facing several serious problems. One of them is the solvency of the program over time. And another is its fairness to the younger generations. There is a new idea here in Washington and a simple idea that has surfaced just within the last few weeks on Social Security reform that does not solve the entire problem in one fell swoop, but would start us on a path and would address the most egregious problem of all, and that is the structure of Social Security which simply is unsustainable in its current form. So I want to focus this discussion this afternoon largely on that new idea. It is an idea that responds as the House should respond to the concerns and the interests of the American people about what is happening with their Social Security taxes, their payroll taxes. Let me begin with some of the basics. As I think all Americans understand on both sides of the aisle, the Social Security system as it is structured today is a pay-as-you-go system. It is a system where those of us working today in the workforce pay in our payroll taxes and those payroll taxes by and large immediately go out the door to pay the retirement benefits of the Americans who are retired today. That is the structure of the current system, and that is the structure that many countries around the world created some 35 to 40 to 50 years ago. Germany, I think, was first to substitute a Social Security program for its elderly based on this premise, that is, that we would tax workers to pay retirement benefits for those retired. There was nothing wrong with that proposal when initiated because at that time the workforce was dramatically larger than those who were on retirement. Indeed, I think most Americans now know that in 1935 when Social Security was created, there were some 42 Americans working for every American collecting retirement benefits. Clearly, 42 workers can, through their payroll taxes, support one retiree. But as most Americans know by today, those numbers have changed dramatically. In the 1950s, it went to where we had roughly 15 or 16 workers per retiree. Again, that was sustainable. But now we face a new problem. The reality is that the workforce relative to the number of people retired has shrunk and today in America there are only 3.3 working Americans paying payroll taxes to support each individual currently retired and collecting Social Security taxes. If the trends continues, and it will, that is unsustainable. Very soon we will be down to where there are two workers and even less than two workers paying Social Security taxes, payroll taxes to support each retiree. That simply cannot be sustained over time. And so we have a problem with the structure of Social Security. We also have a problem with its long-term solvency. And, most importantly, I think we have a problem with what is referred to as generational fairness. We all know that solvency is the issue of whether or not we have the money set aside to pay the benefits we have promised, and in point of fact we do not. While the system runs a short-term surplus today, we collect more in Social Security taxes than we pay out today in Social Security benefits. That short-term Social Security surplus of revenues in over benefits paid out will end as soon as 2017. Indeed, the surplus itself will begin to shrink, that is go down, year to year as early as 2008. So this is a problem that confronts us very soon, and as the actuaries have told us and as I think Americans understand, the trust fund which we would have to begin drawing upon in 2017 to pay the promised benefit will itself be depleted by 2042. Thus, we have a long- term solvency problem with the current structure where we have a shrinking number of workers per retiree. But the other issue that is not discussed very often is the issue of generational fairness. Generational fairness is a term I use, and I think most Americans and my colleagues understand it, but then when I talk to an audience they say they do not understand it so let me try to make that point clear. Solvency is one issue, but generational fairness is a separate issue. As it turns out under the Social Security system that we have today in America, my grandparents, most Americans' grandparents, collected an effective rate of return on the Social Security taxes they paid, that is, on the payroll taxes they have paid into Social Security, when they collected their benefits, on average they got a rate of return on the money they had put in of about 5 percent. Now, 5 percent is not a great rate of return. You and I would like to be able to invest our money and get 8 or 10 or a better rate of return on the money we invest; but for a program which is designed as this program is designed to provide a floor of protection for those Americans who have either not been able to or have not, in fact, set aside money for their retirement, if you got a rate of return on the money you put into Social Security of 5 percent, you were doing fairly well. That is a decent rate of return. But because of the current structure of Social Security, that is not continuing. Indeed, our children, my children and my grandchildren, will get a rate of return of less than 1.6 percent; and, indeed, for many of them, their rate of return will be negative, that is, they will pay in more in social security taxes than they collect in their lifetimes, on average, in Social Security benefits. That is generational fairness, and it is simply not fair. I think most Americans would agree that creating Social Security, the Social Security program we have, creating a floor of protection so that all Americans can enjoy their retirement years, safe in knowing that they have money to pay for their groceries and to pay their rent is a laudable goal, and with a rate of return of 5 percent on your money, you can do that. But with a rate of return of 1.6 percent or less, or a negative rate of return, our children and our grandchildren, if we do not make changes, will in fact not have a secure retirement. Indeed, they will not have the funds when they go to retire to even minimally get by. Now, those are the basics that have been involved in this debate from the outset, and there are lots of ideas on the table. President Bush has put ideas on the table to deal with both the issue of solvency and the issue of generational fairness so that we can make the program financially sound for the future. Indeed, he would like to make it financially sound forever, not just for the 75-year horizon that the Social Security trustees base their analysis on. But also he would like to make sure that we guarantee the next generation as secure a retirement as this generation has had and as the last generation had. Now, I know a lot of Americans glaze over and say, wow, I have heard so many different ideas on Social Security and on Social Security reform that I get confused. People talk to me about personal accounts. People talk to me about benefit cuts. People talk to me about increases in taxes. I want to talk about a new idea, a new idea which can solve a part of the Social Security problem and stop a practice which is offensive and a bad idea. When I went home and did my town halls with my constituents in Phoenix, AZ, discussing the issue of Social Security, I had to explain to my constituents this short-term surplus that we have. That is the fact that today, and every year since 1983, we have been collecting more in Social Security revenues than we are paying out in benefits. So we have a surplus. And I had to explain to my constituents, as my colleagues here in the Congress have had to do, that that excess money is not being set aside for Social Security. Indeed, the Social Security surplus that Americans are paying in collectively through their payroll taxes, that is the money in excess of the amount spent today for those retired today, is being, I would say quite frankly, misappropriated by the Congress of the United States and the Federal Government. Because when Americans pay payroll taxes to fund the Social Security program, they believe, and they have an absolute right to believe, that their money, paid as payroll taxes to fund Social Security, should be and is being used for Social Security. But that is not true today, and it has not been true since 1983. That money, this short-term surplus of Social Security revenues or Social Security benefits paid out, is in fact taken each year by the United States Congress and spent for general government purposes. It is spent to fund the Department of Agriculture. It is spent to fund the Department of Defense. It is spent to fund the Department of Health, Education and Welfare. It is spent all over this government for general purposes having nothing to do with Social Security. And I will tell you, my constituents, when they learn that, are angry. Now, I mentioned a moment ago that there are many ideas for reforming Social Security. And some back home say, Congressman, it is all too confusing to me. I do not understand. That is the central key element of this new idea. When I went home and when my colleagues went home to address the issue of Social Security reform, and when the American people understood that we are misappropriating the Social Security surplus to things other than Social Security, they got angry; and they said, well, I do not care how and I do not understand how you reform the entire Social Security program, but the one thing you better do, Congressman, the one thing you owe to us, the American people, the one thing you owe to every single person collecting Social Security and every single person paying social security taxes is to stop stealing, stop raiding the Social Security surplus, those payroll taxes paid in for our future retirement, and using them for general government purposes. And that is precisely what this new idea does. A colleague of mine in the Senate, Jim DeMint, first elected to the House and served with me here in the House, has dropped a piece of legislation, and I and a group of members on the Ways and Means Committee in the House have dropped a piece of legislation that will do precisely that. It will take, from the moment it is enacted through a 10-year period, from roughly today through 2017, the Social Security surplus that comes in and it will stop spending that money on anything other than Social Security. Now, how do we do that? What we will do is allocate that surplus to every single American who is paying payroll taxes under the age of 55, and we will set up an account in their name and we will put that money in that account. Now, for the first 3 years, the accounts will be invested in U.S. Treasury bonds, the safest investment in the world and the same kind of investment where your social security taxes are being invested today. But the key difference, the critical difference is that we will stop using that money for general government purposes, we will stop using it to hide the real deficit and the real debt, and we will allocate it to Social Security. Talk about a simple notion. I, an American taxpayer, Joe Smith in my district, an American taxpayer who works at a job and pays payroll taxes, he may be one of those American taxpayers who pays more in payroll taxes than in income taxes. We are going to say to him, Beginning with the passage of this bill, which is called the GROW Act, we will make sure that every single dime you pay in payroll taxes to fund the Social Security System goes to Social Security. Now, a portion of it will go to current retirees, but the rest will no longer be spent for Forest Service pickup trucks or for national defense or for welfare benefits, or for any other purpose than Social Security. And the way we will do that is to put it into an account in your name. I think that is a simple, straightforward basic idea that the American people can address and they can understand, because it is not complicated, and they can embrace and say, well, if we cannot fix all the problems with Social Security, we ought to at least get started. And I am extremely excited and encouraged that this simple notion of taking the Social Security surplus that we will have for the next decade and locking it away in individual, and use the overused term lockboxes, in the name of each American taxpayer so that we do not spend it on any other purpose, I think, is a great idea whose time has come. By the way, these will be individual accounts. They will be in the name of each payroll taxpayer. They will be inheritable. It will be their money. Indeed, just to show you how different it is than the current system: under the current system, if you pay payroll taxes this year, and you pass away 2 years from now, and you are under the age of 65, that money that you paid in goes away. It is lost forever. If we enact this simple bill, locking away just the Social Security surplus, and you work for 2 more years after the program goes into effect and then you pass away, still under the age of 65, instead of getting nothing, your spouse or your children or your grandchildren will inherit every dime of that money. It is your money; and when you pass away, it becomes their money. This is not a gimmick. This is not a paper scheme. This is not a ledger entry here in Washington that never matters. This is hard, cold cash in the pockets of your children or your grandchildren beginning to accumulate the day this legislation takes effect. There are lots of other good things to say about it, but I have been joined by my colleague from Texas (Mr. Hensarling), and I have talked fairly long about this topic for a moment so maybe I will let him chime in and vary the discussion a little bit.

Mr. SHADEGG

Mr. SHADEGG. Mr. Chairman, I thank the gentleman for yielding me time, and I rise in strong support of the amendment. I think the point that needs to be made here is what the gentleman from Arizona (Mr. Kolbe), my colleague, has already made, and that is, this was indeed a rather sudden ruling, and it does change what is happening. These schools have, in fact, been funded for years, and the only point that has not been made on this floor yet today, I do not believe, is that if the ruling is allowed to stand, funding will be cut off in less than 30 days. It will be cut off in about 12 days, on July 1. My colleagues can say what they will about the impact upon the school. I think we ought to focus upon the impact on students. In Arizona, schools begin the school year as early as August 1. My wife who is a teacher will be going back to school on August 1. Parents need to plan where their children are going to go to school this fall, and were this ruling to be allowed to stand, it would mean children would have less than a month to try to find a new school. To do that to low-income and special-needs children, to deprive those schools of the funding they need to provide that type of education, and to do it on that short of notice is inappropriate. This is a ruling that directly affects Arizona today and about five other States immediately, but it holds the potential of affecting all 50 States. The ruling I think ought to be discussed on the merits, and I think the Congress should do that, but we appreciate the opportunity to at least temporarily suspend its impact for the sake of the children in Arizona who want to continue to be educated at these schools, many of which are in low-income areas, and these moneys, in particular, go to low-income needs. So I thank the gentleman for his position.

Mr. SHADEGG

Mr. SHADEGG. Mr. Chairman, I thank my colleague from Oregon for yielding me this time. I rise in strong support of this amendment by both my colleague from Oregon and my colleague from Arizona. It is very important to note that if we talk about free trade and we talk about free markets, we ought to follow that talk with action. The reality is you simply cannot defend current policy. I listened to one of my colleagues on the floor just a few moments ago who talked about the dire consequences of this amendment. Let me tell you how precisely how dire they are. It would reduce the effect of the sugar loan program by 6 percent. Quite frankly, we have to begin at some point. If we believe in free markets, if we believe there ought to be open trade on these issues, then we need to begin somewhere. I just listened to my other colleague from Florida, a gentleman I admire greatly. He said visit these poor sugar farmers and see that they are barely making their living. I understand that. Except that on that theory, the government owes it to everyone in America to subsidize their income. That simply is not the kind of America that I believe in. It is not the kind of America that the Founding Fathers envisioned. U.S. sugar policy today, the subsidies we provide, the loan programs we provide cost American consumers as much as $2 billion each year. How do we defend that policy back home? Is it not appropriate now that we begin to send the message that we should wean ourselves from unproductive subsidies and policies that discourage productive capacity and production by people of goods and services we need? No one wants to put today's sugar farmers out of work, but we do need to make sure that there is free trade in America and that no product is given beneficial treatment. This is a reasonable start. I urge my colleagues to support the amendment.

Mr. SHADEGG

Mr. SHADEGG. Mr. Speaker, I rise in strong support of H.R. 1077, the Realtime Investor Protection Act. As has already been indicated, this legislation will require the National Association of Securities Dealers to make its databases of complaints against broker-dealers publicly available on a secure Internet site and is relatively straightforward. Let me explain, however, this is indeed a serious problem. I personally know of individuals whose entire wealth has been wiped out by fraud which could have been detected had these investors taken the time to research the broker-dealer they were dealing with in an appropriate manner. As has been explained, the current law requires the NASD to maintain BrokerCheck. BrokerCheck is a system through which investors can research their broker-dealer before entrusting with them their hard- earned savings. But in light of Congress' increased focus on retirement security, I believe we should encourage Americans to, in fact, take advantage of BrokerCheck, and even go beyond that and to conduct their own research before making any investment decision. BrokerCheck, as has been indicated by my colleague on the other side, provides these individuals with this information through a free check that can be accessed either over the Internet or by telephone. But because it is accessed over the Internet and by telephone, and requires that an inquiry be submitted and then a response prepared and that response sent back, the delay in getting this information can be anywhere between 10 minutes and as much as 2 days. This legislation goes at that problem and allows instantaneous access to this kind of information. Through the current system and through the enhanced system this legislation will authorize, BrokerCheck will gather and make available online on an instantaneous basis, and an investor can discover, whether or not their broker has a criminal record, has been subjected to a regulatory action by the Securities and Exchange Commission, and whether or not their broker has had consumer complaints filed against them. While the current system is a good idea, as I indicated, it has not kept pace with technology. Today investors can only access the information by placing a request through the NASD's toll-free phone number or Website, and then must wait for a response. This legislation will update the system by requiring the NASD to make this information available through a secure Website on the Internet so investors can search for this information instantaneously. NASD statistics bear out the need to utilize the Internet for this purpose. Let me give just a few statistics. Over 4.4 million requests for information were submitted to the BrokerCheck program in 2004, and 99 percent of these were submitted on the Internet through e-mail. Only 1 percent were by telephone. Clearly investors have figured out that the Internet is the proper mechanism for submitting this kind of inquiry and checking out their broker-dealer before they invest. But by having it require now a response from the NASD, rather than having the check be instantaneous, we are exposing investors to that 10-minute to 2-day delay during which they cannot access this information. By making information accessible online, as H.R. 1077 does, it will be easier for individuals to research their broker-dealer and provide themselves with the information they need before they make an investment decision. I hope my colleagues share my interest in encouraging individuals to become more informed investors, and I urge a yes vote by all of my colleagues on the Realtime Investor Protection Act. I appreciate the comments of the gentleman on the other side in support of the legislation, the comments of the gentlewoman from New York (Mrs. Kelly), and the support of the Committee on Financial Services.

Mr. SHADEGG

Mr. SHADEGG. Mr. Speaker, thank you for giving me an opportunity to voice my thoughts on this significant issue. This Nation was founded to preserve the sacred rights of mankind: life, liberty, and the pursuit of happiness. Alexander Hamilton correctly noted that these rights were intrinsic and could ``never be erased or obscured by mortal power.'' Our Nation was premised on this notion, and our government built upon its foundation. Yet, more than 200 years after our founding, we are still fighting to realize this sacred vision. The fight to save the life of Terri Schiavo, a disabled Florida woman, is evidence of our struggle. In cases like Terri's, when there is no living will and exact wishes are impossible to determine, we must err on the side of protecting innocent life. Without such guiding principles, how can we be sure that we have not forsaken her rights and replaced them with a court-ordered death sentence based solely on hearsay? It is not only mortal power that seeks to take the life of Terri Schiavo, but moral power overseen and blessed by government. If we allow this course to continue, and if we stand idly by as this human life expires as a result of government-ordered starvation, we will have lost the moral compass passed down to us by our forefathers. If we cannot protect innocent life in these circumstances where there is no written evidence of the individual's wishes, the family is deeply divided, and death is neither imminent nor certain in the near future, we have failed to do our jobs of protecting her constitutional rights.

Mr. SHADEGG

Mr. SHADEGG. Mr. Chairman, I offer an amendment.

Mr. SHADEGG. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, my amendment seeks to address a significant air quality issue facing many of our communities and our constituents. Our Nation faces a serious air quality problem with tiny particles of dust and chemicals otherwise known as particulate matter. Particulate matter is a health hazard because people breathe it in and the human respiratory system cannot filter the particles out because they are so small. Thirty States have areas with particulate matter problems and over 100 million Americans live in communities facing this issue. Many scientific studies have linked the breathing of particulate matter to a series of health problems, including aggravated asthma, chronic bronchitis, decreased lung function and also premature death. Particulate matter is also the major cause of haze and reduced visibility in many parts of the country. That is precisely the reason why Congress required communities to achieve air quality standards for these small particulate matters under the Clean Air Act. The EPA has accordingly established two standards for particulate matter. One is PM-10, which is a fairly fine particulate matter, and the second is PM-2.5 which is extremely fine particulate matter. Both are produced by vehicles driving on both paved and unpaved roads, and neither PM-10 nor PM-2.5 can be filtered out by the human respiratory system. Current law allows States to use funds provided through the Congestion Management Air Quality Improvement program, known as CMAQ, to achieve compliance with particulate matter. However, the current allocation formula for funding under that law does not make any reference to or include particulate matter. This leads to significant funding shortfalls with regard to dealing with particulate matter problems. My amendment seeks to correct this inequity by adding both the EPA standards for particulate matter for PM-10 and PM-2.5 to this allocation formula. The language is essential because it will greatly aid areas with particulate matter pollution problems in meeting the air quality standards, particularly the emissions of these pollutants from roads. Measures which States and counties are required by law to take to deal with particulate matter problems include purchasing specially designed street sweepers; curbing, paving and stabilizing the shoulders of paved roads; paving, vegetating and chemically stabilizing access points and unpaved roads; the timing of traffic lights; and using unformulated gasoline. Again, this is a serious issue facing our communities. It directly affects my constituents and those of many of my fellow colleagues. My amendment would make the CMAQ program more equitable in its allocation of resources and would recognize the significant air quality concern which is currently overlooked in the programs' funding formula. I urge my colleagues to support the amendment. Mr. Chairman, I reserve the balance of my time.

Mr. SHADEGG. Mr. Speaker, will the gentleman yield?

Mr. SHADEGG. Mr. Chairman, as we have discussed, this is an issue which I raised last year and on which the gentleman graciously agreed to address, both the gentleman and the full committee chairman, in the conference. It is a complicated issue. When we dealt with this issue last year, one of these two pollutants had been included in the bill on the Senate side; the other had not. So our concern was to make sure that, if we dealt with one, we should deal with both because some States are confronted by a problem by one of those, and some States are confronted by a problem with the other. Quite frankly, some States have both. But I am prepared at the right point in time to withdraw the amendment based on my understanding from both the full committee chairman and the ranking member that this is an issue which can be addressed. It is indeed a more complicated issue than can be dealt with in a floor amendment and it can be addressed in conference. And based on the assurances I received I am more than willing to do that. I am not anxious to do it now because I have one gentleman who would like to speak to the issue, but once he has had a chance to do so I will be happy to proceed as agreed.

Mr. SHADEGG. Mr. Chairman, I yield 1 minute to the gentleman from Georgia (Mr. Gingrey).

Mr. SHADEGG. Mr. Chairman, based on the representations of both the chairman of the committee and the ranking member, their gracious willingness to work on this issue as it moves to conference and their acknowledgment that it is a serious concern, I ask unanimous consent to withdraw the amendment.

Mr. SHADEGG

Mr. SHADEGG. Mr. Speaker, I thank the gentleman for yielding me this time, and I rise in strong support both of this rule and the underlying bill, the REAL ID Act. I also want to thank the gentleman from Wisconsin (Mr. Sensenbrenner) for his effort in bringing this legislation to the floor. All of the reforms contained in the REAL ID Act are crucial to our national security interests, and all of them will help make America less vulnerable to terrorist attack. The bill's provisions include long-overdue and very common-sense safeguards that were recommended specifically by the 9/11 Commission. Let me point out just one of those. ``Secure identification should begin in the United States,'' wrote the bipartisan 9/11 Commission. They went on to say, ``The Federal Government should set standards for the issuance of birth certificates and sources of identification, such as driver's licenses. Fraud in identification documents is no longer just a problem of theft. At many entry points to vulnerable facilities, including gates for boarding aircraft, sources of identification are the last opportunity to ensure that people are who they say they are and to check whether they are terrorists.'' The bipartisan 9-11 Commission called for this legislation. Just a moment ago I heard one of my colleagues say this legislation does not improve upon the bill we passed dealing with the issue just a few months ago. I beg to disagree. Her point was, it does not address the issue of those who are here illegally, yet it very much does so. A provision of this bill pushed by my colleague, the gentleman from Arizona (Mr. Flake), for a number of years, provides that a driver's license may not have an expiration date beyond the date upon which someone's visa expires. That would specifically go to people here illegally. Let me point out how it would have applied to the 9/11 hijackers. Looking at Nawaf Alhazmi, his visa expired in January of 2001, yet he got a Florida's driver's license in June of 2001, he got a Virginia ID card in August of 2001, and he got a reissued Virginia ID card in September of 2001. A second hijacker, Hani Hanjour was in the same situation. He was in violation of his visa when he obtained a Virginia State ID in August of 2001 and a Maryland ID in September of 2001. These are critical reforms to making America safer. I urge my colleagues to vote for both the rule and the underlying legislation.

Mr. SHADEGG

Mr. SHADEGG. Mr. Speaker, as the 108th Congress comes to a close I hope all Members will take stock of our accomplishments. In particular, I want to commend Congress and President Bush for enacting the Identity Theft Penalty Enhancement Act. Identity theft is one of the fastest growing crimes in the United States, costing victims over $5 billion annually. Congress took a valuable step this year in stiffening penalties and giving the Justice Department more tools to combat this pervasive crime. However, there is still work to be done. Identity thieves continue to find new ways to exploit innocent Americans. In response, we must continue to improve our identity theft prevention and protection efforts. I rise today to commend to the nation one Arizona company, in particular, for aiding us in these efforts. Phoenix-based TriWest Healthcare Alliance performed a service to our country by coming forward with recommendations after it was the victim of an information theft. In December 2002, TriWest computer hard drives containing the personal information of beneficiaries were stolen from the company's office. Rather than obscure this fact for the sake of public relations, TriWest embarked on an effort to notify all 562,000 affected customers of the theft. At substantial cost, the company helped its customers place safeguards on their personal credit files and created a system of communication second to none. TriWest CEO and President David McIntyre testified before House and Senate committees to share his company's experience so that Congress could improve its efforts to protect all consumers from this threat. TriWest's actions exemplified what a good corporate citizen should do. In fact, in June 2004, TriWest was awarded three Arizona Corporate Excellence (ACE) awards by the Phoenix Business Journal and the Arizona Chamber of Commerce for displaying unwavering dedication and commitment to quality and integrity in serving Arizona's military community. During the award ceremony, it was noted that Mr. McIntyre ``responded in a way that is recognized nationally as the standard for companies faced with a serious crisis'' and that ``the approach of the TriWest team created a textbook example of how to treat customers with openness and integrity.'' For all these reasons, Mr. Speaker, I ask that you and my colleagues in the People's House join me in commending the men and women of TriWest Healthcare Alliance for going the extra mile for their beneficiaries and setting a benchmark for businesses to follow when confronted with a potential identity theft situation.

Mr. SHADEGG

Mr. SHADEGG. Mr. Speaker, I am pleased to speak on behalf of a fellow Arizonan and former colleague, Michael C. Cudahy, in recognition of his dedicated service to the citizens of the State of Arizona and this great Nation. Mike grew up in Southern California and Arizona in a family that had deep roots in the cattle and meat packing industry. After graduating from Middlebury College in Vermont and receiving his law degree from the University of Arizona College of Law, he served as a law clerk to two justices on the Arizona Supreme Court. Mike spent the majority of his professional career as an attorney with the Arizona Attorney General's Office, where he progressed through the office ranks from trial attorney to Chief Counsel and Senior Prosecutor, Criminal Division, during his 26 years of service. Through the administrations of numerous Attorneys General, who differed in their management styles and who were often from different political parties, Mike's talents for administration and skills as a litigator were consistently recognized and highly valued. He is held in high esteem by his colleagues, opponents, and judges for his trial skills, integrity, professionalism, and most of all, his sound judgment. Often he served as lead trial counsel in some of the most difficult and challenging cases facing the Attorney General's Office. A man of courage and conviction, Mike always adhered to the principles of fairness, justice, and the rule of law. Mike has always taken great pride in mentoring new attorneys, inculcating them with a deep appreciation and respect for the duties and responsibilities of serving as a member of the legal profession, especially those engaging in public service who often bear being held to a higher standard. He often opined that being an attorney was a privilege. Mike exemplified the highest and most honorable attributes expected of an attorney, and those who came under his tutelage were fortunate indeed. Despite dealing with the frailties of individuals who entered the criminal justice system, Mike has maintained an optimistic perspective about the human spirit and our society. He has always remained positive about the world we live in and about the future of our Nation. In his personal life, his love and devotion to his family--wife Joanie, daughter Catherine, and son John--are the cornerstones of his life's journey. Despite some recent challenges to his health, which have caused an early retirement, Mike maintains his sense of humor and optimistic outlook. Every now and again, a special individual intersects with our own life in a profound way, and through his daily example creates a positive beam for us to follow. Michael C. Cudahy is one of these special individuals, and it is for these reasons I want to honor my friend and former colleague today.

Mr. SHADEGG

Mr. SHADEGG. Mr. Speaker, it is with profound pleasure that I rise to commend to the Nation Dennis Conner, of America's Cup fame, an outstanding American yachtsman, competitor and sailing icon, in admiration and appreciation of his magnificent restoration of the historic wooden yacht Cotton Blossom II. Mr. Conner's expertise and dedication to preserving yachting history are to be commended. His extraordinary efforts are a testament to his uncompromising devotion to excellence and authenticity. Thanks to Dennis Conner's vision and generosity, Cotton Blossom II is an elegantly restored masterpiece that honors our country's rich yachting heritage and the classic art of wooden boat building. Cotton Blossom II was designed in 1924 by Johan Anker, the leading ``Q'' Boat designer of the time. She was built for Lawrence Percival of Boston at the Jensen Shipyard near Oslo, Norway. Leonore, as she was first named, was delivered to Marblehead in October 1925. She was later sold to Walter Wheeler and christened Cotton Blossom II. Wheeler campaigned her with great success out of Stamford, CT. Among her many racing victories were the Vineyard Race and the Astor Cup for the New York Yacht Club. She was named the NYYC Boat of the Year in 1939, and her half model is displayed in the Club's Model Room. Twenty-three years later, this well-designed yacht continued to win major races under the stewardship of owners Ed and Gloria Turner of the San Diego Yacht Club. Cotton Blossom II successfully spanned the dramatic changes that had taken place in the sport since the 1920s as she became a familiar sight winning all the major races at the club, including the Lipton Trophy, and was named SDYC Boat of the Year in 1963. Her half model is displayed in the club today. As a young man and rising star in the sailing world, Dennis Conner sailed extensively on Cotton Blossom II. When he had the good fortune of acquiring Cotton Blossom II, Mr. Conner assembled a team of the finest craftsmen and shipbuilders to restore her with meticulous care to her original condition. Mr. Speaker, I ask that you and my colleagues in the People's House join me in commending Dennis Conner and his talented team of skilled craftsmen for preserving U.S. maritime history with the restoration of the legendary wooden yacht Cotton Blossom II.

Mr. SHADEGG

Mr. SHADEGG. Mr. Chairman, I rise in strong support of the underlying bill, H.R. 10; and I want to thank all of those who were involved in crafting its provisions. I think it is important to our Nation. As a member of the Select Committee on Homeland Security and Chair of the Subcommittee on Emergency Preparedness and Response, I am extremely pleased that H.R. 10 includes critically important provisions regarding the funding for our first responders. My colleague, the gentlewoman from Washington (Ms. Dunn), the full committee vice chairman, talked about these issues. I strongly believe, as does the chairman of the full committee and I think the 9/11 Commission, that it is important that we dispense homeland security funds not based on politics or peanut butter to every Member's district, but rather based on risk, to where we face a real threat. The provisions of that bill which are incorporated in this legislation moved through my subcommittee, and they ensure that States are awarded grant money to locals in a timely and efficient manner by establishing stringent timelines and incentives for grant disbursement, along with penalties for failure to disburse those funds. They requires States to pass through at least 80 percent of their funds to local government so that first responders actually get the money and get it no later than 45 days after receiving the funds from the Federal Government. They establish clear benchmarks for terrorism preparedness to help localities determine spending priorities with confidence. And they require parties to make spending decisions before the money is even allocated, thus facilitating quicker distribution of these funds to all recipients. We move the planning process to the front end. The Senate bill does not fix this problem of back-ended distribution fights that slow distribution. The 9/11 Commission supported this language. I think it is critically important, and I urge my colleagues to support the legislation.

Mr. SHADEGG

Mr. SHADEGG. Mr. Chairman, I thank the chairman of the subcommittee for his support of this amendment; and to my friend from the opposite side of the aisle, I want to make it clear to him, we did propose a much more modest amendment, only $20 million. Our original goal had been to restore the entire $296 million. I would hope that in negotiations with the other body you would find, as I know the chairman will look to find, funds to put into this block grant program. I understand and sympathize with the remarks he made in his effort. Hopefully, as this bill moves forward and he will be in the conference and I will not, you can restore these funds even above the $20 million level here. Our effort was to be sure there was a line item in the bill as it leaves the House for you to work with as you go to the Members of the other body on this issue.

Mr. SHADEGG. Mr. Chairman, this is an amendment offered by myself and the gentlewoman from Colorado (Mrs. Musgrave), and we believe it is extremely important at this particular time in our Nation's history. Mr. Chairman, the base bill we have before us omits any funding for title V, part A education block grants, and that program has previously been funded at the level of $296 million. That program is one of the few places where educators in America have flexibility to spend money as they see fit. Indeed, these title V block grants are critical, and they give local educators the flexibility and the funds to address local needs. They are used to reduce class size, buy computers, provide teacher training, and they are used to support remedial reading efforts. It is the flexibility of these grants that are so important at a time when the no child left behind bill is being funded across our Nation, and some people say there is not sufficient funding. Many local educators have spoken up and said this program needs to be funded. Indeed, in a letter from the American Association of School Administrators, which represents more than 14,000 school administrators and local education leaders across the country, in a letter dated just yesterday, they said, ``At a time when every dollar flowing from the Federal Government to local districts has a specific purpose, only this funding stream,'' the title V education block grant, ``allows districts the flexibility to use the dollars to meet the unique needs of the local school district.'' The letter went on to say every district benefits from funding under this block grant; therefore, every district would be affected by its elimination, and they reiterate these dollars are helping local school districts implement No Child Left Behind. I believe there is no opposition to the addition of the funding which this amendment offers. What there is is a debate about the source of that funding. The amendment takes $20 million from the Even Start Program and puts it into this title V education block program. We chose that because it was the only source we could find. We would note that Even Start is already funded at $247 million, and that is a sufficient amount to continue the programs already funded. I urge my colleagues to support the amendment. Amendment Offered by Mr. Obey to Amendment Offered by Mr. Shadegg

Mr. SHADEGG. Mr. Chairman, I ask unanimous consent to strike the requisite number of words.

Mr. SHADEGG. Mr. Chairman, I offer an amendment.

Mr. SHADEGG

Mr. SHADEGG. Mr. Chairman, I thank the gentleman for yielding time and I rise in strong support of H.R. 3574, the Stock Option Accounting Reform Act. Let me make it very clear, this is not a technical issue which Congress should leave to FASB. This is not how do we account for something. Indeed, that issue presents itself here, and no one can agree on how we should account for the expensing of stock options. But the issue that brings us here is not a technical FASB issue; the issue that brings us here is one that has great implications on public policy. That is, do we continue to incent companies to use stock options to give employees a stake in their company, which I believe all Americans want and is the key to our Nation's vibrant economy, or do we squelch that by allowing a technical rule to go into place forcing the expensing of all stock options the minute they are issued. I submit to my colleagues that it is FASB that is acting too fast. It is FASB that is acting imprudently and without taking the time to study this area closely. Indeed, there has been no study yet of the impact on our economy were we to suddenly jump forward and require the expensing of all stock options immediately. This economy is beginning to emerge from a recession and is getting stronger every day, but it is critically important that we allow America's companies to continue to give incentives to their employees. This is particularly true of start-ups. It may be that the big companies, those with billions of dollars in assets, can handle this requirement, but the little start-ups, the small companies that bring ingenuity to the marketplace and challenge the existing large companies in the market and our high-tech industry, have survived and indeed prospered by using stock options. They are confident that this will damage them immensely. Harvard professor William Sahlman has said, ``If the advocates of expensing win their small point and the spotlight on corporate America fades away as a result, I fear that we will end up having done nothing at all to prevent unscrupulous executives from yet again stealing their investors' money.'' It is absolutely critical that we not allow FASB to treat this as a technical issue. There is not yet an agreed-upon best or even good method for calculating the value of stock options. Expensing will not make our corporate expenditures more clear or bring greater clarity to investors. It solves nothing. I urge my colleagues to oppose it because it will hurt start-ups and it will hurt high-tech companies.

Mr. SHADEGG

Mr. SHADEGG. Mr. Speaker, I thank the gentleman for yielding me this time. I rise in strong support of the Project Bioshield Act. Is the act perfect? Does it solve all problems in this area? No. But I do not think we will hear anyone take to the floor and say that this is not a bicameral, bipartisan proposal to address a serious threat to this Nation. I want to thank the chairman of the Committee on Energy and Commerce and the previous chairman, the gentleman from Louisiana (Mr. Tauzin), both of whom have worked very hard on this legislation, as well as the chairman of the Select Committee on Homeland Security in bringing this initiative forward and moving it as rapidly as possible through the United States Congress. I also want to thank President Bush for putting this initiative on our agenda. Thirty years ago, perhaps 20 years ago, we had never even heard of biotechnology or genomics; but today, along with our country's unparalleled leadership in semiconductors and computing power, we are making breathtaking breakthroughs in the field of bioscience. And as my colleague from Texas just outlined, there is much more that can be done. This legislation goes at a serious vulnerability for our Nation. As has been referred to in this debate, we are aware by the briefings we get and by the press we read that we face a threat from al Qaeda and others who would seek to use these agents against us, chemical, biological, radiological, and even nuclear, weapons. They would like to use dangerous agents like anthrax, botulinum toxin, the plague, ebola and other similar viruses, as have just been noted, even some we are not even aware of. And of course as was well explained by my colleague, the former chairman of the Committee on Energy and Commerce, the gentleman from Louisiana, in the absence of this legislation, it is very clear that there is no incentive for anyone, not the government, not the private sector, not anyone, to develop and do the research to develop the countermeasures we need for these serious threats to the American people. This is critically important first-step legislation. It not only will encourage the research but it also encourages the development of those countermeasures and the stockpiling of them so that they are readily available. The American people expect that of us and both committees in both bodies have worked hard on this kind of legislation. I want to point out that I chair the Subcommittee on Emergency Preparedness and Response of the Select Committee on Homeland Security as well as serving on the Committee on Energy and Commerce; and I chaired hearings on the House parallel to this legislation, H.R. 2122. In those hearings we discovered a fact that has not been mentioned in this debate, and that is that the mere development of these countermeasures for such a biological attack will deter the attack. Think of that point. The reality is if al Qaeda knows that we are unprepared for a chemical, a biological or a radiological attack, then they are incentivized to make that kind of attack. On the other hand if they know that we have invested the money and done the research and we have developed countermeasures so that a biological attack or an anthrax attack, an attack of ebola or of the plague is something we are prepared for, then they are discouraged to even make that kind of attack. The American people expect us to do everything humanly possible to prepare for the event of an attack; but even more importantly they want us to deter any attacks. They want us to protect the American people from an attack. This legislation, Project Bioshield, by not only encouraging the research of these antitoxins but also encouraging their development and their stockpiling will indeed deter such attacks. I strongly urge my colleagues to support this legislation.