Arlen Specter

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to reintroduce legislation that would substitute the United States in the place of electronic communications service providers who were sued for violating the Foreign Intelligence Surveillance Act, FISA, and other statutory and constitutional provisions. FISA reform legislation passed the Senate in February and July of 2008, both times by a vote of 68 to 29, before being signed into law by President Bush on July 10, 2008. This legislation made many necessary changes to FISA to enhance our intelligence collection capabilities, but it also included a controversial provision giving retroactive immunity to telecommunications companies for their alleged cooperation with the warrantless surveillance program authorized by the President after September 11, 2001. The legislation stripped the Federal courts of jurisdiction to decide more than 40 consolidated cases involving claims of violations of FISA and related statutes, even though most Members of Congress had not been briefed on the program, and despite the fact that the judge handling the cases, Chief Judge Vaughn Walker of the Northern District of California, had questioned the legality of the program in a related opinion issued just days before the final Senate debate. During the February and July FISA debates, I sought to keep the courts open as a way to check executive branch excesses. Through both a stand-alone bill, S. 2402, considered by the Senate Judiciary Committee and an amendment, SA 3927 to S. 2248, offered during the Senate's February debate on the FISA reform bill, I proposed to substitute the U.S. Government for the telephone companies facing lawsuits for their alleged cooperation with the Terrorist Surveillance Program, TSP. Just as in 2008, I propose legislation that would place the Government in the shoes of the telephone companies, with the same defenses no more and no less. Thus, under the bill, plaintiffs get their day in court and may hold the Government accountable for unlawful activity, if any, related to the surveillance program. At the same time, the carriers themselves avoid liability stemming from their efforts to be good citizens. I fought hard in 2008 to keep the courts open on the question of the TSP, and urged my colleagues to improve the FISA bill. I continue that fight today with a new Administration in office. During the prior floor debate I said: ``Although I am prepared to stomach this bill, if I must, I am not yet ready to concede that the debate is over. Contrary to the conventional wisdom, I don't believe it is too late to make this bill better.'' As I observed on the floor last year, it is necessary for Congress to support intelligence collection efforts because of the continuing terrorist threat. No one wants to be blamed for another 9-11. Indeed, as I acknowledged during the debate, my own briefings on the telephone companies' cooperation with the Government convinced me of the program's value. Nevertheless, I tried to impress upon my colleagues the importance and historical context of our actions. I said: We are dealing here with a matter that is of historic importance. I believe that years from now, historians will look back on this period from 9/11 to the present as the greatest expansion of Executive authority in history-- unchecked expansion of authority. The President disregards the National Security Act of 1947 mandating notice to the Intelligence Committee; he doesn't do it. The President takes legislation that is presented by Congress and he signs it, and then he issues a signing statement disagreeing with key provisions. There is nothing Congress can do about it. The Supreme Court of the United States has gone absent without leave on the issue, in my legal opinion. When the Detroit Federal judge found the terrorist surveillance program unconstitutional, it was [reversed] by the Sixth Circuit on a 2-to-1 opinion on grounds of lack of standing. Then the Supreme Court refused to review the case. But the very formidable dissenting opinion laid out all of the grounds where there was ample basis to grant standing. Now we have Chief Judge Walker declaring the [surveillance illegal]. The Congress ought to let the courts fulfill their constitutional function. It is not too late to provide for judicial review of controversial post-9/11 intelligence surveillance activities. The cases before Judge Vaughn Walker are still pending and, even if he were to dismiss them under the statutory defenses dubbed retroactive immunity, Congress can and should permit the cases to be refiled against the Government, standing in the shoes of the carriers. This legislation substitutes the U.S. in place of any electronic communication service provider who provided communications in connection with an intelligence activity that was: authorized by the President between September 11, 2001, and January 17, 2007; and designed to detect or prevent a terrorist attack against the U.S. In order for substitution to apply, the electronic communications service provider must have received a written request from the Attorney General or the head of an element of the intelligence community indicating that the activity was authorized by the President and determined to be lawful. If the provider assisted the Government beyond what was requested in writing, this legislation will provide no relief to the service provider. The legislation also establishes a limited waiver of sovereign immunity that only applies to ``covered civil actions'' essentially, the 40 cases currently pending before the U.S. District Court in the Northern District of California. This is to prevent the Government from asserting immunity in the event it is substituted for the current defendants. We can still pass legislation substituting the Government for the various telecom defendants and have a judicial assessment of the constitutionality and legality of the controversial surveillance. Such a judicial assessment is necessary to resolve the clash between the Executive and Legislative branches over the legality and constitutionality of the surveillance program. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. SPECTER. Mr. President, I have sought recognition to introduce legislation that will mandate Supreme Court review of challenges to the warrantless wiretapping program authorized by President Bush after 9/ 11, commonly known as the Terrorist Surveillance Program or TSP. While the Supreme Court generally exercises discretion as to whether it will review a case or grant ``certiorari,'' there are precedents for Congress to direct Supreme Court review on constitutional issues-- including the statutes forbidding flag burning and requiring Congress to abide by Federal employment laws--and the gravity of this issue merits Congressional action. In August 2006, Judge Anna Diggs Taylor of the U.S. District Court for the Eastern District of Michigan issued a 43-page opinion finding the TSP unconstitutional. At the time, many applauded and many others criticized her decision, but we have yet to see appellate review on the merits. Instead, in July 2007, the U.S. Court of Appeals for the 6th Circuit overturned the district court's decision on other grounds. By a 2-1 vote, in ACLU v. NSA, it declined to rule on the legality of the program, finding that the plaintiffs lacked standing to bring the suit. The Supreme Court then declined to hear the case, even though the doctrine of standing has enough flexibility, as demonstrated by the dissent in the 6th Circuit, to have enabled it to take up this fundamental clash between Congress and the President. With the Supreme Court abstaining, another lone district judge took a stand. In In re National Security Agency Telecommunications Records Litigation, Chief Judge Vaughn Walker in the Northern District of California considered a case brought by an Islamic charity that claims to have been a subject of the surveillance program. In a 56-page opinion he held that Congress's enactment of the Foreign Intelligence Surveillance Act of 1978, FISA, had constrained the President's inherent authority--if any--to conduct warrantless wiretapping: ``Congress appears clearly to have intended to--and did--establish the exclusive means for foreign intelligence surveillance activities to be conducted. Whatever power the executive may otherwise have had in this regard, FISA limits the power of the executive branch to conduct such activities.'' Nevertheless, this finding is preliminary. Whatever Chief Judge Walker ultimately decides, my bill will permit any party who is disaffected by a subsequent decision in the Ninth Circuit to have the case heard by the Supreme Court by eliminating discretionary review. Under my bill, the Supreme Court would also have to review appeals concerning the constitutionality or legality of: the Terrorist Surveillance Program writ large; the statutory immunity for telecommunications providers created by Title II of the FISA Amendments Act of 2008; and any other intelligence activity involving communications that was authorized by the President during the period beginning on September 11, 2001, and ending at such time as the activity was approved by a Federal court. Relying on similar precedents, the bill requires the High Court to expedite its consideration of such cases. The bill, however, is limited to circumstances where the Court has not previously decided the question at issue. Thus, it does not create a permanent right of review for all similarly situated parties, but it does require the Court to take up the matter in the first instance. Congress clearly has the power to require appellate review by the Supreme Court under Article III, Section 2 of the Constitution, and it has exercised this prerogative. For example, 28 U.S.C. Sec. 3904 provides for direct appeal to the Supreme Court of decisions ``upon the constitutionality'' of the Congressional Accountability Act if the Court ``has not previously ruled on the question'' and requires the Court to ``expedite the appeal.'' Congress used nearly identical language to provide for direct appeal and expedited Supreme Court review of the constitutionality of a ban on flag burning in 18 U.S.C. Sec. 700. I propose similar action here. It is hard to conceive of a better case to have finally decided in the Supreme Court than one which challenges the legality of warrantless wiretapping--or the constitutionality of the retroactive statutory defenses passed by Congress last year. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. SPECTER. Mr. President, I seek recognition to speak on legislation I am introducing with Senator Casey that will require the Secretary of Agriculture to determine the price of all manufactured milk, classified as Class II milk, using the national average cost of production. At a time when the dairy farmers in Pennsylvania and across the country are seeing record low prices for their milk, this legislation is necessary to bring the price of milk back to a level where farmers can earn a living and provide for their families. Over the past year, farmers in my state have seen the average price for a hundredweight, cwt, of milk drop from around $24 in July 2008, to hovering around $10 this February. This dramatic price decrease has been the result of a perfect storm of factors, including record high fuel prices last summer, which increased the cost of feed and other supplies, and a decrease in demand for dairy products abroad, where cases of melamine in milk have caused a severe drop in demand. Last year, Sen. Casey and I worked diligently to increase the Milk Income Loss Contract, MILC, Program in the 2008 Farm Bill. We were successful in including a cost of production increase to all MILC payments. These direct payments from the federal government are triggered when the price of milk per cwt falls below $16.94. When the average price of milk for a given month falls below this trigger, farmers are paid 45 percent of the difference between the actual price of milk and the trigger price. With the 2008 Farm bill's inclusion of the cost of production to these payments, farmers are seeing higher MILC payments than they otherwise would. However, this is not enough. I have heard numerous reports from my constituents that the price of milk has fallen so low that they are fearful of having to sell their farms in order to provide for their families. Many of the dairy farms in Pennsylvania are small, family- owned farms, which, once sold, will be lost forever. We cannot let this happen. The dairy industry is critical not only to Pennsylvania's economy, but to the economy of the U.S. and to the security of our nation. The Federal Milk Marketing Improvement Act will not only use a national average cost of production to determine Class II milk, but will also keep the Secretary of Agriculture engaged in protecting farmers from falling milk prices. This legislation would require the Secretary to adjust the value of milk four times a year, ensuring that price volatilities in the fuel sector will not unfairly hurt this industry, as we have seen it do in the past year. Finally, this legislation provides an exemption for new dairy producers, up to 3 million pounds of milk during the first year of production, to encourage growth in the industry. With recent losses across the country of so many dairy farms, this provision is important to spurring new farmers and producers to enter the dairy industry. I look forward to working with my colleagues to advance this and other legislation which will help a vital industry to this country. Our dairy farmers are the backbone of the agricultural community, and they deserve our support.

Mr. SPECTER

Mr. SPECTER. Mr. President, I seek recognition today on behalf of myself, Senator Grassley and Senator Tester, to offer the Presidential Signing Statements Act of 2009. The purpose of this bill is to regulate the use of Presidential Signing Statements in the interpretation of Acts of Congress. This bill is similar in substance to two prior versions of this legislation: the Presidential Signing Statements Act of 2007, which I introduced on June 29, 2007; and the Presidential Signing Statements Act of 2006, which I introduced on July 26, 2006. As I have stated before, I believe that this legislation is necessary to protect our constitutional system of checks and balances. This bill achieves that goal in the following ways. First, it prevents the President from issuing a signing statement that alters the meaning of a statute by instructing federal and state courts not to rely on, or defer to, presidential signing statements as a source of authority when determining the meaning of any Act of Congress. Second, it grants Congress the power to participate in any case where the construction or constitutionality of any Act of Congress is in question and a presidential signing statement for that Act was issued by allowing Congress to file an amicus brief and present oral argument in such a case; instructing that, if Congress passes a joint resolution declaring its view of the correct interpretation of the statute, the Court must admit that resolution into the case record; and providing for expedited review in such a case. Since the days of President James Monroe, Presidents have issued statements when signing bills. It is widely agreed that there are legitimate uses for signing statements. For example, Presidents may use signing statements to instruct executive branch officials how to administer a law or to explain to the public the likely effect of a law. There may be a host of other legitimate uses. It is clear, however, that the President cannot use a signing statement to rewrite the words of a statute, nor can he use a signing statement to selectively nullify those provisions he does not like. This much is clear from our Constitution. The Constitution grants the President a specific, defined role in enacting legislation. Article I, section 1 of the Constitution vests ``all legislative powers . . . in a Congress.'' Article I, section 7 of the Constitution provides that, when a bill is presented to the President, he may either sign it or veto it with his objections. He may also choose to do nothing, thus rendering a so-called pocket veto. But the President cannot veto part of a bill--he cannot veto certain provisions he does not like. The Framers had good reason for constructing the legislative process as they did. According to The Records of the Constitutional Convention, the veto power was designed to protect citizens from a particular Congress that might enact oppressive legislation. However, the Framers did not want the veto power to be unchecked, and so, in Article I, section 7, they balanced it by allowing Congress to override a veto by 2/3 vote. As I stated when I initially introduced this legislation in 2006, this is a finely structured constitutional procedure that goes straight to the heart of our system of checks and balances. Any action by the President that circumvents this procedure is an unconstitutional attempt to usurp legislative authority. If the President is permitted to re-write the bills that Congress passes and cherry pick which provisions he likes and does not like, he subverts the constitutional process designed by the Framers. The Supreme Court has affirmed that the Constitutional process for enacting legislation must be safeguarded. As the Court explained in INS v. Chahda, ``It emerges clearly that the prescription for legislative action in Article I, Section 1 and 7 represents the Framers' decision that the legislative power of the Federal Government be exercised in accord with a single, finely wrought and exhaustively considered, procedure.'' 462 U.S. 919, 951, 1982. It is well within Congress's power to enact rules of statutory interpretation intended to preserve this constitutional structure. This power flows from Article I, section 8, clause 18 of the Constitution, which gives Congress the power ``To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the U.S., or in any department or officer thereof.'' Rules of statutory interpretation are ``necessary and proper'' to execute the legislative power. Several scholars have agreed: Jefferson B. Fordham, a former Dean of the University of Pennsylvania Law School said, ``[I]t is within the legislative power to lay down rules of interpretation for the future;'' Mark Tushnet, a Professor at Harvard Law School explained, ``In light of the obvious congressional power to prescribe a statute's terms (and so its meaning), congressional power to prescribe interpretive methods seems to me to follow;'' Michael Stokes Paulsen, an Associate Dean of the University of Minnesota Law School noted, ``Congress is the master of its own statutes and can prescribe rules of interpretation governing its own statutes as surely as it may alter or amend the statutes directly.'' Finally, J. Sutherland, the author of the leading multi- volume treatise for the rules of statutory construction has said, ``There should be no question that an interpretive clause operating prospectively is within legislative power.'' Indeed, recent experience shows why such legislation is ``necessary.'' The use of signing statements has risen dramatically in recent years. President Clinton issued 105 signing statements; President Bush issued 161. What is more alarming than the sheer numbers, is that President Bush's signing statements often raised constitutional concerns and other objections to several provisions of a law. The President used those statements in a way that threatened to render the legislative process a virtual nullity, making it completely unpredictable how certain laws will be enforced. Even where Congress managed to negotiate checks on executive power, the President used signing statements to override the legislative language and defy congressional intent. Two prominent examples make the point. In 2006, I spearheaded the delicate negotiations on the PATRIOT Act Reauthorization, which included months of painstaking efforts to balance national security and civil liberties, disrupted by the dramatic disclosure of the Terrorist Surveillance Program. The final version of the bill featured a carefully crafted compromise necessary to secure the act's passage. Among other things, it included several oversight provisions designed to ensure that the FBI did not abuse special terrorism-related powers permitting it to make secret demands for business records. The President dutifully signed the measure into law, only to then enter a signing statement insisting he could withhold any information from Congress required by the oversight provisions if he decided that disclosure would ``impair foreign relations, national security, the deliberative process of the executive, or the performance of the executive's constitutional duties.'' The second example arose in 2005. Congress overwhelmingly passed Senator John McCain's amendment to ban all U.S. personnel from inflicting ``cruel, inhuman or degrading'' treatment on any prisoner held by the United States. There was no ambiguity in Congress's intent; in fact, the Senate approved it 90 to 9. However, after signing the bill into law, the President quietly issued a signing statement asserting that his Administration would construe it ``in a manner consistent with the constitutional authority of the President to supervise the unitary executive branch and as Commander in Chief and consistent with the constitutional limitations on the judicial power.'' Many understood this signing statement to undermine the legislation. In a January 4, 2006 article titled, ``Bush could bypass new torture ban: Waiver right is reserved,'' the Boston Globe cited an anonymous ``senior administration official'' as saying, ``the president intended to reserve the right to use harsher methods in special situations involving national security.'' As outrageous as these signing statements are, intruding on the Constitution's delegation of ``all legislative powers'' to the Congress, it is even more outrageous that Congress has done nothing to protect its constitutional powers. In 2006 and 2007, the legislation I introduced giving Congress standing to challenge the constitutionality of these signing statements failed to muster the veto-proof majority it would have surely required. With a new administration, I believe the time has come to pass this important legislation. This bill does not seek to limit the President's power, and it does not seek to expand Congress's power. Rather, this bill simply seeks to safeguard our Constitution. In this Congress, it has a better chance of mustering a majority vote and being signed into law by the new President. That said, two days after criticizing President Bush's signing statements, President Obama issued one of his own regarding the Omnibus Appropriations Act of 2009. Citing among others his ``commander in chief'' and ``foreign affairs'' powers, he refused to be bound by at least eleven specific provisions of the bill including one long- standing rider to appropriations bills designed to aid congressional oversight. As I told The Wall Street Journal, ``We are having a repeat of what Democrats bitterly complained about under President Bush.'' I hope this will be the exception rather than the rule. In the meantime, this bill seeks to implement measures that will safeguard the constitutional structure of enacting legislation. In preserving this structure, this bill reinforces the system of checks and balances and separation of powers set out in our Constitution. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to reintroduce legislation that would substitute the United States in the place of electronic communications service providers who were sued for violating the Foreign Intelligence Surveillance Act, FISA, and other statutory and constitutional provisions. FISA reform legislation passed the Senate in February and July of 2008, both times by a vote of 68 to 29, before being signed into law by President Bush on July 10, 2008. This legislation made many necessary changes to FISA to enhance our intelligence collection capabilities, but it also included a controversial provision giving retroactive immunity to telecommunications companies for their alleged cooperation with the warrantless surveillance program authorized by the President after September 11, 2001. The legislation stripped the Federal courts of jurisdiction to decide more than 40 consolidated cases involving claims of violations of FISA and related statutes, even though most Members of Congress had not been briefed on the program, and despite the fact that the judge handling the cases, Chief Judge Vaughn Walker of the Northern District of California, had questioned the legality of the program in a related opinion issued just days before the final Senate debate. During the February and July FISA debates, I sought to keep the courts open as a way to check executive branch excesses. Through both a stand-alone bill, S. 2402, considered by the Senate Judiciary Committee and an amendment, SA 3927 to S. 2248, offered during the Senate's February debate on the FISA reform bill, I proposed to substitute the U.S. Government for the telephone companies facing lawsuits for their alleged cooperation with the Terrorist Surveillance Program, TSP. Just as in 2008, I propose legislation that would place the Government in the shoes of the telephone companies, with the same defenses no more and no less. Thus, under the bill, plaintiffs get their day in court and may hold the Government accountable for unlawful activity, if any, related to the surveillance program. At the same time, the carriers themselves avoid liability stemming from their efforts to be good citizens. I fought hard in 2008 to keep the courts open on the question of the TSP, and urged my colleagues to improve the FISA bill. I continue that fight today with a new Administration in office. During the prior floor debate I said: ``Although I am prepared to stomach this bill, if I must, I am not yet ready to concede that the debate is over. Contrary to the conventional wisdom, I don't believe it is too late to make this bill better.'' As I observed on the floor last year, it is necessary for Congress to support intelligence collection efforts because of the continuing terrorist threat. No one wants to be blamed for another 9-11. Indeed, as I acknowledged during the debate, my own briefings on the telephone companies' cooperation with the Government convinced me of the program's value. Nevertheless, I tried to impress upon my colleagues the importance and historical context of our actions. I said: We are dealing here with a matter that is of historic importance. I believe that years from now, historians will look back on this period from 9/11 to the present as the greatest expansion of Executive authority in history-- unchecked expansion of authority. The President disregards the National Security Act of 1947 mandating notice to the Intelligence Committee; he doesn't do it. The President takes legislation that is presented by Congress and he signs it, and then he issues a signing statement disagreeing with key provisions. There is nothing Congress can do about it. The Supreme Court of the United States has gone absent without leave on the issue, in my legal opinion. When the Detroit Federal judge found the terrorist surveillance program unconstitutional, it was [reversed] by the Sixth Circuit on a 2-to-1 opinion on grounds of lack of standing. Then the Supreme Court refused to review the case. But the very formidable dissenting opinion laid out all of the grounds where there was ample basis to grant standing. Now we have Chief Judge Walker declaring the [surveillance illegal]. The Congress ought to let the courts fulfill their constitutional function. It is not too late to provide for judicial review of controversial post-9/11 intelligence surveillance activities. The cases before Judge Vaughn Walker are still pending and, even if he were to dismiss them under the statutory defenses dubbed retroactive immunity, Congress can and should permit the cases to be refiled against the Government, standing in the shoes of the carriers. This legislation substitutes the U.S. in place of any electronic communication service provider who provided communications in connection with an intelligence activity that was: authorized by the President between September 11, 2001, and January 17, 2007; and designed to detect or prevent a terrorist attack against the U.S. In order for substitution to apply, the electronic communications service provider must have received a written request from the Attorney General or the head of an element of the intelligence community indicating that the activity was authorized by the President and determined to be lawful. If the provider assisted the Government beyond what was requested in writing, this legislation will provide no relief to the service provider. The legislation also establishes a limited waiver of sovereign immunity that only applies to ``covered civil actions'' essentially, the 40 cases currently pending before the U.S. District Court in the Northern District of California. This is to prevent the Government from asserting immunity in the event it is substituted for the current defendants. We can still pass legislation substituting the Government for the various telecom defendants and have a judicial assessment of the constitutionality and legality of the controversial surveillance. Such a judicial assessment is necessary to resolve the clash between the Executive and Legislative branches over the legality and constitutionality of the surveillance program. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. SPECTER

Mr. SPECTER. Mr. President, I seek recognition to speak on legislation I am introducing with Senator Casey that will require the Secretary of Agriculture to determine the price of all manufactured milk, classified as Class II milk, using the national average cost of production. At a time when the dairy farmers in Pennsylvania and across the country are seeing record low prices for their milk, this legislation is necessary to bring the price of milk back to a level where farmers can earn a living and provide for their families. Over the past year, farmers in my state have seen the average price for a hundredweight, cwt, of milk drop from around $24 in July 2008, to hovering around $10 this February. This dramatic price decrease has been the result of a perfect storm of factors, including record high fuel prices last summer, which increased the cost of feed and other supplies, and a decrease in demand for dairy products abroad, where cases of melamine in milk have caused a severe drop in demand. Last year, Sen. Casey and I worked diligently to increase the Milk Income Loss Contract, MILC, Program in the 2008 Farm Bill. We were successful in including a cost of production increase to all MILC payments. These direct payments from the federal government are triggered when the price of milk per cwt falls below $16.94. When the average price of milk for a given month falls below this trigger, farmers are paid 45 percent of the difference between the actual price of milk and the trigger price. With the 2008 Farm bill's inclusion of the cost of production to these payments, farmers are seeing higher MILC payments than they otherwise would. However, this is not enough. I have heard numerous reports from my constituents that the price of milk has fallen so low that they are fearful of having to sell their farms in order to provide for their families. Many of the dairy farms in Pennsylvania are small, family- owned farms, which, once sold, will be lost forever. We cannot let this happen. The dairy industry is critical not only to Pennsylvania's economy, but to the economy of the U.S. and to the security of our nation. The Federal Milk Marketing Improvement Act will not only use a national average cost of production to determine Class II milk, but will also keep the Secretary of Agriculture engaged in protecting farmers from falling milk prices. This legislation would require the Secretary to adjust the value of milk four times a year, ensuring that price volatilities in the fuel sector will not unfairly hurt this industry, as we have seen it do in the past year. Finally, this legislation provides an exemption for new dairy producers, up to 3 million pounds of milk during the first year of production, to encourage growth in the industry. With recent losses across the country of so many dairy farms, this provision is important to spurring new farmers and producers to enter the dairy industry. I look forward to working with my colleagues to advance this and other legislation which will help a vital industry to this country. Our dairy farmers are the backbone of the agricultural community, and they deserve our support.

Mr. SPECTER

Mr. SPECTER. Well, I thank Senator McConnell for those comments. The statute which is on the floor--the bill which is on the floor, proposed statute--is a very important legislative piece. It will strengthen law enforcement being directed against precisely the kinds of white-collar crime we are talking about. The bill authorizes $165 million a year for hiring fraud prosecutors in the Department of Justice, including $75 million for the FBI to bring on 190 additional special agents and more than 200 professional staff. The bill includes $50 million a year for the U.S. Attorneys' Offices to staff those strike forces. The bill authorizes $80 million a year over the next 2 years for the U.S. Postal Inspection Service, the Inspector General, the Secret Service, and the office of Housing and Urban Development. It amends the definition of ``financial institution'' to extend Federal fraud laws to mortgage lending businesses that are not directly regulated or insured by the Federal Government. These companies were responsible for nearly half of the residential mortgage market before the economic collapse, yet they remain today largely unregulated and outside the scope of traditional Federal fraud statutes. This bill will correct that. It amends the major fraud statute to protect funds expended under TARP, the Troubled Asset Relief Program, and the economic stimulus package. So we are providing criminal sanctions for the people who are going to misuse the moneys which have been appropriated in the past year. It amends the Federal securities crime statute to cover fraud schemes involving commodities futures and options, including derivatives involving the mortgage-backed securities that caused such damage to our banking system. It also amends the Federal money laundering statutes to cover not only profits but proceeds. The Supreme Court interpreted the statutes so narrowly that it needs modification. And there were also judicial interpretations of the False Claims Act which this legislation will correct. So this is a very important bill. That is a very short statement of the bill and its purpose. It is my hope anyone who has amendments would come to the floor to offer them. I believe this is a bill which will get very widespread support in the Senate. We have a great many important legislative matters behind it, so it would be my hope we could move this bill through expeditiously, giving people an opportunity to offer amendments if they have some. We would be looking for a time agreement as soon as we could construct one. So I urge my colleagues to come to the floor to help on this process. I yield the floor.

Mr. SPECTER. Madam President, may the Record show the Presiding Officer has changed while I was looking at Senator Leahy. I concur with what Prosecutor Leahy said. It bears out the experience I had when I was a prosecuting attorney myself: that jail sentences are important in the way to deal with this kind of crime. When I have been questioned by my constituents on my travels through Pennsylvania about who is going to be held accountable, and I tell them that the prospects for jail sentences are real, they are somewhat assuaged. Madam President, I note the distinguished Republican leader has come to the floor. If I may have his attention and make an inquiry. If he cares to take precedence--he is busier than I am, although I am very busy--I would be glad to yield to Senator McConnell.

Mr. SPECTER. Mr. President, I have sought recognition to comment on the Fraud Enforcement Recovery Act, the legislation which is currently on the floor. Before the distinguished chairman leaves the Chamber, if I could have his attention, I agree with him about the importance of having strong law enforcement on crimes involving business fraud and on white-collar crimes. We are dealing with a financial situation where there are billions of dollars at stake, if not trillions. It is hard to know exactly how many zeros to add on. We are faced with a very desperate--strong word but understated if anything--challenge as to what to do with the economy worldwide. We had a $700 billion program proposed by President Bush for companies in trouble and a twin brother proposed by President Obama, $787 billion. As I travel through my State, all I hear are questions. I don't hear any commendations. The Congress is not exactly held in high esteem. And the questions are: Why are we bailing out companies which made bad business judgments? If somebody makes a bad business judgment, why shouldn't they sustain the loss instead of coming to the taxpayers for a bailout? You have these fancy Wall Street instruments. What is a derivative? Then there is the explanation about how no longer do you have mortgages with simply a home buyer and a banker, but you have all of these commercial papers lumped together and securitized. I do not know how long the word ``securitized'' has been in the dictionary. In fact, I am not sure it is in the dictionary, and most Americans are trying to find out what it means. You slice them up, and they are securitized, and they are sold around the world. Much of the time, they are filled with misrepresentations to the extent that they become fraud. Fraud is a crime, and you have prosecutions which are brought which involve extraordinary sums of money, and then there is a fine which looks big in the newspapers but not when compared to what has been involved. It is a license to do business or, perhaps more accurately, a license to steal. But if you have criminal prosecutions and you have jail sentences, that is meaningful. Mr. President, may I direct a question to the distinguished chairman. I say to the Senator, I believe you were a prosecuting attorney in Vermont. What experience did the Senator have on the difference between a fine and a tough jail sentence?

Mr. SPECTER

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

Mr. SPECTER. Madam President, I have sought recognition to comment on the three nominees whose votes are scheduled a little later this afternoon. All three of these nominees were voted out of the Judiciary Committee on a voice vote. All three have outstanding credentials for the positions for which they have been nominated. Christine Anne Varney Ms. Christine Varney is the nominee for Assistant Attorney General in the Antitrust Division. She has an outstanding academic record, having graduated magna cum laude at Syracuse University in 1978 and having received her law degree from Georgetown University Law Center. She served as a Commissioner on the Federal Trade Commission from 1994 to 1997, and has been a partner in the firm of Hogan & Hartson for the past 12 years. I believe her tenure on the Federal Trade Commission gives her a good background beyond being an antitrust lawyer in private practice for this job. We discussed quite a number of legal issues in a private meeting I had with her. I consider the Antitrust position to be of unique importance. They are all important in the Department of Justice. But I believe she will bring a vigor to the job which I think is most appropriate. Lanny A. Breuer The nominee for Assistant Attorney General of the Criminal Division is Lanny A. Breuer, who also has a fine academic background: a bachelor's degree from Columbia and a law degree from Columbia in 1985 and was a Harlan Fiske Stone Scholar. I am impressed with his resume generally but especially the fact that he was an assistant district attorney in the Manhattan DA's Office from 1985 to 1989. I am especially partial to people who have been assistant district attorneys. One further comment about Mr. Breuer. I emphasize the importance of seeking jail sentences in appropriate cases. Too often, criminal prosecutions result in fines which turn out in the context of the case to be really a license to do business. White-collar crime especially is an area where there can be effective deterrence, and his commitment on that subject was reassuring. Tony West The nominee for Assistant Attorney General in the Civil Division is Derek Anthony West, who also has a fine academic record: Harvard bachelor's degree, was publisher of the Harvard Political Review--that might be a more important document than the Harvard Law Review; might be--a law degree from Stanford in 1992, president of the Stanford Law Review, so he covered them both. Again, he has an outstanding resume professionally. Of particular interest to me is having been assistant U.S. attorney, Northern District of California, for 5 years, from 1994 to 1999, and was adjunct faculty member of the Lincoln Law School of San Jose, which I think is significant, and has been a partner at Morrison & Foerster for the last 8 years. I ask unanimous consent to have these resumes printed in the Congressional Record following my brief statement.

Mr. SPECTER. Madam President, I think this is an appropriate time to point out a few factors on the confirmation process. The first is that Senators are being afforded less time to review the records of almost all of President Obama's nominees than they were for President Bush's nominees. The Judiciary Committee has held hearings for 8 of the 11 Department of Justice nominees faster than it held hearings for President Bush's first nominees to the same positions. The committee has held hearings, on an average, 22 days earlier for these eight nominees. The Senate is confirming almost all of President Obama's Department of Justice nominees faster than it confirmed President Bush's first nominees to the same positions. Assuming that the three nominees scheduled for votes today are confirmed, of the eight Department of Justice nominees who have been confirmed, only two took more time to confirm than President Bush's first nominee to the same position. Attorney General Eric Holder was confirmed 63 days after his nomination. John Ashcroft was confirmed 42 days after his nomination. Lanny Breuer will be confirmed 56 days after his nomination. Michael Chertoff, 24 days. The other six nominees who have been confirmed this year have been confirmed, on average, 44 days faster than President Bush's nominees to the same position. So I offer these statistical points to counter the contention that there is a slowdown here. The facts simply do not support it. Acknowledging that a little more time was taken with a couple of the nominees, it was for good cause. But as a generalization, the processing has been more expeditious now than under President Bush. I thank the Chair and yield the floor. Exhibit 1 Christine A. Varney Assistant Attorney General, Antitrust Division Birth: 1955, Washington, DC. Legal Residence: Washington, DC. Education: B.A.: The State University of New York, University of Albany, 1977; M.P.A., Magna Cum Laude, Syracuse University, 1978; J.D., Georgetown University Law Center, 1986. Employment: Associate, Pierson, Semmes & Finley, 1986-1989; General Counsel, Democratic National Committee, 1989-1992; Chief Counsel, Clinton Gore Campaign, 1991; General Counsel, 1992 Presidential Inaugural Committee, 1992; Associate, Hogan & Hartson, 1991-1993; Cabinet Secretary, Executive Office of the President, 1993-1994; Commissioner, Federal Trade Commission, 1994-1997; Partner, Hogan & Hartson, 1997- present; Personnel Counsel, Obama-Biden Transition Project, Nov. 2008-Jan. 2009. Selected Activities and Honors: Award, Washington, DC, Super Lawyers, 2008; Award, Chambers USA Competition and Antitrust, 2004-2008 (lists top lawyers); Award, Chambers USA Privacy and Data Security, 2007-2008; Director, Ryder System Inc. (delivery trucking company), 1998-present; Director, Parity Communications Inc. (technology company), 1997- present; Director and Chairperson, TRUSTe (internet privacy dispute resolver), 1998-2007; Director, NDN (progressive think tank and advocacy organization), 2003; Advisory Board Member, 2002-2005; Director, Enterasys Networks (technology company), 2001-2002; Director, CommonPlaces LLC (technology company), 1999-2000; Director, Exclusive Resorts LLC (luxury destination club), 2000-present; Member, American Bar Association, 1986-present: Member and Chair, Election Law Committee, Member, Antitrust Section; Advisory Board Member, Aveo Inc. (technology company), 2000; Advisory Board Member, The Industry Standard (technology magazine), 2000; Advisory Board Member, RealNames (technology company), 1999 Chairperson, Online Privacy Alliance, 1998-1999; Technology Advisory Council, Earthlink Network Inc. (internet service provider), 1998-1999.

Mr. SPECTER

Mr. SPECTER. Madam President, I believe Mr. Breuer warrants confirmation.

Mr. SPECTER. I ask for the yeas and nays.

Mr. SPECTER. Madam President, I can't hear Senator Leahy, so I will not know how to formulate my rebuttal.

Mr. SPECTER. Is my time reserved, Madam President?

Mr. SPECTER. Let's confirm her.

Mr. SPECTER. Madam President, I used all the time I wanted. Let's confirm her.

Mr. SPECTER

Mr. SPECTER. Mr. President, in approaching the budget for fiscal year 2010, I am heavily influenced by the $700 billion expenditure in President Bush's bailout package--it was badly administered and I voted against release of the second $350 billion--and the President Obama twin brother $787 billion stimulus package. We have to take a closer look than usual at the mounting deficits and mounting national debt. These budget votes are all going to be determined by the Democratic majority largely on party lines so my vote is really a protest vote and to show there is substantial concern, at least with the loyal opposition, to limit Federal expenditures. To that end, I supported amendments offered by Senators Sessions, No. 772, and Crapo No. 844, to freeze domestic discretionary spending. I also supported amendments by Senators Alexander, No. 747, and Gregg, No. 739, to require a 60-vote threshold on any budget resolution that increases public debt. Congress must take action to address the current deficit spending especially the increasing funds for entitlement programs. I supported an amendment offered by Senator Gregg, No. 835, to establish a commission to examine the long-term obligations of the Federal Government and make recommendations to reduce that spending. Similarly, I voted in favor of the McCain amendment, No. 882, as an alternative budget resolution to lay down a marker to encourage reductions in Federal expenditures. The budget is just an outline without any of these votes being determinative as to what will occur on appropriations bills, where I will take another look at spending proposals depending on circumstances at that time.

Mr. SPECTER

Mr. SPECTER. Mr. President, I ask unanimous consent that the text of S. 740 and S. 741 be printed in the Record.

Mr. SPECTER

Mr. SPECTER. Madam President, I have sought recognition to comment on the issue of reconciliation which may, according to some speculation, seek to deal with substantive legislative proposals such as health care or perhaps even education or perhaps even global warming. I believe any such effort would be a colossal mistake, to try to change Senate procedures to deal with such substantive measures on a legislative vehicle which will take 51 votes instead of allowing for the customary Senate debate which could be cut off only by 60 votes. In this Chamber, we had a fierce debate in 2005, where the Democrats were lined up on filibustering President Bush's nominees for the Federal courts. Republicans were threatening a so-called nuclear or constitutional option. At that time the Democrats were utilizing the time-honored process of continuing the debate unless Republicans had 60 votes to invoke cloture and cut off debate, which Republicans did not have. The partisan feelings got so high that there was a plan devised where the system could be short cut, have a ruling of the Chair and have a motion to overrule the ruling of the Chair, have it decided by 51 votes. Fortunately, that did not occur. Historically, as I spoke at some length on the issue at that time, the filibuster, the extended debate in the Senate, had guaranteed judicial independence in the impeachment proceeding of Justice Chase in about 1805, and saved the independence of the Presidency in the impeachment of Andrew Johnson in 1868. So that issue was avoided. Now we have what may well be an effort to circumvent the 60-vote rule. The unique feature of the Senate, which has frequently been called the world's greatest deliberative body, is that any Senator can offer virtually any amendment on virtually any bill at virtually any time. That plus extended debate gives this Chamber the opportunity to acquaint people with serious problems and to build up public demand one way or another. That is an expression of speech and persuasion in a setting where there is opportunity to advance the public good. If we start to shortcut that procedure and undertake major legislative change on items such as health care or global warming or education, we will destroy a most precious aspect of Senate procedure. According to the Congressional Research Service, reconciliation ``was created as part of the Congressional Budget Act of 1974 as a way to assure compliance with the direct spending revenue and the debt limit levels set forth in the budget resolution agreed to by Congress.'' The rules governing consideration in the Senate limit debate to 20 hours and, when all amendments are considered, the bill then moves on to a final vote. The House Resolution this year instructs the Energy and Commerce Committee and the Committee on Ways and Means to produce legislation on ``Health Care Reform'' and for the Education and Labor Committee to produce legislation on ``Investing in Education.'' These committees could produce legislation on other subjects within their jurisdiction, including climate change. Senator Byrd, in a speech on February 12, 2009, at hearings entitled ``Senate Procedures for Consideration of the Budget Resolution/ Reconciliation,'' had this to say--and we all know and prize Senator Byrd's erudition as the leading Senate scholar and spokesman and also the author of the Budget Act of 1974. This is what Senator Byrd said: I can say with confidence that the process the Senate utilizes today hardly resembles the process envisioned in 1974. Today the reconciliation process serves as a reminder of how well-intentioned changes to the Senate rules can threaten the institution in unforeseen ways. Reconciliation can be used by a determined majority to circumvent the regular rules of the Senate in order to advance partisan legislation. Senator Byrd decried and protested loudly and effectively against that process. Earlier this month, March 12, 33 Senators, including 8 Democrats led by Senator Byrd, wrote to the Budget Committee Chairman and Ranking Member to ``oppose using the budget reconciliation process to expedite passage of climate legislation.'' The letter stated: Legislation so far-reaching should be fully vetted and give appropriate time for debate, something the budget resolution process does not allow. Using this procedure would circumvent normal Senate practice and be inconsistent with the Administration's stated goals of bipartisanship, cooperation, and openness. I think it worthwhile to focus for a moment on what President Obama has emphasized in an effort to get bipartisanship, cooperation, and openness. There are those of us on this side of the aisle who have cooperated. I think it fair to say that to misuse the reconciliation process would be a very strong blow against bipartisanship and cooperation. Obviously, it would impede future activity by the Obama administration in reaching across the aisle to get necessary Republican votes. Senator Byrd went on to say: I was one of the authors of the legislation that created the budget reconciliation process in 1974, and I am certain that putting health care reform and climate change legislation on a freight train through Congress is an outrage that must be resisted. Pretty strong words, ``freight train'' and ``outrage.'' There are eight Senators on the letter to the Chairman and Ranking Member. I ask unanimous consent that the full text of the letter be printed in the Record.

Mr. SPECTER. One other Senator has been quoted, one other Democratic Senator, in Politico last Tuesday, March 24, as warning that the circumvention of regular order could do ``serious damage to our bipartisan effort.'' We have the statement of Chairman Conrad in the March 26 article in the New York Times stating: I don't believe reconciliation was ever intended for this purpose. It doesn't work well for writing major, substantive legislation. Senator Baucus, chairman of the Finance Committee, has been very outspoken in his opposition. I will quote him as follows from the Hill on March 26: ``Reconciliation would hurt healthcare reform, it would make it partisan, it would hurt, it would stymie it, it would make it very partisan.'' The reconciliation route is not designed to deal with measures such as health care. ``Healthcare reform is so large, you're going to have many provisions that are not directly related to revenue or directly related to spending.'' The article goes on to point out that Senator Baucus also said that putting health care reform under budget reconciliation would require that it be sunset after 5 years. Senator Baucus said: It has to be term-limited five years; that's nuts. Those are his words. Senator Baucus also said that the only way to pass ``sustainable'' health care reform would be to attract Republican support with which reconciliation protection would not be necessary. Taking the eight Senators who signed the letter of March 12, adding the Senator identified in Politico from which I quoted, plus Senator Baucus and Senator Conrad, adding those to the 41 Republican Senators who would likely be against misusing the reconciliation process--I don't speak for all of the other 40, but I think that is a fair inference--would be 52. That would present finding 50 Senators, plus the Vice President, if he chose to cast the 51st vote, so that the reconciliation process would not be possible. It is important that all colleagues focus on this issue institutionally and how important it is. Whenever you cite numbers, there will always be slippage, but when you have the kind of strong language I have referred to today, there is strong reason that we should not have 51 votes somehow created in this body to misuse the reconciliation process. I thank the Chair and yield the floor.

Mr. SPECTER

Mr. SPECTER. Mr. President, American taxpayers face another Federal income tax deadline. The date of April 15 stabs fear, anxiety, and unease into the hearts of millions of Americans. Every year during ``tax season,'' millions of Americans spend their evenings pouring over page after page of IRS instructions, going through their records looking for information and struggling to find and fill out all the appropriate forms on their Federal tax returns. Americans are intimidated by the sheer number of different tax forms and their instructions, many of which they may be unsure whether they need to file. Given the approximately 582 possible forms, not to mention the instructions that accompany them, simply trying to determine which form to file can in itself be a daunting and overwhelming task. According to the 2008 annual report to Congress, released on January 7, 2009 by the National Taxpayer Advocate for the IRS, U.S. taxpayers and businesses spend about 7.6 billion hours a year complying with the filing requirements of the Internal Revenue Code. This figure does not include the millions of additional hours that taxpayers must spend when they are required to respond to an IRS notice or audit. Much of this time is spent burrowing through IRS laws and regulations which fill over 17,000 pages and have grown from 744,000 words in 1955 to 7.1 million words in 2005. By contrast, the Pledge of Allegiance has only 31 words, the Gettysburg Address has 267 words, the Declaration of Independence has about 1,300 words, and the Bible has only about 1,773,000 words. The majority of taxpayers still face filing tax forms that are far too complicated and take far too long to complete. According to the IRS's most available data, the average time burden for all taxpayers filing a 1040, 1040A, or 1040EZ in 2006 was 26.4 hours, with an average cost of $207 per return. Taxpayers filing 1040 forms had an average burden of approximately 34 hours. Moreover, this complexity is getting worse each year. According to the estimated preparation time listed on the forms by the IRS, the 1999 Form 1040 was estimated to take 12 hours and 51 minutes to complete. Thus, the time it now takes to fill out these tax forms has more than doubled over an eight year period. It is no wonder that more than 80 percent of individual taxpayers pay transaction fees to help file tax returns. Well over half of all taxpayers, 61 percent according to a recent survey, now hire an outside professional to prepare their tax returns for them. However, the fact that only about 35 percent of individuals itemize their deductions shows that a significant percentage of our taxpaying population believes that the tax system is too complex for them to deal with. We all understand that paying taxes will never be something we enjoy, but neither should it be cruel and unusual punishment. Further, the pace of change to the Internal Revenue Code is brisk. Since the beginning of 2001, there have been more than 3,250 changes to the tax code, an average of more than one a day, including more than 500 changes in 2008 alone. And we are far from being finished. Year after year, we continue to ask the same question--isn't there a better way? My flat tax legislation would make filing a tax return a manageable chore, not a seemingly endless nightmare, for most taxpayers. My flat tax legislation will fundamentally revise the present tax code, with its myriad rates, deductions, and instructions. This legislation would institute a simple, flat 20 percent tax rate for all individuals and businesses. This proposal is not cast in stone, but is intended to move the debate forward by focusing attention on three key principles which are critical to an effective and equitable taxation system: simplicity, fairness, and economic growth. My flat tax plan would eliminate the kinds of frustrations I have outlined above for millions of taxpayers. This flat tax would enable us to scrap the great majority of the IRS rules, regulations and instructions and delete most of the 7.1 million words in the Internal Revenue Code. Instead of billions of hours of non-productive time spent in compliance with, or avoidance of, the tax code, taxpayers would spend only the small amount of time necessary to fill out a postcard- sized form. Both business and individual taxpayers would thus find valuable hours freed up to engage in productive business activity or for more time with their families, instead of pouring over tax tables, schedules, and regulations. My flat tax proposal is dramatic, but so are its advantages: a taxation system that is simple, fair, and designed to maximize prosperity for all Americans. A summary of the key advantages are: A 10-line postcard filing would replace the myriad forms and attachments currently required, thus saving Americans up to 7.6 billion hours they currently spend every year in tax compliance. The flat tax would eliminate the lion's share of IRS rules, regulations and requirements, which have grown from 744,000 words in 1955 to 7.1 million words currently. It would also allow us to slash the mammoth IRS bureaucracy of approximately 87,000 employees, creating opportunities to put their expertise to use elsewhere in the government or in private industry. Economists estimate a growth due to a flat tax of over $2 trillion in national wealth over 7 years, representing an increase of approximately $7,500 in personal wealth for every man, woman and child in America. This growth would also lead to the creation of 6 million new jobs. Investment decisions would be made on the basis of productivity rather than simply for tax avoidance, thus leading to even greater economic expansion. Economic forecasts indicate that interest rates would fall substantially, by as much as two points, as the flat tax removes many of the current disincentives to savings. Americans would be able to save or invest the $265 billion they currently spend every year in tax compliance. As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud. Currently, the IRS is estimating a tax gap of $300 billion a year. Simplification of the tax code will allow us to save significantly on the $10 billion annual budget currently allocated to the Internal Revenue Service. The most dramatic way to illustrate the flat tax is to consider that the income tax form for the flat tax is printed on a postcard--it will allow all taxpayers to file their April 15 tax returns on a simple 10- line postcard. This postcard will take 15 minutes to fill out.. This is a win-win situation for America because it lowers the tax burden on the taxpayers in the lower brackets. For example in the 2006 tax year, the standard deduction is $5,150 for a single taxpayer, $7,550 for a head of household and $10,300 for a married couple filing jointly, while the personal exemption for individuals and dependents is $3,300. Thus, under the current tax code, a family of four which does not itemize deductions would pay taxes on all income over $23,500--that is personal exemptions of $13,200 and a standard deduction of $10,300. By contrast, under my flat tax bill, that same family would receive a personal exemption of $30,000, and would pay tax on income over that amount. The tax loopholes enable write-offs of some $393 billion a year. What is eliminated under the flat tax are the loopholes, the deductions in this complicated code which can be deciphered, interpreted, and found really only by the $500-an-hour lawyers. That money is lost to the taxpayers. $120 billion would be saved by the elimination of fraud because of the simplicity of the Tax Code, the taxpayer being able to find out exactly what they owe. This bill is modeled after a proposal organized and written by two very distinguished law professors from Stanford University, Professor Hall and Professor Rabushka. Their model was first introduced in the Congress in the fall of 1994 by Majority Leader Richard Armey. I introduced the flat tax bill--the first one in the Senate--on March 2, 1995, Senate bill 488. On October 27, 1995, I introduced a Sense of the Senate Resolution calling on my colleagues to expedite Congressional adoption of a flat tax. The Resolution, which was introduced as an amendment to pending legislation, was not adopted. I reintroduced my legislation in the 105th Congress with slight modifications to reflect inflation-adjusted increases in the personal allowances and dependent allowances. I re-reintroduced the bill on April 15, 1999, Tax Day, in a bill denominated as S. 822. I then introduced my flat tax legislation as an amendment to S. 1429, the Tax Reconciliation bill; the amendment was not adopted. During the 108th Congress, I introduced my flat tax legislation once again on April 11, 2003. On May 14, 2003, I offered an amendment to the Tax Reconciliation legislation urging the Senate to hold hearings and consider legislation providing for a flat tax; this amendment passed by a vote of 70 to 30 on May 15, 2003. I then testified on this issue at a subsequent hearing held by the Joint Economic Committee on November 5, 2003. On April 15, 2005 and again on April 10, 2007, I again reintroduced my flat tax legislation in a bill denominated as S. 812 and S. 1081 respectively. Over the years and prior to my legislative efforts on behalf of flat tax reform, I have devoted considerable time and attention to analyzing our nation's tax code and the policies which underlie it. I began the study of the complexities of the tax code over 40 years ago as a law student at Yale University. I included some tax law as part of my practice in my early years as an attorney in Philadelphia. In the spring of 1962, I published a law review article in the Villanova Law Review, ``Pension and Profit Sharing Plans: Coverage and Operation for Closely Held Corporations and Professional Associations,'' 7 Villanova L. Rev. 335, which in part focused on the inequity in making tax-exempt retirement benefits available to some kinds of businesses but not others. It was apparent then, as it is now, that the very complexities of the Internal Revenue Code could be used to give unfair advantage to some. Einstein himself is quoted as saying ``the hardest thing in the world to understand is the income tax.'' The Hall-Rabushka model envisioned a flat tax with no deductions whatsoever. After considerable reflection, I decided to include in the legislation limited deductions for home mortgage interest for up to $100,000 in borrowing and charitable contributions up to $2,500. While these modifications undercut the pure principle of the flat tax by continuing the use of tax policy to promote home buying and charitable contributions, I believe that those two deductions are so deeply ingrained in the financial planning of American families that they should be retained as a matter of fairness and public policy--and also political practicality. With those two deductions maintained, passage of a modified flat tax will be difficult, but without them, probably impossible. In my judgment, an indispensable prerequisite to enactment of a modified flat tax is revenue neutrality. Professor Hall advised that the revenue neutrality of the Hall-Rabushka proposal, which uses a 19 percent rate, is based on a well-documented model founded on reliable governmental statistics. My legislation raises that rate from 19 percent to 20 percent to accommodate retaining limited home mortgage interest and charitable deductions. This proposal taxes business revenues fully at their source, so that there is no personal taxation on interest, dividends, capital gains, gifts or estates. Restructured in this way, the tax code can become a powerful incentive for savings and investment--which translates into economic growth and expansion, more and better jobs, and raising the standard of living for all Americans. The key advantages of this flat tax plan are threefold: First, it will dramatically simplify the payment of taxes. Second, it will remove much of the IRS regulatory morass now imposed on individual and corporate taxpayers, and allow those taxpayers to devote more of their energies to productive pursuits. Third, since it is a plan which rewards savings and investment, the flat tax will spur economic growth in all sectors of the economy as more money flows into investments and savings accounts. Professors Hall and Rabushka have projected that within seven years of enactment, this type of a flat tax would produce a 6 percent increase in output from increased total work in the U.S. economy and increased capital formation. The economic growth would mean a $7,500 increase in the personal income of all Americans. No one likes to pay taxes. But Americans will be much more willing to pay their taxes under a system that they believe is fair, a system that they can understand, and a system that they recognize promotes rather than prevents growth and prosperity. My flat tax legislation will afford Americans such a tax system. Mr. President, I ask unanimous consent that a copy of my flat tax postcard, a variety of specific cases that illustrate the fairness and simplicity of this flat tax, and an example flat tax table be printed in the Record.

Mr. SPECTER. Mr. President, I have sought recognition to introduce legislation to further expand the home buyer tax credit. A robust home buyer tax credit will spur consumer demand and help to stop the fall in home values, which continues to affect millions of Americans. This decline is destroying the savings and net worth of Americans, whose homes are their most valuable asset. Many now have mortgages that exceed the value of their homes. The Housing and Economic Recovery Act of 2008 created a tax credit for first-time home buyers of $7,500 through June of 2009. However, taxpayers were required to repay the tax credit in equal installments over 15 years, which greatly reduced its effectiveness. The 2009 Stimulus bill waived the repayment requirement for purchases made in 2009, increased the value of the credit to $8,000, and extended eligibility for purchases made through November of 2009. Further improvements are necessary, in my judgment, to bring about a recovery in the housing market that will ultimately contribute to the turnaround of the broader economy. First, this bill would amend the Stimulus bill and raise the value to $15,000, or 10 percent of the value of the home, whichever is less. Second, this bill would make the home buyer tax credit available to any individual who purchases a home, not just first-time home buyers. Doing so would stimulate demand for the entire range of homes on the market. Finally, this bill would remove the income eligibility threshold. Again, doing so would stimulate demand for the entire range of homes on the market. Currently, the credit is reduced for individuals with modified adjusted gross income, AGI, of more than $75,000, $150,000 for joint filers, and is zero for those individuals with modified AGI in excess of $95,000, $170,000 for joint filers. The need for a robust home buyer tax credit is clear. According to the National Association of Realtors, pending home sales hit a record low in January 2009. The Pending Home Sales Index, which measures the number of sales contracts signed each month, fell 7.7 percent to 80.4, the lowest mark since 2001 when tracking began. At the same time, the housing affordability index rose 13.6 percentage points to a record high of 166.8. A value of 100 means that a family with the country's median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home. The higher the index, the better housing affordability is for buyers. These two figures, taken together, demonstrate that a robust home buyer tax credit is needed to spur demand from Americans that are hesitant to buy homes for fear that prices will not stabilize. Recent reports indicate a 13-month supply of unsold new homes, compared with a 4-month supply under more normal circumstances. Add to that a continually increasing number of foreclosed homes. According to the RealtyTrac 2008 Year-End Foreclosure Market Report, a total of 3.2 million foreclosure filings--default notices, auction sale notices and bank repossessions--were reported on 2.3 million U.S. properties during 2008, an 81 percent increase in total properties from 2007 and a 225 percent increase in total properties from 2006. Jobs across all industries have been lost as a result of the housing crisis. According to a March 2, 2009, op-ed in the Washington Post by Robert J. Samuelson, ``Since late 2007, housing-related jobs-- carpenters, real estate agents, appraisers--have dropped by 1 million, a quarter of all lost jobs.'' I applaud the efforts of Senator Johnny Isakson, who has been the leader on this issue in the Senate. I cosponsored his legislation in the 110th Congress to create a home buyer tax credit. In the 111th Congress, I supported his amendment to the Stimulus bill to make improvements to the credit and I have decided to join him as a cosponsor of S. 253, which seeks to make further improvements. The bill I am introducing is different from S. 253 in three main ways. First, my bill would improve the home buyer credit using the 2009 Stimulus bill as a starting point. Second, my bill would increase the value of the credit to $15,000, or 10 percent of the home value, whichever is less, whereas S. 253 would increase the credit amount to 10 percent of the home price capped at 3.5 percent of Federal Housing Administration loan limits. These limits are geographically dependent and would yield a credit ranging between approximately $10,000 and $22,000. Finally, my bill would remove income limitations on the credit, whereas S. 253 limits the credit for individuals earning up to $125,000, or $250,000 in the case of a joint return. I believe it is important for both bills to be pending so that additional ideas can be debated. To that end, I look forward to working with Senator Isakson to build consensus and support for further improvements. As long as forecasts predict that home prices are falling and that the economy will remain weak, a large fraction of potential homebuyers may choose to remain on the sidelines without a robust tax credit in place. I urge my colleagues to support this legislation, or the legislation introduced by Senator Isakson, to make further improvements to the home buyer tax credit.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to discuss S. 253, a bill introduced by Senator Johnny Isakson to expand the home buyer tax credit. I support this legislation and have asked to be added as a cosponsor. A robust home buyer tax credit will spur consumer demand and help to stop the fall in home values, which continues to affect millions of Americans. This decline is destroying the savings and net worth of Americans, whose homes are their most valuable asset. Many now have mortgages that exceed the value of their homes. The Housing and Economic Recovery Act of 2008 created a tax credit for first-time home buyers of $7,500 through June of 2009. However, taxpayers were required to repay the tax credit in equal installments over 15 years, which greatly reduced its effectiveness. The 2009 Stimulus bill waived the repayment requirement for purchases made in 2009, increased the value of the credit to $8,000, and extended eligibility for purchases made through November of 2009. Further improvements are necessary, in my judgement, to bring about a recovery in the housing market that will ultimately contribute to the turnaround of the broader economy. First, S. 253 would increase the value of the credit to 10 percent of the home price capped at 3.5 percent of Federal Housing Administration loan limits. These limits are geographically dependent and would yield a credit ranging between approximately $10,000 and $22,000. Second, S. 253 would make the home buyer tax credit available to any individual who purchases a home, not just first-time home buyers. Doing so would stimulate demand for the entire range of homes on the market. Finally, S. 253 would increase the income eligibility threshold to individuals earning up to $125,000, or $250,000 in the case of a joint return. Currently, the credit is reduced for individuals with modified adjusted gross income, AGI, of more than $75,000--$150,000 for joint filers--and is zero for those individuals with modified AGI in excess of $95,000--$170,000 for joint filers. Again, doing so would stimulate demand for the entire range of homes on the market. The need for a robust home buyer tax credit is clear. According to the National Association of Realtors, pending home sales hit a record low in January 2009. The pending home sales index, which measures the number of sales contracts signed each month, fell 7.7 percent to 80.4, the lowest mark since 2001 when tracking began. At the same time, the housing affordability index rose 13.6 percentage points to a record high of 166.8. A value of 100 means that a family with the country's median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home. The higher the index, the better housing affordability is for buyers. These two figures, taken together, demonstrate that a robust home buyer tax credit is needed to spur demand from Americans that are hesitant to buy homes for fear that prices will not stabilize.