Jeff Sessions

Mr. SESSIONS

Mr. SESSIONS. Madam President, I wanted to say I am interested in the earned income tax credit, immigration, and in savings. The Senator has mentioned health care. All of those are ways, apart from mandating a salary or minimum wage increase, to help workers. The bill the President proposed would not go as far as Senator Coburn would like to see--and I am impressed with his analysis--but it would, in fact, provide a good benefit for working Americans.

Mr. SESSIONS. Mr. President, I thank the Chair and I thank Senator Cornyn and Senator Kyl for their remarks. I share with Senator Kyl his concern over the resolution that we will be apparently addressing later this week or next week. He quoted an NBC News report in which soldiers in Iraq in harm's way said that, in their view, you can't support the soldiers without supporting the policy we sent them on, and that is a troubling thing. Today I talked to a businessman from Alabama--quite a fine, upstanding leader in the community. His son is in Iraq right now. They already heard about the Senate Foreign Relations Committee resolution. It was very troubling to them. They didn't know how to read it, according to him, or what it meant to them. I talked to a lady not long ago, within the last week, and she told me her son was in his second tour there, and he believed in what he was doing. He was proud to serve, but he didn't know what we were doing here. He said he: ``Didn't want to be the last soldier to die if we weren't going to follow through on a policy that we have set here.'' So we are in a difficult time, and we need to remember those things as we set about our policy. I don't know all of the answers. I don't disrespect people who would disagree with me on this. I know there are a lot of people with a lot of different ideas about what to do in Iraq. But my observation is and my thought is that we, as a Congress, ought to affirm the policies we are asking our soldiers to execute. They say we are not asking them, but the President is, and the President speaks for us, until Congress withdraws that power by reducing his funding. The President executes the policies as Commander in Chief. So it is a big deal and we need to be careful about what we do and I am disappointed we will be dealing with those resolutions. Mr. President, I remember during the immigration debate last fall, last summer and spring, Senator Kennedy and I were on the floor one night, and I talked about how I believe the large amount of immigration we are seeing today, much of it illegal, was adversely affecting the wages of American workers. Senator Kennedy didn't object to that, but he stood up and in response basically said: Well, we are going to offer a minimum wage bill, and that is going to take care of it. If anyone heard Senator Lamar Alexander's speech on Friday--and not many people did; it was after the vote had been cast--but he went into some detail and with great care explained how the minimum wage is not reaching poor working people in this country in the ways most people think it is but that most people making minimum wage are part of a household whose income exceeds $40,000 a year, I believe was the figure he cited, and there are a number of studies on that. The point being that usually it is a transition period for young people or others--maybe they are part time and that kind of thing. I am not saying people would not like an increase in the minimum wage, but the working poor, the people who are every day out giving their best to try to raise their families and who need to have a higher income, people who have been out there for years and working, they are already above $7 an hour, for the most part. If they show up on time and are reliable and give an honest day's work, as almost all of them do, then they are going to be above $7 an hour now. Do you follow me? So this is not the panacea we are concerned about. What we want and what we care about, fellow citizens and Members of the Senate, is having better wages for working Americans, having all the people be able to go out and get a better wage they can take home and take care of their families with. That includes how much taxes are taken out, how much insurance is taken out. President Bush has a great proposal that is going to help a lot of people. I assure my colleagues a lot of people will feel a substantial benefit from this health care tax credit plan he has proposed. That is a way to help working people, a real significant way. Senator Alexander mentioned the earned-income tax credit, and he went into some detail about it. Economists and experts are quite clear: The earned-income tax credit more appropriately benefits working Americans than a minimum wage at much less cost. We spend $40 billion a year on the earned-income tax credit. That is what the credit amounts to in terms of benefits to working Americans. Their wages are lower, and, at certain levels, they don't qualify for other benefits. And as a result, they do qualify for the earned-income tax credit. So I would like to talk about that. I offered an amendment that would have required the earned-income tax credit to be paid on individual's paychecks, when they get their paycheck each payday. That is correct, in my view, as a matter of policy. It is a complex thing. Some are concerned about the mechanics of it. So I offered another amendment that was accepted by the Democratic leadership and the Republican leadership that required the Department of the Treasury to review what would happen and how it could be done if we allowed people to get their earned-income tax credit on their weekly or biweekly paycheck. It can be done now. In fact, a little less than 2 percent of the people get their earned-income tax credit, or at least a portion of it, on their check each week. So we would like to talk about that because as we debate the minimum wage, the real debate is how to help working Americans, middle-class Americans, lower income Americans get more legitimate pay for the work they do. Now, that is what we are all about; not some fetish with having an increase in the minimum wage, particularly when it is not going to be as effective in meeting the needs of the working poor, as is being sold to this Congress and the American people. In 2004, more than 22 million Americans--get this--more than 22 million Americans claimed the earned-income tax credit, putting $40.7 billion into the pockets of the working poor. This is a very large program. It is a very large shift of resources to the working poor. The amount of the credit for each recipient depends on several factors, such as the worker's income and the number of dependent children they claim. Nonetheless, a low-income worker with one child will be eligible to claim up to $2,853 for tax year 2007, while a worker with two or more children could receive $4,718 on a 2,200-hour work year. The average earned-income tax credit for a beneficiary with a qualifying child was $1,728 in 2004. That is almost $1 an hour on average. Many have criticized the earned-income tax credit over the years, saying it is another welfare handout and it has far too much fraud in it. Some numbers have shown fraud as high as over 30 percent, but the tax credit is here to stay. I don't see any real movement to eliminate it. Why don't we see if we can make it work better? The idea is to reward work. It is a benefit of the Government, an earned tax credit, earned by working. That was the purpose of the earned-income tax credit from the beginning, to encourage welfare recipients and others who were not in the workforce to decide that it was beneficial for them to work. Some of this came from Milton Friedman, the great free market economist who recently died, calling for a negative income tax. That is sort of what inspired this. All is not perfect. The earned-income tax credit has provided real money for low-income Americans working hard to pull their family out of poverty. As Senator Alexander demonstrated in some detail, remarkably and ably, it gets to the working poor far better than an increase in the minimum wage. An important feature added to the earned-income tax credit occurred in 1978, a few years after the law was passed. That allows the credit recipients to receive the benefit on their paychecks rather than as a one-time lump sum tax refund. Now, you work all year. Most people have no idea if they are earning any earned-income tax credit. They are not receiving extra money for their work. And next year, they file for a tax refund and get a big check, disconnecting, in their minds, the receipt of that check with the work they did the year before. Therefore, it ceases to be the kind of incentive to work we want it to be. Receiving an advanced payment under the law is simple. Workers believing they will be eligible can fill out a form or W-5 with their employer, and once completed workers will receive part of their EITC benefit on their paycheck based on the amount they are expected to receive over the year based on their income. So despite a number of campaigns by the IRS to increase the number that sign up for this advance payment, only a few do, less than 2 percent. The majority, unaware they can receive the credit in advance, receive it in the form of a tax refund in the spring of the next year. Recipients earn the tax credit by working throughout the year. Yet they do not receive the benefit until months after when they file their tax returns. For most workers who receive the EITC as a lump sum at the end of the year, they never make that connection between the increased work and the increased paycheck, as they simply receive a fat check. How can it encourage work if there is no correlation for most recipients between the work they do and the money they receive? An amendment, which the Senate has already accepted, challenges the Secretary of the Treasury, the Department of the Treasury, to get us a report on how we can do this effectively. It is important. It will ensure the taxpayers who are giving this benefit to working Americans get the second part of the benefit that the taxpayers intended them to receive. The first part, of course, is helping the working poor have more money for their families. We want to help them. The second benefit we want to occur is for the overall economy and health of America to encourage people to work, to make work more rewarding. If you are making $7 an hour and you get $1 an hour pay raise as a result of the earned-income tax credit, you have received a substantial increase, well over 10 percent increase in your take home pay, especially since there are no taxes taken out of that part that has accrued as a result of the earned-income tax credit. That encourages work. That makes work more attractive. That helps meet the needs of America today. That is what this is about. A worker who is making $6 an hour would be making closer to $7. Workers making $8 would be making closer to $9. It adds up to real money as the years go by. We can do a much better job of utilizing the existing program without any cost beyond what we are already expending, but in a way that gets money to people when they need it, right then on their paycheck. They may have a tire blow out and they need a new tire. The transmission may have broken in their car. A child may need to go on a trip at school. They need the money as they earn it so they can apply it in a sound way to their family's budgetary needs instead of one big fat check sometime in the spring of the next year. That is a suggestion I have for improving the quality of life for American workers. Another sense-of-the-Senate amendment I offered, that was accepted, we voted on 98 to 0, was to call on Congress to state that it is a sense of the Senate that we should do a better job in Congress of establishing a uniform savings plan for Americans. We in the Government have a wonderful plan called the thrift plan. It allows every Federal worker, in any department or agency, to put money in the thrift plan and the Federal Government would match up to 5 percent of their contributions. Many young people starting to work for the Government today, if they contribute 5 percent each paycheck, with the Government matching it, will retire with $1 million in the bank--trust me on that--with the power of compound interest. It is an exciting program. Many private companies have similar programs, 401(k)-type programs, but many don't. Half of the workers in America today work for a company that does not have such a retirement plan. A chunk of those, even if they do, don't take advantage of it. This is particularly concerning to me because I have learned from Secretary of Labor Elaine Chao that the average American has nine jobs by the time they are 35. What does that say to the practical men and women of the Senate? It says they are bouncing around a lot. They may go to a company that has a plan and they may invest in it a little bit, then they go to a company that doesn't. Or they go to a company that says they have to work for 6 months or a year before they can participate in their plan, or they decide not to put into that plan. Or, if they put in some money and they change jobs and the account is $500, $2,000, $1,500--we have statistics that show that over 40 percent of them cash in those accounts paying the penalties--they think it is not enough money to worry about. Whereas, if they set aside a small amount of money from the day they start working at age 18, or out of college, every day, every paycheck, a small amount of money set aside as is done by most of the thrift account savers, they could retire with hundreds of thousands in the bank, which would allow for an annuity, if they purchased it at age 65, to pay someone $2,000 a month for the rest of their life, easy. Those things are realistically possible. It is a great tragedy, it is a tremendous national tragedy, that in a time where we have relatively low unemployment--in my State it is not much over 3 percent, maybe 3.6 percent in Alabama--and most people are working, the wages have gone up, although not as much as we would like, but our wages are beginning to edge back up, that most Americans are not saving. They could be setting aside even a small amount that would transform their retirement years from retirement years that depend solely on Social Security, the retirement years can be supplemented by a substantial flow of money. Finally, I talk about another subject, our general concern that wages have not kept up in America. I share that concern. I have heard the economists make the argument--many in the business community are people I respect--make the argument that wages tend to lag behind. Gross domestic production growth goes up for a while and wages do not go up, but they catch up, and there is some truth to that. I don't deny that. But if you look at the numbers and how middle-class and lower income workers are getting along today, you cannot be pleased with what is occurring, particularly in certain areas and certain fields. It is from that perspective I say, as part of this debate over minimum wage which we are told is designed to help people have more money to take home, to take care of their families, and if you think this is not the right way to do it, you don't love families and you don't want to help poor people; that is not correct. I hope to be able to vote for this minimum wage bill. I voted for several to increase the minimum wage. I am just saying the minimum wage has been demonstrated by analysis, by top-flight econometric firms, that it does not reach the poor people in a way that most people think it does. It oftentimes helps young people who are children of some corporate executive who may be working. Our motivation, and I think it is universal in the Senate, through the legislation moving through the Senate now, is designed to improve the take-home pay of Americans so they can more ably benefit from the great American dream and take care of their families effectively. Significant economic evidence indicates the presence of large amounts of illegal labor in low-skilled job sectors is depressing the wages of American workers. That is an important statement if it is true, right? If that is true, isn't that important? First of all, we are a nation of laws. We think the laws ought to be enforced. Overwhelmingly the American people agree with that. But if it also is depressing the wages of working Americans, that is a double concern, particularly as we are asking ourselves in this debate: How can we help low-wage workers do better? I will talk about that. We have to talk about this. Harvard economist George Borjas, who testified before the Senate Health, Education, Labor and Pensions Committee, and Lawrence Katz, also of Harvard, estimate that the influx of low-skilled, low-wage immigration into our country from 1980 to 2000 has resulted in a 3- percent decrease in wages for the average American worker--that is all workers--and has cut wages to native-born high school dropouts--those who have not obtained a high school degree; unfortunately, we have quite a number of those in our country--who make up the poorest 10 percent of our workforce, by some 8 percent. Eight percent, if you figure that out on a yearly basis, amounts to $1,200 a year. That is $100 a month. Now, for some people in America today, $100 a month is not a lot. But if you are making near the minimum wage, $100 a month is a lot of money. Alan Tonelson, a research fellow at the U.S. Business and Industry Council Educational Foundation, says: [T]he most important statistics available show conclusively that, far from easing shortages-- Shortages of labor-- illegal immigrants are adding to labor gluts in America. Specifically, wages in sectors highly dependent on illegals, when adjusted for inflation, are either stagnant or have actually fallen. Now, he is referring to Labor Department data and information from the Pew Hispanic Center. For example, he cites data from the U.S. Bureau of Labor Statistics that indicates the following: inflation- adjusted wages for the broad Food and Services and Drinking Establishments category--they have a category for that: the broad Food and Services and Drinking Establishments category; and they monitor the wages for it--between the years 2000 to 2005 fell 1.65 percent. The Pew Hispanic Center estimates that illegal immigrants comprise 17 percent of food preparation workers, 20 percent of cooks, and 23 percent of dishwashers, about a fifth of those workers; three-fifths, four-fifths being legal native citizens. But contrary to what we have been told, that you cannot get workers at the wages they are paying, and paying fair wages, it looks as though the wages have fallen, which is a matter of interest. Inflation-adjusted wages for the food manufacturing industry--the Pew Hispanic Center estimates that illegal immigrants comprise 14 percent of that workforce--fell 2.4 percent between 2000 and 2005. Inflation-adjusted wages for hotel workers--the Pew Hispanic Center estimates illegal immigrants make up 10 percent of that workforce--fell 1 percent from 2000 to 2005. Inflation-adjusted wages in the construction industry--Pew estimates that illegal immigrants make up 12 percent of the workforce there--fell 1.59 percent between 2000 and 2005. Inflation-adjusted wages in the animal processing and slaughtering subcategory--and Pew estimates that illegal immigrants comprise 27 percent of that workforce, the highest percentage--fell 1.41 percent between 2000 and 2005. So if these numbers are correct--and they come from the objective BLS and are supposed to be accurate, and we rely on them for our business around here--something is amiss if people say they cannot get workers, yet they are getting the work done, and they are paying less in 2005 than they were in 2000. Now, you tell me. Others studying the same issue have found similar trends. According to a recent City Journal article by Steven Malanga, a senior fellow at the Manhattan Institute: . . . low-wage immigration has produced such a labor surplus that many of these workers are willing to take jobs without benefits and with salaries far below industry norms. . . . Well, let me go on. Day laborers--these are people who gather at certain known locations within areas, and they hang out until somebody comes out and hires them--who work in construction in urban areas ``like New York and Los Angeles . . . sell their labor by the hour or the day, for $7 to $11 an hour . . . far below what full time construction workers earn.'' You see, we want Americans to be able to have a job that has some permanency to it, that pays a decent wage, that has retirement benefits, and has health care benefits. But our workers who might be interested in construction--and more are than most people think--are having to compete against people who will work by the day for $7 and $11 an hour and do not demand any benefits. Robert Samuelson, a contributing editor of Newsweek, has written a column for the Washington Post since 1977. In his column last spring he summed up the impact of illegal immigration on the unskilled American worker this way: Poor immigrant workers hurt the wages of unskilled Americans. The only question is how much. Studies suggest a range ``from negligible to an earnings reduction of almost 10 percent,'' according to the [Congressional Budget Office]. That is a lot: 10 percent. Five percent is a lot. To put this impact into a larger perspective, one might ask how much native workers have lost as a whole due to competition with low-skilled immigrant laborers. Although only a few studies have ever looked at this issue, a 2002 National Bureau of Economic Research paper written by Columbia University economics professors Donald R. Davis and David E. Weinstein is on point. Using complex methodology, they aggregated the total loss to the U.S. native workers and found that the magnitude of losses for U.S. native workers equates roughly to $72 billion a year, or .8 percent of GDP. Now, I don't know if that figure is correct, but the earned income tax credit is just $40 billion a year, and they say it amounts to $72 billion a year. The economics professors at Columbia University also said immigration is as costly to the United States as all trade protections. When wages are suppressed, people drop out of the workforce. In addition to the evidence that low-skilled American workers--and particularly African-American workers--are suffering wage suppression due to the competition they face from illegal alien labor, we also know competition is causing some Americans to drop out of the labor force. Steven Camorota, last spring, of the Center for Immigration Studies, analyzed the steady decline in the share of less-educated adult natives in the workforce between March 2000 and March 2005. Prior to Hurricane Katrina, there were 4 million unemployed natives-- those looking for jobs who were unable to find them--with high school degrees or less in the workforce. An additional 19 million natives with high school degrees or less existed but were not actively looking for jobs. Between 2000 and 2005, the number of adult immigrants--legal land illegal--with only a high school degree or less in the labor force increased by 1.6 million. During the same time period, unemployment among high school graduates and less educated native Americans increased by nearly 1 million--so unemployment among our high school graduates or high school dropouts increased by nearly 1 million--and an additional 1.5 million left the workforce altogether. Although jobs grew in the United States from 2000 to 2005, natives only benefited from 9 percent of the total net job increase. That is an important factor. Although jobs grew in the U.S. from 2000 to 2005, natives only benefited from 9 percent of that total. The number of adult natives holding a job grew by only 303,000, while the number of adult immigrants holding a job increased by 2.9 million. So it is 303,000 compared to 2.9 million among high school graduates or high school dropouts. Steven Malanga, a senior fellow at the Manhattan Institute, recently explained: [M]any of the unskilled, uneducated workers now journeying here labor . . . in shrinking industries, where they force out native workers, and many others work in industries where the availability of cheap workers has led businesses to suspend investment in new technologies that would make them less labor-intensive. . . . [T]he unemployment rate among native-born ``unskilled workers is high--about 30 percent.'' The unemployment rate among native-born, unskilled workers is about 30 percent, I repeat. To me, those numbers do indicate a significant problem. It is a problem we need to talk about as we talk about how to help working Americans get a better wage. Mr. President, I will note a few more points before I wrap up. Professor Richard Freeman--the Herbert S. Ascherman Professor of Economics at Harvard--testified before the Senate Judiciary Committee. I participated in that hearing last spring. He said: If you're a poor Mexican, your income in the U.S. will be six to eight times what it is in Mexico. Robert Samuelson explained in a March 2006 column in the Washington Post: They're drawn here by wage differences, not labor ``shortages.'' American workers, I think it is fair to say, cannot compete with the wage gap between their country and other countries. I was in South America last May with Senator Specter. We visited Peru, and we saw a poll that had just been published in Nicaragua while we were there that said 60 percent of the people in Nicaragua would come to the United States if they could. I mentioned that to the State Department team there in Peru, and they told me that a poll in Peru had recently shown, just about this time last year, that 70 percent of the people in Peru would come to the United States if they could. So I guess what I am saying to my colleagues is, we need an immigration policy that allows immigration and that is consistent with our historic values as a nation that welcomes immigrants, but the numbers and the skill sets that they bring ought to be such that they do not depress wages of our lower income people because we cannot accept everybody in the world who would like to come here. It is not physically possible to any degree that we could accept that. We have a lottery section that does not have any requirements of skills in it. You apply to it if you want to come to America. It allows for 50,000 to be drawn out of a hat each year. And those who are drawn get to come to America on a random basis. We had 5 million people, according to Professor Borjas at Harvard, who applied for those 50,000 slots. I do not blame people who want to come here. I am not demeaning them. Most of them are good and decent people who want to get ahead. But we have such a higher wage base that we could attract people from all over the world in virtually unlimited numbers, and it does have the impact, if allowed to be too great and too concentrated in certain industries, to pull down American wages. While we are thinking about how to increase the wages of American workers, we need to think about that. That is all I am saying. And we are going to talk about that if we talk about immigration this year, as I expect we will. We can have immigration, but it needs to be done right. How do we level the playing field? Let's consider the advice given by Dr. Barry Chiswick. He is the head of the Department of Economics at the University of Illinois in Chicago. He testified before the Senate Judiciary Committee last spring, stating: [T]he large increase in low-skilled immigration . . . has had the effect of decreasing the wages and employment opportunities of low-skilled workers who are currently residing in the United States. He goes on to say: Over the past two decades . . . The real earnings of low skilled workers have either stagnated or decreased somewhat. [W]e . . . need to . . . provide greater assistance to low- skilled Americans in their quest for better jobs and higher wages. [O]ne of the best ways we can help them in this regard is by reducing the very substantial competition that they are facing from this very large and uncontrolled low-skilled immigration that is the result of both our legal immigration system and the absence of enforcement of immigration law. That is pretty much indisputable. I haven't heard a professor who would dispute that yet, or anybody who can seriously object to those numbers. Professor Harry Holzer, associate dean and professor of public policy at Georgetown University, a great university here, also testified at that same hearing. He believes American workers do want jobs currently being held by illegal laborers. I don't agree with this idea that these are jobs Americans want to take. Americans are not interested in a job that is only going to last for 3 months, that pays the minimum wage and has no health care and no retirement benefits. I will say that. And neither do we want them to take those jobs. Professor Holzer believes that absent illegal immigrant competition, employers would raise wages and improve working conditions to attract the American worker: I believe that when immigrants are illegal, they do more to undercut the wages of native-born workers, because the playing field isn't level and employers don't have to pay them market wages. . . . [T]here are jobs in industries like construction that I think are more appealing to native-born workers, and many native-born low-income men might be interested in more of those jobs. . . . Absent the immigrants, the employer might need to raise those wages and improve those conditions of work to entice native-born workers into those jobs. That is true. That is all I am saying. As we discuss the minimum wage--and I am confident somehow we will work our way through this, but there are some amendments and votes that need to be taken--it should be done only as part of a serious evaluation of what is happening to the wages of low-skilled workers and middle-class workers. If we do that and think it through, we will see we ought to reform the earned income tax credit so people can receive that benefit while they work. We will conclude we ought to create a savings program every American worker can put money into throughout their working career, from the first paycheck they get until the day of their retirement. It would transform the retirement years of those people. We have that in our capability. As we craft an immigration policy, we cannot craft that policy in such a way that it only benefits corporate profits. It must be done in a way that considers the impact that is occurring on our own low- skilled workers. If we do a good lawful system of immigration that is in harmony with our history of immigration in America but at the same time provides protection to the least of our American workers, we will have done something worthwhile. Unfortunately, I have to say the bill that passed the Senate last year would have been a disaster. It would have increased legal immigration in this country, skewed mostly to low-skilled workers, by almost three times the current rate. How can that have done anything other than hurt our workers? Those are some thoughts. I appreciate the opportunity of sharing them. I ask unanimous consent that the pending amendment be set aside and that amendment No. 147, which I have offered, which deals with increased fines for employers who hire illegal immigrants, be called up. That fine currently is $250. I think that is too low. I ask that that be called up.

Mr. SESSIONS

Mr. SESSIONS. Senator Alexander, I was going to talk about the earned-income tax credit in some detail, about how we work it in America today. An amendment I filed has been accepted, and I do think the earned-income tax credit, as the Senator most cogently stated, has greater potential to help the working poor in America than the minimum wage increase. I knew that was so. But after the Senator's speech I know it is much more so than I thought. It is important we hear about this. I thank the Senator. The amendment that I offered that was accepted will ask the Treasury Department within 6 months to report to us what can be done to allow working Americans to get their earned-income tax credit as part of their paycheck. I have been talking about this for several years. It is time to get serious about it. I found most people get their earned- income tax credit when they file their tax return the next year. They work all year. As a result of that income history and the number of children they have, they qualify for the earned-income tax credit, and they get a big refund. On average it is $1,700 to $2,400, depending on the size of the family. That is a lot of money. It is almost $1 per hour worked. Now, one of the key purposes of the earned-income tax credit was to help the working poor. The working poor are trying to make decisions about jobs, how to take care of their families, and we wanted to incentivize them to work and to not take welfare or other benefits, but over the years, the way it has worked out, the tax credit comes in one lump sum--not when a person is making a decision about whether to go to work. And they don't get it then, so they still are paid whatever the minimum wage is. I feel strongly about this. It is contrary to the policy that Milton Friedman and others thought about when they were talking about earning tax credits by working because, in the mind of the employee, the worker, there is no connection between that big tax return and their work. The tax credit needs to be tied to the work. It can be done now. A small number of businesses provide that tax credit today on the paycheck. It would, in fact, amount to almost $1 an hour for lower income workers as an increase in their pay if we can make this happen. Remember, we do not have withholdings from this tax credit. There are no deductions from it. It is $1 they can take home, keep, and use for their family--to fix the tires on the car, the brakes, buy something their children need at school. It is bad public policy to have the earned income tax credit to be distributed as it is. It is contrary to, I think, the impetus behind it. I believe we can fix it. I know a lot of people, as the Senator said, think the earned income tax credit is rife with fraud. There is some evidence to suggest there is a substantial amount of fraud in this program. I do not think it would increase if it were paid on the paycheck. I think more people, perhaps, would find themselves eligible if it were brought up at the workplace with them when they started to work and they made claim to it, who otherwise would not know they are eligible for it and might not even file a tax return, or if they do, they may not even claim the earned income tax credit. So I think we might have some more people claim the benefit, but it would have the public policy benefit of encouraging work and helping people while they work. I think it is the right thing to do. I have talked with the Treasury Department about it several times. They fiddle around, and they talk to you, and they give an excuse, and they say: There is this problem and that problem. But from the beginning, this has been talked about. When they got right down to it, they could not obtain a consensus on how to do it, and they did not require it to be made part of the paycheck. They allowed it to be done differently. And most people are taking it otherwise than in their paycheck. So, Mr. President, I am excited that this has been accepted. I hope the Treasury Department will respond in good faith to help us analyze this problem. And if they do, I think we can do a lot for working Americans.

Mr. SESSIONS. Thank you, Mr. President. We would be pleased to have that happen.

Mr. SESSIONS. Mr. President, I suggest the absence of a quorum.

Mr. SESSIONS. Mr. President, I understand Senator Lautenberg will be recognized next. I don't see him in the Senate. I will yield to him when he comes. I say to my colleague from Tennessee, Senator Alexander, how much I appreciate his fabulous remarks and analysis. Amendments Nos. 209 and 210 En Bloc

Mr. SESSIONS. Mr. President, I ask unanimous consent that the pending amendment be temporarily set aside and I call up amendments Nos. 209 and 210 en bloc on behalf of Senator Kyl.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I thank Senator Levin, our chairman of the Armed Services Committee and our extraordinarily capable leader. Mr. President, I would like to be notified in 4 minutes.

Mr. SESSIONS. Yes.

Mr. SESSIONS. No, after I have spoken for 4 minutes.

Mr. SESSIONS. Mr. President, I want to make a couple of points about General Petraeus. My colleague, Senator Bunning, who knows him personally from when he served in Kentucky--and has been with him in Iraq, as I have, will speak longer about him. I will just say this: General Petraeus was in Iraq in 2003 during the initial invasion. I met him there when I went on a codel. He impressed me, and all of us, as an extraordinary leader. He was commander of the 101st Airborne. He is a Ranger and a combat officer. He finished at West Point at the top of his class. He has a Ph.D. from Princeton. He was No. 1 in his class at the Command and Staff General Officer School. By all accounts, he is a man of the most extraordinary ability. He came back to Iraq when we realized the training of the Iraqi military was not progressing effectively. So after he had hardly been home a year, the President asked him to go back to train the Iraqi military and police; for 15 months, he went back to Iraq, leaving his family again. Fortunately, his wife is a daughter of a military officer and understands our national interest and the lives of American soldiers are at stake. He went back to train those officers, and he did that, by all accounts, to an extraordinarily fine degree, given the difficulties that entailed. He got to know virtually all the leaders in Iraq. He doesn't know Prime Minister Maliki, but he knows all the leaders in Iraq. Then he came back, and his duties for the last year have been to prepare this manual, the military manual on counterinsurgency. That is exactly what we are in today, a counterinsurgency operation in Iraq. I believe we have the finest person this country has to offer to take a fresh look at the situation. I am an admirer of General Casey and General Abizaid. I think they worked their hearts out and did a lot of great things. I never believed they have done anything but a superb job, but sometimes, we need change and new people. I believe this is the best person we can send. General Petraeus promised, as Senator Levin said, which is critically important, in response to a question I asked, but he had volunteered it to me in a private conversation: Senator, if you want the truth, I will tell you. If you send me over there, I am going to tell you what I think. I said to him at the hearing: Will you tell the American people how this thing is going? And if it is not going effectively and we shouldn't continue, will you tell us? He said: Yes, sir, I will. I believed him when he said that. We cannot have a situation in which we end up 20 years from now with someone writing an autobiography and saying: I thought the war was lost. Yet I didn't say it at the time. We need somebody to tell us the truth. I believe he will do that. We need to support him. The whole infrastructure and bureaucracy of this Government needs to be responsible to the commander on the ground. We have a good Ambassador, but in Iraq where we have this much disorder and military threats, the commander is a leading factor. The people there respect him. We in the United States look to him to do much of the work, when much of it is actually being done by the Ambassador and other agencies of Government. But they need to respond to him because he understands the situation. We need to have adequate prisons and an adequate court system. If the soldiers go out and apprehend these people, where are they going to put them?

Mr. SESSIONS. Mr. President, we need infrastructure, and we need trainers. General Keane was very positive about General Petraeus and said some important things about these needs. This manual deals in great depth with almost every issue raised by Senator Levin. So I believe in General Petraeus; we have the person best able to work through all the joint command and political issues, as well as the military. I thank the Presiding Officer, and I yield the floor.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, I think we had an agreement to speak. I ask unanimous consent, if the floor managers agree, to commence my time at 4:45. A number of Senators have amendments they want to offer during that period of time between now and 4:45.

Mr. SESSIONS. I understood that an agreement had been reached to vote at 5:15. We had agreed to 30 minutes equally divided. I left a few minutes for some others who want to speak. That was my suggestion.

Mr. SESSIONS. I will.

Mr. SESSIONS. If the Senator will yield for a question, can we add that I be allowed up to 15 minutes before the vote at 5:15, or thereabouts?

Mr. SESSIONS. Mr. President, I understand Senator Kennedy's concern. All I am asking for is 10, 15 minutes before we vote.

Mr. SESSIONS. Mr. President, I would be pleased to make opening comments. I guess the time of 5:40 p.m. was selected by the leadership or something.

Mr. SESSIONS. One of my goals was to hurry up so we could vote at 5:15 p.m. Now they decided they wanted to vote at 5:40. It is not my fault, I say to my colleagues. I did reduce the time.

Mr. SESSIONS. Mr. President, I ask unanimous consent that the pending amendment be set aside and that amendment No. 148 be called up.

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

Mr. SESSIONS. Mr. President, the whole purpose of the Minimum Wage Act is to increase the wages of working Americans, particularly low- skilled workers who are paid minimum wage-level salaries and who are having a difficult time. That is a noble goal because I don't think their salaries have gone up as much as we would like. One of the reasons, as I discussed earlier and will discuss again before this debate concludes, that those salaries have lagged behind is because of a large influx of illegal immigrant labor. That is indisputable, and it has not been discussed much. People apparently don't want to talk about it. We are going to talk about it. We, also, have with regard to Government employees and Government contractors, a significant loophole we ought to fix that involves national security, as well as competition for American workers, and that is the purpose of this amendment No. 148, which I note has been cosponsored by Senator Grassley and Senator Coburn. This amendment would focus only on contractors who do work for the Federal Government. Unfortunately, I have not been able to get an agreement to have a vote on raising the penalties for other businesses in America from $250 as a fine for hiring illegals as I would have on amendment No. 142. That has been objected to by the Democratic leadership. I think we ought to vote on that amendment. It is a bigger issue, but at this point, we will be able to proceed to a vote on amendment No. 148. Employment verification is the responsibility of an employer when someone is hired. It exists in paper form and was mandated in 1986 as part of that 1986 amnesty, in which 3 million people were legalized. We promised not to allow this kind of problem to happen again, and we set up a system that was supposed to work to verify the citizenship of people or their legality when they came to work. Employers under the 1986 act must identify work authorization documents from each new person they hire, fill out form I-9 with an attestation and retain the I-9s in case the Department of Homeland Security wishes to look at them. That is what they are required to do. Unfortunately, anything that looks good they often accept and some of them argue they have to accept. They don't look behind these documents, and there is no real verification. Many are totally bogus and fraudulent. Thousands and tens of thousands of documents are submitted with Social Security numbers that are all zeros. I think it was 50,000 Social Security numbers in this country that were all zeros. How bogus is that? So an alternative to the paper I-9 system that has not been working, an Electronic Employment Verification System, was created in a pilot. It is used voluntarily by about 13,000 employers throughout this country to verify work authorization when hiring new employees. The amendment before us today would prohibit contractors for the Government that get caught hiring illegal aliens from obtaining a new Government contract for up to 7 years or 10 years, depending on whether they currently have a contract with the Government. We voted for this concept in the immigration bill previously, but a waiver from this debarment from contract work--and that is a substantial penalty for some of these companies--would be available for national defense and national security purposes. Contractors, in addition, would be protected from this debarment, this ban, if they are using the EEVS system, or the Basic Pilot Program to verify the legality of the employers. It is used by the Senate, it is used by the House, it is used by every Government agency, and it is used by 13,000 businesses throughout this country. All one has to do, basically, is your administrative officer or appropriate staff person goes online and checks the Social Security number or documents of the employee to verify their legality, and if they come up legal, they are able to hire them. The same would be true for these contractors who do contract work for the Federal Government. If they don't do that and they hire people who are illegal, then they could suffer the consequences. It would require them to do that. I think it only makes good sense. Most economists do not dispute the contention that illegal work by illegal workers lowers the overall wage rate for particular industries, especially unskilled workers. Since the minimum wage is intended to raise the wage levels of these mostly unskilled workers, it is appropriate for us to consider the wages of Americans if contractors can easily obtain illegal labor from illegal immigrants and there would be fewer Americans hired to these jobs, and it would depress the wages, I submit, in reality and in theory. Mr. President, I ask that I be notified when 9 minutes is up. Many scholars and policymakers, including the U.S. Chamber of Commerce, Department of Homeland Security, the Heritage Foundation, on either side of the debate have advocated for some form of advanced mandatory employment verification system as one of the main tools necessary to prevent another surge of illegal immigration and to protect employers from liability, or being held accountable, for inadvertently hiring illegal workers. There have been a lot of problems with that, I will admit it. It is time for us to give clear direction to the employers and a clear system that will work. This amendment takes the first step. We encourage but not require the contractors to use an EEVS system, by providing them with protection from any liability if they use it. If anyone should be following the system, any businesses should be, it ought to be businesses doing work for the U.S. taxpayers, spending money that belongs to the U.S. taxpayers. Large numbers of illegal workers are being hired in America today. We know that. The vast majority of businesses carefully follow the law, but many of them, unfortunately, do not. Some are even contractors who are working on sensitive Government contracts. Let me tell you, we have a problem. I will share some information about it. It impacts jobs, the economy, and our national security. The Associated Press reported last Friday, January 19, that nearly 40 illegal immigrants hired by contractors working on 3 military bases in Georgia, Virginia, and Nevada, were arrested last week by the ICE Agency, the immigration enforcement group. Twenty-four of the illegal immigrant workers were arrested while trying to enter Fort Benning, GA, to do construction at the military base. According to the ICE, the illegal immigrants worked for different subcontractors. My 9 minutes is up. I will try to finish in a couple of minutes, a very few minutes.

Mr. SESSIONS. According to ICE, the illegal immigrants work for different subcontractors who are not facing any charges from the Government. Unfortunately, that is not a new problem. In October of 2005, seven illegal aliens were arrested for working at the U.S. Air Force base in Idaho. They were employed by a subcontractor. Also, last October, 2006, three illegal workers were working at Fort Bragg and they were arrested. In 2005 alone, ICE arrested 6 illegal aliens working at Homestead Air Reserve Base in Florida, 48 illegal aliens working at the Seymour Johnson Air Force Base in North Carolina, 9 illegal aliens performing contract work at a facility that refits Navy aircraft in North Carolina, 18 working for a San Diego company that performed maintenance on U.S. Navy vessels. According to an Empire Journal article, a huge problem is that employers can participate in a voluntary program to verify employee work eligibility, but they suffer no penalty for failing to check the validity of the Social Security numbers. The article concluded: A weak law allows the employer to see the document and if the document looks genuine to the employer, the employer cannot be held responsible for hiring the illegal immigrant. It is astounding how widespread this problem is. In a report by ICE in 2005, a company contracted by the Navy to paint ships was found to employ 86 illegals who had security passes giving them access to the entire Navy base in San Diego. In 2004, 41 suspected illegal aliens were apprehended while working for a Department of Defense contractor that was providing Boeing with anti-missile systems and radar--top security type equipment. Also, in 2004, seven foreign nationals were arrested for working illegally at the Fort Polk Joint Readiness Training Center in Louisiana. They were ``role players'' in combat exercises to prepare soldiers for combat in Iraq. In one alarming incident, the Nuclear Regulatory Commission was caught allowing illegal aliens to obtain bogus documentation by using fake Social Security numbers to work as contract painters in nuclear facilities. Representative Edward Markey, a Democrat from Massachusetts, stated: Commission regulations are supposed to ensure that individuals who are able to access nuclear facilities are subject to appropriate background and security checks but they clearly did not work in this case. This amendment would fix key weaknesses in the employer verification system, provide a defense to companies that follow the rules and act in good faith, and debar companies that violate the rule. We will not tolerate that, with taxpayers' money on taxpayers' contracts. We want to help people in this country get higher wages. I have talked about that for some time. We need to consider and take the advice, I believe, of Dr. Barry Chiswick, head of the Department of Economics at the University of Illinois in Chicago, when he testified before the Senate committee last spring. He said: The large increase in low-skilled immigration . . . has had the effect of decreasing the wages and employment opportunities of low-skilled workers who are currently residing in the United States. Over the past two decades . . . [t]he real earnings of low- skilled workers has either stagnated or decreased somewhat. This is Dr. Chiswick. He goes on to say: We . . . need to . . . provide greater assistance to low- skilled Americans in their quest for better jobs and higher wages. [O]ne of the ways we can help them in this regard is by reducing the very substantial competition they are facing from this very large and uncontrolled low-skilled immigration that is the result of both our legal immigration system and the absence of enforcement of immigration law. Professor Harry Holzer, Associate Dean and Professor of Public Policy at Georgetown, said this before the Judiciary Committee last spring. He believes American workers do want jobs currently held by illegal laborers and he believes that absent illegal immigrant competition, employers would raise wages and improve working conditions to attract American workers. Absolutely that will happen. This is what the Associate Dean and Professor of Public Policy in Georgetown said: I believe that when immigrants are illegal, they do more to undercut the wages of native born workers because the playing field isn't level and the employers don't have to pay them market wages . . . [T]here are jobs in industries like construction I think are more appealing to native-born workers and many native-born low-income men might be interested in more of those jobs. . . . Absent the immigrants, the employer might need to raise those wages and improve those conditions of work to entice native-born workers into those jobs. As we consider this, let's also consider the relevance of unfair competition to low-skilled workers. Let's let their wages go up in this time of unprecedented prosperity and GDP growth and profits. Let's let the workers' salaries go up. One way to do that is eliminate this competition from large numbers of illegal workers. I yield the floor and reserve the remainder of my time.

Mr. SESSIONS. How much time remains on this side?

Mr. SESSIONS. Mr. President, we want higher wages for American workers. This is important. I would like to see them receive $15, $20, $30 an hour, not $7 an hour. I would like to create economic forces to work so the average worker can benefit from that without some sort of Government wage control. I have voted for minimum wage increases. We are going to move this bill forward, as I understand it, with a package of relief provisions for small businesses, and it will be passed. But we are not through yet with some relevant, important amendments. Is that what my colleagues object to? They certainly did not object to it when the Republicans were moving bills through the Senate last year or the year before. Senator Kennedy can file a stack of amendments 2 feet thick if he desires. There is nothing wrong with offering some amendments, and we will move forward. I will say a couple of things about it. We had amendments in the Senate almost every year in recent years--3, 4, 5 years--that would have raised the minimum wage and would have provided relief for small business. But the Democratic leadership, to make a political point, preferred not to have that and blocked that provision, voting only for their pure increase of the minimum wage. So we are at this standoff that I think is particularly silly in light of the fact now that the bill we are about to pass, and I suggest will pass, is going to have the same small business relief provisions in it that could have been passed last time, last year, or before. I don't appreciate the suggestion that we are here to protect corrupt, greedy, business people. My amendment targets greedy contractors, contractors who go out with Federal taxpayer money, hire people here illegally instead of hiring Americans to do work for the U.S. taxpayers. Let's crack down on them. I am glad the Senator supports that. However, I am disappointed that his leadership opposed a far more significant amendment that would have raised the minuscule $250 fine on big, greedy businesses that hire illegal workers. Why would they object to that when, in hiring those numbers by the tens or hundreds of thousands, we pull down the wages of American citizens? Why would we do that? Who is greedy now? What is wrong with creating a lawful system? Why don't we take care of our American workers? Just in the last week there was an article on the front page of the Wall Street Journal about a chicken plant in Georgia. They raided that plant and nearly three-fourths of the workers disappeared. Some were arrested for being there illegally. The company went out and ran ads in the paper to say they were having new wage increases at the chicken plant. They were paying more than $1 an hour more. They sent buses to nearby towns to see if people wanted free rides to work. They provided dormitories for those who wanted to stay in the dormitory. They went through unemployment agencies in Georgia. They have already hired 200 workers, mostly African-American citizens, for those jobs. Another 200 applications were pending. Don't tell me that if we have a lawful system of immigration it won't improve significantly the wages of American workers. I suggest my colleague from Massachusetts introduce himself to Professor Borjas at Harvard who has written a book on it. He says it has brought down the wages of low-income workers by as much as 8 percent, which is $100 per month, or $1,200 per year. I submit these amendments are not irrelevant to our discussion. I note that small businesses do not all get rich. I met the nicest young man who opened a restaurant in Mobile, AL. He was working 90-hour weeks for months. He didn't know whether he was going to make it. He was not making a minimum wage, not in the weeks he started his business. He turned it around. Now he works 70-hour weeks and his business seems to be doing well. I hope he makes a lot of money. But he has some legitimate concerns for those small businesses to help him be successful. If he failed, a lot of people would not have had jobs. We are coming to the conclusion of the time in which we will vote. This is a good amendment. We ought not have corporations or businesses getting Government contracts and going out and hiring people who are illegal to make an extra buck. It is not right. We have a system in place that should be in place for every business in America. It is a system that we in the Senate follow, the House of Representatives follows, and every Government agency in America follows. But you can hire somebody; you go online and you verify their employment legality. It works very well. If the employer does that, they will not be subject to penalty under this act. We need to take some real steps in that regard. I believe we can do so. We will need to do more of it if we want to protect our workers. One way not to protect the salaries of workers would be to pass the bill that was before the Senate that came out of the Senate Judiciary Committee last year, the Kennedy-McCain bill, that would have added as many as five times the number of people into this country legally as currently are allowed. As it finally left the Senate, it would have increased by three times the number of people legally in this country. That would have a devastating impact on low-income workers in America. We cannot assimilate that many people that rapidly. When we talk about comprehensive reform, let's talk about that. Let's see if we can't do it. Let's do it in a way that protects the livelihoods of the least in our Government. I yield the floor.