George Voinovich

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, the Finance Committee has laid before the Senate a bipartisan bill that will finally provide every senior access to affordable prescription drugs. Passing this long-awaited legislation is one of the best things we can do right away to help solve the health care crisis in this country. I applaud the efforts of the committee and specifically commend the leadership of the chairman and ranking member, Senator Grassley and Senator Baucus, in developing this critical legislation. The bill reported out of the Finance Committee, S. 1, is the culmination of years of hard work in the Senate to bridge the gap between the Medicare of 1965 and the Medicare for today and the future. Currently, seniors are paying too much for their needed prescription drugs out-of-pocket. The cost of these life-saving drugs is increasingly becoming a large burden for seniors, with some even traveling to Canada to find cheaper drugs. Seniors should not have to go to a foreign country to receive the drugs that their doctors prescribe. We need to provide an environment where America's seniors don't have to go to Canada. The bill reported out of the Finance Committee accomplishes that. This bill not only provides every senior access to affordable prescription drugs, but it will also provide seniors access to benefits that a modern health plan should have, such as preventive care and disease management--options that Medicare does not currently provide. Moreover, these additional benefits are provided by giving seniors a choice and control over their prescription drug plans and health care providers. These changes will only improve and strengthen Medicare. As my colleagues know, when Medicare was enacted in 1965, Congress made a commitment to our Nation's seniors and disabled to provide for their health security. Unfortunately, that security is on shaky ground because Medicare has not kept up with the evolving nature of health care. The delivery of health care has vaulted ahead so dramatically 38 years after the inception of Medicare, that this system which was once sufficient is now antiquated and ineffective. For example, conditions that used to require surgery or in-patient care can now be treated on an out-patient basis with prescription drugs. But more than the progress that has evolved from the utilization of prescription drugs, medicine has too evolved to the extent that preventive care can now eliminate the need for extensive reliance on the health care system. It is time for Medicare to reflect the realities of today's health care delivery system. My colleagues from the Finance Committee have found a solution that is a good compromise and is a result that can be agreed to by both Democrats and Republicans. Is this bill a panacea for seniors' health? No. But it is a quantum leap forward from a system that has been stuck in a time when the Ed Sullivan Show and the Dick Van Dyke Show were seen as original programming in America's living rooms. While the Senate has finally begun its debate on Medicare I would be remiss if I did not take a step back and point out the roadmap that has lead us to this point. The President deserves great credit in providing in his budget substantial funding to add a prescription drug benefit to Medicare. The amount the President allocated, $400 billion, illustrates his commitment to our nation's seniors. Time and again, the President has called for strengthening and improving Medicare. Additionally, this year we are operating under a budget resolution. Last year, the Senate operated without one because we never voted on the fiscal year 2003 budget resolution--the first time the Senate has not done so since 1974. The Senate got the job done this year. Through the leadership of Chairman Nickles of the Budget Committee, the Senate laid out a blueprint for future spending that has brought us to where we are today. The Senate is standing at the brink of providing seniors access to affordable prescription drugs. This is long overdue, and we cannot delay any further. Over the past year, I have traveled throughout Ohio holding health care roundtables to hear what the citizens in my State are saying. These roundtables have included seniors that inevitably tell me it is past time that Congress added a prescription drug benefit to Medicare. I believe this is the year Congress will deliver on its longstanding promises. I am ready to go to my constituents in Ohio and say we were finally able to move past partisanship and provide real security for their health. While it is vital that we pass a prescription drug benefit this year, it is also vital that we pass one that is fiscally responsible. Ideally, seniors would receive the assistance they need to have access to every medicine prescribed by their doctor. Unfortunately, we live in the real world and are subject to limited resources. I would like to take a few moments to shed some light on our Government's current fiscal condition. As recently as fiscal year 2000, the Federal Government had a combined surplus of more than $100 billion. Every penny of payroll tax was retained in the Social Security trust fund and the General fund was generating enough revenue to fully fund its contribution to Medicare and still pay down the National Debt. As my colleagues know, this rosy budgetary picture is long gone. According to the Congressional Budget Office's latest monthly budget estimate, May 2003, the unified deficit for fiscal year 2003 will exceed $400 billion even after borrowing every penny of this year's Social Security trust fund surplus. With this in mind, it is imperative that we act not only to provide Medicare benefits for today's beneficiaries, but also for the baby boomers that will arrive in 2011. The Finance Committee bill strikes a balance between providing seniors and the disabled access to needed prescription drugs today and doing so in a fiscally sensible way that would allow benefits to extend to future generations. Senator Grassley and the Finance Committee have put before the Senate a bill that will cost $400 billion as scored by CGO. The natural question that I think the American people would like to know is what does $400 billion buy? In my opinion, $400 billion provides a real prescription drug benefit that is affordable to both the beneficiaries and the Federal Government. First of all, seniors would get assistance immediately through the prescription drug card. And our neediest seniors would receive an additional $600 on top of the discounts Medicare will provide through this card. When the prescription drug program begins in 2006, under the Finance Committee bill, premiums would average $35 a month. After a $275 deductible, the government would cover half of all prescription drug costs up to $4,500. Now, critics of this approach will claim that the so-called ``doughnut hole'' after $4,500 will be the financial ruin of every senior. The truth is that the vast majority of seniors--80 percent-- would never even hit the hole. As a matter of fact, for 2003, the Kaiser Family Foundation estimates that the average Medicare beneficiary will consume approximately $2,300 in pharmaceuticals. And should seniors consume over $5,800 in prescription drugs, the Federal Government would pick up 90 percent of drug costs. While this benefit will greatly help seniors throughout the Nation, there are still some seniors for whom the $35 per month premium and additional cost-sharing is too high. For those individuals, the bipartisan Finance Committee bill provides protections that will allow access to prescription drugs. For those seniors under 135 percent of poverty, $12,123 for an individual and $16,362 or a couple, the Finance Committee bill would provide a full subsidy for monthly premiums. In addition, the government would cover 95 percent of their prescription drug costs to the initial benefit limit and 97.5 percent above the stop-loss limit. And for those seniors between 135 and 160 percent of the poverty level, S. 1 would provide assistance with their monthly premiums on a sliding scale. In addition, these individuals would pay no more than 50 percent of their drug costs once the $250 deductible has been reached. When we talk about dollars being spent, we should also point out to seniors that they will receive more bang for their buck under the Finance Committee bill through Medicare Advantage. Under Medicare Advantage, seniors will not just receive direct assistance from the government to cover their prescription drug bills. Rather, private health plans will have to compete for beneficiaries and will attempt to attract seniors by providing the best health care plan--including prescription drugs and possibly preventive care, disease management, vision and dental services. To the advantage of both Medicare beneficiaries and the Federal Government, this competition will decrease the price of prescription drugs and permit all parties to stretch their dollars further. This body has been playing this political posturing game with senior's health care for too long. I am tired of explaining partisanship as the excuse for the Senate's failure to pass a prescription drug benefit, which has forced the least of our brothers and sisters to choose between food and prescription drugs. I am pleased that the Senate will have the opportunity to show the American people, especially our nation's seniors and disabled that we are serious about enacting legislation to provide a prescription drug benefit this year. The bill before us seems to have broad support from both sides of the aisle. The President is ready and willing to sign a bill into law this year. It is time to get the job done.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I ask unanimous consent that the text of the Disaster Area and Health and Environmental Monitoring Act of 2003 be printed in the Record.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I ask unanimous consent that the text of the Disaster Area and Health and Environmental Monitoring Act of 2003 be printed in the Record.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise today to congratulate and pay tribute to Mr. Nirmal K. Sinha of Worthington, OH, as a 2003 Ellis Island Medal of Honor recipient. The prestigious Ellis Island Medal of Honor award is presented annually to ``remarkable Americans who exemplify outstanding qualities in both their personal and professional lives,'' and ``who have distinguished themselves as citizens of the United States, while continuing to preserve the richness of their particular heritage.'' Nirmal Sinha is such an American. In addition to creating a business in Ohio and being active in numerous civic organizations. Nirmal and his wife Tripta have maintained strong ties to the Asian Indian American community. I have often said, ``show me someone who is proud of their ethnic heritage and I'll show you a great American!'' I am proud to say I have worked with Nirmal Sinha for many years. In 1992, as Governor of Ohio, I appointed him to the Ohio Civil Rights Commission. I reappointed him in 1997, and I am gratified that Mr. Sinha served two 5-year terms, helping to enforce State laws prohibiting discrimination in housing, employment, credit, and higher education. He has worked with the U.S. Department of Housing and Urban Development and the U.S. Equal Employment Opportunity Commission to develop outreach programs, particularly to Hispanic and Asian Americans. As mayor of Cleveland and as Governor of Ohio, I was close to the Asian Indian American community and knew of Nirmal's distinguished record as a business leader and someone who was active in a variety of civic organizations. Some of those organizations include the Asian Indian American Business Group, AIABG, of Columbus, founding member of the Global Organization of People of Indian Origin, GOPIO, the Asian Indian Alliance of Ohio, and the Asian Indian Forum for Political Education. Mr. Sinha also has served as a member of the Ameritech Consumer Advisory Board, Columbus International Program, and Main Street Business Association, member of the advisory board to the Ohio State University's Department of Communications, and a director of the Central Ohio March of Dimes and the International Center in Columbus. Nirmal Sinha is an accomplished professional who always makes time to give to others. Mr. Sinha is active in both the National Association of Human Rights Workers, NAHRW, and the International Association of Official Human Rights Agencies, IAOHRA. In 1998, the Columbus Dispatch awarded Mr. Sinha the Outstanding Community Service Award. In 1989, he received the Outstanding Community Service Award from the mayor of Columbus. Mr. Sinha's record in human rights is exceptional. In 1998, he initiated the first ever ``Asian Roundtable'' discussion on Civil Rights with joint efforts involving the Equal Employment Opportunity Commission and the Ohio Rights Commission. Also in 1998, Mr. Sinha received the Dr. Martin Luther King, Jr. Award for Community Service to the State of Ohio. In his profession, Mr. Sinha is an accomplished mechanical engineer and has been involved in the design and construction of large electric power plants. He holds a bachelor's degree in mechanical engineering from Jadavapur University in Calcutta, India, and a master's degree from the Polytechnic University of New York. He also studied management at the Ohio State University and computer science at Franklin University. Currently, he is president of Marketing USA Group, a consulting firm he founded which advises clients on energy, telecommunications, technology, and global business. As a humanitarian, Mr. Sinha is known for his quiet leadership. He has been called ``a humble man with a compassion for human and civil rights.'' Throughout his career, Nirmal Sinha has exemplified the highest American values, including good citizenship, and responsibility to his fellow man. Nirmal Sinha is very deserving of the Ellis Island Medal of Honor. America is a nation of immigrants, and I believe our cultural and ethnic diversity helps make us strong. When I was Governor of Ohio, one of the goals that I set for my administration was to celebrate the cultural diversity of our State by seeking out individuals from nontraditional ethnic groups and giving them an opportunity to serve. I am proud that I appointed a number of Asian Indian Americans, such as Nirmal Sinha, to various boards and commissions, particularly in such fields, as medicine, manufacturing, and higher education. Mr. Sinha is in good company as a recipient of the Ellis Island Medal of Honor. Former recipients include four Presidents, several Senators and Congressmen, and Nobel Prize winners. As someone who has had the pleasure of knowing and working with Mr. Sinha, I can guarantee that his significant contributions to his community and to the State of Ohio will not stop, but will continue to grow. I also know that he does not seek recognition for his humanitarian service. Instead, he lives in accordance with his strong faith, and his commitment to education, his family, and his community. Nirmal Sinha is someone all of us would do well to emulate and I am pleased and proud to salute him and his wife Tripti and their two daughters. I congratulate Nirmal Sinha as a 2003 Ellis Island Medal of Honor winner. He is an outstanding American whose dedicated service to others helps improve the quality of life for his fellow Americans every day.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise in support of nuclear energy and in support of the provisions in S. 14 that promote the use of this vital component of our energy portfolio. Nuclear energy accounts for 20 percent of our electricity generation--one in five American homes and businesses are powered by nuclear energy. It is an important energy source now, and will become even more important in the future--as we strive to meet growing energy demands while protecting our environment. As many of my colleagues know, nuclear energy provides emissions-free electricity--no emission of airborne pollutants, no emission of carbon dioxide or other greenhouse gases. In fact, nuclear energy provides three-fourths of the emissions-free electricity generated in the United States--more than hydro, wind, solar and geothermal energy combined. President Bush has said many times that energy security is a cornerstone of national security. He is right--and nuclear energy is a vital component of our energy supply. Uranium--the fuel for our nuclear fleet--is mined domestically and by many of our allies. Unlike oil, nuclear energy is not subject to foreign manipulation. Unlike natural gas, nuclear energy does not have domestic shortages and importation problems. Unlike wind, solar and geothermal energy, nuclear energy provides highly affordable and reliable power. Production costs of nuclear energy were 1.76 cents per kilowatt-hour versus 1.79 cents for coal and 5.69 cents for natural gas in 2000. Plant capacity utilization exceeded 90 percent in 2002--the fourth year in a row that the industry set a record for output without building any new plants. Nuclear energy is safe. Our nuclear plants are the most hardened of any commercial structures in the country and have a superb safety record and few, if any, industries have oversight comparable to that provided by the NRC for nuclear plants. Our nuclear Navy is a great example of the safety of nuclear energy-- The U.S. Navy has safely traveled over 126 million miles without a single reactor incident and with no measurable impact on the world's environment. Sailors on a nuclear submarine, working within yards of a reactor, receive less radiation while on active duty than they would at home from natural radiation background. However, we must act now if we want to preserve the benefits of nuclear energy. The last license for a domestic reactor was issued in 1978--and the technologies used to power our nuclear plants are over 30 years old. Our industry has developed advanced nuclear technologies--and the NRC has licensed them--but new plants have only been built overseas, not in America. Our nuclear plants were built in a highly regulated market--where returns on these investments were guaranteed--not in today's highly competitive energy markets. Nuclear plants present unusual risks to the financial community due to the significant up-front capital investments that are required years before they generate any returns--as opposed to natural gas generators that are relatively inexpensive and easy to build. Without new interest in nuclear power, our pool of qualified nuclear workers is drying up. From 1990-95, the number of students in nuclear engineering dropped by 30 percent. In 1975, there were 76 research reactors on American college campuses--today there are 32. Current estimates project that domestic energy demand will increase by almost 50 percent by 2030. Without a significant effort to increase our nuclear capacity--which must include construction of new nuclear facilities--we will have no other choice than reliance on natural gas to meet that demand, which will drive up the costs for both electricity and natural gas through the roof. The nuclear energy provisions in S. 14 are essential to assure that nuclear energy continues to thrive and provide its benefits to our Nation: Price-Anderson reauthorization: The bill permanently reauthorizes the Price-Anderson liability protection that is so crucial to all nuclear facilities. Advanced reactor construction: The bill will authorize construction of a new advanced reactor as a research test-bed using the very latest ideas developed in the Generation IV reactor program. Advanced fuel cycle initiative: Authorizes funding for development of technologies to reduce the volume and toxicity of final waste projects, simplify siting for future repositories and recover fuel from spent fuel. Federal loan guarantees: The bill provides loan guarantees for new plant construction in order to offset the problems with new development that I mentioned earlier. I want to spend just a minute on the Federal loan guarantees that are the subject of an amendment by Senator Wyden and Senator Sununu. These loan guarantees are necessary to jumpstart construction on new nuclear plants. In order to begin construction of a new facility, the nuclear industry needs to move into uncharted waters--they need to go to investment bankers and say ``I know that this is a huge capital outlay, and that we haven't built one of these facilities in 30 years, but we need to do this.'' These loan guarantees will ensure that private-sector financing will be available for utilities that make the decision to move forward. My distinguished colleague from Oregon has stated that we are throwing away good money on these ``subsidies.'' I must respectfully disagree. As Chairman Domenici pointed out earlier, this is not a handout program. These are loan guarantees--for up to 50 percent of the construction costs for a new facility--which means that the utilities will have to make payments on the loans, and that there will likely be no expenses to the Government. I applaud the work that Chairman Domenici has done on these provisions--all of these provisions--and I will oppose any efforts to strip them from the energy bill. I urge my colleagues to oppose the Wyden-Sununu amendment.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise today to honor Alfred Lerner. Al, as he was called by those who knew him best, was a man of great success and wealth but also great compassion and charity. Al was born in New York City, graduated from Columbia College and proudly served in the Marine Corps as an officer and pilot from 1955 through 1957. The son of Russian immigrants, Al Lerner had an amazing sense of patriotism and was so proud to accept the Ellis Island Medal in honor of his immigrant heritage and individual achievements in 2002. My personal relationship with Al developed because of the fondness we shared for the city of Cleveland, and Cleveland is a better place because of Al Lerner. His generosity was seen in well known ways such as his contributions to Rainbow Babies and Children's Hospital, where the Lerner Research Institute was founded, and to the Cleveland Clinic. In fact, Al Lerner's $100,000,000 contribution to the Cleveland Clinic was one of the largest donations to academic medicine in the history of the United States. Al gave so much of himself to these institutions, serving as president and trustee of the Cleveland Clinic Foundation and establishing the Lerner Research Institute at the Clinic to conduct research of new treatments for cancer, coronary artery disease and AIDS. Al Lerner also understood how important professional football is to the city of Cleveland, and due in large part to his business savvy, Lerner and his partner, Carmen Policy, were able to reestablish a football team in Cleveland. He was subsequently appointed chairman of the National Football League Finance Committee, and I am confident that the Cleveland Browns' 2002 playoff appearance, just 4 years after returning to the league, had a great deal to do with Al's leadership and guidance. I am not sure Cleveland would have its Browns today without Al Lerner's dedication and determination. Despite his amazing success as the founder, chairman, and chief executive of MBNA Corporation, Al Lerner remained grounded. He helped raise funds through the company and the Cleveland Browns, for the ``Cleveland Brown Hero Fund'' to aid families from the New York City Fire and Police Departments who suffered the loss of a parent in the tragic September 11, 2001, terrorist attacks. Al also answered President Bush's call in the aftermath of September 11, and was a member of the President's Foreign Advisory Board. Throughout his lifetime, many of Al's other achievements could also be observed in quieter ways that were never heralded. His dedication to his family was remarkable. He married his high school sweetheart and best friend, Norma. They shared 47 glorious years together and raised two children, Randy and Nancy. My wife Janet and I talked often about how Al and Norma seemed to love each other and genuinely enjoyed each other's company. Perhaps the greatest contribution that the two of them made was the strong example of a good marriage for their children, seven grandchildren, and anyone who know Al and Norma Lerner. I am honored to have known and worked with Al Lerner and am confident that his legacy will remain an example of hard work, philanthropy, and genuine kindness for generations to come.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise today in support of Senate amendment 850, an amendment to add a renewable fuels package to the energy bill. This language establishes a nationwide renewable fuels standard of 5 billion gallons by 2012, repeals the Clean Air Act's oxygenate requirement for reformulated gasoline and phases down the use of MTBE over 4 years. This language has strong bipartisan support and is the result of long negotiations between the Renewable Fuels Association, the National Corn Growers Association, the Farm Bureau Federation, the American Petroleum Institute, the Northeast states for Coordinated Air Use Management, NESCAUM, and the American Lung Association. Passage of this ethanol language will protect our national security, economy, and environment. The amendment that the majority leader has introduced--a compromise that will triple the amount of domestically-produced ethanol used in America--is one essential tool in reducing our dependence on imported oil. President Bush has stated repeatedly that energy security is a cornerstone for national security. I agree. It is crucial that we become less dependent on foreign sources of oil and look more to domestic sources to meet our energy needs. Ethanol is an excellent domestic source--it is a clean burning, homegrown renewable fuel that we can rely on for generations to come. Ethanol is also good for our Nation's economy. Tripling the use of renewable fuels over the next decade will: Reduce our National Trade Deficit by more than $34 billion; Increase U.S. GDP by $156 billion by 2012; Create more than 214,000 new jobs; Expand household income by an additional $51.7 billion; Save taxpayers $3 billion annually in reduced government subsidies due to the creation of new markets for corn. The benefits for the farm economy are even more pronounced. Ohio is 6th in the Nation in terms of corn production and is among the highest in the nation in putting ethanol into gas tanks, over 40 percent of all gasoline sold in Ohio contains ethanol. An increase in the use of ethanol across the Nation means an economic boost to thousands of farm families across my State: Currently, ethanol production provides 192,000 jobs and $4.5 billion to net farm income nationwide; Passage of this amendment will increase net farm income by nearly $6 billion annually; Passage of this amendment will create $5.3 billion of new investment in renewable fuel production capacity. Phasing out MTBE on a national basis will be good for our fuel supply. Because refiners are under tremendous strain from having to make several different gasoline blends to meet various State clean air requirements--and no new refineries have been built in the last 25 years--the effects of various State responses to the threat of MTBE contamination--including bans and phase-outs on different schedules-- will add a significant burden to existing refineries. The MTBE phase- out provisions in this package will ensure that refiners will have less stress on their system and that gasoline will be more fungible nationwide. Expanding the use of ethanol will also protect our environment by reducing auto emissions, which will mean cleaner air and improved public health. Use of ethanol reduces emissions of carbon monoxide and hydrocarbons by 20 percent; Ethanol also reduces emissions of particulates by 40 percent; Use of ethanol RFG helped move Chicago into attainment of the federal ozone standard, the only RFG area to see such improvement; In 2002, ethanol use in the United States reduced greenhouse gas emissions by 4.3 million tons--the equivalent of removing more than 630,000 vehicles from the road. Our farmers can meet the ethanol standard. For 2003, the ethanol industry is on pace to produce more than 2.7 billion gallons. The amount of ethanol required under the FRS begins at 2.6 billion gallons in 2005. Adequate ethanol supply is simply not an issue. Currently, 73 ethanol plants nationwide have the capacity to produce over 2.9 billion gallons annually. Further, there are ten ethanol plants under construction, which when completed will bring the total capacity to more than 3.3 billion gallons. California has been cited as a major problem area; however, all but two small refiners have already transitioned from MTBE into ethanol. California will use close to 700 million gallons of ethanol in 2003 after consuming roughly 100 million gallons last year. The California Energy Commission has concluded the transition to ethanol ``is progressing without any major problems.'' The U.S. Energy Information Administration found the transition went ``remarkably well.'' Individual States are banning the use of MTBE, but they cannot change the federal RFG oxygen content requirement. The collision of these two elements under current law will likely lead to higher costs. Under current law, California's required ethanol use in 2005 would be 895 million gallons. Under this amendment, fuel providers supplying California will be required to use far less ethanol in 2005--291 million gallons. And more importantly, they will benefit from the bill's credit banking and trading provisions. With the State MTBE ban set for January 2004, New York faces a similar situation. Under the status quo, fuel providers will be required to use 197 million gallons of ethanol in New York in 2005. However, if this amendment is enacted, refiners, blenders and importers would be required to use or purchase credits for even less--111 million gallons of ethanol in 2005. A study conducted by Mathpro, a prominent economic analysis firm, found that, compared to a situation where States are banning MTBE and the federal RFG oxygen content requirement is left in place, this amendment will lower the average gasoline production cost: by about two-tenths of a cent per gallon. In addition, this language provide safeguards. In the event that the RFS would severely harm the economy or the environment or would lead to potential supply and distribution problems, the RFS requirement could be reduced or eliminated. Ethanol is already blended from Alaska to Florida and from California to New York. Ethanol is already transported via barge, railcar, and oceangoing vessel to markets throughout the country. The U.S. Department of Energy studied the feasibility of a 5 billion gallon per year national ethanol market and found that ``no major infrastructure barriers exist'' and that needed investments on an amortized, per- gallon basis are ``modest'' and ``present no major obstacle.'' Both the U.S. Department of Agriculture and the Congressional Budget Office have recognized the benefit of the investment of the ethanol program on the overall health to the nation's economy. Recently, the USDA stated the ethanol program would decrease farm program payments by $3 billion per year. In its analysis of this amendment, CBO stated the provision would reduce direct spending by $2 billion during 2005-2013. The RFS agreement includes strong anti-backsliding provisions that prohibit refiners from producing gasoline that increases emissions once the oxygenate requirement is removed. A Governor can also petition EPA for a waiver of the ethanol requirement based on supporting documentation that the ethanol waiver will increase emissions that contribute to air pollution in any area of the state. The fuels agreement would benefit the environment in a number of ways: reduces tailpipe emissions of carbon monoxide, VOCs, and fine particulates, phases down MTBE over 4 years to address groundwater contamination, and since ethanol biodegrades quickly, it will not have the same problem, provides for one grade of summertime Federal RFG, which is more stringent, increases the benefits from the Federal RFG program on air toxic reductions, provides states in the Ozone Transport Region and enhanced opportunity to participate in the RFG program because of unique air quality problems, includes provisions that require EPA to conduct a study on the effects on public health, air quality, and water resources of increased use of potential MTBE substitutes, including ethanol. The use of ethanol-blended fuels also reduces so-called greenhouse gas emissions by 12-19 percent compared with conventional gasoline, according to Argonne National Laboratory. In fact, Argonne states ethanol use last year in the U.S. reduced the so-called greenhouse gas emissions by approximately 4.3 million tons, equivalent to removing the annual emissions of more than 636,000 cars. I also want to point out that the California Environmental Policy Council recently gave ethanol a clean bill of health and approved its use as a replacement for MTBE in California gasoline. A similar provision has already passed the House of Representatives this year. Virtually the same agreement passed the Senate in April 2002 with 69 votes. The fuels agreement is supported by the American Petroleum Institute; the Renewable Fuels Association; the Northeast States for Coordinated Air Use Management (NESCAUM); U.S. Chamber of Commerce; US Action; the Union of Concerned Scientists; the Environmental and Energy Studies Institute; the Governor's Ethanol Coalition; General Motors; the Governors of California and New York; and all of the major agricultural organizations in the United States. It is time to pass an ethanol bill, and I urge my colleagues to vote yes for America's farmers and this amendment.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise to speak on behalf of the ethanol amendment and to comment upon several of the remarks that were made by my colleagues. One of the items that was mentioned by the junior Senator from Arizona was the issue of subsidy. I think it is important we clarify the fact that, yes, ethanol has been subsidized over the years, but the Federal ethanol program was established following the OPEC oil embargoes of the 1970s. I am old enough to remember the long lines in 1973. At that stage of the game, we were only about 34 percent reliant on foreign oil. Of course, we all know today we are 58 percent reliant on foreign oil. So when the ethanol subsidy came in place and the program was established, we had a dangerous dependence on imported oil. That was one of the reasons they did it. As an alternative to petroleum, ethanol directly displaces imported oil and reduces tailpipe emissions while helping to bolster the domestic economy. Yet today, as I just said, we import more petroleum than ever before with rising crude oil prices and increasing international instability. Incentives for production and use of domestic ethanol are critical; that is, we can rely upon ethanol. We cannot rely upon imported oil. I think it is really important for all of us to recognize the fact that we have subsidized the oil industry substantially since the early 1900s. Some may not believe this, but the oil industry started out in the State of Ohio. It was called Standard Oil. Today we continue to subsidize the oil industry. In fact, according to the General Accounting Office, in an October 2000 report, the oil industry has received over $130 billion in tax incentives just in the past 30 years, dwarfing the roughly $11 billion provided for renewable fuels. Here is an interesting fact: During this time, the U.S. oil production has plummeted while annual U.S. ethanol production has grown by over 2 billion gallons. The point is, when we got into the issue of subsidizing ethanol, we were in very bad shape in terms of our reliance on foreign oil. Since that time, we have made substantial progress. During the same period of time, if you want to pit one industry over the other, we have seen our dependence on foreign oil grow despite the subsidy we have provided to the oil industry. There is also the suggestion that the ethanol mandate will largely benefit producers, not farmers. According to the U.S. Department of Agriculture, ethanol production raises the price of corn by 30 to 50 percent nationwide. This is an average of 5 to 10 cents additional premium in the areas that supply ethanol plants. Both of these numbers apply to all corn, not just corn sold to ethanol plants. Given a billion bushel corn crop, it adds between $3 and $5 billion to farm income every year. There is no question, ethanol is good for our farmers. Additionally, farmers own nearly 40 percent of the ethanol industry, and that is growing. These farmer owners realize value-added benefits from their investments. A chart was referenced by the Senator from California about the fact we are relying on Archer Daniels Midland for 46 percent of our ethanol. The fact is it is now down to 32 percent. The real growth in producing ethanol is from ethanol plants financed by the agricultural community in the United States. Finally, every major farm organization supports the fuels agreement, including, but not limited to, the following: American Farm Bureau Federation, the National Farmers Union, National Corn Growers Association, American Corn Growers, National Grain Sorghum Producers and American Soybean Association. Now, we have some concern about what impact does this industry have on the National Treasury, our general fund. Both the U.S. Department of Agriculture and the Congressional Budget Office have recognized the benefit of the investment in the ethanol program on the overall health of the Nation's economy. Recently, the USDA stated the ethanol program would decrease farm program payments by $3 billion per year. In its analysis of this amendment, CBO stated the provision would reduce direct spending by $2 billion during 2005 to 2013, certainly a partial offset to any subsidy given to the ethanol industry. Tripling the use of renewable fuels over the next decade will reduce our national trade deficit by $34 billion. Our trade deficit is at an all-time high. A lot of that trade deficit has to do with importing oil. It will increase the U.S. gross domestic product by $156 billion by 2012 and create more than 214,000 new jobs. It will expand household income by an additional $51.7 billion, and it will save taxpayers $2 billion annually in reduced government subsidies due to the creation of new markets for corn. We see a tremendous economic benefit to this ethanol industry in our country. That is why we are working so hard to have this amendment included in the Energy bill. In addition to its importance in becoming more self-reliant in terms of imported oil, also in terms of our economy, ethanol helps our environment. This bill provides strong antibacksliding provisions that prohibit refiners from producing gasoline that increases emissions. Once the oxygenate requirements are removed, a Governor can also petition EPA for a waiver of the ethanol requirement based on supporting documentation that the ethanol waiver will increase emissions that contribute to air pollution in an area of the State. This is something that was not mentioned by the junior Senator from Arizona in his presentation. The fact is, if ethanol is such a big environmental problem in the State of Arizona, the Governor of Arizona can petition that they be exempt from the mandate provision. That is included in our amendment. Last year, the ethanol industry also worked with EPA on the discovery and containment of the emissions from ethanol facilities. Consent decrees have been filed by the Justice Department in record time, and compliance by the ethanol industry has been cited as a model. The fuels agreement we are asking Members to support will benefit the environment in a number of ways. It reduces tailpipe emission of carbon monoxide, VOCs, and fine particulates, and phases down MTBE over 4 years to address our ground water contamination problem. It provides for one grade of summertime Federal RFG, which is more stringent. It increases the benefits from the Federal RFG program on air toxin reduction. It provides States in the ozone transport region enhanced opportunity to participate in the RFG program. And it includes provisions that require EPA to conduct a study of the effects on public health, air quality, and water resources of increased use of MTBEs. We have tried to cover everything in this amendment. The amendments to opt out of this program are unnecessary and unwarranted. The fuels agreement contained in this amendment that passed the Senate last year includes the establishment of a renewable fuel standard and will provide for greater refinery flexibility in the fuels marketplace than the existing Clean Air Act oxygenate requirement. It does not require that a single gallon of renewable fuels be used in any particular State or region; rather, the requirement is on the refiners. The RFS will allow much greater flexibility in the work of oxygenates, which should reduce the chances that localized supply disruption of gasoline or oxygenates will result in retail supply shortages. The additional flexibility provided by the RFS credit trading provisions will be a lower cost to refiners and, thus, consumers. The credit trading system will ensure that renewable fuels are used when and where most cost effective, which is why we have the credit and trading provisions. In California, we need to emphasize this. By the way, California is the area where the junior Senator from Arizona says they are going to have to rely upon getting their ethanol blend gasoline. Nearly all the refiners, the people who provide the gasoline to the State of Arizona, have switched from MTBE to ethanol in advance of the State's MTBE phaseout deadline of January 1. The results can only be described as seamless. There have been no ethanol shortages, transportation delays, or logistical problems associated with the increased use of ethanol in the State of California. In fact, according to an April 2003 California Energy Commission report, the transition to ethanol which began in January 2003 ``is progressing without any major problems.'' We need to emphasize that. This is not going to discombobulate delivery of the gasoline in California or New York or other places that people say it will cause a problem. The Energy Commission of California says it is progressing without any major problems. Today, approximately 65 percent of all California gasoline is blended with ethanol. It is estimated that 80 percent of the fuel will contain ethanol by this summer. They are moving ahead. Only 100 million gallons of ethanol were used in the State last year. California refiners will use between 600 and 700 million gallons of ethanol in 2003. There is not any reason to opt out because of the fact that blended gasoline will not be available to these States. This legislation is the result of a great deal of work and compromise on the part of many Members of the Senate working with a variety of organizations. I would like to remind my colleagues of the organizations that support this. It is unusual, in terms of the diverse groups represented. It is supported by the American Petroleum Institute. There has been some talk that the oil industry does not support it. The fact is, the American Petroleum Institute is supportive; of course, the Renewable Fuels Association; the Northeast States for Coordinated Air Use Management. Again, there is an area of the country that could be affected by it, and they like the compromise that has been put together. We are talking about environmental concerns. The American Lung Association is supportive of this ethanol amendment. The U.S. Chamber of Commerce is certainly concerned about the impact this would have on the economy of the United States. The Union of Concerned Scientists, again, a very forthright, outspoken environmental organization that, on many occasions, is very critical of legislation being promoted in the Senate, says: We like this agreement that has been entered into. The Environmental and Energy Studies Institute; the Governors' Ethanol Coalition; General Motors. Here is one that I think is really important for some of my colleagues who cannot make up their mind with regard to some of the amendments we are going to get to this ethanol amendment, and that is that the Governors of both California and New York support this compromise, and, of course, all the major agricultural organizations in the United States. I urge my colleagues to support this ethanol amendment and defeat some of the amendments that they are going to have an opportunity to vote on later on this afternoon.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise today in support of Senate amendment No. 539, the renewable fuels package to the Energy bill, and to oppose the opt-in and waiver amendments of the Senator from California. First, I will talk a little bit about the renewable fuels package and its benefit to the people of this country. The amendment contains language which was voted out of the EPW Committee, of which I am a member, earlier this year. The language establishes a nationwide renewable fuels standard of 5 billion gallons by 2012, repeals the oxygenate requirement for reformulated gasoline under the Clean Air Act, and also phases down the use of MTBE over 4 years. The language in this amendment has strong bipartisan support and is the result of long negotiation between the Renewable Fuels Association, the National Corn Growers Association, the Farm Bureau, the American Petroleum Institute, the Northeast States for Coordinated Air Use Management, and the American Lung Association. I am very familiar with the amount of work that went into drafting the compromise legislation. It was lengthy, it was open, and I was very pleased all of these various groups could get together and work out that big compromise, particularly the Senator from Ohio, who has Ashland-Marathon Oil and also represents the sixth largest State in corn production. I emphasize that the passage of the ethanol bill will protect our national security, help our economy, and protect our environment. The amendment the majority and minority leaders have introduced is a compromise that will triple the amount of domestically produced ethanol used in America. It is an essential tool to reducing our dependence on imported oil. I think we all know over 58 percent of the oil we use in this country is imported. Last year, we imported an average of 4,558,000 barrels per day from OPEC countries and 442,000 barrels a day from Iraq. Let me say that again. Last year, we imported nearly a half million barrels of oil from Iraq, and this dependence is not getting any better. The Energy Information Administration estimates our dependency on imported oil could grow to nearly 70 percent by the year 2020, and our President has stated repeatedly that energy security is a cornerstone for national security. I agree. It is crucial we become less dependent on foreign sources of oil and look to domestic sources to meet our energy needs. Ethanol is an excellent domestic source. It is clean burning. It is a homegrown renewable fuel that we can rely on for generations to come. The renewable fuels standard in this language will displace 1.6 billion barrels of oil. Ethanol is also good for our Nation's economy. Tripling the use of renewable fuels over the next decade will reduce our national trade deficit by more than $34 billion. By 2012, it will increase the U.S. gross domestic product by $156 billion. It will create 214,000 new jobs, expand household income by an additional $51.7 billion, and save taxpayers $3 billion annually in reduced Government subsidies due to the creation of new markets for corn. All of us who were concerned about the farm bill that passed last year are concerned about these subsidies. The passage of this ethanol amendment will help reduce the subsidy by $3 billion. The benefits for the farm economy are even more pronounced. As I mentioned, Ohio is the sixth in the Nation in terms of corn production and is among the highest in the Nation in terms of putting ethanol into our gas tanks. Forty percent of the gasoline in Ohio is ethanol blend. An increase in the use of ethanol across the Nation means an economic boost to thousands of farm families across my State. Currently, the ethanol production provides 192,000 jobs and $4.5 billion in net farm income nationwide. The passage of this amendment will increase the net farm income by nearly $6 billion annually, which is significant. Passage of this amendment will create $5.3 billion of new investment in renewable fuels production capacity. Phasing out MTBE on a national basis will be good for our fuel supply because refiners are under tremendous strain from having to make several different gasoline blends to meet various State clean air requirements. And no new refineries--I want to underscore--no new refineries in this country have been built in the last 25 years. The effects of the various State responses to the threat of MTBE contamination, including bans and phaseouts on different schedules, will add a significant burden to existing refineries. The MTBE phaseout provisions in this package will ensure that refiners will have less stress on their system and that gasoline will be more fungible nationwide. Expanding the use of ethanol will also protect our environment by reducing auto emissions, which will mean cleaner air and improved public health. Use of ethanol reduces emissions of carbon monoxide and hydrocarbons by 20 percent. Ethanol also reduces emissions of particulates, which are a real problem in this country today, by 40 percent. Use of ethanol RFG helped move Chicago into attainment of the Federal ozone standard, the only RFG area to see such an improvement. It was done in the Chicago area by using ethanol. In 2002, ethanol use in the United States reduced greenhouse gas emissions, something we have talked about a great deal on the Senate floor, by 4.3 million tons. Listen to this: The equivalent of removing more than 630,000 vehicles from the road. Think of that. Over the course of the debate on this amendment, several arguments against the renewable fuels package have been raised by our colleagues from California and New York, ranging from concerns that a renewable fuels standard cannot be met and will raise gasoline prices to claims that ethanol is bad for the environment and allegations that this package will benefit a select number of producers without helping our farmers. These arguments remind me of the adage that you cannot let the facts get in the way of a good argument. The concerns raised by opponents of the renewable fuels standard concerning the impact of RFS, the fuel supply, and gasoline prices, while understandable, I believe are completely unfounded. The fact is, our farmers will be able to meet the ethanol standard, and the combination of the MTBE phaseout and oxygenate waiver in this package will significantly improve our fuel supply system and lower costs for consumers. Our farmers can meet the ethanol standard. For 2003, the ethanol industry is on pace to produce more than 2.7 billion gallons. The amount of ethanol required under the RFS begins at 2.6 billion in 2005. Adequate ethanol supply is simply not an issue. Currently, 73 ethanol plants nationwide have the capacity to produce over 2.9 billion gallons annually. Further, there are 10 ethanol plants now under construction which when completed will bring the total capacity to more than 3.3 billion gallons. That is today. We are talking about 5 billion by the year 2012. There is no problem with achieving that goal. California has been cited as a major problem area. However, all but two small refineries have already transitioned from MTBE into ethanol. California will use close to 700 million gallons of ethanol in 2003 after consuming roughly 100 million gallons last year. Think of that: From 100 million last year to 700 million this year. The California Energy Commission has concluded the transition to ethanol ``is progressing without any major problems.'' The U.S. Energy Information Administration found the transition went ``remarkably well.'' The Energy Information Administration studied the RFS without accounting for the impact of banking and trading credits. This means they analyzed the effective cost of ethanol being blended at every single refinery and concluded the impact on refiner costs would be one- half of 1 percent per gallon. However, it was noted with credit trading ethanol will not need to be blended at every refinery. Forget about the fact we built into this the credit trading provision. This would reduce the impact because refiners will have the flexibility to use ethanol where it makes the most sense economically. Look around the country and they can trade, use it where it makes most sense economically. In the absence of Federal legislation, consumers will likely be subject to the costs of uncoordinated State action, individual States adding the MTBE but cannot change the Federal RFG oxygen content requirement. This bill does that; it gets rid of that requirement. The coalition of these two elements will likely lead to higher costs unless this bill is passed. For instance, California will ban MTBE in 2004 and the Federal RFG oxygenate requirement will be left in place if this does not pass. Therefore, California's required ethanol use in 2005 would be 895 million gallons. However, if the fuels provision of this amendment is enacted, fuel providers in California would be required to use far less ethanol in 2005, 291 million gallons, which could be even less with the bill's credit banking and trading provisions. There is a lot of flexibility for States to do what is in their best interest. With a State MTBE ban set for January 2004, New York faces a similar situation. Under the status quo, fuel providers would be required to use 197 million gallons of ethanol in New York in 2005. However, if the amendment is passed, refiners, blenders, and importers would be required to use or purchase credits for even less--100 million gallons of ethanol in 2005. A study concluded by Mathpro, a prominent economic analysis firm, found that compared with the situation where States are banning MTBE and the Federal RFG oxygen content requirement is left in place, the fuels provisions would decrease the average gasoline production cost by 2 cents per gallon. In addition, the fuels provisions provide safeguards in the event that RFS would severely harm the economy or the environment or would leave a potential supply and distribution problem, the RFS requirement could be reduced or eliminated. The status quo situation creates transportation and infrastructure problems. It is individual State bans, as in California and New York, which will require the transport of large amounts of ethanol to States far from where it is produced. In contrast, a critical element of this fuels package is a national RFS with, as I mentioned, a credit banking and trading program to ensure that renewable fuels will not have to be in every gallon of gasoline. This will allow refineries to use ethanol where it makes the most sense. Furthermore, ethanol is already blended from Alaska to Florida and from California to New York. Ethanol is already transported via barge, railcar, and ocean-going vessels from markets throughout the country. The U.S. Department of Energy studied the feasibility of a 5 billion gallon per year national market for ethanol and found no major infrastructure barriers exist and needed investments on an amortized per-gallon basis are modest and prevent no major obstacle. Let's talk about our farmers and how it helps them. Some of my colleagues have used the supplier ADM, Archer Daniels Midland, as an argument that the market is dangerously concentrated. Contrary to the charts presented by the Senator from California, with the current industry expansion, ADM, according to the information I have, is at 32 percent of total capacity. By comparison, farmer-owned ethanol plants have increased their percentage of total production capacity from 20 percent in 1999 to 38 percent today. I know in my own State when I met recently with our farm community, there is talk of our farmer community investing in two new plants that will be owned by the farmers in the State of Ohio. Furthermore, when ADM purchased another ethanol producer last year, the Department of Justice investigated the impact this would have on competition. They found that ``the acquisition did not warrant challenge in terms of its potential effect in the ethanol market.'' Contrary to claims of entry into the marketplace problems, the industry has grown by leaps and bounds over the past 3 years with 30 new facilities built since 2001. According to the Federal Trade Commission merger guidelines, entry time of less than 2 years is not considered a barrier to entry. The average entry time of the new ethanol facility is from 15 to 20 months. If the industry continues to add 8 to 10 facilities a year through 2012, we will have an additional 70 new facilities across this Nation to take care of any market control that anyone might want. Both the U.S. Department of Agriculture and the Congressional Budget Office have recognized the benefit of the investment of the ethanol program on the overall health of the Nation's economy. Recently, the USDA stated that the ethanol program would decrease farm program payments by $3 billion. In its analysis of this amendment, CBO stated the provision would reduce direct spending by $2 billion during 2005 to 2013. Let's talk about the impact on the economy. Tripling the use of renewable fuels over the next decade will also reduce our national trade deficit by more than $34 billion. A lot of our trade deficit has to do with importing oil. It will increase the U.S. gross domestic product by $156 billion by 2012. It will create more than 214,000 jobs. It will expand household income by an additional $51.7 billion. As I said, it will save taxpayers a lot of money because of reduced Government subsidies to the agricultural community. The benefits for the farming community are even more pronounced. An increase in the use of ethanol across the Nation means an economic boost to thousands of farm families across the States through this country. Currently, ethanol production provides 192,000 jobs and 4.5 billion in net farm income nationwide. Passage of this amendment will increase net farm income by $6 billion annually. As I said before, it will create 5.3 billion in new investment and renewable fuels production capacity. Now, the environment. It has been brought up that ethanol is bad for the environment, that there have been problems and red flags thrown about the use of ethanol. The Clean Air Act's reformulated gasoline program requires the same smog-reducing characteristics for gasoline whether blended with MTBE or ethanol. In other words, if you use ethanol you still must comply with the Act. The RFS agreement includes strong anti-backsliding provisions that prohibit refiners from producing gasoline that increases emissions once the oxygenate requirement is removed. A Governor can also petition EPA for a waiver of the ethanol requirement based on supporting documentation that the ethanol waiver will increase emissions that contribute to air pollution in any area of the State. So if there is a period during one year where there may be a problem, a Governor can ask for a waiver from one provision. The fuels agreement would benefit the environment in a number of ways: It reduces tailpipe emissions of carbon monoxide, VOCs, and fine particulates. It phases down MTBE over 4 years to address groundwater contamination, and since ethanol biodegrades quickly, it will not have the same problem. It provides for one grade of summertime Federal RFG, which is more stringent. It increases the benefits from the Federal RFG program on air toxic reductions. It provides States in the ozone transport region an enhanced opportunity to participate in the RFG program because of unique air quality problems. It includes provisions that require EPA to conduct a study on the effects on public health, air quality, and water resources of increased use of potential MTBE substitutes, including ethanol. The use of ethanol-blended fuels also reduces so-called greenhouse gas emissions by 12 to 19 percent compared with conventional gasoline, according to Argonne National Laboratory. In fact, Argonne states ethanol use last year in the U.S. reduced the so-called greenhouse gas emissions by approximately 4.3 million tons, equivalent to removing the annual emissions of more than 636,000 cars. Additionally, a new report from the Pew Center on Global Climate Change concluded that: During the next 15 years, replacement fuels offer the greatest promise for reducing transportation sector [greenhouse gas] emissions. Regarding benzene, there have been no conclusive studies showing ethanol-blended gasoline, leaked into an existing benzene plume would result in further benzene spread--blending ethanol usually equates to less benzene in gasoline. According to the Northeast States for Coordinated Air Use Management: We are satisfied to have reached an agreement that substantially broadens the ability of the U.S. EPA and our Nation's Governors to protect, and in some cases improve, air quality, and public health as we undertake major changes in the Nation's fuel supply. Also, after an environmental impact analysis, the California Environmental Policy Council gave ethanol a clean bill of health and approved its use as a replacement for MTBE in California gasoline. The fuels agreement is supported by the American Petroleum Institute; the Renewable Fuels Association; the Northeast States for Coordinated Air Use Management--NESCAUM; the American Lung Association; U.S. Chamber of Commerce; US Action; the Union of Concerned Scientists; the Environmental and Energy Studies Institute; the Governor's Ethanol Coalition. We have heard so much talk about letting Governors opt into this program. I want to make it clear the Governors' Ethanol Coalition is supporting this ethanol agreement and this amendment. General Motors and, as Senator Daschle mentioned earlier today in his response to the Senator from California, the Governors of California and New York also support this amendment, plus all of the major, of course, agricultural organizations in the United States. Again, I want to state for my colleagues particularly, there were many public and well-attended stakeholder meetings leading to this historic RFS fuels agreement. So many times there are issues that come before the Senate where we have groups that have differences of opinion. So often, these groups never get together and talk to each other; they talk past each other. As one who has been so involved in this whole issue of ethanol, beginning frankly when I was Governor of the State of Ohio, I was always concerned that somehow we just could not get the folks from the oil industry and the corn growers and other groups together to talk about how we could come up with something that would make sense, that would satisfy their respective needs, to underscore the importance of the fact that they had a symbiotic relationship with each other; if they got together, they could come up with something that would achieve their respective goals. That happened. It doesn't happen very often around here, but it did happen. I will never forget the press conference that was held in the LBJ Room. On that stage were representatives from a dozen or so organizations in this country, organizations that, if someone had said they would be on the stage together supporting this ethanol compromise, people would have said: No way. No way. It happened. So I am saying to my colleagues, this has been vetted. It has been discussed. We have a good compromise. Let's not diminish it with the amendments that are going to be submitted to this very important amendment, this amendment that is so important for our country. By the way, this bill has to get done this year. If we do not get this amendment done and deal with the oxygenate program and the MTBE, we are going to have chaos--chaos. If the people in California and New York think the gasoline price is high now, if this is not passed, it will go sky high. I am saying to everyone, please, let's support this amendment and vote against any of the amendments to this amendment that are being submitted by some of my colleagues. I yield the floor.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise today to express my disappointment that the Senate is not able to act on my amendment to the Defense Authorization bill: the NASA Workforce Flexibility Act. NASA and DoD have a long history of collaboration on numerous programs that are central to the success of each agency and the expertise NASA provides DoD is critical to our national security. For over a year, NASA has been discussing with us the impending crisis within their workforce. In March, my Subcommittee on Oversight of Government Management and the Federal Workforce held a hearing on this very issue. Of great concern to me is the fact that 15 percent of NASA's workforce currently is eligible to retire; that number climbs to 25 percent in just five short years. Also disconcerting is the fact that scientists and engineers over age 60 outnumber those under age 30 by nearly three to one. With so many experienced people eligible to retire in the next few years, who knows how much institutional knowledge and expertise is going to walk out the door? This creates substantial risk to NASA and our national security. During the war in Iraq, we saw some of the tremendous benefit our advanced technology provides to our troops. Many people may not be aware that NASA and DoD collaboration is central to providing for our national security. We have many examples in my own State of Ohio. As the former Mayor of Cleveland and Governor of Ohio, I have seen firsthand the collaboration between the NASA Glenn Research Center in Cleveland and Wright- Patterson Air Force Base in Dayton. In Ohio alone, NASA and DoD work together on projects that include: Joint fuel cell research to be used in space applications, Army use of Glenn Research Center expertise in testing helicopter rotor engines, and Navy use of Glenn Research Center expertise in missile propulsion program. These joint efforts are not limited to Ohio; this collaboration exists nationwide. At other Centers throughout the Nation DoD depends on NASA facilities, such as its wind tunnels, for development and testing of all military aircraft, including the Joint Strike Fighter; DoD relies on NASA for technical assistance in investigating and correcting DoD flight problems; the National Aerospace Initiative, formed at the direction of the Presidential Commission on the Future of Aerospace, is a joint DoD-NASA project to develop the future of aerospace technology that is critical to national defense. The American Helicopter Society awarded the 2002 Howard Hughes Award to NASA's Langley Research Center. Established in 1977, the Howard Hughes award is given in recognition of accomplishments in the helicopter industry. NASA partnered with the Army, and working in conjunction with academia and the private sector, developed what it calls ``Tilt Rotor Aeroacoustics Code.'' This is the technology to reduce the noise generated by helicopter rotors. My amendment addresses NASA's current and future workforce needs. It would direct NASA to work with OPM and its employees to develop an agency-wide workforce plan. In the highly competitive science and engineering fields, my amendment would authorize NASA to offer enhanced recruitment and relocation bonuses to attract and retain top talent. It also would allow NASA to offer a mid-career individual in the private sector a vacation package competitive with the private sector and comparable to career federal employees. In addition, my amendment would establish a competitive scholarship program for students in return for employment at NASA. Mr. President, this body took remarkable action last year when it included in the creation of the Department of Homeland Security the first major governmentwide reforms to the civil service in 25 years, since 1978. That was a good first step, but we have much more work to do. I am concerned that human capital remains on GAO's high-risk list for 2003 throughout the federal government. In such a critical area as national security, it is clear that the Department of Defense needs NASA. And NASA needs workforce reform.

Mr. VOINOVICH. Mr. President, in this important debate on the Fiscal Year 2004 National Defense Authorization Act, I am deeply disappointed that the Parliamentarian has ruled irrelevant the amendment which Senator Collins and I planned to offer. Our amendment would establish the National Security Personnel System for the more than 700,000 civilian employees of the Department of Defense. The impact of the parliamentarian's ruling is that the Senate will be silent on one of the most substantial modifications to civil service law in the last 25 years. This is most unfortunate. There is absolutely no doubt in my mind that this amendment should be considered by the Senate--if for no other reason than the House of Representatives has already acted on a similar measure. Both the House Government Reform Committee and the House Armed Services Committee approved a version of the National Security Personnel System, and it will be included in the Defense Authorization Act that the House sends to Conference. I remind my colleagues that a new human resources management system for the Department of Defense will emerge from Conference. It will be one in which the Senate as a whole has had no voice, and the first time this chamber votes on it will be during the final passage of the Defense Authorization Act later this year. This is regrettable. I have worked on Federal Government personnel issues generally, and Department of Defense personnel issues specifically, since I arrived in the Senate 4 years ago. In March 2001, the Subcommittee on Oversight of Government Management held a hearing entitled, ``National Security Implications of the Human Capital Crisis.'' This hearing is just one of 13 that have been held by my Subcommittee on the Federal Government's human capital challenges. Among our panel of distinguished witnesses that day was former Defense Secretary James Schlesinger, a member of the U.S. Commission on National Security in the 21st Century. Secretary Schlesinger discussed a comprehensive evaluation on national security strategy and structure that was undertaken by the Commission. Regarding human capital, the Commission's final report concluded: As it enters the 21st century, the United States finds itself on the brink of an unprecedented crisis of competence in government. The maintenance of American power in the world depends on the quality of U.S. government personnel, civil and military, at all levels. We must take immediate action in the personnel area to ensure that the United States can meet future challenges. Secretary Schlesinger added further: . . . it is the Commission's view that fixing the personnel problem is a precondition for fixing virtually everything else that needs repair in the institutional edifice of U.S. national security policy. Just last week, my Subcommittee held a field hearing in Ohio entitled, ``An Overlooked Asset: the Defense Civilian Workforce.'' During this hearing, I heard testimony on the National Security Personnel System from Dr. David Chu, the Under Secretary of Defense for Personnel and Readiness, and the head of the U.S. General Accounting Office, Comptroller General David Walker. Dr. Chu testified that, ``the rigidities of the title 5 system of personnel management make it difficult for our civilians to support the military.'' He stated that the Defense Department's top three priorities were hiring flexibilities, reform of the compensation system, and bargaining at the national level with the Department's unions. Mr. Walker stated that ``We strongly support the concept of modernizing Federal human capital policies within DOD and the Federal Government at large,'' and ``the Federal personnel system is clearly broken in critical respects.'' However, he also noted that the ``senior civilian and military leaders have devoted `far less' attention to civilian personnel challenges than the challenges of maintaining an effective military,'' and that the Department needs to further develop and integrate its departmentwide human capital strategies. But even before these hearings in which the national security establishment's personnel needs were outlined so clearly, I have been working to improve the management of the Defense civilian workforce. Many of the acute challenges confronting the Defense civilian workforce were brought to my attention several years ago through conversations with senior managers, both military and civilian, at Wright Patterson Air Force Base in Dayton, Ohio. When the Senate was considering the 2001 National Defense Authorization Act in June 2000, Senator DeWine and I offered an amendment that would provide the Defense Department the ability to reshape its workforce through the use of early retirement and voluntary separation incentives. Securing passage of that relatively simple amendment was not easy. I worked closely with the distinguished Chairman of the Armed Services Committee, Senator John Warner, the distinguished Ranking Member of the Armed Services Committee, Senator Carl Levin, and my distinguished colleague on the Armed Services Committee, Senator James Inhofe, to ensure the adoption of that modest reform. I wish the Senate had built on this earlier reform and the broader reforms that were included in the Homeland Security Act last year. I would like to outline briefly what should be included in the National Security Personnel System. First, the system should feature the broad flexibilities that were provided to the Department of Homeland Security. I believe that the labor-management collaboration process that was mandated for that new Department, and which would be replicated for the Defense Department, is proving effective in ensuring employee participation in the establishment of a new human resources system. The Defense Department should use its flexibility to design and implement a modern pay-banding and pay-for-performance system which emphasizes accountability, as opposed to the current system in which seniority and pay increases are based primarily on the passage of time. In addition, the new National Security Personnel System must include substantial hiring flexibility, broad workforce reshaping authorities, and must grant the Department of Defense the ability to bargain with its unions at the national level. The new system also should provide the Secretary of Defense additional flexibility in hiring personnel outside of the United States on short notice, as well as additional benefits for certain Defense personnel serving abroad. I support retaining the Director of the Office of Personnel Management as a strategic partner with the Secretary of Defense in the establishment of this new personnel system, and I do not believe that the Secretary should have ``sole, unreviewable'' authority over this new system. The provisions I just described will give the Defense Department the authority to create a modern personnel system to meet the challenges of the 21st century. Despite the documented need for further significant reform of the civil service, and the Defense Department's concerted and diligent efforts in this area that culminated in the proposed National Security Personnel System, the Senate apparently will take no action. Mr. President, in this regard, the United States Senate has abrogated its responsibility to the civilian employees of the Department of Defense.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise today to introduce the Highway Funding Equity Act of 2003. I am joined on a bipartisan basis by Senators Levin, Stabenow, Bayh, Lugar, Hutchison, Cornyn, Warner, Chambliss, Lott, Lindsey Graham, Bill Nelson, Alexander, DeWine, Dole, Cochran, Landrieu, Miller, Hollings, Breaux, and Bunning. The Transportation Equity Act for the 21st century, TEA-21, authorized more than $218 billion for transportation programs and will expire in September 2003. TEA-21 requires certain States, known as Donor states, to transfer to other States a percentage of the revenue from Federal highway user fees. Several of these donor States transfer more than 10 percent of every Federal highway user fee dollar to other States. As a result, donor States receive a significantly lower rate- of-return on their transportation tax dollar being sent to Washington, Currently, over 25 States, including my State of Ohio, contribute more money to the Highway Trust Fund than they receive back. My State of Ohio has the Nation's 10th largest highway network, the 5th highest volume of traffic, the 4th largest interstate highway network, and the 2nd largest inventory of bridges in the country. Ohio is a major manufacturing State and is within 600 miles of 50 percent of the population of North America. The interstate highways throughout Ohio and all the donor States provide a vital link to suppliers, manufacturers, distributors, and consumers. Maintaining our Nation's highway infrastructure is essential to a robust economy and increasing Ohio's share of Federal highway dollars has been a longtime battle of mine. One of my goals when I became governor 12 years ago was to increase our rate-of-return from 79 percent to 87 percent in the Intermodal Surface Transportation Efficiency Act of 1991, ISTEA. Then, in 1998, as Chairman of the National Governors Association, I lobbied Congress to increase the minimum rate-of-return to 90.5 percent. The goal of the Highway Funding Equity Act of 2003 is to increase the minimum guaranteed rate-of-return to 95 percent. The Highway Funding Equity Act of 2003 has two components. First, the bill would increase the minimum guaranteed rate-of-return in TEA-21 from 90.5 percent of a State's share of contributions to the Highway Trust Fund to 95 percent. The Minimum Guarantee under TEA-21 includes all major Core highway programs: Interstate Maintenance, National Highway System, Bridge, Surface Transportation Program, Congestion Mitigation and Air Quality, Metropolitan Planning, Recreational Trails, and any funds provided by the Minimum Guarantee itself. Second, the bill uses the table of percentages now in Section 105 of Title 23 to guarantee States with a population density of less the 50 people per square mile a minimum rate-of-return that may exceed 95 percent of that State's share of Highway Account contributions. This provision is intended to ensure that every State is able to provide the quality of road systems needed for national mobility, economic prosperity, and national defense. Under the 2000 Census, this provision would benefit 15 states: Alaska, Arizona, Colorado, Idaho, Kansas, Maine, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, and Wyoming. Increasing donor States' rate of return to 95 percent will send more than $60 million back to Ohio for road improvements we sorely need. The interstate system was built in the 1950s to serve the demands and traffic of the 1980s. Today, Ohio's infrastructure is functionally obsolete. Nearly every central urban interstate in Ohio is over capacity and plagued with accidents and congestion. Ohio's critical roadways are unable to meet today's traffic demands, much less future traffic which is expected to grow nearly 70 percent in the next 20 years. Like all the donor States, we need these funds in Ohio. States can no longer afford to support others that are already self- sufficient. Each State has its own needs that far outweigh total available funding, especially in light of the so-called ``mega projects'' coming due in the next decade. For example, the Brent Spence Bridge that carries Interstates 71 and 75 across the Ohio River into Kentucky is in need of replacement within the next 10 years at a cost of about $500 million. With the inclusion of the approach work, the total project could cost close to $1 billion. The goal of this legislation is to improve the rate-of-return on donor states' dollars to guarantee that federal highway program funding is more equitable for all states. Donor States seek only their fair share, and I look forward to working with my colleagues to improve highway funding equity during the upcoming surface transportation reauthorization process. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I rise today to introduce the Highway Funding Equity Act of 2003. I am joined on a bipartisan basis by Senators Levin, Stabenow, Bayh, Lugar, Hutchison, Cornyn, Warner, Chambliss, Lott, Lindsey Graham, Bill Nelson, Alexander, DeWine, Dole, Cochran, Landrieu, Miller, Hollings, Breaux, and Bunning. The Transportation Equity Act for the 21st century, TEA-21, authorized more than $218 billion for transportation programs and will expire in September 2003. TEA-21 requires certain States, known as Donor states, to transfer to other States a percentage of the revenue from Federal highway user fees. Several of these donor States transfer more than 10 percent of every Federal highway user fee dollar to other States. As a result, donor States receive a significantly lower rate- of-return on their transportation tax dollar being sent to Washington, Currently, over 25 States, including my State of Ohio, contribute more money to the Highway Trust Fund than they receive back. My State of Ohio has the Nation's 10th largest highway network, the 5th highest volume of traffic, the 4th largest interstate highway network, and the 2nd largest inventory of bridges in the country. Ohio is a major manufacturing State and is within 600 miles of 50 percent of the population of North America. The interstate highways throughout Ohio and all the donor States provide a vital link to suppliers, manufacturers, distributors, and consumers. Maintaining our Nation's highway infrastructure is essential to a robust economy and increasing Ohio's share of Federal highway dollars has been a longtime battle of mine. One of my goals when I became governor 12 years ago was to increase our rate-of-return from 79 percent to 87 percent in the Intermodal Surface Transportation Efficiency Act of 1991, ISTEA. Then, in 1998, as Chairman of the National Governors Association, I lobbied Congress to increase the minimum rate-of-return to 90.5 percent. The goal of the Highway Funding Equity Act of 2003 is to increase the minimum guaranteed rate-of-return to 95 percent. The Highway Funding Equity Act of 2003 has two components. First, the bill would increase the minimum guaranteed rate-of-return in TEA-21 from 90.5 percent of a State's share of contributions to the Highway Trust Fund to 95 percent. The Minimum Guarantee under TEA-21 includes all major Core highway programs: Interstate Maintenance, National Highway System, Bridge, Surface Transportation Program, Congestion Mitigation and Air Quality, Metropolitan Planning, Recreational Trails, and any funds provided by the Minimum Guarantee itself. Second, the bill uses the table of percentages now in Section 105 of Title 23 to guarantee States with a population density of less the 50 people per square mile a minimum rate-of-return that may exceed 95 percent of that State's share of Highway Account contributions. This provision is intended to ensure that every State is able to provide the quality of road systems needed for national mobility, economic prosperity, and national defense. Under the 2000 Census, this provision would benefit 15 states: Alaska, Arizona, Colorado, Idaho, Kansas, Maine, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, and Wyoming. Increasing donor States' rate of return to 95 percent will send more than $60 million back to Ohio for road improvements we sorely need. The interstate system was built in the 1950s to serve the demands and traffic of the 1980s. Today, Ohio's infrastructure is functionally obsolete. Nearly every central urban interstate in Ohio is over capacity and plagued with accidents and congestion. Ohio's critical roadways are unable to meet today's traffic demands, much less future traffic which is expected to grow nearly 70 percent in the next 20 years. Like all the donor States, we need these funds in Ohio. States can no longer afford to support others that are already self- sufficient. Each State has its own needs that far outweigh total available funding, especially in light of the so-called ``mega projects'' coming due in the next decade. For example, the Brent Spence Bridge that carries Interstates 71 and 75 across the Ohio River into Kentucky is in need of replacement within the next 10 years at a cost of about $500 million. With the inclusion of the approach work, the total project could cost close to $1 billion. The goal of this legislation is to improve the rate-of-return on donor states' dollars to guarantee that federal highway program funding is more equitable for all states. Donor States seek only their fair share, and I look forward to working with my colleagues to improve highway funding equity during the upcoming surface transportation reauthorization process. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. VOINOVICH

Mr. VOINOVICH. I have an amendment that has been modified. The modification has been agreed to. I send my amendment, with the modification, to the desk.

Mr. VOINOVICH. It changes the ratio of the membership and increases more representation by minority. It takes off the head of the IRS, and it is more evenly balanced and meets the problems that we talked about last night.

Mr. VOINOVICH. Mr. President, I ask that the amendment, as modified, be accepted by voice vote.

Mr. VOINOVICH

Mr. VOINOVICH. I will soon ask for the yeas and nays on my amendment. Second of all, the ranking member of the Finance Committee and I sat in on meetings together as part of the centrist coalition. The thing that impressed me, when we met with Alan Greenspan, was the fact--and he has said this publicly since the time we had our private meeting with him--that the most significant thing we could do to aid the economy was to eliminate double taxation, eliminate the tax on dividends, although it was a short-term benefit, he said, but something systemic needs to be done to better the Tax Code. You can argue the dividend issue any way you want, but what I usually do is ask the people back in Ohio how they feel about it. No. 1, many of our businesses that have defined pension plans, because their stock is down, are going to be asked for an enormous amount of money to be deposited in those fine pension plans, which they don't have. Other corporations have told me that if their stock price gets a bump, they will issue stock and they will get cash that way so they won't have to borrow it the way they are now borrowing the money. In addition, there are many people, such as my son George, who have retirement accounts, who have seen those retirement accounts go down in value. There are millions of Americans in that same position. Other Americans, who are in a better position, have seen a vast amount of wealth disappear in the stock market. Many of them say to me that eliminating the tax on dividends will give a bump to the market. Because the market will get a bump up, they are going to feel a little better about the future and, as a result of that, will be more likely to spend some money. So you can argue this any way you want. I have other people who say to me, if you do this, it is going to impact on municipal bonds, affect real estate trusts, and eliminate or have an impact on the low-income housing tax credit. So that is the issue we are talking about here. We will talk about that today and tomorrow. What we really need to do is put all of this on a table and not do it as part of this stimulus package, and have tax reform, so we can start to look at the wealth factor and look at whether it makes a difference in terms of our economy. We have tax loopholes and tax expenditures that are really no longer relevant. We can take that money and put it into something elsewhere. We can reduce taxes and provide something that would be really helpful to the economy. But we don't do that around here. We take things from day to day, week to week, year to year. I say to the ranking member of the Finance Committee, my distinguished colleague, if the commission membership is not what it ought to be, I am glad to rewrite it so that it is entirely impartial, so it will get the job done. I want to get the job done. I would like to have a commission such as they had in 1983 when we looked at Social Security. They did a good job. I think we ought to do that again. I think a lot of people agree on that. But unless we get at it now, it will not happen, we will let it go, and it will be something else next year.

Mr. VOINOVICH. I am happy to yield my distinguished colleague 3 or 4 minutes prior to submitting my amendment.

Mr. VOINOVICH. Thank you, Madam President. Amendment No. 592 Madam President, I send an amendment to the desk.

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

Mr. VOINOVICH. Madam President, I rise today to commend Chairman Grassley for the outstanding job he has done to bring this reconciliation bill to the floor and to focus attention on our urgent need to address fundamental tax reform. When the Senate enacted the budget resolution for fiscal year 2004, it presented Chairman Grassley with a very difficult challenge--to report to the Senate meaningful, stimulative tax deductions while keeping the overall growth in the deficit below $350 billion. Many observers, in and out of Congress, considered that task impossible. But I believe the Finance Committee has accomplished that goal. The reconciliation bill before the Senate today contains $430 billion in tax cuts and $80 billion in offsets, for a net cost of $350 billion. Equally important, both the tax cuts and the offsets are real. The Joint Committee on Taxation, a highly respected, neutral scorekeeper, has analyzed this bill and certifies the revenue effects of both the tax cuts and the offsets. Many people claim this economic growth package is too small and they would like to see larger tax relief for small businesses and working families. So would I, but only if we can offset the additional cost. And some people claim the tax cuts are too large and will limit funds available to low-income support programs. I sympathize with their concern, but we must recognize that the most effective low-income support program is a job. And we can only provide jobs by jump-starting the economy. Too many of our fellow Americans are out of work, too many of our fellow Americans are worried about whether they are going to have a job. Small business owners and investors in Ohio have told me this is a good plan that will help them create jobs in my State. We accelerate the reduction of tax rates, we end the marriage penalty, we accelerate small business depreciation, we increase the size of the child tax credit, and we begin to eliminate the double taxation of dividends. Another area of contention is the nature of the offsets. It is in this area, more than any other, that Senator Grassley has been unjustly criticized. He was asked to produce offsets that would limit the total cost of tax reform to $350 billion, and he has done it. Members of Congress who oppose some or all of the offsets because of their impact on special interest groups have had ample time to present their own alternatives and failed to do so. It is easy to criticize, but it is difficult to legislate. Let us acknowledge that regardless of our individual opinions regarding the offset package Chairman Grassley and a majority of his committee have chosen to legislate. However, the current disagreements over the offset package inevitably begs the question: Why is the Tax Code so complicated? How did we get into this situation? And how can we return to a simple, fair, and honest Tax Code? What is stimulative to the economy? What isn't stimulative? What tax expenditures came in several years ago which are no longer relevant? All these issues need to be discussed. That is why I am offering this amendment. Many of my colleagues have said: We need fundamental tax reform, but now is not the time. I have heard that over and over. I have heard that for years: Tax reform but now is not the time. I think the debate over offsets demonstrates this is precisely the time to abandon piecemeal tinkering and embrace fundamental tax reform. This Congress--not the next or the one after that--should seize the opportunity to focus national attention on the need for comprehensive tax reform in the United States of America. I am proposing the establishment of a commission to examine the Tax Code from top to bottom. And I recommend fundamental restructuring. The goal of any Government revenue program should be to raise sufficient funds to operate public programs with the minimum disruption of the economy. Tax structures should be simple, fair, effective, and honest. Our current Tax Code achieves none--none--of these objectives. Proof of the complexity of our current Tax Code is demonstrated by a few, simple observations: The Internal Revenue Code consists of approximately 1,395,000 words. There are 693 sections of the Internal Revenue Code that are applicable to individual taxpayers; 1,501 sections applicable to businesses; 445 sections applicable to tax-exempt organizations, employee plans, and governments. As of June 2000, the Treasury Department had issued almost 20,000 pages of regulations containing over 8 million words. The current 1040A short form has doubled the number of lines that once appeared on the 1945 version of the standard 1040 tax return. It has an 85-page instruction booklet which now tops the long form 1040 instructions published just 7 years ago. This is the short form, 85 pages; and it is more than the instructions that we had 7 years ago on the long form. The IRS prints at least 1,101 publications, forms, and instructions, containing 16,339 pages, up from 943 documents with 12,933 pages. That is 2 years ago. Over 56 percent of the taxpayers in this country need professional people to help them prepare their tax return. Americans toil for about--listen to this--6.4 billion hours on tax forms and recordkeeping, accounting for 84 percent of the Federal Government's paperwork burden in this country. And that is associated with the Internal Revenue Code. This only includes financial recordkeeping and tax preparation, and these estimates may be too low since they ignore the countless hours spent on tax minimization strategies. Everybody is working to figure out a way not to pay taxes. Included among the items of needless complexity today are the following: An alternative minimum tax that treats items such as dependent exemptions as tax shelters, thereby threatening to tax millions who never were meant to be affected; phaseout after phaseout of such allowances as itemized deductions, earned-income tax credits, personal exemptions, eligibility for IRAs, eligibility for other savings incentives, eligibility for educational tax breaks; and each of these is like an additional minimum tax system all of itself, forcing taxpayers to file multiple schedules for each form. I have a very simple return. I do not have that much. But the schedules that are connected with my return are unbelievable. I am sure my colleagues who think about it think about all the time they spend on preparing their own individual tax returns. Also, included among the many items of needless complexity today are: Pension and saving incentives that add administrative costs and possibly even reduce net savings by providing different rules for withdrawals, penalties, Social Security tax treatment, allowable amounts of exclusion or deduction, and so on; a tax treatment of dependent children that needlessly causes millions of unnecessary tax returns to be filed; a capital gains law with at least seven different tax rates, and that requires taxpayers to fill out pages of forms even when they have only a few dollars of capital gains; complicated rules for charitable deductions and charities, including multiple limits on giving as a percent of income, and a perverse excise tax on foundations that actually discourages charitable giving; child credits and dependent exemptions that could easily be folded into one; and unnecessarily strict estimated tax rules that pick up very little extra revenue for all the complexity they introduce. It is unbelievable. One of the most disturbing aspects of this current Tax Code is the almost continual growth of so-called tax expenditures. Essentially, they increase the level of tax rates far beyond what is necessary, and then mitigate the impact with incentives to special interest groups. It is the Government equivalent of jacking up prices in the grocery store, and then accepting coupons at the checkout counter. Private sector investment becomes distorted by tax provisions encouraging both individuals and corporations to allocate their funds to minimize their taxes rather than to maximize their income. Ultimately, most people end up paying more than they should for both their groceries and their taxes. According to a recent article in the Washington Post, many leading tax reform advocates believe the only solution for this dilemma is to propose new and different tax cuts every year. Although I sympathize with their goal, it will not provide the most effective reforms that meet the ultimate test the American people demand: a Tax Code that is fair, simple, and honest. Tax reform, like surgery, is best done quickly. Do you hear that? Tax reform, like surgery, is best done quickly and infrequently rather than slowly and often. That is why I am proposing a commission to propose comprehensive reform that can be enacted at once, implemented quickly, and establish a fair, simple, honest, and effective revenue structure for the next generation. This commission will examine all aspects of the Federal revenues, including individual taxes, corporate taxes, capital gains taxes, excise taxes, user fees, taxes on dividends, tax deductions, tax credits, and tax complexity. The commission will recommend fundamental reforms that can be enacted in a single reform package and implemented quickly. It will allow Congress and the Nation to focus on tax reform, devise a simple, fair, honest solution, and move on to other priorities. The current debate clearly demonstrates the system is broken and now--not next year, or the year after--now is the time to fix the problem. Madam President, I yield the floor.

Mr. VOINOVICH. Madam President, I ask for the yeas and nays on my amendment.

Mr. VOINOVICH

Mr. VOINOVICH. Mr. President, I thank the Senator from New Mexico. I respectfully disagree with some of the information that was provided to us by the distinguished Senator from California. First, I would like to say this second-degree amendment would create more balkanization of the fuel supply. We need a national fuel policy. This amendment, in my opinion, would further constrain the fuel supply in this country. The bipartisan agreement that was negotiated last year between various organizations was not done behind closed doors. It was relatively transparent. In spite of some of the comments made about the environmental threat of ethanol, that agreement was supported by the American Lung Association. I am sure if they had any concern that this was going to harm the environment, they certainly would not have signed on to the agreement that was entered into last year. The fuels agreement passed by the Senate last year includes the establishment of a renewable fuels standard. The RFS would provide for greater refinery flexibility in the fuels marketplace and the existing clean air oxygenate requirement, particularly as MTBE is phased out of gasoline. It does not require that a single gallon of renewable fuels be used in any particular State or region. Rather, the requirement is on refiners. The RFS will allow much greater flexibility in the use of oxygenates, which should reduce the chances that localized supply disruptions of gasoline or oxygenates will result in retail supply shortages and price spikes. The additional flexibility provided by the RFS credit trading provisions in the House and Senate bills would result in much lower costs to refiners and thus to consumers. The credit trading system will ensure that renewable fuels are used when and where it is most cost effective to do so. In California, according to the information I have, nearly all of the refiners have voluntarily switched from MTBE to ethanol in advance of the State's MTBE phaseout deadline of January 1, 2004. The results can only be described as seamless. There have been no ethanol shortages, transportation delays, or logistical problems associated with the increased use of ethanol in the State. In fact, according to an April 2003 California Energy Commission report, the transition to ethanol, which began in January of 2003, is progressing without any major problems. Today, approximately 65 percent of all California gasoline is blended with ethanol, and it is estimated that 80 percent of the fuel will contain ethanol by the summer. As a result, while only about 100 million gallons of ethanol were used in the State last year, California refiners will use between 600 and 700 million gallons in 2003. Thus, efforts to carve out California from the RFS, while unjustified, are also completely unnecessary. I would also like to make the point that any State may petition EPA for a waiver of the renewable fuels requirement for any year. If EPA, in consultation with the Departments of Energy and Agriculture, finds that there would be substantial harm to the economy or environment of a State, region, or the United States, or that there would be an inadequate domestic supply for distribution capacity to meet the requirement, EPA may reduce the volume of renewable fuel required in whole or in part. Such a waiver would be good for 1 year but could be renewed. Under this circumstance, the overall renewable fuel volume requirement would be reduced nationwide. In addition, I would like to point out that the use of ethanol significantly reduces the tailpipe emissions of carbon monoxide, an ozone precursor, and VOCs and fine particulates that pose a health threat to children, seniors, and those with respiratory ailments. Perhaps that is one of the reasons the American Lung Association is supporting this compromise. Importantly, renewable fuels help to reduce greenhouse gases emitted from vehicles, including carbon dioxide, methane, and other gases that contribute to global warming--another answer to the problem of carbons. The fuels agreement included protects against any backsliding on air quality. First, the agreement tightens the toxic requirements of reformulated gasoline by moving the baseline that refiners must meet to 1999-2000. Secondly, refiners have agreed to meet southern-tier RFG standards for VOC emissions. Other adjustments to the existing mobile source air toxics rule will ensure additional environmental protections. The agreement allows States and the Ozone Transport Assessment Group--I have been dealing with that group for many years and have had some large disagreements with them, but the agreement allows them to opt into RFG whether the State is in attainment for ozone or not. Finally, the bill allows EPA, as I mentioned before, to waive a State's volatility to tolerance for ethanol-blended fuels, if necessary, for air quality. In other words, if there is a problem with ethanol in a period of time, the State can waive out of the requirement during that period of time. I could say many other things, but I think most of the issues raised can be answered very easily. The last thing I would like to point out deals with the issue of cost. The Department of Agriculture has concluded that the ethanol tax incentive program actually--actually-- saves the Government money by reducing farm program costs and stimulating rural economies. This is a big deal for rural economies in the United States of America. I will also say that there was some statement about Archer Daniels Midland being the big supplier. In my State, the farmers and cooperatives are in the process of going forward with building processing plants for ethanol. You are going to have a lot more people in the marketplace when this legislation passes. The USDA has stated that the net impact of the tax incentive on farm programs is a net savings of more than $3 billion annually. I point out, just as I mentioned before, there are 11 new ethanol facilities or under construction in the United States. Twenty or more ethanol facilities are in the planning stages. Last but not least, the concern that has been raised regarding the Federal ethanol tax incentive's impact on the highway trust fund has been addressed in legislation introduced by Senators Grassley and Baucus. It is supported by a broad coalition of transportation, local government, business, and agricultural people. The proposal returns full funding to the highway trust fund while restructuring and preserving the Federal tax incentives for ethanol. So on all of these points, this amendment that we have offered, that is being sponsored by the majority leader and the minority leader, and so many Members of the Senate, is good for America, is good for our economy, is good for our security, and is good for the environment. And the amendment from the Senator from California, I think, would certainly make it less effective, if it were agreed to by the Senate. I urge its defeat.

Mr. VOINOVICH. Mr. President, I thank the Senator from New Mexico for this opportunity to speak in favor of the ethanol amendment, No. 539. This amendment has been offered by the distinguished majority leader and the distinguished minority leader. As I have often stated, it is about time this Nation had an energy policy. I have said that, I think, 3 years in a row. Last year, we worked very hard to come up with what we considered to be a decent package. Unfortunately, that package did not come out of conference committee and we are here today, this week, to see if we cannot resurrect part of that and enhance it with some of the improvements that were done in the Energy Committee under the chairmanship of Senator Domenici. When the President released his national energy policy in May of 2001, he noted that America was too dependent upon foreign oil; that we needed to increase our use of renewable fuels, such as ethanol and biodiesel; and that we needed to protect the environment while producing the energy that drives our economy. President Bush was right about that 2 years ago and, quite frankly, the urgency is greater today than it was then. The United States has a responsibility to develop a policy that harmonizes the needs of our economy and our environment. These are not competing needs and too often are looked upon as if they are. A sustainable environment is critical to a strong economy. A sustainable economy is critical to providing the funding necessary to improve our environment. We need a policy that broadens our base of energy resources to create stability, guarantee reasonable prices, and protect America's security. It has to be a policy that will keep energy affordable. Finally, it has to be a policy that won't cripple the engines of commerce that fund the research that will yield environmental protection technologies for the future. I believe that increasing our use of alternative and renewable fuels, such as ethanol and biodiesel, is a key element in our effort to construct a viable energy policy. During the last Congress, I worked with a number of my colleagues, including Senators Hagel, Daschle, Jeffords, Inhofe, Grassley, Bond, and Bingaman, to develop an ethanol package that would not only increase the use of renewable fuels in America but would provide other tangible benefits for the American people. That package was included in the comprehensive energy bill passed by the Senate in an overwhelming bipartisan vote. This year, thanks to the leadership of Chairman Inhofe, we were able to vote language out of the Environment and Public Works Committee that reflects that bipartisan agreement we reached last year on a bipartisan basis. Thanks to the leadership of our distinguished majority and minority leaders, as well as a large number of Senators, we again have the opportunity to pass legislation that contains a renewable fuels package. Mr. President, passage of an ethanol bill will protect our national security, economy, and our environment. Amendment No. 539 contains the language in S. 791, the Renewable Fuels Act of 2003, which was introduced and shepherded through the EPW Committee by Chairman Inhofe. This language establishes a nationwide renewable fuels standard of 5 billion gallons by 2012, repeals the Clean Air Act's oxygenate requirement for reformulated gasoline, and phases down the use of MTBE over a 4-year period. This language has strong, bipartisan support and is the result of long negotiation between the Renewable Fuels Association, the National Corn Growers Association, the Farm Bureau Federation, the American Petroleum Institute, the Northeast States for Coordinated Air Use Management, and the American Lung Association. It is hard to get all those people together on any piece of legislation. I think it is wonderful. I happen to come from a State that is an oil State. We have Ashland Marathon Oil in Ohio. I also come from a State that has a large number of people who belong to the Corn Growers Association. I think we are fifth or sixth in the Nation in producing corn. I recall a couple of years ago them coming to me and asking me to take their cause on this particular issue. I suggested to them, rather than do that, I wanted them to go into a room and start to negotiate and start talking to each other. I will never forget it. We were in the LBJ Room. I saw a bunch of people on stage at a big news conference. A year before, if anyone had said those people would stand on the same stage together, they had to say they had something wrong with their head. My colleagues in the Senate should realize this is an unusual situation for all of these people to get together, and that is why it is so important that we do not allow any amendments to this very carefully put together compromise by all of these various organizations and groups. In fact, I suggest we ought to be looking to do that in so many more instances around here where people just talk past each other instead of talking to each other. It is with no small irony we are discussing issues affecting our gasoline supply so shortly after our troops were engaged in a war in the Middle East. As we know, they are still engaged and will be for a long time. While our purpose in Iraq was to end a regime that sought to become the arsenal of terrorism and liberate the Iraqi people from oppression and violence, our mere presence in that part of the world highlights the fact that we are entirely too dependent on the oil we import from the Middle East. The amendment the majority leader has offered, a compromise that will triple the amount of domestically produced ethanol used in America, is one essential tool in reducing our dependence on imported oil. It is no secret we currently import over 58 percent of the oil we use. Last year, we imported an average of 4,558,000 barrels per day from OPEC countries and 442,000 barrels per day from Iraq. It is interesting; all during the last several years while we were bombing Iraq occasionally and maintaining the no-fly zone, we were getting an enormous amount of oil from Iraq. In some instances, almost 5 percent of our oil for this country was coming from Iraq. Again, last year we imported nearly a half million barrels from Iraq. This dependence is not getting better. The Energy Information Administration estimates that our dependency on imported oil could grow to nearly 70 percent by 2020. Although our troops were successful in the liberation of Iraq, our greatest energy challenge remains the need to reduce our reliance on foreign sources and to meet our energy needs. President Bush has stated repeatedly that energy security is a cornerstone for national security, and I agree. It is crucial that we become less dependent on foreign sources of oil and look more to domestic sources to meet our energy needs, and ethanol is an excellent domestic source. It is a clean-burning, home-grown renewable fuel that we can rely on for generations to come. The renewable fuels standard in this language will displace 1.6 billion barrels of oil. Ethanol is not only good for our Nation's economy, tripling the use of renewable fuels over the next decade will also reduce our national trade deficit by more than $34 billion. A lot of our trade deficit has to do with importing oil. It will increase the U.S. gross domestic product by $156 billion by 2012. It will create more than 214,000 new jobs. It will expand household income by an additional $51.7 billion. It will save taxpayers $2 billion annually in reduced Government subsidies due to the creation of new markets for corn. The benefits for the farm economy are even more pronounced. Ohio is sixth in the Nation in terms of corn production and is among the highest in the Nation in putting ethanol into its gas tanks. Over 40 percent of all gasoline in Ohio sold contains ethanol. An increase in the use of ethanol across the Nation means an economic boost to thousands of farm families across my State and across the States throughout this country. Currently, ethanol production provides 192,000 jobs and $4.5 billion to net farm income nationwide. Passage of this amendment will increase net farm income by nearly $6 billion annually. Passage of this amendment will create $5.3 billion of new investment in renewable fuels production capacity. Phasing out MTBE on a national basis will be good for our fuel supply because refiners are under tremendous strain from having to make several different gasoline blends to meet various clean air requirements. And no new refineries, as you know, Mr. President, have been built in the last 25 years. The effects of various State responses to the threat of MTBE contamination, including bans and phaseouts on different schedules, will add a significant burden to existing refineries. That is why we have to get this bill done this year. States are banning it, and refiners are trying to figure out how they are going to deal with this new marketplace. We went through this a couple of years ago when we had a shutdown of one of the oil supplies from Michigan and then from Texas. They were reformulating gas, and we saw the price of gasoline skyrocket at that time. The MTBE phaseout provisions in this package will ensure that refiners will have less stress on their system and that gasoline will be more fungible nationwide. That is very important. Expanding the use of ethanol will also protect our environment by reducing auto emissions, which will mean cleaner air and improved public health. Use of ethanol reduces emissions of carbon monoxide and hydrocarbons by 20 percent. Ethanol also reduces emissions of particulate by 40 percent. Use of ethanol reformulated gas helped move Chicago into attainment of the Federal ozone standard, the only RFG area to see such an improvement. In 2002, ethanol use in the United States reduced greenhouse gas emissions by 4.3 million tons, the equivalent of removing more than 630,000 vehicles from the road. It is my hope and expectation that the Senate will adopt this fuels package. These issues have been in front of us for far too long, and now that we have everybody in the same room at the same time agreeing to the same legislation, we need to move it. We need to get this amendment done. I urge my colleagues to support amendment No. 539.

Mr. VOINOVICH. I will be happy to.