Jim Webb

Mr. WEBB

Mr. WEBB. Madam President, I rise to address the recent debate we have had on the Omnibus appropriations bill with respect to earmarks. The premise seems to be, for those who have criticized the earmarks process, that this is pork. Sometimes it is; sometimes it is not. But I would start first with the Constitution. There is nothing in the Constitution that says the executive branch of Government should appropriate funds or decide which funds should be spent. That is a procedure that has evolved over the centuries because of the complexities of Government, where the executive branch looks at its needs and comes to the Congress and asks for appropriations. Earmarks take place when individual Members of Congress, exercising their authority to appropriate under the Constitution, decide and recommend that worthwhile programs in an ideal case should be included in a budget process, programs that have not been considered or included by the executive branch or through other processes. For instance, I was able, last year, along with Senator John Warner, now retired, to bring $5 million into a rural area of Tidewater, VA, so they could put broadband in. Broadband is something we know all Americans who want to compete for their future and contribute equally need to have. It didn't make it into anybody's bill. Who is thinking about sparsely populated areas such as rural Virginia? Yet we were able to bring a lot of benefit to those who otherwise would not have received it. What I would ask my colleagues, particularly those who have become so adamant in their concern over the earmarks process, to consider is, let's take a look at the budget that comes to the Congress. Is there pork in the budgets that come over, pork that comes through, in some cases, unnecessary influence or individual discretion? You bet there is. I say that as someone who spent 5 years in the Pentagon, 4 years of which I was on the Defense Resources Board where on any given day we were implementing a budget, arguing a budget in the Congress, and developing the next year's budget. I offer an example of a situation that my staff has been following for the last 10 months and use it as an invitation to colleagues to join me in looking at where there can be abuses of discretion and where there can be a lot of money that can be saved. Ten months ago, on May 21, there was an article in the Wall Street Journal that talked about Blackwater Worldwide attempting to obtain local approval for a new training center in San Diego, CA. We all remember Blackwater. They are an independent contractor that has done more than a billion dollars of business since the Bush administration, the most recent Bush administration took office. I became curious about this project, first, because I had seen reports of what a very high percentage of the Blackwater contracts had been awarded were either noncompete or minimal compete and the high volume number, more than a billion of them. And also the fact that having at one time been Secretary of the Navy, they were apparently wanting to build a training center so they could train Active-Duty sailors how to defend themselves onboard a ship. Having spent time in the Marine Corps, I immediately started thinking about what it would have been like to have a nonmilitary contractor teaching me how to do patrolling when I was going through basic school in Quantico all those years ago. It didn't fit. I started asking around. The first thing I found out was, this was a contract from the Navy that was worth about $64 million. I wrote a letter to Secretary Gates. I said: Is this Blackwater program in any way authorized or funded by U.S. tax dollars? The answer came back, yes, obviously. I asked: Is there specific legislative authorization for it? Because I couldn't find any, as a member of the Armed Services Committee. The answer was no. According to Secretary Gates, this activity falls under the broad authorization provided to the Secretary of Defense and the Secretaries of the military departments to procure goods and services using appropriated funds and prescribed procedures for those procurements. Then I asked him in this letter: Is there a specific appropriation, either in an appropriations bill or through an earmark? The answer is: No, there was no specific appropriation or earmark directing this effort. As we started to peel this back, here is what we found. An individual, an SCS, midlevel individual in the Department of the Navy had the authority to approve this type of a program up to the value of $78 million, without even having a review by the Secretary of the Navy. This was not an authorized program. It was not an appropriated program. It was money that came out of a block of appropriated funds for operation and maintenance that then somebody in the Navy said was essential to the needs of the service, the needs of the fleet, which is a generic term. I ask my colleagues who are so concerned about some of the pork projects or earmarks process here, which has gained a great deal of visibility since I have been here over the past 2 years and transparency, to join me in taking a look at these sorts of contracts. When a midlevel person in the Pentagon has the authority to approve a program that hasn't been authorized and hasn't been appropriated up to the value of $78 million and not even have the oversight of the Secretary of that service, that is where you see the potential for true abuse of the process. That is where we need to start focusing our energies as a Congress.

Mr. WEBB

Mr. WEBB. Madam President, I have introduced a bill that will create a perpetual Purple Heart stamp. I cannot think of any other stamp or any other area for a perpetual stamp that is more deserving than this award which recognizes sacrifice on the battlefield. The original cosponsors of this legislation are Senators Brown, Vitter, Wicker, Boxer, Lincoln, and Ben Nelson of Nebraska. The Purple Heart is the oldest continually authorized U.S. military decoration. It was created as a badge of military merit by George Washington in 1782. The original Purple Hearts were awarded to three soldiers in the Continental Army who had shown outstanding courage during the Revolutionary War. In 1931, Army Chief of Staff Douglas MacArthur commissioned work on a new design for the Purple Heart to coincide with the then upcoming 200th anniversary of President Washington's birth. President Hoover's War Department authorized the award for wounds received by Army personnel in action or for meritorious service dating back to World War I. On February 22, 1932, General MacArthur became its first recipient. In December of 1942, the Purple Heart was extended to all branches of service, but the criteria were then strictly limited to those we know today; that is, to be awarded to those who are wounded or killed during direct combat with the enemies of the United States. More than 1.7 million Americans of every race, color, creed and from all 50 States have received the Purple Heart in honor of their sacrifice on our Nation's battlefields. This is the only U.S. military decoration for which there is no recommendation. It is simply earned through bloodshed for our country. In 2003, the Postal Service honored recipients of this award by commissioning a first-class Purple Heart stamp in a ceremony at the home of George Washington in Mount Vernon, VA. The image used for this stamp is a photograph of one of the two Purple Hearts received by Marine LTC James Loftus Fowler of Alexandria, VA, which he received in 1968 as a battalion commander near the Ben Hai River in South Vietnam. Since that first issuance in 2003, approximately 1.2 billion first- class Purple Heart stamps have been sold, an average of 200 million a year. At the new first-class rate of 44 cents, which is taking place in May, that is approximately $88 million a year in revenue for the U.S. Government. This yearly sales rate is equal to or greater than the sales of even the most popular commemorative stamps issued during that period, stamps bearing such American icons as Supreme Court Justice Thurgood Marshall, singer Frank Sinatra, and the classic Disney characters. In 2007, the Postal Service created the first ``forever'' stamp, a stamp which, no matter when it was purchased, would be good for first- class postage on the day it was used. The image they chose was an image as old and venerable and quintessentially American as the Purple Heart--the Liberty Bell. According to a Postal Service press release, since its first issuance in April of 2007, more than 6 billion forever Liberty Bell stamps have been sold. This is an order of magnitude greater than any other single stamp sold in the United States, generating revenue of $2 billion. Clearly, the volume of sales of forever stamps is a win for the Postal Service, which is facing a shortfall in future revenues, and a win in terms of the value delivered to the people who want to use them. In creating the first Purple Heart, General Washington said: Let it be known that he who wears the military order of the Purple Heart has given of his blood in defense of his homeland and shall forever be revered by his fellow countrymen. George Washington intended that the Nation he helped found would forever revere those who wear the Purple Heart as a symbol of the sacrifice they have given in our Nation's defense. As a recipient of the Purple Heart in Vietnam as a Marine, I believe that making the Purple Heart stamp a forever stamp is the most appropriate way to honor the past and future recipients of our Nation's oldest military decoration. I hope my colleagues will join me in this legislation.

Mr. WEBB

Mr. WEBB. Madam President, I have introduced a bill that will create a perpetual Purple Heart stamp. I cannot think of any other stamp or any other area for a perpetual stamp that is more deserving than this award which recognizes sacrifice on the battlefield. The original cosponsors of this legislation are Senators Brown, Vitter, Wicker, Boxer, Lincoln, and Ben Nelson of Nebraska. The Purple Heart is the oldest continually authorized U.S. military decoration. It was created as a badge of military merit by George Washington in 1782. The original Purple Hearts were awarded to three soldiers in the Continental Army who had shown outstanding courage during the Revolutionary War. In 1931, Army Chief of Staff Douglas MacArthur commissioned work on a new design for the Purple Heart to coincide with the then upcoming 200th anniversary of President Washington's birth. President Hoover's War Department authorized the award for wounds received by Army personnel in action or for meritorious service dating back to World War I. On February 22, 1932, General MacArthur became its first recipient. In December of 1942, the Purple Heart was extended to all branches of service, but the criteria were then strictly limited to those we know today; that is, to be awarded to those who are wounded or killed during direct combat with the enemies of the United States. More than 1.7 million Americans of every race, color, creed and from all 50 States have received the Purple Heart in honor of their sacrifice on our Nation's battlefields. This is the only U.S. military decoration for which there is no recommendation. It is simply earned through bloodshed for our country. In 2003, the Postal Service honored recipients of this award by commissioning a first-class Purple Heart stamp in a ceremony at the home of George Washington in Mount Vernon, VA. The image used for this stamp is a photograph of one of the two Purple Hearts received by Marine LTC James Loftus Fowler of Alexandria, VA, which he received in 1968 as a battalion commander near the Ben Hai River in South Vietnam. Since that first issuance in 2003, approximately 1.2 billion first- class Purple Heart stamps have been sold, an average of 200 million a year. At the new first-class rate of 44 cents, which is taking place in May, that is approximately $88 million a year in revenue for the U.S. Government. This yearly sales rate is equal to or greater than the sales of even the most popular commemorative stamps issued during that period, stamps bearing such American icons as Supreme Court Justice Thurgood Marshall, singer Frank Sinatra, and the classic Disney characters. In 2007, the Postal Service created the first ``forever'' stamp, a stamp which, no matter when it was purchased, would be good for first- class postage on the day it was used. The image they chose was an image as old and venerable and quintessentially American as the Purple Heart--the Liberty Bell. According to a Postal Service press release, since its first issuance in April of 2007, more than 6 billion forever Liberty Bell stamps have been sold. This is an order of magnitude greater than any other single stamp sold in the United States, generating revenue of $2 billion. Clearly, the volume of sales of forever stamps is a win for the Postal Service, which is facing a shortfall in future revenues, and a win in terms of the value delivered to the people who want to use them. In creating the first Purple Heart, General Washington said: Let it be known that he who wears the military order of the Purple Heart has given of his blood in defense of his homeland and shall forever be revered by his fellow countrymen. George Washington intended that the Nation he helped found would forever revere those who wear the Purple Heart as a symbol of the sacrifice they have given in our Nation's defense. As a recipient of the Purple Heart in Vietnam as a Marine, I believe that making the Purple Heart stamp a forever stamp is the most appropriate way to honor the past and future recipients of our Nation's oldest military decoration. I hope my colleagues will join me in this legislation.

Mr. WEBB

Mr. WEBB. Mr. President, today I rise to introduce the bipartisan Federal and Military Retiree Health Care Equity Act. I introduce this bill with Senators Burr, Collins, Cardin, Durbin, Warner, Rockefeller, Akaka, Dodd, Kerry, and Bunning. This legislation will provide some relief for our Nation's Federal and military retirees from the increases in their health care plans. This measure extends premium conversion to Federal and military retirees, allowing them to pay their health insurance premiums with pretax dollars. I believe strongly in protecting the rights and benefits of our federal and military retirees, many of whom have given years of service to our country. I commend their service to our Nation. The increasing cost of health care is a critical issue, especially to Federal and military retirees living on a fixed income. Health care premiums are rising for Federal and military retirees and their families. This legislation will help to ensure that more Federal and military retirees are able to continue their health care coverage with the Federal Employee Health Benefits Plan and supplemental TRICARE health insurance plans as premiums continue to rise. In the fall of 2000 premium conversion became available to active Federal employees who participate in the Federal Employees Health Benefits Program. It is a benefit already available to many private sector employees. While premium conversion does not directly affect the amount of the Federal Employee Health Benefit Plan premiums, it helps to offset some of the increase by reducing an individual's Federal tax liability. Extending this benefit to Federal employees requires a change in the tax law, specifically section 125 of the Internal Revenue Code. This legislation makes the necessary change in the tax code. Under the legislation, the benefit would be concurrently afforded to our Nation's military retirees as well to assist with increasing health care costs. A number of organizations representing federal and military retirees are strongly behind this initiative: National Active and Retired Federal Employees Association, The Military Coalition, National Treasury Employees Union, National Association of Postmasters of the United States, Professional Aviation Safety Specialists, National Association of Postal Supervisors, National Federation of Federal Employees, National Association of Government Employees, National Rural Letter Carrier Association, National Postal Mail Handlers, American Foreign Service Association, and American Postal Workers Union. The Federal and Military Retiree Health Care Equity Act has enjoyed overwhelming, bipartisan support for four Congresses. This is a matter of basic fairness. Our Federal employee and military retirees deserve access to the same quality, affordable health care they received as active members of the civil service and military. I encourage my colleagues to join me in moving this legislation forward in this Congress. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. WEBB

Mr. WEBB. Mr. President, today I rise to introduce the bipartisan Federal and Military Retiree Health Care Equity Act. I introduce this bill with Senators Burr, Collins, Cardin, Durbin, Warner, Rockefeller, Akaka, Dodd, Kerry, and Bunning. This legislation will provide some relief for our Nation's Federal and military retirees from the increases in their health care plans. This measure extends premium conversion to Federal and military retirees, allowing them to pay their health insurance premiums with pretax dollars. I believe strongly in protecting the rights and benefits of our federal and military retirees, many of whom have given years of service to our country. I commend their service to our Nation. The increasing cost of health care is a critical issue, especially to Federal and military retirees living on a fixed income. Health care premiums are rising for Federal and military retirees and their families. This legislation will help to ensure that more Federal and military retirees are able to continue their health care coverage with the Federal Employee Health Benefits Plan and supplemental TRICARE health insurance plans as premiums continue to rise. In the fall of 2000 premium conversion became available to active Federal employees who participate in the Federal Employees Health Benefits Program. It is a benefit already available to many private sector employees. While premium conversion does not directly affect the amount of the Federal Employee Health Benefit Plan premiums, it helps to offset some of the increase by reducing an individual's Federal tax liability. Extending this benefit to Federal employees requires a change in the tax law, specifically section 125 of the Internal Revenue Code. This legislation makes the necessary change in the tax code. Under the legislation, the benefit would be concurrently afforded to our Nation's military retirees as well to assist with increasing health care costs. A number of organizations representing federal and military retirees are strongly behind this initiative: National Active and Retired Federal Employees Association, The Military Coalition, National Treasury Employees Union, National Association of Postmasters of the United States, Professional Aviation Safety Specialists, National Association of Postal Supervisors, National Federation of Federal Employees, National Association of Government Employees, National Rural Letter Carrier Association, National Postal Mail Handlers, American Foreign Service Association, and American Postal Workers Union. The Federal and Military Retiree Health Care Equity Act has enjoyed overwhelming, bipartisan support for four Congresses. This is a matter of basic fairness. Our Federal employee and military retirees deserve access to the same quality, affordable health care they received as active members of the civil service and military. I encourage my colleagues to join me in moving this legislation forward in this Congress. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. WEBB

Mr. WEBB. Mr. President, I rise today to speak about today's guest Chaplain, Reverend Marshal Ausberry of Antioch Baptist Church, located in Fairfax Station, VA. I am pleased to welcome Dr. Ausberry to the U.S. Senate today. Dr. Ausberry holds a master of divinity degree from the Samuel DeWitt Proctor School of Theology at Virginia Union University and a doctorate of ministry degree in preaching at Gordon-Conwell Theological Seminary. He and his wife Robyn have been married for nearly 30 years, and have three children: Marshal Jr., Rian, and Mycah. Antioch Baptist Church was founded in January 1989, and in its 20th year continues to bring its mission and ministry to the greater DC metro area. Since 1995, Dr. Ausberry has led this vibrant and robust congregation, expanding not only their membership, but their outreach and community involvement as well. Through the dozens of missions and ministries at Antioch, Dr. Ausberry has made a profound impact on the lives of many members of not only my constituency but those throughout the DC metro area. I am certain that he will continue to guide his congregation for many years to come, and I look forward to seeing the direction of Antioch Baptist Church under his leadership. I suggest the absence of a quorum.

Mr. WEBB

Mr. WEBB. Mr. President, I rise today to celebrate the 100th anniversary of the founding of the National Association for the Advancement of Colored People, NAACP, one of our Nation's oldest and most influential civil rights organizations. Founded on February 12, 1909, the NAACP's original and primary goal was to secure for African Americans the rights that our Constitution guarantees under the 13th, 14th and 15th amendments. The NAACP played a leading role in the civil rights movement in the mid-20th century, stirring the conscience of our nation against segregation and institutionalized racism. Today, the NAACP continues its work to eliminate racial prejudice, and the organization has expanded its endeavors to ensure equal access to political, educational, social and economic advancement for all Americans. Throughout its 100-year history, the NAACP has effected change at all levels of society and politics, working tirelessly through organizing, advocacy, and judicial action. From a small group of determined citizens in the early 1900s to an organization with over a half-million members and supporters today, the NAACP has established itself throughout America and the world as a leading champion for civil and human rights. I am proud to be a lifetime member of the NAACP. I share its desire to ensure economic fairness and social justice in this country, and I am pleased to congratulate the NAACP on the occasion of its 100th anniversary.

Mr. WEBB

Mr. WEBB. Madam President, I ask unanimous consent to set aside the pending amendment and call up amendment No. 58.

Mr. WEBB. I ask unanimous consent that further reading of the amendment be dispensed with.

Mr. WEBB. Madam President, I offered this amendment yesterday first by saying, and I would reiterate today, that I firmly support the legislation that is before us. I have a great sense of appreciation for the Senator from Montana for all the work he and his staff have done to bring this legislation to the floor. I offer this amendment in an attempt to resolve what I believe are two issues of fundamental fairness. They go to how this program is going to be paid for. The first is that the offset being used right now, the 61-cent-per- pack increase on cigarette tax, I believe--as does the Senator from North Carolina, as well as other Members I have discussed this issue with on the floor--that this is unfairly singling out one industry that has already been heavily taxed. Right now, tobacco is federally taxed at 39 cents per pack for this program and all 50 States and the District of Columbia also impose an excise tax on top of that tax. In Virginia that is a 30-cent tax on top of it. Our States, which are also undergoing a lot of difficulty in their economies, are considering raising that tax as well. My grandmother used to say you can't get blood out of a turnip. I think we are about at the point with this particular industry, that we are getting as much out of it as possible, in a way that is inequitable to the industry--and not just to the industry but, as I mentioned yesterday, according to the Congressional Research Service, cigarette taxes are especially likely to violate horizontal equity. They are among the most burdensome taxes on lower income individuals, and so we have something of an anomaly here where we are levying a tax on a large proportion of people who are economically challenged in order to assist, with this CHIP program, others who are economically challenged. That to me seems a little bit anomalous. The second issue of fundamental fairness, the ``pay for'' that I proposed in this amendment, is to tax carried interest, which is compensation based on a percentage of the profits that hedge fund managers make. My legislation would tax their compensation as ordinary earned income rather than the capital gains tax they presently pay. This idea is not my own. President Obama campaigned in favor of changing the carried interest tax rates during his campaign. Yesterday I read from a variety of editorials of major newspapers. I will not go through those in detail, but the Washington Post in a masthead editorial 2 years ago said: This is a make or break issue for Democrats. If they can't unite around this issue then they aren't real Democrats. The New York Times, in a masthead editorial, said: Congress will achieve a significant victory for fairness and for fiscal responsibility if it ends the breaks that are skewing the Tax Code in favor of our most advantaged Americans. USA Today and the Philadelphia Inquirer had masthead editorials. Even the Financial Times, which is a conservative newspaper, editorialized: This repair should be done at once. That was 2 years ago. In my view, taking this particular tax break, which characterizes earned income and calls it a capital gains with a much reduced tax, is an imbalance in our system. I am all for people making money. The American system is founded on entrepreneurship. But I am also for people paying their fair share. I proposed this amendment that would provide partial relief from the cigarette tax. I still believe it would be a good amendment, but I also can count votes and I do not think this amendment has a chance of passing, frankly. I know the Senator from Montana has questions about it. I would appreciate very much if the Senator from Montana could tell me his hesitation on this so we might work it out.

Mr. WEBB. I appreciate the Senator's comments. Again, I would like to emphasize my respect for the leadership that he has shown in our caucus on all of these issues. I would also say, in my view, in terms of the tobacco industry, this is a Virginia issue, but in terms of both of these issues I believe they are larger issues of equity. I have a concern for people across the country on both of those issues, but I do take the Senator's point. There is a time and place for everything. I would like to have seen the pay-for on this bill mitigated in terms of people who use cigarettes. I am a reformed smoker, like a lot of people in this body. I do not encourage people to smoke. But it is a legal activity, and there are certain protections that all businesses deserve. At the same time, I do take the Senator's point. I appreciate his comments and his earlier remarks about the issue of carried interest. Keeping strongly in mind that we need to bring this legislation to a prompt conclusion, I withdraw my amendment.

Mr. WEBB

Mr. WEBB. Mr. President, I thank the Senator from Rhode Island, and I am here to speak in favor of this legislation. This is a very important piece of legislation. It is long overdue. I also would like to point out that I have an amendment I will offer. I am very concerned about the way this legislation is going to be funded. We all have our own issues with respect to whether tobacco should be used or not used, but to fund an entire program based on a tobacco tax, I think, is not the way to go for a number of reasons. So I am offering an amendment that will help offset this highly regressive, 61-cent-per-pack increase in the cigarette tax that is being used to fund this bill, and to add on to the bill a tax on carried interest, which is the compensation that is received by hedge fund managers. This proposal would generate $11.2 billion in revenue over 5 years. Tobacco taxes would thus be raised by a more reasonable 37 cents a pack to make up for the shortfall between the revenue being generated by this amendment and the costs of the CHIP reauthorization. Tobacco is already federally taxed at 39 cents per pack for the CHIP program. All 50 States and the District of Columbia also impose an excise tax on cigarettes above this tax. For instance, my State of Virginia adds 30 cents on top of the present tax. In these difficult times, many States, including Virginia, are considering an increase in their State excise tax. So we would have, with the amendment I am going to offer, the 39-cent Federal tax that is already in place on a pack of cigarettes, an additional 37 cents--instead of an additional 61 cents--plus the State taxes on cigarettes; and a big proportion of this--all the Federal tax--going to fund a health program. I would like to be clear that there is no question in my mind about the fact that we do need to reauthorize and expand this program. But I do not think it is a proper to fund this program on the backs of people who, for better or worse, smoke cigarettes. I am a reformed smoker. Many of my contemporaries in the Senate are reformed smokers. I am not encouraging anyone to smoke cigarettes. I hope you do not. I just believe although tobacco taxes are already a popular source of revenue, it does not change the reality that this tax is regressive. We had a Congressional Research Service report brought to my office, and I am going to quote from it. It said: Cigarette taxes are especially likely to violate horizontal equity and are among the most burdensome taxes on lower- income individuals. Only about a quarter of adults smoke, and less than half of families have expenditures on tobacco. Tobacco is more heavily used by lower-income families than are other commodities, and is unusual in that actual dollars (in addition to the percent of income) spent on tobacco products decline in the highest income quintile. My amendment will help soften the blow of the increase in the cigarette tax. Let me provide some background on carried interest. A partner of a private equity or hedge fund receives two different types of compensation. First, hedge fund managers receive management fees that are linked to the assets they oversee. Second, they receive what is called ``carried interest,'' which is compensation based on the percentage of the profits generated by the assets they manage. Currently, carried interest is taxed at a capital gains tax rate. As noted by Peter Orszag, who is now a member of the Obama administration, in his 2007 testimony, many economists view carried interest as: Performance-based compensation for management services provided by the general partner rather than as a return on financial capital invested by that partner. Given that carried interest is performance-based compensation, it makes sense to tax it as ordinary income. This compensation has been earned by many of the same people who helped bring about the present financial crisis. The Financial Times stated these managers ``have made fabulous sums in recent years.'' Given the need to pay for children's health insurance, it makes more sense to have these persons, who are better positioned to pay for it, pay a greater percentage of the cost. When it comes to taxing carried interest as ordinary income, there is a wide acceptance in support of this proposal among thinkers and editorial writers across the country. The Financial Times itself editorialized ``this repair should be done at once.'' They made that statement 2 years ago. I have a string of editorials that support the idea of closing this carried interest loophole as a matter of fairness. I ask unanimous consent they be printed in the Record at the end of my statement.

Mr. WEBB. They include editorials from the Washington Post, New York Times, USA Today, the Philadelphia Inquirer. In fact, the Washington Post in 2007, in talking about this particular tax break, said this: The only mystery is why Senate Democrats don't have the good sense to grab on to this as their centerpiece domestic issue. It's hard to think of an issue that better taps into the public anxiety about the markets and the economy, the anger about income inequality, or the disgust with a political system that bends to the will of powerful interests. The Washington Post continued: This is a make-or-break issue for Democrats. If they can't unite around this issue, then they aren't real Democrats and they don't deserve to govern. The New York Times in 2007 talked about this issue, mentioning: With income inequality surging along with the need for tax revenue, supporters rightly conclude that it is untenable for the most highly paid Americans to enjoy tax rates that are lower than those of all but the lowest income workers. Congress will achieve a significant victory, for fairness and for fiscal responsibility, if it ends the breaks that are skewing the tax code in favor of the most advantaged Americans. There are others and, as I mentioned, I will insert the full text of these editorials at the end of my comments. I also should point out that our new President, President Obama, has supported throughout his campaign the idea of taxing carried interest as ordinary income. So the choice is this: Do we help fund this program, which we all agree is critically necessary, with a well-deserved tax adjustment for some of those who are the most capable of absorbing a new tax, or do we take money exclusively from tobacco, causing people who in large part are in the same economic circumstances as the beneficiaries of this health insurance program to foot the bill? Let's think for a moment about the irony of that. We are taxing a practice that we deem unhealthy in order to fund a health program, and we supposedly want this practice to go away, but if it goes away, we are not going to be able to fund our health program. So we need to find a way to fund health care needs that is sustainable and fair, and a declining revenue source is not sustainable. I hope my colleagues will join me in supporting this measure, which will partially offset the cigarette tax that is a part of the bill. I again wish to express my strong appreciation to Chairman Baucus and to others, such as my colleague from Rhode Island, who have worked so hard on this bill and who work to help those in our system who are most in need of medical care. With that, I yield the floor. Exhibit 1 Editorials Supporting Closing Private Equity/Carried Interest Loophole as Matter of Fairness [From the Washington Post, Sept. 9, 2007] Private-Equity Tax Breaks, a Call To Be Up in Arms Even by Washington standards, the private-equity industry certainly went over the top in conjuring up the economic woes that would befall the United States if their cherished tax breaks were taken away. Pensioners would be destitute. Wall Street would pack up and move to Dubai. The hedge fund industry would disappear. Federal revenue would plummet. Entrepreneurial risk-taking would grind to a halt. And the urban underclass would slip even deeper into poverty. And all that just because some of the richest people in the world would have to pay the same 35 percent tax rate on their income as dentists, lawyers and baseball players. There is no mystery as to why the industry bothers to make these ridiculous and contradictory arguments--billions of dollars in tax windfalls are at stake. The only mystery is why Senate Democrats don't have the good sense to grab onto this as their centerpiece domestic issue as they head into the 2008 campaign. It's hard to think of an issue that better taps into the public anxiety about the markets and the economy, the anger about income inequality, or the disgust with a political system that bends to the will of powerful interests. And if Republicans go through with their threats of a filibuster and a presidential veto, Democrats ought to put aside all other business and call their bluff. This is a make-or-break issue for Democrats. If they can't unite around this issue, then they aren't real Democrats and they don't deserve to govern.

Mr. WEBB

Mr. WEBB. Mr. President, I would like to spend a few minutes today also addressing this very troublesome issue of the next tranche of $350 billion that is being asked for by the incoming administration. I, like many people who supported the initial request on October 1, was very disappointed with the differences in the current administration's implementation of TARP as opposed to the logic that was presented to us asking for our support. I would also say if there were a new proposal coming to us from the current administration, given this experience, I would probably not support it. Given the administration's conduct since October, I would not support it. There is, however, an incoming administration that is in a situation that was created by Congress's initial vote. It is in the middle of this $700 billion proposal. I have received concrete guarantees from the President-elect regarding TARP. I spoke to him at great length yesterday. I am going to support releasing this next tranche. I would like to take a few minutes to explain my support. I was one of the first people to originally question Secretary Paulson's request last September. I came to the Senate floor the Monday after the request was made. I laid out five different points of concern we had with the proposal itself. I worked with other Members of this body. We had nine Senators join in a letter to the majority leader saying that any proposal like this had to, first of all, guarantee that it was not one individual in the executive branch who was able to make these kinds of decisions; that ideally, from our perspective, there should have been a three-person panel of honest brokers; that the American taxpayer should be invested in the upside of a program like this; that there should be re- regulation of the financial markets; and that there should be concrete limits on executive compensation. We had some movement on those issues during the negotiating process led by the senior Senator from Connecticut. We did not get all of them, but we did get enough. Coupled with the predictions of the catastrophic effect that might occur in the world markets without action, I decided to vote for the program. Then Secretary Paulson went off and spent the money in a totally different way than he told us he was going to. The situation now, in my view, is different. I spoke with the President-elect. He indicated he was totally comfortable with my coming to the Senate floor and saying that he personally guarantees closure on all of those issues: that there will be more than one person in the administration, at least three people in the administration, working together to find out the best place to put these funds; that American taxpayers are invested; that there will be limits on executive compensation; and that there clearly are going to be strong proposals, to re-regulate the financial markets. We are in a very difficult situation in this body because we cannot amend this document. We cannot put these proposals into legislative language. We can only vote up or down as to whether this money is made available, and I am going to vote to release those funds. The distinction for me is that, in the first instance, we had an administration that was ending its tenure. It was on its way out the door as it implemented the first tranche in, I think, not a fully responsible way. In this instance, we have a new administration coming in. They are ready to be held accountable. The President-elect indicated to me that he wanted me to inform this body of the specific guarantees he is giving. With respect to the valid concerns that were just laid out by the Senator from Missouri, we have plenty of time for debate available to us for the larger stimulus package where we can truly sort out what type of financial rescue plan we are going to put into place for the country. So I have struggled with this like so many of my colleagues. I am very comfortable with the guarantees that were given by the President- elect. I am going to vote in favor of this program.

Mr. WEBB

Mr. WEBB. Mr. President, a lot of comments have been made about the automobile bailout. We are in a situation, because of the extreme effect on our entire economy over the past several months, where there is a legitimate issue of cashflow rather than the innovation or lack thereof that has gone into the automobile industry. I am favorably disposed to supporting this loan provision, which is what it is, if the right requirements are placed in the proposal. I should point out, for all of the information that has gone back and forth over the past 2 hours, the irony that Senator Dorgan mentioned, that the chief of Merrill Lynch is today arguing for a $10 million bonus for a company that had a loss of almost $12 billion last year. That is a private company. I won't pass any commercial judgment on that. But it does stand in stark contrast to what the CEO of Ford has proposed, going to $1 a year, if we can inject some cashflow into their business to attempt to get them through this period and back into a situation where they can properly manage their future.

Mr. WEBB

Mr. WEBB. Mr. President, I wish to discuss another issue I have had a great deal of concern about for many years, particularly since the time I came to the Senate. That is the role of the legislative branch in the development of foreign policy and the abrogation of the legislative branch during this past administration when it comes to foreign policy. Over the past nearly 8 years, the executive branch has been a runaway train. Unfortunately, this isn't simply the Bush administration. It also is the policies that have come out of the Department of Defense and the Department of State. We have observed over the past year the negotiation of a future relationship with Iraq that has gotten almost no attention in the Congress. This is not simply a SOFA, status of forces agreement, as we have seen in dozens of other countries around the world which are implemented pursuant to our legal authority to be in those countries. This also is a strategic framework agreement, a document which defines our future relationship with Iraq, which in Iraq had to be approved by their Cabinet, by their Parliament, and now will be subject to a plebiscite and which, in the United States, simply has been approved by the signature of one individual out of the Department of State. I was among many who began expressing my concern about this a little more than a year ago. I believe it is stark evidence of how the legislative branch, the Congress, has abrogated its constitutional responsibilities in the area of the evocation of foreign policy. I am going to put a map up in the Chamber. It is a very busy map, but I want to take time to explain something else. I think it is very important for my fellow Senators and people over in the other House of the Congress to understand the implications of what has been going on in Afghanistan. We have heard throughout the Presidential campaign that we should be focusing our energy away from Iraq and into Afghanistan. We have been having these types of discussions without the articulation of a clear strategy. We are moving to the point where we are soon going to have at least 60,000 American troops in Afghanistan. When I was there as a journalist in 2004, we had about 10,000 American troops in Afghanistan. It is going to be very important, as the new administration comes in, to impress upon not only the administration but individuals in the State Department and the Department of Defense that they must come forward with a strategy that will enable us to know when the end comes. You do not have a strategy if you cannot articulate the end point. We have another very serious problem with respect to our presence in Afghanistan, and that is all of the logistical lines into Afghanistan are in areas that could cause the United States great concern. This--I am going to draw a circle around it on this busy map--is Afghanistan right here. Afghanistan is a land-locked country, as everyone in this Congress surely knows. The supply routes into Afghanistan are principally through Pakistan: from Karachi up into Peshawar, through the famed Khyber Pass, which caused the British such problems and difficulties more than 100 years ago, in through the mountainous areas of the federally administered tribal regions and the Northwest Frontier Province very lawless areas where al-Qaida and the Taliban operate heavily. So 80 percent of the supplies that go into Afghanistan go via land through Pakistan. To the north, Uzbekistan has indicated it probably will not allow alternate supply routes if problems occur in Pakistan. Iran, obviously, is not going to allow supply routes to go in to supply our troops in Afghanistan, which leaves Turkmenistan. Turkmenistan is very close to Russia, which we have been in very difficult relationships with, particularly since the incidents in Georgia last summer. So what does this mean? There is an old saying--Frederick the Great, supposedly, was the first to say it--and that is: Without supplies, no army is brave. If you look at this route in Pakistan, over the past 6 months this is what has happened: In March, there were attacks in the Khyber region that set fire to 40 to 50 oil tankers. These are convoys that are not protected by the American military because the American military does not operate in combat areas in Pakistan. So in March: 40 to 50 oil tankers. In April, Taliban raiders stole military helicopter engines valued at $13 million. In November, 12 vehicles were hijacked near the Khyber Pass. Two humvees were included in the hijackings. Last week, 22 more vehicles were destroyed at a truck stop between Peshawar and the Khyber Pass. Yesterday, 145 vehicles, trailers, and containers were destroyed in a warehouse just outside of Peshawar. Today, there was a separate attack at a shipping terminal near Peshawar which destroyed 50 trucks carrying containers. This is millions and millions of dollars worth of equipment in an area where we in our present policy cannot provide military security. We have Pakistani security forces, we have Pakistani truck drivers, and we are in a very delicate relationship with Pakistan itself. I am hoping that in this type of situation, where 80 percent of our cargo is coming in through Pakistan, and where our ability to resupply our military from other areas depends on our relationship with Russia, that our new administration and the leadership in the State Department and the Department of Defense will take a very hard look at how many military people we want to have in Afghanistan, what it is we want them to do, how we are going to resupply them, how we are going to conduct our relationships inside Pakistan, what our alternatives might be if those convoys continue to be interrupted, and, finally, how we will know when we have concluded our strategic purpose in this part of the world. With that, I yield the floor.

Mr. WEBB

Mr. WEBB. Mr. President, I rise to talk about our foreign policy. Before doing so, I wish to point out that I have spent the last 2 hours presiding and listening to a number of very strong statements with respect to the automobile bailout and also the proposal that there be some action to limit the next tranche of $300 billion to come on the TARP program. I associate myself with the remarks of the Senator from North Dakota on those issues. We had a pretty hard vote on October 1 with respect to the TARP program. I was among the overwhelming majority of people in the Senate who voted to go ahead with this program, after the assurances of this administration and the people who had been negotiating on our behalf about the danger that the world economy was in, the prospect of a cataclysmic effect if we did not do something. I am going to look very hard at this next tranche. We should all recall that the program that was voted to go forward was a program that was going to address the situation of toxic assets. The concern that I and many others had about giving one individual the authority in the executive branch to use these funds in a way that did not have a substantial oversight was borne out over what has happened. There is a very high bar that will go forward before I personally would vote in favor of continuing to allow the Secretary of the Treasury in an outgoing administration to be dispensing these types of funds so close to the approach of a new administration.

Mr. WEBB

Mr. WEBB. Mr. President, in the 2 years since I have been privileged to be in this body, I have spoken frequently about my concerns with respect to the balance of power between the executive branch and the legislative branch and the atrophy of the powers and the influence of the Congress. There are two issues that are before us this week that I think illuminate the dangers of that atrophy. The first is in respect to the powers we gave to the Secretary of Treasury in our vote at the beginning of October, before we went into recess, as he addressed the issues of the bailout. Many Senators, including myself, wrote letters of concern immediately after this bailout was proposed, noting that it was unprecedented for one individual in the executive branch of Government to be given the broad discretion the present Secretary of the Treasury has been given. I voted to support this bailout, as did most of my colleagues, as we were assured, not only by members of the administration, but also with a great deal of hesitation by members of our own party in the Senate, that this was an essential act to avert an international calamity in the financial markets. We were told by the Secretary of the Treasury that we needed to reinforce the good will and the concerns people had by allowing him to take certain actions. We ensured oversight over the Secretary of the Treasury, but he still retained the total discretion that has been used over the past several weeks. At the same time, we all know now--it has been said several times already this afternoon--the decisions that were made, as to where this money has been going, were not in line with the reassurances that were given this body when the legislation was brought forward. There has been a great deal of inconsistency coming from the Secretary of Treasury, and it has created a mood of unpredictability that we have seen reflected in the markets and in the confidence of investors. I would agree with the concept that was recently put forward by the Senator from Oklahoma about slowing down the amount of money that is available to be spent under this bailout. I also would propose, in examining legislation to that effect, that we as a body revisit the whole idea of giving this kind of power to one individual in the executive branch. There are plenty of precedents in history which create a small body of honest brokers, perhaps three individuals who collectively can make decisions for the good of the country and who would not be burdened by conflict of interests because of their own background, either real or imagined, or the burden that goes with the discretion of one individual. I hope to place something to that effect before this body relatively soon. I hope other Members of the Congress will consider that idea as well. The second issue with respect to the abrogation of power by the legislative branch to the executive branch concerns the relationship that we are now about to finalize with Iraq. We have seen it reported in the media today that the Iraqi Cabinet has given a near unanimous agreement to a strategic framework agreement--which is very little discussed, and a status of forces agreement--which has been much debated, that ostensibly would define the future relationship between the United States and Iraq. I find it more than ironic, and I have mentioned it several times on this floor, that the Congress has not been invited to participate in this process. The Iraqi Cabinet is going to present this agreement to the Iraqi Parliament for a vote. The Congress of the United States is hardly even getting a look. If you turn to article II, section 2 of the U.S. Constitution, it says the President: . . . shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur. . . . The question is, Is this a treaty? It is going to define the long- term relationship between the United States and Iraq in a situation where we are going to have military bases of some sort in Iraq and a security relationship with Iraq. That sounds quite a bit like a treaty to me. The administration has been claiming this is simply an executive agreement and, as a result, the Secretary of State can sign this; the Congress can be consulted but does not have to have a vote. But let us remember, at the end of this year, on December 31, the legal authority for the United States to be operating in Iraq ends under international law with the expiration of the U.N. mandate. So under what authority, legal authority, will we be operating in Iraq? An executive agreement is only constitutional when it is implementing a law. So what law or constitutional authority will this executive agreement be implementing? The members of the administration, when I raised this issue nearly 8 months ago, claimed that the 2002 authorization to go to war in Iraq was their legal authorization to negotiate an executive agreement looking to the future relationships in Iraq. I have strong questions about that. First, if the 2002 authorization to go to war would be good in terms of an executive agreement to define our future relationship, then why did we even need the U.N. mandate in the first place? The second is, the 2002 authorization to go to war in Iraq took place at a time when the present Government of Iraq did not even exist. So I would state my strong belief, again, that the Congress needs to assert its constitutional authority on this matter. The Congress needs to concur with the strategic framework agreement in order for us as a nation under the Constitution to properly define our relationship with a government and a country where we are going to have military forces in place, and where we are going to have security guarantees. In that regard, I conclude by stating my strong hope that the incoming administration, under President-elect Obama, will, early on, take a comprehensive diplomatic approach to all the issues that affect the United States in that particularly troublesome spot in the world. We should be fostering the right kind of diplomatic environment with other countries such as Russia and China that have interests in this region. We should be exploring ways to formally and aggressively explore our relationships with countries such as Iran. We need to put the whole issue of Afghanistan, Pakistan, Iraq, and other countries in the Middle East on the table early on and forcibly. Reality indicates and history proves that the longer the new administration waits, the more strongly they are going to be embedded in the policies that have preceded them, and the more difficult it is going to be to put a comprehensive approach to the future into place. I strongly hope this administration, at an early time, will take a comprehensive approach to this region. I yield the floor and suggest the absence of a quorum.

Mr. WEBB

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

Mr. WEBB

Mr. WEBB. I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements related to the resolution be printed in the Record.

Mr. WEBB

Mr. WEBB. Mr. President, what is the business of the Senate?

Mr. WEBB. I ask unanimous consent to speak as in morning business.

Mr. WEBB. Mr. President, I would like to add my voice to a number of other people who have spoken today about this economic bailout situation and, perhaps from a bit different perspective, suggest that people need to calm down a little, that all of us are arguing responsibly with different approaches, but serious approaches, to try to resolve the issue. There is a lot of commentary out there today alleging that people in the Congress, a lot of people in the Congress are simply playing politics with this volatile issue. There is commentary about how the average American does not understand the problem and, as a result, has objected to the approach that has been taken. There are accusations that the Congress is not doing its job because of the approach that was taken in the vote in the House yesterday. I would suggest there are a lot of people who are not playing politics, who do understand the problem, who are doing their job, and yet, who still have grave concerns about the approach that has been taken with this proposed solution. Let's take a minute and review what has been going on. Only 11 days ago, Secretary Paulson, on behalf of the Bush administration, came forward with a proposal, a three-page proposal, saying the Congress needed, within a couple days, to give him $700 billion or the authority to invest $700 billion, with very little supervision or oversight, in a very dramatic transfer of power to one individual. Then we started having this great discussion in the media and on the floor about us not acting quickly. Let me, first, say I was one of the first Members of this body to speak on this floor on September 22, on that Monday, questioning publicly the approach that had been suggested in this Bush-Paulson proposal to address our crisis. Also, last Friday, was joined by eight other Members of the Senate, urging that any bipartisan compromise addressing this crisis contain several important principles. I would say, with due respect to the Senator from New Hampshire and others, that there has been tremendous effort over this week to try to take a three-page proposal and make it into a piece of legislation we can all live with and that addresses the problems. They all have my appreciation and my admiration for that effort. But at the same time, we can do more. I hope, as they reconsider the vote yesterday, the drafters can take a hard look at some of these areas and tighten these provisions so some, myself included, can feel more comfortable in supporting it. Firstly, we need to recognize that we have, in this legislation, taken into consideration the idea that we are going to transfer a massive amount of power to the executive branch of this Government. This, at a time when the executive branch, over the past 8 years, has accumulated more power, than perhaps at any time in our history, as a result of 9/11, the war powers, and regarding the privacy of individuals, et cetera. We are not only transferring that power to the executive branch, we are giving the authority to one person, the Secretary of Treasury, who, as Senator Feinstein had pointed out, may have a conflict of interest. This is an individual who has made hundreds of millions of dollars working on Wall Street. I respect his confidence and I respect his career. But at the same time, as a matter of policy, is this the best place or best way for us to transfer the money that would be invested in order to save our economy? In the past, when these situations have arisen, money has been transferred to entities such as the RTC. There were proposals brought forward, noting perhaps the necessity for a board of people, honest brokers, wise men and women who would make these determinations rather than simply one individual. I know in this process we have left oversight to individual discretion, but perhaps we ought to think about a panel of three or some other form where we can reassure ourselves that there would not be a conflict of interest on the other side. A number of us in this body and the other body have said, we need to proceed forward with an appropriate regulatory structure. There is language in the bill that was voted on yesterday that had a commitment to move forward, to looking at the problem but no specificity from the Congress saying we need to fix the problem, or that we need to reinstate regulations. There was an article in the Wall Street Journal today written by Robert Morgenthau, the Manhattan district attorney. In this article he points out: There is $1.9 trillion, almost all of it run out of the New York metropolitan area, that sits in the Cayman Islands, a secrecy jurisdiction. Another $1.5 trillion is lodged in four other secrecy jurisdictions. And Morgenthau adds: Any significant infusion to the financial system must carry assurances that it will not add to the pool of money beyond the safety net and supervisory authority of the United States. Moreover, the trillions of dollars currently offshore and invested in funds that can impact the American economy must be brought under appropriate supervision. This is a point that has been made many times on the Senate floor by other Members, particularly Senator Dorgan of North Dakota. This is a moment in which we can have a commitment by the Congress that regulatory structures will be put in place in order to properly protect our economy. Another area where you see the abandonment of regulatory structure, to the detriment of our economy, is in the commodities market. We had debates during the consideration of the Energy bill in August where many Senators came to the floor speaking relative to what happened when we took regulation out of the oil futures market. A barrel of oil cost $24 in 2002, when this Congress voted to go to war in Iraq. Since then the price has gone all the way up to $147. When you see the fluctuation in the oil markets that has attended this crisis, you see this is not an old-style commodities market, where people who are using the product are the ones who were purchasing the futures. This is now a speculative market. Just like a regular stock market, commodities should have a similar regulatory structure. We need, and I have pointed out, along with other Members of this body, the need to provide clear caps on executive compensation. The bill that was voted on yesterday has significant improvements over the Paulson bill which was totally lacking in this area. It could be tightened further. I would recount a conversation I had with an individual who had a long respected career on Wall Street, is one of the most brilliant Wall Street analysts, and now retired. When I called--I was calling around to as many people from different professional environments as I could to try and understand this crisis. This is someone who made good money on Wall Street and is very well respected. I asked him about the issue of executive compensation. His comment to me was, ``The people who perpetrated this situation ought to be punished.'' That was his word, ``punished.'' I do not believe specifically in punishing them, but I certainly believe strongly, as do most Americans, that the people who have gotten us into this situation should not be unjustly enriched as we fix it. Finally, we need to give the American taxpayer a clear up side in this process, as the securities and assets are bought and sold by whichever entity ends up doing that. An ``up side'' in the sense of returning money back to the Treasury and, an up side in the sense that our legislation should do something that directly helps the people who are at the bottom in this crisis, the people who want to stay in their homes. Again, there has been movement in that direction in the last week, but this area is where better assurances, clearer assurances could bring more people over to the side of passing this legislation. We want a solution. We all recognize there is a problem. My reaction, quite frankly, to the situation from yesterday, is that it brings me back to a saying from when I was in the Marine Corps that sometimes you have an opportunity that is masking itself as a disaster. Perhaps we can tighten this proposal, get the right kind of formula-- it will not take a great deal of change--and bring the Congress to supporting provisions and move into the future with a strengthened economy, a better regulatory process, and an environment that truly takes care of the interests of the taxpayers who are going to have to foot the bill.

Mr. WEBB

Mr. WEBB. Mr. President, I ask unanimous consent that the Senate now proceed to the en bloc consideration of the following Senate resolutions which were submitted earlier today: S. Res. 695, S. Res. 696, S. Res. 697, S. Res. 698, S. Res. 699, and S. Res. 700. I ask unanimous consent that the resolutions be agreed to, the preambles be agreed to, and the motions to reconsider be laid upon the table en bloc.

Mr. WEBB

Mr. WEBB. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of H. Con. Res. 416, which was received from the House.