agriculture from imposing needless, costly restrictions on the school lunch and the school breakfast programs. we debated this amendment at length last night, so i'm not going to do so again now. but i did want to report on some progress that we're making in achieving consensus amendment. first, i want to thank the chairman of the subcommittee, senator kohl, and his staff who have been very, very helpful to us. i also want to thank the ranking member of the subcommittee, senator blunt, and his staff, who have also worked with us. and we've worked with usda, so this morning i am filing another amendment with senator udall of colorado that makes a few changes in the amendment.

it's very consistent with the intent of the amendment that we debated last night, but it does strike the words "and fruits." and since the intent of our amendment was not to change the requirements on fruit servings, i was happy to suggest that -- accept that suggestion from usda. so i have filed a new amendment. i understand there's going through the clearance process on our side of the aisle. and i hope this is an amendment that we can clear and accept very shortly. but i just want to bring my colleagues up to date to thank the two leaders of the subcommittee and to let my colleagues know that we're making great progress. this amendment is going to make a real difference to school districts across the country,

without in any way impairing the nutritionist -- th the nutritios meals that we want all of our schoolchildren to receive. thank you, mr. president. mr. kohl: mr. president? the presiding officer: the senator from wisconsin. mr. kohl: i appreciate the amendment by senator collins. i understand her concerns about how it may affect producers in her state. this issue does relate to child health so we need to be careful about what we dovment i think we've made good progress. i hope that we'll be able soon to have language where we can come to an agreement. mr. president, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: mr. blunt: i ask to suspend

the quorum. the presiding officer: without objection. mr. blunt: i want to join senator kohl in thanking senator collins for the amendment. i think it is a good addition to the bill. i also think we had a good exchanges of ideas on the floor yesterday and would note that we've received a number of amendments to the bill. and i encourage my colleagues to offer amendments that they feel would improve the bill that is in front of them. senator kohl and i believe this is a good product, but we also believe that it will benefit from debate and discussion. we're looking forward to an open amendment process and are glad to have the pending amendments to discuss, plus particularly the one that senator collins has just offered that we both believe is a good addition to the bill. and i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

reid mr. president? the presiding officer: majority leader. mr. reid: are we in a quorum call? the presiding officer: yes, we are. reid scried that be vitiated. officer without objection. reid rioted call for consideration of amendment 750. the amendment be modified with

the changes at the desk many. the presiding officer: the amendment is pending and will be so modified. mr. reid: i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. reid: i ask that the quorum call be terminated. the presiding officer: without objection. mr. reid: i ask that the senate return to amendment number 775. the presiding officer: without objection. mr. reid: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

>> the senator from montana. -- the presiding officer: the senator from montana. mr. baucus: i ask unanimous consent further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. baucus: a native american expression on the circle of life offers insight into a life well lived. when you were born, you cried and the world rejoiced. live your life so when you die, the world cries and you rejoice. on sunday the world cried when eloi s*e kobel left the earth. she was a brave member of the black feet nation in my home state of montana who fought tirelessly for what was right. on sunday the world lost a great hero. native american people everywhere lost a champion. her husband alvin and son turk along with her extended family

lost an mired and irreplaceable loved one. i can say after having worked with her for many years, i lost a dear friend. through her persistence and determination, she drew attention to the federal government's mismanagement of indian trust lands. she deserves the highest recognition and thanks for helping close a chapter on a bitter history of broken promises. for more than 100 years, the federal government did not fairly compensate native americans in montana and across the nation for revenue generated from their land. mr. president, it's billions of dollars the federal government squandered and wasted and not paid native americans revenue that they were due. it was eloise.

eloise took up the cause. others wouldn't. she did. she knew it was wrong. she knew she had a mission. she worked tirelessly through the courts until the judicial system finally recognized what she had uncovered. the judge in the case decried the federal government's action as -- quote -- "fiscal and government irresponsibility in its purest form." i was proud and humbled to work with her on the legislative plan to help settle the long-standing indian trust lawsuit. last year we passed bipartisan legislation to provide a long overdue conclusion for hundreds of thousands of folks in indian country. recently i joined my colleague, the present occupant of the chair, senator tester, who introduced legislation to award eloise with the congressional medal of honor, the highest honor possible from congress.

eloise kobel fought for many who could not fight for themselves and brought a voice to many to see justice served. may eloise's memory continue to inspire everyone who believes that justice is worth the fight and may the creator welcome eloise home with joy and tenderness as we offer our thoughts and prayers to her loved ones. our hearts are heavy as we mourn elouise because she lived a life worth living. she lived a life worth rejoicing. mr. president, i yield the floor. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from montana. mr. baucus: i ask further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. baucus: on another matter, i'd like to speak against the amendment offered by the senator from arizona, senator mccain, amendment number 740. mr. president, this chamber approved three free trade agreements last week and did so with overwhelming support. but for many, that support hinged on passage of a robust trade adjustment assistance otherwise known as t.a.a. last month the senate approved trade adjustment assistance and during floor consideration an amendment similar to the one offered by senator mccain was rejected. why was it rejected?

i'll tell you why. because a majority of senators in this chamber want to help small businesses. they want to help small businesses improve their competitiveness, and we want to help small businesses take advantage of the opportunities that trade provides. with this amendment would end trade adjustment assistance. it would end the only program specifically designed to help manufacturers hurt by import competition. it would end the companies that helps companies adjust, retool and stay competitive in an increasingly global economy. in 2010, trade adjustment assistance for firms enabled 330 companies to buy strategies that got them back on track. it helped them identify new markets. it helped them improve inefficiencies. it helped them restructure their debt and helped them find new financing. and the results proved that trade adjustments for firms

works. 98% of the companies that participate in the program are still in business after five years. without trade adjustment assistance for firms, many of these companies would be out of business and their workers out of jobs. the program has helped create or retain more than 50,000 good-paying manufacturing jobs since 2006. mr. president, i would think with unemployment at such high rates, over 9%, and with a large vote in this body on the currency amendment with respect to chinese manipulation of currency, it makes eminent sense to help american whorbgers who lost -- american workers who lost jobs. that's what trade adjustment assistance does. it helps american workers who lost jobs on account of trade. senator mccain's amendment would put those jobs at risk. i don't think that's what this body wants to do. we should not be creating jobs -- excuse me.

we should be creating jobs, not destroying them. for these reasons, i urge my colleagues to vote "no" on the amendment. mr. president, i yield the floor. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: mr. kohl: mr. president, i ask unanimous consent the quorum call be rescinded. the presiding officer: without objection. mr. kohl: i ask the senate go into recess until 2:15 p.m. as provided for under the previous order. the presiding officer: under the previous order, the senate stands in recess until 2:15 p.m.

senator reid has said hoped for a vote on the measure which provides $35 billion to hire teachers and first-responders sometime this week although no agreement has been reached yet. we'll have more live senate coverage here on c-span2 when they gavel back in at 2:15 eastern. coming up tomorrow on c-span, coming up this afternoon excuse me on c-span, 1 clin 15. federal reserve chairman ben bernanke will talk about the long-term effects of the recession. that is 1:15 over on c-span. also on c-span tomorrow, a look at homeland security with janet napolitano. we will testify before an oversight hearing by the oversight committee. that is also 10:00 a.m.

eastern also on c-span. >> because i am a businessman, i which incidentally am very proud and was formally connected with a large company, the opposition have attempted to picture me as an opponent of liberalism but i was a liberal before many of those men heard the word, and i fought for the reforms of the theodore roosevelt and woodrow wilson before another roosevelt adopted and distorted the word liberal.

>> this weekend six republican presidential candidates traveled to des moines for the iowa faith and freedom coalition candidate forum. watch our live coverage of herman cain, newt gingrich and rick santorum as well as governor rick perry and representatives ron paul and michele bachmann starting at 7:00 p.m. eastern on saturday, on c-span's road to the white house. protests continue across the country as the occupy movement grows. you're looking at video from the occupy wall street scene. this was shot yesterday. [siren] [inaudible conversations]

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[inaudible] >> good luck, guys. >> thanks. [inaudible conversations]

[inaudible conversations] >> you know why. the lawyers know what judge they will see and what they agreed. they know the judges. people object. take this check. in the court. case thrown out. -- at same time that will be downfall of this country is money. if you have money you can do anything.

that's what they're doing. took over this whole country. it is not just here. it is all over the world. >> the way you're describing summed up in one word, corruption. >> of course. money talks. money talks and other things keep right on walking. >> [inaudible] [inaudible conversations] >> allentown, pennsylvania. >> [inaudible]. >> i've been here for 23 days. when i first heard about it i realized basically since this country started it has been a war between the rich and the poor. that is really what defines whether we have democracy or not. there is no democracy when there are classes involved, you know. so it is a class war and perpetrated against the poor pretty much one-sidedly.

when i heard about this i knew that the poor were waking up and we were going to take our side of it. this is really where power is from. the seat of power. not washington d.c. i think it is important. >> [inaudible]. >> i don't think, see i want a revolution but i don't see it coming out of this specifically. but the first half the revolutionary is to change public opinion. and this is a big university. there are 15 different world views per square foot. and i'm here to talk. i'm here to listen and learn and hopefully teach a little, you know. that is basically it. >> what did you think about all the other protests that have been happening around the world? >> it is because, we've had the moral argument for revolution, for taking our side of the class war for, class system emerged, you know. now the necessity is actually pinching people. the middle class is becoming poor and the poor are

jumping off bridges because they can't make ends meet. so it is not the moral argument anymore. it is necessity. that is why the world is uprising all over. >> how has the economy impacted you personally? >> well, i'm 25. i worked seven years of my life. i haven't been able to find a job for the last year-and-a-half. i, not like i'm looking for good jobs. i worked on garbage trucks nursing home, room service. impacted me greatly. i'm from a town next to allentown that i lived in next to bethlehem that used to produce most of the steel for the country. now it -- [inaudible] ♪ .

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[background sounds] >> all we ask for is donations. thank you very much. >> thank you. >> [inaudible]. ♪ .

>> you will find that video and other recent "washington journal" discussions on the issue of occupy wall street in our video library at c-span.org/video library. member of the board of governors of united states postal service warns major reform is needed for survival of the organization. james miller was the featured speaker at the hudson's institute discussion of the future of the post office. he says the old business model isn't working and systemic changes must be made to give the postal service more flexibility to adapt to market changes and forces. this is about an hour. [inaudible conversations] >> well, shall we begin? >> let's begin. >> welcome to this session. the center for the economics of the internet of the hudson institute. very pleased that you could

join us today and we're particularly pleased to have with us the c-span audience. a couple of minor housekeeping things. please continue to enjoy your lunch. i do want to mention we have some upcoming events. we will have panel of economists discussing the at&t-t-mobile merger with different perspectives in early november. in december professor greg rothstein of stanford university will come to speak about universal service. i have a couple of other speakers. we're working on getting exact dates for them. but today is the main event and we are extremely pleased to have with us jim miller who has very distinguished career in washington holding a variety of positions and i think today he has one of his most challenging positions on the board of

governors of the u.s. postal service. jim miller has previously served as chairman of the federal trade commission, as, director of the office of management and budget. he has served on countless boards and but i do think one of his most challenging positions has to be the u.s. postal service and i also want to particularly emphasize that this is the center for the economics of the internet and we're very pleased that jim miller is ph.d economist. has written more than 100 scholarly publications, nine books and if anyone is in a position to understand the economics of the postal service it is jim miller. so with that, please join me in welcoming jim miller today. thank you. [applause] thank you, commissioner,

it's a great pleasure to be here at the hudson institute where i count among the leading lights two of my former colleagues from the office of management and budget, michael horowitz and john weicker. i have other friends here. thank you for inviting me. it's quite an honor. today i will summarize the dilemma facing the u.s. postal service and then take questions. my basic message, our or message in a nutshell is that the old business model is broken and must be replaced. and then i'll tell you why. but first a disclaimer. what i say today are my own personal views. they don't necessarily reflect the views of the management of the pose it will -- postal service or the postal service's board of governors. as you may know the, there was an old post office department and it was the

outgrowth of an authorization contained in the u.s. constitution. it sometimes says that the constitution mandates a postal service. it does not. it authorizes a postal service but clearly from the very beginning there was perceived to be a nexus between the federal government and a postal service. benjamin franklin was the very first postmaster general established under the old continental congress. in 1792 congress passed the, the president signed, a bill called the private, usually referred to as the private express statutes which outlaws competition with the postal service. the postal service was granted then a monopoly on delivery of letter mail back

in 1792 and as a result of that the justice department enforced that law and put out of business insipient competitors, including the old pony express. it didn't last very long because it was put out of business by the federal government. the postal service was an organization which responded to a lot of congressional pressures to hire this person or that person. the postmaster general was typically the president's most important political adviser. it was patronage carried to a national level and partly for that reason it was a pretty inefficient operation and in fact, something that most people don't know is that through up until the late '60s the postal service

received outright appropriations, subsidies for its services. in 1970 after a bipartisan commission made a report, the postal service by law was converted from the old post office department to the postal service, a government-sponsored enterprise that was among other things meant to be run like a business, make profit of, a small profit. weren't supposed to make big profits. supposed to spread the goodies around. but it was supposed to operate like a business. until recently, that is the last decade or so, the operating model of the postal service was very simple, it was a statutory monopoly and the postal service was to take the profits from the monopoly portion of its service, that is the delivery of letter

mail, and subsidize everything else. so you had a lot of services being delivered at below cost, any kind of attribution of some fully-allocated cost. let me just comment. historically it's very difficult to get your arms around costs for the postal service because among other reasons you've got to talk about classes of mail, delivery everywhere in the country. you've got to, you have got enormous fixed obligations. so typically attributable costs or what economists might call marginal cost, are significantly below fully-allocated costs and there's a dilemma because if you price everything above, above attributable cost, you're unlikely to, just if that's your goal, you're unlikely to cover the full cost of service. so that was the model.

profits on letter mail subsidized everything else. and arguably this was efficient. if you go back and look at the microeconomic literature and see what would be optimal for a price constrained mow apolloly with significant scales of economy, you get ramsey pricing. you know what that is? it was efficient second order conditions and you would get something approximating the rate structure that the postal service experienced until a few years ago but in the last decade or so the demand for monopoly mail, basically letter mail, has been shifting to the left. volumes started falling in 2002. and appears to becoming and the demand curve for the monopoly mail appears to be coming more lasting. now why is that? well, it's because of electronic communication.

and it is not only e-mail but it is electronic bill-payi bill-paying. i dare say that the number of electronic messages now dwarfs the number of letter mail messages every day, dwarfs it. my own experience i know that's the case. i send far more electronic messages than i send letter mail messages. so, now that's not to say that the postal service volume of mail need fall because you could have a big burgeoning of total messages. in fact that's what we've experienced. big burgeoning of message but these electronic messages have eaten into the postal services first class mail and i see no reason to believe that that is going to turn around. now one reason that the first class mail volume has

fallen has been the recession. and early on in the process where we started clanging the bell, the postal board of governors, among other people, started clanging the bell saying something is wrong here. we've got to do something is because there was a recession. a lot of folks said that's the problem. it is not anything fundamental. it is not a systemic problem. it will hasn't really changed. it is just a product of recession, but cooler heads, more analytical people looked at it closely and recognized there was this diversion going on and it would not end. so what do you do? what do you do when you have a model where all of this losing service is being undergirded by profits on another, on one class of mail, which constitutes about half the total revenue but when that revenue, the net revenue is disappearing?

there is a withering away of this monopoly return, and there is nothing to offset it. now, now that's a simple explanation. what do you do about this? i mean how do you address these kinds of problems? well people say, why don't you just raise rates? now we, economists, including people in this room know that just raising rates doesn't necessarily increase profits, right? you know, if you have a monopoly and you've got the right price, my profit-maximizing price. if you increase it you're less profit profit and more, et cetera. so just the simple answer that you could raise rates is not always the accurate answer. and a lot of people don't think beyond the notion, well you just raise rates. but in any event could you raise rates? well, in 2006 congress

passed the postal accountability and enforcement act which liberalized some of the postal service's restraints, in particular gave it some authority to, to manage its competitive products primarily, products in competition with fedex and ups, but didn't really change the other. in fact, made it more difficult to change or to alter the rest of the services, the services, including the services that were losing the most money. it put a limit on the rate increases by class of service. and in fact said, you couldn't raise rates more than the cpi. now that seems sort of like a straightforward, good -- [inaudible] you have monopoly. you have to have strain on rate increases that could be, that could obtain but, but

what? well, if you, limited the cpi and you've got a lot of services for whom, for which the price is far below even attributable cost you're in a box because you can't raise the prices on losing services, you know, very much so you've got to keep providing these services and you lose on every item but the theory is you make it up on volume. i don't think so. i don't think so. so that many is a problem. another provision of this law by the way, you find this interesting, requires, legally requires the board of governors to establish rates so those rates cover all costs of the service, for each class of service. so you're in a position where one part of the law says you can't raise rates more than this amount and

another part of the law says you really are supposed to raise rates this amount. now what do you do in that situation? i mean if you're an elected official, sworn to uphold the constitution, follow the laws of the land you're in a pickle. we're, all the governors are facing that dilemma right now. we're violating one part of that law or another part of that law. so that's the difficulty. now, there is a provision for what is call exigent rate increase. when there are significant, unexpected, dramatic reductions in the outlook, and reductions in performance because of unanticipated factors. suppose there were, pray to god it doesn't happen but another anthrax scare or another 9/11 or something like that. we have, i mean it is not what an economist would say would be a good solution but you do have the authority to go to the postal rate

commission and ask for a rate increase or exception from this cap. . . but we have to go to the

prc, the postal regulatory commission 45 days at least ahead of time for them to do a proceeding to find out whether it's okay to change those rates. suppose you want to raise the price of altoids, i mean, is it going to be 1.89 or $2.25 and suppose you had to go to some government agency and apply, you know -- file a bunch of paper ahead of time and get some kind of decision. it doesn't make any sense. it doesn't make any sense for the postal service either, in my judgment. even those rates to products and rates in competition with ups and with fedex, we have under the new law authority to make those changes in those but the prc has a proceeding in which

they can make a determination that the prices are below attributable costs and are unlawful, but you have that hanging over your head. now, what about reducing costs? obviously, that's -- profit is the difference between revenue and cost. one way to get out of a bind is to increase revenue. another way is to reduce costs. well, we, the postal service, is a logistics network. with a nod toward ups which advertises this, uses the word, we are in the logistics business, right? so think of this -- the economy is constantly -- one of the wonderful things about our economy is consumers change what their preferences are and where they want to live and from which retailers they want to buy

things from. so our need is to be able to adapt to those changing patterns. but we have in the law requirements to give advanced notice for any kind of change and that gives congress an opportunity to insert nimby, not in my backyard with other legislation or just threaten to do that. so it makes it difficult for us to make those kinds of changes. similarly, with post offices, we have about 36,000 post offices, only about 6,000 of which earn revenue that post office more than the cost of operating that post office. now imagine your wal-mart and you're told, i don't care if you don't make any money on this, you've got to keep this store

open. well, yeah, but the bridge is out and they're not going to fix it for three years. it doesn't matter. you got to -- i mean, multiply that by tens of thousands and you can see what a problem that we're in. there is also problems where changing delivery. at wal-mart, you open at 8:00 to 8:00, or 7:00 or 10:00, or even 24 hours. but that decision is up to wal-mart. or mcdonald's. some of them are open 24 hours. some of them are open for a very short -- you know, much shorter period of time, et cetera. the market determines that. people who own these stores or run these stores have the opportunity. they're looking at consumer demands. now they say, consumers don't want to come in here between 10:00 at night and 5:00 in the morning. why keep the lights on?

why pay people to stand back here and keep the wheel going? close it down. we don't of that authority. we can't just eliminate those kinds of operations or change hours or change the frequency of delivery. that's a big issue right now. there is provision in current law that requires us to provide six-day a week service. current law we have a appropriations rider that requires us to provide service six days a week. now, it wasn't always that way. in fact, it was the other way around. in fact, when i was a kid, i was growing up in the 1800s -- [laughter] >> we got delivery in my little town in conyers, georgia, we got the mail delivery twice a day. have you ever heard of that? we got delivery twice a day. now, that hasn't been the case

for a long time. but people get delivery once a day. well, i'll just tell you as a business proposition, there are places that ought to get delivery of mail six days a week. there are other places ought to get mail delivery five days a week. there are other places that ought to get mail delivery three days a week and some places maybe one day a week. do you know we deliver mail at the bottom of the grand canyon on mules, take the mail down there and all that. now, i don't mean people want to live in the grand canyon, god bless them, you know. i mean, there are enormous costs and, ladies and gentlemen, there ain't no such thing as a free lunch. so if people are imposing big costs on the system, somebody's paying for it. and it's the rate payers for others. and when you're in a position where 20, 30 years ago you had a

lot of profits, delivery of first class mail, you could subsidize that kind of system. it's not there now. it's simply not there. so that means there are going to be big losses racked up. there's also a problem of labor costs. labor costs are 80% of our total cost. 80%. now, why is that a big problem? well, i mean, you know, it could be 90%. i'm not taking issue with the 80% number. but we do have two problems that experts -- those who are much more facile about in statistics and multicorrelation and, you know, auto correlation and all that stuff. it doesn't have anything to do with automobiles. it's statistical testing of --

[inaudible] >> well, they say that number 1 the current employees, both those that have mail inside a facility, you know, that are involved with handling the mail and those who actually walk the beat are getting a premium, the total cost including benefits is higher than would be the case in the private sector. and secondly, because of the constraints in saying historically in the contract and the constraints that are mandated by law and there's some constraints mandated by law. you have to give them this that currently they're earning a significant premium. now, i'm not against anybody earning good money. absolutely.

but on the other hand, when you have monopoly mail making a great profit you can distribute it around you can get along with that. but not now. because we don't have the profits on first class mail to distribute around to losing services. so it would be possible for us to do a lot better if we were able to get contracts with our two major unions the postal union and the letter carrier union which would provide more basic compensation, number 1. and number 2, a great deal more flexibility. the board went out and visited the facilities of ups and fedex. they have big -- they have all these things they collect around

the country and they all go in to memphis for fedex and they have -- starting about 1:00 in the morning have all these big planes landing. i mean, it's just pandemonium, you know. well, their peak problem is a problem but we do have a peak problem but what they do they hire a lot of college students to hire college students. and we have peak problems as well but for all practical purposes, we have to pay people an eight-hour day on an eight-hour day basis. we can't hire people for four hours. for practical purposes there is some flexibility in the newest contract. now why can't we get revision and pay scales and also some freeing up of these work groups? well, there's a special law that applies to labor relations at

the postal service. it says that management employees negotiate and if there is an impasse, it goes to compulsory arbitration. right? compulsory arbitration has been that organized labor gets pretty much what it asks for. for that reason, we recently signed with the apwu and gave them a great number of concessions including an extension of the provision for no layoffs, but they gave in return some reductions in freezing the salaries, the wages for a short period, et cetera. so we have a labor law that's driving this. it's not that the postal service says, oh, give them whatever they want. we have something that's driven by law.

well, despite all these problems, the postal service has been doing all can be to just talk, to streamline the system, to have a more efficient logistical network and we have reduced costs by quite a lot. but not as much, unfortunately, as the reduction of total mail volume. what more could be done? well, in march of 2010, the prosal board of governors and the postmaster general announced a plan based on our intensive study of these issues for about eight months of really intensive work after sounding alarms for some time and it required some reform and delivery frequency, some restraints on workforce compensation and freeing up work rules, some pricing flexibility. and things of this nature.

one proposal that has been floated by academics has been to de monopolizmonopolizes the pos service. let me tell you when i was budget budget director i sat down across the cabinet room table with president reagan. and said to president reagan, mr. president in this budget i prepared for you, i propose that we demonopolizes and privatize the postal service. his reaction was, well, jim, that sounds like a good idea. [laughter] >> now, i found subsequently when this book that annelise and karen skinner and marty on his own hand that he had given a radio address saying virtually the same thing which is an example by the way -- you know, he had a plaque on his desk that said, you know, you'd be -- something to the effect you'd be

surprised how much progress you can make if you don't care who get the credit. rather than saying, i proposed four years ago, he said that was a good idea. so we put it in there. and, of course, there was no progress on that proposal at all. there was massive opposition. i couldn't get anyone on the hill really interested in that proposition. and that situation prevails today. there is no constituent in privatization and demonopoly. dana rohrbach, a congressman and an associate of mine in the white house and now the congressman from california puts in a bill nearly every year saying let's give the postal service to the employees and the unions fight that tooth and nail. well, i mean, i'm surprised. if you had the current system,

right, and you offered -- and you -- and the postal service would offer an ipo, what kind of price do you think it would bring? it's not an ongoing proposition. in fact, ladies and gentlemen, if the postal service were an ordinary corporation, today it would be in chapter 11, perhaps chapter 9. the postal service is flatly bankrupt. i hate to see that. i don't know whether that will be news or not. i've said it before. so changes have to be made. but basically that is a nonstarter. we could do some reform of the labor law. one proposal has been the arbitrator should take into account the financial condition of the postal service. to me this is not an elegant solution. it doesn't matter, you know?

organized labor should be able to contest these things. and so that's one situation. another might be to relax what is called the universal service obligation. there is in the postal service a requirement by congress that it provides service everywhere in america. everywhere in america. there's some places where you need to provide service. and there are other places where it makes no economic sense for us to be providing service. people say, you know, without the universal service organization obligation, there would be massive reductions in service, et cetera. people would never get their mail, et cetera. those same arguments were used against deregulation. i remember a volume was put out -- in the ford administration where they had a model that showed all of these

services in the small town michigan. how did they pick michigan? all the services in michigan would disappear, right? didn't happen. same thing with airlines deregulation. forecast without the universal service obligation and control of the airlines by the civil aeronautics board, massive reductions in service. people wouldn't be able to get there. it didn't happen. in fact, the reverse happened. much more service than before. to be the case you would have the elimination of the uso postal service. neither fedex nor ups has any kind of universal service obligation. their service is ubiquitous, right? you have trouble finding a ups or fedex? no.

but they have some flexibility. they locate their provisions, their frequency -- for example, i live in virginia. fedex and ups don't deliver on saturday. i know that. and for that reason, i can make provisions. i can always go to the central place and pick up what i need. in fact, the postal service has proposed that we were given the authority to reduce service, the question of six versus five, we would keep the post offices open. well, there will be people getting medicine on saturdays and they would go without the medicine. well, they could go to the post office to get the men's instead of have it delivered to them. the postal commission recently did a study where the universal service obligation cost local service $4.4 billion each year.

the monopoly on the mail, letter mail they estimated benefit the postal service 3.5 billion each year. i mean, eliminate the requirement for uso and in exchange would give up the monopoly on letter for the mailbox and the letter mail. prc could put more classes of mail in the competitive category. we have some first class mail that's still regulated under the old system and it's just in direct competition with ups and fedex. that ought to be in the competitive category. in any event, there's legislation to consider dealing with the postal service who's supposed to have paid the federal government $5.5 billion on september 30th. i said publicly last march, it ain't going to happen.

we will default. and you can't say that and i said yes, i can. i'm chairman of the audit committee. i can do anything i want. [laughter] >> well, say it. u.s. government will default. i mean, the postal service will default on its obligation to the u.s. federal government. now, what happened in the c.r. y'all know what a c.r. is. you go to these cocktail parties, i know about the c.r. they think you're smart. it's a continuing lack of foundation they postponed the date so we wouldn't technically be in default but i mean, we don't have any money. i mean, it's not there. unless they do something we're going to default. you know, they just keep pushing the date back. the president recently came out and said he was in favor of restructuring retiree health benefit funding. everybody agrees that we have

overpaid for retiree health benefits. and we need to change that. federal employee retirement systems we overpaid that. and so some notion of getting a refund there. and the president is supporting some flexibility in our delivery requirements. there's specific bills congressman issa has a bill in the house. congressman lynch, congressman cummings in the senate there's bills by lieber, carper, cummings and senator mccain. and among other things, they would provide the establishment of a federal financial control board in case we defaulted there. workers' compensation rules and so forth. so in conclusion i know -- in

conclusion, there are a lot of smart people who are groping for solutions that would establish a model that worked. and that's good. because the old model -- the old business model doesn't work. and in my opinion, the postal service must have more freedom to operate as a business if it's to remain part of the broader postal market and avoid substantial continuing subsidies from the federal government. thank you for your time and attention and i'll stop here to take some of your questions. [applause] >> jim, if i can take the moderator's prerogative and ask the first question. >> sure. >> could you describe for the audience the structure of the governing bodies to the postal

system? you referred to a postal regulatory commission -- >> right. >> i'm curious, do they have any responsibilities other than regulating a government-appointed board? >> let's start -- let's start with the postal service organization. the postal service is headed by a postmaster general, a deputy postmaster general that are chosen by a board of governors. the board of governors consist of for most purposes 11 members including postmaster general and the deputy postmaster general. obviously, when we choose a deputy or a postmaster general they don't get to vote. but members of the postal board of governors are 9 in number are chosen by the president,

nominated by the president and confirmed by the senate. those are part-time jobs but i'll tell you, i serve on a number of boards and none take as much time as this one. and none pay less than this one, okay? so there's a board of governors and they are the equivalent of a board of directors. if you like having a board of directors but the board of directors doesn't have the same authority that they would have in the private sector. so you've got this. and then there's a postal regulatory commission. these are five members nominated by the president, confirmed by the senate, no more than a bare majority can be part of one political party and they're a full-time job, and they figure out how the postal service works

and doesn't work but also have decision-making authority on whether we can raise rates, lower rates, how the rates have to be structured, et cetera. so every time -- every time we want to do something in that area, we have to turn it over to them for them to make a decision. i'm being -- i'm simplifying somewhat. but basically major decisions have to be reviewed by these five -- [inaudible] >> let me turn it over to the audience. and we have a microphone and -- please identify yourself.

>> thank you, good afternoon. i think part of your question is sort of rhetorical. >> can you identify yourself. >> oh, sure. my name is todd wiggins and i'm an internet vigographer, blogger, et cetera. and i use the internet for free. so i think part of your response is a bit rhetorical because we know the money is shifting over to google, yahoo! and hot mail the post office needs to mimic what is going on over there. and as you pointed out mail delivery that's where a lot of mail delivery is going. so could the postal service intergrate some of those attitudes that you saw internet providers do in delivering virtual mail or will i end up having to pay for my hot mail in the future because that seems coming down the pike. live to pay my youtube in the future because the government will tax it? i think you've obviously thought

of those be. your boards have obviously thought of those methods. and then when you said you're thinking about -- talking about raising the costs of mail, well, i understand i'm going to have to pay more for mail. and i'm going to have to pay more because you're not making a profit and i will have to take on that profit. i think it's realistic the american public are going to see some changes and it's not going to be pretty or palpable but you're going to have it, right? >> mr. wiggins, it's a good questions. let me say we have done some very preliminariary work in expanding in the visual area. we're not in a position to talk about it much 'cause it is so -- it would be premature to do that. but we thought about this and are addressing that as well. on the internet side, let me just say as a person who is a

user of internet, i think if the federal government regulated heavily the internet, we would be at the position of dial-up and something called broadband would be studied by hudson and other places and there would be such vested interests against it that it would not take place for a long time. so the fact that the internet was not regulated by the federal government enabled it to advance at such a great pace. there are, obviously, problems built at the margin about the regulation and deregulation of internet base and i don't want to opine on that as well. in terms of prices, a lot of people say that postal delivery is a terrific bargain.

where else do you send something from here today, you know, and have it delivered in -- i don't know why i'm thinking of cupertino maybe because i just bought a macair but it's a great value but i mean, maybe the price has to go to 65 cents. i'm just guessing, though -- [inaudible] >> that is a total hypothetical. interestingly, though, i want to mention the point about delivery frequency. poll after poll showed that when people are asked, would you like to reduce delivery frequency from six days a week to five days a week. no, i want six days a week. would you rather have six five-day a week delivery or you have -- pay a dime more for

stamps? five-day delivery is fine. so -- i mean, it's like so much polling information where they -- you don't give them the price of what it from other sources and they'll send -- [inaudible] >> but we got to make hard choices. ..

something we've been thinking about, thinking about for a long time. as you look at the significant changes that have gone on and you discuss, has the commission at all or you personally looked at over seizing examples of postal service that have made the kind of transformations necessary to bring thousands to the modern age, in europe the past few years we've seen the sale, for european regulatory purposes. and i'm just wondering what you have seen on the postal side, are there any examples particularly worth following in this new age? >> let me again speak for myself. i am very concerned about the postal services extending its reach right now. the notion that somehow we are going to be able to jump into banking or jumping to electronic transmission and make a huge profit in competition with the private sector is nuts. i mean, you're not going to do that.

i would say the same thing if i owned another company. the company that says the way out of our deep hole is to jump in the new lines of piranhas. it's nuts. over time we may get into some of these things. we have paid a lot of attention to what europe has done, et cetera. part of it is a lot of the postal services in europe, the predicate for them is much different than in the united states. i mean, take for example, in japan. they were part of the banking system, et cetera. so i'm concerned about that. on the other hand, there are opportunities there and we ought to be very aware of them and look at the evidence on those, and take advantage of them where we can.

>> i understand on a commercial entity of the crisis how it plays out. i guess the treasurer walks in one day and says okay, our cash may be out tomorrow, and the general counsel says okay, call the law firm and our chapter, what ever. but this is a different world, chapters or whatever, bankruptcy code don't apply. you have the full faith and credit of the treasury. can you help with the analogy, in an ordinary commercial crisis, and does this ever sort of, can the can be kicked down the road by treasury? >> it can be kicked down by treasury, can't be kicked down the road by the postal service. it can be kicked down by the president. the congress has to change the law. the postal service is limited by law borrowing from the federal government. no more than $15 billion. we are at $15 billion. ain't another dime we can

borrow. treasury can't do anything about that. that's one law. other law is postal service can't borrow money from the private sector. that's a law of law. there's a law of economics that says nobody is going to lend the money to the postal service if it were to borrow such money, right? so we are in a box there in terms of further analogy. i mean, the reason we had to decide not to make the payment on september 30, and the board of governors voted we're not going to make the payment and let everybody know, some people interpreted that as a threat to congress. it was not a threat. we just want to let you know. we are not going to make it. and the reason is we didn't have the money. him yes, we did have about a billion

dollars, by september 30 we had about a billion dollars. that was sort of the absolute minimum cash balance that allowed us to continue operation, including pay, our employees and benefits. so we just can't go below that. there's a number, and i just, i don't want, i don't want to put him on the spot. i just talked to our cfo this morning, and he looks kind of haggard. it's a bad situation. you know? you don't have the money. and you are worried every day about making sure that you can pay bills. now, the way mail volume works, in october, every october and november, december it ramps up somewhat. why? because the christmas season. and postal services revenues

rise more than the increase in costs, above the cost line is a way of saying it. so i think we will be fine. in fact, we have, as long as we don't have to pay the $5.5 billion due last september, now due november 18, we will get through to september 30, at which time we will default because we owe another 5.5 or so billion dollars on september 30 him of 2012. there's been a lot of suggestions proposed for the federal government to kind of bail out the postal service here, bail it out there. i mean, those are one year things. i mean, for the organization to survive and to be an active and productive participant in this postal market, small p. postal market, we have to have systemic change. the systemic change is to give

the postal service board of governors the authority to respond to market forces as a board of directors of an ordinary company would do. that's my bottom line. >> i'm kind of concerned about this. michael horowitz, ask me a question. >> what would be so apocalyptic, jim, if the postal service went bankrupt? if congress refused to provide subsidies? as i sense it, increasingly what the post office is is a subsidy operation for junk mailers. that in terms of first class service provides terrible service. every time i have to go to the post office i sit around waiting forever. so the question is, why do we need the postal service in its him current form? could you spell out for us what the impact on the economy would

be if, somehow you defaulted? and employees did not get paid or vendors didn't get paid and congress refused to provide the subsidy. how would that impact the american people, the american economy? >> let me state that i understand your predicate as being, default means to shut down. we defaulted or we're going to default, that is the payment to the federal government, even with that default we will continue operating. but let's just -- the postal service shut down. it would not be apocalyptic. there would obviously be a lot of employees would be hurt, vendors would be caught shorthanded. there would be consequences of that, but let's just look at the consumer side. there are alternatives. i mean, advertisers can use different means of reaching consumers than sending it through the mail. what is called standard mail, what a lot of people call junk mail.

there are other avenues. my point is there's a demand out there for vendors who want to communicate advertising messages to consumers that would be standalone, that enterprise would make money and cover costs. that is basically the market test of whether it makes sense to have such an institution. the problem is there's so many constraints on it right now that it just can't do that. and again, i return, the postal service needs to be freed up to provide services and make adjustments and operate as a business enterprise would ordinarily operate. now michael, you were there at the white house when the president said okay, that's a good idea, jim, right?

but the conditions have changed from big monopoly source of inefficiency of allocated inefficiency to a situation now that is quite different. my algorithm is try to make the postal service operate as a efficient business enterprise, and it can't do that with all of these restraints. i feel like, a little bit about reading gulliver's travels, you know, it's like being tied up in this little rule, that little rule, you are tied down you get to the point where you can't get up. [inaudible] >> the problem is that it's the labor unions that stand in the way of removing constraints. and what troubles me is the lack of tough bargaining. and you're a tough bargainer. i've seen on the part of the postal service itself. you said you don't want to go to arbitration because we will

inevitably lose. i'm not sure you're right on that score, but can't we place far more pressure, leverage and hard choices, on the unions? if you block this from happening, if you block that freedom, then this postal service is going to go bankrupt, you will wind up with nothing and the impact on the economy will not be that substantial. people won't miss it that very much. why isn't there more of that taking place? >> well, that's what congressman issa asked, and -- chairman issa asked. but let me say two things. one, we need flexibility in terms of a lot of other ways in which the restraint is not the unions but the congress. but on the union side, i mean, i won't divulge the nature of the discussions the governors had about this, but our decision was

that the deal we orchestrated with the apwu was terms of expected of what we could get. i'm reporting what the governors decided. this was the best we could get. and we bargained hard to get it. >> thank you. jim, we have met previously on the campaign trail. my question is toward sort of the financial side. in your expenses could you just estimate how much of that is towards pension obligations and how much of that is towards operating costs in terms of your people, your equipment, that sort of thing? >> just roughly speaking, from 0-100%, wages, direct wages, including the taxes due on the

wages and all, probably 80%. and the 20% are benefits, benefits, retirement, health care after retirement, things of this nature. i don't -- [inaudible] >> we would be able to contract. him hi if you think roughly in terms of six to five, one-sixth, that would be an overstatement of savings you would get from some of the reasons you are pointing out. but there would be substantial savings in the order of three or $4 billion. we, i mean, we receive about

roughly speaking, 62 or $63 billion in revenue. and our outlays are about $72 billion. so 72 billion, you would get, you know, three or $4 billion savings. it wouldn't happen immediately. part of it would be, the total pool of employees would shrink, but it would shrink over time since we have no layoff provisions in most of these contracts. you would have to take place slowly over time. so you wouldn't realize the annual savings so greatly, immediately. it would take, it would take a while. >> another omb'r, john weicher.

>> long ago in the days when we are getting mail twice a day i started to become a stamp collector. and like most kids i stopped, but i always remember the postal officials would say that stamps for collectors were pure profit. are you still making pure profit, are you still making money on stamps from collectors? >> we are. we are. it's not a whole lot. i mean, it is, we have, we have to carry on our books the liability for stamps we have issued that haven't been redeemed, but part of it is a calculation what portion of these stamps are in the hands of collectors and will never be redeemed? we had a bit of a problem a couple years ago because we had to change the method, not change the methodology but change the estimates when we started issuing the forever stamps.

how many of you like the forever stamps? i'm glad because i had a lot to do with that. [laughter] all right. the postal service now thinks it's a great idea. and, in fact, i went out last year and spoke at the unveiling of the new reagan centennial stamp. and i should be ashamed of myself. i said, and you know what? if i get my way, this reagan stamp will be a forever stamp. got this wonderful stand up applause, and i knew we were going to do it already. [laughter] but, but it's interesting because -- is someone knows that word.

philatelist group, we are not sure about the forever stamp. and so that's one reason we made them all forever stamps. so they are not at a disadvantage. and more importantly, continue our flow of profits from them. >> we have time for two more questions. >> i was just saying, to my knowledge no legislation deregulation for the mail system like trucking, airline, or railroad, and they all had a taxpayer bailout. do you think any current legislation will give flexibility to post office to meet its demand? and also, isn't a taxpayer

bailout by extending borrowing by 10 billion? i was just wondering what you thought? >> i don't think congress is going to give the kind of flexibility i've advocated. just not going to do that. congress looks at the postal service as its own enterprise, and will control that enterprise. will grudgingly grant flexibility to the postal service, if necessary, keep it going without big government subsidy. there are provisions in these various issa, carper, collins and all bills that if i could pick and choose, won't get me where i was suggesting we go, but get me down that line a long way.

whether they will make those choices or not, i don't know. we've testified, we've positioned ourselves, we've tried to encourage the various staffs. the president, the white house has been very responsive to the concerns we've expressed. but where it will all come out i don't know. [inaudible] >> issa's bill, recollect, the refunding of the overpayment of fers, federal employee retirement system. actuaries ranging from the big accounting firms to the postal regulatory commissions and so on have concluded that we have overpaid already. besides that, the schedule of

payments continues to overpay because we have a shrinking workforce. 10 years ago we had about 700,000 full-time employees at the postal service. we now have about 450,000, or something like that. so it has shrunk already some. but if you have a schedule predicated on forecast 10 years ago obviously you would be overpaying. so i don't characterize that as a bailout. i know bailouts. i would recognize a bailout when i would see it. those are not bailouts, and you know, we may get thrown in at the last minute, you know, some solutions like okay, we will raise the borrowing limit to 20,000 -- $20 billion. that's no solution. that's what i would say, i mean, that would be a bailout, or just

forgiving obligations that are justified would be a bailout. but this is not a bailout. i'm troubled by chairman issa's proposal to establish a financial control board. that's what i thought we were doing, you know? that's what our responsibility is. we are the financial control board. i'm the chairman of the committee. i'm trying to control, i mean, the board controls those sorts of things, and have a separate financial control. it's kind of like we've been breaking our backs to avoid financial disaster, which could be placed at the feet of all the regulatory and legal restraints that we face, and along come and say well, you guys haven't done your job. >> senator chuck taking a break now for the weekly party caucus lunches. they will be back at

2:15 eastern. working on a number of amendments to the spending bills. we'll have live coverage. earlier they also talk about the issue of detainees of terrorist detainees. the hill right republicans say harry reid is blocking a vote on the defense authorization bill because of a provision in the bill meant to make sure detainees at the guantánamo bay prison are not brought to the u.s. for trial. the administration opposes those provisions which would make it more difficult to bring detainees to the united states. earlier today on the senate floor, a number of republican senators including the ranking member on the armed services committee, john mccain, talked about the defense authorization debate. it's about half an hour. we will show you as much as we can't until senate comes in, ort which may also hear from senate republican leadership here on c-span2. the floor to talk about the importance of the defense authorization bill.

for 50 years, five zero, 50 years, the congress of the united states has enacted a defense authorization bill, enacted it do law and had it signed by the president of the united states. now, there have been times when this legislation has been very contentious. days during the vietnam war, days during operation desert storm, operation iraqi freedom, bosnia, companies owe voe, all -- kosovo, all of those times the defense authorization bill has been a vehicle for debate and votes on the floor of the senate concerning transcend ant issues of national security. of national security. >> and for 50 years, we have hae ere for the men and women whote have served and provided them ta with the equipment, the pay, the benefits that the men and women of this countryntry deserve.ours with hundreds of hours of wri

deliberations, thousands ofefore hours written testimony and comi testimony before the committee,, full committee and subcommittee such as the chairmanship of the senator from the state of georgia. legislation the majority leader has decided that we will not take this bill to the floor of the senate. that, my friends, is a betrayal of the men and women who are serving this nation. now, i understand that there are differences on the issue of a detainee treatment. i understand it's an emotional issue. but should it be a reason for the united states senate to carry out its 50-year tradition and debate and discuss and amend and vote and come out with a package that provides for the needs, the training, the equipment, the benefits of the men and women who are serving? i quote from a letter from

the -- from the distinguished majority leader who says, and i quote, the letter to be senator levin and to me, he says "however, as you know, i do not intend to bring this bill to the floor until concerns regarding the bill's detainee provisions are resolved." is that the way the senate works? that we don't bring bills to the floor unless objectionable -- that are disagreed with by one side or the other are not resolved? i always believed the way these issues are resolved is through debate, through amendments, through votes, through allowing the american people also to see and hear our deliberations, our discussions, and our debate. so now it appears -- and obviously the fiscal year has expired, and so this bill is obviously long overdue. so now we are in a position that

apparently the majority leader wants to take up the president's job bill one by one, apparently, in complete disregard of the needs and the requirements of the men and women who are serving in our national security. part of that bill also is the intelligence parts of the bill from the intelligence committee. the senator from georgia, who i -- and by the way, i note the presence of the senator from south carolina who knows more about detainees than any member of this body without question. he continually travels to iraq and afghanistan, he has visited the prisons, he understands the issues better than anyone. and i'd be willing to ask him how he feels about the detainee provisions after the senator from georgia makes a comment about the importance of the intelligence portion of the defense authorization bill.

mr. chambliss: i thank the senator from he arizona. this is the ninth defense authorization bill that i've been involved in since i've been a member of the senate, and i must say that the refusal to bring this defense authorization bill to the floor by the majority leader is truly disheartening. it's critically important that we address the issues not only of what's going on in iraq and afghanistan, but the day-to-day operations of our military from the standpoint of pay raises, quality of life, purchase of weapons systems for future use, any number of issues that are included today and the refusal of the majority leader to bring this to the floor because of his objection to a very critical aspect of this bill truly is disheartening. during committee consideration of the bill, committee considered and adopted by a vote of 25-1 a comprehensive bipartisan bill -- provision

relating to detainees. we have no detainee policy in this country today. if we had captured bin laden, what would we have done with him? if we had captured anwar awlaki, what would we have done with him. certainly we could have gained actionable intelligence from either one of those individuals, but we have no detainee policy in this country today. we have nowhere to take them to that we can hold these individuals and ensure that they don't get lawyered up quickly and that we're unable to get the type of information that we need to get from -- from individuals like that. over the past several years there's been an ongoing debate about the importance of being able to fully and lawfulfully intergate suspected terrorists. one thing is clear after all these years that our nation still lacks this clear and effective policy. this bipartisan detainee

compromise goes a long way toward ensuring we can get timely and actionable intelligence from newly captured detainees connected to al qaeda and other terrorist organizations. the compromise also provides for a permanent process for transferring guantanamo detainees to other countries. and we're in the midst right now of review within the intelligence committee of the thought process that went into the transferring of the detainees by both the bush administration and the current administration, and i will tell you that there are real flaws in that policy. those flaws have resulted, according to the d. niemplet, general clapper, of a recidivism rate of guantanamo detainees of 27%. that means 27% of the individuals that we have released from guantanamo and sent to other countries who have been willing to take them under various agreements, 27% of them have returned to the battlefield and are killing -- seeking to

kill americans. so the policy is not only about detainees, but policies with regard to what we do with guantanamo detainees is extremely important. there were a number of us that were involved in those -- the amendments that went into the authorization bill in committee. senator graham from south carolina, senator ayotte from new hampshire was integrally involved. and let me just turn to senator ayotte, and from the perspective of the people of new hampshire, where do you think we are with respect to a detainee policy in this country today? ms. ayotte: thank you, senator chambliss. i would say this, you highlighted the importance, number one, as did senator mccain of passing the defense authorization. i have been to the floor twice on this issue because i think it's so important for our

country. the notion that it's been half a century since we have failed to pass this authorization, what is at stake for our troops and for the troops and the message that it sends to them. we still are at war, in two wars. there are threats that face our country every day, and our military men and women, we owe it to them that they know that we're going to pass this authorization to address issues like pay increases and issues like weapons that they need, and all of the fundamental day-to-day issues to make sure that they know that we're behind them. but this issue of the detainee policy of this country, i would summarize over the last few months in the armed services committee, military leader after military leader has come before our committee, and we have asked them about this issue of how do we treat detainees. and i questioned general carter himm, the commander of the africa command about what we would do if we captured a member

of the al qaeda in africa. he said he would -- quote -- need some lawyerly help to answer that one. is that what we have come to? our commanders need lawyerly help in order to know how to deal with captured terrorists and how to treat them within our system to make sure that we have a secure place to gather intelligence from them and to ensure that the american people and our allies are protected? this detainee compromise that the majority leader is holding up the entire authorization bill for was an overwhelmingly bipartisan compromise. this provision in the committee was voted 25-1 in support of this because there is such a need to address how we treat detainees. and as senator chambliss already highlighted, we have a 27% recidivism rate from those who have been released from guantanamo. just a couple of examples of

what those individuals are doing right now, against us, our troops and our allies. for example, the number two in al qaeda in the arabian peninsula was someone released from guantanamo. another top commander of the taliban in the kadasura is out planning attacks, someone we released from guantanamo. that's why this issue cries out for a detention policy for our country. this is a very important issue to be brought to the floor along with the entire authorization, and i see my colleague from south carolina here, senator graham, who i know has worked very closely on these detention issues as a j.a.g. attorney and someone who has visited afghanistan just in office. i would ask him, have you ever seen, first of all, in your time in the senate us acting like this with respect to the defense authorization, the senate in this way? and second, how important do you

think it is that we address this detainee issue? mr. mccain: could i just say i thank the senator from new hampshire and the enormous contribution she has made in putting together this legislation. and i would also like both of you and my friend from south carolina in the letter to address this issue, in the letter that senator reid, the majority leader, i would ask my colleague, sent to senator levin and me, he used as the rationale for not bringing the bill to the floor, he says i do not intend to bring this bill to the floor until concerns regarding the bill's detainee provisions are resolved. it goes on and on. and then he says, as deputy national security advisor john brennan stated in a recent speech, he said, in sum, he said this approach -- talking about the approach that we have taken in the bill, i believe the vote was 25-1, he said this approach

would impose unprecedented restrictions on the ability of experienced professionals to combat terrorism, injecting legal and operational uncertainty into what is already enormously complicated work. i wonder if the senator from south carolina -- does mr. brennan understand what's in the legislation? mr. graham: well, i thank the senator from arizona and all of my colleagues for working on what is a very difficult subject matter, but when 25-1 becomes the outcome, that's pretty good. and i don't know what the -- this is not -- quite frankly, i like senator reid. this goes back to the white house. this is president obama's team. this is not harry reid. this is not the senate holding up this bill. it's the white house holding up this bill because they have an irrational view of what we need to be doing with the detainees. they have lost the argument, and i tried to help, to close

guantanamo bay. it's not going to close. we're not going to move those prisoners inside the united states. the congress has said no. the american people have said no. and the reason we have lost that argument is after working with the white house for about a year and a half to try to find a national security-centric detainee policy that would ensure the american people that we're not going to let these people roam around the world and treat them as common criminals, they could never pull the trigger on the hard stuff. we're here because the white house cannot tell the aclu no. there are 48 people at guantanamo bay being held under the law of war who will never see a courtroom, military or civilian courtroom, and that's part of military law. you don't have to let an enemy prisoner go. most enemy prisoners are never prosecuted. and they are being held down at guantanamo bay under the law of war in executive order issued by the obama administration gives them an annual review. we have been trying to work with the obama administration for a couple of years now to create a

statutory scheme to deal with every class of detainee that we may run into in this war that will go well beyond my lifetime. and the reason that mr. brennan objects is because there is a decision made by the congress to say that if a detainee is captured and interrogated by the high value interrogation team which i like, which is an interagency combination of the c.i.a., the f.b.i., military and other law enforcement agencies to make sure we get the best intelligence possible, that we create a presumption for military custody. and the reason we're doing that is because the obama administration has been hellbent on criminalizing this war. sheikh mohammed, the mastermind of 9/11, had charges against him during the bush administration and he was ready to go to trial, literally ready to plead guilty. the obama administration withdraws those charges and was going to put him in norkd, giving khalid sheikh mohammed

the same constitutional rights as an american citizen, take that show on the road from guantanamo bay and have a trial in the heart of new york city that would cost $300 million alone for security. that blew up in their face. you just don't get it. most americans don't see these people as some guy that robbed a car -- stole a car or robbed a liquor store. most americans see the detainees that we're capturing on the battlefield throughout the whole world as a genuine threat to this country. and i applaud the obama administration for taking the fight to the terrorists, for going after bin laden, for using predator drones on the battlefield all over afghanistan and pakistan. what i fought them with is that we have no way of capturing someone and acquiring good intelligence because you have locked the system down. and this detainee legislation that we have before the senate will allow a way to go forward. what happens if you capture someone tomorrow, where do we put them, what jail do we have as a nation to put a captured terrorist in?

we don't have a jail because they won't use guantanamo bay. they captured a terrorist and put him on a ship for 60 days. the navy is not in the detention business. we don't build ships to make them jails. we build ships to fight wars. so this aversion to using guantanamo bay is going to bite us as a nation. so this legislation allows us to move forward. if you capture someone, you can gather good intelligence. there is a presumption that they are going to be held as an enemy combatant, but there is a waiver provision there. what i don't want to do is start reading rights to everybody we capture in the united states as part of a terrorist organization's plot. we're not fighting a crime. we're fighting a war, and under the rules of war, you can hold an enemy combatant and interrogate them as long as necessary to find out what the enemy is up to. that's what this legislation does to my colleagues. you have written a very balanced approach. and this idea of never using guantanamo bay again is

dangerous. the idea that the c.i.a. cannot interrogate enemy parissers in as a policy is dangerous. by give order, the president of the united states, president obama, within a week of taking office took off the table enhanced interrogation techniques under the detainee treatment act that were classified, that were not waterboarding within our values, but they were techniques available to our intelligence community, senator chambliss overseas, that will allow them over time to acquire good intelligence. one of the reasons we captured -- killed bin laden is because of the intelligence picture we acquired over ten years. but this president within a week said by executive order the only interrogation tool available to the united states of america is the army field manual which is online, you can go read it for yourself. mr. mccain: i ask my colleague, it's a fact, as the senator from new hampshire pointed out, that 27% of the detainees that have been released from guantanamo bay

have returned to the fight. not only have they returned to the fight. the fact that they were in guantanamo gives them an automatic kind of charisma and aura and leadership in al qaeda and other terrorist organizations. and is that -- do you think the american people find that acceptable, that one out of every four that we have released from guantanamo bay have re-entered the fight and clearly are responsible for the deaths of -- at least of some brave young americans and may be responsible for the deaths in the future of americans? mr. graham: not only i think are most americans upset by that, but they are worried about what comes down the road. that's what i'm worried about. the senate legislation is trying to create a pathway forward for the future. what do you do with these people we have at guantanamo bay that may never go on trial? what do you do with these people at guantanamo bay who come from countries if you return them to that country, they would be back in the fight by the end of the

day? mr. mccain: as has happened in yemen. mr. graham: so we have a bipartisan proposal that will allow us as a nation to make rational decisions about detention, and the white house is holding it up, and there is -- there is provisions in this bill that affect the day-to-day lives of the men and women in our military, and the white house is saying detainee policy driven by the aclu is more important to them than a bill that would allow the c.i.a., the authorization they need to go fight this war, that would provide wounded warrior assistance at a time when wounded warriors need it the most. you talk about perverse view of things. you talk about having it wrong in terms of what's most important. allowing the detainee issue to deny the c.i.a. the authorization they need to protect us all is dangerous. to put the men and women's needs in uniform in terms of their health care, their pay, their

ability to take care of their families, secondary to detainee policies that make no sense driven by the far left in this country is what this debate is about. well, to the white house, we're not going to change this bill. mr. mcconnell: would the senator yield for a question? mr. graham: yes. mr. mcconnell: then am i correct, i would say to my friends from south carolina and new hampshire and arizona, that because of the administration's opposition to a detainee treatment provision that was, i gather, approved overwhelmingly in the armed services committee, we will for the first time deny everybody in the senate an opportunity to offer any amendments on any subject to the d.o.d. authorization bill and in fact will not consider it on the floor of the senate for the first time in four decades? mr. graham: the minority leader is absolutely right, but i would just add to my good friend from

kentucky, even more -- it's not just about us. what we're denying is general petraeus, the new c.i.a. director, authorization language he desperately needs to fight the war. what we're denying is men and women in uniform pay raises, health care benefits that they desperately need because of detention policy driven by, i think, the most liberal people in this country and 25 out of 26 senators blessed this package. so senator mcconnell, you are absolutely right. not only does the senate not have a say about what would be the way forward on detainees, the men and women in uniform and our c.i.a. operatives out there taking the fight to the enemy do not have the tools they need because of one area of this legislation, and it would be a national tragedy if we could not pass this bill which is sound to its core in all areas because the aclu doesn't like what we have done on detention. mr. chambliss: senator, if the minority leader would yield for a question?

as you well know, the intelligence community depends upon the defense authorization bill for the authorization to operate in the intelligence community. whether it's the budget or whether it's policy. all of that is compromiseed in the majority leader's refusal to bring this bill to the floor. and without the authorities and the respective intelligence bills that are passed by the house and by the senate, then our intelligence committee is handicapped and hamstrung in policies that are needed as we move forward in this ever-changing war on terrorism. by ask the senator from kentucky if he has ever in his long experience in the senate, ever seen any bill of this nature held up and not allowed to come to the floor because of any single senator's refusal to

accept the provisions that are in the bill by an overwhelming vote like this. mr. mcconnell: mr. president, i'm not sure who has the floor but i would say in response to my friend from georgia -- mr. mccain: i would say we have unanimous consent for a colloquy. mr. mcconnell: there may have been examples but i'm hard pressed to think of one recently. and the tradition of the passing the defense authorization bill is there for a good reason. the national defense of the united states is the most important thing the federal government does, and the committee upon which the senator from georgia and the senator from arizona and the senator from new hampshire serve are the experts on this the matter and i find this truly astonishing. it's consistent, however, i must say with the pattern around here in recent times. no amendments, fill up the tree, deny the majority and the minority in this case, both the majority and the minority, the

opportunity to have any input on a piece of legislation that determines what we do in the federal government's most important responsibility. i think this is another example of the way the senate has deteriorated into operating like the house. and it's extremely bad direction for this institution and for the american people. ms. ayotte: i would just like to add as well this detainee compromise as senator mccain and i have talked -- have talked about before is actually the group of individuals that we're talking about here are military custody for members of al qaeda or affiliated groups who are planning an attack against the united states or its coalition partners, and you think about that category of individuals, the most dangerous category of individuals that we

have to address, is why we came to the compromise in committee that the default would be that the default would be >> some of the discussion earlier on the detainee policy on the senate floor. we will take you live outside the senate for republicans leadership. >> we will vote later this week on a piece of what the president calls his jobs bill. we've had this vote twice. we had in the first stimulus. we had it a second time. it basically involves the federal government in the earlier votes voting to borrow money in order to send it down to states so they would be able to retain state employees. now we have a different version of it. it is to raise taxes, a little over 300,000 business owners in order to send the money, raised by this tax increase by business down to the state, to help them with their employment problems.

but we don't have the money to supplement state employment. this is a state issue. and even though it was done once back when the democrats completely owned this place, it was not a good idea to do it. two quick observations on other matters. the majority leader will confirm to you when he comes out that he is agreed to take up the defense authorization bill. that's a good thing. this is a bill that has passed every year for roughly a half a century. it's extremely important, and we're happy we're going to have an opportunity to pass that bill. with that, let me -- spent in interest of time, i wasn't going to speak but i want to put a finer point on one thing the leader said. in the past, republicans have made the case these tax increases on the upper income folks are at least indirectly attacks on small business and job creation. this is a direct tax on the very people who would be hiring the

new workers in our country. >> live comments from senate republican leadership. we will have all of that later in our program schedule and individual library at c-span.org. the u.s. senate will be coming back in momentarily to resume deliberations on three spending bills rolled into one. they include agriculture, commerce and the justice and science, transportation, housing and urban development. the senate considering amendments to the legislation. leader reid yesterday introduced the first of several parts of the president obama's jobs plan. the senate is coming in now. we will take you to the senate floor here on c-span2. mr. casey: mr. president? the presiding officer: the senator from pennsylvania. mr. casey: thank you, mr. president. i'm -- i would ask consent to speak as if in morning business. the presiding officer: without objection. mr. casey: mr. president, i just have a short presentation to make regarding trade

adjustment assistance, which of course is legislation that was passed through the senate not too long ago, and there was a long debate, an important debate, about trade adjustment assistance, which is basically a program that we've had in place for decades that recognizes that sometimes workers and companies are caught in a position where, because of unfair trade and unfair competition, that they're left without -- not only without a job but sometimes without a prospect of retaining their position in a particular trade or work that they've done for many years. and so a trade adjustment assistance -- and so what trade adjustment assistance allows us to do is to provide some assistance so we can retrain folks for the future or so that that worker can be retrained and adjust to changes in the economy.

and, in particular, today i rise in opposition to amendment number 740, which would eliminate funding for the -- for trade adjustment snangs for firms -- trade adjustment assistance for firms. there's part of the act that provides help to firms. u.s. trade policy should, i believe, work in the best interests of the american people and especially american workers and american companies and, of course, as the senator from pennsylvania, i want that policy to work for our workers in pennsylvania and our companies. unfortunately, that's not always the case. past trade deals have sent jobs overseas and several administrations have to the done enough to crack down on china's unfair trade policies. our workers and our companies need safeguards against employment disruptions caused by our trade policies, or sometimes

caused by our lack of a trade policy. and that's one of the reasons why trade adjustment assistance is so important that we extend it, as we have, to help workers and the companies -- the companies that they work for deal with the repercussions of bad trade deals and unfair competition and unfair trade that our workers are impacted by. so now there's an effort by this amendment to somehow change the dynamic as it relates to firms. i know that in pennsylvania in calendar year 2010, 51 dmps our state were accepted into the program. so 51 individual companies accepted into the trade adjustment assistance program to help those companies rebound, to recover from the ravages of international trade. supporting these firms as they work to better compete against

foreign imports will help protect the jobs of the workers in those firms, and i've worked to ensure that the t.a.a. program is reextended, including this help that we provide for individual firms. the legislation that was recently passed maintains trade adjustment assistance for firms but returns funding authorization to its pre-2009 levels. i think this is a critically important point to maifnlgt maybe the best evidence, though, of what's happened is evidence from individual states but more particularly individual companies. mr. president, i would ask consent that a news article that is dated tuesday, june 21, 2011, from the bethlehem express times be made part of the record. the presiding officer: without objection. mr. casey: this article talks about a visit that i made to a

chemical manufacturing plant, and the pertinent part of this article speaks volumes about why trade adjustment assistance is so important for firms. i'm quoting here from a statement made by a gentleman who heads the manufacturing resource center in bethlehem, pennsylvania, jack funder. here's a sum rirks i should say, of what he said. the article says, and i quote, "funder said that with technical and financial assistance provided by t.a.a., the manufacturing industry is able to innovate and better prepare itself for a successful future." so that's someone who's on the ground every day, working on manufacturing issues in bethlehem, pennsylvania. he knows what he's talking about when it comes to the impact of trade adjustment assistance for our firms and in particular for this firm. another part of the article talks about the -- one of the

vice presidents at the company that i visited, puritan products. their senior vice president thomas sterner believes it's -- quote -- "absolutely" -- unquote important for a manufacturing company of puritan product's size to receive government funding in this economic climate. and i'm quoting here from the article. the last line of the article: "we don't have the funds internally to do some of the things so getting some government support certainly helps our cause." that's one company in the leadership of one company telling us in a very concise way why trade adjustment assistance for firms is vitally needed. so i know we're going to have debates about this issue, that will be ongoing even after passage of the legislation. but i rise in opposition to senator mccain's amendment, number 740, and would urge all members of the senate to continue to support not just trade adjustment assistance for workers but trade adjustment

assistance for firms as well as especially in this very difficult economy. mr. president, i would yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. bingaman: mr. president? officer the senator from new mexico. mr. bingaman: mr. president, i'd ask that the quorum call be dispensed with. the presiding officer: without objection. mr. bingaman: mr. president, i'd ask consent to speak for up to 15 minutes, as if in morning business. the presiding officer: without objection. mr. bingaman: mr. president, on november 18, exactly a month from now, the current law that permits the funding of the government will expire. something will have to be enacted in its place, since it's clear to all of us, i believe, that we will not have passed and sent to the president all of the appropriations bills by that time. the normal procedure for enacting funding bills is for them to originate in the house of representatives and be passed there, then they come to the senate for consideration and get passed here. i come to the floor today to

urge that before the expiration of the current continuing resolution -- that is, before november 18 -- that the house enact and send to the senate a funding bill which extends to the end of the current fiscal year, which extends funding to the end of the current fiscal year -- that is, september 30 of 2012. my simple point is that in my view it's irresponsible for us to continue funding the government just a few weeks at a time. already this year we experienced a near-shutdown of the federal government in april, a near-default on the country's debt in august, a partial shutdown of the federal aviation administration in august, and another near-shutdown of the federal government three weeks ago because of a dispute over disaster funding.

these repea repeated perils of e scenarios have shaken the american people's perception of this congress. this government generated uncertainty, also has real economic consequences. federal reserve chairman ben bernanke said, and i quote, "the negotiations that took place over the summer disrupted financial markets and probably the economy as well and similar events in the future could over time seriously jeopardize the willingness of investors around the world to hold u.s. financial assets or to make direct investments in job-creating u.s. businesses." end quote. so these are self-inflicted wounds that the economy can ill-afford and reducing the risk of them occurring in the future

would provide a modicum of certainty to businesses in this country and throughout the world. congress can readily eliminate the risk of a government shutdown during this fiscal year simply by enacting a full-year continuing resolution. the sad reality is that in recent years the congress is more and more re-- has more and more relied on short-term funding bills or so-called continuing resolutions to keep the government functioning while we try to reach agreement on appropriations levels. so some would ask, why are the circumstances different this year? they are different for the simple reason that we have already settled on the level of funding for the government. the budget control act of 2011 that was enacted in august set the spending levels for the federal government for this year and for each of the next nine

years. these spending levels were passed with large bipartisan majorities in both chambers. here in the senate the vote was 74-26. therefore, enacting a full-year continuing resolution that sets federal spending at that level should not be controversial. we should not have to rehash the debate on spending levels every few months. adopting a full-year continuing resolution would free up valuable time in congress to work on other legislation intended to create jobs and to help the economy. a full-year continuing resolution also allows the government to operate more efficiently than it can under a series of short-term continuing resolutions. short-term continuing resolutions make it difficult for federal agencies to enter into construction contracts such as to build or repair roads or to enter into long-term supply

contracts that are often less expensive than short-term supply contracts. in other words, short-term continuing resolutions delay critical projects and increase the overall cost to taxpayers. adopting a full-year continuing resolution would address both of these problems. it's clear that passing a long-term continuing resolution does nothing to preclude congress from going ahead and passing individual appropriations bills, as they are agreed upon. stan colander, a respected budget spector has written about this and he said -- i quote from an article he wrote. he said, "if the tried-and-true procedure is used, the c.r." -- that is, the continuing resolution -- "will simply stop applying to the departments and agencies when these separate appropriations are signed.

in appropriations-speak, those covered by the individual spending bill will -- quote -- "disengage" -- end quote -- from the c.r. the only argument that i've heard against passing a continuing resolution for the rest of the year is the argument that doing so will take away the pressure on the appropriations committees and the congress to pass the remaining appropriations bills. that's essentially an argument to force those of us in congress to do what we ought to do; that is, to pass appropriations bills. in order to do our basic job, do we need to subject the rest of the government and the country to a series of threatened shutdowns? and especially do we need to do that at a time when we have already agreed on spending levels? i question this argument. it seems to me that both parties -- democrats and republicans -- and particularly the

appropriators, both in the house and senate, have substantial incentive to reach agreement and pass appropriations bills whether a year-long continuing resolution has been adopted or not. and if it were true that passing a year-long continuing resolution would lessen the incentive to complete action on appropriations bills, nen so be it. -- then so be it. to my mind, the benefit of eliminate ago threat from a series of government shutdowns far outweighs any disadvantage that might result from failure to pass full appropriations bills. so to me the conclusions are clear. first, we have already, as a congress, disagreed on the spending levels -- agreed on the spending levels for the current fiscal year. second, we should make every effort to pass all the appropriations bills reflecting those spending levels as soon as possible. and, third, that while we're making to effort to pass the

appropriations bills, the responsible course is to pass a continuing resolution that extends to the end of the fiscal year. here's achance for us to provide at least a modest agree of predictability for the remaining 11 months of this current fiscal year. i believe we owe it to the american people to do just that. mr. president, i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. sessions: mr. president. the presiding officer: the senator from alabama. mr. sessions: i would ask that the quorum call be dispensed with. the presiding officer: without objection. mr. sessions: mr. president, americans have a right to know how their government is spending their money. if congress were more open and honest about where their tax dollars were going, i think they would be shocked by what they would see. it's even worse than people think, i hate to say it. my commitment as ranking member of the budget committee is to fight for honest budget practices. i have joined with senator olympia snowe to introduce the honest budget act, stripping away some of the most outrageous gimmicks that have been used in congress to advance spending beyond our limits. in fact, i will be filing an amendment today to stop the use of a gimmick called chimps, in

one of the very bills that's before us this week. we'll explain that as we go forward how that leads to improper increases in spending. president obama is taking his bus tour around the country, riding in his taxpayer-funded million dollar campaign bus, really, telling people that we must raise taxes to prevent drastic cuts in federal spending. what the president doesn't say is just how much spending has increased in just the past few years. including through a number of gimmicks and just how much of that money is being improperly spent and wasted, indeed since the president has taken office the first two years, we saw a 24% increase in nondefense, nonwar discretionary spending. not social security, not medicare, but discretionary spending. it went up 24% at a time when

this country has never faced larger deficits. according to the congressional budget office, this fiscal year, washington set new spending levels this year, despite our debt. $3.6 trillion went out the door and $1.3 trillion of that was borrowed. we spent not less but more than last year, a 4.2% increase. but we don't have the money. so my challenge to the president is this: during your next speech, i guess these official remarks you're making but they look political to me, before you call for higher taxes on american people, would you be able to look them in the eye and tell them that you cleaned up spending here, washington is not wasting their money? would you be able to look them in the eye and tell them their

money is being spent wisely and effectively with strict oversight? would you be able to look them in the eye and tell them that you are reducing spending, not increasing it? so i fear the answer is no. i fear that any increase in tax rates will amount to nothing more than a bailout for the big spenders here and an incentive to continue business as usual and an excuse to avoid the hard choices that are being made by families all over america when their income is down, by cities and counties and states all over this country making the kind of tough choices that eventually will help them to be a more productive institution for the taxpayers. so let's consider the situation here in congress. the senate democratic majority

hasn't had a budget plan for over 900 days. indeed, sunday was the 900th day this congress has gone without a budget. the republican house has produced a really historic, effective budget that would change the debt trajectory of our country in a positive way. it wouldn't do everything that needs to be done, but it was a significant positive historic step. the senate, nothing. it's hard to remove waste from a budget when you don't even put together a budget plan. we should bring these spending appropriations bills that we have on the floor now through the regular order one at a time, not three at a time. trying to find savings in each and every one of them every place we can. we owe it to the people who send us the tax money that we

disburse up here. cramming three bills through in one is no way to run this government. we, i suppose, are supposed to say thanks to the majority leader reid for allowing us to have some amendments on this bill instead of -- because we have got three, only three appropriations bills in one rather than all of them in a super omnibus as we have been having. but there is time to move each bill through the congress. our leadership would tell us there's not. we haven't done much at all all year. we could have passed a budget. we could have been moving appropriation bills long before now, one at a time, brought forth under full amendment process, under strict scrutiny with every possible effort to see what we can do to bring in

our -- fulfill our responsibilities without running up the debt. so i would ask how can my friends on the other side of the aisle ask anyone to pay more in taxes when they aren't even willing to comply with the budget control act and produce a budget plan in the regular order? washington asking for more tax revenue is like an alcoholic asking for more cash before a trip to the liquor store. even if the alcoholic asks a millionaire for the cash, it doesn't change the fact that the money is not being wisely used. for example, just a few weeks ago, we learned that lawyers at the department of justice went to a conference where they were billed $16 apiece for muffins. and we all know about the half billion dollar loan for the

now-bankrupt solyndra, yet another big business ally of the white house. president obama has coined the term the bucket rule in his push to raise taxes. this rule relies on a little sleight of hand since buffet pays mostly a capital gains tax. the upper bracket as we all know pay the higher income tax rates. that's how our system works. but this debate about taxes is a little premature. that's why i would like to suggest something called the solyndra rule. under this rule, before any proposals are offered to raise any taxes, we first put an end to wasteful and inappropriate spending in washington. until we do, raising tax rates only funds washington's continuing abuse of all american taxpayers.

but the waste is not limited to headline-grabbing controversies. it's pervasive throughout, i'm afraid, virtually every aspect of our government. the food stamp program, a popular program, the snap they call it now, supplemental nutritional assistance program, is the largest item in the agricultural budget. i think by far. spending on food stamps -- get this -- has increased 300% in just ten years. it's nearly doubled since president obama took office. and in the appropriations bill before us this week, the democratic majority here would propose to make that 300% increase a 350% increase. the bill would increase snap spending by 14% over last year. again, even more. 11 million more americans are on

food stamps now than when the president took office. is the size of the benefit has increased 31% since 2008. when the food stamp program was expanded nationally in the 1970's, food stamps were used by 2% of the population. at the beginning of the last decade they were used by 6% of the population. today, that figure has risen to 13%, one in eight americans. this sevenfold increase in food stamp usage demands honest examination. it's time to look under the hood of this program. what is going on? a recent article in "the milwaukee journal-sentinel" reported that wisconsin food stamp recipients routinely sell their benefit cards on facebook. the investigation also found that, quote, "prosecutors have

simply stopped prosecuting the vast majority of food stamp fraud cases in virtually all counties, including the one with the most recipients, milwaukee," close quote. in michigan, a $2 million lottery winner continued to receive food stamps because his winnings were counted as an asset and not income. i kid you not. apparently he asked about it. they said well, it's not income, it's assets, you don't count assets. but you're supposed to. eligibility standards have been loosened across the board, people are getting food stamps that do not fit the program's requirements. we've always had a problem with this program, as a federal prosecuting united states attorney and assistant united states attorney for almost 15 years, i personally prosecuted fraud in the food stamp program.

they were used as currency among drug dealers in many areas of our country. there are all kinds of problems and we've done little or nothing about it. nothing about it, really. one glaring example is something called categorical eligibility. what this means basically is that even if your level of wealth ordinarily would make you ineligible for benefits, you will still get food stamps simply because you use another government program. if you use another government program, you qualify for it. apparently they automatically makes you eligible for food stamps. for example in one state they've included information for a pregnancy hotline, in other words if you qualify for the pregnancy or use a pregnancy hotline, apparently you qualify for food stamps. you automatically become eligible for them.

in many states, all that is needed to become food stamp eligible is to be mailed a brochure by the government. and again, regardless of the assets the individual might have. so the amendment i'm filing today would eliminate categorical eligibility. only those people who are eligible under food stamp requirements would be eligible to receive the benefits. it's not too much to ask of an applicant for a benefit worth thousands of dollars to file an application under oath that assures that the person is really in need. and qualifies under the law to receive a benefit paid for by the taxpayers of this country. is that too much to ask? the second amendment i'll be offering today would set next year's food stamp funding at the same level that the house of

representatives has passed. the proposed $9 billion increase would amount to a decrease would amount to nearly $100 billion in savings over the next ten years in the food stamp program. $100 billion savings. assuming no further increases in the program. by the way, i just met an alabaman who is familiar with the alabama harbors and waterway system. that program totally, nationally, comes in at less than a half a billion dollars. we've had three ships run aground in recent months because we didn't have the money to do the dredging. a few million dollars. this is talking about saving

$10 billion, $9 billion a year. a billion dollars is a thousand million. nine thousand million dollars when a few hundred million dollars would fix our ourways. a half a billion dollars would fund the -- double the current waterway bill in the entire united states of america. so surely members on both sides of the aisle can agree that we need to be focused on making programs more effective before we increase them beyond on this program beyond its 100% growth already. so the greatest danger our economy faces, in my opinion --, and i believe that of experts, we've heard testify at the budget committee -- is the debt. the cloud, the -- that the debt places over our economy is

endangering it. it's costing economic growth, it's costing jobs this very minute. and the first thing we need to do is see if we can't reduce that debt without raising more taxes on a weakened economy. that's the first responsibility, i believe. so under the president's leadership, the deficits have increased dramatically each year. no one can deny this. meanwhile, the president's stimulus plans have resulted in not less but more unemployment actually. to restore prosperity, we need an honest, concrete budget plan that restores confidence, ends waste, creates private sector growth. such a plan must reduce the deficit. the experts tell us, by at least $4 trillion over the next

ten years. but the plans we have in place today and if you're committee of 12 reaches the agreement that they've been asked to reach, they would, in effect, accomplish a $2.4 trillion reduction in our deficit over -- our deficit increase, not our debt. it would reduce the projected deficit increase by $2.4 trillion. but the experts tell us we need to reduce it by $4 trillion. bipartisan. mr. erskine bowles, appointed by president obama who head his own debt commission, said $4 billion. mr. zandi who has been advising the democratic majority testified a couple weeks ago you've got to have $4 trillion in reduced spending and reduced

deficits. so we're not getting there. we're not doing the things necessary. and i truly believe -- and i hate to say it -- that we are still in denial in this congress. we haven't realized how serious the threat is. some of the things we're going to have to do. business as usual cannot continue. and i hope that as we go forward with this legislation we'll get some votes that can actually begin to reduce spending in a number of areas. i hope during the course of this debate the people of the united states will begin to focus on what's happening in the congress and hold us all accountable, makes sure we're managing your own effectively. and if we do that, we might surprise ourselves. indeed, we would surprise ourselves. how much that could be accomplished in a decade of sustained, smart effort to eliminate wiewf wiewf -- waste,

fraud and abuse to reduce spending that could be contained. the defense budget has to tighten its budget. the defense department, no doubt about it. but you can't balance the budget all on the defense department. their budget makes up less than half of the deficit this year. our deficit this year will be about $1.3 trillion. the defense budget is about $529 billion. so it's less than -- way less than half of it. so we've got to do across the board in programs that aren't being run well, that are surging out of control like food stamps, which are the largest -- one of the largest expenditures in the entire federal budget, they need to be brought under control. we may not have enough money for the highway bill. it's about $40 billion. we're now spending twice that on food stamps.

having tripled it in a decade. so i would just say to my colleagues, we need to get serious about spending. i believe we can do better and we can surprise ourselves if we make a -- a firm determination to do better, and i look forward to offering amendments that will help us get there. i thank the chair and would yield the floor. i note the absence of a quorum. a senator: mr. president, i ask that the quorum -- that the quorum call be lifted. the presiding officer: without objection. the senator from connecticut. mr. blumenthal: i ask i be permitted to speak as if in morning business. the presiding officer: without objection. mr. blumenthal: thank you, mr. president. i agree with my distinguished colleague from alabama that the united states senate can no longer deal with serious issues relating to economic and national security as if we were

doing business as usual. i have slightly different views in some instances radically different views, but i hope on the issue that i will discuss here that we can really come together on a bipartisan basis in support of the teachers and first responders back to work act, which i am cosponsoring. and i hope for a bipartisan support because this bill should be about as far from a partisan issue as can be. i hope we can all agree that what america needs at this moment in our history is policies that put america back to work and help to protect and create jobs. we need to put connecticut back to work and every state in our union back to work policies that favor, not just our national

security and make us safer and more secure, but also invest in our work force for the future. and there's no better place to start than with teachers and first responders. funding these two professional areas is much more than an immediate need, it is a commonsense solution and a national priority in promoting safe and secure communities and a highly educated work force. we all know the numbers. tens of thousands of jobs, 300,000 jobs, to be more precise, in our schools have been lost due to budget cuts in the last few years. in connecticut alone, 3,600 jobs have been lost in our schools. those numbers are not just

abstract, speculative statistics. each of them attests to an individual whose potential creativity in a classroom and possible contribution to our young people has been lost. it attests to the loss of individualized attention to students at a critical point in their lives when they need that kind of care. and every one of them means an educator, probably another educator, is stretched farther, burdened more in the capacity to provide a positive learning environment for our kids. the teachers that would be supported by this bill are not numbers, they are not statistics, they are vital to our most precious resource, our

children, and this bill is not about only their fate, it is about our children. it is about the fault of their learning. and it's about the quality of our future work force in this nation. when manufacturers tell us as we go home that they need people with the skills to match jobs that exist now or will be created in the future, this measure will help to provide them with the work force they need and deserve to make things in america, and to make sure that america is competitive in the world economy. this measure meets our most urgent priorities -- our children, our competitiveness in the world and our security and safety in our communities. we all know that fiscal challenges have forced our towns and cities to make cuts going to the bone of what they feel is

fundamental and essential to our schools and also to our first responders, and this bill is in a sense an emergency response, a first response to those needs, because if we fail to meet this challenge, the lives of our children will be changed forever, the lives of children in connecticut affected by those 3,600 teachers will be diminished and degraded forever by the loss of classes and tutor ing and teams that will be ended. our first responders need this bill as much as our teachers, and not just our first responders but the people that they serve. every day, we urge our children to follow their example, their integrity, their commitment, their service, and yet as budgets have been cut, we have been all too willing to cut the

first responders who should be the last to go. this approach not only weakens our economy, it weakens the safety of our neighborhoods and our communities, and this bill is just common sense about putting those people back in their jobs, back on their roots, back in their cars and vans and their offices. the numbers are not sufficient to tell the whole story, but those numbers are staggering. this bill will invest $30 billion to support state and local efforts which otherwise would be lost. these efforts to retrain, rehire, recruit good people for these jobs in connecticut and around the country are absolutely essential. the shortfall of $2.9 billion in connecticut as a result of this

fiscal crisis has been stunningly impactful to our state. we have been forced to slash funding for programs, and the 3,600 jobs lost in connecticut will take their toll in a slowed recovery and an extended downturn. the teachers and first responders back to work act will provide connecticut with an additional $336 million to support 3,800 positions that are essential to our children and the safety of our communities. this money will give a boost to the state's economy and improve education, and we know it is undeniable and we know that we need these positions in connecticut, we need them in the country. america needs to get back to work, and we know that teachers and first responders are the right place to begin.

let me just close by saying as i go around my state, what people tell me -- and they are not politicians. some of them could be less interested in politics, but they are ternd that classes are canceled, that teams are uncoached, that music and arts programs are ended, and that their students are untutored. they want action, they want decisions from this body. we have an obligation to meet those needs and to provide this response for teachers and first responders, and i urge that we do so on a bipartisan basis in an effort that is fully funded from the tax on millionaires

that we have proposed. thank you, mr. president, and i yield the floor. i note the lack of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from illinois. mr. durbin: mr. president, i ask unanimous consent the quorum call be suspended. the presiding officer: without objection. mr. durbin: and consent to speak in morning business. the presiding officer: without objection. mr. durbin: mr. president, tomorrow night, we expect 15 million americans, including a lot of children, to tune in to watch the first game of the world series. it's a big deal for a lot of people and a lot of families. we watch our heroes and the championship of that great american sport of baseball. there are many fans on both sides, of course, with texas and st. louis facing off. i know where senator blunt will be, rooting for his cardinals and i will be joining him in that effort. it will be a great contest. we look forward to it. but i want to raise another issue related to baseball which

several of my colleagues joined in today in a letter that we sent to major league baseball and to the players association. senators lautenberg, harkin, blumenthal and i today called on major league baseball players association to ban the use of all tobacco products including smokeless tobacco on the field, in the dugout and in the locker rooms at all major league baseball venues. you see, unfortunately, among those 15 million fans are a lot of children who watch every move that their heroes on the diamonds will make, and as they watch those, they undoubtedly note that little puff in the lip, that can in the pocket, and they think that's part of being a great baseball player. they decide that they, too, want to be great baseball players and they are just going to imitate the conduct of those baseball major leaguers. the 2009 national youth risk behavior survey found that the use of smokeless tobacco

products has increased by 36% among high school boys since 2003, and the proportion of high school boys using smokeless tobacco is now an alarming 15% of all high school boys in america. it's no wonder, the tobacco companies spend millions on advertisements tailored to attract young people to use tobacco products. the industry more than doubled its marketing for smokeless products between 2005 and 2008 to a record $547.9 million. the letter that we sent points out major league ballplayers who use smokeless tobacco at games are providing celebrity endorsements for these tobacco products which encourage many young people to take up smokeless tobacco. it's a dangerous product. we know that every year, tobacco kills 443,000 americans, most of whom started their tobacco addiction as teenagers. the surgeon general, centers for

disease control and prevention and the national cancer institute have concluded that smokeless tobacco causes cancers of the stomach, larynx, esophagus and oral cancer and can result in disfiguring surgery, pancreat i can cancer and -- pancreatic cancer, one of the deadliest forms of cancer. the use of smokeless tobacco is linked to cardiovascular disease, gum disease, tooth decay and mouth lesions. mr. president, this has been a battle i have been engaged in for a long time. i started off battling the tobacco companies over smoking on airplanes over 25 years ago. i won that battle, and i didn't know at the time but that victory, along with my colleague senator lautenberg, was a tipping point in america. from that point forward, people started asking questions. if it's not safe to smoke tobacco in an airplane, why is it savannah train, a bus, an office, a school, a hospital?

and one by one, those opportunities to smoke in those places started to close up. people today would find it incredible -- in fact, many young people still can't believe it that we would allow people to smoke on an airplane, but many of us remember it well. america has changed but when it comes to smokeless tobacco, i'm calling on major league baseball and the players' association to be part of positive change on behalf of their young fans. let them set an example in their negotiations with the major league baseball owners to eliminate tobacco from the baseball field, the dugout and all aspects of the game of baseball. that would be a great message. it would not only show responsible conduct on the part of the baseball players, but it will show their fans how much they love them, that they're willing to make an extra sacrifice to protect them from the dangers of smokeless tobacco. it's not a new battle. i've been involved in this before, i've called on major

league baseball before. i can tell you that bud selig is strongly in favor of what i'm asking for, i talked to him on the phone just a few weeks ago. but it really comes down to this negotiation, the contract between the players and the owners. and usually it becomes a bargaining chip at the table. let's not let the health and safety of young baseball fans across america be a bargaining chip between the major league players and the owners. let's win one for the kids across america. i hope that the major league baseball players will show the leadership which i know they can show and eliminate smokeless tobacco from the game of baseball and really give our kids across america the greatest baseball fans in the world the help that they need to avoid this deadly habit. mr. president, i yield the floor. and suggest --. a senator: mr. president. the presiding officer: the senator from maryland. ms. mikulski: thank you very much, mr. president. i rise to pose a pend -- oppose

a pending amendment, the amendment offered by the senator from arizona, senator mccain, that is amendment number 740. mr. president, this amendment would eliminate any funding under the economic development administration for trade adjustments assistance. trade adjustment assistance under the economic development administration is $15.8 million. this amendment would stop a.d.a. from implementing the t.a.a. for something called the firms program which was just reauthorized last week by the senate. the trade adjustment assistance for firms is the only program specifically designed to help small manufacturers hurt by import competition.

let me emphasize, it's the little guys. it's the machine tool shop, it's the small to medium sized business that we go hoorah-hoorah for in the senate all of the time. but when it comes to helping them when they were hurt by trade imports or their intellectual property has been stolen, we're not going to give them help. i oppose this amendment. the economic development administration is in the commerce, justice, science subcommittee. it was reauthorized by the senate. now, under the bill that was passed, it would provide technical assistance, mask federal funds to help develop and implement a plan to help them get back on their feet. it's a competitive grant program, and the largest grant is $75,000. now, the trade -- the trade adjustment assistance for

something called the firms program was created back in 1974, 1974. it was under gerald ford to help small business and small manufacturers adjust to increase imports and increased international competition. the 2011 trade adjustment assistance bill passed last week authorized this program at $16 million and said the e.d.a. should manage it. the c.j.s. follows the authorizing direction, as we should. trade adjustment assistance for the firms program, the small business, helps them adjust, retool, and stay competitive in an increasingly global economy. in 2010, this program enabled

334 -- 330 firms to devise strategies to get back on track. what did it help them do? identify new markets, improve efficiencies in their operation, and also help them identify additional financing. 98% of the companies that participated are still in business after five years. without t.a.a. for the firms program, many of these communities -- excuse me, many of these companies would be out of business. since 2006, it is estimated that over 50,000 manufacturing jobs were saved because of this. you know, manufacturing is the backbone of america. one of the reasons we're in the economic turmoil that we're in now is that we've lost so much manufacturing. now, we give all kinds of tax breaks to send jobs overseas. we also do bailouts to help the really big boys like the

automobile industry, and we had to help them. i understand that. but for these small, medium sized businesses some of which i visited in my own state, they need this kind of help when their whacked by often subsidized imports. you know, many of my companies know how to compete with other companies, but they often feel they're competing with other countries. they know what to do, and we need to be able to help them do it. trade adjustment assistance is important. if we don't invest in helping our manufacturers stay in the global game, we're going to lose out. so we would hope that we would defeat the mccain amendment. during the senate consideration of the trade adjustment bill, our colleague -- the other senator from arizona offered an amendment to strike the program then. it failed 43 by 54.

i hope this amendment fails again. let's use some of the federal help to help those that are creating jobs. if you want to talk about creating jobs in manufacturing, let's give this program, modest, small. we can help small and medium sized businesses after they've been whacked off by unfair and anticompetitive trade practices. mr. president, i yield the floor. the presiding officer: the senator from arizona. mr. mccain: mr. president, if it's agreeable to the managers i will discuss two of my amendments, one the amendment to prohibit the use of transportation enhancement grants to fund certain projects and the other number 740 to eliminate funding for trade adjustment assistance for firms.

is that agreeable? i thank the senator from maryland. i would like to talk about the remedy that would -- that would remedy the misplaced focus of congress by improving our nation's crumbling infrastructure. under current present law, 10% of funding provided from the surface transportation program must be used for transportation enhancement activities. let me make it clear. when you pay your taxes on a gallon of gasoline and it's sent to washington, 10%, 10 cents out of every one of those dollars, is -- has to be used for transportation enhancement activities. if the state's priority is to rebuild a bridge, 10% of it has to go to transportation

enhancement. if the state's priority is to build a new freeway, too bad. 10 cents out of every dollar must still be spent on, quote, transportation enhancement activities such as transportation museums like the corvette museum in kentucky, the white squirrel sanctuary in tennessee, landscaping along vegas -- las vegas highways, walk waste, bike paths and other activities. many of these programs may be valuable and they could be valuable. but shouldn't, rather than a mandated 10% be used for those purposes, shouldn't the states and the local authorities be the ones to make those decisions if they think that the money could be better spent on other priorities? rather than we here in congress mandating that 10% should be

used for transportation enhancement activities. now, everybody knows and the president has spoken eloquently about our nation's highways, roads, and bridges are crumbling and in need of repair, so it doesn't make sense to mandate any federal dollars to something other than those especially since the priorities of the state and local governments may be very different. the amendment would prohibit funding in the bill for seven of the 12 transportation enhancement activities. specifically, funding would be prohibited for scenic or historic highway programs, including tourist and welcome centers, landscaping and scenic beautification, historic preservation, rehabilitation and operation of historic transportation buildings, structures, or facilities, control and removal of outdoor

advertising, archaeological planning and research, and establishment of transportation museums. now, i will be the first to say that some of those are good programs. some of those may be necessary. but none of them need to be mandated. it would not prohibit this -- this amendment does not prohibit funding for pedestrian and bicycle facilities, pedestrian and bicycle safety and education activities, conversion of abandoned railway corridors to trails, environmental mitigation of highway run-off pollution, reduced vehicle caused wildlife mortality, habitat connectivity and acquisition of scenic easements and scenic or historic sites. frankly, i would like to see it all eliminated, but i can understand an argument for the five that are not included in this amendment. now, we're talking about real

money. according to the department of transportation, almost $1 billion was educated for transportation enhancement funds in 2011. since 1992, more than $12 billion has gone to these programs. you know, my colleagues can argue that these are important. i argue that it makes more sense to stop forcing states to spend this money on flowers and museums and allow them to spend it on 146,633 deficient bridges in this country. my home state of arizona alone has 903 deficient bridges. if the state of arizona should want that money spent to repair bridges, it seems to me that they should be allowed their priorities, rather than 10% of it being mandated for any purpose, much less those seven

that are outlined in the amendment. we know what the debt is, $14.8 trillion. we've got to spend our money on -- in a fiscally responsible manner and not on special interest projects. for example, tennessee, the state of tennessee has more than 3,800 deficient bridges. because of this federal mandate, however, states are forced to spend valuable and limited transportation dollars on transportation enhancement projects, such as the white squirrel sanctuary in kenton, tennessee. kenton, the home of the white squirrel, has spent $269,404 on the sanctuary. the funding for the white squirrel sanctuary was used for construction of walking trails, including brick crosswalks, footbridge and trailhead parking within kenton to provide for the

safe observation of white squirrels. the lincoln highway, 200-mile roadside museum in pennsylvania received $300,000 to commemorate the historical roadway with several items along the 200-mile route. these funds were used for items such as signs, quote, colorful vintage gas pumps painted by local artists, and this refurbished coffee pot, refurbished coffee pot pictured on this poster board. meanwhile, pennsylvania ranks first out of all states for deficient bridges. yet it seems to be more important to refurbish large roadside coffee pots. instead of spending money on fixing california's 7,091 deficient bridges, federally

mandated tax dollars were spent on antique bike collections, a dragon gateway and a sculpture for a parking lot in laguna beach. specifically, the university of california received $440,000 to purchase and display 60 antique bikes for its bicycle museum collection. los angeles spent $250,000 to aid in the construction of the twin dragons gateway entrance to the chinatown area. the national corvette museum in deny kekentucky received money d a national corvette museum simulated theater while over 1

1,300 are functionally deficient. now, i must say from the interest of full disclosure, i have a special feeling for the corvette. my first means of transportation on graduation from the naval academy was a modest model of the corvette, and i almost wanted to take this out. but since a national corvette museum simple later theater -- simulator theater has very little to do with transportation enhancement, i felt compelled to add this in. that has spent millions of federal transportation dollars to make vague as highways beautiful. in 2008, nevada received $6.3 million in transportation enhancement grants. instead of spending the money on road upgrades or repairing the 804 deficient bridges, the money was used for landscaping projects. for instance, $498,750 -- $

$498,750 went for decorative rocks, native plants, some pavement graphics, a few walls, and some great big granite boulders to beautify an interchange to las vegas to 15 beltway. i think it is a very beautiful boulder. nevada also spent $319,000 on more landscaping projects that included more rocks and more plants on a highway beautification project only a few miles down the road. let me say again, i think that highway beautification projects are very important, and the i think that when local and state officials want to have that kind of beautification along many of the freeways in my state, we planted cake pus and biewgen via and others, i think that's wonderful. but the fact is that when we

have bridges that are actually dangerous for our constituents to use, then obviously we have to make some prioritization. as i mentioned, local officials discussing the projects were quoted as saying -- i'm talking about the nevada graphics and big, giant boulders and rocks -- "we applied for the federal enenhancement dollars and they can only be used for landscaping"-- landscaping"-- "did only be used for landscaping and pedestrian-type improvements." in other words, these local officials in nevada said they had no choice as to what to spend the money on. in addition, the in-do ndot wasd as saying, "it's really getting out of hand to where these pots

of money have those constraints associated with them and you can't spend money where you want to." florida spent $3.4 million of stimulus i transportation enhancement funding for a wildlife ecopassage. the wildlife cross work will be used by turtles and other animals that live in lake jackson, florida. the turtle tunnel will consist of a series of tunnels that will direct all the animal traffic to a 13-foot tunnel that will go under the road. even though florida has received millions in stimulus funds for the tunnel, the permanent ecopackage is only in the design stage and is not fully funded. it needs $6 million more and it's unclear how long it will take to get the project built. meanwhile, florida has over

1,800 bridges in need of repair or improvements. other examples of wasteful and unnecessary mandated transportation enhancement projects include $400,000 for a pennsylvania trolley museum. $23 million for a tennessee bicentennial history memorial. $234,000 for an art walk in vermont. $160,000 for a roman bathhouse renovation in west virginia. $500,000 for the renovation of the toledo harbor lighthouse in ohio. $150,000 for salamander crossing in vermont. $1 million for the north carolina transportation museum. $78,000 for a railroad caboose relocation and renovation.

$210,790 for the merchant and trover's tavern in nother. $40,000 spent on a new town sign in iowa. $216,000 for fencing around oil wells in oklahoma. $500,000 for a santa ana train station mural. $44,500 on welcome signs in south carolina. $150,000 to print and produce brochures and replace a brochure display case in kansas. $3 million on land scapes scaping and a pedestrian walkway at the indiana state fair grounds. so, here we are with $1 billion

spent in just last year. more than $12 billion gone in the last -- since 1992 -- and the numbers go up. so i would hope that my colleagues would vote to find it necessary that these kind of funding would be prohibited for the programs such as i have outlined. and i have to be honest with my colleagues. if i had my way, about 80 cents out of every dollar in gas taxes, if i had my way, would stay in my home state of arizona, and in every state of america where it's collected. and then we'd let the governors and the city councils and the mayors and the county authorities make the decisions as to what that money should be spent on p. i would remind my colleagues that we enacted the gas tax during the eisenhower administration in order to build a national highway system.

long ago, the national highway system was completed, and yet the money still goes from our citizens to -- directly to the federal government, and it should be going to the states to make the decisions which they can make best. i doubt -- i doubt if many state authorities would have made the decisions such as i have just described there, and i also believe that a lot of the authorities and officials for -- in various states would agree with the deputy director of the nevada department of transportation director for southern nevada who was quoted as saying -- quote -- "it's really getting out of hand to where these pots of money have

these constraints associated with them, and you can't spend money where you want to." so i hope that my colleagues would vote in favor of that amendment. now, madam president, according to the previous agreement, i will discuss amendment number 740, which is to eliminate funding for trade adjustment assistance for firms. i want to emphasize, "for firms." now, again, in interest of full disclosure, i believe that trade adjustment assistance is a compromise that was made back under president clinton's administration when certain free trade agreements -- specifically, as i recall, nafta was agreed to -- and the trade adjustment assistance program was set up for individuals that would be adversely affected as a

result of the enactment of free trade agreements. now, we wouldn't have enacted the free trade agreements if we didn't believe that the overwhelming effect of free trade agreements would be beneficial to business in the united states and would result in hiring and jobs and a better economy. but i also understand that there may be individuals in specific cases where these free trade agreements hurt the businesses in certain places in the country. now, i must say that i opposed the increase in the trade adjustment assistance, which was part of the deal made in order to ensure passage of the three free trade agreements that were just concluded in this body a short time ago. a free trade agreement with south korea, colombia, and panama.

but i do believe that there are some aspects of this program that we should examine more carefully. the t.a.a. for firms programs provides matching grants up to $75,000 to firms that have been impacted by trade so that the firms can hire private-sector consultants to help them become competitive. the program is administered through a network of regional, nonprofit trade adjustment assistance centers who are chosen noncompetitively. it has been my experience that wherever federal dollars -- that wherever the federal government abandons competition, the american taxpayer usually loses. these t.a.a. have been known to charge exorbitant overhead rates of 60% of grant funding. and the government accountability office has questioned the program's effectiveness and administrative costs. according to the president --

this president, this administration sent over a termination list for the fiscal year 2012 budget -- the president of the united states proposed, and you quote, "the administration proposes to eliminate the economic development administration trade adjustment assistance for firms program. that is not the senator from arizona's proposal, although it is in this amendment; it is th e president of the united states's proposal, who i think it would be hard for my colleagues on the other side of the aisle to argue that he is insensitive to the plight of firms and individuals and companies that are affected by free trade agreements. now, according to the president's termination list, the message that he sent over to congress, the justification goes on to say, "the administration believes that it would be more effective to concentrate e.d.a.'s resources on public

investments in infrastructure and institutions that provide -- that promote innovation and entrepreneurship." "the inclusion of this program in the president's termination list is strong evidence that we should no longer be funding the program. it also begs the question, why are we choosing to spend almost $16 million on a program we don't need and has consistently had its effectiveness questioned? this is money we don't have and don't need to spend. as i said before, i've always been skeptical of trade adjustment assistance and similar programs like this one for firms. i believe these programs are potential vehicles for government waste, market interference unfairly, and puts the government in the position of choosing winners and losers. i believe the evidence stating that trade adjustment assistance and similar programs achieve their goals is suspect as well.

but that fight is over. at least for the time-being. but i might add, there's still many questions about the t.a.a. program. we need to analyze whether the t.a.a. program is really doing what it is intended to do. the following are some of the questions and concerns that we should consider: does the t.a.a. program provide overly generous benefits to a narrow population? according to analysis from the heritage foundation, based on statistics from the bureau of labor statistics, in the third quarter of fiscal year 2009, only 1% of mass layoffs were a result of import competition of overseas relocation. another question: is there evidence that trade adjustment assistance benefits and training help increase participants' earnings? an analysis by professor car a m. reynolds of american university found "little

evidence that t.a.a. helps displaced workers find new well-paying employment opportunities." in fact, t.a.a. participants experienced a wage loss of 10%. the same study found that in 2007, the federal government appropriately -- appropriated $855.1 million to t. aa. programs d. to t.a.a. programs. of this amendment, funding for training programs amounted of to only 25%. in 2507, the office of mapghts and budget rated the t.a.a. program as -- quote -- "ineffective." unquote. the o.m.b. found that the t.a.a. program fails to use tax dollars effectively because, among other reasons, the program has failed to demonstrate the cost-effective informs achieving its goals. the american people e hurting. unemployment remains at unacceptable levels and is estimated to continue to grow.

we need to cut unnecessary spending like this program at a time when our national debt has reached the unsustainable level. and the american people face painful choices about how to cut our federal budget. now, i want to say, conclude again by saying that i don't believe that the trade adjustment assistance is a viable program, but i also understand what was decided by both sides of the house with the support of some of my republican colleagues and that trade adjustment assistance was the price for passage of the three trade agreements that have been signed by the president of the united states. but i think in this case, on this particular program, where the president of the united states has asked for its termination because of its ineffectiveness and it would

be -- and i believe that it would be more effective to concentrate these resources on public investment and infrastructure and institutions that promote innovation and entrepreneurship, i hope that we would abide by the recommendation of the president of the united states, whom, as my colleagues know, i'm not always in total agreement with. madam president, i yield the floor. a senator: madam president? the presiding officer: the senator from pennsylvania. mr. casey: thank you, madam president. i wanted to respond to my colleague from arizona on a couple of points. i rise in opposition to his amendment, but i think there's a lot we agree on based upon the remarks that he just gave about making sure the programs work and are efficient to deliver results for taxpayers. i just don't agree with eliminating the program in this case, but i appreciate the words he said about the trade adjustment assistance and his recognition that workers are going through a tough time right

now. this amendment is really disagreement about what we do about firms. and in this case it's pretty simple. we have trade adjustment assistance that helps individual workers, and i think there's a lot of agreement on that. but this particular program is about individual companies. basically what we're talking about here is about 265 firms in the country. the average quantum of assistance is a little more than almost $62,000 per firm. and part of that is simple as having an expert come into a company that needs help, and because of foreign competition, and i would say unfair foreign competition, and helping them with their process, being able to produce a product in a more efficient way. changing an assembly line or giving advice in ways sometimes a company isn't able to figure out on their own. so it does provide that technical assistance. the other part about this is i think it's really an effort to make sure that these firms can

better compete in a very tough environment, frankly, that's often been undermined by trade agreements. that's my perspective i. know some don't share that. the other number i point to in terms of the effectiveness of the program is that 98% of the companies that have received this trade adjustment assistance help for their technical assistance or otherwise are in business more than five years later. so i would debate the question about the effectiveness. but this is really, it's the same spirit or the same belief that underlies trade adjustment itself, is that when a worker is thrown out of a job because of unfair foreign competition or the ravages of a tough economy, we say to that worker, we're going to retrain you to get you back into the workforce. and that's the purpose of the worker part of this. the same is true of a company. sometimes a company gets their legs knocked out from under them in a bad economy and we say to them we're going to have a program that will allow an

expert to come in and help you get through this period. it's not unlimited. there is a limited amount of money amount natalie for those 26 -- nationally for those 265 firms. i think there is a lot of disagreement here about the basic agreement about the need of a particular trade adjustment assistance program for the companies. i would respectfully rise in opposition to my friend from arizona's amendment. i yield the floor. mr. mccain: madam president? the presiding officer: the senator from arizona. mr. mccain: i thank the senator from pennsylvania, and i'll be very brief. the united states obviously weighed -- the president of the united states obviously weighed in very heavily in favor of renewal and even expansion of the trade adjustment assistance program. this amendment only applies to the portion of the trade adjustment assistance program that the president and the administration specifically pointed out as being ineffective and sent over as a program that

they recommended termination. so i hope my colleagues are not confused that this is an attack, or an amendment which would destroy t.a.a. it would not. it only focuses very narrowly on the portion of the trade adjustment assistance that the president of the united states has requested that be terminated. and frankly, i don't think it would have a tkaplt effect -- a dramatic effect on the entire trade adjustment assistance, i'm sorry to say. madam president, i yield the floor. mr. begich: madam president? the presiding officer: the senator from alaska. mr. begich: i first want to say i know my colleague from alaska was down here on the floor talking about today as alaska day. it was a great day for our country when the final transfer from russia to the united states, the great state of alaska, which has had incredible resources that this country has

benefited from. i just want to wish all the people back home a great alaska day. but before -- i came down to the floor because i know my friend from arizona, senator mccain, offered an amendment on elimination of transportation enhancements. let me speak from two parts. one, as a former mayor that dealt with this issue over and over again, but also as someone who's family has been in the industry and understands the power of a great community and what it can be and what it can do for the long-term economic health after community when you ensure that the infrastructure designed and built right and also someone from the real estate industry. first, as a former mayor, these issues we debate a great deal on transportation enhancements. i know there will be issues at times -- it doesn't matter if it's this program or the defense department or the interior department. i can name any department over

the years that have had issues that have come up that are not the most appropriate expenditure of the dollars. when you look at enhancements and transportation enhancements, there are an incredible asset. i will tell you from alaska's perspective and i will tell you from the mayor of anchorage, as i was for five years. during that five years, five and a half years, we built more roads than the last three mayors combined, over 15 years. in five years we built a ton of roads to enhance our community. but the roads of the 1950's and 1960's are no longer the viable roads of the future. in the old days they used to build them, just pave them. maybe you might put some curb on there. you might put a sidewalk, but barely. that would be considered the road, the transportation network. but things have changed quite a bit. the roads we built in anchorage not only had the pavement, curb, sidewalk, the transportation enhancements, the landscaping that goes along with it, because when you put all that into play,

the net result is you get a better transportation network. you can also utilize it, as we have done, on a couple of roads in our neighborhoods to slow down traffic so there would not be a danger to the children within the zone. or in case of some, where we built pedestrian multiuse trails which i can point to several within our own area where i was mayor in anchorage where these trails became huge enhancements for the neighborhood but also to our visitors. the visitors came and spent money on our economy, maybe they twoepbt a place to -- went to a place to visit or went out fishing or maybe they came back and after dinner went to take an evening walk. these trails that were designed would be another experience that they would see and feel and take back to their own hometown. this amendment that senator mccain has brought forward is opposed by not only the u.s. conference of mayors but the national tour association, are

the u.s. travel association, the southeastern tourism society, and many others are growing on the list because they see not only the value for improving the road infrastructure, but they see the value of attracting a quality of life that makes the property values better around these enhancements, the tourism that comes along with it, the value of economic development. i think there's just a lack of understanding by some members because they like to pick one or two. and i would agree we have to review these programs to make sure they're being used for the right purposes. but in this case i will tell you and i can show you project after project in alaska where we saw a great value. it could be the water street improvements in ketchikan, which during my time here in the last two and a half years, i've seen that development change, the front street of their community. the kenigh river trail improvements, which has incredible salmon fishing but

ensuring those trails are safe. the enhancements and why do you want those trail improvements? because if you have people crawling all over the banks, you'll deteriorate the banks, create erosion. you're destroying the habitat which in turn destroys this great salmon creek. or in anchorage where we improve the creek with the same kinds of enhancements. why? to make it safer for the pedestrians utilizing it. it also ensured that six-plus million fishery continued to thrive because we weren't damaging the habitat. i can go through one project after project after project that we utilize enhancements to improve the quality of our road projects. i know some want to believe road projects are just this az fault and maybe a little drain and that's it. i will tell you now, pulling my hat off for the real estate industry, i spent many years in the real estate industry.

and what people looked for was the quality of the environment around them. if you were on a strip-paved road or barely paved road with maybe a little drain or curb, it had certain value. but if you were on a road that had a nice pedestrian pathway, tphaoeud curb and get -- nice curb and gutter and landscaping, i guarantee you those property values were stronger, better. the local community benefited from that because it had stronger property taxes. the homeowner benefited because they had an investment that would maintain its value because the quality of the infrastructure around it -- the roads, the water, the sewer, and in this case the enhancements -- were of high quality. for those that kind of brushed these off as wasteful expenditures, i can show you again project after project that we took substandard roads, enhanced them with transportation enhancement resources -- dollars -- and the net result is we had economic development occur around it.

we had quality of life improved. we had better values in our properties that are owned by the private sector, whether they be commercial, residential. i would strongly recommend to my friend from arizona that i know it's easy because staffs run around here. they always want to get the worst-case scenario of everything. we can all do that. that's easy to do. you can always find one project somewhere about something. but that's not what this is about. it's about the 90-plus percent, probably 98% of the projects that really are incredible enhancements to communities. again as a mayor and someone who's been in the real estate industry, i have seen the value of these. as i mentioned also, the organizations that don't support these, the tourism industry folks that i mentioned don't support these because they understand that when you are traveling to a community, it is not just about the one item tphug there, go in there for king salmon fishing or maybe in the wintertime, skiing, whatever

it might be. there's these other pieces that people experience. in alaska, we have some great trail systems that people rave about, and they talk about. wherever i go around the country and i run into someone that visited alaska, they will tell me tpheufs -- they'll name the community. if they were in anchorage when i was mayor. they'll say tpheufs your city, and by the way, i went on this trail or that trail. ship creek trail is an skpapl pell -- example, beautiful trail that at lunch time hundreds of people utilize. so again, i would encourage -- and i recognize there's things that i agree with with senator mccain, on multiple things we've worked on, defense authorization. but this one i beg to differ on his rationale for getting the resources. this is important for local communities. the best part of this is, i want to emphasize this is not

congressional earmarks. it is money set aside that the local communities through their metropolitan planning efforts or in the state, through their efforts, decide houd to spend this money. -- how to spend this money. it is the best way to allow local communities less federal control to do the right thing based on some framework and guidelines here. so, if you want less federal government, this is one of those programs that allows the flexibility on the local end to do the right thing, what they think will enhance their road improvements in their communities, may they be small neighborhoods or major highways. i was inviteed to alaska. i'll take him on the bypass to see the bypass, where you can drive, pull out, see some incredible beluga whales. go to see an incredible rain forest at the same time. i will take him to four or five of these projects because he'll want to pull over and take the photos. those will be federally funded

projects that made it possible pore you to do that. why is that important? if you drive the sueard highway, it is not the safest highway. these enhancements have made it a safer place. you can pull over and see sheep walking on the side of the mountains right there. instead of walking on the rind pulling on the side there a little bit, you actually pull off into a wayside. safer, better for tourism. it does the right thing, ensuring that the project is a better project. so again i would challenge my friend from arizona that i will gladly take him on many of these projects and show him the value of what's done -- what we have done with them and the economic opportunity that goes along with it and the jobs that are created with it and the long-term benefit to the values of the properties that are associated with these improvements that are in the private sector. so, madam president, i want to thank you for allowing me a few minutes also again to wish my friends and all my constituents

back home a great alaska day, but also to talk about an important amendment that i think would be the wrong direction if we vote for it. thank you very much. i yield the floor. the presiding officer: the senator from wisconsin. mr. kohl: madam president, i ask unanimous consent that at 4:35 p.m., the senate proceed to votes in relation to the following amendments, cornyn p 775,s a 0 modified with the changes at the desk; mccain number 740. the time until 4:35 be equally divided between the two leaders or her designees, no amendments or points of order be in order prior to the votes other than budget points of order, and that there be two minutes equally divided between the two votes. further, after the votes in relation to those amendments, the following senators be recognized to offer the amendments listed: vitter number 769, collins number 804, sanders number 816,

and landrieu number 781. the presiding officer: is there objection? without objection, so ordered. mr. kohl: i suggest the absence of a quorum, time is divided equally to both sides. the presiding officer: without objection, so ordered, the clerk will call the roll. quorum call:

mr. kohl: madam president, i ask that the quorum call being

rescinded. the presiding officer: the senator from wisconsin, without objection. mr. kohl: i request the yeas and nays ond the cornyn amendment. the presiding officer: is there a sufficient second? there appears to be. the clerk will call the roll. vote:

vote: