“MAKING FURTHER CONTINUING APPROPRIATIONS FOR THE FISCAL YEAR 2007-- Continued” published by Congressional Record on Feb. 13, 2007

“MAKING FURTHER CONTINUING APPROPRIATIONS FOR THE FISCAL YEAR 2007-- Continued” published by Congressional Record on Feb. 13, 2007

ORGANIZATIONS IN THIS STORY

Volume 153, No. 27 covering the 1st Session of the 110th Congress (2007 - 2008) was published by the Congressional Record.

The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.

“MAKING FURTHER CONTINUING APPROPRIATIONS FOR THE FISCAL YEAR 2007-- Continued” mentioning the U.S. Dept of State was published in the Senate section on pages S1891-S1897 on Feb. 13, 2007.

The publication is reproduced in full below:

MAKING FURTHER CONTINUING APPROPRIATIONS FOR THE FISCAL YEAR 2007--

Continued

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 President, I ask unanimous consent that the order for the quorum call be rescinded.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. ALEXANDER. Mr. President, I ask unanimous consent that I be allowed to speak for up to 20 minutes on the continuing resolution.

The PRESIDING OFFICER. The Senator has that right.

Mr. ALEXANDER. Thank you, Mr. President.

A few days ago, I came to the floor deeply concerned because someone, someone over in the House of Representatives--first, let me ask the Chair, will you please give me a minute's notice when my 20 minutes is up?

The PRESIDING OFFICER. At the conclusion of 19 minutes, the Senator will be given notice.

Mr. ALEXANDER. Thank you very much.

Someone over in the House of Representatives, before they sent that continuing resolution or joint funding resolution over here, had taken the Teacher Incentive Fund, which was to be funded at $100 million a year, and reduced it to $200,000. In other words, they killed the funding. I couldn't imagine someone would do that on purpose, and so I came here to say so. I know it was a confusing time and there were lots of different priorities to be met. Perhaps, in the difficulty of putting together the joint funding resolution, it was just a slip-up. I said I hoped it wasn't the signal of what the new Democratic majority's education policy would be because I couldn't imagine the new Democratic majority--or the old Democratic minority, for that matter--or any of us on either side being against the Teacher Incentive Fund.

What the Teacher Incentive Fund does is almost the most crucial thing we need to do in helping our schools succeed. It makes grants to States and cities that are doing the best work in trying to find fair ways to reward outstanding teaching and to reward good principals. Every education meeting I go to, and I have been going to them for years, that ends up being the No. 1 thing we need to do. First are parents, second are teachers and principals, and everything else is about 5 percent. In other words, a child who has a head start at home is a child who is going to get an education almost no matter what else happens. But if you add an outstanding teacher and an outstanding principal to whatever happens at home, the school is better and the classroom is better and the child succeeds. This is especially true for low-income children in America, which is exactly what the Teacher Incentive Fund is designed to meet.

Well, I wasn't disappointed because within 5 minutes after I began, the distinguished Senator from Illinois, Mr. Durbin, the assistant Democratic leader, came on the floor, and I think I am being fair in characterizing his remarks when he said: Whoa, wait a minute. This is a good program. In fact, I just received a call this afternoon, said Senator Durbin, from the superintendent of the Chicago schools, and he said we need this program. He said we have a lot of low-income, poor kids who aren't making it, whom we are leaving behind, we want to help them, and this helps us do that. He said we have a grant under the Teacher Incentive Fund to do it.

We heard further testimony at a roundtable in our Health, Education, Labor, and Pensions Committee that in the Chicago schools they closed some schools where children were not learning year after year after year. What did they do? They put in a new team--a new principal, a new set of teachers. And what did they do with the teachers? They paid them

$10,000 a year more than they were otherwise making to make sure they would go there because they were the teachers known in Chicago to be able to help low- achieving students achieve.

We all know from our experience and research that virtually every child can learn. Some children just need a little extra help getting to the starting line. If you don't get it at home, you especially need it at school. And where you get it at school is from outstanding teachers and principals.

So it wasn't Senator Durbin, who is the assistant Democratic leader in the Senate, who was trying to kill the Teacher Incentive Fund. So I have been wondering for the last few days, well, then, who was it? Who was it? Well, now I know, Mr. President, because they have announced it.

Today comes a letter to me--``Dear Senator Alexander''--on behalf of the National Education Association, the NEA, with 3.2 million members, saying:

We urge your opposition to several ill-conceived amendments to the continuing resolution. Specifically, we urge you to vote ``no'' on an amendment to be offered by Senator Alexander, Republican of Tennessee, that would provide $99 million for the teacher incentive fund.

So the NEA, in its brilliance, has written me a letter to ask me to vote against my own amendment.

I am astonished. That doesn't surprise me so much. Any of our offices can make a mistake. But what I want the President to know, and I want our colleagues to know--I want them to know who is against this, and I want the world to know what they are against. What they are against is helping find a fair way to pay good teachers more for teaching well and to train and help good principals lead schools, especially in big cities where we have a lot of low-income children who are falling behind.

This is not some abstract notion. The President had recommended $100 million for the Teacher Incentive Fund as part of the No Child Left Behind legislation. In a bipartisan way it passed several years ago, and we are in the midst of a remarkably bipartisan approach to see what we need to do about NCLB as we reauthorize it for 5 years, and part of it is the Teacher Incentive Fund.

In a very tight budget, President Bush has recommended not just $100 million for the next year, he has recommended $200 million.

I placed into the Record a few days ago Secretary of Education Spellings' letter saying this is very important. We have just started this program. We made a number of grants to cities all across America, 16 grants across the country, at least one State--in South Carolina. You have cut us off. You stopped us from making an evaluation and reporting back to the Senate, to the Congress, how this is working. You are disappointing these school districts who have stepped up to do this.

That is what has happened. Just to be very specific, here is the kind of thing that the Teacher Incentive Fund grant does. Memphis, our biggest city, has an unusually large number of our lowest performing schools. It is our poorest big city, one of the poorest big cities in America. It has a real solid school superintendent, she's excellent, and they are working hard to improve.

A lot of the Memphis citizens are putting together a special effort to say: One of the single best things we can do in Memphis is to take every single one of our school principals, put them through a training program for a year, hook up with New Leaders for New Schools to do that, continuing after the year, and then we will put them back in charge of their school. We will give them autonomy to make the changes they need to make, and we will see if these children can succeed because we know if they can succeed, if we help them the correct way--

we give them extra hours, as we have in our charter schools, give them extra training, we know they will succeed.

Memphis City Schools and New Leaders for New Schools were awarded a grant for $3.1 million in the year 2006, the first year after the 5-

year grant totaling $18 million. Over the 5-year grant, Memphis plans to provide training and incentive grants to 83 principals serving almost one-third of the schools in the Memphis school system. Principals will receive incentive grants of at least $15,000 a year.

What is wrong with that? Why would the largest educational association in America oppose taking a city with low-performing students and saying we are going to kill the program that trains your principals and pay them $15,000 more a year to do a better job? Why would they do that?

The assistant Democratic leader doesn't agree with that. At least he said so on the floor of the Senate. I don't agree with it. I don't think the parents of the children agree with it. The school superintendent doesn't agree with it, nor does the mayor. Who is against this? We are trying to pay more money to the members of the association that is trying to kill the program. That is what we are trying to do.

It is not just Memphis. I think it is important that my colleagues in the Senate--if the snow and the ice has not caused them to flee to the suburbs. I think most of them are in their offices, maybe a few are even listening. I want them to know that the National Education Association wants to kill the program for the Northern New Mexico Network, the Northern New Mexico Network for Rural Education, a nonprofit organization, one of the 19 grantees of the Teacher Incentive Fund. It is partnering with four school districts. They serve a region with high levels of poverty, high concentrations of Native Americans and Hispanic students, extreme rural conditions, small schools. So the NEA wants to kill the program to help make those teachers and those principals better.

Here's another project, New Leaders for New Schools in the DC public schools. This is a coalition with DC public schools and several others, to provide direct compensation to teachers and principals who have demonstrated their ability to move student achievement.

What a terrible thing to reward--teachers who have demonstrated an ability to move student achievement. Let's kill that program right away. We don't want that happening in the District of Columbia, do we?

Let's go to the Chicago public schools. Chicago has taken a lot of steps in their public schools. The mayor deserves a lot of credit for that. The school system deserves a lot of credit. They know these children can't wait 5 or 10 years to have a good education experience, so, as I mentioned earlier, in some cases they are not moving the school, they are just transforming it. How do you transform a school? There is only one way. You move in a new principal and you move in some really good teachers. There is only one way to transform a school, and that is it.

So the Chicago public schools in collaboration with the National Institute for Excellence in Teaching proposes the Recognizing Excellence in Academic Leadership. At the heart of that is multiple evaluations, opportunities for new roles and responsibilities, recruitment, development, retention of quality staff in 40 Chicago high schools that serve 24,000 students. The NEA wants to kill that program. That is the third grantee.

Let's go to Denver. The Denver public schools proposed a twofold district-wide expansion of its professional compensation system for teachers--that means we pay them more--to develop and implement and evaluate a performance-based compensation system for principals.

My goodness, Denver wants to pay its best principals more money so they might stay in the school? And how are they going to do that? They are going to think about it. They are going to work within the system. They are going to ask for outside help. They are not just imposing a one-time bonus, merit pay system. They are trying to lead the country in doing this. The National Education Association says: No, let's kill it.

The National Education Association not only said, no, let's kill it, they issued a threat to Members of the Senate. ``Votes associated with these issues may be included in the NEA legislative report card for the 110th Congress.'' That means if you vote against the Alexander amendment or anybody else's amendment supporting the Teacher Incentive Fund, what we, the National Education Association, will do is write all the teachers in Tennessee or Rhode Island or wherever we may be and say: Your Senator is anti-education.

Why is the Senator anti-education? Because he wants to support a program to find a fair way to reward outstanding principals and teachers who are teaching low-income children and helping them succeed.

California--my goodness. The Mare Island Technology Academy--here is another thing that NEA would like to stomp out. It proposes to extend a current project to award incentives to teachers and principals instrumental in increasing student achievement. We can't have that in California, at least under the NEA.

The Houston independent school district--maybe Senators Cornyn and Hutchison would like to know about this. It is the largest public school district in Texas, the seventh largest in the United States. It proposes an incentive plan for teachers that focuses on teacher effectiveness and growth in learning. We don't want that in any school, do we?

Guilford County, NC--maybe Senator Burr and Senator Dole would like to be aware of this because their schools proposed a financial recruitment project called Mission Possible and plans to extend the program to an additional seven schools, charter schools in various States.

Another project. Alaska--one school district there serves as the fiscal agent. They are working on the same sort of progress and expanding on a current program with the Re-Inventing Schools Coalition.

South Carolina Department of Education. A modified version of the existing teacher advancement program to implement a performance-based compensation system to address problems with recruitment and retention in 23 high-need schools in six districts. We wouldn't want 23 high-need schools in six South Carolina districts to have a program to pay good teachers more for teaching well, would we? We would like to kill that in the Congress because the National Education Association might put us on their list of not voting for the NEA legislative report card.

Dallas independent school district--they have a similar program. They want to identify and reward principals and teachers based on a combination of direct and value-added measures of student achievement. Can't have that.

The school district of Philadelphia, PA. Let's pay particular attention to this one. The overall purpose of Philadelphia's initiative is to pilot a performance-based staff development and compensation system that is teacher pay and principals, that provides teachers and principals with clear incentives that are directly tied to student achievement, growth and classroom observations conducted according to an objective standards-based rubric at multiple points during the school year. Twenty high-need urban elementary schools that have demonstrated high degrees of faculty buy-in--that means the teachers want it--will participate in the pilot.

Nobody is making them do it. They are volunteering to do it. The teachers want it. Leaders from the school district of Philadelphia's administration and from two unions, representing all Philadelphia teachers and principals, have designed the pilot and will oversee its implementation. So the National Education Association says kill the program in Philadelphia for a lot of high-need kids, even though the program involves the unions who work in those schools. That is a very arrogant attitude, it seems to me.

Ohio, State Department of Education, Eagle County, CO, and Weld County, CO--those are just the schools and school districts and the States where the Department has made 16 grants in the first year of its operation.

As you can see, the common thread running through here is, can we find a fair way to reward outstanding teachers and help in training and reward outstanding principals so they will stay in the classroom, so they will have an even better idea of what they are doing, so we can honor them, treat them in a more professional way? If we were to do that, wouldn't that be better?

Why wouldn't the largest educational association in America welcome this? I know in Chattanooga, TN, when the new Senator from Tennessee, Bob Corker, was mayor, he was more effective than I was in working with the local teachers association or union, and he did just this--

generally with their participation and agreement. And he helped, in a model school system in Chattanooga, TN, find a way to attract teachers to the schools where children were having trouble learning and needed extra help. These were teachers who had shown an ability to help these students achieve more. So they were paid more for that. They were paid more for that.

Let me conclude my remarks. I ask unanimous consent for another 5 minutes, if I may?

The PRESIDING OFFICER. The Senator has that right.

Mr. ALEXANDER. I will conclude my remarks with a little bit of history. If you sense, in my voice, a heavy amount of disappointment, it is because this goes back a long ways. In 1983, when I was Governor of Tennessee, I proposed what then was the first statewide program to pay teachers more for teaching well. We called it the Master Teacher Program.

I was astonished, after a term as Governor, to discover that not one State was paying one teacher one penny more for teaching well. I could not understand how we were going to keep outstanding men and women in the classrooms, particularly--this was 25 years ago, almost--now that women had many more employment opportunities. The math teacher was headed for IBM, the science teacher was going over here. One reason was because of the teacher pay scale. You could make more for staying around a long time, you could make more for getting another degree, but you couldn't make a penny more for being good.

I went around to try to find out how do we reward outstanding teaching, and everybody said you can't do that. Not quite everybody. One person who did not say that was Albert Shanker, who was the head of the American Federation of Teachers, which is the second largest teachers union. Mr. Shanker said if we have master plumbers we can have master teachers, and maybe we need to get busy trying to think of a fair way to do that. He invited me to go to Los Angeles and speak to the convention of the American Federation of Teachers. They were very skeptical--which I understand, because professionals who are already working in their profession have a right to be skeptical of outsiders who would come in and say we are going to grade you. Even though these teachers are in the business of grading themselves.

I spoke to the American Federation of Teachers. I worked with Mr. Shanker. I even raised taxes in Tennessee. Guess who was against doing what we eventually did? The National Education Association. Their President said we are going to send whatever we need into Tennessee to defeat Alexander's silly ideas, and we fought for a year and a half and finally I won, temporarily, and Tennessee established a career ladder program which eventually attracted 10,000 teachers with 10- or 11-month contracts who volunteered to go up the career ladder to a second or third level. They were called master teachers.

We raised the pay for every teacher by $1,000, just if they took the basic teacher competency test. That was voluntary, too, but more than 90 percent did it. And 10,000 teachers did. That was quite a number. This was sort of the model T of the teacher compensation plans.

Since then, a lot has happened across the country. Governor Jim Hunt and others, with the support of the teachers unions, have developed the National Board of Professional Teaching Standards Certified Teacher Program, which is one way of certifying a biology teacher in the same way you would certify an orthopedic doctor. This is helpful if you are on the school board in Providence, you can say: I don't have the means to evaluate if this teacher is better than that teacher, but if you are a board certified teacher we will pay you $10,000 more a year. That has worked pretty well. Some places around the country have found ways to do that, but it is not possible for a school board in the town to take on the whole mixture of difficulties that go with a fair way to reward teachers.

We did it in 1983 and 1984, and we had to create a panel of teachers who were outside the district of the teacher who wanted to be a master teacher to avoid politics. We made sure one of those teachers was of that same subject. If it was an eighth grade U.S. history teacher, then somebody on the panel was an eighth grade U.S. history teacher. Principal evaluations were part of it and a teacher portfolio was part of it.

One thing we did not know how to do then and we are just beginning to understand in our country is how to measure student achievement. Our common sense says a teacher makes a big difference, but how do we measure it? The challenge, as we work on schools that need help, is how do we make sure they have the best teachers and the best school leaders? It is a big challenge, but it is not impossible.

We are learning, after 4 years of No Child Left Behind, that 80 percent of our schools I would call high-achieving schools are meeting all the adequate yearly progress requirements for No Child Left Behind. That means we have about 20 percent of our schools that aren't. In 5 percent of the schools, they are only behind in one category. So it is only 15 percent of the schools where children are chronically not learning and being left behind. The ugly fact was, before No Child Left Behind, we let that happen.

Now we put the spotlight on it, and we have to do something about it. The best way to do something about it is what? Get a terrific school leader and help him or her be a good principal, move in some tremendous teachers or reward those who are there and keep them teaching. And the National Education Association says kill the program that is the most important Federal program to do that? I don't understand that; I don't understand.

I say to my colleagues in the Senate of both parties, I hope this approach will have unanimous opposition in the Senate. I hope we say we want to reward efforts in Memphis, in New Mexico, DC, Chicago, Denver, Dallas, Houston, Philadelphia, Chattanooga, where they tackle the problem. No, we are not talking about a one-time bonus pay for people, or teacher of the year, who the principal might like. We are talking about a more professional system where we can say talented men and women who are teachers, we like to honor you. We want to work with you in your district to form a way to honor you and raise your pay.

There is one reason I regret having to make this speech, I had a wonderful visit the other day. It came from six or seven members of the Tennessee Education Association. Earl Wiman, Guy Stanley, Paula Brown, Nita Jones, and Kristen Allen came to my office. We visited for a while. I am about to write a handwritten note to Earl Wiman to say how much I appreciated the visit. He was a career ladder teacher, making

$75,000 extra dollars over his tenure. He said ``I want to thank you for that.'' We acknowledged there were problems with the master teacher program we had in Tennessee as there always are when you start up something new. It was a terrific visit from people I greatly respect.

It reminded me, wherever I go in Tennessee, retired teachers or current teachers come up to me and say, thank you for the master teacher program. It paid for my child's education. It honored my work. It raised my retirement pay. It kept me teaching. You would be surprised how many times this happened, so I know this can be done.

But it cannot be done if the largest educational association in America sends out letters such as this threatening Senators with, in effect, writing every teacher in their district, and saying you are a bad Senator because you voted against the NEA legislative report card.

I would give them an F on a letter for another reason. They said that the Teacher Incentive Fund restricts the use of funds to only two possible uses: merit pay and tenure reform. That is not true, at least not according to the Department of Education. We called over there today. This is what they told me: The Department of Education says the words ``tenure'' or ``merit pay'' do not even appear in the application forms. The specific goals of the teacher incentive fund include: one, improving student achievement by increasing teacher and principal effectiveness; two, reforming teacher and principal compensation systems so that teachers and principals are rewarded for increases in student achievement; three, increasing the number of effective teachers teaching minority, poor, and disadvantaged students in hard-to-staff subjects; and finally, creating sustainable, performance-based compensation systems.

Applicants must outline how they will utilize classroom evaluations that are conducted multiple times throughout the school year and provide incentives for educators to take on additional responsibilities and easy leadership roles.

The Department also gives extra points to applications that demonstrate they have support from a significant proportion of teachers, the principal, and community. As I mentioned, in Philadelphia or Denver, that means the teachers' union.

I know in this joint funding resolution it looks as though we are not going to have a chance to amend that. That is why I voted against cloture. I understand that. Both sides of our aisle did not get our work done so we have had to clean it up too quickly this year. The Teacher Incentive Fund took a big hit.

I say earnestly to my colleagues in the Senate, I hope Senators will look at the Teacher Incentive Fund carefully. I hope you will think about what your ideas are for improving schools with low-performing students. I hope you will ask yourself whether what they are doing in Chicago, for example, to move in a new principal and to move in a team of teachers and to train them more and to pay them more might not be one way to do it. If Denver wants to do it this way, and Dallas wants to do it that way, and Philadelphia wants to do it that way, and Mayor Corker helped Chattanooga do it, why shouldn't we help them?

We don't want the Federal Government to take over the local schools, but clearly one of the appropriate things for the Federal Government to do in support of elementary and secondary education and high school education is to help solve this tough problem of how do we fairly and effectively reward outstanding teaching and outstanding school leadership.

If we don't do this in our current system, we are not going to be able to keep the best men and women in our classrooms, especially in the most difficult classrooms, which is where our spotlight is going. We know that 80 percent of our schools in America are high-achieving schools, they are making the advanced yearly progress under No Child Left Behind. Five percent more are just missing it, and in the 15 percent, don't we want to ignore this letter from the National Education Association?

I will answer their letter from here. I am not going to vote against the Alexander amendment.

I hope they will write me often. I hope it is not this kind of letter again. I say to my friends from Tennessee who were good enough to travel all the way up here and visit with me, I am going to work a little harder in communicating with them. I know there will be issues upon which we disagree--the Tennessee Education Association and I have proved in the past we can disagree.

What I want to prove to them in the future is there are lots of ways we can agree. I know they are dedicated professionals, they are working hard every day under difficult circumstances--many with children whose parents don't feed them well, don't teach them before they come to school, and don't take care of them in the afternoon. I want to be sensitive to that.

In my remarks today I want to send a clear message to the National Education Association: I am disappointed in their letter, I am disappointed in their attitude. I hope the Senate rejects their attitude. But I want to be as clear to my friends in the Tennessee Education Association that I greatly appreciate their visit.

I look forward to redoubling my efforts to work with them. I look forward to talking with them over time about support. I encourage their ways to honor their professionals, including development of a compensation program that rewards outstanding teaching and schools.

I ask unanimous consent the letter from the National Education Association be printed in the Record.

There being no objection, the material was ordered to be printed in the Record, as follows:

February 13, 2007.Hon. Lamar Alexander,U.S. Senate,Washington, DC.

Dear Senator Alexander: On behalf of the National Education Association's (NEA) 3.2 million members, we urge your opposition to several ill-conceived amendments to the FY07 Continuing Resolution. Specifically, we urge you to vote NO on:

An amendment to be offered by Senator Alexander (R-TN) that would provide $99 million for the Teacher Incentive Fund

(TIF); and

Any amendment that would call for across-the-board cuts to already depleted domestic programs.

Votes associated with these issues may be included in the NEA Legislative Report Card for the 110th Congress.

NEA strongly opposes the Teacher Incentive Fund, which diverts scarce resources from existing underfunded professional development programs. For example, Title II of the Elementary and Secondary Education Act allows use of funds for the stated purposes of the Teacher Incentive Fund and also gives states and school districts significant flexibility to utilize funds for activities that best meet their needs. In contrast, the Teacher Incentive Fund restricts use of funds to only two possible uses--merit pay and tenure reform.

The proposed CR would reduce TIF funding, while increasing funding for programs proven effective in maximizing student achievement. We support the CR as proposed and oppose any effort to increase TIF funding.

NEA also opposes any proposal to reduce funding across-the-board, further stretching limited resources among already struggling domestic programs. Although such amendments may be addressing very worthy goals, we believe they are more appropriately considered as part of bills to be debated later, such as Emergency Supplemental legislation. Therefore, we urge your vote against any such amendment.

We thank you for your consideration of our views on these important issues.

Sincerely,Diane Shust,

Director of Government Relations.Randall Moody,

Manager of Federal Policy and Politics.

Mr. ALEXANDER. I suggest the absence of a quorum.

The PRESIDING OFFICER. The clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. NELSON of Florida. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

The PRESIDING OFFICER (Mr. Cardin). Without objection, it is so ordered.

Mr. NELSON of Florida. Mr. President, we are in the posture of having to pass an appropriations bill that is to none of our liking because the Congress is not fulfilling its responsibility in the budgeting and the appropriations process. It goes back to the fact that albeit the Senate and the Senate Appropriations Committee were responsible in producing all 13 appropriations bills, the leadership in the last Congress decided they did not want to pass 11 of those 13. To the best of my recollection, it was the Departments of Defense and Homeland Security appropriations bills that were passed, leaving all the others without funding. Each time we have continued emergency stopgap funding. The particular law that is in effect now goes until midnight this Thursday. That is no way to run a railroad. It puts us in the posture of having to take something instead of nothing which would shut down the Government. That is not a logical way to do it.

The entire Federal budgetary process ought to be revamped. In the old days, back in the 1970s, the Budget Act was enacted because it was giving the new tools available for the Congress to discipline itself on spending, to hold down spending. Over 22 years, we have seen the Budget Act become not an economic process but a political process in which budget documents are submitted--for example, the one submitted by the President, completely unrealistic--so that political goals can say they are going to be achieved; in other words, moving the budget toward balance. The President has pointed that out over a 5-year period. When, in fact, the reality is that a lot of the President's assumptions in his budget he has sent to the Congress are not realistic. In fact, they are fiction.

For example, there is a tax that is called the alternative minimum tax. It was designed years ago so that people with higher incomes that had huge deductions couldn't offset all of their income. They would have to pay some tax. It was designed to go to that higher income group so that they would still pay their fair share. If that alternative minimum tax is not allowed to be applied in the future--and I can't tell you the technicalities--it comes down and it swoops in a great deal of the middle class, which it was never intended to do, middle-

income people, with the result that much higher taxes would be paid in the very income levels that the alternative minimum tax was never designed to hit.

Naturally, a Congress in the future is not going to let that happen, for that additional tax to go on the middle class. Yet the President's assumptions in the budget he has sent are that that alternative minimum tax is going to go away and, therefore, the increased revenue is going to be coming into the Federal Government from the middle-income taxpayers. Therefore, it makes it look like his budget deficit is getting smaller and smaller and moving toward balance.

The same thing is true with the tax cuts that were enacted back in 2001. Over the next several years, a number of those tax cuts expire. Those tax cuts that affect the middle class are not going to expire because the Congress is not going to let that happen. If it did, as the President has proposed in his budget, the revenues to the Government are going to be greater and, therefore, the annual deficit is going to be less. But that is not realistic. So what we have is a document of political fiction.

This isn't the first time. This has been going on over the last couple of decades. But when it leads us down the path of fiction, sleight of hand, a head fake on what the budgetary condition of the country is, as the country, indeed, ought to make its staggering steps toward balancing the budget, at least down the line in the next 5 to 7 years, when that is all a political fiction, it undermines confidence. It undermines the entire system. In large part, it leads to where we are today.

We are going to pass what is known as a continuing resolution, which is an end-of-the-day budget that is pared down, that doesn't address priorities as it should. And are the American people served best by this kind of process? No.

This Senator thinks it is time for us to have some major overhaul of the Budget Act. There are a lot of other things in the Budget Act that could be reformed, many of which are technical in nature and very extensive. I will not take the time to go into them today. But when are we going to learn? When are we going to stop using the budget of the United States as a political tool instead of moving us in an economic way toward a sound economic plan to bring our fiscal house in order?

I yield the floor and suggest the absence of a quorum.

The PRESIDING OFFICER. The clerk will call the roll.

The assistant legislative clerk proceeded to call the roll.

Mr. KOHL. Mr. President, I rise today to speak in more detail about the ``earmarks'' that some members of this body claim remain in H.J. Res. 20. On February 7, 2007, one of our colleagues issued a press release on his Web site which was critical of H.J. Res. 20, the continuing appropriations resolution. Of note was his claim that the resolution continues a number of earmarks. That claim, both generally and specifically, is not true.

The list of ``earmarks,'' stated as fact in this press release, are all supposedly found in the Ag Chapter of the resolution. I would like to take a minute to address those specific items and explain why this information is wrong.

Our colleague claims that H.J. Res. 20 provides $350,000 for the World Food Prize. Although this item was funded in the fiscal year 06 bill as part of General Provision 790, H.J. Res. 20, in section 21004, provides that the amount available for Section 790 is zero. So, obviously, that earmark has been removed.

Our colleague claims that $1.5 million for construction of the entrance to the U.S. National Arboretum is funded in H.J. Res. 20. First of all, this item was never included in the 2006 bill, which is what H.J. Res. 20 is based on. It was, however, included in the 2007 bill under the agricultural research service buildings and facilities account. H.J. Res. 20, in section 20101, provides that the amount available for that account is zero. The entire account, not just the earmark, is removed.

Our colleague claims that H.J. Res. 20 contains more than $1 million for alternative salmon products, including baby food products. This item was funded under the special research grants program of the Cooperative State Research, Education, and Extension Service. H.J. Res. 20, in section 20102, provides that the amount available for that program is zero so the earmark is removed.

Our colleague claims that H.J. Res. 20 contains $591,000 for the Montana Sheep Institute. This item was also funded under the special research grants account of the Cooperative Research, Education, and Extension Service, which, as I stated earlier, was eliminated in section 20102 of H.J. Res. 20. Thus the earmark was removed.

Here is a third ``earmark'' claim under this same account, which was eliminated. The Senator claims that H.J. Res. 20 contains $295,000 for wool research, again, under the special research grants account of the Cooperative Research, Education, and Extension Service. I repeat again that H.J. Res. 20, in section 20102, provides that the amount available for that program is zero. Again, and I know I am beginning to sound like a broken record, but the earmarks are removed.

In another account, the Senator claims that $232,000 remains for the National Wild Turkey Federation. This item was funded under the Federal Administration program of the Extension Service. H.J. Res. 20 provides that all funds for the Federal Administration program are reduced to a level that only protects Federal FTE positions definitely not the National Wild Turkey Federation. H.J. Res. 20, in section 20103, provides that all other funding in that program, which would include funds for the National Wild Turkey Federation, is zero. There are no earmarks.

The Senator claims that $100,000 is contained in the Agricultural Marketing Service account to establish a farm-raised catfish grading system. However, this item was never included in the 2006 bill, which, again, is what H.J. Res. 20 is based on. It was included in the 2007 bill, which never even passed the Senate floor. There is not, and never was, any funding for this activity in a bill that passed the House or Senate. There are no earmarks in this account.

Finally, the Senator's press release states that $2,970,000 is continued to maintain a partnership between USDA and the National Fish and Wildlife Foundation. This was funding provided by the natural resources conservation service conservation operations account to a non-Federal entity. H.J. Res. 20, in section 20104, provides that all funds for the conservation operations account were reduced to a level that only protects federal FTE positions. H.J. Res. 20 provides that all other funding in that program, which would include funds for the National Fish and Wildlife Foundation, is zero. Once again, there are no earmarks.

As our colleagues should now realize, not only does H.J. Res. 20 not continue these items, H.J. Res. 20 actually removes the money which would make their funding possible, even if the administration wished to do so. For even those who wish to claim that money is still provided in the resolution which would enable the items to end up getting funded, it is obvious that in these claims, specifically listed in a press release, that is simply not possible. While I do appreciate zeal for finding and making public all earmarks, perhaps a closer reading of H.J. Res. 20 would have prevented these misstatements from occurring.

Mr. CRAPO. Mr. President, I rise today to speak to a global competitiveness amendment to H.J. Res. 20 and to call attention to the challenges facing U.S. financial markets. The first half of the amendment highlights findings from two recent reports that the U.S. is already losing ground in the key areas of global initial public offerings, IPOs, and over-the-counter, OTC, derivatives. The second half of the amendment expresses the sense of the Senate about what steps should be taken to bolster the competitiveness of this essential sector of the U.S. economy.

IPOs are critical to our economy because when a company goes public, it creates capital--and that means jobs and investment opportunities with great potential payoffs. The risk-taking exemplified by IPOs is in the most important sense the critical fuel of a market economy. OTC derivatives play a critical role in our economy, assisting investors to more precisely match their investments to their risk preferences, and helping companies to manage or hedge their risks. Additionally, these instruments provide liquidity to financial markets and reduce volatility by helping to diversify and distribute risk. At the same time the OTC derivatives industry attracts highly skilled professionals who, by virtue of the demand created by their talents, have the potential to contribute significantly to an area's tax base.

Together, IPOs and OTC derivatives contribute to a robust and dynamic capital market which is a tremendously beneficial force for our economy and an empowerment to our citizens. It is critical to ensuring economic growth, job creation, low costs of capital, innovation, entrepreneurship, and a strong tax base in key areas of the country. The U.S. financial sector acts as a catalyst for all other sectors in the U.S. economy. That is why the decline in global initial public offerings in the United States, and the fact that London already enjoys clear leadership in the fast growing OTC derivatives market, are such worrying trends.

Fortunately, academics, business leaders, and politicians are working together to study this issue. They have identified several specific problems that hinder the competitiveness of the U.S. capital markets and have issued reports outlining possible solutions. Chaired by former White House economic adviser Glenn Hubbard and former Goldman Sachs president John Thornton, the Committee on Capital Markets Regulation was formed in September 2006 and issued its preliminary report in November 2006. Mr. Schumer of New York along with New York Mayor Bloomberg released the McKinsey Report on New York Competitiveness in January 2007 outlining regulatory, legal, and accounting changes they say are necessary to maintain the city's status as a leading global financial center.

Both reports add considerably to the understanding of the challenges that American capital markets face and offer solutions that could help American markets, companies, and workers to better compete.

According to the Committee on Capital Markets Regulation:

A key measure of competitiveness, one particularly relevant to the growth of new jobs, is where new equity is being raised--that is, in which market initial public offerings

(IPOs) are being done. The trend in so-called ``global'' IPOs i.e., IPOs done outside a company's home country, provides evidence of a decline in the U.S. competitive position. As measured by value of IPOs, the U.S. share declined from 50 percent in 2000 to 5 percent in 2005. Measured by number of IPOs, the decline is from 37 percent in 2000 to 10 percent in 2005.

According to the McKinsey Report on New York Competitiveness:

London already enjoys clear leadership in the fast-growing and innovative over-the-counter (OTC) derivatives market. This is significant because of the trading flow that surrounds derivatives markets and because of the innovation these markets drive, both of which are key competitive factors for financial centers. Dealers and investors increasingly see derivatives and cash markets as interchangeable and are therefore combining trading operations for both products. Indeed, the derivatives markets can be more liquid than the underlying cash markets. Therefore, as London takes the global lead in derivatives, America's competitiveness in both cash and derivatives flow trading is at risk, as is its position as a center for financial innovation.

The challenge we are facing is that the U.S. capital markets are losing their competitive edge in intensifying global competition. A shrinking proportion of international companies are listing shares on U.S. stock exchanges and the fast-growing OTC derivatives market are growing more rapidly elsewhere.

This amendment welcomes these reports and encourages Congress and the administration to begin to vet and consider their recommendations.

(1) Congress, the President, regulators, industry leaders, and other stakeholders should carefully review the Interim Report of the Committee on Capital Markets Regulation, published in November 2006, and the McKinsey Report on New York Competitiveness, published in January 2007, and take the necessary steps to reclaim the preeminent position of the United States in the financial services industry.

(2) The Federal and State financial regulatory agencies should, to the maximum extent possible, coordinate activities on significant policy matters, so as not to impose regulations that may have adverse unintended consequences on innovativeness with respect to financial products, instruments, and services, or that impose regulatory costs that are disproportionate to their benefits, and, at the same time, ensure that the regulatory framework overseeing the U.S. capital markets continues to promote and protect the interests of investors in those markets.

(3) Given the complexity of the financial services marketplace today, Congress should exercise vigorous oversight over Federal regulatory and statutory requirements affecting the financial services industry and consumers, with the goal of eliminating excessive regulation and problematic implementation of existing laws and regulations.

I urge my colleagues to join me in supporting this amendment.

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

The PRESIDING OFFICER. Without objection, it is so ordered.

____________________

SOURCE: Congressional Record Vol. 153, No. 27

ORGANIZATIONS IN THIS STORY

More News