where you're wanting to know about some proprietary thing. this was taxpayer money. sometimes i think you can't justify, you know, some sorts of getting information, but i think you can here. and i think you've done a great job. let me change gears, professor warren. i wrote a letter to you on june 24th. i've looked to some of those questions. some of them, you know, i'm not sure they're a little harder to interpret. sometime maybe in august, if you could kind of respond to some of those, i'd appreciate it. but i'm not even going to ask you about them now. but the other thing -- >> would you accept my apology that you don't have a response yet? >> well, now i wouldn't expect -- there's too much going on -- >> nonetheless, congressman, please accept my apology. we're doing our best. >> i don't think they're due. >> okay. >> i don't think it's sufficient

amount of time for you to have responded. >> no. >> because the questions are really -- you know, they're going to take a little time. but i just wanted -- one thing i wanted to show you and kind of at some point you might give me an answer -- you know, we're talking about one-page disclosures, and this is actually 15 pages on a card agreement. now, some of these aren't, you know -- you know, they're just part of the page but that's what the law requires right now. so you got quite a job because you're going to have to almost say well, we're not going to require this anymore. or maybe some of this you're going to decide to put in small print but it does show you the challenges you face. if you get your get your agency through. so thank you. >> thank you. >> thank you, sir. next the chair recognizes -- >> i usually ask questions -- it's very rare for me not to do

that. but there were no questions because i thought the questions were answered. >> thank you. the chair next recognizes congresswoman kilroy for 5 minutes. >> thank you, mr. chairman. i appreciate it. thanks all of your work for looking out for the taxpayer issue and making sure the values of transparency and accountability are the values that we don't forget as we move further away from the initial infusions of the t.a.r.p. money. and each one of you have, in your testimony, emphasized the importance of transparency. i would certainly agree with you. sunshine is a great thing to have in the public sector. but i also think in this instance that transparency can

assist the taxpayers in getting maximum value, maximum return on the investment that they made. and i think the congressional oversight panel report backs it up. it says treasury would be more likely to maximize taxpayer returns if it sold the warrants through auctions. the reason is straightforward. an auction would cause the warrants to be allocated to the buyers willing to pay the highest price and competitive pressures in the bidding process may push bids up. do you agree with that, the statement, professor warren? >> i do, congresswoman. >> i certainly do as well. and i think the market and public auctions are certainly a very valid way for setting a price. we've heard today a lot of talk about goldman and the value that

was received through the negotiation process with goldman. but not to be too pessimistic or too cynical, you know, there are reports today that the initial offer from goldman was made several weeks ago. and the initial offer was $650 million. and that was followed up by a counter-offer by treasury of some $900 million and then followed up some time after that by the release of goldman's statements indicating how much money they had made certainly in part because of the infusion of money the taxpayers gave them. and as goldman's stock prices go up, would you agree that the value of those warrants that the taxpayers were holding would also be going up? yes.

so then it's certainly maybe not surprising that goldman increased its offer to the taxpayers? and offered to pay $1.1 billion for the warrants. do you agree with that? yes. well, would you also agree that perhaps if we allowed it to go to market, that others who might see the same reports about goldman's recent earnings might think that holding goldman's warrants, which could be used by them to purchase stock over a pretty lengthy period might be to them worth more than $1.1 billion and they might make a higher offer than that at public auction? >> that is certainly possible, congresswoman. >> so, you know, would you agree the market has a great deal of experience in this issue of

setting prices and that treasury has also experience in terms of conducting public auction? >> yes, congresswoman. >> and again going back to all three of you in your statements with respect to maximizing value for the taxpayer and being transparent, would you agree that a public auction would be an excellent way to combine and achieve those two -- those two goals, maximizing profits and being transparent? >> yes, congresswoman. >> does anybody on the panel have a different view, who would disagree? >> i think in particular it addresses a lot of the transparency concerns and a lot of the allegations that may be made when it is a closed door process. >> and the goal of restoring public confidence in the markets and having public confidence in our government officials is an

important and worthwhile goal, i would think. thank you. i yield back. >> i thank the gentlelady. the chair now recognizes congressman mchenry for 5 minutes. >> thank you all for testifying and sorry for the length of the day. it's long for all of us. obviously, mr. barofsky, i heard from you yesterday in front of the oversight and government reform committee which i'm a member of. ms. warren, in terms of your panel, the congressional oversight panel, what's your budget? >>/yo i can tell you how much we spent. >> is there a budget allocation? >> no, we don't have a budget allocation. >> how much have you spent. >> we spent $2.7 million. sorry. you can tell the world i've been dealing in. >> $2.7 million. where did that money come from? is it out of t.a.r.p. or out of treasury? >> no. it comes from the senate and from the house.

it comes from you. >> okay. how is that allocated? i'm sorry -- >> basically you just spend whatever you want and send the bill to congress? how is that allocated? >> well, we go through the process, for example, of hiring -- >> how many people can you hire, are you authorized to hire? >> we can hire as many as we need. >> okay. that's enough. i think it just shows -- there isn't a clear budget. mr. mccool, is that a fair assessment that there's not been an appropriations for this committee? >> i don't really know. >> huh, this is quite a challenge. mr. barofsky? >> congressman, we've got the t.a.r.p. to look after. we haven't looked into the funding for the congressional oversight. my funding i could speak on -- >> the inspector general's office is an appropriations, yes. mr. mccool, in terms of your

panel meetings -- >> i'm sorry. >> ms. warren -- >> i'm sorry, i thought you said miss mccool. >> it's late in the lay. i don't have much time. ms. warren, yes, all right, is it true you have regular panel meetings? >> yes, we do, congressman. >> are those publicly disclosed? >> the fact that we have the meetings, yes, congressman. >> no, actually, the panel meetings. >> we have business working meetings that are not public meetings. >> so you have the panel of how many members? >> we have -- well, we had a five-member panel since senators sununu has resigned, we have a four-member panel. i presume it will be -- >> when you meet in session, for the purposes of transacting business, is that open to the public? >> we have working meetings that are not open to the public. >> okay. do you have a transcript or minutes of that meeting? >> i don't have a transcript or minutes -- .

it is recorded by the senate. but, no, i have not seen a transcript. >> is it transcript available of your meetings? >> publicly? >> for members of congress, is that available for your meetings. >> it's not available publicly, no, congressman. >> i'm a member of congress -- >> oh, i'm sorry. >> am i able to get a copy of the transcript of your meetings? >> i believe our transcripts are held in our office and if you wanted to -- >> would that be available? >> i believe you would be able to read them. >> okay. >> if you wish to do that, congressman. >> so you'll make that available for members. >> if you wish to come to our offices to read it. >> why are the transcripts not available to the public? >> these are working meetings of the panel, and we discuss a great deal of confidential information. and so they were never public from the beginning. we do hold -- i should remind you, congressman, we do hold

public hearings. >> is this an executive session -- this is what's interesting to me. you're an oversight panel. >> yes. >> yet, you don't disclose your meetings. and what happens and what transpires in these meetings and the decision us make, the votes you take, are there votes taken at these meetings. >> sometimes -- >> we don't know what the votes are much less, you know, how this report was created with this panel. so there is no disclosure from the oversight committee. do you think that's perplexing or strange? >> well, we have working meetings where we discuss confidential information. we issue a public report every 30 days. >> yeah. >> and the report on that vote is public every 30 days and each of the members is entitled as part of that process to add additional views if they wish to do so. >> i think it's quite perplexing that an oversight panel wouldn't disclose their meetings. even -- you can redact confidential information. that's certainly in your capacity.

which is done throughout government. but it seems like this is a very removed from the public and pretty nontransparent for a board that is demanding transparency from t.a.r.p. funds and the treasury in general. do you find that problematic? >> well, what i would find -- >> if she could -- if she could be able to finish? >> i would find it quite problematic if we discussed sensitive information about t.a.r.p. recipients, about the inquiries and the lines of inquiry that we were pursuing and that were a matter of public speculation as soon as we finished saying it. my sense is we need an opportunity to work together and that's what we try to do. but we issue public reports every 30 days and hold public hearings at least once a month.

[inaudible] >> thank you for the questions, mr. mchenry. and next the chair will recognize mr. christopher lee for 5 minutes. >> thank you, mr. chairman. mr. barofsky, i'd just like to ask a question -- i'm going to yield some of my time but just to follow up on some of the discussion we had on the first panel with mr. allison. it has been mentioned that some companies have been getting mixed signals and mixed answers in terms of what's coming out of the treasury in pay back the payments or purchasing the warrants i guess what their regulations or stipulations might be for that and there's some frustration. have you found the government or the treasury has been very clear in terms of what it's actually demanded for repayment of those funds or has it been foggy. i'm just curious what your perspective might be on that? >> with respect to the warrants, our audit is pending and ongoing. so i'm not really prepared at this time to give, you know, a conclusion that would come out

of that audit so it's a little bit premature for me to answer that question. >> okay. i've heard from some in fact business community about the way the stimulus and the t.a.r.p. funds have been distributed or handled. the committee had a hearing yesterday on the too big to fail, the full committee. and one of the things we think we missed is the whole too small to save or the concept of what small community banks or small business -- what the impact has been on them what the majority of those funds have gone to the larger institutions. after about six months now we've seen the administration started now finally to talk about actually looking at the small business angle and focusing more on that direction which i think is smart and prudent and the first time, earlier we had an amendment authorizing legislation that would have required you to report on small business activity as well as a part of, you know, special inspector general obligations on the next report. is that something you think you could look at including in your next report including some

measures on small business participation in the t.a.r.p. or small financial institutions? >> i think it would be -- what we could do is with the information that we already have, perhaps from the survey and what banks are doing with respect to small lending, what they're saying. we really don't have the resources or the mechanism to do exactly what you're saying that really falls on treasury. i mean, that is a basic part of treasury's, i think, obligations under -- you know, under the concept of transparency. they should be doing that assessment and making that information available. it really goes to the heart of transparency recommendations by the use of funds. how are the institutions using the funds with respect to small businesses? and reporting in their transaction reports how -- what their steps that they are taking for small businesses. i'll be happy to work with you and your staff and have my staff talk to you if we could think out some other ways where we could contribute to that transparency, you know, we're always open to suggestions and look forward to following up with you on that. >> i do want to commend you on

your work. you've been helpful. i would like to yield the balance of my time, if i could to mr. mchenry. >> i thank my colleague from minnesota for yielding. just to follow up on this again. the fact that there's an unknown budget that hasn't been allocated and to my knowledge from the legislator branch appropriations there wasn't a line item for that. and i would ask the gao and i'd ask the sigtarp if y'all could take a look at that and perhaps answer how that actually works, if the chair doesn't know. miss warren -- well, i know you don't have a purview. my apologies. >> i'm prohibited from statute from doing that. >> good. well, it's late in the day so obviously i'm missing a few things here. miss warren, you've testified before this committee about the consumer financial protection

agency that's last month; correct. >> that's correct. >> and i saw a youtube video and a few thousand others saw that as well in your advocacy for cfpa; right? >> yes, congressman. >> is that part of your official role as head of the congressional oversight panel? >> it's part of my role as professor of harvard law school. >> so that's done through your official resources at harvard? >> yes. and through my personal resources i should say, i wrote a check for it. >> okay. well, youtube is actually pretty cheap so -- >> no, i mean, i wrote a check for the out-of-pocket expenses to be able to produce the video. >> oh, okay. you got a producer. >> well. >> no, i understand. it's youtube. i understand. there's a lot of conjecture that you would be head of the cfpa if congress does pass that. but no official resources under the congressional oversight panel has been used or staff has been used in your advocacy?

>> no. >> okay. good to know. thank you, and i yield back. >> thank you. next the chair recognizes mr. lee for 5 minutes. >> thank you. before i start, i do want to thank everybody for your -- all three of you for the support in what you're trying to do to protect taxpayers and the oversight. it's very commendable. i'll start out with mr. barofsky. we've had a chance to meet in the past and again, and has been very accessible and i appreciate what you've been doing. again, one thing that does scare me, however, is the fact that over -- or under our oversight at risky heard numbers anywhere $2.3 to $2.8 trillion and that the total potential support government wide in response to the crisis since '07 could reach close to $24 trillion. those numbers fairly accurate? >> yes. to explain the $24 trillion, though, is to put it in context. what we did in our report is in section 3, we gave a summary of

about 50 different support programs outside of the t.a.r.p. and for each of those programs, we calculaugd how much is currently outstanding, what the high water market is since it's inception and the amount outstanding is $3 trillion. the high watermark is $4.7 and the $23.7 trillion, that represents if everything was maxed out at once. it's not likely that would ever occur, but i justment to put that caveat in there. >> not likely but a scary number all together? >> but it is absolutely an accurate number of what the government is committed to do to support the financial system. >> well, in june the congressional budget office scored the t.a.r.p. at a loss at taxpayers to roughly $160 billion. we're writing off billions in loans to gm, chrysler. yet, it's unclear to me what we are doing with the funds being repaid by the t.a.r.p.

recipients. in letters to the secretary of the treasury and to the president, which to my knowledge have to this point have gone unanswered, many of us on this panel led by my colleague, mr. mccarthy out of california have advocated for those repayments to be used to specifically reduce the national debt. yet, others want to recycle those funds and use them for other programs some of which are brand-new. i'm curious from your perspective do you believe it's in the best interest of the taxpayer to take t.a.r.p. repayments to pay down the debt? >> our perspective is really a legal one and i think legally treasury's treatment of taking any interest or dividends and -- or profits and direct them through the reduction of the national debt, that's very clearly what's compelled by under eesa, the principal payments, the treasury is consistent with the law is they have the option to relet that money out to a maximum of -- >> as long as eesa permits them

to do so which is right now through the end of the year. >> the part i keep hearing from people, taxpayers, that take the money back and we throw it out and have more risk and eventually the debt obligation that we have is staggering. miss warren, you've been an advocate on behalf of ie the taxpayers where they better served about paying down the debt or spending t.a.r.p. for other purposes? >> well, i think, congressman, this is really the policy choice that congress should be making. and the legislation is ambiguous on this point and treasury has made its position clear that it's going to use the head room analogy that mr. allison talked about so if congress wants something different, then congress is going to have to pass legislation, i think, to change that.

>> with that i'm going to yield back. thank you. [inaudible] >> miss bauchman, you are up for questions, please. >> mr. chairman, thank you. and i agree, thank you all for being here. i agree it's a long day but you've all been very responsive and we appreciate the great information that you've made available to us. i was curious -- i was listening to the previous line of questioning on meetings and help me -- did i understand correctly -- i guess, this would be miss warren, if a member of congress requested a transcript of one of these meetings of the panel we get get it? was it true or maybe i didn't understand? >> congresswoman, i was surprised by the question so let me -- let me articulate more clearly. we don't have official transcripts. unlike your circumstances where there are published transcripts, members go back and they correct the language, we identify who spoke and who did not speak, we

have no verified transcripts. we have no official transcripts. we have typing that comes back from someone who listened to our tapes who is not part of our panel. not part of this process. and no one has verified the accuracy of any part of it. >> so then the meetings that you have that are not the field hearings where it's the four -- i guess it's four members now, was five minutes -- when the 5 members meet or when the four members meet, are those meetings recorded? >> we have working meetings that have been recorded. >> so those meetings are recorded. so are they transcribed or are they just in recorded form? >> they are in recorded form and as i understand, there is a transcription service. >> so we can get those transcribed? it's possible for us to have the transcription of those meetings? >> i actually -- i have not considered this question because no one had asked.

and i am a little hesitant to commit my copanelists to a process when these are unverified transcripts. that is, something may be attributed to someone -- >> well -- >> that has never been varied. >> that's something i would want to know as a member of congress if the panel is meeting as a panel, whether it's the 5 or the 4, and if the meetings are recorded, it seems to me that they could be transcribed. and i don't know what the verification process -- the reason why i'm asking is because i had learned yesterday that two requests were made to access those transcriptions and that those requests were not honored. and i have no reason to doubt the calls for transparency and the treasury department wants to be transparent. i have no reason to doubt that at all. but it seems to me that's in conflict if on one hand the

treasury department is saying they want to be transparent. on the other hand, why can't we as members of congress at least receive transcribed copies or even if we members of congress can't receive the copies, couldn't the members of the panel that sit on the panel receive the copies of the transcribed -- of the recorded meetings? >> congresswoman, you may be aware -- this is a matter of some discussion within the panel. and the panelists themselves have different views on this. and those views are currently under discussion. we have been trying to work out something that is congenial to all the panelists but i have to emphasize -- these are working meetings where we discuss lines of inquiry that we are taking -- >> no, i understand that and i understand congressman mchenry said it's possible to redact material but does the congressional oversight panel have a phone number? >> i believe we do.

>> do you? okay. very good. and can we get it? >> certainly. >> okay. so then we would be able to call and make that request for the -- for the recording or the transcriptions potentially? >> as i said to congressman mchenry, i believe it would be the case -- and i really must add the qualification, i am, as i said before -- i am not the entire panel. >> so no decision has been made -- no decision has been made about the transparency of those hearings? we know that they aren't put up on the public for record but no decision has been made -- it just seems to me odd that if the commitment is transparency, that we wouldn't be able to actually receive those hearings 'cause votes are made in those meetings. >> as i said, congressman, these are working meetings. i think perhaps the correct analogy would be to -- >> what's the difference between working meetings and like a -- and any other meeting? >> then there are public

meetings where we do not discuss matters that wouldn't -- that should not be in the public domain. >> but aren't these public meetings? >> no they are not. >> they are meetings of the committee. they're formal meetings of the committee members? >> these are working meetings -- >> these are working -- >> the gentlewoman's time has expired and i would advise the members that if they have additional questions or other questions or would like to pursue this, you certainly have the right to submit that in writing. without objection the record will remain open for 30 days for all members to submit questions -- >> mr. chairman, if i may just -- i wanted to clarify what the witness said in answer to my question versus congresswoman bachmann and i want to make sure i have the correct understanding -- >> sir, we got another meeting scheduled for this room at 5:30. i'll deny the gentleman's -- >> well, parliamentary inquiry.

>> you have a right to submit written questions and they'll be answered in 30 days. >> parliamentary inquiry. >> yes. >> what point will a transcript of this meeting be available? >> i don't know that we have a transcript of this meeting. >> yeah, there'll be one. if the gentleman would yield to me. >> certainly. we got a pretty hard-working staff here. but i would say this, rather than wait for a whole transcript, if there's a particular piece that the gentleman is concerned about, we could have the stenographers prepare that piece for him. >> thank you. >> a whole transcript may take a while. but a particular piece we could break it out so if you would designate to the staff what you want to look at so you could formulate your question based on that, you could get it tomorrow. >> thank you, mr. chairman. thank you, mr. chairman. >> and again, i want to thank all the witnesses for their testimony this afternoon. i think it give us a better understanding of how the t.a.r.p. process works. we need to keep pressing for

t.a.r.p. and i look forward to working with republicans and democrats. these issues should not be partisan at all. we're all in this together. as well as the treasury department, t.a.r.p. oversight organizations to finish this and i thank again the witnesses. this hearing is concluded. [inaudible conversations] [inaudible conversations] >> the u.s. senate is about to

meet to continue work on defense department programs and policy for the new budget year. the bill includes military troop levels, military pay, weapons programs and authorization for the continued wars in iraq and afghanistan. a number of amendments have been offered. today votes are expected on at least two. one dealing with the nuclear arms agreement with russia and another on the f-35 joint strike fighter. so far this week, senators have added legislation to the bill expanding the hate crimes definition and removed authorization for seven more f-22 fighter planes. final passage vote is likely to occur next week unless senators can reach an agreement on amendments. live coverage of the senate now on c-span2. the guest chaplain: let us pray.

we ask not for tasks that are suited to our strength, but we ask for your strength, for any task that you have given to us to accomplish. help us to live in the knowledge that you have given us this hour and history and that the place and time and service to you and to our country is not random but by your wisdom and direction. father, walk close to our senators that they may not fail.

remind all of us, lord, that your wisdom is not found in an harks a day, or a year, but in a process that lasts a lifetime with you, lord, by our side. we ask for patience, for understanding, as our senators serve this beloved country. we ask that you watch over our armed forces this day and always. o lord, you are our strength and shield. bless us with your abiding presence now and forever, amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all.

the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c, july 23, 2009. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable kirsten gillibrand, a senator from the state of new york, to perform the duties of the chair. signed: robert c. byrd, presidet pro tempore. votes in relation to amendments are expected to go throughout the day and into the evening. that is time for people who have indicated they want to offer amendments to do so. we had a lot of down time yesterday that people could have. but we're making progress on the bill. it is my understanding speaking

to the managers that the most contentious issues are -- there is a pathway to complete those. we hope that in fact is the case. mr. mcconnell: madam president? the presiding officer: the republican leader. mr. mcconnell: last night the president, to his credit, reiterated what the american people have been saying for weeks, that the democratic health care proposals we've seen so far aren't where they need to be yet. i couldn't agree more, the rising health care costs are a threat to our economy and any reform must reduce the long-term costs. the problems that the president

highlighted are real and here, again, republicans agree with him. unfortunately, the solutions to the problems are not in the democratic plans now working their way through congress. in fact, the bills we have seen make the problems even worse. the director of the congressional budget office said the proposals would increase overall health care spending, not reduce it. all of us want health care reform. but we want reform bringing down costs and long-term spending not so-called "reforms" that makes things worse. the president said health care reform must not increase the national debt. republicans agree with that, as well. but, again, both democratic bills we've seen saddle americans with hundreds of billions of dollars of additional debt making the situation even worse. just jerd, the chairman of the federal reserve warned unless we get serious about spending and

debt we endanger our recovery from the current recession but also endangering future economic growth. this is why he said any health care reform must get control of costs. otherwise, it could bankrupt both our government and our entire economy. so the last thing we need is a flawed health care bill that adds to the national debt and increases long-term health care costs. instead of trying to rush through the proposals that don't work, we need to take the time to do it right and make the reforms the american people are asking for that will not put us on the road to bankruptcy. mr. mcconnell: madam president, earlier this year i came to the senate floor and outlined a number of foreign policy principles that served our nation well in the past and

which i believe would serve us well into the future. in doing so it was my hope the principles would serve as the basis for steady, bipartisan cooperation between the senate and the new administration. these principles transcend party, they're time tested and could be summed up in a single sentence: the cornerstone of u.s. national security policy lies in a strong and teddy defense and keeping -- a strong and steady defense and keeping alliances strong. as the senate debates the defense authorization bill i take the opportunity to reiterate the importance of this fundamental principle of action and highlight something that seriously endangers our ability to uphold it. i'm referring to our nation's staggering national debt. the national debt threatens our way of life. it threatens the value of our national currency and it

threatens our ability to pay for intimes that millions of americans depend on. yet just as importantly the national debt also endangers our position in the world. the long-term capabilities of our military and the long-term viability of the all-volunteer force currently serving us so ably and courageously in two very challenging wars. that's why it's increasingly urgent to focus on the growing threat to do something about it. let's put the current situation in context. the story of the american military over the past century reflects what historians have described as," feast o as a feae approach to defense extending from world war one, world war ii, croon war an korean war and. the u.s. military had an abrupt

expansion of manpower and followed by calls for draw down in the size of our force and reduction in defense spending. this pattern, though not always well as vieded may have been understandable but the nature of our current threats and position in the world make it indefensible today. with developments in weapons technology, america no longer has the luxury of isolation. and september 11th showed us we can no longer leave ungoverned territories unwatched. the demands on the military are constant: either on offense or at risk. feast or famine and isolation no longer work. this is why the ever growing national debt is perilous. those who believe as i do a strong and ready defense is the cornerstone of our security cannot guarantee it if current

trends persist. put simply, if we do nothing to pay down the debt, and address the needs of social security, medicare and medicaid, then america risks finding itself so weakened that some day in the not-too-distant future we will not have the resources we need to equip and maintain forces in the places they are needed most. consider the fact that the federal government is now spending an average of $100 million a day just to pay the interest on a single piece of legislation, the $1 trillion stimulus bill that congress passed earlier this year. or that it is estimated we will pay $347 billion on just this one bill over the next 10 years. at current rates of spending, that's enough to provide healthk for our nation's venezuela -- to provide health care to our nation's veterans for five years and cover the salaries and

benefits of all active duty and reserve forces for 2 1/2 years. or nearly $350 billion we could put back into the pockets of the american people at a time when they could really use it. that's just one piece of legislation. now, imagine what it costs to finance our entire national debt. by the end of the decade, it's estimated under the president's budget we will spend nearly $800 billion a year just to cover the interest on the national credit card, not reducing what we owe but just keeping the creditors from knocking on the door. here's the frightening part of where we are: by 2017, the amount of money we're expected to spend on interest alone will exceed the amount of money we are expected to spend that year on all of defense.

the implications of this for our national security are clear. more and more, our ability to deploy forces with state-of-the-art weaponry is in competition with our financial obligation to the countries that hold our debt and we get closer to the day when countries that hold large amounts of u.s. debt such as china and saudi arabia, could directly influence the foreign policy decisions of a future president. we also get closer to the day within our allies and partners will rethink the value of a relationship with the united states. sooner or later, we'll have to face the fact we're on a path that leads to some very unpleasant choices, either we default on our debts which we will not do, prints more money to cover the debts, and cause inflationary spiral or withdrawal from security commits

as great britain did at the end of the world war ii. america's all volunteer force costs a lot of money to maintain. indeed, a major reason we have been able to avoid con description in this country since the vietnam war has been our ability to maintain recruiting and retention policies through an attractive retirement system, recruiting bonuses, incentive pay, and sensible housing allowances. in country dollars, military personnel costs have increased from $69 billion to $131 billion a year over the past decade. but these necessary expenses will be crowd out by the growing cost of long-term entitlements and the growing principle and higher and higher interest payments on our debt. spending increases we now regard as necessary may no longer be possible. the choice is clear: in order to provide for the common defense we must reform entitlement programs that are consuming a larger and larger share of our

budget and reduce the national debt. cutting $100 million here or there in discretionary costs won't do the trick. in 195 discretionary spending accounted for 62% of the budget. today, it accounts for just 38% of our budget. as discretionary spending has become a smaller and smaller part of the pie, mandatory spending on entitlements and debt have become a bigger and bigger part of the pie. in 1965, mandatory spending in interest accounted for 38% of the budget. today, they account for 62% or nearly two-thirds of the entire budget. this means that in order to face our problem head on we'll have to address the problem of entitlement spending and the only serious option on the table

is the conrad-gregg proposal providing a pathway for fixing the long-term challenges forcing us to get debt and spending under control. i had a number of good conversations about this proposal with the president based on the conversations and am hopeful it will be given serious attention. for the safety and security of our nation, the conrad-gregg proposal deserves broad bipartisan support. every secretary of defense must confront the tension between america's near-term readiness and future investment. but some future defense secretary will no longer be able to make either choice if we do nothing to address the problem of long-term debt. regardless of the global dle ths we fairks we will be forced to feel a smaller and less capable force. the money just won't be there. when most americans think about threats to our security, they come up with a standard list.

but few people include our growing national debt. they should because it's real and it's serious. based on current trends, it's quite possible to imagine some future chairman of the joint chiefs of staff walking into the oval office one day and informing the commander in chief that he has no choice. he can either protect the sea lanes in the persian gulf or he can protect the sea lanes in the sea of japan, but he can't do both. and on that day, the united states of america will northern be the guarantor of the international trading system, sea lines of communication, the security of our allies, or even our own independence. all of this should matter to members of the senate. americans trot our nation's intelligence and uniform personnel to protect them from distant threats but it is incumbent upon the men and women of this body, those of us who

control the purse strings to make sure the nation's resources are managed in a way that aibles these forces to do their work. the men and women of the senate must look beyond the narrow demands of a single political term in office or the next election to the long-term security of our nation and, indeed, the world. no one else can protect the american people from the diminishment of power and capability that come with our dangerous and ever-increasing national debt. now, madam president, i have one more item to address.

mr. mcconnell: with sadness i rise to speak today about a fallen warrior from kentucky. on december 31, 2007, private first-class brian l.gorham succumbed to injuries sustain earlier that month while an explosive device struck his vehicle. he was 21 years old and able to spend the last days of his life not halfway around the world but back in america in a hospital in ft. sam, hughes tongue, texas, to be precise, surrounded by his loving family. for his bravery in uniform, private first class gorham received several medals, awards and decorations including the army good conduct medal, the purple heart, and the bronze star medal.

at brian's funeral service in franklin, kentucky, hundreds of people came to offer their sympathies to his family and friends. brian's father, tony gorham, said "it's hard to believe that so many people, a lot of them i don't know, walked up to me, shook my hand, or patted me on the back, and told me 'we're proud that your son fought for us and sacrificed for us'." maybe it's not so surprising, madam president, if you know the dedication brian put into everything he did from a very early age. jack wright, brian's sunday school teacher, remembers when brian was a young middle school student who would participate in two-hand touch football games that were played after bible study services on wednesday nights. brian was never the biggest or the fastest, jack, say, but no

one put more effort into the game and no one enjoyed playing any better than brian. that enthusiasm carried over when brian joined the football team in middle school. brian also liked basketball and baseball and could often find a pickup game with neighborhood kids many nights after school. in high school brian joined the junior rotc program and just like in those football games he put his all into becoming the best. he succeeded by being in the first group to complete his rotc program's leadership academy. that achievement was symbolized on brian's dress uniform by a silver band around his right shoulder. jack wright remembers brian would proudly wear his rotc uniform to services at woodburn baptist church for many years. brian still found time for fun, of course. he loved to fish, explore the caves near his house, and float

down the wrea creek in his fries boat. one time brian and his friends were racing go-carts and decided to hold a contest to see who could drive through a huge mud puddle and see who could come out the muddiest. this is one contest brian's parents are probably glad he didn't win. another boy was so mudty, that when his mom came to pick him up, she made him ride home in the trunk. brian was close to his sister and brother. when they were kids, bria brande him play dolls with her. randy was his big brother's shadow. henry remembers that during one of his football games at school, both of his parents were unable to attend. henry wasn't doing so well until

he heard his big brother brian cheering him on from the sidelines. brian's mother shirley also remembers the time when she and tony went away for the weekend and brian called her to say he was cooking dinner for some friends and not to worry. they were sharing the cost. he said he would have food ready for them, too, when they got back. so shirley and tony came home to see brian had bar becued and they sat down to a wonderful meal. it wasn't until the next day when shirley realized brian had emptied out the freezer and there was nothing left in the house to cook. brian graduated from greenwood high school in 2003 and after serving as command he have his school's rotc program, he enlisted in the army. he was with the 173rd airborne brigade stationed in vencenza,

italy. brieance's family remembers how loved what he was doing and took pride in his work. his mother shirley was proud of her son's humanitarian work in uniform. in ask he distributed seeds to afghan farmers and helped provide security for the engineers to build roads and rebuild the country. madam president, we must keep brian's family and friends in our thoughts, as i recount his story for the senate today. we are thinking of his mother and father, shirley and tony gorham, his sister brandy dickson, and her husband, horns, his brother henry, his maternal grandparents, roger and ester bunch, his paternal grandmother, neal tabor, his aunt, regina, and many other family and friends. madam president, brian had a 1976 chevy pickup that was

passed down through the family. he called it "old blue." he would often have a hard time starting it and had to wake his sister up to start it for him on some days. when brian was in the hospital in texas, he told his father that he wanted the two of them to work on restoring old blue together. brian did not get to finish that task, but tony has the car in his garage now, and he promises to fulfill his son's wish. our country must also fulfill a promise to private first class brian l. gorham and foreever honor his service. it is the least we can do after his tremendous sacrifice. madam president, i yield the floor. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the

senate will resume consideration of senate bill 1390, which the clerk will report. the clerk: calendar number 89, s. 1390, a bill to authorize appropriations for fiscal year 2010 for military activities of the department of defense and so forth and for other purposes. the presiding officer: the senator from michigan. mr. levin: madam president, we're now back on the bill, as the clerk has indicated, and as the presiding officer has indicated. it was agreed to last night in our unanimous consent agreement that i offered and was accepted that the next order of business would be to take up the kyl amendment and that there was protected either a second-degree or a side-by-side amendment to that amendment, and then we would move after that to an amendment by the senator from

connecticut, mr. lieberman, and a side-by-side or second amendment could be then offered by the senator from indiana, senator bayh. madam president, in a moment, i'm going to -- i see my friend from arizona sheer. froms a -- i see my friend from arizona is here. i ask that we reverse the order of that because of senator kerry's requirements this morning. and i have no objection at some point to expwer into a time agreement on kyl, by the way. that's not the purpose here, to delay that to a cloture vote. but i think that the minority would want to see the language of any side-by-side before there was an agreement to a time agreement. if not, i'm happy to enter into a time agreement on senator kyl's and any second-degree or side-by-side at any time my good

friend from arizona wants to do that. but in order for the convenience of the parties, if senator lieberman and senator bayh could come down now, if they can do that i'd like to inquire about that and dispose of their amendment first and then take up the kyl amendment, with a time agreement, just to reverse the order of those two. because of the finance committee's meetings this morning, which senator kerry needs to attend. i haven't had a chance to talk to the -- my friend from arizona about this, just because of the way the morning goes. but that's what i'd like to suggest, and if that could done it would simplify things. there's also a number of over things that -- of other things that we need to do. i have -- the senator froms a is familiar with this. there is an amendment on voting rights for the troops, by i think has been cleared. it is a bipartisan amendment, which is going to need about 15

minutes of debate, i understand, and that could be done as well hopefully. but my goal, if it's agreeable to the manager -- republican manager, would be to basically flip the two time agreements for both, going first to the lieberman and bayh amendment, if they are able to do it. mr. mccain: madam president? the presiding officer: the senator from arizona. mr. mccain: let me just say to my friend, the distinguished chairman, all of our members have very busy schedules. the senator from arizona, whose amendment it is, happens to be the second-ranking republican and has heavy responsibilities. i would point out that we waited for a couple hours yesterday for the same senator yesterday afternoon to be able to come to the floor to address another amendment. at the same time the clock is running because the majority leader filed cloture on the

amendment. so are we going to run the proceedings here -- consideration of the authorization bill -- based on the priorities of one senator, or are we going to carry out what we all agreed to last night in the unanimous consent agreement? there was no objection last night from the senator from massachusetts last night. he could have objected. so now we want to turn everybody else's schedule on their head because one senator has some other priorities. i don't -- obviously we're going to finish the bill because the majority leader filed cloture to close out the bill. after spending nearly a week on two michigans: hate crimes and guns, neither of which had a single thing to do with the defense authorization bill. because unprecedented in the 20-some years that i have been a member of the armed services committee, the majority leader of the senate came to the floor and proposed a hate crimes bill that had not been through the

committee of jurisdiction and was obviously very controversial on this side. so after getting messed up for a week on those two issues we enter into a unanimous consent agreement when the majority leader files cloture to close off debate on this side -- that's the reason it's done -- so now we're supposed to overturn some ten hours later a unanimous consent agreement because one senator cannot fit it into his schedule when the sponsor of the amendment is the number two ranking member on this side? there's something wrong with that process. i'll be glad to discuss it with the distinguished chairman and we'll try and see if we can adjust to it. in the meantime the clock continues to run and we have fewer and fewer amendments that will be germane and allowed to

discuss because we find out this morning after a unanimous consent agreement that could have been objected to last night that one senator has a schedule that dictates we turn the unanimous consent agreement on its head. i suggest the absence of a quorum. mr. levin: madam president? the presiding officer: the clerk will call the roll. heavy live madam president, if the senator would withhold that request just for a minute so i could comment on that. contain i'll be glad to. i withhold. mr. levin: i was not suggesting that we not proceed this morning. i was suggesting to accommodate senator -- a senator who is going to be offering a second-degree amendment that we reverse the order. that is not acceptable, we do not need to do that. i was trying to simply to accommodate the senator so the second-degree or side-by-side amendment that was in the unanimous consent proposal last night could be offered. if that's not agreeable to the

republican side, then i obviously am not going to make the suggestion but it would not delay anything. all it would do is to change the order of two events to accommodate us. if that's not acceptable to the minority i obviously will not make that unanimous consent. mr. mccain: madam president? the presiding officer: the senator from arizona. mr. mccain: can we arrange -- i ask the distinguished chairman, then, in the spirit of compromise, can we arrange a time agreement on the lieberman amendment that's reasonable so that perhaps we could take up the kyl amendment later in the morning so that at least that might not upset his schedule since we are making accommodation for the sponsor of a second-degree amendment seems to be our priority. mr. levin: madam president, of course, that's exactly what i was proposing and i appreciate the willingness of the senator

from arizona to try to work that out. that's no problem with the time agreement on the lieberman-bayh matter. we could not do that because the language was not available in time for the minority side to consider a time agreement. we would be happy to have a time agreement of one hour on the lieberman amendment, one hour on the bayh amendment, two hours together and we are happy to have a time agreement on senator kyl's amendment but we were suggest we reverse the order to accommodate -- it would not result in any additional use of time. it would not delay anything. it would simply reverse the order for the accommodation of the senator who needs to be here to offer a second-degree amendment if we're going to do it or a side-by-side to senator kyl's first-degree amendment. mr. kyl: map? the presiding officer: the senator -- mr. kyl: madam president,

whatever is most convenient to the chairman and ranking member, subject to, i planned because of conversations last night to do this, this morning. this afternoon i will have a lot of conflicts and i, too, am on the finance finance where senator kerry is right now and i'm supposed to be there but made this arrangement. i don't believe the business before the finance committee is going to last very long at all. it was a very quick matter to be resolved so as long as we can try to get the amendments relating to the start treaty resolved before off noon i'm perfectly -- before afternoon i'm perfectly willing to agree to everything here. mr. mccain: let me just say if we could have one hour on each side on the lieberman amendment and then move directly to the kyl amendment if that's

agreeable. mr. lieberman: madam president? the presiding officer: the senator from michigan. mr. levin: madam president, what we need to do along that line is see if we can get an agreement with senator lieberman and senator bayh on a time agreement on the two amendments. i would suggest, as the senator from arizona did, there be an houruallanhour equally divided,e majority leader is agreeable -- mr. mccain: maybe we need a quorum call for a minute. mr. levin: i suggest the absence of a quorum. mr. lieberman: well, i just want to say overnight, a number of people want to come down and speak on our side and i would like to ask on our amendment at we have at least an hour and a half, perhaps two. i hope not to use it but this will be a significant debate.

mr. levin: madam president, i suggest we seek an agreement there be two hours on the two amendments together, one -- equally divided between the senator from connecticut and -- i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. levin: i ask unanimous consent -- the presiding officer: the senate is in a quorum call. mr. levin: i ask unanimous consent the call of the quorum be dispensed. .the presiding officer: without objection, so ordered. mr. levin: madam president, i ask unanimous consent the order of consideration of amendments this morning be switched and the senate now consider the lieberman amendment 1627; and the bayh amendment, 1767, they be debated concurrently for a total of 150 minutes with 90

minutes under the control of senator lieberman and 60 minutes under the control of senator bayh and no amendments be in order to either amendment; upon the use or yielding back of time, the vote in relation to the amendments occur at a time to be determined with the first vote in relation to the bayh amendment to be followed with a vote on the lieberman amendment with two minutes of debate prior to the second vote. the presiding officer: is there objection? without objection, so ordered. mr. levin: i thank the presiding officer and i thank my colleagues for working this out to accommodate all of us the best we can.

mr. lieberman: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. lieberman: madam president? the presiding officer: the senator from connecticut. mr. lieberman: madam president, i ask unanimous consent that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. lieberman: i thank the chaimplet first, madam president, on behalf of senator bingaman, i ask unanimous consent that abdullah foroz be griffin privileges of the floor for the pendency of debate on s. 13 th 0, the defense authorization bill, and all bills thereon. the presiding officer: without objection. mr. lieberman: i thank the chair. madam president, i have consulted with the chairman of the armed services committee and the ranking member, senator mccain, and they have urged me to go forward and call up my

amendment on the alter national engine and begin to debate it while we're awaiting senator bayh to come over with either his second-degree amendment or side-by-side. the presiding officer: without objection. mr. lieberman: i call up that amendment at this time. officer the clerk will report. the clerk: mr. lieberman for himself and others proposes amendment 1627. mr. lieberman: mada madam president, i ask unanimous consent that further reading of the amendment be dispensed with. the presiding officer: without objection. mr. lieberman: i thank the chair. madam president, this amendment i'm introducing with senator mccain as my lead cosponsor and a strong bipartisan group of cosponsors, including senator reed of rhode island, senator snowe, senator schumer, senator inhofe, senator dodd, senator hutchison, senator collins, senator kyl, and senator cornyn, and i'm very grateful for that

support. to state it briefly and then to go into some detail, this amendment would remove funding from this bill that was add by way of amendment in the armed services committee -- $438.9 million -- $439 million -- to build a second engine for the joint strike fighter plane. and i will argue on behalf of the amendment i've introduced with senator mccain and others that this is a waste of $439 million to buy a second engine for a plane that we don't need. in fact, estimates are that continuing the acquisition of this second engine will cost over $6 billion of taxpayer money that we don't need to

spend because there has been a competition for the engine to be used in the joint strike fighter, which is now the heart and soul of our -- of america's hopes for the future when it comes to tactical aviation, particularly after the senate terminated the f-22 program the other day. so there was a competition to build the engine for the joint strike fighter. general electric, in its proposal, lost that competition. pratt whitney won that competition. and now, by way of legislation, the proponents of the second engine for this plane are trying to achieve, by legislation, what they could not achieve by competition.

and it is not only that it is an unnecessary expenditure of $439 million in the coming year and more thank $6 billion for a second engine for a plane that we don't need that second engine, it has consequences. it's not just that we're spending taxpayer money, but i'll go into this in some detail in a moment, but building that second engine, putting that money to use on that second engine -- a general from the air force overseeing this program -- joint strike fighter program -- told the committee that it would delay the giant strike fighter which our services are desperately waiting for. so it would delay the program and in fact this air force general testified to our

committee that putting money into the bill for the second engine and continuing to fund it would result over the next five years in a reduced capacity to build joint strike fighters by 53 planes. so to build -- to spend the money to build a second engine for a plane when we don't need a second engine because the first one won the competition and is performing very well, we're going to reduce the buy of this tactical fighter that our military needs by 53 planes over the next five years. and how do my friends who support the second engine pay for it? well, in the armed services committee bill, which is before

us, which senator mccain and i and others are trying to remove, they defund the acquisition of helicopters, huey helicopters, that are desperately needed by our marines, particularly those fighting in afghanistan. there will be an alternative proposal made today, this morning, in the amendment, i gather, that senator bayh will introduce, i presume because there's been so much protest to defunding this acquisition of helicopters the marines need in battle in afghanistan in order to pay for a second engine, unnecessary, for the joint strike fighter. so, instead, the amendment will defund the acquisition of c-130's that are specially fitted for our special operation forces. again, carrying out extremely

dangerous, critical missions in afghanistan, iraq and other places where they are courageously taking on particularly terrorist whose attacked us on 9/11. that's the essence of the argument. this second engine is a program that president obama has described -- and i quote -- "as an unnecessary defense program that does nothing to keep us safe but, rather, prevents us from spending money on what does keep us safe." end yoat from th quote from the. and that warning from president obama about the consequences of funding the second engine for the joint strike fighter is realized already in the part of the bill that senator mccain and i and others are trying to withdraw and in the amendment my

friend from indiana will introduce, because it takes money from the marines and the air force special operations community in areas that they and we desperately need. to add that this morning -- i want to add that this morning i was grateful and honored to receive a letter from secretary of defense robert gates in which the secretary of defense strongly and clearly expresses his opposition to the alternate engine, the second engine, the unnecessary engine, the $6 billion unnecessary engine for the joint strike fighter and his support for the amendment that senator mccain and i and others have introduced. madam president, i'd ask unanimous consent that the letter from secretary gates be printed in the record. the presiding officer: without objection. leash leeb i thanmr. lieberman:e chair. i want to read the letter. "the department of defense

supports striking from legislation any provision that would require the development or procurement of an alternate propulsion system for the f-35 joint strike fighter. the current engine is performing well with more than 11,000 test hours. in addition, the risks associated -- the risks associated with the single-engine provider are manageable, as evidenced by the performance of the f-22 and f-a 18-e and-f. the air force currently has several fleets that operate on a single-engine source" so i draw back from the letter, what is unusual is to have a second engine, quite logically. i mean, if we went to buy a car, it would be nice have a second engine in the garage but would we pay the extra money for it

when we knew we had a perfectly good engine in the car we were buying. "thus, further expenditures on a second engine are unnecessary and will likely impede the progress of the overall f-35 program. it is my belief," secretary gates says, "that the joint strike fighter program presented in the president's budget request is in the best interests of national security. if a final bill is presented to the president containing provisions that would seriously disrupt the f-35 program, the president's senior advisors will recommend that the president veto the bill." i intend to show in my argument this morning, madam president, that in fact this armed services committee bill, if the amendment that senator mccain and i are proposing is not adopted, will

seriously disrupt the f-35 program, the giant strike fighter program, and, therefore, will be occasion for the president's advise advisors to recommend that he veto this entire and critically necessary bill. i thank secretary gates for expressing support for the amendment that senator mccain and i and others, senator schumer, senator dodd, senator kyl, have introduced to strip this unnecessary expenditure of money from the bill. our amendment, as i've said, would restore funding that was taken from the u.s. marine corps helicopter, the huey, when the committee voted to fund the alternate engine. the vote to cut ten marine corps helicopters is at a time the marines are conducting a major offensive in the mountains of

afghanistan where the high altitude and hot weather require the best capabilities that congress can provide them including the huey's and in recent statements from the joint staff, it is clear how urgently marines need the enhanced capability of the huey on the battlefield. speaking before th the armed services committee the vice chairman of the joint chiefs, general cartwright said to the members of the committee -- and i quote -- "those helicopters are, in fact, critical," and he continues "the helicopter for the marines is one of the most lethal weapons, the most effective on the battlefield particularly in the counterinsurgency arena and built up urban areas and in compounds because they can be discreet and the values of those helicopters is significant." the day after general cartwright appeared i receive a letter from the commandant of the marine corps, general james conway and i ask unanimous consent the

letter be included in the record. the presiding officer: without objection. mr. lieberman: i thank the chair. in this letter general conway writes "procurement of less than the optimum ramp up of 28, h-1's lead to continued reliance on aging helicopters that should have been retired from the inventory years ago as we focus on operations in afghanistan sustaining the introduction of the h-1 is vital for our future success." he continues "because of the severe operational limitations of the corps' legacy helicopters, the marines are transitioning to the improved kippibilitys of the uh1y which will be deployed in a sphul fuld drop in november which is

desperately needed in combat today. and i received a letter from major general retired from the army reserve now acting executive director of the reserve officers association and says the reserve officers association representing 65,000 reserve component members supports the lieberman-mccain amendment which restores critical funding to pro-secure helicopters that the marine corps urgently needs in afghanistan. madam president, i suspect that the reserve officers association will no more support an effort to ask our special operation forces as the second-degree or senator bayh does to pay the bill for an unnecessary engine that to to pay that bill.

and i ask that letter be printed in the record. the presiding officer: without objection, so ordered. mr. lieberman: this amendment would essentially remove the funding for the second engine but it does it in a way that, i think, is thoughtful. it requires that there be no obligation of any funds on the development of a second engine for the joint strike fighter unless and until the secretary of defense certifies to congress that the development and procurement of the engine reduces the we total lifecycle costs of the program, improve the operational readiness of the f-35 fleet and avoid either disrupting the joint strike fighter program or result in the procurement of fewer joint strike fighter aircraft during the lifecycle of the program. why do we propose these conditions? because they are the benefits that the proponents of the secretary engine claim it will deliver. we ask that the second engine be

judged on its alleged merit. i hope my colleagues will agree this is a fair way to go at this. i spoke already at the outset about the fact there was a competition for the engine, for the joint strike fighter. it took place in 1996. won engine won the competition and the other lost. understandably, but not separably the makers of the engine that lost attempt to achieve what they could not achieve by competition. the proponents of the second engine have also claimed that it would lower costs on the joint strike fighter program overall. i've cited numbers that come from the pentagon and elsewhere that argue on the other hand that this program will cause -- cost over $6 billion of taxpayer

money without any showing, really, that it will save money. developing a second engine quite logically and following commonsense requires the department of defense to maintain two logistics operations to support it, tails, as it is called in the military, two sets of training manuals, two sets of tooling, component improvement parts. the additional expenses would raise operations and sustainment costs for the joint strike fighter throughout the lifecycle of the program. i want to get to what impact funding the second engine -- unnecessary engine -- the costs would have on the joint strike fighter program. on june 9, the armed services committee, subcommittee on air land which i have the honor of chairing, heard testimony from lieutenant general mark shackleford, military deputy office to the assistant secretary of air force, in

charge of acquisition. i asked whrompt th whether or ne development of the second engine would disrupt the program. his explanation is important to hear -- and i quote -- "the fiscal year 2010 production quantity for the joint strike fighter is 30 aircraft split between three variances, three different services. if forced to pay for the at nalt we have to reduce that from 2-4 depending on the variance a negative effect on the remaining aircraft if you buy fewer. and it ripples into next year's quantities and costs and as we take that 2010 increment of dollars and extend that out through the future year of defense program," which is the five-year program that the pentagon plans "there are equal number of aircraft we can buy

with the remaining dollars." after hearing that decreases, reductions in the number of aircraft, we can buy, i asked general shackleford how many fewer joint strike fighters would be purchased over that five-year-period if we went ahead with the second engine. he responded -- and i quote -- "over the five-year period it would be 53." i cannot emphasize that enough -- 53 fewe fewer aircrafe otherwise would have paragraphed for the air force, navy and marine corps who are desperately in need of them, 53 fewer planes because we're going to spend that money buying a second engine that we don't need. that really would be a major descrupg to the joint strike fighter program but it is

avoidable. and it is avoidable by adopting the amendment that senator mccain and i, senator schumer, senator dodd, senator kyl, senator hutchison, senator collins, senator snowe -- broadly bipartisan group -- has offered. i close this opening statement in support of our amendment and opposition to the amendment that my friend from indiana will introduce with this quote from president obama when he sent the defense budget to us on may 15. here's the quote from the president: "we're going to save money by eliminating unnecessary defense programs that do nothing to keep us safe but rather prevent us from spending money on what does keep us safe. one example is a $465 million program to build an alternate engine for the joint strike fighter. the defense department is already pleased with the engine

it has. the engine it has works. the pentagon does not want and does not plan to use the alternate version. thathat's why the pentagon stopd requesting this funding two years ago." that's why i respectfully ask my colleagues in the interest of the taxpayers, in the interest of the joint strike fighter program, to protect funding for the marines, for the huey's and special operation forces of the air force, for the c-130's to protect the navy air force and,d marines who are waiting for the joint strike fighter i ask you to vote against the amendment offered by my friend from indiana and for the amendment i have the honor to offer. i thank the chair. i yield the floor.

the presiding officer: the senator from indiana. mr. bayh: i ask unanimous consent to call up my amendment number 1767. the presiding officer: the clerk will report. the clerk: the senator from indiana proposes amendment number 1767. mr. bayh: i ask unanimous consent further reading be dispensed. the presiding officer: without objection. mr. bayh: madam president, i would like to begin thanking my colleague from connecticut and my friend, joe lieberman. we working to on so many things and so well i find this to be an odd set of circumstances today where we have a difference of opinion on this issue but even here we have worked to call up our respective amendments in a timely manner and i regret the order of offering the amendments was changed because i know you had arranged for some speakers to speak on behalf of your approach to this issue, as had i. i wish their voices could be heard. i am grateful that senator levin will be speaking shortly in support of this -- of my

approach. the fact that he is the chairman of the armed services committee leadedeleads some credence to or approach. i thank you and senator mccain for working together on many different things and i thank senator mccain for his courtcy in respecting the time of various members who planned to speak here. so i thank you, senator lieberman for all of that. we do, however, have a difference of opinion on this important issue. madam president, this amendment will restore funding for marine corps helicopters and the joint strike fighter management reserves. let me repeat for my colleagues who are concerned about funding for the marine corps helicopters or the number of join join that will b -- or thejoint strike fil be purchased, this amendment deals with this. the statements about the marine corps and helicopters and testimony in favor of the helicopters, that is no longer relevant. under my amendment the helicopters are provided for.

many of the comments about the need for the joint strike fighters and their removal of the number of tails, the number of planes, those commends are no longer relevant. we have full funding for the number of joint strike fighters so i know this debate is -- has proceeded rapidly but the comments about joint strike fighter has been taken care of but my amendment and no longer relevant to the consideration of the underlying issue, the importance of competition and how best to save must b save mos program. what is on the table -- and i also say, a number of statements were read to the president and his points of view. it is important for my colleagues who care about the comments from the president's staff of a recommendation of a veto to point out that in those comments they were speaking directly to the number of planes which is now taken care of. that has been addressed. they were not referring to the underlying opinion of the g.a.o. and the whole fiscal aspect which is legitimate debate but

those comments were not raised as legitimate grounds for veto threat by the president of the united states. so that has been taken care of, as well. what is on the table, madam president, is preserving competition in the joint strike fighter engine program. my friend and colleagues' amendment number 16 27, strikes funding for the commonsense program and i wish to set the record straight by preserving this competition. the joint strike fighter is a massive acquisition program. by 2030 the fighter will make up the vast majority of our tactical air fleet. ensuring competition now over the life of this is good government. and sound management practice. understanding this my colleagues in the armed services committee prudently included $439 million to continue development of the competitive engine. at most colleagues know i am very concerned with our nation's growing deficit. i've consistently opposed bills that spend too much including the omnibus spending bill and

the recent budget. because of my -- and i supported amendments to strike wasteful spending. i understand the respose of restraint and i would not be here today if i did not truly believe this competitive engine strategy will save the taxpayers money. i am not alone in this bill. in 1996 congress initiated the f-136 because we knew then as we know now competition results in lower cost, improved performance, increased reliability, and greater contractor responsiveness. since then congress has maintained unwavering support for this program for 13 consecutive years, 13 consecutive year, madam president. i want to be clear that there was never a competition since the g.s.f. engine development. i have heard the word "competition" used repeatedly by my friend and colleague. i hold in my hand copies of the

contract, the contracts for the engine that has just been alleged to have been let competitively. the first contract was in january 23 of 1997 to pratt & whitney in the sum of $804 million, and it says in bold print, madam chairwoman, "this contract was not competitively procured." let me repeat that. in plain english, this contract for the engine program which was just stated repeatedly for which there was a competition was in fact not competitively let. it is in plain english. a federal government document refutes that contention. the second contract dated october 26, 2001, once again to pratt & whitney in the sum of $4,830,000,000. this contract was not competitively procured, not competitively procured. there was no competition for the engine program. it is a matter of public record, in plain black and white. so if you care about

competition, you will support my approach to dealing with this issue. this engine program will cost totally $800 billion. the general accounting office, g.a.o., has consistently supported funding a second engine as a fiscally responsible approach that will yield long-term cost savings for taxpayers. often may 20 of this year -- on may 20 of this year, the g.a.o. reaffirmed this view when discussion the cost to completing the second engine stating, and i quote, "a competitive strategy has the potential for savings equal to or exceeding the amount across the life cycle of the engine." "prior experience indicates that it is reasonable to assume that competition on the g.s.f. engine program could yield savings of at least as much. as a result, we remain confident

-- confident -- the competitive pressures could yield enough savings to offset the costs for competition over the g.s.f. program's life." g.a.o. went on to elaborate on the nonfinancial benefits of procuring a second engine, an i quote again, "our prior work along with studied by the department of defense and others, indicate there are a number of nonfinancial benefits that may result from competition, including better performance, increased reliability, and improved contractor responsiveness. the long --" end of quote. "the long history in the department of defense is that when you award sole-source, noncompetitive contracts to a single provider, responsiveness goes down, the taxpayers suffer. that is what my amendment will avoid. further, in light of the increased investment that secretary gates and the administration have chosen to make in the g.s.f. program,

limiting it to a single source has serious considerations. if we have problems with the primary engine we will have no alternative. there will be no second provider with the ability to produce a comparable engine. engine failures could prove catastrophic for an already-thin tactical air fleet. anybody who thinks that a large contract to a single vendor without competition -- and again i reiterate, as the contracts specifically indicate, they were not competitively bid. noin thinks that's a good way for the government to do business -- anyone who thinks that's a good way fo for the government to do business should support the lieberman amendment. some contend ma my amendment is wasteful. many have supported this as good public policy in the past. they were right then. we need to keep in mind the i am right today. primary contractors honest and the only way to do that is through competition. flofs competition in the award of -- there was no competition in the award of these contracts.

we now maintain that competition through the adoption of this amendment. madam president, there were several other senators who were intending to speak on behalf of this amendment. because of the change in schedule, they may 0 not be able to be with us. we'll have to wait and see about that. but again i thank senator mccain for his courtesy in attempting to ensure that they could speak heemplet i know there were some in opposition to my approach that wanted to speak as well. it would be good if we could accommodate them. senator kennedy cosponsors nigh amendment but because of health care concerns, he could not be here today. but i do want to share with our colleagues a statement he made -- he issued on june 24 as a part of the armed services committee markup in support of my approach. i would like to ask that this be entered into the record, with -- i ask unanimous consent. the presiding officer: without objection. b.i.a. let me share with you the -- mr. bayh: let me share with you the thoughts of senator kennedy, a long standing member of the armed services committee. "for the fourth year in a roarks the department of defense

continues to ignore the will of congress on the production of an alternative joint strike fighter engine in order to protect against cost overruns, preserve the u.s. industrial base and support our international partners." dwheas our amendment is designed to accomplish. that's why he supports it. he goes on to say, "i remember well the great engine wars of the 1980's and thevestment an acquisition strategy considered controversial that delivered stronger and more cost-effective fighter aircraft to our nation. that began a decade earlier when the decision to sole-source the f-15's f-100 engine resulted in inadequate time lines and our inability to address these discrepancies. ultimately, the air force, navy, and congress agreed that the short-term and long-term benefits of industrial competition would meet these challenges and deliver results.

that experience is as relevant today as it was then because we face a similar challenge. the joint strike fighter is one of the largest military aircraft programs in history, $100 billion allocated for engines alone. in light of recent defense acquisition challenges and the growing fighter gap in our air forces, these decisions would not be more important or the results more far-reaching. critics emphasize the short-term cost savings and the sole-source procurement strategy and reports showing different time lines to recoup program costs. but dramatic long-term opportunity costs are missing from this debate and are conspicuous in their absence." that's what the g.a.o g.a.o. is referring to in the study i cited before. "competition for the joint strike fighter engine has compelling advantages and avoids past pitfalls. dual sourcing will build redundancy into the fleet --

with other fleetwide groundings. competition delivers an inherent incentive for manufacturers to absorb and contain costs even as it encourages responsiveness by contractors. all of these factors are less evident in sole-source contracts. the alternative engine program appropriately diversifies capability and capacity across the u.s. industrial base and ensures that sustained production, maintenance and availability of crucial components are not concentrated in a single provider. in addition, the f-136 alternative engine program considers the sustained pmtion of key international partners n. as stakeholders, especially in the united king drnlings australia, canada, denmark, italy, norway and turkey as well. their commitment is important to the future of the joint strike fighter program, and our basic security relationships. for these reasons, i strongly support the additional $438 million in the fy 2010 national

defense authorization act to sustain the alternative joint strike fighter program." those are the words of senator kennedy, madam chairwoman. by way of summary, the marine corps helicopter issue has been taken care of. that is no longer an issue. we fully provide for that. allegations about the reductions in the number of procurements for the joint strike fighter has been taken care of. that is no longer an issue. statements by the president's staff with regard to a possible presidential veto to the potential reduction in the number of fighters, that issue to be taken care of. as i mentioned, the contracts for the engines themselves in black and white, given to pratt & white kne whitney, "this conts not competitively procured." that is a matter of public record. this debate is about competition, the benefits of competition. i support them. that is why i urge my colleagues to support our amendment. thank you, madam chairwoman.

i-year-old. i. i yield the floor. the presiding officer: who yields time? the senator from arizona. mr. mccain: madam president, i rise in support of the amendment which has been described by the proponent and opponent obviously would strip from the defense authorization bill a provision that authorizes funding for an alternate engine for the f-35 joint strike fighter. underscoring senator lieberman's point, as was the case with the provision this body addressed in the f-22 program, funding for an alternate program for the j.s.f. at this time is something that the department of defense has not asked for and does not want. it's not reflected in any of the president's budget requests or any of the service's unfunded priorities lists. madam president, i believe there's good reason why neither the department or any of the services at this time want an alternate engine for the j.s.f.

that reason is perhaps best expressed in a letter that senator lieberman has already quoted from and entered into the record from secretary gates. where he concludes by saying, "it is my belief that the joint strike fighter program presented in the president's budget request is in the best interests of national security. if a final bill is presented to the president concerning provisions that would seriously disrupt the f-35 program, the president's senior advisors will recommend that the president veto the bill." and before i go much further, i'd like to apologize to all members who had planned to speak on this very important amendment that had arranged their schedules to do so and we have, obviously, changed the timing despite a unanimous consent agreement to the contrary to apparently accommodate one

senator's schedule. and so i hope that, because this is a very important issue, that senators both in support of senator bayh's position and senators in support of this amendment would have -- seize the opportunity to come down and address this issue. some have cited the benefits of competition as a reason to pursue a second engine for the joint strike fighter. but a competition for this engine was already conducted -- was already conducted -- as part of the original competition for the joint strike fighter itself. and the current airframe manufacturer and engine team won. in 1996 lockheed martin, boeing, and mcdonnell douglas originally competed for the technology demonstration ad wards. in convection that, each of those airframe manufacturers solicited engine proposals from

pratt & whitney and general electric. pratt & whitney won the exerks as to lockheed martin and boeing and general electric won separately as to mcdonnell douglas, lock immediate martin and boeing were selected. where lockheed martin ultimately won in 2001. that is exactly how most military aircraft engines are selected, as a team combining an airframe with a power plant. that makes serntion i might say. it obviously -- yet obviously we don't want them being developed separately. so with regard to a second engine, we're really not talking about competition. we're actually talking about another bite at the apple. i hope that the great engine war is over. i know of no doubt or analysis that supports the taxpayers will see any net savings from subjecting the engine for the j.s.f. to any further competition. i don't believe that there's anybody who believes more in competition than the senator

from connecticut and me. including the chairman. we need to have competition. but there comes a point where you have to make a decision in the development of both the aircraft and the engine and move forward, and at some point you have to abandon the alternate engine or in some cases there's been advocates of alternate aircraft itself to perform the same mission, as in the case of the tanker. but -- and to move forward in order to proceed in a fashion which is in the best interests of the taxpayers and the defense of the country. that's why the secretary of defense feels so strongly on this issue that he says that "the president's senior advisors will recommend that the president veto the bill" if the lieberman amendment is not adopted. so, the fact is also that

funding an alternate engine over the next six years has been estimated to cost the program about $5 billion, the equivalent of 50 to 80 aircraft according to the program manager. given that continuing development that is eak second engine requires in excess of $6 million according to the deputy assistant secretary of the air force. paying for the engine in the year requires cutting production of at least two joint strike fighters this year alone. there may be some nonfinancial benefits to subjecting the engine program of the joint strike fighter to additional competition, improves contractor performance at the margins, for example, and like senator lieberman i am not persuaded the benefits are worth additional cost of $5 billion to the joint strike fighter's bottom line over the next six years. certainly there are more cost effective ways of ensuring

contractor performance. in my view the possibility of a fleet-wide grounding due to a senatosingle engine is overstat. the only other aircraft with alternate engine is f-16 and others have single engine sours that have worked well. there is no doubt the cost growth has been a huge problem. fiscal year 2007-2008 the costs have grown specifically to meet the needs of the marine corps for a version that can have vertical take off but the challenge is to ensure the development costs remain stable not to introduce a new engine to the program that will most assuredly add more uncertainty, testing requirements, complexity, and ultimately costs to the program. so i believe the provision

currently in the bill would be seriously disruptive because one of the offsets that it uses to fund developing and buying a second engine derives from search, development, testing and evaluation efforts, supporting the program itself. also, it's my understanding that the offset of the c-130 which obviously is very much required in ouration ourations in iraq ad afghanistan -- our operations in iraq and afghanistan. secretary gates provided for more robust developmental testing over five years to ensure the program stays on the planned budget. taking money from the program's research and development and testing and evaluation effort will, in my view, disrupt the program. one of the lessons of history on this program is the stability in funding is vital to executing the program soundly and the instability in programming, the

disruption that the provision introduces into the bill byes the bill within the scope of a veto threat. i urge my colleagues to support the amendment under consideration and prohibit any additional funding for an alternate energy program for the joint strike fighter. let me also point out to my colleagues, this secretary of defense has decided, i think, an incredible act of courage to take on certain institutions and the way we do business. i think this secretary of defense decided to take on, and i know he has, the military industrial congressional complex. that lards on pork barrel and unnecessary spending. which in many respects, places parochial interests over the national interests. obviously he feels so strongly about it that he would recommend a veto by the president of the united states. that would be regrettable,

obviously, because we have so many important provisions in this bill for the men and women who are serving this country, for the wounded warriors, for a pay raise, for so many things -- the amendment of senator lieberman that we adopted yesterday that we would provide an additional 30,000 members of the united states army so we can better pursue the conflicts in iraq and afghanistan. but obviously as of yesterday the defense feels so strongly on this issue he would recommend that the president veto the entire bill. does that mean it would kill a bill? no but it does mean that there would be a significant period of delay in passing this legislation and, therefore, delay the pentagon and the military's ability to implement some of the various important provisions of this legislation. so i would urge my colleagues to

examine this issue carefully as i am sure they do all of the issues before this body,y, and, also, i would hope, take into consideration the views of our distinguished secretary of defense. i don't agree on every issue with the secretary of defense. neither does my colleague, senator lieberman. but i think he's on the right track. and i think we can really bring about change at least as to how we acquire weapons and how we spend money. and end this atrocious, outrageous cost overruns that we've experienced in literally every single weapon system in recent years which is cost the taxpayers incredible amounts of money and end the earmarking and pork barrel process that i will talk more on today. every day, just about, pick up a paper and hear about or go online and hear about some organization that got an earmark and their wait, mismanagement,

and, in some cases, criminal behavior as far as using the taxpayers' dollar is concerned. we have to do the big things and the small things. this is a big thing. i respect, enormously, the senator from indiana. there has been no more valuable member of the armed services committee than senator bayh. i respect his views. i understand where he's coming from and for the name and sake of competition. senator lieberman's and my argument is that the time for that competition is over and it's time to move forward with a tested engine that will, one, accelerate the development and operational entrance by the f-22 and also save some $5 billion of the taxpayers' money. so i hope my colleagues will examine this issue very carefully and support the lieberman amendment. madam president, i yield the floor. mr. lieberman:

madam president? the presiding officer: the accept from cut can you. mr. lieberman: i want to speak briefly because i note the presence on the floor of the senator from ohio and i want to speak simply to thank senator mccain for his various strong and thoughtful statement. i'm honored he is the cosponsor of this amendment. senator mccain has enormous credibility in two areas that come together in this amendment much the first, obviously, is his support of the men and women of our military; the second is his opposition to wasteful spending of taxpayer dollars of the two come together, here, of course, as he has argued, so compellingly, there are a lot of times when the wasteful spending of taxpayer dollars for military action question sessions is not only -- military action question signatures is not only harmful but it takes money away if things we need more. that's the case here. the money that will be spent

five, six, $8 billion over the next six years by various estimates, will result in 50 to 80 fewer joint strike fighter produced in that sometime, navy, air force, marines waiting with anxiety, i'd say, for these tactical fighters. in addition to that, the folks who want to fund the second engine have to fine the money ty and they find it by delays in the joint strike fighter but either by amendments today give the alternate, the first was to take it from the marine corps or from the air force special operations community, for c-1 30's they need in afghanistan, and iraq and throughout the

world. i thank senator mccain for his very strong statement and for his cosponsor. madam president, i yield the floor. the presiding officer: who yields time? who yields time to the senator from ohio i? mr. voinovich: who is manages. the presiding officer: senator bayh and senator lieberman. mr. voinovich: i request, madam president, i take time from senator bayh. the presiding officer: without objection.

mr. voinovich: madam president, i rise today to speak in support of the competitive sourcing for joint strike fighter engines. senator bayh's compromise continues support for competition for the joint strike fighter engine and reofficers funding for marine corps helicopters and i know a number of my colleagues are concern about. from my understanding of what happened here is that in the defense committee, armed services committee, senator bayh was concerned that the committee did no not have money in the but for competition for the joint strike fighter. as a result of that, he moved to amend and took money away from

the helicopters that senator lieberman is so concerned about and today we're here because the senator from connecticut wants to restore that money for those helicopters and at the same time those of us that are concerned about competition would like to see the money in there so we can continue competition for the joint strike fighter. as most of you know, i'm a former governor and mayor and ardent champion of fiscal responsibility and total quality management in government. i'm not a johnny come lightly to this whole business of efficiency in terms of our defense budget. in 1990, the department of defense acquisition management since that time has been on the g.a.o.'s high risk list. that's why in my capacity as chair and now ranking member of the subcommittee on oversight of

government management i strongly supported reforms that the defense department that addressed contracting weaknesses and promote good business practices to support our men and women in uniform. this is not the f-22, this is about competition, fiscal responsibility, and good government management. when i came to the senate i remembered dwight dived eisenhower talked about the military industrial complex. since i've been a united states senator he had it wrong, it's the military industrial congressional complex. if you watch how things are done on the floor of the united states senate a lot of it has to do with protecting the businesses in our state even though in some instances it's not in the best interest of our country. i am proud to say in spite of the fact in my state we lost about 500 jobs, i voted to

eliminate the f-22. and that's what we should see more of here but too often when we maybe our decisions here it has more to do with the contractors in our respective states and the jobs than it has to do with what's in the best interest of the country or what is fiscally responsible. all of us should be concerned about it. i will leave at end of next career but it seems tnext yearbe attention to that we will be in trouble. in testimony before the house armed services committee this past may, the government accountability office stated that competition for the joint strike fighter engine will yield long-term cost savings for taxpayers. does it mean it will cost more at the frontnd because you have more than one company competing? of course it will cost a little bit more but that testimony that

g.a.o. gave cited an example of engine competition for the f-16. we had competition for the f-16 and this joint strike fighter is going to be the fighter for all of the federal agencies, with us, probably, for the next 3 25r 30 years. the testimony said it reduced engine costs for the f-16 by over 20%. by putting a little money upfront and having competition between the companies that wanted to do the engine we, over the contract, save 20% on that. and, madam president, i ask unanimous consent the g.a.o.'s full testimony be entered into the record. g.a.o.'s -- the presiding officer: without objection. mr. voinovich: it's quite a report and for those that are really interested in the subject, i asked them to read this or have their staff look at it: joint strike fighter strong risk management essential

entering the most challenging phase. it is interesting the company originally chosen to do this has had cost overruns even in the beginning and the two companies that were competing with them have been on budget and on time. for the record -- by the way, it's right here in this g.a.o. report. all you have to do is read the report and it is there. let me read the record "a competitive strategy has potential of exceeding that amount across the life cycling of the engine. prior experience indicates it is reasonable to assume competition on the joint strike fighter engine program could yield savings. as a result we remain confident that competitive pressures could yield enough savings to offset the upfront cost of development over the joint strike fighter's program life." let me repeat that again. if says "as a result, we remain confident that competitive pressures could yield enough

savings." most of us understand competition. we have laws against, you know, antitrust, trying to make sure that one company doesn't get an advantage over another. and so i -- most of my colleagues understand brings out the best and the lowest price. madam president, the g.a.o. goes ton address the competition on quality of products and incentives tincentives to perfo. "our prior work along with you had stews by the department of defense and others indicate there are a number of nonfinancial benefits that may result from competition, including better performance, increased reliability and improved contractor responsiveness." i just heard the senator from arizona speak eloquently about all of the overruns and expenses and everything else about it, and i -- if he were here, i'd say to him, hey, what we want to do is have some competition on

this engine so we get the best price, we get the best quality, we get the most responsiveness. now, madam president, we don't need the g.a.o. to confirm common sense. we all know that, again, competition leads to lower cost, improved performance, increased reliability, and helps to keep our contractors honest. without a competitive engine, over 90% of our fighter aircraft will be powered by one engine by 2030. think about it, one company -- one company will have that contract. given giving an extraordinarily large contract without competition is reckless and irresponsible. our government has an obligation to keep our contractors honest and the way to achieve that is through competition. i urge my colleagues to support the bayh amendment -- compromise amendment that preserves competitive sourcing for the joint strike fighter engine. we have an opportunity. i can understand the senator from connecticut was upset

because we took money to maintain the competition out of the helicopters. but senator -- what senator bayh has tried to do is come up with an amendment so we can restore the money, buy the helicopters, take care of that and at the same time maintain competition on the giant strike fighter. i urge -- on the joint strike fiemplet i urge my deletion really study this -- i urge my colleagues to really study this issue. and if you have a chance, you or your staff ought to look at this report by the goovment i think it substance yaitz the reasons why we're so ardent in terms of our support for competition for this joint strike fighter. i yield the floor. mr. lieberman: madam president? the presiding officer: the senator from connecticut. mr. lieberman: madam president, i yield myself such time as i need from the time allotted to me. let me respond to a few points that have been made here. this is a very good, very important debate. first, as was clear, the

original place that proponents of this second engine, which i believe is an unnecessary engine, unnecessary expenditure of taxpayer money, the place from which they would take the money originally for the huey helicopters for the marines -- i think there was a lot of upset about that, so the amendment choice that senator bayh has put before us today would cut the hc-130 and mc-130 aircraft which would seriously impact both the air force's air combat perform and the competitio special opers command. this is a late-breaking -- the change of the source of the funding. but we asked for a response from the office of secretary of defense and it was this. that this take from these two variants of the c-130's that the

air force special operations command is using in afghanistan, iraq, and elsewhere where they're needed in the world, the secretary of defense said this would slow down the rate at which the aircraft would be delivered. end of quote. the air force has told us specifically that on the argument here -- the argument here is that -- that senator bayh made -- in the supplemental we adopted earlier three additional m c.f.-130's and four hc-130*s were included, seven planes. but the air force says to us this morning, based on the jr. c validated requirements -- based on the jroc validated requirements that the air force has validated requirements for 37mc-130's and 70 hc-130*s

including the air force special operations command and air combat command. they are therefore grateful that the seven that the supplemental gave them but they need many more. they need 115 total and so far we've given them seven. and in removing the nine planes that were in the president's budget for the air force to fund the unnecessary second engine, its eight not a costless move dicialts costless -- it'snot a . it would do damage to the air force's program. i want to say very briefly -- i think i'll hold. i note that senator reed is here. i know he wants to speak on the amendment before us, so i would yield the floor. mr. reed: thank you very much, senator lieberman. let me rise in support of your amendment, together with senator mccain, and commend both of you -- the presiding officer: the senator from rhode island. mr. reed: i commend both of

you for your efforts in this regard. this represents part of what i believe secretary gates is trying to do, which is to focus on the immediate consequential threats and necessary equipment while we are able to continue to maintain deterrents in the future. this second engine has not been, i think, fully validated by the secretary of defense, and this amendment would require such a validation. in addition, one of the aspects of the underlying legislation is that the alternate engine for the joint strike fighter would be paid for, in part, by taking away funds to purchase additional uh-1y helicopters for the marine corps. this request was in the president's busmght these helicopters are critical to the ongoing operations in afghanistan and throughout the

world. the wear and tear on equipment, particularly in afghanistan and iraq, has been considerable, and if we don't upgrade, repair these pieces of equipment on a regular basis, then we're not going to have the lift that we need to combat our opponents across the globe. i would just say, by comparison, right now in great britain there is a great argument about the sufficiency their forces have. we don't want to get into such an argument down the road. we want to make sure that our forces in the field need the equipment they need to carry the fight to our opponents. let me emphasize, i think this amendment is extremely well-crafted. it puts the money where it should be, to help our tactical airlift, marines particularly

helicopter airlift. it requires the secretary to justify and validate that a second engine would reduce the whole life cycle cost, improve the operational readiness of the f-356789 i think we should go -- f-35. i think we should go forward with helicopters and let the secretary make a judgment about the efficacy of the second engine. and i would thank the gentleman for yielding the floor. and i yield the floor. mr. lieberman: madam president? the presiding officer: the senator from connecticut. mr. lieberman: i want to thank my friend from rhode island, senator reed, for coming over. i know he had to adjust some things. but i appreciate immensely both his presence and the strengths of his statement. he is a senior member of the armed services committee, and his support means a lot to this cause. i thank the chair. madam president, i have seven unanimous consent requests for committees to meet during today's session of the senate.

theft approval of the majority and minority leaders. i ask unanimous consent that these requests be agreed to and that these requests be printed in the record. the presiding officer: is there objection? without objection, so ordered. mr. lieberman: i thank the chaimplechair. the presiding officer: the senator from michigan. mr. levin: mr. president, i would yield myself 10 minutes of senator bayh's time. the presiding officer: the the senator from michigan is recognized for 10 minutes. mr. levin: mr. president, i oppose the lieberman amendment wooled eliminate funding for the joint strike fighter alternate engine. the committee voted 12-10 to keep this competition going and i want to emphasize this is not a new engine that is being introduced. this effort is to have a competitive engine and this effort has been supported by congress for many, many years. indeed, our armed services committee had a vote on this two years ago where we determined to

maintain the competition. but this year's vote was 12-10. a fundamental tenet for reforming the defense department's acquisition system is ensuring competition throughout the development and production cycle of major acquisition systems whenever and wherever that makes sense. in the case of the joint strike fighter program, congress has concluded repeatedly that competition makes sense because of the size of this buy. the j.s.f. program is planned to be one of the largest acquisition programs ever undertaken by the defense department. the defense department intends to buy more than 2,400 j.s.f. partners, with you are a foreign partners slated to buy at least another 600 aircraft. that means that we're talking about a program of more than

3,000 aircraft, and that means more than even 3,000 engines. the cost of the engines alone will exceed $50 billion over the life of the program. this is not an issue like whether or not we add f-22's or not. this is a matter of whether we're going to have competition in a program that i think everybody supports and where we intend to purchase about 3,000 planes. now, a number of studies have been done trying to estimate the economic cost and benefits of developing a second engine. the analysis of our government accountability office, the g.a.o., which congress directed to review, came out with its report a few years ago. michael sullivan, the g.a.o.'s director of acquisition and

sourcing management, testified as follows in march of 2007, before the house armed services committee: "the the current estimated remaining life cycle compost for the j.s.f. engine under the sole-source scenario is $53.4 billion. to ensure competition by continuing the j.s.f. alternate engine program, an additional investment of $3.6 billion, $4.5 billion may be required." this is back in 2007. it is a lot less than that now to complete this program. "however," he said, "the associated competitive pressures from this strategy could result in savings equal to or exceeding that amount across the life cycle of the engine. the cost analysis that we performed" -- and he's talking

about the g.a.o. -- "suggests that a savings of $10. 10.3% to% suggests that it is reasonable to assume that competition on the j.s.f. engine program could yield savings at least that much. these results are dependent on how the government decides to run the competition, the number of aircraft that are ultimately purchased, and the exact ratio of engines awarded to each contract. in addition, d.o.d. commissioned reports and other officials have said that nonfinancial benefits in terms of better engine performance and reliability, improved industrial base stability, and more responsive contractors are more likely outcomes under a competitive environment than under a sole-source strategy. department of defense experience

with other aircraft engine programs, including that for the f-16 fighter, has shown competitive pressures can generate financial benefits of up to 20% during the life cycle of an engine program and/or the other benefits mentioned. the potential for cost savings and peformance improvements along with the impact the engine program could have on the industrial base underscores the importance and long-term implications of department of defense decision-making with regard to the final acquisition strategy. and just a few months ago before the armed services committee in may of 2009, that same mr. sullivan of the g.a.o. said that, in his study of 2007 is still relevant and the same conclusions can be drawn. now, madam president, this is

not a new engine which is being introduced. this is an engine development program to provide competition which has been long underway. the department of defense and congress have approved authorized and appropriated spending so far of $2.5 billion for this alternate engine, and the most important point that i think i can make here is that this is not a $4 billion, $5 billion, or $6 billion additional funds that we're talking about. in order to complete the development of this competitive engine, it will require $1.8 billion. so the $2.5 billion is already sunk into this engine development program. that's probably two-thirds of its cost already sunk. the question is, did we complete the development of this alternative engine at a cost of

about $1.8 billion? that would conclude the cost to the engine contract or other government costs for that program for testing activities and for oversight. again, the issue is not whether to introduce a new engine. the question is: do we complete the development of a second engine which is already two-thirds paid for? now, madam president, we received a letter this morning -- i received a letter this morning from the secretary of defense, and the letter concludes that, "if the final bill presented to the president containing provisions that would seriously disrupt the f-35 program, the president's senior advisors will recommend that the president veto the bill." madam president, if the final bill presented to the president

contains a provision that would seriously disrupt the f-35 program, i would recommend to the president that he veto the bill. there is no serious disruption to the f-35 program that would occur, whether or not the bayh amendment is adopted. the bayh amendment makes friendship fully sure there will be no disruption -- makes tripley sure there will be no disruption at all, even a minute disruption in the f-35 program. it's not going to be disrupted at all. the funding for this alternative engine in the bill which the committee approved came from the marine helicopters program, a part of which could not be produced this year. and so the committee determined that it could safely take funds that were requested for that program which could not be spent

this year. a question has been raised about that. there is no one on this committee, there is no one on this senate that wants to slow down a marine helicopter program. none of us will permit that to happen. that program is a vital program. we spent a lot of money on it. it's critically necessary. the decision which was made by the armed services committee was to simply take funds which could not be spent for that program because of development delays and to spend that instead for the second engine. however, what the bayh amendment does is to make triply sure, to reassure anybody there could not be any impact on a marine helicopter program by finding a distinct source, an alternative source for this second engine. so that the bayh amendment removes any question about marine helicopters. if adopted, that would be off the table. it was off the table in any

event, but everybody wants to assure the marines that there's not going to be any impact on the marine helicopter program for any reason, much less a second engine. now, there's another question which some have raised about whether or not -- the presiding officer: you've consumed ten minutes. mr. levin: i thank the presiding officer. i will -- how much time is left for senator bayh? the presiding officer: 27 minutes. mr. levin: i would, in that case, conclude my statement. if there's additional time for senator bayh that he has left, i will then ask at a later point for some of that time. but for those reasons and more which i've not yet been able to reach, i very much support the bayh amendment. and i yield the floor. the presiding officer: who yields time? mr. lieberman: madam president, i would yield to the senator from georgia,

senator chambliss, such time as he requires. mr. levin: if i could ask the senator from georgia about how much time you believe you'd be using? mr. chambliss: no more than ten minutes. mr. levin: i would ask, madam president, that after that ten-minute time is used that then senator kerry be recognized for a period up to ten minutes of senator bayh's time. the presiding officer: is there objection? without objection. mr. chambliss: madam president, i thank the senator from connecticut for yielding time on this critically important issue. you know, as we have been here debating on the floor for the last two weeks now, the respective issues relative to the priorities from a defense authorization standpoint, we've done everything other than going from increase in pay for our

military personnel to the termination of what i argued on the floor last week and this week, the latest, most technologically advanced war-fighting machine that's ever been produced by mankind. but the decision was made to terminate the f-22. the f-22, not only from a technology standpoint, was providing valuable test material for the follow-on fighter, but it also is powered by two engines, one of which engine is going to be on the f-35. and here we are now talking about the issue of whether or not we should continue with a competitive second engine for an airplane that now has an engine that is being flown, has been flown, has been tested by the air force on the f-22. and it has successfully flown on the f-22 for years now, and also

has flown successfully in what limited testing has been done on the f-35. we put all of our eggs in the f-35 basket. as i said during debate on the f-22, i'm a big supporter of the f-35. it's a great airplane. i know it's going to succeed. but we're at a point with respect to the cost of all weapons systems that we've got to look more towards where we're going to be in future years from a cost standpoint than with regard to what we're able to provide to our men and women. and when you look at items that need to be included in the mix from a competition standpoint, there is nobody that supports competition more than i do. and that's the reason that i supported the second engine up to a point in time. but when it came up again last year, it was pretty obvious that we were at a point where the

engine manufactured by brad and whitney, two of which fly on the f-22, only one of which is needed for the f-35, is a good engine. it's doing the job. it's passed the test. so i decided last year that we needed to move away from the spending of the money on the second engine and let's concentrate on providing, obviously, the two engines for the f-22 and the one engine on the f-35. now we have something else thrown into the mix. i didn't support senator biden's amendment in committee for what i think still is all of the right reasons from a standpoint of do we need competition for an engine that is successful or an engine that we know is working or an engine that we know what the cost of is today. why do we need the second engine? i know detractors have said, and they've made the argument to me

that look, that engine may fail. something may happen to that engine. and i agree that for a point in time that could have happened. but we've been at this with respect to the engine that's powering the f-35, for years now, and it is a success. so we reached -- i reached a point in time last year when i decided we did not need the additional competition from the standpoint of a second engine. obviously the committee reached that same result this year. now we're changing horses a little bit more. instead of using the discontinuance of the helicopters, the marine helicopters, we're taking money from six c-130-j's to fund the competitive second engine for the f-35, and the competition is going to be between the new engine that we've tested and had in production now for several

years against an engine that we know to be successful. well, madam president, the issue has gotten even more sensitive to me because i know how critically important the c-130-j is to our men and women who are in combat today. not those who might be going into combat and might need this weapons system somewhere down the road. our men and women in theatre today depend every single day on the c-130-j and on the c-130h's even that are old airplanes that are in theater that are flying our men and women. and they are looking to get the new c-130-j's to help them transport themselves as well as equipment from one part of the theatre to the other, from outside the theatre inthe theatre. our special operations men and women are looking to the c-130-j

for the gunship operations that they carry out. and here we're going to say to those men and women, well, we think it's more important to have competition for a second engine against an engine that we know is successful than it is to provide you with the latest, most technologically advanced airlift capability that we can give you. that makes no sense whatsoever to me from a national security standpoint. all of us have been to iraq and afghanistan at some point or another. i've been to iraq eight times. i've been to afghanistan twice. and when we go over there, we fly into either kuwait or into jordan or some neighboring country. and then we're transported from that country into iraq or into afghanistan. and what have we flown on? what have we flown on? i would say not 99% of the time, but 100% of the time when we're transported into theatre, we fly

on c-130's. and all of us have had the experience of seeing date plates on c-130's that we're flying on into theatre where rockets are being fired occasionally at those weapons systems, and we've had some issues relative to that. but the date plates on those airplanes that we fly on almost consistently are in the 196 office or the 19 -- in the 1960's or the 1970's. today what we're asking our men and women to do is to fly c-130's that are 40 years old, 30 years old or whatever it may be that are not equipped with the most technologically advanced weapons systems. and here we are saying to those men and women that we're going to take away from you the entrance of decisional c-130-j's into theatre because we think it's important that we have

competition for a second engine on the f-35. this makes absolutely no comprehensive from either a fiscal standpoint or from a national security standpoint. the c-130-j is a great airplane. we have nine of them in this authorization bill. this particular amendment takes six of those nine out of the bill and pays for the funding, the remainder of the funding on the second engine. that second engine is a great engine. it has performed magnificently. but it's competing with an engine that also is performing magnificently. so to say that we now ought to take a weapons system like the c-130-j that our men and women depend on every single day to fly them around within afghanistan because they need these airplanes to land -- need an airplane that can land on a short runway and the c-130 has

that capability, to fly our men and women around in iraq, to fly our men and women who carry out special operations missions and have the gunships that are -- the guns that are mounted on the c-130-j to be transformed into a gunship, we're going to take away that capability and that need from our men and women to fund a second engine for an airplane that already has an engine on it, that is performing well, that we know is successful, that we know how much it costs today? it's not like we're going to see a reduction in the price on the engine of the f-35 because we complete the testing and the procurement of an alternative engine. that's not going happen and that's not the issue here. the issue really comes down to the point are we going to take in this case a weapon system away from our men and women who fund a second engine to compete

with an engine that's already successful? and, madam president, i would say that -- that obviously i felt very strongly and was very emotional about the discontinuance of the f-22 for all the right reasons. but this is one of those issues that makes even less sense than the discontinuance of the f-22. we need to make sure that we spend tax money wisely. we've had the competition on the f-35. it's time we moved down the road of building and procuring as many of those as we can can and with the rampup that this bill calls for under the direction of the chairman, we're going to be buying a lot of f-35's in a short period of time. they have a great engine on them today. it works, it's successful. that's where we need to concentrate. that's we're need to spend our money. we don't need to spend the money on the second engine, nor do we need to take six c-130 airplanes

out of this budget to pay for an engine that we're probably never going to buy. so, madam president, i would simply say that -- i would simply urge my colleagues to vote in support of the lieberman amendment and to vote against the bayh second-degree amendment. and i would yield back. a senator: madam president? the presiding officer: the senator from massachusetts. mr. kerry: he madam president, thank you. madam president, i rise to join my colleague, senator kennedy, in opposing the lieberman amendment to eliminate funding for the joint strike fighter alternative engine. i disagree with the comments from the senator from georgia who is actually inaccurate in saying that it is going to take away a weapons system from our military at the current time. it doesn't take any -- any weapon system away whatsoever. it simply changes the schedule of production with respect to the c-130's, but all of the

c-130's ordered will be built. so no system is taken away. i think it is important to try to be accurate about what is at stake here. like senator kennedy, and a lot of other people, senator bayh, and others, i leave that the alternative engine is critical to help reduce risk to our forces, to protect against cost voafer runs, to preserve the -- overruns, to preserve the manufacturing base and to support our international partners. and it's a -- it's a little strange, i might add to have some of our friends on the other side of the aisle who usually are quick to come up here and support competition in the american marketplace arguing that we shouldn't have competition and that we ought to have a single source of production for engines. where we have already seen that there are problems, frequently, in those single-source production lines. i strongly support the second-degree amendment offered by senator bayh and senator

kennedy that would provide more than 156 million for the management reserves of the joint strike fighter program and more than $280 million for the marine corps helicopter fleet. this will allow the senate to preserve funding for the vital marine corp. helicopters without eliminating competition for the joint strike fighters competitive alternative engine program. now, let me just say, madam president, that the funding for the joint strike fighter alternative engine has been important to center kennedy for a long period of time. as we all know, he is being treated back in massachusetts, not here today, but his statement in -- in support of the amendment that he is offering with senator bayh has already been put in the record by senator bayh. and i would like to simply reference one thing that senator kennedy has said -- quote -- "competition for the joint strike fighter engine has

compelling advantages and avoids past pitfalls. duel sourcing -- siewl sowrsing will avoid a single point of failure for the engine malfunction experienced in the past with other fleet-wide groundings. competition delivers an inherent incentive for manufacturers to absorb and maintain cost growth even as it encourages responsiveness by contractors. continuous product improvements and innovations. now all of us know that's the american -- that's the way are most effective at producing all of our goods in this country. we do it through competition and it's that kind of competition that spurs innovation and it avoids cost overruns. senator kennedy is 100% accurate in his analysis of this issue, and i hope senators will weigh his measurement of this based on

his years of experience on the armed services committee as well as on the facts regarding this particular engine proposition. the alt engine program -- alt engine program spreads capacity across the base. what it does is it assures the production, maintenance, and availablity of critical components so that they're not concentrated in the hands of one single producer. now why does that matter? well, the current engine for the joint strike fighter has had testing issues. it's simply not appropriate to stand up here and suggest that everything is absolutely hunki hunky-dory. there have been two engine blade failures in the past two years requiring a redesign, remanufacture, and delays in the flight test program. in fact, the engine has yet to

even be flight tested in the most stressing flight regime, the vertical landing mode. these tests have been delayed for up to two years and they're now scheduled to take place in december. it is precisely that kind of delay that begs for this kind of alternative engine program. in fact, the 2007 institute of defense analysis study concluded and i quote from it -- competition has the potential to bring benefits, in addition to reduced prices, including forced readiness, contractor responsiveness, and industrial-base breadth. so i don't believe, madam president, that it's in the best interest of our military to have the major part of the fighter fleet dependent on a single engine type provided by a single manfacturer. it's simply too risky and experience tells us it is too risky. in the 1970's many of the f-15's

and f-16 fleets were grounded as a result of reliability and durability issue because the aircraft were dependent on one engine type. similarly the av-8 was grounded for months due to engine problems. with over 200 f-35's planned for procurement and each dependent on one aircraft and one engine type for the vast majority of capability, it simply doesn't make sense to put all of it into one engine manfacturer, one engine and one producer. and we certainly don't want to take the risk of the entire f-35 fleet being grounded. competition will avoid that potential. so i ask my colleagues to oppose the lieberman amendment. support the bayh-kennedy amendment to provide additional funding for the joint striker fighter program and to the marine corps helicopter fleet. i believe that is the way we

best eliminate risk and best serve the armed services and the needs of this particular aircraft. madam president, i reserve the balance of the time to senator bayh. madam president, does the senator from ohio -- mr. brown: madam president, i would like to speak and to thank senator bayh for his work and chairman levin and senator kerry in opposition to the amendment. the presiding officer: the senator from ohio. mr. brown: thank you -- mr. kerry: i yield to the senanator such time as he may ue on behalf of senator bayh. mr. brown: thank you, senator kerry. i want to thank chairman levin for his leadership and senator bayh for his work. this debate is about competition. it's about how our government spends money. earlier this year the senate passed a comprehensive d.o.d. procurement reform law. now we're debating a defense authorization bill of more tha than $660 billion.

we need to continue to reform the procurement process. we need to make sure congress is not just a rubber stamp. we're debating today whether we should hand a near monopoly on engines and long-term maintenance for the joint strike fighter to one company. the department of defense created the alternate engine program in the mid-1990's because d.o.d. knew that a program would foster competition between engine manufacturers. competition fosters cost savings, improved performance and flexibility. now we're debating whether the senate should create a monopoly and buy just one engine for more than 2,400 aircraft. what would happen if we ended the alternative engine program? the government would have no option. the government would have no bargaining power. that's what we're talking about here today. we're debating whether we should clear the field and have no competition, not even the threat of competition for our nation's

most important airline defense program. what would happen if performance standards changed? i'll tell you, we'll become price takers. the company will tell us how much they want for make the required changes. we'll have to accept it. what would happen if the manfacturer decided it can't deliver the engine at the agreed price? we'd be price takers again. what if we needed to ramp up production to defend our nation, but we have only one production line? we'd be in trouble. what if there are skyrocketing costs for production? we'd have to pay them. if this amendment passes, we're setting the stage for inflated costs. we're setting the stage for inadequate capacity. so as we work ways -- work to find ways, madam president, to save money in this bill, as we work to reduce our budget deficit, we're contemplating cutting funding for program that could lower the cost of the j.s.f. and save our government billions of dollars while

creating a more reliable aircraft. we're debating whether to limit the military's ability to pick the best engine possible. we've been talking about an alternate engine program. it is not an alternate engine, it is a competition between engines to ensure we pick the right one. remember the famous competition between engine manufacturers for the s-16, so the called great engine war served our government billions of dollars and provided our military with the best engine possible. the s-16 kept our nation safe for a generation. it is in large part because the military was able to pick the best possible engine. that competition made it possible to avoid massive kos overruns, to avoid cost productions, to avoid performance issues. that's why we have a competitive engine program now. we're not talking about one alternate engines. we're talking about two engine alternatives. it is an important distinction.

we're debating an effort by some to declare the competition over even though this provided funding for two engines over an over. we will provide over 2,400 joint strike fighters and cost will keep going up. according to news reports we're talking at least $300 billion. we need to make sure we spend this money wisely by eliminating the alternative engine program to serve a few dollars today, we're jeopardizing billions later. $300 billion, 2,400 planes, the next generation aircraft that will serve the entire military for decades. we have to get this right the first time. there are no do overs. the j.s.f. is a single engine fighter. any problem with its engine could ground the entire fleet. this would waste billions of tax dollars. it would jeopardize -- even more importantly jeopardize our military's ability to defend our nation. we need toe get this right. we need -- we need to get this

right. we need to make sure that we're not granting a monopoly today that we'll be stuck with for 20 years, 30 years from now. let's keep the second engine program going. let's have a competition. let's make sure our military has the best plane possible. thank you, madam president. and i yield back my time and yield the floor. a senator: madam president? the presiding officer: the senator from connecticut. mr. lieberman: i thank the chair, madam president. i want to respond to a few of the statements that have been made by the proponents of the seconding in, which i feel is a costly waste of taxpayer money and is unnecessary. the argument's been made, why stop competition? i can't say it often enough. there has been competition. there was a competition in the 1990's between these two great engine manufacturers pratt and whitney and general elect