going with t.a.r.p. and your bottom line proposal on reinsurance. we sense the bermuda and swiss companies competing with american companies are taking note of what you propose. in the last issue, the department of labour is proposing new rules on fiduciaries. their public hearing next month. at the same time the sec is proposing new rules under dodd frank to create a uniform fiduciary standard. i hope the treasury will be involved in this rulemaking so you will have some enforcement responsibility if i r as r -- carried from the last few sessions. diane asking what the treasury rule will be. .. came into office and

we believe outside of housing these programs will show a positive return to the american taxpayer very substantial amounts. and that's because we ran a strategy that had private capital not the taxpayers money come in and bear the largest burden of trying to solve our crisis, recapitalizing the banking system, et cetera and we've been very, very successful managing those investments to generate -- just look at the bank investments, for example, billions and billions in dollars in positive return we can use to meet our long-term challenges. these programs were incredibly successful in restructuring the automobile industry, restoring it to profitablity and we have a more success before the crisis because of the president's strategy. we've not just saved, you know,

hundreds and hundreds of billions of dollars of taxpayers resources but we're going to show a positive return outside of housing that's very -- i think it will prove to be the most successful financial rescue in modern history even recognizing that we still face a lot of challenges ahead in digging out of this crisis, repairing the damage. >> what support that initiative i would point out i think it's important to acknowledge again that that legislation took place in october of 2008. so we're grateful for your efforts to make sure the initiative worked and understanding even though it was proposed by the previous administration it is one of those instances in the house of representatives where moderate democrats and moderate republicans cast the correct vote. >> and the current -- because the house played a decisive role in helping to make that happen and there's a lot of courageous votes in this body in support of the legislation, very unpopular decision but it was a courageous and necessary act. now, when we came in, we had to

finish the job and get the money back, but it was absolutely essential to help break the back of the financial crisis. >> thank you, mr. secretary. >> thank you. mr. heller is recognized. >> thank you, mr. chairman. mr. secretary, thank you for being here. when you -- -- you keep exempting housing every time you talk about the economy turning around. i'd like to hone in on that for just a minute because you're preparing aware of it. i'm from nevada. so we have some real housing problems in nevada. in fact, for the last four years straight, actually 49 straight months nevada has continued to have the highest foreclosure rate in the united states. 1 in every 79 housing units in nevada has received a foreclosure notice. we have one county -- i believe 1 in 49 homes has received a foreclosure notice. we have over 400,000 households that owe more on their mortgage

than they're worth. to put in that better perspectives, three-quarters of the people in their homes are owing more than their homes are worth. a couple examples, we have a house unit none of northwestern las vegas that were originally priced at 730,000, built in 2006, one of them went for 62,500 at auction last year. there's also a condo unit in las vegas that was selling in 2006 for 625,000. now selling for 106,000. so just trying to put this thing in perspective and help you understand. when i talked to my constituents, of course, they blamed the banking industry saying they're not willing to negotiate. when you talk to the banking industry they blame the fdic. you talk to the fdic they blame you. now, i'm not asking you who you blame. i'm just trying to set this

picture. in a manner that perhaps you can respond. i want to give you two of your quotes. and i don't disagree with these quotes. but i think you can help shed some light on it. you said i personally believe that there's going to be a good case for the government preserving some type of guarantee to make sure that people have the ability to borrow to finance a house even in a very damaging recession. i think there's going to be a good case for that. you also said i think we're not going to preserve fanny and freddie and anything like their current form. we're going to have to bring fundamental change to that market. some people would say that those two conflict one another. and the more i read it i think it makes more sense. can for my sake and perhaps my constituency's sake, could you shed some light perhaps on where we're going in the housing industry and so that we're not exempting housing every time we talk about the economy improving that perhaps there is a direction that we are moving or this administration is moving that we can fully understand?

>> excellent question and i'm glad that you emphasize this basic reality still which is again the scars of this crisis are still very deep and broad and they're present still across the country but the housing crisis was very much concentrated in your state and three other states and a series across the country and it's still very, very hard and to be realistic, it's going to take several more years to hear the damage caused by that crisis. now, we're trying to do two things. one we're trying to make sure we can reach as many americans as we can to give them a chance to stay in their home if they can afford it. the programs we've helped put in place have helped roughly 2.5 million americans have a chance to take advantage of a modified mortgage that lowers their monthly payment and stay in their home. we can't help everybody because a lot of people got themselves way overextended and we don't think we can justify to stay in homes they can't afford but we're going to try to make sure

we can reach as many people as awake. those programs that are still in place are making a huge difference for millions of americans and we want to make sure again that they do as much as they can. now, longer term, obviously we have a housing system that is a mess. and did not work overwhelming dependent on the government now still. and what we laid out last week was a plan to gradually wind down fannie and freddie, gradually restore this market to a market where private capital provides most of the mortgages in this country. but still has the government play a limited role, a targeted role in helping provide affordable housing alternatives, rental as well as ownership to low-incomed americans. and we proposed a variety of other models we're trying to make sure that the government is providing some kind of protection against the risk of a very severe recession in the future. we're not going to do that with fannie and freddie, though, we don't think they can be part of that solution and we want to begin a debate in congress with relevant committees about how best to craft legislation that would achieve those objectives.

wind down frannie and freddie, restore the private market to the dominant place in housing finance but with better protections for consumers, more capital against risk, homeowners holding more equity in their homes, and some protection in the in a future crisis against the risk. you have a mild recession turned into a depression. that's a very difficult challenge to do. and with reasons you begin with, we want to make sure these reforms are phased in gradually because we are not going to take any risk that we slow the process of repair in the housing market or we damage the recovery. >> all right. thank you. mr. gerlock is recognized. >> thank you, mr. chairman. mr. secretary, thank you for testifying today. one of the statements the president made in the state of the union which i felt was very positive was his desire to address the corporate tax situation and while he did not express necessarily where he felt the rate should be lowered to. it was a very positive statement that's an initial he wants to work on. do you have a sense of where the president wants to go from the

35% corporate to what level? >> well, my own view is for it to be worth it, you got to move it substantially lower. the average right now -- >> 30s or below 30 into the 20s? >> the average rate of our major trading partners now is in the high 20s. and you -- to make a meaningful difference you want to get it down substantially towards that level. >> okay. and are you of the belief by doing that you're incentivizing more domestic activity, economic activity, try to encourage more investment here domestically rather than abroad? >> absolutely. there's two very important rationales for doing this. one, you want the market allocate investment. you want the market choosing which companies grow, which companies succeed. you don't want the tax system making those judgments, getting in the way of those judgments. and so if you can clean up the tax system, lower the rate, broaden the base you probably improve over all growth and

efficiency but as important as that you want the tax code working with and not against encouraging investment in this country. >> would those same goals apply to an individual taxpayer? >> i think generally we'll have comprehensive individual tax reform, too. and as many people have proposed in the past, probably the best way to do that, to simplify the system and make it more fair is to also lower the rates and broaden the base. >> okay. , as i understand it under the president's 2012 proposal he actually wants to raise the two top marchingal rates from 33 to 36 and from 35 to 39.6 both of which would be over the corporate rate that we're talking about reducing. if those same goals apply to corporations as an individual taxpayers, why would the administration want to see an increase in those fascinates >> what i would do compare -- if you think of those rates in context they are the rates that prevailed in the '90s and we were doing fine as a country

then. actually, it's a record that was the ephave i of the world then and we would be thrilled to recreate today. so i think those rates are something completely consistent with a strategy of making sure we're more competitive and we're growing and it recognizes again as many of your dealings have recognized we have unsustainable deficits and we want to make sure those savings go to deficit reduction and improving incentives for investment in the country. >> okay. well, we don't have the same economy in 2011 as we did in the '90s, and i would hope we would all work together to reconstruct a tax code that works for the current economy both domestically and in the world rather than going back to the '90s and try to reconfigure the same kind of tax structure that may not be applicable to what we need to do today. and i can't understand if we on the one hand agree that we need to lower the corporate tax rate to stimulate investment, why all of a sudden then we also want to increase taxes on individuals if we want those same taxpayers to take their hard-earned money,

invest it in the economy, create economic activity to do things we all want to see happen to raise everybody's boat. it seems to be a little incongruous that we'd want to decrease the -- or lower the corporate tax rate and yet at the same time still in an economy with 9% unemployment, you want to increase taxes on people we want to see invest in this economy? >> congressman, again, you're raising very important questions. it just reflects the difficulty of the choices we face. you know, my sense is if you -- if you gave businesses the choice, they'd choose that mix. they'd say, we are comfortable living in an economy where we see a modest increase in marginal tax rates for only 2% of americans and we see a more competitive tax system. i think they'd prefer to play in that economy than the one we have today. >> thank you, mr. secretary. >> mr. becerra is recognized. >> thank you, mr. chairman. i'm going to detour from asking

you about the president's budget for next year for a moment because the plan house republicans released on friday pertaining to this current year's budget could create an immediate crisis for millions of americans who depend on social security. the republican proposal cuts the social security administration's operating budget for the rest of this current year by $1.7 billion below what the social security administration needs for this current year 2011. that's over $500 million below what the administration spent to serve the public last year with a smaller population of beneficiaries. as the trustee of social security, i'm wondering if you can give me comments as too whether or not you think that's the way we should be stewarding the most important program that the federal government has for americans especially those of retirement age? >> well, again, congressman, as you would suspect i would not support those changes for the reasons you've said.

>> my understanding from what we're being told as the cut is made as the republicans propose in their current year budget proposal, it would mean a loss of 3,500 jobs, it would shut down the social security administration's offices for one month, which means each and every one of us who services seniors in our office, disabled americans in our offices through constituent services would have to explain to members in our community that for a period before a month there would be no one answering the phones, no one responding to queries, no checks going out to beneficiaries, no social security numbers issued to newborn babies. over half a million retirees, widows and severely disabled workers would face these delays starting with the creation of a budget like this. is that something that do you think as a trustee for social security that we can at this stage handle? >> no, again, i would not support cuts that would have that impact for just the reason you said. again, i just want to be careful -- i haven't seen those cuts. we don't know what the house is actually going to pass and we

would take a very careful look on anything the house passes and to try to make sure people understand the full implications but the most important thing again as we find a way to restore gravity to our fiscal position, we're not cutting into basic services and critical investments that will hurt the economy longer term. not just short term but long term as well. >> now, on a related note our republican colleagues are threatening to shut down the government unless certain cuts are made in certain programs and that would come to a vote on the debt ceiling limit and they would vote -- some had said they would vote against it. some members on the republican side have side that they would vote against increasing the debt limit in keeping the government operating unless there were cuts to social security. i know that there's some who made a proposal that would -- i would call it the proposal to pay china first. before you pay any money for any program, whether it's a social security beneficiary, medicare beneficiary you have to first

pay our other creditors including china and others who have lent us money. that's why some of us call it the pay china first proposal. do you believe that he should with be holding the government and all those who depend on the services that the government provides hostage in order to make certain cuts that could ultimately have a devastating impact on americans? >> i don't, congressman. as you know, i believe that america has to meet its obligations. that we're a country that pays its bills. we meet our commitments and we cannot afford to do anything that would create a risk of jeopardizing this recovery, slowing the pace of expansion, slowing the pace of employment growth and to create any uncertainty in the minds of the american people in the broader investment community that america will not meet its obligations will be very damaging to the recovery. and again, i want to just to take the more competent side of this. of course, i'm completely confident congress will act as it always does to raise the debt limit and i very much welcome

the comments made by the republican leadership both in the house and the senate that recognizing that america's obligation is going to have to meet them. now, we're going to have to have a very important debate about how to restore fiscal responsibility and we're looking forward to that debate again because that's a necessary debate for us to have. but we're going to have to work that out and still make sure that we understand that we're a country that meets its commitments. >> now, we'll have a further discussion later on not just a discussion on the budget but coming up with tax reform policies. what we do with all these tax loopholes. the president's fiscal commission which i was privileged to serve as a member of called these tax loopholes tax earmarks because essentially we're earmarking money to certain segments of the american economy, whether it's businesses or individuals. and they get -- they get the gain while the rest of the population doesn't. and you do touch on them some. in fact, you had a conversation with my colleague as they go to the oil industry.

are those the types of things you're going to try to seek out consensus and try to make reform to our tax code? >> could you just answer briefly? time expired. >> yes. >> thank you, mr. secretary. >> thank you, mr. chairman. mr. secretary, thank you for joining us today on what really i think is one of the most important issues for our constituents. they understand that our fiscal house is not in order and they demand that it be put in order. just by way of clarification, i think it's also important to appreciate that the president is the one who holds the keys as to whether or not the government gets shut down. he has said that he won't sign something fill in the blank. whether or not this government gets shut down is squarely in the president's lap. you said just a moment ago that you thought it was appropriate for the market to decide which companies grow and succeed. many of us on our side of the

aisle and many americans believe that this administration has grossly distorted the market and made it much more difficult for companies to be able to succeed in the way that the normal business processes work where the government isn't coming in to bail out their competitor or to change the playing field so i think it's incredibly important that we recognize that the kinds of things that are being said here aren't -- don't necessarily square with what the reality is or at least the perception of folks out there. but i want to talk about your -- what you have said and what the president said. this is a ten-year path. you said today we need to take the lead and the initiative. and so for so many of us, we're just dumbfounded, astounded by the fact that the administration hasn't taken this opportunity to address the issue of entitlements. clearly, the automatic spending that's in the -- in the budget -- in the federal government just continues and

continues and continues. and if there is no change, obviously, that is what will make us greece with no pejorative opinion on greece but certainly the financial situation. why didn't you all address the entitlement situation? >> well, congressman, at the risk of repeating myself, what the president's budget does is reduce our deficits to roughly 3% of gdp. over a five-year time. >> i got that. >> which is the level necessary to stabilize our debt burden at a level that's acceptable to us. >> in five years are we any more capable of addressing the challenges of medicare and medicaid than we are right now? >> well, you're right to point out as we do that's just a first step and solving the 10-year deficit which is essential and important does not by itself solve the long-term deficits but again, this president and this body has already passed and put

in place the most sweeping entitlement reform to reduce costs that we've consider as a country and just contrast it, for example, what this body passed in the previous decade which is a large expansion of medicare to cover pharmaceuticals without paying for it. adding to our deficit -- >> actually, mr. secretary, i wasn't here -- >> you weren't here. >> you weren't here? >> what was passed in health care will in fact increase cost to the federal government, increase our deficit and our debt as opposed to decrease it. so it's -- it really is remarkable for -- again, when you say we take the lead and initiative, but there's no evidence of this administration taking the lead and initiative on entitlement reform. you've taken the lead on the initiative on expanding entitlements and expanding automatic spending. i want to address a particular issue in the area of health care as a physician.

the issue of sustainable growth rate and how physicians are compensated for the remarkably high quality care that they deliver. my reading of the budget and it's just -- it's just recent is that over the 10-year window i think it's about 341 billion, somewhere in that range, to allow for the sgr to continue. how do you -- where are you getting that 341? i haven't been able to determine that? >> we identify ways to cover the cost for i believe the first two years but not for the remaining 8. >> correct. >> and we're assuming and it is an assumption or it's a prediction, it's a congress that congress will as they've done in the last two years figure out a way they can sustain -- sustain those rates at levels congress seems to want to and due to the way they do it. >> so the assumptions are that congress will take care of that and that that money will be there? >> not all on your own. we'll probably have to join you

in figuring out ways to pay for it. we don't solve it and identify how to do it over the full 10 years. >> okay. let me register finally my real concern about the -- what i believe is a remarkable lack of leadership on the part of this administration in not addressing the issue of medicare and medicaid reform. >> thank you. >> thank you, mr. chairman. and thank you, mr. secretary and the budget the president has presented seeks to add some improvements in our fiscal operations both through revenue and spending changes. and is important as those spending cuts are, some of them even painful cuts in spending. the revenues also very important. in fact, it's the principal job of this committee -- you don't believe that we can achieve a balanced budget without some additional revenues, do you? >> no, i don't. i don't think you can achieve the necessary reluctantion in deficits that are critical to long-term growth without looking

at sensible, carefully designed tax reforms as well. >> right. and with reference to those tax reforms, one that you have been involved in of late is corporate tax reform. we've recently as you know had a hearing in this committee on this. according to a bush administration treasury report, taxes on u.s. corporations represent a smaller percent of their profits in fact than in other developed countries across the oecd. i believe that last year there was a report out that corporate tax receipts represent a little over 7% of federal tax revenues. 50 years ago it was about three times that amount that we got. president reagan, which i think provides us some guidance here -- when he approved the 1986 tax reform act, he actually raised corporate tax revenues for the federal treasury by about $122 billion.

you have said that the guiding premium here and the president has said at the state of the union at a minimum we should not borrow money or shift more of the tax burden to individuals in order to have corporate tax reform. and i want to assure that that is a firm and unyielding position of the administration that we will not be borrowing from the chinese to finance such reform and we will not be shifting more of the burden to individuals? >> that's right. when we say revenue neutral, we mean we would not support tax reform that reduced revenues from the corporate sector but it also means we don't think it's realistic or achievable or desirable to try to raise revenues from higher taxes on businesses because we live in a much more competitive world and though as what you said is right. the average affected tax rate on u.s. business today is about the average of our competitors but our statutory rates are much higher. their statutory rates are much lower and that creates a playing field that works to our

disadvantage. and we don't think realistically we can shift more of the burden to the business community than they already bear because of that new competitive world. when we say revenue neutral, we mean revenue neutral. >> you're not going to have -- >> not going to reduce and try to go -- i mean, higher. >> you've included in this budget proposal again international tax loophole closures that you've had in the past. in one of that i've been particularly interested in is the one that deals with corporations that develop intellectual property, patents, various other forms of intellectual property here in the united states perhaps even using our research credits and just before they're to be marketed they shift the ownership or they joint venture it offshore. we had testimony on this last year at our hearing from assistant secretary shay that the administration would support moving forward to deal with this

narrow but very costly problem that i believe your budget that you've just submitted says, cost us about $20 billion over 10. and my question to you, does the administration continue to support dealing with this serious problem of shifting spaelectricual property, overover abroad, overseas and for broader reform we hope to achieve. >> we can do it in two different ways. we can do it by the current system with the opportunity to shift outcome outside of the united states. income from intangibles like you suggested. or we can do it through comprehensive reform but again, but the overriding objective is to make sure we're reducing both the incentives and the opportunities in the tax system to shift income and investment outside of the united states. >> and i believe there are proposals not unlike the one mr. becerra talked about for

social security in this continuing resolution to make significant cuts to internal revenue service tax enforcement. i know some people who would like to see that amount cut to zero. you but we've had testimony in the past but for every dollar we cut in tax enforcement, we are reducing revenues by 3 to $14. does that remain true that significant cuts to the enforcement will actually worsen our budget deficit problems? >> absolutely. the independent analysis look at this and say every dollar you put in, irs resources, customer service enforcement you raise at least $4. every dollar you cut is the same cost. >> thank you. mr. smith is recognized. >> thank you, mr. chairman. thank you mr. secretary, for your time and your service. we heard earlier commentary on social security and what could be accomplished or could not perhaps speculatively be accomplished. now, a furlough as apparently was suggested, would that not be

an administrative prerogative? >> you know, i don't have the privilege and the responsibility of managing the social security administration so i can't -- and i haven't had a chance to look at these cuts so i was very careful in responding to that question that if the cuts had that impact then i think it would be imprudent and unwise and unnecessary and i don't know how we could meet what the congress has proposed. >> i appreciate that and i guess i certainly would like to do part in not participating in hyperbole and ramping up rhetorical statements for various reasons but i certainly -- i think you can agree we are facing some significant challenges. we've touched a bit on taxes here today. you know, the estate tax i hear a lot of input from that from back home, rural nebraska. they say it's double taxation. do you agree with that?

>> you know, i don't know how i would describe it but what i would say the rates and exemptions we proposed would make sure that tax only affected we think less than one-half of 1% of estates in a given year. and again, we're not proposing it because we like doing it. we're only proposing it because as you're saying, over and over again, we have unsustainable obligations, unsustainable deficits and they will hurt future growth and it will make us weaker as a country if we don't fix them and we will have to do certain things to spread the burden of that. but again, our proposals would only affect less than one-half of 1% of all estates in a given year. >> but i can appreciate that. i mean, it certainly reduces the political push-back. i would hope that you would share the concern of many of my constituents, not just about the estate tax or death tax but the narrowing of the tax base that fewer and fewer people are

paying taxes, whether it's the federal income tax, that fewer and fewer people are paying. how do you think we could address that? >> well, if you look at our tax system today, there is lots of unfairness across the system. and you referred one piece of it which some people think is unfair which is lower-incomed americans pay payroll taxes but many don't have to pay the income tax as a whole but the vast majority do pay the payroll tax but i'll take the other side of it. it's also true as many of our, you know, most successful executives said, you can be -- you can be a very successful businessman today and pay a much lower effective tax rate than people who work for you and that doesn't seem fair to you either. and again, we're trying to propose some initial reforms to help leave us with a more simple and more fair system. >> and i can appreciate that as well. now, on the capital gains tax

rate, is there any concern that letting that go back up or even pushing it back up could actually result in fewer dollars of capital gains tax being recovered? >> not at 20%, no. again we're proposing to make sure, you know, congress would have to make that choice that it only goes up for the highest incomed americans that it will go up to 20% and we think that's a very modest income rate on capital income. >> but still increasing the penalty per se of a transaction there would be no risk or very little risk of actually having fewer transactions? >> i don't think -- i think it's a very small effect. you know, as we said we're proposing to eliminate capital gains in small businesses and i think that would be a very modest change and no material impact on the economy or investment decisions. >> okay. thank you. mr. secretary, i yield back. >> all right. ms. jenkins is recognized. >> thank you, mr. chair and thank you, mr. secretary for joining us. >> if the gentlewoman would

suspend. because of the short time the ranking member and i have discussed -- we're going to go to 3 minutes to try to accommodate every single member. >> and again, i'm happy to respond to any questions and i'm sorry i have to leave at 3:30. >> thank you, mr. chair and mr. secretary, thank you for joining us as a result of the agreement last december the estate tax for the next two years will be imposed at a top rate of 35% with a $5 million exemption. and effective for 2013, president obama has proposed to make permanent the tax the top rate at 49%, 3.5 million exemption which would not be indexed for inflation. i'm a sixth generation kansasan raised on the family's dairy farm in holton and my kids are the seventh generation to grow up in eastern kansas. mr. secretary, as you probably know kansas is an ag state.

and i hope you have an appreciation for the importance of the family farm to this nation. do you even happen to know what the price of a new combine is? >> i have never been a farmer, do not know but i will say one thing, which is the agricultural community in the united states today is one of the strongest parts of the economy today. and you're seeing it in exports of agriculture in basic growth in agriculture a lot of encouraging signs about how strong this country is in agriculture and if we want to do everything we can to make sure we're re-enforcing it here. >> a new combine cost over $300,000. a new tractor over $225,000. that's with nothing attached to it. if you want to attach a high priced implement it's 170,000 on top of that. so as you can see, the cost of the necessary equipment to manage a farm can be quite high.

in fact, it can easily top 1.5 million just in equipment. several years back the usda did a study -- there were nearly 11,000 kansas family farmers that had land and buildings valued at over 2 million. so the cost of implements and land values when added together is really is not hard to get to the 3.5 million on the cap that the president's budget is imposing. and in addition i want to note the net income on a family farm is approximately 45,000 a year. now, i've heard the president state that everyone needs to pay their fair share of taxes but under the president's proposal, it's not unreasonable to expect that a significant percent of kansas family farms could be placed at work when trying to comply with family tax laws and most likely could not meet the capital requirements to maintain ownership between generations. so i just would like to see if you realize how this proposal

negatively treats family farms. i would ask you how did you advise family farms address this challenging issue? and perhaps as a follow-up, it was promised that taxes would not be raised to those earning below $250,000 with the net income of family farm being 45,000 a year in kansas, again, how do you explain hitting them with a tax increase that could cost many of them their livelihood. >> just very briefly, mr. secretary. >> can i just say one thing the estate tax changes will affect only one-half of 1% of the states in a given year including the families that you're concerned about and we share those concerns. one very important point, in the tax package passed by the congress at the he said of the year, the president proposed and was included in that a provision for one year any business in the country can fully expense capital investment, fully write off their taxes with a new combine and new tractor and

that's run won you're seeing capital inventures at the beginning of the year. those that we put in place, they will substantially improve the capacity and the competitiveness of american businesses of american companies. >> all right. thank you. mr. thompson is recognized. >> thank you, mr. chairman. mr. secretary, thank you for being here. if the gentlewoman is truly interested in saving family farms, i have a bill for you. see me after the hearing. i think it's important that we discuss this bill today, this budget today on the same day we're beginning the debate on the c.r. and a couple of my colleagues have juxtaposed some of the differences. i think one of the major ones speaks directly to the issue that i think was mr. herger raised that he was interested in a budget that gets people back to work. and that's kind of the antithesis of what the c.r. does given the early analysis that would cost us about 800,000

jobs. and so if you juxtaposed what's happening today in the c.r. and the president's budget specifically things such as the build america bonds which were so successful. i know sacramento airport used those. they generated 1250 jobs. in and probably every district across the country can say something similar. and i'd like to hear how you deal with that because that's certainly a job-creator vis-a-vis the job killer in the c.r. and also on energy issues, i noticed the president's budget extends the 1603 treasury grant program which is so important for renewable energy and the section 48c provision, the manufacturing tax credit which is important to keeping those jobs here in america. i'd like to hear about that and

what you see is an opportunity for us through encouraging and investing in renewable energy -- how we can use that to create more jobs? and i should also mention because it was brought up today by someone on the other side about the potential loss in traditional energy jobs that the c.r. makes some cuts that will make it impossible to get permits renewed and issued for those traditional energy jobs which again is an energy -- puts us at anna energy disadvantage. >> congressman you highlighted a range of things we think are some of the most important things we can do to help the economy recover not just in the short term but long term. and i would share the cost caution as you look at how to make these tough choices across the deficit as a whole, be careful not to cut investments

that will hurt jobs and be careful not to cut investments that will hurt our competitiveness in the future. and when you think about our broader fiscal challenges, make sure you bring a long-term perspective and that you're putting in place restraint that we can live with over time that balances that need to make sure we're strengthening the recovery of the economy as a whole and also bring some gravity to our fiscal position. >> all right. thank you mr. buchanan is recognized. >> thank you mr. geithner for being here. and thank you, mr. chairman, for this meeting. the biggest concern i've got is about the taxation but i want to get in terms of the president's budget but i want to touch on a couple things. one, we're all interested in jobs 'cause we know if we grow jobs, it cuts the deficit so we've got to do that. i think you'd agree with that. but let me tell you the realities. i'm a guy that's been in business 30 years. has 1,000 employees four years ago so i understand the middle markets pretty well. as the chairman from the florida chamber i've dealt in these middle market small companies. let me give you my observations from florida.

one, there's a severe lack of credit for small, medium size businesses. you've known it and you've acknowledged numerous times. and four years ago you can go ahead credit but today you're going to get credit but unless you're going to put up a half million dollars of cd you will not get that line of credit or whatever you need. the second thing is health care. to me it's a big entitlement program for 32 million or 50 million people. but it doesn't do anything to bend the curve for small, medium size business. we had one of our largest employers in sarasota. they are getting ready to hire 30 people. they could hire up but their health care went up millions of dollars. i just got my health care bill. it went up 20%. it's killing jobs. lack of credit is killing jobs. now, the third thing comes to the budget with the president is increasing taxes. i want to go back to a point

that you made. you said that it only affects by raising taxes 2 to 3% was in your opening comment. that might be true of the percentage of businesses that make up over 35% but how many jobs do they create? there's a lot of people and most of them that might make a million dollars today but they have 700 employees. they need more capital. and if we raise their taxes along with the lack of credit, health care costs going up and then you start raising their taxes and a lot of these as you know are pass-through entities. so how do you respond to the tax aspect of the president's budget. >> okay. again very briefly. you're right about the credit problem and i agree with you it's very important, you know, after where credit was too easy it's too tight now in pockets of the country completely with businesses that are increasely in their choice of bank because their bank got overextended and they were victims of the banks leverage.

the numbers suggest it's starting to improve. the price of credit it was much, much lower than it was in the last two years or so. the small business program is working its way through the system it will help a little bit. help small banks get capital from the government. help states have a little bit more power in the credit programs and we got to make sure that the examiners the supervisors and the bank supervisors aren't -- >> the tax piece i really want the 2 to 3%. i want to make a comment on it. >> it's very important to understand and i'm glad you asked it again. i'm just telling you the numbers the independent tax people inform the congress of. it is 2 to 3% of companies -- >> that employ how many? >> they employee a substantial number of people. but the vast bulk companies affected by that are companies that make a substantial amount of earnings. now, you're right their taxes -- >> and not all law firms of investment -- >> but those -- >> but those are not law firms that investment firms are

overwhelmingly still earning a substantial amount of money and again, these are the rates that prevailed at a time when the small business community in this country -- >> we don't have the circumstances -- >> your time has expired and mr. secretary, we agreed on a hard stop at 3:30. we do have three members on each side that have not had an opportunity to question. i don't know -- >> can i listen to the questions and if i don't have time to them i'll respond to them in writing. >> let's have them present your questions to you if you want to try to smashes at the end i appreciate that. >> mr. secretary, first of all, i identify with my friend mr. thompson about the energy -- [inaudible]

>> it's happening anyway. but my specific question that i would pose to you deals with what my friend from louisiana talked about, about potential downside impacts of the president's proposal to eliminate outdated fossil fuel subsidies for the oil companies that -- and invest in energy for the future. because, some of us -- i have introduced legislation that would do exactly that. have a number of cosponsors. i would hope you could analyze for us in a world oil market where a barrel of oil is fungible and a price is determined internationally, that is in the range of 2 to $3 trillion or more if it keeps going up, what impacts $8 billion would have on the 2 to

$3 trillion -- the extent it would have any benefit would that inure to europeans or chinese if it made any difference at all. it seems to me that would be useful for us to have this proper context. thank you, mr. chairman. >> mr. burg? >> my question comes from north dakota and, you know, back in the '80s we had a real financial problem and we increased taxes and the problem just continued. a decade ago we had the same problem, a lot of other states did, after the dot com burst and really we took the opposite approach. we tightened our belt, we didn't taxes. we encouraged the private sector growth and today we're below 4% unemployment. we encouraged oil and energy industry to grow, encouraged those kinds of jobs and they're all positive. my question to you really relates to the importance of small business and, you know, my

own experience is when you tax small business, that's negative for them. they're not -- it creates uncertainty and so in this budget i see the taxes going up on small business. i mean, most small business, a lot of small business has passed through and so they're paying as income. so again my question to you just relates to how can we increase the taxes on the small business and how can that be good for on you economy? >> again, well, i'm sorry. i said i wouldn't respond but i'll come back at the end. >> thank you, mr. chairman, and mr. secretary thank you for being here. i too have a follow-up question about the fiduciary definition that's being worked on by labor and sec and i'll submit by writing and hopefully get a response from you. but i don't know if you are or are not aware but the economic policy institute, nonpartisan independent group finally had a chance to the republican resolution this week. if enacted as proposed it would result in over 800,000 jobs

being lost in both the private and the public sector given the public implications behind their continuing resolution. i find that 8 hin,000 number very fascinating because the day president obama was sworn in, you may recall, we were losing 800,000 jobs a day. since then we've had -- >> a month. >> a month. since then we had levity consecutive months of private sector job growth. the day he was sworn in $17 trillion of wealth had already been destroyed in the stock market. since then over 13.5 trillion has been restored. and the day he was sworn in he inherited from the previous administration a $1.5 trillion budget deficit. now, the first year which you guys had control of the budget it was revised downwards by 150 billion. it's going up again next year but that's primarily due to the continuation of the tax cuts that all of them supported on the other side. and i think we just have a very stark contrast between two different visions for our country right now. one that's offering a very cold dark assessment about the future

of our nation and the possibility of economic growth and one that's more hopeful and optimistic. i see that in the budget that this administration has proposed. especially in the area of innovation and competitiveness. i agree and i just most people would agree with the president and the state of the union we have for outinnovate, outbuild, outcompete the rest of the nations in the world. and there are smart investments in doing it and bad spending that we have to get control of in order to bring balance to all of this. and i'd be interested again if you would like to submit a written response to highlight some of the more important investments you feel we have to move forward on in order to create the sustainable long-term economic growth that we face in this nation. >> all right. ms. black is recognized. >> thank you, mr. chairman. mr. geithner, i want to read from your written testimony here. you say our deficits are too high and they're unsustainable. left unaddressed, these deficits will hurt economic growth and make us is weaker nation and we must go back to living within our means, which i couldn't

agree with you more. but this budget predicts over the next 10 years that we're going to lower our deficit to 3%. and i'm just thinking about my 14-year-old grandson and 10 years from now what i can say to him, you know, dylan, i'm really sorry that we could only lower this to 3%. and because, you're going to have at least a $15 trillion deficit that you and your family know that you start about are going to have to pay back and i'm really sorry i just couldn't get it quite done for you. why is it our goal to be a deficit not a balanced budget and not growing our economy to the point where we can start paying down our debt? that just seems like not a very good goal to me? >> excellent question it's a great place to start but it's not enough. >> mr. pascrell is recognized. >> thank you, mr. chairman. mr. geithner, let's put to bed once and for all if you would and i think you need to address

this directly that we did not -- maybe the president did not address it for other reasons the entitlements but it's not true that the federal health care reform adopted many -- they did adopt many of the recommendations from congress's own independent advisory commission. i hope you read it. the medicare payment advisory commission, very specific recommendations. and by having a medicare center for innovation, medicare can now test and use new payment models to improve patient care and to bring the cost down. i have never heard anything about that from fox. ever, ever, ever will i hear that. and my second area i think you should address is we are cavalierly talking about public employees like the channel. that's what we do with cops and firemen and teachers and they're not. they've given their lives to this country but if they got some bad ones in the midst get

them out thereof but you can't paint with a wide brush. we are now having a weird situation of increasing private jobs and the public jobs going down. and if you don't think that's not going to cost us money, you're wrong. thank you. >> mr. shock is recognized. >> thank you, mr. chairman. thank you, mr. geithner, for being here. two questions i want to highlight, one dealing with what some are calling the t.a.r.p. tax, you know, the tax being levied on institutions over 50 billion. i'm specifically interested in a couple things. one, why in one step we're saying all institutions above 50 billion whether they took t.a.r.p. or not. and then at the same time, we exempt out some entities that actually took t.a.r.p. and then i think the question that's begged is when the administration says we're making money on t.a.r.p., why would we need a tax to begin with?

and then the other question deals with the budget really seeks to penalize those companies that utilize deferral. and for those of us that have companies in our state that are large multinationals, i guess my question would be how does that help create jobs? and more importantly, how does it help us become competitive in a world climate when for a company that may only have 10 or 12% overseas, we may be able to get the skin but if 70 to 80% of what they sell is manufactured and sold in other companies, i would -- i would suggest that perhaps they're just going to leave if we continue to make it more and more uncompetitive for them to remain in america. >> mr. crowley is recognized. >> thank you, mr. chairman. and i will be brief. i was hoping to have more of a discussion with you, mr. secretary, i appreciate you being here today. in regards to the -- and with

respect to the health care reform law that we put in place and that you so ably help lead the charge on and to talk about the impact on the u.s. economy, i would have liked to have a conversation and heard from you and your thoughts about the -- what we're hearing more about the taxation on america's middle class that that bill will bring about. how it's going to kill jobs in america. i would have loved to talk to you about that and how it's going to kill small businesses, that small businessless never use the tax credits they've been afforded under the new law. i would love to have a conversation about the falsehoods that have been spewed and even though small businesses are using tax credits even though we're not killing small businesses in this country. nor are we killing jobs creation and growth as you've just said that we consistently in the last 11 months we've continued to see growth in the private job market and there's not going to be an increase because of that bill on taxes in the middle class.

i would have liked to have an opportunity to talk to you about that. i able to but i think i answered the questions for you but thank you for being here. >> mr. secretary, i want to thank you for your time. it's very generous. i'll certainly give the opportunity to respond now if you would like to touch on any of those things or to respond in writing at your discretion, if you'd like to comment now, you may. >> coup -- could i just say a few things. if you care about entitlement reform and our long-term fiscal deficits the most important thing congress could do is to make sure the reforms are put in place to reduce the rate of health care cost growth remain in place or enacted congress sticks to them and if we can find ways to go beyond that we welcome a chance to do that. second, there's a lot of discussion about the state of the economy and what's going to be good for future growth. i just want to emphasize by any measure you can look at the fact that the stock market is up about 100% since when we came into office or you can look at overall levels of profitability for the business community as a whole the american private

sector you look at productivity growth, dynamics, innovation, export growth, the american business sector is in dramatically stronger position today because of the actions taken by congress and the president and the fed over this period. our job is to help re-enforce that. and on the t.a.r.p. tax, the law that authorized the t.a.r.p. requires the administration to propose a fee to cover any losses so that we don't -- we hold the taxpayer harmless. and those costs have come down dramatically and as i said outside of housing, we're lucky to earn a positive return but because the independent estimates still estimate we still have some loss we felt excelled to put if the budget how we recoup that so the taxpayers aren't exposed to that and we propose a modest fee only those who were eligiblible, the largest firms that were

eligiblible for the emergency assistance. >> when you think of deferral, think about it this way the current tax system at the margin makes it more likely the company in your state is going to build a plant outside of the united states rather than inside the united states and what it means if you have two companies in your state competing together the current tax system will favor with lower tax burden the company that builds that next plant outside of the united states. it's a complicated thing to fix and we're committed to fixing it. that's why we're proposing comprehensive tax reform but as you look at these changes i think you'll want to join with us in making sure that the tax system is working with our broad objectives of trying to strengthen incentives in the united states. if you give any tax benefit or tax credit it means all other businesses on average pay higher taxes. that's not fair and makes it less competitive and that's something worth changing. nice to be here today.

thank you, excellent questions. good discussions. we look forward -- i look forward continuing them with you and let's see if we can do corporate tax reform. >> thank you. and thank you for being so generous with your time and if members have questions, they'll submit them to you in writing and i hope we could receive a response. thank you again, mr. secretary. this hearing is now adjourned. >> beyond what we cover on the c-span networks, there are many live events to watch and streaming video on our website. >> when i was sworn in as president, i pledged to cut the deficit in half by the end of my first term.

the budget i'm proposing today meets that pledge. >> president obama sent congress a $3.7 trillion budget that would reduce the deficit by $1.1 trillion over the next 10 years. this week hear the details from the administration including cabinet officials and watch reaction from house and senate members online at the c-span video library. search, watch, clip and share. it's washington your way. >> it's a three-day presidential weekend on american history tv on c-span3. live from the truman little white house in key west. what it's like to be related to an american president. we hear candid conversations with descendants and presidents. and president kennedy and the lessons he learned and the application das and we'll visit the smithsonian portrait gallery to learn the art and politics of presidential portraits. experience american history tv on c-span3 all weekend, every

weekend. for the complete three day holiday schedule go to c-span.org/history and to have our schedules emailed to you click the c-span alert button. >> the u.s. senate is about to gavel in today they'll have general speciess. amendment votes are expected throughout the day. live coverage of the senate here on c-span2. will lead the senate in prayer. the chaplain: let us pray. o god the hope of the world, let your kingdom come. let your will be done on earth as it is in heaven. fill the minds of our

lawmakers with your truth so. that they will labor for freedom with integrity and compassion. lord, use them to establish your rule in the life of our nation. may they be guides who lead us away from sin, sorrow and destruction toward truth, justice, and peace. shelter them in their coming in and going out in their labor and leisure, as they seek to advance your kingdom. we pray in your sovereign name. amen.

the presiding officer: please join me in reciting the pledge of allegiance 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., february 16, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable kirsten e. gillibrand, a senator from the state of new york, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. mr. reid: madam president? the presiding officer: majority leader. mr. reid: following any leader remarks there will be a period of morning business until 11:00 a.m. with senators permitted to speak for up to ten minutes each during that time. that time will be equally divided and controlled between

the leaders or their designees. at 11:00 this morning the senate will resume consideration of the f.a.a. authorization bill. as a result of cloture being filed yesterday, any germane first-degree amendments must be filed at the desk prior to 1:00 p.m. thaod in order -- today in order for the amendments to be in order postcloture. we have the opportunity to complete this legislation opportunity. there will be two cloture votes in the morning. we hope to be able to have some votes today, and senators will be notified when roll call votes are scheduled.

mr. mcconnell: madam president? the presiding officer: republican leader. mr. mcconnell: are we in a quorum call? the presiding officer: no, we are not. mr. mcconnell: as the debate over government spending comes into focus this week, i think it's worth noting once again how this debate has shifted in recent weeks. after two years of bailouts and stimulus bills, we're finally talking about how much government should cut instead of how much it should spend. obviously the details matter, and we'll be working those out in the weeks ahead. but the fact that this debate has shifted is a testament to the millions of americans who insisted that their voices be heard on this issue. they've made a difference.

it's important that we acknowledge all of that. now the question shifts to whether those in power will actually follow through in a serious way. will democrat leaders in washington really do something to rein in a government we can no longer afford, or will they just pretend to and hope that the american people focus on their words instead of their actions? unfortunately, the early signs are discouraging. the president's approach to the growing national alarm about spending and debt was a proposal to freeze government spending at the already irresponsible levels that he himself set over the last two years, levels that have maintained, though only intensified the current crisis by pulling us deeper and deeper in debt. the consensus on the president's proposal is that it is both unserious and irresponsible and that despite what the president may say he is not in fact

treating this crisis with the seriousness it demands. the president even seemed to concede the point yesterday saying his budget wasn't adequate to the task and suggesting that maybe congress can do something more meaning tp-pb tp*l than he has -- meaningful than he has. what do we find in congress? we find one party in the house of representatives making a genuine toefrt cut spending -- effort to cut spending and debt. we find democrats in the senate announcing they intend to line up behind the president's timid proposal for a partial spending freeze. in other words, democrat leaders in congress intend to join the president in resigning themselves to a future of growing debts and deficits at a time when americans are demanding cuts instead. so here's what we've learned this week. on the most pressing issue of the day, the president and democratic leaders in congress have decided to take a pass. they're either unwilling to admit that washington needs to

live within its means or they're completely unwilling to make the tough choices that will get us there. it's really hard to believe, americans are screaming at us to do something about a $14 trillion debt. the president proposes a budget that nearly doubles it. and democrats clap their hands in approval. maybe democrats are so focused on passing their health care bill last year, they didn't notice what's been going on in europe. maybe they were so focused on defending their stimulus that they missed a national uprising right here at home about the spending and the debt that they've racked up. maybe they missed the fact that while we were busy adding $3 trillion to the debt, nearly 3 million americans lost their jobs. maybe they have been so focused on passing their agenda that they didn't notice the fact that the american people just repudiated their entire agenda. they need to get real.

the men and women who were sent to washington this year weren't sent here on a mission to keep spending at the levels this administration has set. they were sent here to change the culture, to convince the administration that it needs to change its ways. democrats in washington seem to think that they can wait, just wait it out, and if they just agree to freeze current spending levels in place, people will think they're listening. don't they realize current levels in spending are the reason we had the biggest wave in washington in a generation? the senior senator from new york seems to think anything short of spending current levels is extreme. extreme is to insist in the middle of a jobs and debt crisis that government has to spend $1 trillion more than we take in every year. that's what is extreme. that's extreme. extreme is a view of the world that says government will not live within its means, even when

the american people are demanding it. extreme is a view of the world that says survival of that program is more important than the survival of the american dream itself. extreme is telling our children they may have to do without because we refuse to do with less. so i would stoug my democratic colleagues -- i would suggest to my democratic colleagues to stop thinking about what they can get away with and start thinking about what's actually needed to solve this crisis. i suggest they start listening to the american people who are telling us in no uncertain terms that a freeze won't cut it. madam president, i yield the floor. the presiding officer: leadership time is reserved. the senate will be in a period of morning business until

11:00 a.m. with senators permitted to speak therein for up to ten minutes each with the time equally divided and controlled between the two leaders or their designees. the clerk will call the roll. quorum call:

quorum call:

ms. collins: madam president? the presiding officer: the senator from maine. ms. collins: thank you, madam president. i ask unanimous consent that proceedings under the call be dispensed with. the presiding officer: without objection. ms. collins: thank you, madam president. i ask unanimous consent that i be permitted to proceed for 15 minutes, as if in morning business. the presiding officer: without objection. ms. collins: thank you, madam president. madam president, americans are resilient. throughout our nation's history, we have stood up to every challenge, and we have stood together. at this moment in history, we face the challenge of recovering from the worst economic recession since the great depression. through no fault of their own, too many americans have lost

their jobs and continue to struggle to find work in this tough economy. putting americans back to work is the key to economic recovery and must be the number-one goal for this congress. today i offer my own seven-point plan to help us reach that goal. this jobs plan recognizes that small businesses are america's job creators and, thus, our efforts must be targeted toward helping small businesses start up, grow, and prosper. in maine alone, we have 141,000 small businesses. during the past decade, america's small firms have created about 70% of all new

jobs. but far too often congress directs federal policies and attention toward those businesses deemed too big to fail. instead, we must redirect our efforts toward those small businesses that are too entrepreneurial to ignore. the plan that i'm introducing today is based on extensive conversations that i have had with small business owners and workers throughout the state of maine. it also represents a great deal of hard work by my staff. while each state has its own particular opportunities and challenges, the fundamentals of a jobs-oriented economic recovery are similar everywhere. as i illustrate my seven-point

plan with examples from my home state of maine, i believe that the presiding officer and my colleagues will recognize similarities in their own home states. first, my plan to build a 21st century economy begins with building a 21st century workforce. america's greatest asset is its people. ensuring that american workers get the education and job training that they need to compete in an increasingly global economy must be a top priority. my plan amends the workforce investment act to place special emphasis on job-training programs that assist our manufacturing industry. i'm tired of seeing so many manufacturing jobs leave my

state and our nation to go overseas. it's important that we have a strategy to work with manufacturers, to work with local community colleges and universities to develop the manufacturing-based curriculum, job-training programs, and research opportunities to ensure that this generation and the next have the education and skills for the jobs of today and tomorrow. some of those manufacturing jobs are gone forever. but others are coming online, and america must lead. and congress must support targeted funding to help provide the resources for this education and training. in addition, we must provide

workforce development assistance to those communities harmed as a direct consequence of the closure or realignment of military installations. for example, the state of maine is expected to lose more than 6,500 military and civilian jobs following the decisions made by the base realignment and closure commission in 2005. we're losine brunswick naval air station in our state. there are many other states -- illinois, missouri, new jersey -- that are facing similar losses. in virginia, nearly 40,000 jobs will be lost. in such cases where decisions made at the federal level directly affect local

employment, we have a special obligation to make sure that displaced workers have the training and the education that they need to find new employment in their communities. after all, these communities have structured their economies to support military operations for decades in many cases. now that that linchpin of the local economy is being pulled out, surely we have an obligation to help with the adjustment. my plan would redirect economic development administration funds, e.d.a. resources, to those communities most harmed by these decisions. targeted federal funds can also

be a catalyst for new economic opportunities. for example, i worked to secure onetime funding for a radio logic technician training program at a maine community college th-fplt program had broad support -- this program had broad support from local hospitals, from the college, but they simply couldn't afford the expense of equipment to get the program underway. with that onetime federal investment, the program is now completely self-sustaining. it produces between 18 and 20 graduates a year. job placement has been 100% with graduates earning starting salaries of about $40,000 a year. and i'm sure that similar targeted job training success stories can be found in every state, and we ought to build on

them. we must also fix what has not worked as well as it should. government agencies must provide more efficient and productive services to the american people. the department of labor, for example, should reduce paperwork and red tape associated with federal job training programs. the department should identify ways that it could cut costs by working more closely with other government entities such as the department of education and with the private sector. the best programs i've seen at community colleges, for example, combine some job training funds with commitments from private employers to hire the graduates and to help shape those job training programs so that we're training people for the jobs that exist or that are going to

exist. the second part of my plan would encourage innovation in maine's natural resource-based economy. nowhere is there greater potential than in energy. i want the united states to lead the world in developing renewable energy technologies, and that is going to require significant private and public investments to develop this technology and to make its deployment affordable. for example, deep-water offshore wind has enormous potential to help us meet our nation's electricity needs and it presents an exciting opportunity to create thousands of much-needed good-paying and sustainable green jobs. estimates show that the development of just five

gigawatts of offshore wind off the coast of maine -- and that's just a fraction of the overall potential -- could power more than one million homes, attract $20 billion in investment, and create more than 15,000 green energy jobs that would be sustained over 30 years. deepwater offshore wind is a key transformative technology that america needs in order to compete globally. europe, china, japan, our technology competitors continue to make far larger investments in offshore wind r&d than we do. i'm proud of the work of the university of maine and the deep sea wind consortium private-sector involvement to

deploy loading wind turbines which would be the first of its kind in the world, placing the united states in a position to lead in deep water offshore wind technology. federal investments in programs to spurt advancement of deepwater offshore wind is an investment in america's future. federal and state seed funding is expected to yield up to $4 billion in private-sector investment over the next ten years in maine alone. and with these investments, maine is well positioned to be a global leader in this promising source of alternative energy. we must not lose these jobs to china, as has increasingly occurred with solar technology. let's not have it happen with

deepwater offshore wind technology. we must also do more to promote agricultural exports. i note this is an issue of great interest to the presiding officer. in maine, blackberry -- in maine blueberries and lobster help sustain and create jobs in our state. every $1 million in agricultural exports supports 12,000 jobs. therefore, increasing exports of our agricultural products could play an important role in reviving our economy. boosting support for the department of agriculture's foreign agricultural services will help promote our homegrown natural products abroad. this effort to increase agricultural exports could be

paid for by strengthening our effort to curtail wasteful agricultural subsidies such as payments to very wealthy corporate farmers who, frankly, do not need federal assistance. the corn-based ethanol tax is another example of an extraordinarily expensive subsidy costing taxpayers some $6 billion annually, which has produced a host of problems, from higher grain prices to impaired engine peformance. we must reevaluate all programs that have not performed as promised, and then reallocate their funding to job creation initiatives and to deficit redemption. third, we simply must do more to encourage job creation and

investment by small business. my plan includes a series of tax reform proposals targeted at these engines of job growth. the tax package agreed to by congress and the president in december included a 2% cut in the employee portion of the payroll tax. but no cut was provided for the employer portion of the payroll tax. with unemployment stuck above 9% for 21 consecutive months, we must do more to encourage businesses to hire. and when i talk to small businesses, they tell me this is something we could do that would directly reduce the cost of hiring and encourage them to bring on more workers. my proposal includes a 2%

reduction of the employer portion of the payroll tax on the first $50,000 of payroll for worker for one year. this reduction in the employer portion of the payroll tax is estimated to lead to the creation of 1.4 million jobs. this will work, madam president. as with the employee's side payroll tax rethraef we passed in december, my proposal would require the treasury to reimburse the social security trust fund using general revenues. and again, the cost of this payroll tax relief can be offset by eliminating the ethanol and other wasteful subsidies and by implementing budget cuts for discretionary spending.

madam president, i would ask unanimous consent, since there are no other members seeking recognition -- there is another member seeking recognition. i would ask unanimous consent that i be allowed to proceed for just five more minutes. mr. inhofe: reserving the right to object, let me explain if i could. we have the president of the chamber of commerce and the afl-cio waiting for me. if i could move in here, you can have all the time you want. ms. collins: madam president, i will reserve the balance of the time that i had requested, ask that my speech be shown in the record as not interrupted and yield to my friend and colleague, the senior senator from oklahoma. mr. inhofe: i appreciate that. the presiding officer: the senator from oklahoma. without objection. mr. inhofe: that's nice of you. we are trying to resolve one of the great problems that i'm sure the senator from maine is sensitive to. that is the infrastructure of this country.

we have two witnesses, the head of the afl-cio and the head of the united states chamber of commerce, to show that liberals, conservatives, labor, industry all feel this should be at least the second-highest priority in america. thank you. i appreciate your yielding and allowing me to do this. i'll make this fairly quick. when i heard the president's budget yesterday and looked at it, i shook my head in disbelief. $8.7 trillion in null spending. $1.6 trillion in new taxes. all these things. i remember in fact when i was complaining in 1996 at this very podium -- that was during the clinton administration. that was his budget. that was $1.5 trillion. did you know, madam president, that the deficit in this president's budget is greater than the entire budget of 1996, to run this whole thing called america. it was a shocker to me. it reminded me that people talk about the entitlements, we're

going to have to do something with that. something we can do with right now is something i tried to do last year, and the house members are trying to do right now. that is when the president gave his message, his message was, in that message he talked about how he was going to freeze non-defense discretionary spending. everyone applauded thinking that was a great austerity program. in reality, he's talking about after he has increased it from 2008 levels to 2010 to, 2010 levels, and then freezing those increases in. that's what i find unreasonable. so i reintroduce, it's senate bill 360. i have a whole lot of cosponsors to, wind back the discretionary spending to 2008 levels and then freeze it at 2008 levels. the bill reduces the nonsecurity spending to 2008 levels, will hold it for five years to 2016.

after, the spending will be allowed to increase with the c.p.i. inflation between 2017 and 2021. the amount of money that would be saved by this in that period of time would be over $1 trillion. this chart shows -- what's going to happen if we don't do this. the red is what's projected. in the blue, what's projected if we are successful in doing this. i'm proud the house of representatives, the republicans in their budget have put together my bill that i had last year that i'm reintroducing today as s. 360 as a part of their budget. i think it's responsible. he we will be looking forward to getting cosponsors. and i thank, again, the distinguished senator from maine for allowing me to bust in with this. thank you. ms. collins: madam president? the presiding officer: the senator from maine. ms. collins: thank you, madam president. there are other provisions in my

bill that are targeted towards small business. for example, section 179 is a provision of the tax code that small businesses have found to be very helpful. it allows them to immediately expense equipment purchases rather than depreciate those purchases over many years. i also would propose making permanent the tax provision allowing restaurants to depreciate equipment over 15 years rather than 39 and a half years. think -- rather than 39 1/2 years. think about it. if a restaurant is only renova renovating once every 39 years, that is not going to be good. it would also decrease the depreciation on commercial

buildings to 13 years. we did that back in 1981 and it worked. my fourth point is one that some small business owners that i know would put at the very stop of the list of when we should do, and that is we need to reduce the red tape that ties them up in knots. let me provide an illustration. we need to make sure that federal regulations do not impose an unnecessary burden on job creation. the e.p.a. has proposed a new regulation known as "the boiler matter." this rule, as originally proposed, could cost maine businesses $640 million to comply with, despite the fact that there are less costly approaches to deal with boiler emissions.

it also has federal agencies working across ash at cross purposes. here we have the department of energy trying to encourage the conversion to biomass boilers at the same time that the e.p.a. is putting burdensome new regulations on them. the result in maine was that the department of energy awarded one maine high school a $300,000 grant to help buy a new wood pellet boiler to reduce the school's use of fossil fuels. but, because e.p.a.'s proposed regulations would have greatly increased the cost of that boiler, the school board ended up turning down the grant. so this is an example where the right hand did not know what the left was doing. my point is that federal agencies should take into account the impact on small

businesses and job growth before imposing new rules. so, thus, my plan contains several provisions to help reduce onerous regulations and cut red tape. first, it requires federal agencies to analyze the indirect costs of regulations, such as the impact on job creation, the cost of energy, consumer prices. sctd, it obligate -- second, it obligates federal agencies to comply with public notice and comment requirements and prohibits them from circumventing these requirements by issuing unofficial rules as -- quote -- "guidance documents." and, third, it creates a mechanism to protect small businesses from onerous penalties the very first time

they fail to comply with a paperwork requirement as long as no harm comes from that failure. if it is an honest first-time mistake that causes no harm, why do we want to slap that small business with a heavy fine? that doesn't make sense. the fifth point to my plan is aimed at our transportation policies. getting raw materials to the factory or farm and finished products to market quickly, efficiently, and safely must be a priority. but the inconsistent and inequitable federal policy on truck weight limits on interstate highways provides a telling example of where we're doing the opposite, and the consequences are particularly acute in maine. i've spoken on this issue many times, so i'm just going to briefly describe it.

maine's businesses and trucking firms are currently at a competitive disadvantage because federal law prohibits the heaviest trucks from using federal interstates and instead diverts them to downtown streets and secondary roads this. means, for example, that -- this means, for example, that nearly 260 miles of nonturn 13 bike interstates that are the major economic corridors in my state are off-limits. yet these same trucks are permitted on many federal interstates in new hampshire, massachusetts, parts of new york state, and neighboring provinces in canada. so that makes maine and vermont an island of noncompetitiveness. it just doesn't make sense. the heaviest trucks belong on the roads built for them. in 2009, i authored a law to

establish a one-year pilot project to allow trucks weighing up to 100,000 pounds to travel on maine's federal interstates. this project was an enormous success. it helped to preserve and create jobs, because it allowed our businesses to be more efficient. it lowered fuel costs, it resu resulted in fewer emissions, carbon emissions, and it made our roads safer. so working with senator leahy, i'm trying to make this permanent. point number six: we must invest in america's future. research and development investment is critical to the breakthroughs that we need to keep our economy competitive and to create good-paying jobs. the r&d tax credit provides an important incentive, but it

needs to be updated so more companies can benefit from it, and there needs to be more certainty. just having that tax credit from year to year discourages the kind of long-range planning and investment that companies need. so my plan includes a five-year extension of the r&d tax credit. that's likely to happen, but by doing year by year by year, we create all this incentive -- these disincentives for investment. finally, the seventh point in my plan would help expand opportunities for small businesses and farmers to do business with the federal government. we need to help our small businesses, our farmers tap into markets that they have not previously explored, and as the former head of the new england

small business administration, i know how ascension this drive for new -- how essential this drive for new markets is for job creation and for our economy. so, one approach that we're going to take is my washington and state offices are going to redouble their efforts to help small businesses reach the federal government, because the federal government is the largest consumer of goods and services in our country. i know that disturbs a lot of americans right now, and it shows the size of the federal government. the fact is, the federal government purchases more than $535 billion worth of goods and services in this past fiscal year. some 23% of that spending is directed to small business, and last year the value of federal

contracts to small businesses in my state alone was more than $250 million. so, if we can expand the opportunity for small businesses to do business with the federal government, that's a brand-new market for their products and services. last year, along with my colleague senator snowe and in conjunction with the department of defense, northeast regional council and the maine procurement technical assistance center, i sponsored a small business match-maker conference that brought together government agencies and prime contractors with our small business community to match up the purchasing needs with goods and services. it was a three-day conference in south portland. it was a tremendous success.

we had about 385 small business owners and representatives from 135 government agencies and prime contractors looking to subcontract work meet face to face, sit down, exchange ideas, and let me give you an example of a successful connection that was made. a representative of a $2 billion aerospace company sat across the table from the owner of a 40-employee maine machine smop with experience in -- shop with experience in very high-quality custom work. that first meeting led to a significant business relationship that continues to grow. and i would note that at our conference in south portland, our total number of registrants was 597 people, and that just

shows how eager our small businesses are to expand their customer base. and one great benefit of the match-maker approach is instead of a small business working for weeks or even months to try to find the right person in the vast government bureaucracy or the right prime contractor, our entrepreneurs merely need to sit down across the table with them. it's direct, effective and efficient. but obviously it's not easy to do business with uncle sam. the rules and regulations are often strict, cumbersome, and unfamiliar, and that's where our offices can help. my plan also calls for congress to work harder to open up the federal marketplace beyond the washington beltway to

entrepreneurs in every state. that will benefit our job creators and the american taxpayer because there'll be more competition. madam president, the struggling economy has challenged our nation's entrepreneurial spirit, but that spirit remains strong, in maine, in your state of new york, and across the nation. we will recover from this deep recession, but the recovery depends on the right policies in washington to encourage the innovative and bold job creators of america, and that means helping our small businesses start up, grow, prosper, sustain, and create good jobs. my seven-point jobs plan offers

a straightforward path forward for congress to lead rather than impede job creation at this critical juncture in our history and in our recovery. thank you, madam president. i yield the floor, and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. roberts: madam president? the presiding officer: the senator from kansas. mr. roberts: madam president, i understand the time for morning business has come and gone, but i ask unanimous consent as if -- the presiding officer: the senate's in a quorum call. mr. roberts: well, i ask that the quorum call be terminated. the presiding officer: without objection. mr. roberts: i appreciate that, madam president. then i ask to be recognized for 20 minutes as if we were in morning business. the presiding officer: without objection. mr. roberts: thank you, madam president. madam president, i recently introduced a bill called the regulatory responsibility for our economy act of 2011. it's s. 358. i would urge my colleagues after

hearing my remarks who would like to, to cosponsor this. i realize that the bill is a mouth full. the regulatory responsibility for our economy act. but i think it's appropriate. this bill would strengthen and codify president obama's executive order from january 18. in that executive order, the president made a commitment to review and to modify, to streamline, expand and repeal. that's a lot of things. review, modify, streamline, repeal those significant regulatory actions that are duplicative, unnecessary, or would have significant economic impacts on americans. so the regulatory responsibility for our economy act of 2011 would ensure just that. madam president, my legislation

would require that all regulations put forth by the current and future administrations, regardless of the president, consider the economic burden on american businesses, ensure stakeholder input -- i.e., the people who are affected -- during the regulatory process and promote innovation. now back on january 18, the president signed an executive order to do precisely that, we thought. it was improving regulation and regulatory review. the president also released a fact sheet on the intent for his regulatory strategy. it was in detail. and per the fact sheet and this executive order, the president requires federal agencies to design cost-effective evidence-based regulations that are compatible with economic

growth, job creation and competitiveness. my legislation would ensure that that would actually happen. in addition, the president published an op-ed in the "wall street journal" detailing the administration's commitment to reviewing regulations. as part of this op-ed, the president stated -- quote -- "we have preserved freedom of commerce while applying those rules and regulations necessary to protect the public against threats to our health and safety and to safeguard people in business from abuse." but he also noted -- and this is the key -- that sometimes those rules have gotten out of balance, placing unreasonable burdens on business, burdens that have stifled innovation and had a chilling effect on growth and jobs. now i must say i absolutely agree with the president. i was extremely pleased when he

came out with the executive order on january 16. and as i travel across my home state, i have heard kansan african san, regardless of the -- kansan after kansan regardless of the business, regardless of where they are on main street who find themselves weighed down by the burden of too many regulations. as a matter of fact, i think if any member this have senate would like to get a standing ovation from even a group of five at a coffee shop or at a meeting of any organization that is business oriented, or just folks, you can talk about the debt, you can at that about spending, you can at that about other issues. but the one that really, that really grabs them is this business of overregulation. this has been going on for too many years, too many decades, as a matter of fact. as a matter of fact, you can come into a meeting and you'll

probably get the question, even the distinguished senator from new york would get the question, probably a little nicer than i would get it. and certainly the other the senator from new york who is now leaving. but at any rate, the question usually comes as, pat, what on earth are you doing back there saddling us with regulations and paperwork that are costly, burdensome, we don't even know about it. all of a sudden on a wednesday morning we wake up and we face this regulatory dictate. it is counterproductive. the cost outweighs the benefit. what is going on back there? what are you guys doing? my response is, let's stop for a minute. i'm not a you guy. i'm an us guy. clear back in the days at the house of representatives when i had the privilege of serving in that body, we are trying to do something about the unnecessary and burdensome regulations. that is the one issue, that's

the tinder box issue, that's the one where you get an immediate response to people saying amen, somebody needs to do something about that. they were so pleased with the president when he came out with the executive order to say, hey, i'm going to do something about this. i have his quote a little bit later on. it really makes sense. so, as of january 3, 2011, less than six months after the dodd-frank act was signed into law, regulators have issued over 1,000 pages of regulatory proposals and 360 pages of final rules. talk about asking senators whether they have read a bill or not, i know that nobody in the senate has read over 1,000 pages of regulatory proposals and 360 pages of final rules on the regulatory reform act. many more pages of regulations, upwards of 5,000, are expected. one of the things that's holding

it up is the definition of what's going on in these regulations, what adjective, what adverb, what does it mean in regards to the regulations? regulations such as those put forth by the department of health and human services along with the department of labor and treasury have resulted in the child-only insurance market effectively disappearing in 20 states because of the regulations. the idea was to provide just the opposite. more child-only insurance markets. but in 20 states today that is not the case. and the environmental protection agency began implementing its greenhouse gas regulations on stationary sources of energy that emit 75,000 or more tons of co2 a year which on its surface aims to only regulate those largest emitters such as power plants, oil refineries.

but it's only a matter of time. it's only a matter of time before stricter regulations are handed down that will impact every corner of commerce. let me just saying the e.p.a. knowing of course that congress said no to cap trained are trying very hard to go around the congress to try to put forth these regulations and to -- into compliance with the law. last year the grain inspection packers and stockyard administration, the wonderful acronym -- everything has to be an acronym in washington but the one for that is called gipsa. tass gyp. they proposed -- it is a gyp. they proposed long rules governing the production of livestock. this is an agriculture thing. i know people's eyes glaze over when we talk about agriculture. but this proposed rule goes far beyond what was intended in the

last farm bill. in fact, a number of items in the proposed rule were defeated here on the senate floor, and yet they were put in the proposed rule. a number of private economic studies show the loss of gross domestic product is in excess of $1 billion, much more costly than the $100 million threshold required for an economic analysis to be completed. unfortunately, an economic analysis is yet to be completed. so, i was encouraged, madam president. i was a happy camper there for a little bit, by president obama's commitment to a new regulatory strategy. but the devil's in the details. and with staff help, after reviewing the executive order, i must say i was left with some larger concerns. i was upset. the executive order states -- and i'm quoting here -- "in

applying these principles, each agency is directed to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible." wonderful, we have have a cost-benefit yardstick applied to all of the regulations pouring out of all the agencies in washington. the distinguished speaker of the house said the other day that we had 200,000 more federal employees in washington than we did two years ago. i can assure you they're not twit telling their thumbs. they are issuing regulations. and they tend to be agenda-oriented, not getting down to sound science or determining the anticipated effects of their regulations. where appropriate and permitted by law -- i'm picking up again on what the president said -- "each agency may consider and discuss qualitatively" -- and

i'm quoting here -- "values that are difficult or impossible to quantify, including equity, human dignity, fairness and distributive impacts. where appropriate and permit bid law each agency, as they go through the regulations to determine which productions are counterproductive in costs billions in regards to manufacturing and business and harming our economy where it should not be harmed, they say okay, but, but, but, where appropriate and permitted by law each agency may consider" -- and this is the part where we ought to take a look at it -- "values that are difficult or impossible to quantify." how are you going to do that? including equity -- everybody's

for that. human dignity -- i don't know who's against that other than iran. fairness and distributi sr*e impacts. try to figure that out if you are working for an agency and trying to figure out a regulation. if that isn't a loophole large enough to drive a truck through, i don't know what is. as the "wall street journal" captured so eloquently in response to president obama poaches comments, these -- president obama's comments, this is not approachable at all. you can't measure them. i feel this language has the potential to be a very large, large, large loop hope. this coupled with an exception for agencies has the potential to result in no changes at all. so we issue an executive order saying let's take a tough look at the regulations that are so terribly counterproductive and

we may end up with nothing, more especially with the independent agencies. note i said fdic. note i said s.e.c. read regulatory reform. the small banks and what they're going to have to put up with and hire a bunch of bad new bears to tell the rest of the employees how they're going to figure out the rest of the regulation. and my favorite, e.p.a., who had the temerity and unmitigated gall to say after this came out, after this loophole came out, none of our regulations even apply. our regulations are just fine. i got news for the e.p.a. in the agriculture committee, the chairwoman of the committee, debra stabenow, and i have agreed to have a hearing on this to determine exactly where we are. and where we are is not good. my legislation would close the

loophole and president obama's executive order. and we close other existing loopholes including those that the administration has been using to bypass valuable stakeholder input on regulations. again, there's that word stakeholder. that's a senate word that's the people that get smacked right up aside the face in regards to the regulations that they don't even know adhere to their business or what they're about. the president has also agreed -- and here is the key word -- sometimes -- or phrase -- sometimes those rules have gotten out of balance, placing unreasonable burdens on businesses, burdens that have stifled innovation, have had a chilling effect on growth and jobs. the president went ton say, "at other times we've failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences." precisely the kind ever thing -- the kind of thing i'm trying to demonstrate here.

"my legislation would ensure a review of these regulations to ensure fewer burdensome and exikly irresponsible burdens on businesses in the united state states." president obama's executive order ensure that federal agencies protect our safety, health, and environment while promoting economic growth. so does my legislation. and it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. that's what the president's executive order does and so does my legislation. the president said, "it is a review that will help bring order to regulations, and it becomes a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parts ants the influence of special interests in washington over

decades." and the president was right. my legislation would do this but would add some teeth to the commitment, sharp teeth. by cutting out the loopholes, the very loophole that i read -- i'm not going to read it again -- i defy anybody to tell me how -- what it means or how anybody could use that kind of language in determining the cost-benefit of any regulation. the president has made it his mission to root out regulations that conflict -- and i'm quoting here -- "that are not worth the cost or just plain dumb." that's pretty clear. the president says that these regulations are just plain dumb. i said "counterproduct tivment" that's a senate word. he said "dumb." that's a dodge city word. i think dodge city would agree. so my legislation should be something that i think the administration can support. while the president believe nays his executive order makes clear we are seeking more affordable,

less intrusive means to achieve the same ends, giving careful consideration to benefits and costs and that it means writing rules with more input from spermts, business, and ordinary citizens, there are a number of loopholes in the executive order that i'm happy to address with the administration in my legislation. and my bill would keep the president accountable for another promise to americans, and i urge my colleagues to support this legislation. the details of which i'm happy to share with my colleagues, and i hope that we get a great number of colleagues to help us codify the executive order, put some teeth in it, make it work and really get at regulatory reform as opposed to being disengine with us, and i think -- disingenuous and i think that's what's happened in regards to what turned out to be a very noble effort but in the

end turns out to have so many loopholes that it will be completely ineffective. i yield back any time that i may have. thank you, madam president. the presiding officer: thank you. morning business is closed. under the previous order, the senate will resume consideration of s. 223, which the clerk will report. the clerk: calendar number 5, s. 223, a bill to modernize the air traffic control system and so forth and for other purposes. mr. rockefeller: madam chairwoman? the presiding officer: the senator from west virginia. mr. rockefeller: i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. rockefeller: madam chairwoman? the presiding officer: the senator from west virginia. mr. rockefeller: i ask unanimous consent that the order for the quorum call be rescinded. the presiding officer: without objection. mr. rockefeller: i just wish to catch the membership on the floor and off the floor a little bit about where we are. we're at midweek, our third week of consideration of the f.a.a. reauthorization bill.

last night senator reid filed cloture on this bill. in a perfect world, we would have finished this bill already, without filing cloture, but we need to finish, and that's what cloture motions are for. i will support cloture, needless to say. senator hutchison also filed cloture on an amendment that will bring conclusion to a debate on slots at national airport. i will talk about that issue in more detail later, but i'm just saying right now, slots are very important, but they don't need to consume all of the arguments, all of the discussion on the floor about this bill. they're a very small part of the bill -- an important part of the bill, recognizing that the west has to be served much better than it is being -- but it is not the entire bill. it is a very small part of the bill. now, last night we disposed of two pending a.m.s by voice vote -- two pending eamghts by voice vote -- two pending amendments

by voice vote. votes will be required on several other amendments. i suspect we will have those votes today. senator hutchison and i are trying to clear a number of other filed amendments. there were at one point 1 radio of them. i hope that we can -- there were at one point 100 of them. i hope that we can accept many of them. i know senator hutchison is committed to supporting the bill. we need to resolve the issue of slots, and she has been working with -- working diligently on that matter. and we will do this with a vote, resolve that issue. after that vote, we will vote on cloture, which i believe will pass, and i am hopeful we can reach agreement to get this bill done this week. the farthest possible day and a most unhappy thought would be if we had to go through the recess

and do it on the day that we came back. i think it is far better that we get it done this week. there's no excuse for not doing it. i thank the presiding officer and i do not notice the absence of a quorum. mrs. hutchison: madam president? the presiding officer: the senator from texas. mrs. hutchison: madam president, i just wanted to say that we now have, i think, a glide path to passing this important legislation. we worked late into the night, senator rockefeller and i did, to try accommodate needs, concerns, amendments of members, and now we have the cloture motion in play and hope that we can come to a real agreement on the reagan airport perimeter issue so that we could even do it before cloture is invoked but hopefully, if we aren't able to

come to a complete agreement, we would at least be able to get cloture and move on. i hope our members know that we are going to continue to work to address everyone's concern. we have concerns of western snorks concerns of -- we have concerns of western senators, concerns of senators within the middle-income metropolitan area, we have small-community concerns, we have eastern seaboard concerns. we have been working for years actually, but then months and then weeks to address concerns. we are open to do that. but it is time to wind this bill up so that we can go to conference with the house with a strong senate position and do the big-picture policy issues that need to be addressed. we must have the next generation of air traffic control started. we must have a satellite-based system that is for the whole

world, for the people coming into our country and the people using our airspace. we need to have the safety and the consumer protections that are in this bill. and we need to have a responsible way for people from all over our country to come into reagan washington national airport while also protecting the people around the area from congestion. so we have a lot of concerns. i think this is a good bill, and it's getting better every day. and i do think we can come up with the right mix that will put our aviation system in the forefront of the world, because half of the air traffic of the world comes into and out of the united states. so we certainly need to be the best and that's what this bill will put us on the glide path to do. thank you, madam president. i yield the floor and suggest

the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. rockefeller: madam president? the presiding officer: the senator from west virginia. mr. rockefeller: i ask unanimous consent that the order for the quorum call be rescinded. the presiding officer: without objection. mr. rockefeller: madam president, i have 14 unanimous consent requests for the committees to meet during today's session of the senate. they have the approval of the majority and minority leaders. i ask unanimous consent that these requests be agreed to and these requests be printed in the record. the presiding officer: without objection. mr. rockefeller: madam president, i have a

colloquy between myself and senator inhofe which i would ask be made a part of the record. the presiding officer: without objection. mr. rockefeller: let me just catch up a bit on where we are. the senate's been working on this national slots issue for close to a year, or maybe ten years; i don't know. it's been an awfully long time. but we've been able to achieve a resolution so far on the matter, and that's a problem. when we began consideration on the f.a.a. reauthorization bill, senator hutchison and i decided that we should focus on helping consumers. everybody was talking about airliners. we were talking about people. airliners fly around. people have to be taoeubl do it -- have to be able to do it, so we decided to focus on them. we both believe the growth of western states must be

recognized. i come from an eastern state, sort of. you come from an eastern state totally. the presiding officer does. but the growth is in the west. they are underserved; that cannot be debated. it's embarrassing how few flights there are back and forth between national and them. the national capital is a fairly important place. people need to go there either for tourism or for business or whatever. and we need more access to the national capital to be provided to the citizens on a both-way basis. time is running short for the consideration of the f.a.a. package. this bill is too important to the country to let it languish over this issue. it's virtually all we have talked about, and i regret that because it does not reflect the nature and the priorities of the bill. unlike the national slot issue, the f.a.a. issue has direct

impact on the whole nation the whole time. it will help our economy now. it will help our economy in the future. with immediate job support and long-term impact on our role in the global marketplace. to move forward on our bill, senator hutchison offered a national slots amendment that i feel offers a fair and reasonable solution on this issue. over the past two and a half weeks, she and i worked closely with other members and their staffs in an effort to achieve a compromise on this issue. many of their needs and ideas have been incorporated into her amendment. it may still not be perfect but it represents an attempt to fairly balance the competing needs of members and their constituents inside and outside of the perimeter. it's fascinating. people, they have it in their minds that something has to hafplt they have to have -- something has to happen. they have to have so many

flights. flights have to go to this city or that city. then people represent airlines, i sort of thought we're here to represent the people of the states that we come from. but more importantly, in some senses, the entire country, particularly on an issue like this. her amendment will commit some additional beyond-perimeter flights shortly after enactment of the bill. and then this very interesting part about the department of tr-gs. we've inter-- the department of transportation. we've introduced that into the bill. the department of transportation which is neutral, which is professional, which is fully engaged in all of this is required to study the effects of those flights over the next year. some people will say that's kind of a dodge. it's not kind of a dodge. because slots are so controversial, it takes the department of transportation and their analysis to guide us about whether there is an overload at national, whether there is an

underload. my own view is there is an underload at national; lots of slots available. but that's not the prevailing view. on the part of some, they feel they can't have a single more flight. d.o.t. can study that. if they find there is no negative impact, a limited number can be added at the appropriate time. or not, depending on what we want to do. the amendment provides network cariers the opportunity to swap swissing flights and use them for flights to western states beyond the perimeter. seven roundtrip flights could be converted under this provision. under this construct, a carrier could use flights to large hub airports within the perimeter where significant service already is provided. this protects states and small communities within the perimeter and limits the number of new flights at the airport, as

requested by local firms. -- by local officials. it provides five exemptions that would permitted to limited incumbent carriers. these could be used for new flights within or beyond the perimeter. all of this is kind of opaque, like a puzzle, but it does have to work. we have approximately 100 amendments filed to the f.a.a. reauthorization bill, and much of the tawrks as i've casted, is focused on slots at the national airport. there are lots of airports, but national airport has gotten the bulk of these amendments. i don't resent that or regret that, i just wish that we could also get to the rest of the bill, which i think is probably going to be entirely acceptable to people because it's a very reasonable approach. only three other amendments have been filed directly -- that

directly address the issue of west coast access. -- west coast access to navment the ensign amendment would allow carriers to have unlimited conversions or swaps for flights beyond the perimeter. i felt this proposal goes too far and could have a significant negative impact locally and for small communities serviced within the perimeter. i do think senator ensign and kyl, whom i've worked with on this issue over the past year, can appreciate this position and will receive opportunities for their constituents through passage of our amendment. the merkley and wyden (cantwell and merkley and begich amendments) are the only two amendments filed with a focus on the issue of beyond-perimeter flights at national. they would both alou for new flight exemptions at the airport that would favor distribution to limited incumbents or new entrants. the merkley amendment would

provide eight new roundtrips for beyond-perimeter service. the wyden amendment would add 12 new roundtrips yoantdz the perimeter and four new roundtrips within the perimeter for a total of 16 new flights. while the hutchison amendment may not provide the same level of opportunity for services to their states that they desire, her amendment does provide ample room for their constituencies to obtain new service with five exemptions rather than 12 beyo beyond-perimeter. i feel we must strike a balance. we have no choice. we can't make everybody happy. senator hutchison's and my approach would sort of go down the middle. people who don't want anymore, people who want a lot more. kind of edge them together. that's all you can do in a bill of this sort, where meigss run i very, very high. i do kneel that we must strike an appropriate balance between

new service from incumbent carriers and limited service. consumers are really what this is about. airlines are obviously important. they are going to fly where the business is. that makes all of us very -- the presiding officer for part of her state which is not in the new york area -- very sensitive to rural situations. and west virginia is entirely rural, has no city larger than 50,000 -- slightly over 50,000 people, that being the state capital. flights in and out of that state are very important to me. most of them are done by propeller. most of them aren't particularly comfortable, but they don't get you -- but they do get to you where you want to go. now we've switched to dulles, so you can feed out from dulles to anywhere in the world. so taking care of rural areas is

incredibly important to us. but again the d.o.t. study included the amendment will also provide valuable insight into the impact of additional flights at national airport on this or any other aspect. under the amendment of d.o.t. -- if d.o.t. finds that more access is appropriate it can permit up to four additional flights at national. these would be provided to incumbent carriers to swap service from large hubs within the pe perimeter resulting in no new air traffic at the airport. i think senator hutchison and i would like to emphasize that word "no new flights." they have room for flights. a g.a.o. study showed that. really quite a lot of flights. but the prevailing wish is not to have noise, not have flights, not to have disruption. the fact of the matter is that planes are getting quieter. they'll get much more quieter as they're entered into all

markets. so, in total, as few as 12 or as many as 16 additional beyond-perimeter flights could result from the amendment over a two-year period. if the d.o.t. determines the initial 12 flights have a direct negative impact on the d.c. market -- i emphasize this, i mean, we're just putting the d.o.t. right on this case so they can watch it very closely; whatever people might think, they are neutral, they are professional, they do it for a living, and if they determine that it has a negative impact, then -- that it will limit the likelihood of adding future additional flights in the f.a.a. authorization. let them be the arbiter of that rather thans battling it out here. this type of review is long

overdue and will provide a far greater understanding of local needs by any carrier seeking access at national. if d.o.t. finds there is enough room for up to 16 flights, the amendment would seek to balance them among various stakeholders. 11 of these flights would be swaps or conversions of service to incumbent carriers who are already providing this resulting again in no new traffic at that particular airport. there are other airports in the country. irhave to keep telling myself that. but it is hard to recognize that in looking at the debate so famplefar.no new impact on the d minimizing the impacts of flights on a local basis generally. five of the flights will be dedicated to new intrantsz or limited incumbents to receive new exemptions. these can be used for service within or beyond the perimeter so all communities in the country would have of an opportunity to obtain a flight.

in closing, i recognize every amendment addressing slots at national will be considered flawed in some corners. that's in the nature of our world here. however, i do think it's important that we have votes on these amendments to determine a senate position on this issue. i believe the hutchison amendment is reasonable. it is a very reasonable offer and i hope it will obtain the support of a majority of the senate. mr. president, i yield the floor. and i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: