>> if approved the stimulus program is negative but just suggested. >> it suggests that. there's another aspect. this is a two legged stool. there is no question in my mind that at a minimum we have to pick the stimulus impact for part of the other aspects. one of the more greater concerns on my part is i think the growth estimate is faulty. we are going to move on and the structure in estimating the impact of the governing program when i went to through it. this is three hundred fourteen billion programs over a number of years. ..

>> which failed to forecast the recession in 2008. and fail to foreclose every recession. and the reason is the way we built those models. i don't want to get too technical, but you have the standard two-stage, a whole series of data. but technical estimates, the coefficients in the model tend to converge towards these data. if you put all into model, i

defy you without sort of overrunning the model to create any sort of recession. i think it's not an accident, that the best of these models, has not ever forecast a recession. it can't. the imf didn't. this is not a gross effect. are any more accurate than the model which have demonstrated. so i have one in which i'm sure of, it's got to be at least some

debit against any gross stimulus, which is basically crowding out issue. and i didn't go back and say, how do i even know a gross estimate is good? and i don't. so that leaves me in a position where data that i have directly only applied to the offset to the gross stimulus. i know the order of agnes -- the order of magnitude of that is. in and of itself it doesn't make the gross stimulus turn negative, but i have very serious concerns about what the actual impact multipliers are, especially in this, and i'm still struggling to find a mathematical means by which i can convert rhetoric the numbers. >> let me ask you about another aspect of this. in the paper you say that the one area, which government in

effect left alone, the equity market, has recovered strongly -- >> until today. >> and a 35 trillion or so of wealth that was lost, about three quarters of that has been recovered. >> global. 35 trillion. >> it's also a provocative, because it implies that the one part, the one engine that's really working, for example, in terms of the wealth effects and everything else is equity prices which was not the object of a government response. and so that struck me because again, the implication is by leaving it alone it's managed to recover quickly and have a quite powerful effect on, for example, household balance sheets and

propensity to spend and so forth. i thought you might comment on a little bit. >> let's go back to the 35 trillion. as you know, you bring down -- >> no, i don't, but go ahead. >> is that market value of equities in, let's say, financial institutions climbs very sharply, it means that that buffer or the liabilities of the institution has come down dramatically, and, therefore, the credit quality of the liabilities of necessity worsens. and that so if you get a significant collapse in financial equity, which equity

in financial institutions, the collateral decision process almost collapses. we would, very close. one of the reasons i supported t.a.r.p. was i thought what it did was it injected equity into the banking system just when it needed it. because collateral -- the value of collateral which is mainly debt in collateral, but that collateral is priced to a large extent on the extent to which the market value of equities in financial institutions are rising or falling. and you could see the financial collapse in terms of the decline in stock prices, even though it's the debt which created the problem. the quality of debt fell as the stock prices went down.

and when we finally hit bottom in march 2009, and what we have seen is a dramatic rise as you point out, not only in a very clearly impact on consumer expenditures, but just as importantly in the financial system. and what this has done is, frankly, it has enabled a good deal of t.a.r.p. to be paid off with capital gains. you can't actually stipulate a particular repayment as capital gain, but if you look at what equity is paying it off, is coming from, it's largely there. so what happens in this case is you get a dramatic rise in stock prices, which liquefies the whole system and increases the

value of collateral in the system and, therefore, longer-term lending which indeed took place quite significantly. and even though it was never enough to bring capital investments around, if there's no rate of return on capital investment because you don't see the future, i don't care what your financing capabilities are. you're just not going -- so what, turn this around is for other reasons, corporate profits dropped fairly sharply. it's a very large extent the result of a relatively short period of very significant amount of cost-saving capital investment. this is not structures. this is not building. it's software, equipment and the

like. basically to reduce the costs of energy, which it did for quite a while. materials and labor. so there's a very strong growth, not only labor productivity, but also the energy and materials productivity which has propelled profits of very materially, therefore it is associated with it. that i might add is beginning to flatten out. probably all of the proper rice was result of rising profit margins, very little to the early stages of recovery which came from sales increases. but what we are seeing now is the profit margins are flattening out. there's some evidence the sales

receipts are picking up. but it's that big surge in profitability which pressed against what economists call equity premiums, which is the rate of return that is required to invest in equity. and as j.p. morgan indicated about six or eight months ago -- >> very high. >> it's come back down. i would say in the last few days it's gone back up, but it's not, it's not -- the fear is still there, and it is reflected in the equity premium, but the surge of the earnings per share is such, that has propelled very substantial rise in stock

prices, and the wealth effect which is just across the board. and as i might add is a global phenomenon. it's not just in the united states. as you're quite correct in my view, i think that fortunately we love the stock market alone. we left it to function by itself. it turned around in an extraordinary rise up through a few weeks ago. >> let's open this up to questions. just one or two observations, please. wait for the microphone. please identify yourself. if you don't mind my saying so, please be sure you ask a question and not give a speech. yes, there. right in the middle right there. >> thank you. mr. chairman, how does this argument differ from herbert

hoover's argued in 1929? he got the microeconomics right. it seemed to miss the whole macro psychology of the economy that required government activism to restore. how can we say the stock market was left alone with these huge banks and huge auto companies were rescued in a way which gave investors confidence to stay or go back into the stock market? it was depend on this government activism. in the '30s it was the supreme court that put a brake on the degree of activism. and you could argue the content of the degree of activism. but wasn't that activism essential to maintain economy in a way that prevented something much worse? >> well, let me first say, as i indicated before i was in favor of government activism right after the crisis. indeed, i argued in an op-ed piece which was published at the brookings institution --

>> this small place somewhere around here. >> down the street. what i argued there is that basic surge that has occurred has been very largely localized to what i would argue was the largest financial crisis globally ever. i mean, i'm certain the depression of the '30s was an in economics much greater, but as far as we had, we have never seen a shutdown in short-term money markets of the type that we saw subsequent to the lehman bankruptcy. commercial paper market close

down. even the repo market was shaky, which is extraordinary. but the fed did not move in on the money market and the money funds that would've caused a consequence. so i'm arguing as i did in that piece that if you have got a type of structure in which the financial system tries to have capital adequate to meet every loan provision, loss provision, up to, say, .999 as far as probability is concerned. that theoretically, the trouble is the .999 still as it happens, .001.

and i think that what we have just been through, i called it hypothetically in his speech i made a long time ago, is that if you have a fractional reserve system and if you do not cover all of the possibilities and overcover them, you are always left with a possibility, what about that very small probability which becomes 100% when it happens? now, i can't prove that what we have just been through is a unique, almost a unique phenomenon. that's my presumption, and i grant you that a lot of things rest on a. i would say with respect to the activism of the '30s, remember that the initial activism was negative. the federal reserve was tightening up in the '20s, and

the whole thing came tumbling down. but then there was a huge amount of activism in the 1930s, which, of course, led to be an ira. but incidentally it did not alter the continued -- the supreme court ruled the nira unconstitutional in the 1935. but the evidence is that the cartelization was coming from that, continued on. and i tried to, there's several interesting papers on that issue which i cite in this particular paper. and it's a very debatable issue. people think that it's a given, much of what was done during the '30s was essential.

i think the evidence is unclear on that. >> let's have another question. >> university of maryland, and peterson institute. about two years ago i had a conversation with the now famous friend, carmen reinhart, and we were talking about whether the status would have a rapid effect as the administration hoped or whether it wouldn't. and she said don't worry, this recession is going to be with us for some time anyway. and as i understand, her reason for saying so was recovery from financial crisis, banking crisis, driven recessions is historically much slower than recovery from garden-variety, excess demand recessions. now, i'm not perhaps described in economics just right, but the

book essentially document very slow recoveries from financially driven recessions. and, therefore, that might be the proper imperative, not recovery from previous recessions that had less fundamental crises driving them. >> you are raising a question that is very difficult in economics as to what is causing, money and how it affects -- how it functions. issues are not necessarily exclusive explanations. first of all, if you can basically get the to, as i've tried to, the specific decision-making processes which is creating the problem, i submit that that is somewhat

superior to historic analogies. carmen reinhart has got great credentials. she is an employee of great testing. songsters are going to argue against her, especially since i see her on occasion with her husband. and they are both very good economists. the problem here is a problem of economics. what constitutes proof? now, by analogy it is not proof. most of the types of stuff that we do, i do come everyone else does and carmen does, is by analogy and historic analogy. i tried to get a step deeper. into looking at the actual decision-making process as it impacts through the distribution of probabilities and the rate of return on facilities. and i submit that that should be

a superior view of analysis of what's causing what. i'm not certain, but i will suspect in retrospect when rogoff and reinhardt puts their next edition out or something like that, they're going to find that this one is lacking. and i think that you have to ask the question, why is that? that break down in structure occurs in finance, i think is related to the collateral decision issue i was discussing before. it's a question of how deep and prolonged it continues. and all i can say is i think i've gone a step beyond trying to ask the question, what

specific decision-making process creates a sub normal rise in economic activity? why is the recovery been so tepid? now, you can draw analogies and say it's essentially because that would financial system runs into problems, it takes a longer time to pick up. i don't deny that. that is not necessarily contradicting what i'm saying. i'm just essentially saying that you need to get beneath the data by analogy in order to come up with a specific analysis. in other words, i demonstrate, for example, on the crowding out issue, not by analogy, i've got a body of data which is highly statistically significant, and not basically by analogies to

series of historical episodes, which in most instances are very valuable and probably essential for getting first judgments. i'm saying that i don't consider it to be enough because i don't know without knowing the individual reasons as to why individual financial crises lead to specific delays in economic really has to get down to why did the 1873 prices differ from, say, 1893? why did the 1893 last so long? this was way before government activism of the type we're talking about. i mean, these are questions i don't know the answer to come and i recognize that they are important to answer. and i don't know the answer, but i do know that a sufficient

condition to explain the existing state of affairs is captured by the statistics which analyzes what the choice of the capital appropriations committee is in business is with respect to what part of their liquid assets they are willing to convert into -- their liquid assets into a liquid, long-term investments. that is a very critical decision. because you are in pairing shareholders equity. and this incidentally is the reason why the equity to assets ratio in nonfinancial business, nonfinancial corporations, is close to 50%. where in finance, it's 10.

and the important issue that i raised in this paper is that illiquid assets are very different than liquid asset investments. because as i mentioned, the issue of the maturity, effective maturity of an investment depends on how long it takes you to get your money back. a 10 year bond for example, is going to be effective maturity in a market which is liquid of five minutes how long it takes you to sell it. what is interesting is that when you get crashes are the type we got in 2008, the liquid markets turn illiquid or partially so, and the convergence between the rate of return on illiquid fixed

long-term investments and these previously liquid baa liquid spreads against treasuries starts to converge. >> let's have another question. yes, sir. >> csis. mr. pearson recently described what we have been through since 2008, beginning with the predatory lending to mortgages. he says it is a reflection of carnivorous and animalistic capitalism. do you share that viewpoint? >> what kind of capitalism is that? i know -- heat is a very old friend of mine. i don't think he means it exactly the way the application of the word.

he is a very pro-capitalist. but there are aspects of human nature, which have those, you could characterize that way. i don't think it's economic structure that is the problem. i think it's human nature. and i would have never argued, for example, that if you take time to go back and look at fabian socialism. fabian socialism in its early stages look far more rational, too many people, then adam smith's monocle. and the reason the argument went was would you prefer investment distribution of your assets were for the people most module rather than individual market people and the like?

indeed, when the british essentially removed out of india, and post a form of fabian socialism on the grounds that it was the best way to organize a society. and he did, as far as i can judge, the most rational way i can imagine. it didn't work. it didn't work because human nature prevented it from happening. and so i would say that the problems that we find in capitalism and socialism and one of the reasons why marx was wrong was not that it was sort of a bug which was inconsistent. it's a very rationally instructive book which presupposes a human nature which doesn't exist. and i would submit that when we have the problems that we see in

marketplaces, whether it's greed or various other short-term aspects of the way markets tend to behave, i would say the route is not the structure. it's basically human nature. and i know of no way we can alter that. >> we're going to take one last question, a very brief question. >> mr. greenspan, i'm having a little trouble with your logic. i heard you say at the beginning that the capital expenditure ratios were the lowest level the cash flow since 1940. and then you talk about crowding out. when i hit the lowest level of expenditure, i hear the cup is at a amounts of money that they could spend on capital expenditures if they wanted to. so how are they crowded out? i don't understand that? the second problem i have, i would be interested to know -- >> can answer the first one first?

the crowding out issue here is such that you have this very large cash flow occurring. and the question is that they don't want to invest, and what do they do with that? it is liquid assets. there's a $500 billion increase in liquid asset holdings. they have all of that cash to spend if they felt they had a rate of return to do it. >> so how are they crowded out? i don't get it. how are they crowded out by the government? >> the savings that the federal government absorbs, which you start off with a proposition, let's assume that the current account balance is zero. which means that savings investment in the economy are equal. it necessarily means that the amount of investment which can take place must be equal. to the amount of savings.

now, but the data showed is that you see is that what happens when federal deficit rises which is negative savings is that it must be offset somewhere in the rest of the system. and what the data show, and this is basically an analysis of the flows of funds come is you see huge increase in the savings, and a huge decline in capital investment. those are the two major moving parts. >> excuse me, but we still have corporations sitting on $2 trillion of cash? if so, how are they crowded out? i hear your number and i hear your charts but it just doesn't correspond with what i'm seeing and hearing in the economy. >> the basic problem is that when the savings get -- first of all, there is a limited amount of savings in the society, and

the question is, who has most -- who is going to employ those savings in one form or another to invest? the u.s. treasury will pay whatever interest rate is required in order to basically achieve that part of the savings which are required to finance the deficit. now, what that means basically is that interest rates are moved up to a level in which you are certain people in the economy who would like to invest the can't afford the interest. >> interest rates are as low as they've been in decades. >> that is true only of aaa corporate, microsoft is not being crowded out. ibm is not being crowded out. the ones that are being crowded out are shown to be those which

are, sake be rated corporations. if you take a look at ccc yields, interest rates are very high. and if you look at what the shortfall and investment is, it is very largely in small business and even construction, particularly, but it is not the large corporations which are being crowded out. they would be crowded out if the deficit were twice the size it is. they do not crowd out at this level. so i would say to you, who is crowded out? well, i can't put the list of names down but i could probably go find it if necessary. it's those who find an eight or 9% interest rate which were were required of some junk bond issuers, or smaller businesses, as too high for them to get a

reasonable rate of return. so the crowding out exists, it's just not -- can't argue that because microsoft is not crowd out, that, therefore, nobody is crowded out. it's a question of the required balance between savings and investment. there's no alternative. >> on that note i do want to be reasonably faithful to our closing time. and i want to thank all of you for coming this morning. [applause] >> most particularly i want to thank alan. and i'd like to remind the members that the next meeting here on march 17 is with afl-cio president richard trumka. thanks for coming. have a good day. [inaudible conversations] [inaudible conversations]

>> [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] thanks for coming. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations]

>> as this discussion comes to close david petraeus's just getting underway on capitol hill.

>> in a 21st century it's not enough to leave no child left behind. we need to help every child get ahead. we need to get every child. >> president obama has called on congress to overhaul the no child left behind education law. in time for the new school year in september. fall the law from its start in the bush administration, and where it stands today.

online, the c-span video library. search, watch, clip and share. it's washington your way. >> from the nation's last world war i veteran is being honored today at arlington national cemetery. live pictures from the cemetery right now actually from the arlington national cemetery memorial amphitheater chapel. army corporal frank buckles died on february 27 at the age of 110. he lied about his age to enlist in the army in 1917. he is being buried this afternoon with full military honors at arlington national cemetery. he is flying in on her at the chapel. as i said, for the public to pay their respects and tilt 2 p.m. eastern today. the events of the day will be available all day for viewing on her website. c-span.org.

[silence] [silence] [silence] >> again, live pictures from a memorial amphitheater chapel at arlington national cemetery. army corporal frank buckles who passed away on february 27 at the age of 110. he is the nation's last world war i veteran and is being

honored today at arlington national cemetery. he will be buried this afternoon with full military honors at arlington at 4:30 p.m. eastern. all of this enviable life for you on our website at c-span.org. >> public has petitioned officials from across the country are meeting for an annual legislative conference. yesterday we heard from congressional lobbying activist stephanie vance. about how they lobby members of the house and senate. effectively to receive transportation funding for their transit system. >> we want to get the program started. if you could take your seats we

would like to get the program started. well, when we began the day together, i promised you good speakers and great information throughout the day. and i hope you will agree with me that that's exactly what we have provided. [applause] >> thank you. and i'll make you one more promise. that's about to continue, because we have a great lineup of speakers for this closing session, which would've entitled capitol hill, summit kickoff. this is a session where you've heard a lot of things from a lot of different people today, and we want to use this as a little bit of a synthesizing, figuring out how we go forward and take our message up on the hill. now, to do that we have two very

distinguished members of congress. you know, the kind of people who sit across the table from you, they've heard it all. so we are hoping they give us just a few hands and a few secrets as to how we could deliver our message in a way that it is helpful to them because they are both leaders who care deeply about infrastructure investment in our nation. and just hear from them a little bit about their thoughts on the issues of the day with transportation, and then how we might make our message a little more effective. after we've heard from our congressional guests, then our plan is to hear from gary thomas of alice start. gary will share some of his perspectives on his many years of working with congress. and, finally, we have the advocacy guru here. and i'll tell you more about her a little bit later. so, let's begin.

first it's my deep pleasure and honor to introduce to you congressman steve latourette. he represents the 14th, get all the teeth working here, 14th district of ohio, which is in northeast ohio. my sister, my two nephews, their families all live in his district. they are all voters like you want to put any pressure on them. by the 14th district is basically that northeast corner east of cleveland. and he's in his ninth term. he is a member of the house appropriations committee, and of particular importance to us, the transportation appropriations subcommittee. he's been a strong voice in congress for many years for the importance of infrastructure investment. and he has been with apta on numerous occasions. so please join me in welcoming back congressman steve latourette.

[applause] >> thank you very much. is a pleasure to be here, and i know i'm going to be followed by one of my great friends, earl blumenauer. and there's a lot of myths about washington. and one is we don't get alone. republicans don't like democrats. democrats don't like republicans. that's not true. and actually this town has a lot to do with relationships. earl and i have been lucky enough to work together for many, many years on a variety of issues including the issues that bring you here to washington today. i wish that i could stand before you and tell you that there is good news in what's about to occur relative to transportation funding. but that would be a big fat lie so i'm not going to tell you. i spent 14 years on the transportation committee, was there when but put together key 21 as the aftermath to ice t., the 1991 historic legislation.

and quite frankly t. 21 was a good piece of legislation. chairman shuster push the envelope. he admitted the house rules so that that drove the appropriate crazy. at the time it was really good. in that the outlays, the appropriators were always constrained to appropriate to the level and the authorization of the t-21 bill. and i continued through the next bill, safetea-lu. safetea-lu in my opinion was not a good piece of legislation. we delivered it two years late. and we got into a little dust up with president bush. is only and he indicated that because of the declining revenues in the trust fund that he started the bidding on the six-year bill at $256 billion which flew in the face of the d.o.t.'s estimates that we needed 400 some billion dollars to get the job done and have an effective highway program and

transportation program in the united states. after two years of ping pong it back and forth, we finally got up to about 300 billion, woefully inadequate for the times, two years late as i indicated. and sadly it became the poster child for what is wrong with washington, and it incorporated the now infamous bridge to nowhere. and so the bridge to nowhere started this forward cascade of earmarks are bad, transportation projects are bad, transportation funding is bad. and that brand sticks with us today. even though somebody, we had a motion to recommit on the floor a couple weeks ago, and somebody got up and said we're going to be found at the bridge to nowhere. if alaska wants to build a bridge to nowhere, let them use their own money and the fact of the matter is because it's below the line, it is up to them whether they want to construct

it or not. but we now find ourselves operating under a series of short-term extensions, short-term extensions are death knell to transportation. how can you blame for anything? you don't know what the money will be six months and a producer we don't know what is going to be six years from now. and so you can't contract with the engineer to draw the plans. you can't begin to higher the workforce to get things ready to go. you can't talk to the orange barrel people to make sure they are all squared away. and use early can't buy buses or retrofit existing fleets because you don't know where the revenue stream is. i would love to tell you that is going to be a six-year bill here but i don't know how. there's going to be a six-year bill. i have a great deal of affection for the current chair of the full committee, but on my side i sit on something known as the steering committee. so everybody comes in front of the steering committee when they want to be chairman of

something. they apply for the job. and i asked mr. mica as it how you going to come up with a six-year highway bill. because no one has figured out where the money is going to come from. and he said private partnerships, private public partnerships. and i said well, again, how are you going to come up with a six-year highway bill? and the fact of the matter is no one wants to address the funding shortfall in highway trust fund which was a great idea in 1956 with dwight eisenhower to building the interstate highway system. it's not doable today in 2011. and then on top of that, a little disappointed, i'm an equal opportunity bashers would be to president bush a bit and now i will talk about president obama and quite frankly secretary lahood who i know you hear from. were both elected in 1994, now he is a cabinet secretary, he has sort of speaking a different language than i used to. but he began our subcommittee

and said we're going to go on 18 months listening to her rather than coming up with a proposal for a six-year highway bill. i don't know what the hell they're listening to because we have known since safetea-lu that we needed to raise the gas tax. and if we had the courage of our convictions in 2005, and actually confronted president bush and said we have to get more money into the trust fund, we wouldn't be having this conversation today. but we didn't. and clearly now an 18 months listening to are traveling around the country listening to people say, i would doubt that your message has changed much. you need money. and you need money and you need money because it not on a bunch of systems but it creates jobs. all across the country. so at the end of the day, and less we raise the gas tax, unless we exercise some excise fee on barrels of oil, and less we take the pilot program that is now underway with vehicle travel, unless we take a position to hold more, it is

limping along, you multiply that by six, you don't even get to a $200 billion bill. so again everybody wants to go to heaven but nobody wants to die. and that's where we find ourselves with this particular set of discussions. so i know this is your kickoff as you are about to storm the hill. let me just say something. you need to get in peoples faces. don't come to my office but go to everybody else's office. go to anybody else's office and get interfaces because i know earl is having the same express because this is a tough time. we have a serious, serious deficit and debt problem that will have to come to terms with it. so all of the people i've seen the last month, all the different groups, as they come with sort of the ring in the hands and their hats in the hands and say we know this is tough. is a tough economic times a we're not going to ask for very much. you got to go in and ask for

something. you have to go in and asked because there's a difference between spending what we just take a bunch of your money and shut out the door and spend it, and investment. and we are taught early on, but shuster in 1995 said every billion dollars we spent at the federal level creates 47.5000 jobs. from the people to the construction and run the trains to the asphalt as, the concrete guys, and when he jobs. unemployed is the hub and around 9% in this country's we have to talk about being an investment. the second thing, there's no more fair way to find something than we funded transportation. it's a use of the. if you use it, you pay for. if you don't use it you don't pay for it. so even the knuckle crackers who have been elected in this last election that sort of wander in and say we hate taxes, we're not going to raise taxes, i do know how we're going to function as a government and less we spend something. but at the end of the day this is fair. and we are not asking, if you don't operate on the roads, you

don't pay for them. and the same with the transit and the same with everything else. you have to get in to these folks offices during your time here. and going to tell you right now that if you go in and say, we know times are tough and we're just sort of, if you could hold is at the safety levels we be really appreciative, that's nuts. you have to go in and say listen, this is an important thing. gas prices are expected at five bucks in this summer. how are we going to move people? how are we going to build america? how are going to put people back to work in less you a robust funding stream in the transportation sector. and if you don't do that -- [applause] >> and if you don't do that, you know, you're going to get what you get and you're going to limp along and you going to continue to see people being laid off from transit systems all across the country. you're going to continue to see rolling stock to carry.

you will continue to see things not in a state of good repair. you can change that during this visit on the hill. and people need to understand when you visit with them that this really matters. a lot of us, we talk of a 30,000-foot level, the deficit is a trillion and a half dollars. the debt is debt. let's talk about what affects everybody every day when we get up and we have to forget whether to go to work how they will get to work, or whether they will have a job, whether they will be up to feed and clothe their families. i think of a good message if you choose to exercise, if you sort of limp and and don't choose to do that this week, then shame on you. and shame on you when your systems deteriorate and you don't get what you think you should get to operate the systems. this is a big deal. this new bunch that was elected in my party are serious. and so serious that they changed the house rules at the beginning. with apta's help and a bunch of

folks who try to keep them from changing the rules but they were all back, no longer is the authorization coupled to the appropriations. they can set the expenditure for transportation under the authorization bill at any level they want to set it at. and it doesn't even have to be was coming into the trust fund. that paltry sum that is coming into the trust fund. this is a big fight, and if you don't treat it as a big fight, unfortunate things are going to happen. i'll close with this before we invite my good friend, girl, up to share his -- i hope you have a happier speech that i just gave. but we are happy. i'm from ohio as you know. we're celebrating this. this is the first year in ages that we haven't had an ohio member of congress as president. [laughter] >> we are very, very, very much happy about that. but i will close with a story

about why this sort of illustrates why this is important and why, what you did last time doesn't matter. this is a new battle and it was a story that was taught to me by one of those he was just recently released. a great thing about congress if he got out of prison and he ran for congress again because apparently being a felon doesn't exclude you. you can't hold office in the state of ohio but you can be a congressman or a senator. i don't know. he told the story always, he told the story always of these three televangelists his wife's out of town and driving a bus of some sort. all dispatch to heaven and st. peter is considering whether to let them in. the first one, smith said 40 years, taught the gospel and i certainly deserve to get in. and st. peter said smith, everybody knows you love money more than you did the lord and that's why your wife's name was penny. so you guys are not getting into heaven.

annex one jones, comes up, same thing. says every knows you love letter more than you do the lord that's what you're wife's name is ready. the circuit is watching this and he is preparing his speech, but he turned around and he has to do to his wife, he said fanny, i don't think we're getting in here. [laughter] >> so i thank you very much and we look forward to your questions. [applause] >> and that's what i'm proud to be from the midwest. commonsense. commonsense, and that's what we just heard. and if i can imagine what earl is about to tell is, we're going to hear more commonsense answer more truth telling. and that's where it's very clear to me that's what our message needs to be. congressman dash do what i try that again? congressman earl blumenauer, again, a longtime friend of

transit and supporter of transit and builder of transit in his home community of portland, oregon, has represented the third district of oregon for many, many years. is the founder of the revolution conference, and has been good enough to i think every year since he's been in congress, and address is here. please join me in welcoming to the podium, longtime friend, the honorable earl blumenauer. [applause] >> thank you, bill. thank you so much. i appreciate your partnership over the years, and it is a pleasure to be on the platform with a gentleman who is my friend, steve latourette. i think i agree with about 99% of what steve just said. he is straightforward, kind of hard to get an opinion from him sometimes. but i do appreciate his consistency. and we served for over 10 years

on the transportation and infrastructure committee. we watched what happened with mr. shuster, with mr. oberstar. it was a great training, a great to be a part of that. and i deeply appreciate see, even though he is transition to appropriations, keeps his interests in infrastructure, in rebuilding, and trying to keep things real on the house floor. i am pleased that he's going to partner with me to thinking some of these prayer meetings that some of your been a part of why we have brought together a wide range of constituents dealing with infrastructure, how we rebuild and renew the country, being able to strategize together. and it's never more important to do rather than this year. -- >> the u.s. senate is gathering

in short. they will start the day with the general speeches at 11 eastern. senators will turn to a bill to continue to programs help research companies. the measure will keep the programs going for another eight years with some changes. senators will recess at 12:30 p.m. for the weekly party lunch meeting. and return at 2:15 p.m. and continue with a small business bill. but first newly elected senator will give their first floor speeches since the election. and now live coverage of the u.s. senate here on c-span2. the presiding officer: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. eternal god, keep us always thankful for your mercy and grace. may we never take for granted

your generous gifts to us and begin and end each day with words of petition, intercession and thanksgiving. continue to bless our lawmakers. give them the wisdom to keep our nation on the shore foundation of your righteousness. may our senators be bastions of moral and spiritual power for the coming of your kingdom of justice and peace. lord, give them the higher vision to work with integrity and to be content with the judgment of history and the knowledge of your approval.

we pray in your holy 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., march 15, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable jeanne shaheen, a senator from the state of new hampshire, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. mr. reid: madam president? the presiding officer: the

majority leader. mr. reid: following any leader remarks, the senate will proceed to morning business until 11:00 a.m. today. senators will be permitted 0 speak for up to 10 minutes each during that time. the majority will control the first half and the republicans will control the final half. following morning business the senate will proceed to consideration of the reauthorization of the small business innovation act, s. 493. the senate will recess from 12:30 until 2:15 for the weekly caucus meetings. at 2:15 senator coats will be recognized to deliver his maiden speech. roll call votes in relation to the amendments for the small business jobs bill are possible during today's session. madam president, this bill is really another jobs bill and really a very important bill. i did an event -- a press event yesterday with the chairman of the committee, senator landrieu, and it was a good meeting. we talked about some of the things that have happened in our states regarding small business

under this program that was developed during president reagan's administration. it's a re -- some remarkably good things happened in every state. new hampshire, i don't know which ones happened there, but there's a -- a number of things in every state. in the state of nevada wonderful things have occurred there. one of the things, smart -- a smart man decided we shouldn't have those 9/11 type instances where people are trapped and can't get out of the high stories and he has an apparatus that goes up there and brings people up and down and it was for an initial grant of some $150,000 he was able to do that. we have another battery that's now being used by the military that was for $180,000, did all these great things putting batteries in vehicles. this didn't occur in nevada, but

one of the amazing things, this electric toothbrush came about as a result of one of these small grants. every state in america has benefited from these grants. the program has worked well for almost 30 years and year reauthorizing it and that's what we're doing so these programs can continue. we hope that people will offer amendments and approve this legislation, not detract from this legislation. we want -- we would really like to complete this legislation this week. we know we have the c.r. coming over here probably tonight sometime. we'll have to deal with that. the -- the next work period is going to be filled with a lot of things. we're going to soon have to go and do the repatriate act to reauthorize that. we have many things to do, madam president. but the things that we have done so far are job creating. not only the small business legislation i just talked about,

the patent bill, finished revision of that in some 60 years, that's 300,000 jobs. f.a.a. reauthorization, 280,000 jobs. i would hope that the house would complete these measures. we're waiting -- the president's waiting for these matters rather than doing the things that they're doing that are not job creating. there's a piece in "the washington post" today about how the republicans are being so shortsighted. for every dollar we spend with the i.r.s. going after people who cheat, we bring in more than $10 to the treasury. they're cutting the ability of the i.r.s. to go after people who cheat paying their taxes. that makes it more difficult for people who pay their taxes. so i would hope that they would get off the government bashing program they've been on and focus on job creation.

we all know that we need to reduce our debt. and we're engaged in that, but in a way that is smart, not twhai is -- not in a way that is indicated in that "washington post" article that is pennywise and pound foolish. would the chair now announce morning business. the presiding officer: under the previous order, the leadership time is reserved. under the previous order the senate will be in a period of morning business until 11:00 a.m. with senators permit to speak therein for up to 10 minutes each. with the time equally divided and controlled between the two leaders or their designees with the majority controlling the first half and the republicans control the final half. mr. reid: i would note the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call:

mr. durbin: madam president? the presiding officer: the senator from illinois. mr. durbin: i ask consent the quorum call be suspended. the presiding officer: without objection. mr. durbin: are we in morning business? the presiding officer: we are. mr. durbin: i ask unanimous consent to speak as if in

morning business. the presiding officer: without objection. mr. durbin: last week, the chairman of the senate appropriations committee, senator inouye of hawaii, proposed a bill to fund the government until the end of this fiscal year. it's hard to believe we're almost halfway through this year and still haven't resolved the basic issue of our budget. our failure to resolve it, lurching from two weeks to three weeks of funding may serve some political purpose. it doesn't serve the purpose of good government, because many people who have to make critical decisions which involve more than a momentary glimpse or glance at our fiscal situation are held back. i met a man last night whose business is to supply the united states of america with vaccine for anthrax, tuberculosis and similar things. we have an inadequate stockpile of vaccine. and the government has said to him we want you to produce more vaccine but we're only funded for two more weeks, and he said to me how can i as a businessman

make a commitment to produce vaccine with an uncertainty as to whether it will be paid for? that's a pretty reasonable question. and it reflects the fact that as we move from two weeks to three weeks of funding, postponements are made in decisions which have an impact on the future of our country. i'd like to address as well this morning something that goes beyond the obvious, stockpiling vaccine, and looks to some of the other aspects of the house republican budget bill and what it will mean to america if it's adopted. this is a bill which they proudly boast will cut cut $100 billion in spending, and most people across america sensitive to our deficit crisis say start by cutting spending. that's a reasonable request by voters in new hampshire and illinois, but there comes a moment when we have to use our best judgment about where cuts should be made and where cuts, when made, would cost us dearly for a long time to come.

senator inouye tried to balance in his bill $51 billion in cuts below the president's original budget request in a way that won't hurt our investment in america's future and economic growth. now, american innovation has always fueled economic sustainability and job creation. senator inouye's bill lays out a wise path toward providing more jobs and less debt, two things we desperately need to do. under his alternative spending bill, which i supported, the budget for the national institutes of health, which is the premier agency for medical research in america, is frozen at $31 billion, the same amount it received last year. this means the funds required to perform cutting edge breakthrough medical research and new clinical trials for much-needed cures and treatments will be available. it also means that nearly 12,000 jobs across the state of illinois in hospitals, universities and medical centers will continue to be supported

under the inouye budget. but under the house republican budget, the national institute of health is cut by by $1.6 billion. that is a cut that is severe by any measure. it would cause new construction projects to be halted when it comes to medical research laboratories and put 351,000 u.s. jobs in danger of being lost. we can't afford these shortsighted cuts when our nation is struggling but is determined that we will come out of this stronger than we went in. that said, we know that freezing budgets is not going to be enough. thoughtful and difficult cuts will have to be made. the senate appropriation bills provide $6.8 billion for the national science foundation. this is a cut of $573 million from the president's budget, but it's still $284 million more than was provided in the bill passed by the house. under the democratic senate alternative, we can continue to

fund basic research, create jobs and programs that educate the next generation of scientists in america. that is not possible under the house bill. as i travel to research laboratories in my state, oregon national research laboratory, the northwestern university medical care center, i meet some of the best and brightest young people i've ever seen in my life. they are from all over the world, and they come here because this is the place to do your research and to make the breakthrough findings that will change america and change the world. thank god for their intelligence and their idealism. and they look at me and say senator, am i going to have a job six weeks from now? and if i'm not, tell me now. i have to make a plan with my life. maybe i'm going to leave research and go into work for a private company and make some more money. maybe i'm going back home to another country where they will welcome me and my research -- in my research capacity. so the generation of scientists who are affected by this decision are as important as the

breakthroughs that might be found in the research itself. the national science foundation will continue to provide $8 million of innovation research to illinois' small businesses under the inouye bill, but the funding level difference between the house and the senate and what they want to cut and what we want to cut is dramatic. let me give you an example. we are working on a new super computer at the university of illinois-urbana-champaign. it's called blue waters. when completed, it will be the fastest computer in the world. most people if asked would say where is the fastest computer in the world today? they would say america, we're the leaders. no, it's in china. we're trying to device and invent the next computer. what difference does it make? because we know that fast computers make quick decisions and help us to find ways to solve problems we never even imagined before.

we're about to sacrifice many of the economic gains that we can realize if we go through with the house republican budget. the budget for the department of energy's office of science was also examined and cut by by $388 million to $4.7 billion for the year. now, that's a $200 million cut. it's difficult because the office of science supports seven of our national laboratories. university research centers and private companies use their facilities to create new drugs, biofuels and solutions to our country's toughest problems. research done by abbott laboratories at the advance photon source at the argon national laboratory were crucial to the development of an aids drug which is now the world's most prescribed drug for fighting aids and h.i.v. virus. cutting back on the funds for argon national laboratory, dismissing one-third of their scientists and engineers as the

house republican budget calls for, cutting back their research by 40% to 50% for the remainder of the year slows down the use of the advance photon source which is utilized by virtually every major pharmaceutical company. and does it work? here's living proof. coletra, the most widely prescribed drug for fighting aids developed at the argon national laboratory. the house republicans say slow down, stop, we'll get back to you later. can we really say that in world that demands innovation and research, that is looking for solutions to problems? if we cut $1.1 billion from this account as the house republican budget suggests, facilities at the national laboratories in my state and across the country will shut down and workers will be laid off. that is a simple reality. i am not coming to the floor and engaging in scare tactics. this is what the directors of the laboratories have told me.

if these centers and labs are closed, private companies, eli lilly, texas instruments, g.e. research and 3m, have a choice. if our labs are closed, they'll find labs, overseas, outside the united states. does that help our economy? does that create jobs in america? to cut research? the house republican budget cuts this research in innovation and welcomes these companies to leave and go overseas to create jobs. would we -- could we possibly be envisioning that at a moment when we have so much unemployment and we're facing a recession in this country? now, japan, china and europe are ready to receive these research projects. they are building facilities in the hopes that these companies will decide that they are more reliable than the united states of america. that's what the house republican budget threatens. whether it's in medical research, energy research, finding new drugs, unless we

make a commitment that people can count on, that research is going overseas and jobs will flow with that research to other countries and not to make. we need to cut the budget and reduce our deficit. no doubt about it. let's not do so in a way that costs america jobs and cuts american innovation off at the knees. the spending bill before the house of representatives is going to cripple our economy at a time when it's just starting to recover. economists tell us the house republican budget will cost us more than 700,000 jobs. that's not the way to move america forward. we can find a way to eliminate tax loopholes and benefits, improve the way we spend money and thoughtfully, thoughtfully decrease our spending. these are elements of a sustainable plan for reaching the budget balance we're seeking and equally important the economic growth we need. you cannot balance the budget of america with 15 million people

out of work. you have to build an economy that creates good-paying jobs and people drawing paychecks that pay their taxes that sustain government growth as well as economic growth. i'm going to be working with my colleagues in the senate to come up with a better approach than the house republican budget, and i certainly believe we can and should. madam president, i now would like to make a statement and ask that it be put in a separate place in the record. the presiding officer: without objection. mr. durbin: madam president, i have come to the senate floor a number of times over the past year to speak of my concerns about the rapid growth of for-profit colleges. i believe that some for-profit colleges are quality institutions, but i also believe that many are taking advantage of federal taxpayers' dollars and doing more harm than good for unsuspecting students. in no area is this issue more important than when it comes to our veterans. a few years ago, i proudly joined senator james webb of virginia, who when he came to the united states senate five years ago said to me i want to pass a new g.i. bill.

it's my number one priority, and he did it. thank goodness he did. this man, a veteran of the vietnam conflict who served in the u.s. marine corps, was later secretary of the navy, knows what he's talking about when it comes to veterans. he helped to put together the modern g.i. bill, and i'm proud to have voted for it, as many of us did. when we passed that bill, we provided veterans with improved benefits to go to college. veterans can receive up to to $17,000 a year to cover the cost of tuition, fees, housing and supplies at the college of their choice. veterans can also access private schools through the yellow ribbon program which allows the v.a. to pay a portion of private school tuition under agreements with these schools. now, a lot of students are using the g.i. bill to attend for-profit colleges which are far more expensive than their public counterparts and even more expensive than many private not-for-profit universities. there is a rapid growth in veteran enrollment in these

for-profit schools. for-profit schools, according to g.a.o. review, costs an average of $14,000 a year, compared to to $2,500 a year at public two-year colleges and $7,000 at public four-year universities. in the first year of the post-9/11 g.i. bill implementation, the veterans administration spent spent $697 million on students attending public schools and and $640 million on students attending for-profit schools, almost the same. but we educated far more students for our money in public schools. 203,000 veterans at public schools compared to 76,000 at for-profit schools, which charge two or three times as much for tuition and obviously educate one half to one-third of what the public schools educate. the top five for-profit

recipients of post-9/11 g.i. bill dollars received over over $320 million from the department of veteran affairs last year. i.t.t. received $79 million. apollo, which is the university of phoenix, $76.9 million. education management corporation, $60.5 million. career education corporation, corporation, $58.2 million. and devry, $47.9 million. there are reports of for-profit colleges aggressively targeting military service members and veterans with expensive ad campaigns and hundreds of recruiters. one prominent for-profit college has 452 recruiters focusing on recruiting veterans out of the military. another employs 300. why do they want these students in because when they bring the students in under the g.i. bill, they get compensated at higher levels by the federal government. we have a limit that says nonfor

these for-profit schools can take more than 90% of their revenue out of the federal treasury. that's money that comes in through pell grants and federal college loans and when it comes to the g.i. bill we raise the 90%. so these schools, which argue, we're just flieft sector, we're -- just in the private sector, get 90% of their revenue from the federal government. they're the most heavily subsidized private businesses in america. and it's time for us to ask, are the taxpayers getting their money's worth? are the veterans getting their money's worth? it's troublesome when these schools spend so much money on recruiting these students instead of educating them. the current system allows for profit colleges to earn millions of dollars from taxpayer-funded programs while providing a low-quality education to students. we need to put the breaks on for-profit colleges that are targeting veterans to reap

profits from taxpayer's dollars. the department of veterans' affairs announced that it had disqualified three texas campuses of the so-called westwood college. they can no longer receive gimplet bill benefit -- g.i. bill benefits. westwood is a for-profit college based out of colorado with 17 locations in six states. several in illinois. when i drive to o'hare, i'm on the kennedy expressway and i look up and there is this office building in a big -- and a big huge sign, westwood college. wow, the campus of westwood college. i know one of the students who went to westwood college. this is a young lady who decided to improve her life after high school and wanted to get into law enforcement. she enrolled in westwood college to get a bachelor's degree in law enforcement. five years later they handed her a deploama at west -- diploma at

westwood and she went to the police department and they said, we don't recognize that college. she went to the cook county sheriff's department, same response. they said this isn't a real college. this isn't a diploma. she learned that to her disappointment and she learned to her disappointment she had encan youd $9 -- incurre incurred $90,000 in college student loans. now the veterans administration has closed down three westwood college campuses in texas for their recruiting tactics when it comes to our veterans. a lesson learned and a word of warning. this action against westwood was in response of findings of misleading advertising in enrollment practices at houston, dallas and fort worth campuses.

a g.a.o. report, which senator tom hark reigned i requested -- harkin requested. they sent applications to 15 of these for-profit colleges. they found that they made questionable statements to potential applicants including westwood. investigators found admission representatives at westwood misstating the cost of programs, failing to disclose graduation rates and even -- even suggesting that applicants falsify federal financial aid forms. the presiding officer: the -- the majority has expired. mr. durbin: i ask that the remainder of my statement be entered into the record and i yield the floor. mr. blunt: madam president? the presiding officer: the senator from missouri. mr. blunt: madam president, next wednesday marks the first anniversary of the day that

president obama signed the law into -- into -- signed the bill into law that really, in my opinion, and in the opinion of most americans, is the greatest involvement in our nation's health care system in history. what we see, that's law is discussed, as it's challenged in court, is a bill that was signed into law that was full of problems when it was signed into law. it was a bill full of constitutional questions and, in fact, while some courts have said it may be constitutional, others have said it's not. it was a bill where when the courts say, well, the federal government can't make you buy a -- a commercially available product, then the same people were saying a year ago that this requirement is not a tax, they're saying, well, maybe it's a tax. maybe the constitution allows us to define that particular purpose as a tax on the american

people. but, madam president, a year ago they were saying this is not a tax at all. this is definitely not a tax. there's no -- no way this could ever be interpreted as a tax. but when courts say you can't do this the way this bill did it, then suddenly they try to reinvent what the law was designed to do. one of the reasons this bill has so many of these kiedz of problems is that -- kinds of problems is that it was a rush to get a bill into law, more government control of health care into law that couldn't have passed the senate the day the president signed it into law. and so a bill that was full of concerns, a bill that the senate voted on never believing that it would be -- actually become law, but would create a vehicle to become law, was what was thought to be the only thing available

to them and they passed it and they passed it without the kind of process that would have produced the law that would have stand to a constitutional challenge, produced a law that americans would be more responsive to. and while the law was misguided, i believe, in its concept, more importantly, it was put together in what i believe -- i think will be seen as the worst possible way. a rush to judgment to get a law in the books. and now the people who voted for the law are saying things like, well, i -- there may be a better way than an individual requirement that everybody buy a specified, defined insurance policy. not all the people are saying that madam president, but some are. they're saying maybe we ought to look for that better way. the time to look for that better way was before the law was signed -- the bill was signed into law, not after it was signed into law. even the white house is saying

this -- let's work together to change this. this is headed fundamentally so much in the wrong direction, changing it would not be the best option. now, already in the senate we've voted not to vote on a repeal of this law that 0 would allow -- that would allow us to replace it with better things. and unless those votes change, i guess that won't happen this year. but the view that americans have of this law is not likely to change either. i certainly don't believe the government has the authority in the constitution the people for not buying a commercially available product. some say that the states have that to buy you ao insurance when you buy a car. one, that's a state decision and, two they don't require you to drive a car. you don't have to have that particular product if you don't make that decision. this gives you no options, but

to pay a penalty or to do what the government says you have to do. during the debate surrounding this bill, and immediately following the enactment of the bill, the american people begin to tell us that there was -- this was not the approach they wanted. and in missouri, where i'm from, the first place that had an issue on the ballot where voters could speak about whether they wanted to be part of this new concept of more government control of health care or not, 71% of them said they didn't want to be part of it. that was in a primary election. hundreds of thousands of people voted and 71% of them said, we don't want to go in this direction. missouri's a state that's generally pretty reflective of the country in our elections, in our economy, in -- in how our population comes together. and 71% of them said, let's not do this.

let's do something besides this. they had a sense that this was a misguided plan that put government between them and their doctors, that had as one of its major tenets that the government would describe certain regiments of care that would have to be followed for doctors and hospitals to be reimbursed. missourians, by and large, believe that this significantly changes. some would say implodes our current health care system and, to make it worse, we cut this bill -- this law cuts medicare by $500 billion not to save medicare or improve medicare, but it cuts medicare b by $500 billion so we can start another health care program. this makes so little sense as we look at medicare, one of our

major challenges as the demographics of the population change. medicare, one of the areas where we know that in -- in a handful of years medicare faces -- begins -- faces a generation of its greatest challenge and we look for savings in medicare not to save medicare, but to start a new program. that -- that would be totally unacceptable anywhere except washington, d.c. it's as -- makes as little sense to people as the idea that we could come up with a new trillion dollar program over a handful of years and say that that that's going to save money. nobody believes that. nobody believes that. and when you look at greater concept of what this law will do if it's ever implemented to change the relationship of people and their government, i can't think of anything besides

the government taking over the economy that actually has greater potential to change that relationship than the government having more control of your health care. what more controlling element could the government look to than your health care and your family's health care to make you sure that you never got on the wrong side of that government? it does change that relationship. it also creates real uncertainty in what should be the number one goal in america today, private-sector job creation. if a year ago the president would have signed bills into law that encouraged private-sector job creation or created more certainty about our health care costs, about our utility bills, about our taxes, about regulation rather than signing this bill into law, i believe we'd be much further down the road toward seeing private

sector jobs, jobs that create taxpayers that help government provide the services that only government can provide, we'd be much further down that road. the -- the very clear message that i heard and others heard all over the country in the last year was we don't want to create these jobs with all of these issues out there not yet really decided and if they are decided likely to be decided in a way that makes that job decision -- job-creating decision less of a good decision than it would have been otherwise. no cap-and-trade in the middle of the country, in missouri, the sixth most dependent state on coal for utilities. the estimate was would double the utility bill in a dozen years. what's the job creation message there? we're exactly where we were two

years ago on the tax question because just a few months ago the president signed a bill that extended current tax policies, but only for two years, so we're no further down the road on that question than we were two years ago today. the president calls for regulation that -- regulation that's make sense, and i join him in that, but we see none of that coming from the regulating authorities right now. the clear message that people had was that they'd like the government to make -- create more certainty in the areas the government controls so that they can decide whether they want to take the certain risk that you'll always have when you create a job. i was in northwest missouri not too long after this bill was signed into law a year ago. and very well remember a conversation i had with someone whose business was -- was going well. in fact, he said, i've got 47

employees. and you'll remember that the bill creates a threshold of 50 that you have different kinds of obligation and regulation once you get to 50, over 50 employees, than you have before that. he said, i've got 47 employees, i need to hire six to seven more people. i have looked at this health care law, my accountants have looked at this health care law, we're not going to get one inch closer, one employee closer to 50 than we are right now. so there are six jobs that didn't get created. his view of what to do about his current situation was i am going to pay overtime, he said, until i can figure out what i'm doing that's not making much money or in fact losing a little money and i'm going to quit doing that. i'm going to be sure we get back to where we are truly a 47-employee business again instead of what should be a

53-employee business, or the many employers i talked to said we're just not going to hire full-time employees. we think we can get our job done with more part-time employees who don't force us into the environment under this law where the government comes in and says you have to pay a penalty or you have to offer an unknown insurance policy that will be created by some group created by the congress that says what everybody's insurance policy has to look like. you know, one-size-fits-all almost never fits anybody, and it won't fit anybody in this insurance plan that this bill anticipates and mandates. what you need is more competition, more choice, real sustainable understanding that the marketplace works, and on the job creation front, private sector job creation will not

occur until we do the things we need to do that create more certainty in the job-creating marketplace. letting families keep more of what they earn, economic incentives for small business, government that doesn't constantly talk about how it can half all the costs that you have as the underlying cost of the business you create. and while i would be voting if we would have to chance to repeal this bill, i would also be working hard to replace it with better solutions. maybe the only good thing about this health care bill is it requires us to either go down a road that most americans now think is the wrong direction or to really tackle these big questions involving health care. things like small business health care plans. at one time, they were called association health care plans where you could find some bigger

group to affiliate with if you were an individual or a business and get your insurance that way rather than trying to get it as an individual. medical liability reform. a bill, a concept that i have sponsored legislation on and others have over and over again to see it pass the house of representatives and not get voted on seven times in the united states senate. the one medical liability bill last year, the estimate was it would save $56 billion for health care under current government programs, and at least that much more in health care costs for americans who pay for their own health care or have their own private insurance. that's over $100 billion in savings at a time when we need to be looking for every every $100 billion of savings we could have, and unfortunately in our current situation, it takes

several of those hundred billion dollars, 16 of them, in fact, to just get the balance back, the budget back in balance. we can't afford not to do things that would save $100 billion. risk pools, nobody wants people not to be able to get insurance because of pre-existing conditions, but they're not moving in the direction this bill would allow them to move. in fact, the people that have signed up for the concept that the bill put out there of how to -- how to open risk pools i think is about 6% of the anticipated number. when you're -- when you're -- when you're meeting the target is 6% of what you thought the law would encourage people to do, obviously there is something wrong with the way that's put together. it's only 94% short of the estimate of people that would rally to risk pools that allowed for access if you have a

pre-existing condition. there are better ways to expand these risk pools that are better than telling people no, you will just get insurance the same way everybody else gets it for the same thing they pay for it any time you need it, which is what the bill says. you will just have to pay a penalty in the interim that's much less than it would have cost you to have insurance. people will figure that out and they will figure that out pretty quickly on what may have been that same visit with the employer at rockport, missouri, i was talking to a hospital in that area right after this bill passed. they said i guess if this bill goes into law, we'll just put the insurance application forms in the ambulance. that way you can get your insurance on the way to the hospital, because, after all, under the bill, you would pay 100% of what everybody else was paying, so why would you want to pay 100% until the day you knew you needed it? this is a badly thought out

concept, expanding risk pools in other ways and helping fund and encourage those risk pools would have been -- would have been the better way to do that. being sure that families still make family decisions about health care instead of being told, no, there is only one option that your -- to your -- that your health care plan that is defined by the government will pay for. encouraging coverage available in other states. buying this product across state lines. there is no reason not to have a health care marketplace. and it doesn't just have to be buying the product in the half dozen states that touch missouri, the six or seven states that touch missouri. it has to be buying in a marketplace. there is no reason it can't be buying in a marketplace that's the national marketplace. competition produces better choices, and it also produces more choices, and more choices so that you can look at the

health care plan that's right for your family or you as an individual rather than the health care plan that some newly created board and agency said had to be the health care plan for everyone to meet the new federal government standards. tax equity, if you buy the health care on your own, you should do that with pretax dollars, just like the biggest corporation in america buys health care for their employees with pretax dollars. more transparency of how health care works. i'd like to know if i'm on the way to get a health care procedure. i'd like to know before i left to do that, what do people charge and what are their results? most trips to the -- for health care are not to the emergency room. they are planned trips to health care.

once you're in the car, if it means driving another 20 minutes or an hour and 20 minutes to get to the place that does a better job for less money, i think most americans would do this. we know this, madam president. these factors are generally known. i remember a study just a year or so ago that was checking to see the survival rates for in-hospital heart attacks based on the response time. and that information is all available. at this point, it's available unanimously, but if it's -- available anonymously, but if it's available anonymously, it would also be available specifically. and more transparency in the system. how do you do to the place that has the best results, or if the results are the same, how do you go to the place that gets the best results for the better cost? when employers are telling us they're not hiring because of the uncertainty created by this law, when courts are ruling the law is unconstitutional -- or

even when courts agree on -- disagree on this topic, when some courts think it's unconstitutional and some think it is, when voters are overwhelmingly rejecting it every opportunity they have had at the polling place to vote on it, something is wrong with the direction we're headed. americans deserves a country where the people are still in the driver's seat, where the people are bigger than the government, where the people are making decisions for themselves and their family about lots of things but particularly about health care. i'm working and will keep working to repeal this bill and replace it with things that make more sense, things that move us toward more competition, more transparency and better health care. the anniversary of this signing next week would be better spent if we were all here next week

trying to come up with things that make health care sense, that make economic sense, that meet the constitutional standard and still keep people in charge of these important life-sustaining, health-sustaining decisions. madam president, i would yield back. and question a quorum. the presiding officer: the clerk will call the roll. quorum call:

a senator: madam president? the presiding officer: the senator from north dakota. mr. hoeven: i ask that the quorum call be suspended. the presiding officer: without objection. mr. hoeven: i also ask unanimous consent to speak in morning business for ten minutes. the presiding officer: without objection. mr. hoeven: thank you. mr. president -- madam president, i would like to speak

this morning on an issue that i believe is of great importance to our economy and to our national security. in recent weeks, we have seen political turmoil in libya and egypt, in tunisia and throughout the middle east and other north african nations. only time will tell what the outcome of these historic events will be. what is clear, however, is that there is once again disruption in the world's petroleum supplies as a result of the turmoil in this region of the world, and american consumers and businesses are feeling the brunt of it. in the united states, we have seen the price of gasoline and other petroleum products increase dramatically. the pain is particularly sharp at the pump. over the last few weeks, retail gasoline prices have risen to more than $3.50 a gallon. they are expected to rise to more than $3.70 a gallon during

the peak summer driving season, and of course they could go substantially higher. this is a reflection of what's happening in the crude oil commodity markets around the world. in fact, the energy information administration's latest forecast of the average west texas spot price for the remainder of this year increased from $93 a barrel to more than $100 a barrel, and the eia expects continued tightening of the oil markets in the next two years. for example, in libya, it's widely reported that much of the country's 1.6 million barrels a day of total production in 2010 has been largely shut down. and it's unclear how long this will last. however, the reality is that the problem is not a matter of current supply. prices are going up not because of lack of supply, but because

of concerns in the market about future supplies. therefore, to address this problem, we must increase domestic production. we must produce more american energy, and we can do it. furthermore, taking steps now to create a legal tax and regulatory environment that will stimulate more domestic production, will help take pressure off prices even before that supply comes online as markets anticipate more production. of course the opposite scenario exists today as markets anticipate less supply from the middle east and they do not see the commitment domestically here in america to offset that reduction in supply. we must change that perception by taking real action to encourage pro dukes here at home. -- production here at home. stalled energy projects are impredments to oil production in our own country are costing our nation's economy billions of dollars and millions of jobs.

a study released just last week by the united states chamber of commerce says 351 energy projects, both renewable and traditional are stalled at a cost of $1.1 trillion to the american economy. and nearly two million jobs for the american people. when you combine disruptions in foreign sources of production and a domestic market hobbled by delays, the result is higher energy prices, a sluggish economy and fewer jobs. and that's exactly what we see happening. that should be a cause of huge concern -- of huge concern, but it should also be a huge call to action. there's a path out of this for america, a math we in my home state -- a path that we in my home state have started a decade ago by building a comprehensive energy plan called empower north

dakota. through empower north dakota we worked to create a business climate that incentivized energy companies across all industry sectors including the oil industry to invest in our state. we created the kind of legal tax and regulatory certainty that attracted capital, expertise, and jobs to north dakota. in fact, when we started 10 years ago, oil companies had either left or they were leaving the oil producing region in our state, the wilston basin. why was that? well, first, they were getting better returns elsewhere. technology was lacking to produce oil economically from new formations. companies were going to other places in the world where they could extract oil less expensively. second, the data on confirmed reserves was lacking and the technology to -- to produce oil from shale really wasn't sufficiently developed. third, the workforce was aging

and we lacked the training and education for new workers. and, fourth, transports constraints limited production. in other words, there were better places for the industry to invest shareholder dollars and earn a return. to turn that around, we built a climate for investment. we established an oil and gas research fund paid for by the industry. we put tax incentives in place. we initiated studies of the balkan formation. that was followed up by a united states geological survey study and i requested another usgs study which i think will demonstrate that we have billions more of -- we created a pipeline authority to expand transportation capacity and we established a center of

excellence for petroleum safety and technology at wilston state college much before that we had to send workers to wyoming or to oklahoma and other places for training and education. now we do it in our state. in response our enhanced business environment drew investment capital, technology, and ingenuity to the wilston basin, which unlocked the tensional of the oil patch. we took advantage of the bal ban which has billions of barrels of oil locked away. by using unconventional technologies and with good environmental stewardship. to release the oil companies in north dakota used hydraulic fracturing which involving pumping water under pressure to crack the shale and release the crude oil. the water's then recycled or deposited safely back into the

ground two miles down, well below -- far below the water table. companies also use directional drilling which enables drilling rigs to drill one vertical boor and horizontal boors deep into the ground producing a smaller footprint and better environmental stewardship. as a result north dakota will produce more than 120 million barrels of oil and that number is growing dramatically. and this is sweet, crude oil. since 2006 we've grown to become the fourth largest oil producing state among all 50 states in the union passing up states like oklahoma and most recently louisiana. bear in mind north dakota it was not about government spending. it was about creating an environment for private investment that brought revenues for the state and actually enabled us to reduce taxes.

now, this isn't a republican or democrat issue, it's an american issue and it will take both parties to fix it. and that's why i'm cosponsoring a bill with senator pat roberts that actually works with a directive from president obama. the regulatory responsibility for row economy act will give -- for our economy act will give an order for an executive order, it may be for those that are excessive and modify or streamline or appeal them. now we're all committed to good environmental stewardship and effective consumer protections, but the president's order acknowledges that federal regulations are hindering the nation's economic growth and our ability to create jobs. the law we are proposing, if passed, will make sure that we take a clear-eyed look at our rules and help to bring regulatory and legal certainty to the markets.

and while we're working to produce more oil in america, i'd add that with the right approach, with the approach that i'm describing, we could also enlist the help of our friend and close ally to the north, canada. to do that, for example, we need to complete some very ambitious projects that need permitting and approval. one example, the keystone exel pipeline. this high-tech petroleum pipeline is designed to carry crude from alberta, canada, to the gulf of mexico. as it passes through the midwest an on-ramp will receive midwestern sweet crude from states like north dakota and montana to mix with the heavier canadian crude and send it to the refiners to produce diesel fuel here in america. with no overseas involvement, this one project, could help

double current flows of oil from canada, which is already our number one trading partner. one estimate projects -- and these are number that's the companies put forward in -- numbers that the companies put forward in advancing this project, but their numbers project that this project will create 20,000 high-paying jobs during the construction phase, more than 250,000 permanent jobs. it will spur more tha than $100 billion in expenditures in the economy, it will produce .5 million for - for -- $6.5 million for workers and their families and $600 million in revenue for state and local governments along its route. federal approval is something that will cost our nation not one penny. what it will do, however, is create assurances in markets that the energy we need to power our nation will be there in the future and that we'll -- it will be there when we need it.

that, in turn, will help to reduce our dependence on unstable, overseas regimes, hold down the cost of gasoline at the pump and create thousands of good american jobs at a -- at a time when unemployment is still hovering at about 9% in this country. and keystone excel is one example. across america there are hundreds of projects like it that could be advanced with good stewardship and responsible oversight if we resolve to do it and we create the climate to do it. today the united states, canada, and mexico combined produce 75% of the total oil that we need and we can do much more. our nation needs to send a signal to the energy markets that the united states is committed to a policy of aggressive domestic energy development by creating a strong business environment and a

pro-energy agenda. including the legal tax and regulatory certainty that companies need in order to make the kinds of investments that will truly lessen our dependence on foreign oil. madam president, we are at a moment in our history when we can truly turn adversity into opportunity, potential into rea lorealot equipment i urge our ms to seize this opportunity to make america stronger, safer and financially secure with a comprehensive approach to truly develop american energy here at home to meet our needs both now and for future generations. we can do it. we must do it for the well-being of our country today and for those future generations. madam president, i thank you for this opportunity, and i suggest the absence of a quorum call. the presiding officer: the clerk will call the roll.

quorum call:

quorum call:

the presiding officer: the gentlewoman from louisiana. ms. landrieu: thank you, madam president. i ask unanimous consent that we now proceed to -- i'm sorry. that we dispense with reading of the rule. the presiding officer: without objection, morning business is closed. under the previous order, the senate will proceed to consideration of s. 493, which the clerk will report. the clerk: calendar number 17, s. 493, a bill to re-authorize and improve the sbir and the sttr programs, and for other purposes. ms. landrieu: i ask unanimous consent that we now proceed to consideration of s. 493 and have a period of debate until noon.

the presiding officer: without objection. ms. landrieu: thank you, madam president. i now have seven unanimous consent requests for committees to meet during today's session of the senate. they have the approval of the majority and minority leader. i ask unanimous consent that these requests be agreed to and these requests be printed in the record. the presiding officer: without objection. ms. landrieu: thank you, madam president. i really appreciate the cooperation of both leaders to help us get to the floor this morning for a debate on this very important piece of legislation and one, madam president, that we have actually and unfortunately struggled with for the last two congresses. and you know as a member of the small business committee and as a senator from new hampshire how important this piece of legislation is as we continue to fight. and that's what the word is here, fight to create jobs right here at home in america. not just on wall street, not just in the fancy places, but on

main street and our hometowns all over america. senator snowe and i are on the floor today together happily to talk about a bill that she has put a tremendous amount of time and effort into as chair of the committee. now i serve as chair of the committee, and she is my very able ranking member, and together our staffs have worked very, very closely for a long period of time to try to fashion the compromise that is before the senate today. i want to thank the 84, i believe, members of the senate that voted for cloture last night. i know the rules of the senate are strange still to many americans, but we really can't operate without unanimous consent, so it takes an extra special level of cooperation. and while we didn't get everyone last night to go on the record, we did get the prerequisite

number above 60 to move to this debate, and i'm hoping that our amendment process can be very smooth, that we stay focused on small business related amendments, that we work in good faith and hopefully in the next couple of days we could get this bill off the floor, because this is a job creator. and one of the senators was here earlier this morning talking about creating an atmosphere for job growth and development. tax codes do some of that. federal investments in infrastructure do that. investments in education do that. but one other thing that does it is fashioning federal programs that work for the job creators of america, and that's what the sbir program is and sttr program. it's the federal government's largest research and development investment program for small businesses. it was created actually 30 years ago, and the idea developed from one of our outstanding federal

workers. he worked for ronald tibet. roland tibet was a staffer at the national science foundation. he took the lead in 1976 in creating a significant share of the research and development budget of the national science foundation and directed it to small business in a new innovation program. why did he do this, madam president? he did it because from his position, directing a very established and strong research component, he saw the federal government giving most of its awards to large businesses. and i think, although i haven't spoken to him personally, but i most certainly intend to because he's testified before former committees, i'm imagining that he probably had a heart for actually want to go find cures for some diseases and realized that not all of that technology

and innovation rested with the large companies. that, in fact, there might be small pharmaceutical companies or brilliant scientists in maine or in new hampshire or in louisiana that had discovered, that had the potential to discover something that could be transformative. so this staffer said let's set aside or direct a small portion but an important portion to small businesses. that is how this program began, and i am so pleased that this funding which only government can do, only government can do this. there are certain things the private sector does well. they do venture capital when an idea has been proven or when the potential has clearly been established or when the potential is at least clearly established in the mind of one or two individuals, like the guy that created facebook or bill gates with microsoft. but mostly, great ideas need

early, early patient capital. very risky, but when it hits, it hits big. that's what this program does. it sets aside 2.5% to 3% of all the research and development budgets of all the federal agencies, ranging from the department of defense, which is about $1 billion would be contributed to this program down to the smaller agencies which have maybe up to a couple of million dollars in their research budgets. but out of that very pilot-like initiative back in 1976 that was focused on discovering funding and evaluating the initial highest risk, most cost-cutting exploratory research that is necessary to achieve significant technological innovations and breakthroughs, this program was created. let me share with you what a gentleman who testified before our committee -- we have had

several hearings on this particular program. and no program is perfect. let me begin with this. this program is not perfect, but we are perfecting it as we bring this bill to you. we have looked at its weaknesses. we have tried in our re-authorization to correct those, to firm those up, but one of the gentlemen who is actually probably the leading expert on this program, dr. wesner of the national research council, recently testified before our committee, he said -- quote -- "an important point to keep in mind is that you can have really good ideas that simply die. they die because they don't have funding. not because they don't have potential but because they don't have funding." and i would add to this, particularly in this time of recession and tightening back on capital and closing down of credit card lending, if you think it's normally tough for entrepreneurs and innovators and discoverers and inventors to get capital, it's been a very rocky road this last year or two.

so he said that these ideas just die. s.b.r. brings capital to transform those ideas into innovation. you're not done then, but that gets you the innovation and product development and the start of the uptake. the rest of the world, he says, thinks this is the greatest thing since sliced bread. the rest of the world is copying it, putting it on steroids while we debate it. and that is the point i want to make. we have debated the re-authorization of this for six years. the time is to stop the debate, pass the bill and recognize this is a world model. no program is perfect, but the wisdom and the importance of setting aside a small portion of the research and development programs of all the federal agencies and then train our work force and our managers to look out, seek and find some of the interesting technologies that could be created into -- and to

grow into big businesses is really very forward thinking, and we should be very grateful to roland tibets and to the senators and representatives that started this program. warren rudman, senator rudman took this idea, saw this pilot program and made it a national program, and we have him and others to thank for the jobs, the businesses that have been created. let me just give you one example. the founder of qualcomm came and testified before our committee. now, qualcomm is a very famous business. it developed a lot of the technologies that made wireless communications possible. it started 25 years ago in the den of its founder, dr. jacobs. he testified before the committee and said basically qualcomm was just at one time 25 years ago an exciting new idea. it wasn't a company. it wasn't a business.

he and 35 of his colleagues consulted together and talked about the new technologies that they were seeing. they got an sbir grant of of $150,000, and then they were subsequently awarded because they developed the idea to to $1.5 million. they got another grant, which are the limits of the program. this program has limits. you get to have to test your idea and then you come back for phase two funding. well, madam president, qualcomm now employs 17,500 people. they are operating in 22 countries. they paid more in taxes last year to local, state and federal government than 50% of the cost of this entire program. so one success story. that's what i mean when i say when it hits, it hits big. now, not every company will turn into qualcomm, but without programs like this, there is what they call a valley of

death. there are ideas that are created out of the minds and hearts of americans who have been well educated, raised to believe that dreams come true, are encouraged to risk. we are natural risk takers. we have these ideas and these innovations, but what happens is that there is not that important early funding to develop that kind of science and technology in large measure. some of these ideas just fall into the valley of death. we're going to catch them and that's what this bill does. it's what it attempts to do, this program. so as it's grown and developed and we have re-authorized it over the years, there have been some important changes and improvements, and i'm going to recognize the ranking member in just a moment, but i want to just finish up for just a few minutes here. in 1980, the white house conference on small business echoed these sentiments, recognized the value of the program. the end result of the

recommendation was this program, as i said, first authored by senator warren rudman. it had 84 cosponsors, eight of whom were still serving in the senate. senator baucus, senator cochran, senator grassley, senator hatch, senator inouye, senator leahy, senator levin and senator lugar. they all were original sponsors of this bill. i hope they are proud. in their careers, they have probably sponsored many bills. i hope they are proud of this one because it's done its job, and it really has helped america to continue to honor our entrepreneurs and our inventors. as i mentioned, senator rudman was a republican from new hampshire, once a member of our committee, was a senate champion. he was a true statesman, a man of vision with regard to the importance of technology to our economy. i just want to quote him as we begin this debate. he said this. the issue addressed in senate bill 881 at the time is one which plays an underlying role

in the ability of this nation to maintain its security, to achieve energy independence, increase productivity and preserve the quality of life we all enjoy. our national strength and confidence in these areas, he said, depend upon maintaining a leading role in technological superiority. this is what he said in his opening statement at the senate subcommittee on innovation and technology on june 30, 1981: "-- senator snowe was in the house at the time. she was a congresswoman when president reagan signed this legislation, creating it in 1982. she quoted from president reagan, and i know she will probably remember this, but she said and i think it's worth repeating: "our nation is blessed with two important qualities that are often missed in other societies. our spirit of entrepreneurship, our capacity for invention and innovation. these two elements are combined in the small businesses that dot our land."

and so, madam president, i'm proud to bring this bill to the floor. it has had extraordinarily positive and noble champions since from the beginning. as i said, no program is perfect. but we tried from this reauthorization to look at where the program was weak and strengthen it. i'll go through that and -- in the latter part of the afternoon. some of these details. but just for an overview this morning, i wanted to give more of a historical context to this bill to thank the members for moving so quickly and at our request to the bill. and i look forward to the debate. and i hope that members will be responsible in offering their amendments. i know that the time for debate is precious on the floor and we'd really like to limit it to debate reflected around the principles, at least, and the details of this bill as best we can. and really getting this program

reauthorized so that we can continue to be the leading cutting edge innovation and the federal government can do its part, an important part. the vent -- that venture capitalists can't do, big banks don't want to do, investment bankers aren't made to do it. only patient, directed capital can give that boost over the valley of death and create that bridge and so scientists and engineers can walk over it safely. i'd like to recognize at this time my ranking member and thank her for support of this legislation from its beginning and her champship to this day. and for clarification purposes, the time until noon will be for debate only and no amendments until after lunch. senator snowe? ms. snowe: thank you. mr. president? the presiding officer: the senator from maine. ms. snowe: thank you, mr. president. first, i want to commend the

chair of the small business committee who's done an extraordinary job in bringing this legislation to the floor in a bipartisan fashion, which i think is so essential to ensuring the passage of this legislation which, suffice it to say has been long overdue. it's been on a long journey since 2006 in terms of extensions and reextensions, but we have never been able to accomplish a reauthorization for a variety yif reasons that -- variety of reasons i'll be able to explain later in my state. but i do want to congratulate the chair for working mightily on both sides of the aisle in the committee, accommodated the bipartisanship by allowing the new members of the committee, particularly on our side of the aisle where we have five new members of the committee who were not able to have the opportunity to review this legislation as new members of the senate because we had passed this unanimously in the last

session of congress. so she did hold hearings and a markup to accommodate those views and give them a chance to review this legislation and also to amend it in the committee. and i know some of the members will have amendments that they will offer on the floor as well. but i want to thank the chair for accommodating those various issues and the members of the committee as they attend to their new duties as members o of the small business committee. i also want to thank the chair for working through these issues diligently. these are two critical programs as she's indicated in her opening statement that are crucial to small businesses, but also important to the innovatio of america. reauthorizing both the sbir and sttr programs represents a profound opportunity for us to recognize the truth and the

optimistic opportunity for america for small businesses to make the contributions not only for job creation, but through their innovation and invention, as the chair mentioned, with president reagan's comments many years ago. that's why i'm very excited about the reauthorizing of these programs. it will foster an environment of innovative entrepreneurship by directing more than $2 billion annually in the federal research and development funding to a nation's small firms most likely to create jobs and commercialize their products. small businesses are our nation's job generators employing more than half the private sector employees and creating 64% of the net new jobs over the past 15 years. they also represent 99% of all employer firms. furthermore, small businesses are the nation's effective innovators having more than 13 times more patents than larger

firps, likely to be among the top 1% of high-impact patents. recipients of both of these awards have produced more than 85,0085,000 patents. it's crucial then that both of these programs, one of the strongest examples of a successful private-public partnership be part of the key agency's aened i. the sbir program got its start at the national science foundation in 1976 following growing concerns as small businesses were not receiving an adequate share of the federal research and development funding despite their prominent role in innovation. it was officially established in law as part of the small business innovation development program of 1982. as the chair indicated, i was an original cosponsor in the house, which sets four goals for the program, stimulate tech lodgele

kal in -- technological innovation, encourage technological innovation, and private commercialization innovation derived from r&d. it was established in 1992 to complement the sbir program by stimulating partnerships between small businesses and nonprofit research institutions such as universities and research laboratories. together these vital job creation programs have provided small firms with over $28 billion during their life spans. these programs have been front and center in improving our nation's capacity to innovate. according to a report by the innovation technology and innovation foundation sbir-backed firms have been responsible for roughly 25% of the nation's most crucial innovations over the past decade. plus it indicated a powerful

demonstration that sbir programs have become a key force in the innovation economy of the united states. furthermore, comprehensive 2008 national academy of science and study, the sbir program, noted that more than 20% of companies responding to their survey noted they were founded entirely or at least in part because of a perspective sbir award. and a full two-thirds said that the projects they performed would have not taken place without the funding. just under half of the projects pursued in the sbir program reached the marketplace bringing countless new innovations for our daily lives. additionally the study noted that over one-third of the companies awarded sbir funding participate in the program for the first time each year thus encouraging innovation across a broad spectrum of firms and it concludes that sbir is sound in concept and effective in

practice. in fact, there are a wide range of remarkable success stories associated with the sbir program including qualcomm, that the chair mentioned, but, now he, it's remarkable that qualcomm received a roughly $1.5 million in sbir grant to pursue programs and develop breakthrough technologies. now it employs 17,500 individuals worldwide with an annual revenue of $11 billion. alone in 2010 qualcomm pai paid $1.4 billion in federal, state, and local taxes, a significant return on investment. another example of sbir's success is the lasic eye surgery, -- in the 1980's nasa award funding to a project developing technology for docking a space vehicles to satellites by pointing to laser beams. this concept was then applied

that developed lasic which corrects vision problems. a household item such as an electronic toothbrush was funded by an sbir award. according to ni -- n.i.h., sbir funding allowed the firm that developed the technology to create a $300 million business employing over 500 individuals. in my home state of maine, text tech industries has researched and develop high-tech textiles used for bullet-proof vests. text tech also developed a fire resistant material to be used as a primary fire barrier in the seating carriers of new commercial aircraft. biosciencecom is responsible for the mark path system that tests for cervical cancer can be used as a research tool.

other companies, like symatex, and gensym all received sbir funding at some point during their formative years. some of these firms are now using household names, others are still businesses with a plethora of novel ideas. as these examples demonstrate, sbir funding has helped small businesses nationwide develop incredible breakthrough technologies for a whole host of applications. these are innovations that we use in our every day lives that help strengthen our national defense and improve our health and that boost our competitiveness. regrettably the sbir program expired in september 2008 and has been subject to a series of 10 short-term temporary extensions since then. plaguing the program with uncertainty and potentially dissuading some of our nation's most promising firms from

participating in them. this is legislation that our committee has worked to have signed into law for nearly six years. since the time, in fact, i was chair of the comoi. indeed we -- committee. we passed legislation out of the small business committee unanimously in 2006 by making improvements to the program and doubling the sbir allocation from 2.5% to 5% over five years and doubling the sttr allocation immediately. last congress, with the chair, we once again passed legislation out of committee unanimously which was very similar to the bill we reported out in the previous congress. specifically it maintained the allocation increases spread out incrementally and the 18 and 8 compromise in the venture capital issue. this time the full senate passed the legislation unanimously and sent it to the house of representatives where the bill sat. and so the legislation that we are debating today, mr. president, is very similar to the bill that we passed out

unanimously just three months ago. but we've already wasted too much time over the past several years and it is now vitally critical that we act now and pass this legislation to provide these crucial innovation initiatives with certainty for the future. as the u.s. chamber of commerce has noted, and i quote -- "even though this program, the small business, has a proven track record of success, its full potential has been held hostage by a series of short-term reauthorizations which has created uncertainty for programming managers and limitations for grant recipien recipients. end quote. as in the previous two congresses, our legislation increases the allocation for sttr from 2.5% for development to 3.5% for over 10 years and doubles the sttr allocations

from .3% to .6% over five years. this means that the federal government can make more awards to a greater number of small businesses out of its existing research and development budget. it would also codify increased award sizes of $150,000 for phase one. in and apply those levels to the sttr program to adjust for inflation. the last statutory increase in the award sizes for the sbir program was 19 years ago as part of the 1992 reauthorization and it is critical that we bring the program into the 21st century to acknowledge the growing cost of quality research. furthermore, in december, senate landrieu and i sent a letter to the sbir administrator stating that rooting out fraud and abuse will be the committee's first priority this congress. to that end our bill includes stringent oversight in fraud

presengs measures -- prevention measures requiring inspector generals to have federal agencies to feab fraud protection -- fraud -- to establish fraud protection measures. and to have data prevention to ensure that we have a better base of information to use when considering future policy changes to the programs and engaging in necessary oversight. this re-authorization act contains an unprecedented compromise on the venture capital issue, which has long bogged down any serious project in re-authorizing these valuable programs. my long-standing guiding principle on re-authorization of these programs has been simple. these are small business programs, not big business programs or venture capital programs, so i have worked closely with chair landrieu to ensure that changes we made to these programs keep it squarely as a small business invention.

and the unprecedented landmark compromise on the venture capital issue passes this test. our compromise has the backing of diverse stakeholders in the u.s. chamber of commerce, nfib, the small business technology council to the biotechnology industry organization and the national venture capital association and a whole host of other organizations, as you can see on this chart. it is critical to note that both of these funding programs is meant to serve as an early seed capital for eligible small businesses. in general, venture capital companies invest in firms that are farther along in their development and commercialization, and they focus on larger developments that are easier to manage than is normally appropriate for many small, innovative technology firms. nonetheless, particularly for firms in the biotechnology industry, venture capital investment is essentially a necessity to commercialize their

technology. here are what some of the groups endorsing our legislation have to say about the compromise that we arrived at, and i ask unanimous consent, mr. president, that all of the letters of support we have received regarding this legislation be submitted for the record. the presiding officer: without objection. ms. snowe: the biotechnology industry organization noted, and i quote -- "this bill represents a balanced approach to ensure that america's most innovative small businesses can access existing incentives to grow jobs by commercializing new discoveries." and the chamber of commerce said, and i quote -- "this landmark compromise bill, if passed into law, would unlock the door for entry into businesses that acquire equity funding for venture capital firms without diminishing the program's effectiveness for traditional small businesses, thus setting the stage for a robust and revitalized sbir program." that's really our goal here, a modern program that recognizes

the reality of today's innovative small businesses and provide the appropriate environment in which they can flourish. given the nature of the compromise that we have reached from increasing allocations over a number of years to allowing limited participation by majority-owned venture capital firms, we must allow time for these programs to take shape and enhance these programs. that is why our legislation re-authorizes these measures for eight years through 2019. indeed, the pass to the re-authorizations of these programs have been for eight years each, in 1992 and 2000, as was the last re-authorization for the technology research program in 2001. this long-term re-authorization will allow more small businesses to access this funding without the fear of constant interruptions based on the whims or whether or not congress will extend these programs for an indefinite period of time. indeed, a company's life cycle in either of these programs is

by nature a multiyear process. a phase one award lasts six months while a phase two award will last for two years, and that time frame doesn't include the time that it takes for businesses to apply for funding and await a decision, as well as the time between the three phases waiting for new solicitations from agencies. it will also allow, mr. president, a government accountability office to effectively study the venture capital compromise over time to see if it is serving its intended purpose of allowing promising small businesses to utilize these resources. we include a provision in the bill mandating that the g.a.o. issue a report on the subject three years after enactment and every three years thereafter. by reducing the length of the re-authorization, we would be allowing this delicate compromise to be relitigated immediately without the benefit of studying its impact, and we would effectively negate any

modicum of certainty provided in the pending legislation. finally, as a matter of procedure, i am very pleased that the majority leader has indicated that he will be allowing an open amendment process to this legislation. i think that that is also important as well as necessary for working through these issues and others that are critical to our consideration. so, mr. president, i thank you for the consideration, but i especially want to thank the chair of the small business committee for providing the kind of leadership that's been so essential to bring this legislation forward after ten reauthorizations and for about eight years in the process to bring it to this point that i think will be critical for the innovation that's so essential to creating new products and also to create new jobs that we desperately need in our economy. so i thank the president. ms. landrieu: thank you so much, senator snowe. i couldn't have a better partner on this committee, and her

expertise is noted and admired among the members here and has served as a member of this committee, oftentimes its chair for many years. so i appreciate her help and the help of her staff as well. i would just like to add in the ten minutes that we have left just a couple of specifics about the specifics of the compromise as senator snowe has outlined, and it is true that this bill has been -- this program has been sputtering along on very uncertain terrain because of every three months or six-month reauthorizations hastily put forward because there has been no agreement on a few of the details. we finally reached an agreement on some of those details. the largest of which had to do with the percentage of awards

that would be given or funded to companies that are owned by venture capitalists. this program was started as a small business program. senator snowe and i feel very strongly and the same to try to keep it as a small business entrepreneurial program, but to obviously recognize the changes in opportunities for capital presented by some venture capitalists out there. so that has been a subject of the largest piece of negotiation, and i'm happy to say that we have letters of support from the bay area innovation alliance, the biodistrict from new orleans, just to name one, the biotechnology council that are all very supportive of this compromise, and i will submit their letters to the record. connect, which is out of the university of california,

another important player in this particular field. dawn breaker, commercialization company, they were part of helping us forge this important compromise. i also want to note that the guidelines of the awards have been raised from the first stage from100,000 to 150, from 750 to a million for phase two and allows for sequential phase two awards. another important change -- and i want to particularly thank senator coburn for this, for agreeing to an eight-year extension. we think, mr. president, for a program like this that is dealing with technologies that sometimes take years to develop can be very promising, but it takes some planning, it takes patience, that this is not a program that lends itself readily to two to four-year re-authorizations. it's too much uncertainty for a program like this.

maybe other programs that the federal government should go through four-year, five-year reauthorizations, but we pressed, both senator snowe and i for a longer time. senator coburn was somewhat reluctant, but we are very grateful that he and others stepped up and said eight years would be a good compromise in that way, we are grateful. so this will be a very important authorization because it will set the direction for the next eight years for our federal agencies. we have also made an important change, and i'm very pleased about this because i think that you can have all the greatest programs in the world, but if you're not focused on quality, if you're not focused on exchanging best practices, if you're not focused on good management of those programs, even some of the best intentions, you know, fall apart or the taxpayers' money is wasted. we do not want to see that happen here, so we have set aside a small portion for

administration, which was recommended by this study of oversight so that the managers in each of these departments can be better trained to actually identify promising technologies, make sure that they are sort of requesting in the right areas the kind of technologies that they are looking for and be able to receive that information in a more professional way. so that is an important component of this compromise. the 3% allocation for administration and oversight. as said, it re-authorizes it for eight years. the arrangement between venture capital and small businesses, and that kind of capsulizes the major changes. i do want to recognize senator rockefeller's amendment which he put on in the 111th congress, which is a policy directive against waste, fraud and abuse.

senator rockefeller has been very helpful in this regard. his amendment along with others requires inspector generals to participate -- in participating federal agencies to establish fraud detection measures, coordinate fraud-related information sharing between agencies and provide fraud prevention related to education and training of the administration. and in addition to all of this, it actually gets even better because senator snowe and i have figured out a way to reduce the cost from the last congress to this congress from $229 million over five years to $150 million. so we're being as efficient with taxpayer dollars as we can, strengthening administration and fraud detection, giving a longer lead time, if you will, and runway for some of these technologies, and again, we think this is a model program in the world -- we don't think. we know that because of the

research and review that's been done of this program and because of what we hear from other countries. they wonder how does your system work? well, this is one important aspect that the government does have a role to play. not the most significant role potentially, but a portion of one of the most significant roles to play in promoting entrepreneurship, creativity, innovations and expanding the number of patents that are issued in the united states by providing programs like this that give an open door, an access and a level playing field to the very smallest businesses in america, to give them a chance to compete against some of the big guys. and that's really what this is all about. mr. president, let me see if the ranking member has anything else to add. we have a few minutes left. she may have one or two other things to add as we close out for the lunch period.

ms. snowe: thank you, madam chair, mr. president. you know, i think that the points that you raised are very critical because of the contributions that these programs have made to our economy, and most especially because much of the innovation that occurs in america comes from small businesses. in fact, you know, in this report on the information technology and innovation foundation underscores this. the innovations coming from big companies is actually on the decline, so we really do depend upon the entrepreneurial spirit of small businesses that create the niche for the kind of innovation that we require in america if we're going to be on the vanguard of change and the vanguard of technology and advancements that are so crucial to moving forward as a nation, and that the sbir program in particular has played a very crucial role in that regard.

and i think that this report truly does emphasize to the degree to which it has played a paramount role over the years since the program was created in 1982. so it certainly has had, i think, an extraordinary history in that regard, and, you know, we talk about a lot of programs that we underwrite here at the federal level, but i can tell you this is a good use of taxpayers' dollars when we're thinking about how we maximize taxpayers' dollars within the federal agencies that are now utilizing these programs, of which we have 11 different agencies that are setting aside the research and development funds specifically to ensure that small business have a, you know, allocation among the research and development dollars so that they get their fair share because that's where the innovation is