[Pages S3850-S3855]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2016

The PRESIDING OFFICER. Under the previous order, the Senate will
resume consideration of H.R. 1735, which the clerk will report.
The senior assistant legislative clerk read as follows:

A bill (H.R. 1735) to authorize appropriations for fiscal
year 2016 for military activities of the Department of
Defense, for military construction, and for defense
activities of the Department of Energy, to prescribe military
personnel strengths for such fiscal year, and for other
purposes.

Pending:

McCain amendment No. 1463, in the nature of a substitute.
McCain amendment No. 1456 (to amendment No. 1463), to
require additional information supporting long-range plans
for construction of naval vessels.
Reed amendment No. 1521 (to amendment No. 1463), to limit
the availability of amounts authorized to be appropriated for
overseas contingency operations pending relief from the
spending limits under the Budget Control Act of 2011.
Cornyn amendment No. 1486 (to amendment No. 1463), to
require reporting on energy security issues involving Europe
and the Russian Federation, and to express the sense of
Congress regarding ways the United States could help
vulnerable allies and partners with energy security.
Vitter amendment No. 1473 (to amendment No. 1463), to limit
the retirement of Army combat units.
Markey amendment No. 1645 (to amendment No. 1463), to
express the sense of Congress that exports of crude oil to
United States allies and partners should not be determined to
be consistent with the national interest if those exports
would increase energy prices in the United States for
American consumers or businesses or increase the reliance of
the United States on imported oil.
Reed (for Blumenthal) amendment No. 1564 (to amendment No.
1463), to increase civil penalties for violations of the
Servicemembers Civil Relief Act.
McCain (for Paul) modified amendment No. 1543 (to amendment
No. 1463), to strengthen employee cost savings suggestions
programs within the Federal Government.
Reed (for Durbin) amendment No. 1559 (to amendment No.
1463), to prohibit the award of Department of Defense
contracts to inverted domestic corporations.

Mr. McCAIN. Madam President, I note with some interest over the
weekend in the New York Times that ``Russia Wields Aid and Ideology
Against West to Fight Sanctions.''
On the front page of the New York Times:

The war in Ukraine that has pitted Russia against the West
is being waged not just with tanks, artillery and troops.
Increasingly, Moscow has brought to bear different kinds of
weapons, according to American and European officials: Money,
ideology, and disinformation.

Yesterday and today in the Wall Street Journal: ``Iraqis Call for a
Deeper Overhaul of Army.'' Also: ``Mistrust of military leadership
among troops is widespread in crisis of confidence.''
Right below that: ``Airstrikes Kill Dozens as Fighting in Yemen
Intensifies.''
The reporting of a world in turmoil, as described by my friend
Lindsey Graham as on fire, continues.
To top it all off, today, speaking to reporters at the G7 summit in
Germany, President Obama said: ``We don't yet have a complete strategy
about how to combat ISIS.''
I would remind my colleagues that on August 28, 2014, nearly a year
ago, President Obama stated: ``We don't have a strategy yet to fight
ISIS in Iraq and in Syria.''
My friends, nearly a year after the President said we don't have a
strategy yet to fight ISIS in Iraq and in Syria, he said again: We
don't yet have a complete strategy about how to combat ISIS.

[[Page S3851]]

I would like to see the incomplete strategy. I would like to see
something. I would not like to see continue that 75 percent of the
combat missions that are flown in Iraq and Syria return to base without
firing a weapon because we don't have forward air controllers on the
ground.
When is this administration going to figure out that if we want to
destroy the enemy, we have to be able to identify the enemy, and that
requires forward air controllers on the ground and that means U.S.
troops.
I know that whenever I and some others say we need additional U.S.
troops, people recoil and say, Oh, no, here we go again. Well, what is
going on now is ISIS is succeeding. Bashar Assad is hanging on. Iran is
on the move. They now dominate four countries: Syria, Iraq, Yemen, and
Lebanon. And the President of the United States says we don't yet have
a complete strategy.
Well, the Pentagon is a pretty big place. There are hundreds of
people who work for the National Security Advisor, and somehow, nearly
a year later, we don't yet have a strategy? Wow. ISIS goes from house
to house in Ramadi with lists of names and they execute people and they
kill 3-year-old children and they burn their bodies in the streets. And
the atrocities in Syria continue as Bashar Assad barrel-bombs innocent
men, women, and children--barrel bombs, by the way, supplied by Iran
and Russia--and we don't yet have a ``complete strategy.''
Well, I have never seen the world in more crises, nor has Henry
Kissinger, nor have most other longtime observers of our Nation and the
world.
I urge my colleagues to take a look at a map of the Middle East from
January of 2009, when President Obama was sworn in as President of the
United States, and look at that same map today and color in where there
is ISIS, where there is Iranian domination, where there is conflict,
and where there is a complete lack, except in the State of Israel, of
democratization or the kinds of freedoms the United States of America
stands for.
All I can say is one has to wonder whether this President just wants
to wait out the next year and a half and basically do nothing to stop
this genocide, blood-letting, and the horrible things that are
happening throughout the Middle East, where, in the view of the
Director of the Federal Bureau of Investigation and the Director of the
CIA, they say, as far as ISIS is concerned, they pose a threat to the
security of the United States. Why do they say that? Obviously, because
these thousands of young men who have gone to Syria and Iraq and are
being radicalized and trained are going to go back to where they came
from. Everybody knows that.
On the day Baghdadi, the leader of ISIS, left our Camp Bucca--where
he spent 4 years along with about 25,000 others--he said to the
Americans: We will see you in New York. Mr. Baghdadi is not known for
his sense of humor.
What we are trying to do in this legislation that is before the
Senate is to provide the means, the training, the equipment, the care
for the men and women, and the much needed reforms that I have been
over and will continue to go over, whether it be in retirement, whether
it be in acquisition, whether it be in a number of other areas of the
Department of Defense and the way we defend this Nation. That is, in my
view, long, long overdue. Now we see the President of the United States
threatening to veto this legislation, if it gets through the House and
the Senate, over the issue of OCO. That, as my colleagues know, is
overseas contingency operations, which began with the conflicts in
Afghanistan and in Iraq as a means of providing additional funds to pay
for and fund the operations in those countries as the name implies--
overseas contingency operations.
I have opposed sequestration. I think it is a terrible thing to
inflict on the men and women who are serving in the military, much less
on our national security. I agree with our uniformed leaders, every one
of whom has testified before the Senate Armed Services Committee that
if we continue sequestration, it puts the lives of the men and women
who are serving in the military at greater risk. I don't know of a
greater obligation that we have than to prevent putting the lives of
the young men and women who have volunteered to serve this country at
greater risk. But that has been lost on my colleagues on both sides of
the aisle.
So now we have the OCO, and it funds the defense of this country at
the levels the President requested. I don't like it. I don't like it
because it can only give them 1 year of planning. What the military
really needs is to be able to plan for at least 5 years ahead of time.
We can't build new weapons and new ships and new airplanes on a year-
to-year basis. But it is better than the sequestration, which, as I
said, increases the threat to this Nation's security.
Last week, the White House issued a Statement of Administration
Policy threatening to veto this national security legislation. The
threat hardly comes as a surprise. After all, the President has
threatened to veto, for some reason or another, every Defense
authorization bill since 2011. The White House's compilation of
complaints is long, but it is woefully short on substance.
The Statement of Administration Policy makes clear that the true
basis for the administration's veto threat has nothing to do with
defense. Objecting to the use of $38 billion in overseas contingency
operation funds--or OCO--to meet the President's request of $612
billion, the statement said the President ``will not fix defense
without fixing nondefense spending.''
It is incomprehensible that as America confronts the most diverse and
complex array of crises around the world since the end of World War II,
that a President of the United States, who has not yet been able to
come up with a ``complete strategy'' for the challenges we face, would
veto funding for our military to prove a political point.
The threats we confront today are far more serious than they were a
year ago and significantly more so since the Congress passed the Budget
Control Act in 2011. That legislation arbitrarily capped defense
spending and established the mindless mechanism of sequestration which
was triggered in 2013. As a result, with worldwide threats rising, we
as a nation are on a course to cut nearly $1 trillion of defense
spending over 10 years. Every single military and national security
leader who has testified before the Armed Services Committee this year
has denounced sequestration and urged its repeal as soon as possible.
This legislation doesn't end sequestration, unfortunately. Believe me,
our committee would have done so if the NDAA were capable of it, but it
is not. The NDAA is a policy bill. This legislation is a policy bill.
It is the appropriators who deal with the money. It only deals with
defense issues, and it doesn't spend a dollar. It provides the
Department of Defense and the men and women in uniform with the
authorities and support they need to defend the Nation. It fully
supports President Obama's budget request of $612 billion for national
defense, which is $38 billion above the spending caps established by
the Budget Control Act.

Let me repeat that. The legislation gives the President every dollar
of budget authority he requested. The difference is that this
legislation follows the Senate budget resolution, which was voted on
time after time all night long and was agreed to by both Houses of
Congress. It is the Senate budget resolution.
Now, this is not my preferred option, as I said. That is why the
committee included a special transfer authority in this legislation
that allows the Department of Defense to transfer the additional $38
billion from OCO to the base budget in the event legislation is enacted
that increases the statutory limits on discretionary defense and
nondefense spending in proportionately equal amounts. This was the
product of a bipartisan compromise, and it was the most we could do in
the Defense authorization bill to recognize the need for a broader
physical agreement without denying funding for our military right now.
Here on the floor we have heard a number of misconceptions about OCO
funding, many of which have been fed by this administration's rhetoric.
While OCO is not the ideal way to budget our defense, technical and
budgetary consequences to using OCO funding have been greatly
exaggerated. OCO is authorized and appropriated on an annual basis,
just like base funding. OCO funding is allocated to the same

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DOD accounts as base funding. In fact, the Defense bill purposely
placed the additional $38 billion of OCO funding in the same accounts
and activities for which the President himself requested the money.
These activities have historically had a large share of OCO funding,
and the account has been designated by the President as OCO eligible in
the past, and there are no laws that make OCO funding expire any
differently than base funding.
The White House threat to veto this legislation and the desire for
increases in nondefense spending are misguided and irresponsible. With
global threats rising, it simply makes no sense to oppose a defense
policy bill--legislation that spends no money but is full of vital
authorities that our troops need--for a reason that has nothing to do
with national defense spending. The NDAA should not be treated as a
hostage in budget negotiation. The political reality is that the Budget
Control Act, which the President signed, remains the law of the land.
So faced with a choice between OCO money and no money, I choose OCO,
and multiple senior military leaders testified before the Armed
Services Committee this year that they would make the same choice for
one simple reason: This is $38 billion of real money that our military
desperately needs and without which our top military leaders have said
they cannot succeed.
The bottom line is this. The NDAA authorized $612 billion for
national defense. This is the amount requested by the President and
justified by his own national security strategy. If the President and
some of my colleagues oppose the Defense bill due to concerns over
nondefense spending, I suspect they will have a very difficult time
explaining and justifying that choice to Americans who increasingly
cite national security as a top concern.
The Statement of Administration Policy raises specious concerns with
the sweeping defense acquisition reforms in the NDAA. For example, the
White House asserted that transferring some acquisition authority back
to the services is somehow inconsistent with the Secretary of Defense's
exercise of authority, direction, and control over all of the
Department of Defense's programs and activities. I could not disagree
more with that assertion. What this legislation does is merely switch
who does what in certain circumstances from different people who all
directly report and serve under the authority, direction, and control
of the Secretary of Defense. In this legislation, for a limited number
of programs to start with, the Secretary of Defense will look to the
service Secretaries directly for management of these acquisition
programs rather than looking to the Under Secretary of Defense for
Acquisition, Technology, and Logistics, or AT&L. This is not usurpation
of the Secretary of Defense's power. It is called streamlining of
authorities and reducing layers of unnecessary bureaucracy. There is a
section in the legislation that would allow the Secretary of Defense to
continue to rely on more layers of management, if he chooses, but only
if he certifies to Congress that this makes sense. There simply is not
any undermining of the Secretary of Defense's authority in here.
Another concern raised has been that the transfer of milestone
decision authority to the services would reduce the Secretary of
Defense's ability--through AT&L--to guard against unwarranted optimism
in program planning and budget formulation. Unwarranted optimism is
indeed a plague on acquisition, and there is not a monopoly of that in
the services. Nothing in this bill overrides a requirement to use
better cost estimates from the Office of Cost Assessment and Program
Evaluation. In fact, new incentives and real penalties imposed on the
services in this legislation are designed to put some of this optimism
in check.
Some in the White House and the Department of Defense want to
perpetuate the absurd fiction that the current system is working. Even
after a wave of 25 program cancellations by former Secretary Gates, all
of the programs that are left under AT&L management have over $200
billion in cost overruns.
I want to repeat that. Under the supervision of the Under Secretary
of Defense for Acquisition, Technology, and Logistics, there are
programs that have over $200 billion in cost overruns. AT&L is trying
to have it both ways, claiming credit for the improvements in the
acquisition system while blaming the services for its long list of
failures.
This is exactly the program this legislation is trying to address,
blurred lines of accountability inside the Defense Acquisition System
that allow its leaders to evade responsibility for results. The reality
is that in the modern world the AT&L management process takes too long
and costs too much. For example, an Army study looked at the time it
would take to go through all of the AT&L reviews and buy nothing. I
repeat: To go through all those reviews and buy nothing. What was the
answer? Ten years--10 years to buy nothing. The Government
Accountability Office looked at the much vaunted milestone reviews that
the Office of the Secretary of Defense is touting as a success. Just
one review takes on average 2 years. A similar review at the Missile
Defense Agency takes about 3 months. Our adversaries are not shuffling
paper. They are building weapons systems. It is time for us to do the
same.
I find it disappointing or maybe just outright laughable that the
Statement of Administration Policy expressed concern about the Armed
Services Committee's decision to downsize and streamline the
bureaucratic overhead of the Pentagon, while at the same time
complaining that we are not letting them downsize the fighting forces.
Let me repeat. The administration wants to keep more Pentagon
bureaucrats while drawing down our forces and cutting military
equipment such as fighter aircraft.
Is there any Member of this Chamber who believes we should increase
the Army staff by 60 percent over a decade, and then turn around and
slash our Army brigade combat teams from 45 to 32? Of course not.
The administration cites reductions already taking place in
headquarters activities, but ignores the fact that the Air Force is
trying to achieve those reductions by playing a shell game--creating
two new organizations and shifting people around. Moving the deck
chairs on the Titanic didn't keep the ship from sinking, and shifting
people around in a game of ``hide the headquarters staff'' will not
keep our national security from sinking under the weight of
bureaucratic empires.

As the White House asks the Senate to preserve bloated staffs, the
Statement of Administration Policy laments the Committee's effort to
address dangerous strike fighter capacity shortfalls across the
services. As deliveries of the F-35 have continued to fall short of
projections, the Air Force has continued to drain combat power. Senior
Air Force officials have repeatedly testified to the alarming reality
that their service is the smallest in its history, with readiness at
very low levels, all while our airmen perform ongoing combat operations
in the Middle East, theater support packages in Eastern Europe,
presence and reassurance to our allies in the Asia-Pacific, and
maintain a strong strategic nuclear deterrence posture. The
misallocation of airpower resources over the past 6 years, coupled with
the mismanagement of very expensive aircraft weapons systems
procurement programs, places America's national security interests in
jeopardy and endangers the lives of our men and women in uniform.
Our military commanders know this is true. That is why, for example,
the Chief of Naval Operations and the Commandant of the Marine Corps
included in their unfunded priorities lists requests for 12 F-18 Super
Hornets for the Navy and 6 F-35B Joint Strike Fighters for the Marine
Corps. The NDAA funds these requests because senior Navy and Marine
Corps leaders have repeatedly testified to significant strike fighter
shortfalls in the maritime services due to unanticipated increased
combat operations in the Middle East, aging and obsolete fighter
aircraft, and significant delays in the F-35 Joint Strike Fighter
delivery schedule. Bizarrely, the White House has apparently
disregarded that testimony and instead labels these requests for more
combat power from our military commanders as ``unnecessary.''
The Statement of Administration Policy opposes the strong oversight
measures put in place by the NDAA on the Ford-class aircraft carrier
program. The administration objects to a

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provision in this legislation that reduces the cost cap for the USS
John F. Kennedy by $100 million from $11.498 billion to $11.398
billion. But in the budget request, the Navy estimated the cost of this
ship at $11.348 billion. In other words, the NDAA still provides a
buffer of $50 million. The provision simply locks in the savings the
Department has advertised, which comes after more than $2 billion in
cost growth--$2 billion in cost growth of one aircraft carrier. Unless
the budget request is misleading or inaccurate, this provision should
not result in reduced capability or a breach of the cost cap as the
administration claims.
It is also unfortunate that the administration doesn't recognize the
importance of conducting full-ship shock trials on the USS Gerald R.
Ford, known as CVN-78. With the abundance of new technology, including
the catapult, arresting gear, and radar, as well as the reliance on
electricity rather than steam to power key systems, there continues to
be a great deal of risk in this program. Testing CVN-78 will not only
improve the design of future carriers but also reduce the costs
associated with retrofitting engineering changes. Absent this
provision, the Navy will delay by up to 7 years full-ship shock trials
and shift the test from the lead ship in the class to the second ship.
That poses the risk that CVN-78 will deploy and potentially fight
without this testing, putting the lives of our sailors at risk.
The Statement of Administration Policy also raised objections to a
number of provisions related to military personnel. For instance, the
administration bemoans the fact that the Committee did not adopt its
plan to raise existing TRICARE fees and implement new fees for
Medicare-eligible retirees and their family members. The so-called
Consolidated Health Plans would not have created a modern, value-based
health care system. The administration made no attempt at all to
improve access to care, quality of care or beneficiary satisfaction.
The NDAA, on the other hand, addresses those issues and more without
raising enrollment fees or creating new fees.
The White House expressed concern about the provisions in the NDAA
that call for a plan to privatize commissaries and a 2-year pilot
program at no fewer than five commissaries in the largest markets of
the commissary system to assess the feasibility and advisability of the
plan. But the rationale is confusing. The administration claims that
``there is an independent study underway to determine whether
privatization is a feasible option and we should wait for those results
prior to making any policy changes.'' The bill did require a
comprehensive review in fiscal year 2015 by an independent organization
of the management, food, and pricing options of the commissary system.
But in that section, there was no requirement to study the feasibility
of privatization of the commissary system. It is also curious that the
administration warns against implementing a pilot program on
privatization before the results of an independent study, while at the
same time encouraging the Congress to adopt their own proposed pilot
program.
The White House's policy statement reflects the President's feckless
policy towards Russia. Despite the advice of nearly every statesman and
policy expert who has appeared before the Armed Services Committee in
recent months--Henry Kissinger, George Shultz, Madeleine Albright,
Zbigniew Brzezinski, and others--and against the advice of both the
Secretary of State and Secretary of Defense, the President has refused
to provide defensive lethal assistance to Ukraine. The President's
continued inaction, for fear of provoking Russia, is seen by Putin as
weakness and invites the very aggression we seek to avoid.
The Ukrainian people aren't asking for U.S. troops. They are simply
asking for the right tools to defend themselves and their country, and
those are the tools that this legislation would provide.
We have seen Vladimir Putin commit aggression, draw back, commit more
aggression, draw back. We are now in the phase where any day now we
will see continued aggression and territory-grabbing by Vladimir Putin
as he establishes his land bridge to Crimea and puts additional
pressures on Baltic countries and Moldova. Meanwhile, we refuse to give
the Ukrainians weapons with which to defend themselves.
This bill does not force the President to provide lethal assistance
to Ukraine. Trust me, if there were a way to do that, it would be in
this bill. The President has a decision to make on providing lethal
assistance to Ukraine. That decision has consequences far beyond
whether the President obligates the full amount of funds authorized in
a decision that is long overdue.
Making matters worse, the Statement of Administration Policy seeks
flexibility to continue our Nation's dependence on Russian rocket
engines. The NDAA would put an end to this dependence by 2019 and stop
hundreds of millions of dollars from going to Vladimir Putin and his
cronies. It eliminates a launch subsidy that the commander of Air Force
Space Command has stated impedes fair competition, and it directs the
administration to stop playing games, develop a domestic rocket
engine--not a new rocket system--to replace the Russian RD-180.
The Russians are being paid billions of dollars for their rocket
engines, and there is a ``middle man'' who has made tens of millions of
dollars just by moving those rockets from Russia to the United States.
There is an individual who runs this outfit who has been sanctioned by
the U.S. Government, and we have elements in the Pentagon who still
want to deal with him for as long as possible.
In testimony before the Armed Services Committee in March, Gen. John
Kelly, the commander of U.S. Southern Command, testified: ``With the
amount of drugs and people that move across our southwest border, it
doesn't seem all that secure to me.'' General Kelly went on to state
that the threat of terrorists crossing our southern border is
``extremely serious'' and that ``if a terrorist or almost anyone wants
to get into our country, they just pay the fare.'' They just pay the
fare.
That is why this bill would provide $45 million for Operation
Phalanx, increasing border security operations by the National Guard
along the southern border, and boosting aerial surveillance of the
region by up to 60 percent. To date, Operation Phalanx has directly
contributed to more than 96,000 apprehensions along the border and the
interdiction of more than 282,000 pounds of drugs destined for our
communities.
The legislation directs the Secretary of Defense to provide up to $75
million in additional assistance to Customs and Border Protection
operations to secure the southern border, potentially including the
deployment of personnel, surveillance assets, and intelligence support
from the U.S. military. The NDAA would authorize an additional $50
million to address U.S. Southern Command's unfunded priorities to
increase surveillance and interdiction operations in Central America--a
primary transit point for illicit trafficking into the United States.
Finally, I am disappointed by the administration's puzzling response
to provisions in the NDAA related to the detention facility at
Guantanamo Bay. The administration argues that this legislation's
limitations placed on Guantanamo Bay transfers are unnecessary and
beyond the scope of congressional authority. That is false. Congress
has long had constitutional authority over wartime detention matters,
and there are good reasons for Congress to assert its authority in this
instance.
For over 6 years, the administration has stated that one of its
highest policy priorities is to close the detention facility at
Guantanamo Bay. But for that same period of time, Members of the Senate
have repeatedly requested a plan that explains how the administration
will handle each of the detainees currently held there, and
unfortunately, over the last 6\1/2\ years, the administration has
consistently failed to provide that plan.
As the terrorist threat continues around the world and grows and
metastasizes, the administration continues to demand that the facility
be closed while failing to explain how it will do so. There are serious
legal and security challenges inherent in moving this population to
other locations, whether inside or outside of the United States.
Congress is simply asking the executive branch to explain where it will
hold those set for trial, how it will continue to detain dangerous
terrorists pursuant to the laws of war, and how it

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will mitigate the risks of moving this population. If the
administration can provide those answers to these basic questions to
the satisfaction of the American people, then congressional
restrictions on the movement of these detainees will be lifted and the
plan can be implemented.
Now, Congress's need for answers is even more acute after the
administration transferred five senior Taliban detainees under secret
agreement to Qatar without prior notification to Congress as required
by law. The President of the United States blatantly violated the law--
which required, before these five detainees were transferred to Qatar,
that Congress be notified 6 months ahead of time--using the rationale
that they were afraid the information might leak. Is that justification
for breaking the law? And isn't it understandable, the skepticism here
on both sides of the aisle about any plan they may have or may not
have? Isn't it reasonable that the Congress of the United States should
be presented with a plan, and shouldn't the Congress of the United
States express its approval or disapproval?
The notification standard was enacted into law to allow the President
the authority to implement his stated policy but with a good-faith
understanding that the people's representative could weigh in on these
important decisions before the transfers happened. The President's
failure to abide by the notification provisions undermined any trust
Congress had in the process.
Now, as the Taliban continues to plot attacks against U.S.
servicemembers in Afghanistan, the administration is scurrying to
figure out how to keep those five terrorists from the battlefield.
This is not congressional overreach; it is congressional oversight.
The President has decided that the security risks of keeping Guantanamo
open outweigh the security and legal risks of closing it. Congress is
seeking information that will allow the American people and Congress to
understand that decision.
The American people deserve an explanation for how the President
plans to execute one of his most repeated policy goals. There is some
dispute about what percentage of those who have been released from
detention in Guantanamo have reentered the fight. Some say it is as
high as 30 percent, and some say it is as low as 7 or 8 percent. There
is no debate that detainees who were released from Guantanamo have
reentered the fight, placing the lives of American service men and
women in jeopardy and in danger. Of course, the five who were released
were amongst the toughest, the worst, the hardest cases. Now there is
some question as to whether they will remain under strict supervision
in Qatar.
Let me conclude by simply saying that the NDAA is far too important
to be held hostage in a budget negotiation. For 53 consecutive years,
the Congress has passed a national defense authorization act. With
threats to our national security multiplying around the world, I would
hope this year would be no different.
I thank my colleague from Rhode Island for all of the hard work he
and his staff and Members on that side of the aisle have done in order
to have legislation that passed overwhelmingly through the Senate Armed
Services Committee. I hope we can move forward on getting that
legislation through the Senate, in consultation and in compromise with
the House, and to the White House for the President's signature.
I would say again that I read carefully the administration's
objection to the legislation as it now stands. These are not valid in
some cases. In other cases, we would be glad to negotiate with the
White House as we go to conference with the House after completing
this. I sincerely hope and pray that--there are so many provisions
there that are important to the lives of the men and women serving in
the military that I would hope the President would take into
consideration how important this is to the men and women who are
serving, their lives and their welfare, their equipment, their
training, and their ability to defend this Nation.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Lankford).
The clerk will call the roll
The legislative clerk proceeded to call the roll.
Mr. REED. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 1559, as Modified

Mr. REED. Mr. President, I have a modification to amendment No. 1559,
which I offered on behalf of Senator Durbin, and I ask that the
amendment be so modified.
The PRESIDING OFFICER. The Senator has that right. The amendment is
so modified.
The amendment, as modified, is as follows:

At the end of subtitle B of title VIII, add the following:

SEC. 832. PROHIBITION ON AWARDING OF DEPARTMENT OF DEFENSE
CONTRACTS TO INVERTED DOMESTIC CORPORATIONS.

(a) Prohibition.--Chapter 137 of title 10, United States
Code, is amended by adding at the end the following new
section:

``Sec. 2338. Prohibition on awarding contracts to inverted
domestic corporations

``(a) Prohibition.--
``(1) In general.--The head of an agency may not award a
contract for the procurement of property or services to--
``(A) any foreign incorporated entity that such head has
determined is an inverted domestic corporation or any
subsidiary of such entity; or
``(B) any joint venture if more than 10 percent of the
joint venture (by vote or value) is owned by a foreign
incorporated entity that such head has determined is an
inverted domestic corporation or any subsidiary of such
entity.
``(2) Subcontracts.--
``(A) In general.--The head of an executive agency shall
include in each contract for the procurement of property or
services awarded by the executive agency with a value in
excess of $10,000,000, other than a contract for exclusively
commercial items, a clause that prohibits the prime
contractor on such contract from--
``(i) awarding a first-tier subcontract with a value
greater than 10 percent of the total value of the prime
contract to an entity or joint venture described in paragraph
(1); or
``(ii) structuring subcontract tiers in a manner designed
to avoid the limitation in paragraph (1) by enabling an
entity or joint venture described in paragraph (1) to perform
more than 10 percent of the total value of the prime contract
as a lower-tier subcontractor.
``(B) Penalties.--The contract clause included in contracts
pursuant to subparagraph (A) shall provide that, in the event
that the prime contractor violates the contract clause--
``(i) the prime contract may be terminated for default; and
``(ii) the matter may be referred to the suspension or
debarment official for the appropriate agency and may be a
basis for suspension or debarment of the prime contractor.
``(b) Inverted Domestic Corporation.--
``(1) In general.--For purposes of this section, a foreign
incorporated entity shall be treated as an inverted domestic
corporation if, pursuant to a plan (or a series of related
transactions)--
``(A) the entity completes before, on, or after May 8,
2014, the direct or indirect acquisition of--
``(i) substantially all of the properties held directly or
indirectly by a domestic corporation; or
``(ii) substantially all of the assets of, or substantially
all of the properties constituting a trade or business of, a
domestic partnership; and
``(B) after the acquisition, more than 50 percent of the
stock (by vote or value) of the entity is held--
``(i) in the case of an acquisition with respect to a
domestic corporation, by former shareholders of the domestic
corporation by reason of holding stock in the domestic
corporation; or
``(ii) in the case of an acquisition with respect to a
domestic partnership, by former partners of the domestic
partnership by reason of holding a capital or profits
interest in the domestic partnership.
``(2) Exception for corporations with substantial business
activities in foreign country of organization.--
``(A) In general.--A foreign incorporated entity described
in paragraph (1) shall not be treated as an inverted domestic
corporation if after the acquisition the expanded affiliated
group which includes the entity has substantial business
activities in the foreign country in which or under the law
of which the entity is created or organized when compared to
the total business activities of such expanded affiliated
group.
``(B) Substantial business activities.--The Secretary of
the Treasury (or the Secretary's delegate) shall establish
regulations for determining whether an affiliated group has
substantial business activities for purposes of subparagraph
(A), except that such regulations may not treat any group as
having substantial business activities if such

[[Page S3855]]

group would not be considered to have substantial business
activities under the regulations prescribed under section
7874 of the Internal Revenue Code of 1986, as in effect on
May 8, 2014.
``(c) Waiver.--
``(1) In general.--The head of an agency may waive
subsection (a) with respect to any Federal Government
contract under the authority of such head if the head
determines that the waiver is required in the interest of
national security or is necessary for the efficient or
effective administration of Federal or Federally-funded
programs that provide health benefits to individuals.
``(2) Report to congress.--The head of an agency issuing a
waiver under paragraph (1) shall, not later than 14 days
after issuing such waiver, submit a written notification of
the waiver to the Committees on Armed Services and
Appropriations of the Senate and the House of
Representatives.
``(d) Applicability.--
``(1) In general.--Except as provided in paragraph (2),
this section shall not apply to any contract entered into
before the date of the enactment of this section.
``(2) Task and delivery orders.--This section shall apply
to any task or delivery order issued after the date of the
enactment of this section pursuant to a contract entered into
before, on, or after such date of enactment.
``(3) Scope.--This section applies only to contracts
subject to regulation under the Federal Acquisition
Regulation and the Defense Supplement to the Federal
Acquisition Regulation.
``(e) Definitions and Special Rules.--
``(1) Definitions.--In this section, the terms `expanded
affiliated group', `foreign incorporated entity', `person',
`domestic', and `foreign' have the meaning given those terms
in section 835(c) of the Homeland Security Act of 2002 (6
U.S.C. 395(c)).
``(2) Special rules.--In applying subsection (b) of this
section for purposes of subsection (a) of this section, the
rules described under 835(c)(1) of the Homeland Security Act
of 2002 (6 U.S.C. 395(c)(1)) shall apply.''.
(b) Clerical Amendment.--The table of sections at the
beginning of chapter 137 of title 10, United States Code, is
amended by inserting after the item relating to section 2337
the following new item:

``2338. Prohibition on awarding contracts to inverted domestic
corporations.''

Mr. REED. Mr. President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. McCAIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 1569 to Amendment No. 1463

Mr. McCAIN. Mr. President, I ask unanimous consent to set aside the
pending amendment and call up amendment No. 1569 for Senator Burr.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The clerk will report.
The legislative clerk read as follows:

The Senator from Arizona [Mr. McCain], for Mr. Burr,
proposes an amendment numbered 1569 to amendment No. 1463.

Mr. McCAIN. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To ensure criminal background checks of employees of the
military child care system and providers of child care services and
youth program services for military dependents)

At the end of subtitle F of title V, add the following:

SEC. 565. CRIMINAL BACKGROUND CHECKS OF EMPLOYEES OF THE
MILITARY CHILD CARE SYSTEM AND PROVIDERS OF
CHILD CARE SERVICES AND YOUTH PROGRAM SERVICES
FOR MILITARY DEPENDENTS.

(a) Employees of Military Child Care System.--Section 1792
of title 10, United States Code, is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following new
subsection (d):
``(d) Criminal Background Check.--The criminal background
check of child care employees under this section that is
required pursuant to section 231 of the Crime Control Act of
1990 (42 U.S.C. 13041) shall be conducted pursuant to
regulations prescribed by the Secretary of Defense in
accordance with the provisions of section 658H of the Child
Care and Development Block Grant Act of 1990 (42 U.S.C.
9858f).''.
(b) Providers of Child Care Services and Youth Program
Services.--Section 1798 of such title is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following new
subsection (c):
``(c) Criminal Background Check.--A provider of child care
services or youth program services may not provide such
services under this section unless such provider complies
with the requirements for criminal background checks under
section 658H of the Child Care and Development Block Grant
Act of 1990 (42 U.S.C. 9858f) for the State in which such
services are provided.''.

Mr. McCAIN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. McCAIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCAIN. Mr. President, I ask unanimous consent that when the
Senate resumes consideration of H.R. 1735 on Tuesday, June 9, the time
until 3 p.m. be equally divided between the managers or their
designees; that following the use or yielding back of that time, the
Senate vote in relation to the Reed amendment No. 1521. I further ask
that there be no second-degree amendment in order to the amendment
prior to the vote.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. McCAIN. We are ready to schedule further votes on amendments
after the 3 p.m. vote on the Reed amendment, and it is my expectation
that we will be able to lock in those votes tomorrow morning. The
ranking member and I have asked all of our colleagues to adhere to a
filing deadline for first-degree amendments to the bill at 6 p.m.
tomorrow, Tuesday. There are several hundred filed amendments already,
and those with further amendments should bring them down tomorrow by
close of business.
I also wish to add, my colleagues, I hope we can agree to the filing
deadline. That will be approximately a week that we have been on the
bill. I think that, hopefully, will be sufficient time for most of our
colleagues or all of our colleagues to have time to file amendments.
Senator Reed and I will continue the practice of allowing pending
amendments, one on either side. We will be able then to schedule votes
on pending amendments as they are, one on either side.
I thank Senator Reed, and I hope we can get a lot of debate and
discussion. The Reed amendment is a very important amendment. I respect
Senator Reed's view on this issue, and we obviously will let the body
decide.
I do hope our colleagues understand that we have many filed
amendments, and we would like to get to as many of them as possible. We
would like to have as many Members be able to have their amendments on
this bill as they feel necessary. We don't have to emphasize the
importance of this legislation.
I also look forward to Members coming to the floor tomorrow and
debating the Reed amendment. It is a very important amendment, and I
think it deserves the views of as many Members as possible, including
those who are on the committee.
Senator Reed.
Mr. REED. The Senator and I concur that we should urge our colleagues
to file their amendments. We have several hundred pending, as the
chairman pointed out, and we hope that can be accomplished by 6 p.m.
tomorrow. We will be debating amendments and then scheduling amendments
tomorrow afternoon.
The PRESIDING OFFICER. The Senator from Arizona.

____________________